RESTRICTIONS ON INCREASES IN LOCAL AUTHORITY RENTS

HC Deb 26 November 1969 vol 792 cc517-53

7.45 p.m.

Mr. Graham Page (Crosby)

I beg to move Amendment No. 1, in page 1, line 18, at end insert: (d) in the absence of the increases it will be necessary for the local authority, in the observance of their obligations as to revenue and expenditure, to increase the general rate.

The Chairman

With this Amendment we can also discuss Amendments No. 3, in Clause 3, page 2, line 43, after 'by', insert: 'information as to the state of the financial reserves upon which the local authority will be obliged to draw in the event of the Minister being unable to agree to the proposals and'. and Amendment No. 4, in Clause 3, page 2, line 43, after 'such', insert 'further'.

Mr. Page

This is an Amendment to Clause 1, which sets out the restrictions on increases in local authority rents. Subsection (1) says: A local authority shall not, for any period beginning before 1st July, 1971 … charge in respect of houses … rents exceeding the former rents … except in certain cases.

Those cases are set out in the three paragraphs in the subsection. One is the limit of 10s. in any individual case, or an average of 7s. 6d. for a group of houses. Paragraph (b) allows an increase when proposals have been put to the Minister and the Minister has agreed to them. Paragraph (c) allows increases when they can be attributed to improvements or extensions to the house. This Amendment would add a fourth case, where unless the increase is made, it would be necessary for the local authority in carrying out its duties of expenditure and revenue in connection with housing to increase the general rate.

Amendments Nos. 3 and 4 which we are discussing with this are Amendments to Clause 3, dealing with the proposals to the Minister which I have mentioned. If the Minister accepts the proposals then the rent may be increased beyond the 10s.—7s. 6d. limit. The Amendments to Clause 3 seek to insert an obligation on a local authority, when making its proposals to the Minister, to tell him what reserves it has or has not upon which to draw in the event of his not agreeing to its proposal to increase the rents above the limits set out in the Bill. They would be telling the Minister which of the kids' piggy banks they would break into to make up the deficit.

In explaining these Amendments I will refer to Report No. 62 of the National Board for Prices and Incomes, "Increases in Rents of Local Authority Housing", to which the Minister of State referred on Second Reading. Although it was published in April, 1968, and although the figures must be out of date, the facts set out in that report are still correct and are relevant to the Amendment. The report carefully explains on page 2, in paragraph 7: The local housing authorities are required by statute to make 'reasonable charges' for their dwellings. This requirement has been interpreted by the Courts to mean broadly that a reasonable balance should be maintained as between tenants and groups of tenants, and between the general body of ratepayers and council tenants as a whole. In practice, that gives local authorities wide powers to set rents as they please. The report explains in paragraph 8, Within this fairly wide area … local housing authorities have to observe certain rules. Those rules apply to the keeping of two separate accounts—a separate housing revenue account and a separate housing repairs account. The separate housing revenue account has to be maintained to show the expenditure and income relating to the authority's council houses. The report states: A deficit on the Account cannot be carried forward from one year to the next, and has to be made good by a contribution from the rates. This is the point which is relevant to the Amendment. If there is to be a deficit on the housing revenue account, that must be made up from some source, whether it be from the rents, from a rate contribution or by some manipulation—and I do not mean that in any wrong way—of the account from the point of view of the capital repayment to that account.

There is then reference to the housing repairs account, to which there must be a minimum contribution from the housing revenue account of £8 per dwelling per year. Most local authorities distribute the costs of their housing and therefore charge rents over the entire housing stock, generally making allowances for differences in the age of houses or the amenities. In this way the costs are spread over. That method of distributing costs is usually known as rent pooling.

The report explains that the Prices and Incomes Board studied a number of local authorities to discover the reasons attributed for rent increases. The board found that 21 per cent. of the local authorities reported that they considered that the most important factor to which the rise could be attributed was the rising housing programme; 16 per cent. thought that it was the rising cost of maintenance and repair; 15 per cent. thought that it was the rising cost of construction; 29 per cent. thought that it was rising interest rates; and 4 per cent. reported that the reduction on the abolition of the rate fund contributions to the housing revenue account was the main cause of rent increases. The report adds: Only 4 per cent. suggested that the increases might be due to a change in or the introduction of a rebate scheme. This report was published in April, 1968. It referred to increases in the building programme. I imagine from the very severe reduction in the housing programme that at present this is not such an important factor and that it is not necessary to spread the cost of the rising housing programme over all the rents of council houses because the programme is no longer rising. Because of the Government's extraordinary policy, it is dropping.

Probably moving to the top of the list is construction costs, which have increased substantially and which will increase in future if the wage demands of the employees in the construction industry are granted in full—as, indeed, there seems to be every indication that they will be granted. The increase in the cost of building houses, therefore, will find its reflection in the rents when spread over the whole of the stock in any one local authority.

The corresponding increase in the cost of repairs will also result, and in the past has resulted, in the need for an increase in rents. The increase in management costs has the same effect. Many local authorities attributed some of the most substantial rises in rents to the increase in interest rates. The report mentions the short-term borrowing from the Euro-dollar market as an increasing cost of local authority housing.

Only a few weeks ago I was in Tanzania talking to the chief of the Bank of Tanzania and teasing him about the control which he had over his Government by controlling the money in his bank and lending it to his Government.

The Minister of State, Scottish Office (Dr. J. Dickson Mabon)

Order.

Mr. Page

Apparently the hon. Member thinks that I am out of order. I will tell him why I am in order. I asked the chief of that bank the rate of interest he paid to his depositors, and he said that it was 8½ per cent. I said, "I suppose that you lend it to your Government as you choose and control their policies in that way". He replied, "No. I lend it to councils in your country at 11 per cent." That is from Tanzania—a country asking for aid from us. If that is the sort of borrowing that local authorities do, there is little wonder at the expense which is reflected in their housing programmes.

Mr. Eric Lubbock (Orpington)

Could the hon. Member exercise his influence on his friend and get me an overdraft with the Bank of Tanzania?

Mr. Page

The hon. Member for Orpington (Mr. Lubbock) will understand that I asked exactly the same question when I first heard of the rate of interest on deposits.

It may be said that local authority borrowing for the purposes of housing is subsidised by the Government in that a local authority pays only 4 per cent. on the money which it borrows and the balance is a subsidy. But of course all that money is put into one kitty at the pool rate, as it is called, so that it is a little more than a drop in the ocean. When a local authority is borrowing at such a high rate of interest for other purposes and is spreading the money all over, at an average, in fact it is not building or repairing its houses with money borrowed at 4 per cent.

Mr. Frank Allaun (Salford, East)

Under the hon. Member's proposal, the whole burden of looking after the area of the local authority, with high interest rates, and so on, and not simply the expense of council houses, would be laid upon the council tenant.

8.0 p.m.

Mr. Page

The hon. Member has not read the Amendment correctly. I have read it to the Committee and I shall not do so again. I ask the hon. Member to read it.

It is frequently said that, for housing, local councils borrow money at a very low rate of interest because anything above 4 per cent. is subsidised. That interest is spread over the whole of the local authority activities and the money is then taken out of the pool at the average rate of interest.

Mr. Julius Silverman (Birmingham, Aston)

While it is true that the money is borrowed from what is called the Consolidated Fund at a general rate of interest, the subsidy is confined entirely to the housing revenue account.

Mr. Page

Yes. All I was trying to say is that when local authorities complain of the high rate of interest causing the necessity to increase rents, which is reported as a major complaint of the local authorities, it is no answer to them that they get their money at a very low rate of interest, because when allocated to the housing account it is not at that low rate, but at an average rate.

The Chairman

Order. I hesitate to interrupt the hon. Member, who is so scrupulously careful about the rules of order, but I find it a little difficult to relate his remarks to the Amendments, one of which concerns the absence of increases on the general rate and another of which is concerned with information. Perhaps the hon. Member will help me.

Mr. Page

I thought it necessary, Mr. Irving, to give the background about how local authorities accumulate reserves, to which reference is made in Amendment No. 3, and to deal with the question of whether, when their reserves have run out, they have to resort to a rate fund contribution. If they have to resort to a rate fund contribution, they may have to increase the rates. That comes within Amendment No. 1. I think that the background which I was endeavouring to give is entirely relevant.

When one looks at the reasons for increases in rent, one sees that they are almost wholly attributable to the policies of the Government—for example, the increases in interest rates, the cost of construction and other things. It is by reason of those policies that increases in rent are necessary and the Government now say that those increases should fall upon the ratepayer.

The Amendment seeks to allow the local authority to make the increase and avoid an increase in the general rate. If the housing revenue account is in credit, it is not necessary to increase the general rate to keep within the law. Local authorities have to abide by certain rules, one of which is that they must keep their housing revenue account in credit. If they have any other source to which to resort, the Amendment would not come into operation, but where they can satisfy the Minister that the only way to obey the law and keep their housing revenue account in credit is to increase the rates, they should be given discretion either to charge the rents or to charge the ratepayers, as they see fit, in observing their duties as local government elected bodies.

In the Bill, local authorities are restricted to an increase of an average of 7s. 6d. a week instead of being allowed to strike a fair balance between council tenants as a whole and the general body of ratepayers, as was said to be their duty in the report of the Prices and Incomes Board. If this restriction imposed in the Bill comes into operation, it will cause great unfairness to the general body of ratepayers and will fail to keep a fair balance.

Mr. James Allason (Hemel Hempstead)

My hon. Friend the Member for Crosby (Mr. Graham Page) has given examples to show why costs are rising. He rather dismissed the question of new house building, but let me assure him that in certain parts of the country new council house building can have a considerable effect. I am thinking of places where rents are low for historic cost reasons. For example, a substantial number of houses might have been built at a time when building costs were cheap and, therefore, the rents are low. If, however, there has to be a further steady stream of council building next year or subsequently and a new scheme comes into operation, the new building will have a considerable effect. This is a good example of the sort of case that we must consider. Costs will rise considerably.

Under the Bill, a local authority will be entitled to raise its rents by an average of 7s. 6d. a week over its whole pool of houses. That figure might not be enough. The local authority then turns to the housing revenue account, finds that it is a little in credit and uses it all up, but even that is not enough. That is the situation that we are considering in Amendment No. 1.

Therefore, it falls squarely on the Government to say what they intend. Is it that the whole of the cost shall fall on the ratepayer and the rates must be increased, or would they in these circumstances wish rents further to increase, remembering the case to which I have referred, in which the historic costs are low and, therefore, rents are quite low?

There is a further alternative which I have posed to the Government on two occasions, but which they always dodge. The third alternative is the one which, I fear, will be used. That is to say, with new building there is no requirement to fix rents in line with the other rents charged by the local authority. Therefore, the local authority will be gravely tempted for new housing to fix a much higher rent than is charged for the rest of its pool of accommodation. To me, that it totally unacceptable.

Surely, that must be unacceptable to the Government, too. They will not say this or face the situation. I wish that they could say something about it. If it is their intention that these further costs, which cannot be absorbed in the way I have described, must fall on the ratepayer, let them say so and let us see that this is a Bill deliberately intended to increase the rates next year in the circumstances with which we are dealing. If that is what the Government say, fair enough, but for goodness' sake let them come forward and face these three alternatives and say which one they prefer.

Mr. Julius Silverman

I intervene only briefly. I agree with the analysis which has been made of the factors in the costs and rents of council houses. New housing is one, rates of interest is another, increased cost of repairs is another, and the introduction of rebate schemes another. I agree entirely with the hon. Member for Hemel Hempstead (Mr. Allason) that for a number of authorities the construction of new houses means a major increase in costs.

What happens is this, and perhaps I can spell it out a little more clearly than the hon. Member. A local authority decides to build a number of new houses. The houses cost very much more than the old houses cost, and notwithstanding the Housing Subsidies Act the economic costs of those rents, even allowing for housing subsidies, will be very high, and, the council would say, much higher than the tenants of those houses can pay.

The hon. Gentleman agrees with me about that. So what does the authority do? It says that the tenants must pay the difference and must pay a subsidy. If it is necessary to build these new houses one would have thought that at any rate the ratepayers would pay a share of the cost instead of the council's going to the council house tenants and saying, "Because we are enlarging our housing programme you will have to pay the bill." This is resented by council tenants, and quite understandably; and to say that the whole of this cost should be borne by existing council tenants is wholly wrong. That is the first point.

The introduction of rebate schemes is another case and it is dealt with in a subsequent Amendment on which I hope to catch your eye, Mr. Irving, later. I think that someone hopes that I shall not succeed, but, nevertheless, I shall try.

Other matters are the rates of interest and the increased cost of repairs. It is quite true that with houses which were built before the Housing Subsidies Act, the rate of interest is a major factor. I accept that. It is also true that the increased cost of repairs is a factor, and it is not unreasonable that the tenant should bear those costs, but I do not believez that these increases can conceivably amount in any case to a total of more than 7s. 6d. An increase of 7s. 6d. a week for a year is certainly more than sufficient to take charge of those costs, even if all those costs are legitimate against the tenant.

Therefore, I agree entirely with what has been said, that there should be a balance between the ratepayer and the tenant but the balance should be struck in the right way, and this Amendment certainly does not do that.

8.15 p.m.

Mr. Wallace Lawler (Birmingham, Ladywood)

I am not quite sure that I follow as fully as one ought the arguments advanced by the hon. Member for Hemel Hempstead (Mr. Allason) and the hon. Member for Birmingham, Aston (Mr. Julius Silverman). They have talked about current construction costs in the public sector. One would have thought that the 4 per cent. ceiling does protect the council tenant in this respect.

Furthermore, I am by no means influenced by the arguments of the hon. Member for Crosby (Mr. Graham Page). One should not accept automatically that an increase which goes above 7½ per cent. can be justified in terms of the state of the housing revenue account, say, two or three months before the close of the financial year and automatically be placed on the backs of the ratepayers.

There are one or two pertinent questions which arise from this, and certainly one rather interesting example. A few years ago one large local authority with which I was connected found a few months before the end of the housing year that a quite sizeable rents increase was anticipated and that a heavy deficit was in store. A conscientious housing officer would call the chairman of the housing committee into conference, and one would hope that he would confer with the housing committee itself, but in this case he had a few words with the chairman of the housing committee and pointed out the position which would arise in two or three months at the end of the housing year, the same position which this present Amendment is seeking to anticipate.

Ways and means were found to avoid the deficit during the succeeding few months. One of the ways was an in- teresting example of what the hon. Member for Aston deplored in the debate last week: let us put a levy on each tenant, transferring one with another; let us put from 8s. to 15s. a week on each future letting of postwar dwellings. The hon. Member for Aston will remember the occasion. Someone closely connected with his own political party did this in the City of Birmingham.

I would be very interested, before making a final decision about the Amendment, to know the attitude of the Minister of State to this and whether he agrees with his colleague who in the debate last week said that it was perhaps a less painful way of avoiding the deficit. If that is the authoritative Government view it would be interesting to have an assurance that it is. There are tens of thousands of council house tenants who take an entirely opposite view and who think that it is quite wrong, but the present legislation leaves open the door very wide for a council still to employ, even in terms in excess of 7s. 6d. a week, the same kind of devious and, to my mind, most dishonest way of avoiding a deficit a few months before the end of the housing year.

I would repeat that it is not necessarily a "must" that any increase over 7s. 6d. should come from the ratepayer. A wise housing authority is able to see the size of its anticipated deficit on the housing account at least halfway through the housing year, and there are many and various ways which can be taken. I have mentioned one, with which I thoroughly disagree, but there are others—cuts, overdue perhaps, in heavy administrative costs, in some large authorities running at very high levels; value for money in expenditure, something with which almost every council tenant in the country would agree; streamlining of procedure in connection with repairs—perhaps allowing only three officials to visit a council house instead of six in connection with each repair. There are very many ways in which increased expenditure can be anticipated and avoided. It is a somewhat hopeless situation for the Opposition to suggest to us that we have simply to say, "Any increase above the level proposed in the Bill should be placed upon the backs of the ratepayers."

I hope that the Minister of State, who seems to find my contribution, which I could not make last week because of illness, somewhat entertaining, will take this point rather seriously and give us an authoritative reply and an explanation of the attitude which the Minister of Stale takes with regard to the devious manner, which I have suggested, by which he is still leaving it open for local authorities to avoid deficits by a system of very wrong and totally unjustified differential rents for a very small section of council house tenants.

Dr. Dickson Mabon

We have had a good-natured debate, and I would be the last to disturb the tenor of our discussion. It might be suggested by some that the three Amendments which we are discussing could be described as wrecking Amendments, but I would not for a moment dream of using these terrible words.

I confirm the point made by the hon. Member for Crosby (Mr. Graham Page), that under the Fifth Schedule of the Housing (Financial Provisions) Act, 1958, every local authority has to make a contribution from the general rate fund to the housing revenue account to meet any deficit which may arise in that account in any financial year. Thus, in any year, if rents, exchequer subsidies and other income credited to the account do not meet the cost falling on the account, a rate contribution has to be made to make up that shortfall.

Whether the contribution, or an increase in the contribution, leads to an increase in the general rate depends upon the balance in the general rate fund and the extent to which the local authority is willing to run down the balance. I think that is why Amendments Nos. 1, 3 and 4 have been tabled. They are designed to provide the Minister with information about the authority's rate fund balances as well as housing account balances.

The Amendment, as drafted, is too imprecise to make any sense. It will be impossible to define or to state exactly when a rent increase is necessary to avoid an increase in the general rate. No authority can precisely estimate in advance, despite what the hon. Member for Birmingham, Ladywood (Mr. Lawler) has said. I am sorry that we were deprived of his company last week for health reasons, and I am glad that he is back in health again. No authority can precisely estimate in advance what balance there will be in the rate fund as a result of expenditure on all rate-borne services.

Nor can it, as I think the hon. Member for Crosby will admit, estimate precisely the prospective deficit in the housing revenue account and the rate fund contribution which will be needed to meet that deficit. It would be impossible even for him to establish beyond argument whether the authority has reached the point where it is faced with a straight choice between a rent increase and an increase in the rate fund contribution. There will always be other alternatives open to the authority.

The hon. Member for Ladywood gave one alternative which he entirely rejected. He gave other alternatives which I would regard as being arguments which should apply in any local authority. They related not to policy but to administrative efficiency. That is not the monopoly of any one party but is enjoyed by certain individuals and denied to others—I will not go into who is who tonight. That is not a policy argument, but an argument of efficiency. It is a matter for consideration by the individuals in charge of any authority at any time.

There may be a balance left on the housing revenue account, the housing repairs account or the housing equalisation account; or the authority might be able to cut expenditure on maintenance, run up a deficit in the housing repairs account for that year, or cut down its housing programme. These would, in our view, be bad alternatives, but it is impossible to say when such an alternative is so bad as to be ruled out and make "necessary", in the words of the Amendment, an increase either in rents or rates.

I was pleased that my hon. Friend the Member for Birmingham, Aston (Mr. Julius Silverman) made the point in favour of the policy in the Bill and against the Amendments, that we aim in the Bill—and I hope the hon. Member for Ladywood is with us on this—to strike a fair balance between the requirements of the Prices and Incomes policy at any given time—a moderating influence—and the interests of the tenants, on the one hand, and the interests of the rate-payers, on the other.

The Bill gives the Minister discretionary power to control rent increases where these prima facie, conflict with any given prices and income policy. The Minister must be allowed to use that discretion in relation to all relevant considerations. One of these is the estimated effect of a rent increase on the size of the rate fund contribution. But this should not be an overriding consideration in respect of which he cannot exercise discretion.

The hon. Member for Crosby referred to the Report of the National Board for Prices and Incomes, and I agree that the amount of the estimated rate fund contribution would be relevant. So would the rent increases which the tenants have already had to bear. The report recommended that a rate fund contribution should be made where this made it possible to keep an average rent increase to 7s. 6d. in any year. Moreover, a rate fund contribution made in any year can be repaid to the general rate fund in any of the nine subsequent years.

In nearly all cases a local authority will be able to meet unavoidable increases in costs by an increase in rent averaging not more than 7s. 6d. a week. I thought that my hon. Friend the Member for Aston made a good point here. Looking back on the experience of the majority of local authorities in England, Wales and Scotland this has been borne out by the facts. In that case, the authority will not need to submit a new proposal to the Minister, but in the few cases where my hon. Friend the Member for Aston is wrong, and where the Government feel that on balance there might be merit in a proposal that the increase should be more than that, then it is right that the Minister should be able to consider whether a larger average rent increase is justified. This is the essence of the division between us.

The Amendments are not only defective in drafting, but detract from the whole purpose of the Bill. I would not for a moment belie their importance; they are fundamental Amendments. I understand the intention. I do not rest my case for rejection on their drafting imperfection. I am simply saying that in policy terms they are wrong, and ill founded, and I hope that the House will reject them.

Mr. Allason

The Minister has not dealt with my alternative suggestion that the local authority might seek to let new dwellings at a substantially higher rent. Will he say what is his policy on that?

Dr. Mabon

I apologise for not answering that point. We favour the idea of rent pooling. I am not sure whether the hon. Gentleman is against the idea that the authority should make a realistic assessment of rents for new houses or whether he is for this. But, on balance, a judgment has to be made on both the present stock of houses and on the new houses being built. It would be totally unfair to throw this entirely on the responsibility of new tenants, existing council tenants or rent payers. A balance must be struck between all the individuals concerned rather than selecting one as opposed to another to bear the cost of the new developments.

[Miss HARVIE ANDERSON in the Chair]

Mr. Charles Mapp (Oldham, East)

I should like to relate the Amendment, cruel as it is, to the problems of a town faced with difficult problems of clearance of unfit houses. Where there is a great backlog of unfit houses, the Amendment provides for the additional cost of providing new units to fall wholly on the municipal tenants.

I should like to take as an illustration my own town, in which in 1955 nearly half the houses comprised unfit dwellings. At the moment a quarter of the 42,000 houses are unfit. The movers of the Amendment should speak to 40 or 50 other authorities in the country with this acute problem, and should say to them, "The clearance of unfit houses and the rebuilding of your town must be at the expense of your municipal electors."

We in Oldham have about 12,000 municipal houses of which about half are post-war. We have 11,000 houses still to clear, and the Tories have taken a rate of 400 houses a year for clearance as against a figure of towards 1,000 houses which was achieved a year or so ago. This means that the job will be three times as long and also that the problem of clearing those unfit houses in such a town will rest on a quarter of the ratepayers.

Nothing is said in the Amendment about the responsibility of industry in such towns. There are no obligations upon them to help house, or even take an interest in housing, the people who work for them. Equally, commercial premises in such towns as Oldham have no obligation to be interested in any way in the clearing of unfit property.

My authority is already burdened on the general rate fund at the rate of about 3s. in the £ towards assistance in the housing programme. That on a penny rate, giving £12,000 to £13,000, would mean £40 to £45 per year on each council house on the principle that one should not put any of the cost on the general rate fund.

I make this point to show how cruel and callous is the Amendment before the Committee. It is inhuman to talk from a Tory point of view about clearing unfit houses. Let them talk to the 40 or 50 authorities in the country with such a backlog and then they will realise what should be done.

In Oldham, which in the past has had immense mining problems, all or some of the unfit areas must be cleared before rebuilding can take place. The costs of clearance and of examination of the land to avoid mining subsidence, and the whole of the capital costs involved between the time the first bulldozer goes into the area and the time when the first tenant goes into occupation, have to be taken at interest of nearly 10 per cent. The interim effect on any authority such as that in my area, whose back is already nearly broken by the problem of financing the rebuilding and pulling down of houses, is unbearable.

I hope that the Committee will reject this foolish Amendment. I feel that had it been possible the authority would have taken a 12s. 6d. increase for the municipal tenant to pay. I do not believe that

people expect that these unfit areas should be cleared wholly at the expense of municipal tenants. Although I will resist this Amendment, I hope that the Minister of State will bear in mind the problems of local authorities in regard to unfit dwellings which deserve most serious attention, and I hope some action quite shortly.

Mr. Graham Page

I appreciate the problems mentioned by the hon. Member for Oldham, East (Mr. Mapp), but I think that he has misread the Amendment. The Amendment does not require the deficit on housing revenue account automatically to be paid by the council tenants, and therefore does not necessarily cause hardship to the tenants. The Amendment seeks to leave the local authority to carry out its duties as the elected local government body.

The Minister of State said that the Amendment was too vague. But he appears to have understood it since he said that it was a wrecking Amendment. The meaning is clear, and if any provisos are necessary to stop up any loopholes that is the job of the parliamentary draftsmen. The Amendment as it appears on the Order Paper is sufficient and clear. It is clear that the Government intend ratepayers to pay the whole of the balance of the deficit above the limits set in the Bill and thus will deprive local authorities of their right and duty to strike a balance between the ratepayers and the council tenants. All the Amendment intends is to leave the local authorities with that right. In view of the reply we have received, I hope that my hon. Friends will divide the Committee.

Question put, That the Amendment be made:—

The Committee divided: Ayes 126, Noes 185.

Division No. 15.]	AYES	[8.33 p.m.
Allason, James (Hemel Hempstead)	Carlisle, Mark	Elliot, Capt. Walter (Carshalton)
Atkins, Humphrey (M't'n & M'd'n)	Cary, Sir Robert	Eyre, Reginald
Baker, W. H. K. (Banff)	Chataway, Christopher	Farr, John
Balniel, Lord	Clegg, Walter	Fortescue, Tim
Bennett, Dr. Reginald (Gos. & Fhm)	Cooke, Robert	Foster, Sir John
Biffen, John	Corfield, F. V.	Glover, Sir Douglas
Body, Richard	Costain, A. P.	Gower, Raymond
Boyd-Carpenter, Rt. Hn. John	Craddock, Sir Beresford (Spelthorne)	Grant, Anthony
Boyle, Rt. Hn. Sir Edward	Crowder, F. P.	Griffiths, Eldon (Bury St. Edmunds)
Brewis, John	Cunningham, Sir Knox	Gurden, Harold
Brown, Sir Edward (Bath)	Currie, G. B. H.	Hall-Davis, A. G. F.
Bruce-Gardyne, J.	Dalkeith, Earl of	Hamilton, Michael (Salisbury)
Buchanan-Smith, Alick (Angus, N & M)	Dance, James	Harrison, Brian (Maldon)
Buck, Antony (Colchester)	Dean, Paul	Harrison, Col. Sir Harwood (Eye)
Bullus, Sir Eric	Deedes, Rt. Hn. W. F. (Ashford)	Hawkins, Paul
Campbell, B. (Oldham, W.)	Dodds-Parker, Douglas	Heald, Rt. Hn. Sir Lionel
Campbell, Gordon (Moray & Nairn)	Eden, Sir John	Heseltine, Michael
Higgins, Terence L.	Morgan, Geraint (Denbigh)	Smith, Dudley (W'wick & L'mington)
Hill, J. E, B.	Mott-Radclyffe, Sir Charles	Smith, John (London & W'minster)
Holland, Philip	Munro-Lucas-Tooth, Sir Hugh	Stainton, Keith
Hornby, Richard	Nabarro, Sir Gerald	Stoddart-Scott, Col. Sir M.
Hunt, John	Neave, Airey	Summers, Sir Spencer
Jenkin, Patrick (Woodford)	Nicholls, Sir Harmar	Taylor, Frank (Moss Side)
Jennings, J. C. (Burton)	Nott, John	Temple, John M.
King, Evelyn (Dorset, S.)	Page, Graham (Crosby)	Thatcher, Mrs. Margaret
Lancaster, Col. C. G.	Page, John (Harrow, W.)	Tilney, John
Lane, David	Peel, John	van Straubenzee, W. R.
Legge-Bourke, Sir Harry	Percival, Ian	Vaughan-Morgan, Rt. Hn. Sir John
McAdden, Sir Stephen	Pike, Miss Mervyn	Waddington, David
MacArthur, Ian	Pink, R. Bonner	Walker, Peter (Worcester)
Maclean, Sir Fitzroy	Pounder, Rafton	Walker-Smith, Rt. Hn. Sir Derek
McMaster, Stanley	Prior, J. M. L.	Ward, Christopher (Swindon)
McNair-Wilson, Michael	Pym, Francis	Ward, Dame Irene
Maddan, Martin	Ramsden, Rt. Hn. James	Wells, John (Maidstone)
Maginnis, John E.	Rhys Williams, Sir Brandon	Whitelaw, Rt. Hn. William
Maxwell-Hyslop, R. J.	Rodgers, Sir John (Sevenoaks)	Wiggin, A. W.
Maydon, Lt.-Cmdr. S. L. C.	Rossi, Hugh (Hornsey)	Williams, Donald (Dudley)
Mills, Stratton (Belfast, N.)	Russell, Sir Ronald	Wolrige-Gordon, Patrick
Miscampbell, Norman	St. John-Stevas, Norman	Worsley, Marcus
Mitchell, David (Basingstoke)	Scott-Hopkins, James	Wylie, N. R.
Monro, Hector	Shaw, Michael (Sc'b'gh & Whitby)
Montgomery, Fergus	Silvester, Frederick	TELLERS FOR THE AYES:
More, Jasper	Sinclair, Sir George	Mr. Timotny Kitson and
		Mr. Bernard Weatherill.
NOES
Albu, Austen	Finch, Harold	MacColl, James
Allaun, Frank (Salford, E.)	Fitch, Alan (Wigan)	MacDermot, Niall
Alldritt, Walter	Fletcher, Ted (Darlington)	McElhone, Frank
Anderson, Donald	Foot, Michael (Ebbw vale)	McGuire, Michael
Atkins, Ronald (Preston, N.)	Ford, Ben	Mackenzie, Alasdair (Ross & Crom'ty)
Atkinson, Norman (Tottenham)	Forrester, John	Mackenzie, Gregor (Rutherglen)
Bacon, Rt. Hn. Alice	Fowler, Gerry	Mackie, John
Baxter, William	Freeson, Reginald	Maclennan, Robert
Beaney, Alan	Galpern, Sir Myer	McMillan, Tom (Glasgow, C.)
Bence, Cyril	Gardner, Tony	McNamara, J. Kevin
Bennett, James (G'gow, Bridgeton)	Golding, John	MacPherson, Malcolm
Binns, John	Gregory, Arnold	Mahon, Simon (Bootle)
Blackburn, F.	Grey, Charles (Durham)	Mallalieu, E. L. (Brigg)
Boardman, H. (Leigh)	Griffiths, David (Rother Valley)	Mallalieu, J. P. W. (Huddersfield, E.)
Booth, Albert	Griffiths, Eddie (Brightside)	Mapp, Charles
Boston, Terence	Hamilton, James (Bothwell)	Marks, Kenneth
Bottomley, Rt. Hn. Arthur	Hamilton, William (Fife, W.)	Mellish, Rt. Hn. Robert
Boyden, James	Hannan, William	Millan, Bruce
Bradley, Tom	Harrison, Walter (Wakefield)	Miller, Dr. M. S.
Broughton, Sir Alfred	Haseldine, Norman	Milne, Edward (Blyth)
Brown, Hugh D. (G'gow, Provan)	Hazell, Bert	Mitchell, R. C. (S'th'pton, Test)
Brown, Bob (N'c'tle-upon-Tyne, W.)	Hilton, W. S.	Molloy, William
Buchanan, Richard (G'gow, Sp'burn)	Horner, John	Morris, Alfred (Wythenshawe)
Butler, Herbert (Hackney, C.)	Howell, Denis (Small Heath)	Morris, Charles R. (Openshaw)
Butler, Mrs. Joyce (Wood Green)	Howie, W.	Morris, John (Aberavon)
Cant, R. B.	Hoy, Rt. Hn. James	Moyle, Roland
Carmichael, Neil	Huckfield, Leslie	Neal, Harold
Chapman, Donald	Hughes, Roy (Newport)	Newens, Stan
Coleman, Donald	Hunter, Adam	Norwood, Christopher
Concannon, J. D.	Jay, Rt. Hn. Douglas	Ogden, Eric
		O'Halloran, Michael
Dalyell, Tam	Jenkins, Hugh (Putney)	Orbach, Maurice
Darling, Rt. Hn. George	Johnson, James (K'ston-on-Hull, W.)	Oswald, Thomas
Davidson, Arthur (Accrington)	Johnston, Russell (Inverness)	Owen, Will (Morpeth)
Davies, Ednyfed Hudson (Conway)	Jones, Dan (Burnley)	Page, Derek (King's Lynn)
Davies, G. Elfed (Rhondda, E.)	Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)	Pannell, Rt. Hn. Charles
Davies, S. O. (Merthyr)	Jones, J. Idwal (Wrexham)	Pavitt, Laurence
Dempsey, James	Jones, T. Alec (Rhondda, West)	Pearson, Arthur (Pontypridd)
Dewar, Donald	Judd, Frank	Pentland, Norman
Dickens, James	Kelley, Richard	Perry, Ernest G. (Battersea, S.)
Dobson, Ray	Kerr, Russell (Feltham)	Perry, George H. (Nottingham, S.)
Doig, Peter	Lawler, Wallace	Prentice, Rt. Hn. Reg.
Dunnett, Jack	Lawson, George	Price, Thomas (Westhoughton)
Dunwoody, Mrs. Gwyneth (Exeter)	Leadbitter, Ted	Probert, Arthur
Eadie, Alex	Lee, Rt. Hn. Jennie (Cannock)	Rankin, John
Edwards, Robert (Bilston)	Lee, John (Reading)	Richard, Ivor
Edwards, William (Merioneth)	Lestor, Miss Joan	Roberts, Rt. Hn. Goronwy
English, Michael	Lewis, Ron (Carlisle)	Roberts, Gwilym (Bedfordshire, S)
Ennals, David	Lomas, Kenneth	Robertson, John (Paisley)
Ensor, David	Lubbock, Eric	Ryan, John
Evans, Fred (Caerphilly)	Lyon, Alexander W. (York)	Shaw, Arnold (Ilford, S.)
Evans, Ioan L. (Birm'h'm, Yardley)	Lyons, Edward (Bradford, E.)	Silverman, Julius
Ewing, Mrs. Winifred	Mabon, Dr. J. Dickson	Slater, Joseph
Faulds, Andrew	McBride, Neil	Small, William
Fernyhough, E.	McCann, John	Spriggs, Leslie

Steele, Thomas (Dunbartonshire, W.)	Walker, Harold (Doncaster)	Williams, Clifford (Abertillery)
Swain, Thomas	Watkins, David (Consett)	Willis, Rt. Hn. George
Taverne, Dick	Watkins, Tudor (Brecon & Radnor)	Winnick, David
Thomas, Rt. Hn. George	Weitzman, David	Woodburn, Rt. Hn. A.
Tinn, James	Wellbeloved, James	Woof, Robert
Varley, Eric G,	Wells, William (Walsall, N.)
Wainwright, Edwin (Dearne Valley)	Wilkins, W. A.	TELLERS FOR THE NOES:
Wainwright, Richard (Colne Valley)	Willey, Rt. Hn. Frederick	Mr. Joseph Harper and
		Mr. William Hamling.

Mr. Alick Buchanan-Smith (North Angus and Mearns)

I beg to move Amendment No. 2, in page 2, line 5, after 'to', insert: 'executed or proposed maintenance of or'. When discussing the last Amendment we said that as a result of the Bill there will be considerable financial pressure on local authorities because of holding down rents. As my hon. Friend the Member for Crosby (Mr. Graham Page) said, for local authorities this creates particular problems in balancing their housing accounts. More specifically, it creates a problem for ratepayers on whom this burden is likely to be placed.

8.45 p.m.

Every local authority will seek one way or another of making economies on account of having to hold down their rents. One way in which they will try to make economies will be on house maintenance. The hon. Member for Birmingham, Ladywood (Mr. Lawler) spoke of authorities looking for economies. I agree with the Minister of State, Scottish Office, that we hope that they are looking for economies all the time. Equally, it must be appreciated that for many local authorities repairs and maintenance can involve large sums.

The hon. Member for Birmingham, Aston (Mr. Julius Silverman) mentioned the high cost of repairs and maintenance for certain types of council houses, particularly older ones. Therefore, if a local authority is looking for economies in one way or another, because it is unable to make a sufficient increase in rent to balance its housing revenue account, economies may be made in house maintenance. This could provide a dangerous temptation for standards of maintenance to be cut.

Subsection (4) makes an exception from rent control for increases in rent that are attributable to improvements or extensions to the house". The Amendment seeks to add to this exception an increase in rent attributable to "executed or proposed maintenance". This is of special importance as regards older local authority houses, because these are the houses where charges for repair and maintenance are likely to be particularly high.

The Amendment is of special importance to tenants of such houses in that it would ensure that their houses are properly maintained.

Mr. Julius Silverman

Can the hon. Gentleman cite any case where the increased cost of repairs amounts to anything like 7s. 6d. per week? The Amendment speaks of "proposed maintenance". Does this mean that it would be possible for a local authority to increase rents because of repairs which had not been carried out but which were proposed?

Mr.Buchanan-Smith

"Proposed maintenance" means exactly what it says. There can be no dispute about the meaning. The hon. Gentleman's first point about the increased cost of repairs would be valid if rents were being increased only on this account, but a local authority must need increased rents for other reasons. There are not only costs of maintenance and repairs. There are costs of borrowing, to give only one example, which rise continually because of the policies of the present Government. It is incorrect to treat an increase of 7s. 6d. a week purely within the bracket of maintenance and repairs. I can think of instances where increased other costs and increased costs of maintenance and repairs will easily amount to more than 7s. 6d a week in any one year.

We move the Amendment, not because we wish to put heavier rents on to tenants, but to safeguard tenants and to ensure that where maintenance and repairs are needed the local authority will not be tempted to skimp and save and thereby not provide a proper service to tenants.

Mr. James Dempsey (Coatbridge and Airdrie)

I paid the greatest attention to what the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) was saying. I was waiting for some evidence of local authorities which are not maintaining houses. It is relevant for the Committee to recall that rents of municipal houses have been increased regularly over the past few years, but in all such cases the increase has been within the purse of the ordinary tenant of municipal houses. In the County of Lanark, where I live, scarcely a year passes but municipal rents are increased, within reason, to a figure which the average tenant can afford to pay. As a result, the houses have always been well maintained.

Indeed, I find in the County of Lanark the converse of the situation described by the hon. Member for North Angus and Mearns. He might be interested to know that not only does the local authority maintain the houses, but it has now started remodelling the old munition houses. A tenant is transferred from an old munition house, the house is remodelled, and in this way these houses are brought up to date. That is what one would call applying a fertile brain towards maintaining the best possible housing conditions in the county. There has never been any danger of houses being neglected there.

I recall some authorities which attempted to get the tenants to meet the cost of certain repairs, but it was discovered that the technicalities of the improvements or maintenance were beyond the capacity of the tenants. Therefore, the local authorities stepped in to ensure that panes of glass were placed in the windows and that the doors would lock, and such other repairs as were essential were done out of the existing housing revenue account.

I am, therefore, amazed to hear of the case mentioned by the hon. Member for North Angus and Mearns when he said that if the rents were increased by 7s. 6d. there would be grave danger of the houses falling into disrepair. I should like the hon. Gentleman to quote one town in Scotland where municipal houses have fallen into disrepair. In the County of Lanark the average increase is 3s. or 3s. 6d. and the county is responsible for all the repairs and maintenance.

Mr. A. P. Costain (Folkestone and Hythe)

Would the hon. Gentleman tell the Committee what is the average cost of maintenance in Lanarkshire and how much is spent per house?

Mr. Dempsey

I cannot say. I do not have those figures. But I do know that these repairs and maintenance are done out of the housing revenue account. Anybody with any sense of responsibility will expect the general ratepayer to contribute to the council housing account. [An HON. MEMBER: "Why?"] Because otherwise the rents would become so extortionate that many of the applicants would be chased back to the old but-and-bens, back to the single ends, as we used to call them, and young married couples would be compelled to go into rooms. When hon. Members opposite ask, "Why?", I am suspicious that some of them would be in favour of that sort of thing happening.

Striking a balance is not easy, but I have never known a municipal housing account to be balanced without contributions from the general ratepayers. Who is the general ratepayer? He is the person who, in due course, will qualify for a council house himself and he will get the benefit of the contributions to the housing account. [Laughter.] Some hon. Members opposite think that this is a laughing matter. It is a tragedy that some hon. Members opposite have not had to live in the types of houses which I have seen and, indeed, in which I myself have lived. I lived in a single end.

I was happy to get it when I was married; it was what we call a single end. Obviously, that is foreign language to hon. Members opposite. They probably lived in mansion houses. I never have, and I can speak, therefore, with some human experience of a human problem, a problem which is absolutely foreign to their way of life.

The laughter and derision of the Opposition tonight shows that there are two worlds, and their world is very different from mine. In my world, houses should be built to up-to-date standards, properly maintained, and be let at rents which people can afford to pay. It is as simple as that. To that end, I hope that the Amendment will be rejected. The Opposition's proposal is that, if rents are not increased beyond 7s. 6d., the repair and maintenance of municipal houses will suffer and they will fall into neglect. That is the sort of propaganda which we have had from the Front Bench opposite, without a shred of evidence to justify it.

Our case is a good one, and I am sure that the Government will reject the Amendment.

Mr. Allason

I am not sure whether the hon. Member for Coatbridge and Airdrie (Mr. Dempsey) heard the Minister's winding-up speech on the last Amendment. It appears that he did not, since he said that housing repair accounts have always been flourishing and that repairs are always carried out.

Mr. Dempsey

Yes.

Mr. Allason

But the Minister has been advising councils that they must look forward to see how they can meet a deficit. We are speaking here of a deficit, and he suggested that the housing repairs account is a suitable account to dip into to try to balance the budget.

Mr. Dempsey

There has always been a deficit in most municipal housing accounts. That has been so in all those of which I have had experience. I was arguing that there would always be one, and, therefore, striking a fair rent could be a difficult problem.

Mr. Allason

The hon. Gentleman is muddling up a deficit and a contribution from the rate fund. I agree that there is a contribution from the rate fund, but, normally, housing repair accounts remain in credit. It is only sensible that they should, and carry forward a substantial credit from year to year. But the Minister says, "Let us dip into that credit and run down the housing repairs account to nothing". That is a false economy.

Dr. Dickson Mabon

I did not say that.

Mr. Allason

As my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith) said, costs are rising all the time. It is not now a matter of trying to cut down the housing repairs account. It is a matter of building it up. One does not carry out a continual stream of repairs, regularly balanced year by year. Very often, a local authority will prefer to do its painting in one year, perhaps one year in seven, and in that case there may well be in the near future a heavy drain on the account.

I understand much better the objection of the hon. Member for Birmingham, Aston (Mr. Julius Silverman). He fears that the Amendment will be an excuse for saying that, as a particular house—

The Temporary Chairman (Miss Harvie Anderson)

Order. I hope that the hon. Gentleman will not try the Chair too far. We seem to be straying backwards a little, which would not be correct procedure.

Mr. Allason

I am sorry, Miss Harvie Anderson. I was speaking of the interjection by the hon. Member for Aston on this Amendment, not of his speech on the previous occasion. He fears that the Amendment would be used as an excuse for increasing rents because a particular house needed repairs. I see that, but I do not think that that is the purpose of the Amendment, which is to meet the Minister's very point. When he says that the repairs account should be dipped into, we say that it should not, that if it is to be run down it should be possible to replenish it by an increase in rents. I think that it means no more than that.

Housing repairs are essential. It is crazy to suggest that now is the time to economise on maintenance. We all know that if we economise on maintenance one year we have twice the expense the following year. It is very silly to allow slates not to be replaced and not to do various things, to the great annoyance of the tenant and the destruction of the building. I believe that what the Minister proposes is wrong, and, therefore, the Amendment is necessary.

9.0 p.m.

Mr. R. C. Mitchell (Southampton, Test)

I listened with great interest to the speeches of the hon. Members for North Angus and Mearns Mr.Buchanan-Smith) and Hemel Hempstead (Mr. Allason). I agree with much that they said, in that we should not allow our repairs accounts to run down and should not economise on maintenance. But would they kindly send copies of their speeches to the Chairman of the Southampton Housing Committee, who is a Conservative, my opponent at the next General Election?

The Conservative-controlled Southampton Housing Committee, as a deliberate act of policy—nothing to do with a 7s. 6d. or 10s. a week rent increase—has deliberately cut down on repairs over the past year. It has been slashing repair accounts, and so on. Since the Conservatives took over they have done exactly what hon. Members opposite said they should not do.

Mr. Norman Atkinson (Tottenham)

I enter the debate merely to ask for clarification of the arithmetic used, which is somewhat confusing. It was suggested that local authorities would skimp the maintenance of their houses if they were ruthlessly held to a 7s. 6d. rent increase. That seems to be the general burden of the argument. It is somewhat confusing to me, particularly after listening to one hon. Member opposite develop the argument a little further. I take it that the Opposition are also saying that the increases allowed in the Bill should be 12s. 6d. and 15s., as advocated on the Amendment Paper, and that that is official Conservative policy.

If logic is not strained too far, I also take it that if the figures were 12s. 6d. and 15s. the Bill would be acceptable to the Opposition. That is the logic of the Amendment. If so, are we arguing that the houses would be properly maintained if the figures were 12s. 6d. and 15s., a difference of 7s. 6d. as compared with the sums discussed tonight? I assume that we can quantify the matter in this way. It is unfair for Conservative hon. Members to condemn the arithmetic of the Greater London Council for instance—

Mr. Costain

Can the hon. Gentleman say where the 12s. 6d. and 15s. appear?

Mr. Atkinson

Amendment No. 12, under the names of Mr. Peter Walker, Mr. Graham Page and Mr. Christopher Chataway, says that the sums of 12s. 6d. and 15s. should be inserted in the Bill. If they are serious—

The Temporary Chairman (Miss Harvie Anderson)

I think the hon. Gentleman must have made an error in quoting an Amendment which has not been called. We are discussing a proposition made in Amendment No. 2.

Mr. Atkinson

I accept that, Miss Harvie Anderson, but the only way in which we can elicit information is to quote figures in the documents before us or in other documents, where it is plainly stated that if those sums of 12s. 6d. and 15s. were inserted the Bill would be acceptable to the Opposition.

The conclusion I draw from this is that the Opposition are condemning the leadership of the G.L.C. for asking for anything up to 38s. per week in order adequately to maintain its properties. The Opposition are saying here that the G.L.C. is incompetent and has no knowledge of the cost of maintenance or of its own housing problems, and that the astronomical increases it has recommended do not represent reality. In effect, they are saying to the G.L.C, "You were wrong in your original assumption in asking for astronomical increases in London rents, and London authorities should be restrained to the levels of 12s. 6d. and 15s. per week."

The Opposition are arguing, presumably, that, if these figures were applicable to London, they meet the need as far as the housing revenue account is concerned. I think it improper for them to come here with these well-thought-out figures condemning the Conservative leadership of the G.L.C.

Mr. Christopher Chataway (Chichester)

Since the hon. Gentleman's observations are based on a misconception perhaps I may explain the situation to him. We made it clear on Second Reading that we are opposed in principle to the control of rents by the central Government and that we believe it should rest with the local authorities. Equally, it has been made clear that we believe that the G.L.C. is behaving entirely reasonably in basing its rents in the long term upon a fair rents principle and that to move by gradual stages over three years to a fair rents principle is a reasonable objective. So there is no question of this or any subsequent Amendment being construed as a criticism of the policy followed by the G.L.C.

The Temporary Chairman

Order. The debate is ranging considerably wider than the scope of Amendment No. 2 and I hope that we can now return to its narrower terms.

Mr. Atkinson

I accept that, Miss Harvie Anderson. What the Opposition are now saying is that their Amendments are a frivolous exercise and were never intended to be serious. We either accept the seriousness of their case on Second Reading or the seriousness of their Amendments. It is either one or the other. We either accept the seriousness of the figures provided for us by the G.L.C. or accept these well-thought-out figures of 12s. 6d. and 15s.

The Opposition seem now to be saying that there should be a ceiling on rents throughout the country. But if, on Second Reading, they said that this should be left entirely to the local authorities concerned, do I take it that they mean that here should be no ceiling whatever on rents and that the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) was wrong in suggesting that some amount should be made available in order that there may be effective repairs of the property?

Mr. Lawler

I was interested to hear from the hon. Member for Coatbridge and Airdrie (Mr. Dempsey) of the excellent state of maintenance of public sector houses in his area. He gave the example of the council moving out one tenant, improving the property and putting another tenant in, and so on. This is being done on a wide scale and perhaps helps to answer the point raised in the Amendment, which is certainly applicable to it, that such action by a local authority will be outside the scope of the Bill in relation to the new rents it will be allowed to impose and will, therefore, give it an enhanced income to help maintain its houses. The letting of properties which had been made vacant for improvements would rank as a new letting.

I find it difficult to follow what is meant by "proposed maintenance". It has been rightly said that many prudent local authorities undertake extensive maintenance operations once every five, six or seven years and each year they allow out of their repairs account a sum of money to meet that ultimate expense. In the example of the Midlands authority with which I am connected this sum is £22 a year per dwelling. It would seem to be prudent for housing revenue accounts and repairs accounts, which go together in their implications in this subject, to be allowed to retain this money to carry out repairs which are guaranteed in stages and which, for at any rate large authorities, would be for large groups of tenants in the public sector.

I take it that in requiring further information to be furnished to him when any application is made for such increases the Minister would take this factor into consideration to see whether there were sufficient reserves created to allow for delayed periodical expenditure in any one, or two or three consecutive years. But can the Committee be given further information about the term "proposed maintenance"? It is accepted that it is the duty of local authorities to keep all houses in the public sector in a good state of maintenance and they make provision to do so, but what additional financial expenditure is expected to justify the terms of the Amendment?

Mr. Albert Booth (Barrow-in-Furness)

You rightly indicated to us, Miss Harvie Anderson, that the terms of the Amendment were narrow, but within those narrow terms an important issue is at stake. If the Amendment were carried, it would run against the whole purpose of the Bill, which is to control rent increases and to do so in specific terms. The Bill relates a rent increase to the expenditure which local authorities spend on administration and interest charges and to increases attributable to maintenance works carried out, but the Amendment proposes to extend the level of rent increases to cover maintenance which it is proposed to carry out.

For a number of local authorities this would be a serious factor. We have reached a stage in the public ownership of housing by local authorities when many municipal houses are due for major maintenance work, one might almost say a major overhaul. This results from the need not only to repair the houses to their original standard, but to bring them up to standards acceptable in modern housing conditions, the desirable standards which local authorities have set them selves.

In these circumstances, local authorities are examining their older council houses and reviewing the work which will have to be undertaken to bring them up to those desirable standards, and their costing clerks are working out the cost, which for many of the older houses will be considerable, perhaps as high as between £200 and £400 per house. If the Amendment were carried, local authorities could impose considerable increases of rent in advance of carrying out extensive work of that nature.

9.15 p.m.

I wonder whether the proposers of the Amendment are serious. Would they grant to anyone who had the power, normally controlled by legislation, the right to increase charges on a proposal stating that at some undefined date in the future some requirement would be carried out, which is not even defined by Statute? Proposed maintenance could mean that it is proposed to be done in three years hence. Even the specific obligation to maintain in practical terms is not defined. It runs counter to the intentions of the Bill. Although it is not as narrowly drawn as I would wish, the Bill allows certain increases in respect of maintenance, and I hope the Committee will reject the Amendment.

Mr. Costain

The speech by the hon. Member for Barrow-in-Furness (Mr. Booth) has really let the cat out of the bag. The question before the Committee is: is it the duty of any local authority to burden the general ratepayers with the extra costs of maintaining houses or should, as hon. Members opposite say, a local authority neglect the maintenance of a house? Those are the alternatives. The hon. Member has suggested that the Bill is designed to keep down basic rents. We on this side know the reason for the Bill, the Government hope to get some votes from the tenants of council houses. I hope that every ratepayer reads that speech and appreciates what is behind that legislation.

Mr. R. B. Cant (Stoke-on-Trent, Central)

May I make a constructive suggestion—that hon. Members opposite pay a visit to Stoke-on-Trent, in which my constituency lies? We have never skimped on repairs there. We have increased the amount allocated to repairs but we have not increased the rent of council houses for the past five years.

Mr. R. W. Brown (Shoreditch and Finsbury)

The hon. Member for Folkestone and Hythe (Mr. Costain) has not mentioned that since 1968 many Conservative councils have deliberately divested themselves of maintenance responsibility. They have put the whole onus for inside maintenance of the house upon the tenant. Yet they have still increased the rent. They have behaved in the most abominable fashion. The attitude of the G.L.C. over the past two years has been deplorable. Any London Member can tell the hon. Member how difficult it is to get the G.L.C. to carry out necessary work of ordinary maintenance, such as dampness. It refused to do this, even though it has increased the rents.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Reginald Freeson)

If this debate has gone rather wide of the terms of the Amendment it is largely due, I am afraid, to the rather imprecise way in which the Amendment is worded and the way in which it has been argued. To some extent I suspect that it is due to some misunderstanding on the part of the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) of the way in which local authorities operate their repairs policies and manage their housing repairs funds.

I am confirmed in that view by the rather inadequate contribution of the hon. Member for Folkestone and Hythe (Mr. Costain). He made no mention of the housing repairs fund. When we are talking about annual expenditure on maintenance of housing estates by local authorities we are talking about sums of money being drawn from a fund, and not about a current contribution being spent on an equivalent basis. There is money going into a fund, and over five- or seven-year cycles it is being withdrawn and spent on repairs. Anything done this year or next is based upon contributions built up over a period of years.

In that connection, the point made by my hon. Friend the Member for Shoreditch and Finsbury (Mr. R. W. Brown) is valid, because some authorities—I hope that they will not pursue the policy too far—have cut back their responsibilities for maintenance, although money has been provided over previous years to enable that maintenance to be carried out in this year or next year.

The Amendment refers to annual increases of rent being related to past or prospective increases in the cost of maintenance and in so doing it shows a basic misunderstanding of how local authorities finance the maintenance of their houses. It has been suggested that the Bill could be damaging to the prospect of major works on some of the older estates, and that comment led other hon. Members to go wider in criticism of the Bill. But the Bill explicitly separates the issue of modernisation and improvement of some of the very old, immediately post-First World War, council estates from the issue of rent control of any kind. There have been many instances over the years in which local authorities have applied, as private owners have applied, for grants under the relevant Acts, and that number will be largely increased under the 1969 Act, which became law a few months ago.

It is as well also to point out, in spite of what has been said about repairs funds being run down into the ground, that during the operation of the prices and incomes policy most local authorities have not found it necessary to propose increases larger than the 7s. 6d. which we are giving as a guide line.

Mr. Allason

If the hon. Member had listened to the speech of the Minister in the last debate he would have heard him refer specifically to the running down of housing repairs funds.

Mr. Freeson

The hon. Member must re-read that speech.

Mr. Allason

No. The Parliamentary Secretary must re-read it.

Mr. Freeson

I happen to know a little more about the operation of housing repairs funds than does the hon. Member.

As was suggested in the report of the National Board for Prices and Incomes, where substantial balances—I am not referring to current contribution levels—have been built up by local authorities in the administration of their housing departments, we have said that these should be looked at, but it has been the Government's policy while this control has been operated not to take account of working balances, which is the money with which we are mainly concerned in managing housing repairs funds. There is no instance in which we have said to a local authority that it must cut back its working balances—the figures on which the five- or seven-year cycle of works is carried out—so as to destroy those balances in order to maintain a lower rent level. Not one hon. Member opposite has produced evidence to show that we have made such a request upon the G.L.C. or upon anyone else.

I stress that the rent control policies being pursued must take account of all the factors. To single out one factor such as maintenance costs over the past and the future—in the terms of the Amendment, the indefinite past and the indefinite future—would be pointless, because any rent increases and any review of rent policy should relate to a whole series of factors which give rise to the cost of managing housing estates.

It is no more right to single out the factor suggested in the Amendment than to single out any other factor and to say that it should be excluded from the consideration of rent control. The reasoning behind the Amendment is unsound, though I willingly accept the motivation which led some hon. Members to be concerned that we should not so conduct our affairs in Government or local government as to destroy the sound management of housing repairs funds. I happen to believe that this is a very important part of local government management in the running of housing estates. I certainly would not be a party to their destruction. It is not the policy of the Government or the purpose of the Bill so to do.

Mr. Peter Walker (Worcester)

For a Parliamentary Secretary who boasts of his superior knowledge in these matters, that was a remarkably bad and incompetent speech. We are told that the trouble with the Amendment is that it is indefinite both as to the past and as to the future. If the hon. Gentleman looks at the Bill, he will see that subsection (4) of the Clause, dealing with improvements, is also indefinite as to the past and as to the future.

If the hon. Gentleman understood the Amendment or bothered to read it, he would realise that all that it tries to do is to add to the question of improvements the question of maintenance and repair. This is something that the Government should have done. Therefore, the hon. Gentleman's complaint that the Amendment is indefinite is a valid complaint against the wording of subsection (4).

We have been given the remarkable argument that it is the normal practice of local authorities to fund their repairs account year by year and that we should, therefore, take no notice of what might happen. Let us look, however, at the types of increase to which the repairs accounts will be subjected. Those who originally decided the basis of funding maintenance and repairs accounts could not have known that the Government would introduce the selective employment tax, with all its impact—and the recent changes in that tax have had a further impact. Similarly, nobody operating the funding of such accounts could have taken into consideration the suggested pay award for the building industry involving a 26 per cent. increase in the period to 1971. Here are simply two factors which have a considerable impact upon the cost of maintenance and repairs.

It is remarkable that none of the arguments from the back benches opposite showed any recognition of what the Amendment seeks to do. It merely tries to say that in the same way as one takes into account the cost of improvements—and they are excluded by subsection (4)—one should also take into account the additional cost of maintenance.

If the Government go into the Lobby against the Amendment, they will be saying that they are in favour of improvements not being taken into account. That was the point which was raised with some concern by the hon. Member for Barrow-in-Furness (Mr. Booth). If he looks at subsection (4), he will find that the point to which he referred is Government policy. Therefore, the hon. Member had better vote against the Bill. We say that maintenance and repairs should be taken into a calculation in exactly the same way as the Government suggest that improvements should be taken into account.

Mr. Booth

The point that I was making—I apologise if I did not make it clearly—was that in maintaining very old houses there is inevitably an element of improvement because they are not repaired to the original standard. Therefore, in those improvements, maintenance grants would not be involved.

Mr. Walker

I am grateful to the hon. Member for reinforcing my argument still further.

The Government are saying in subsection (4) of the Clause that An increase in the rent for a house is excepted from the provisions of this section if it is attributable to improvements". We say that to that should be added maintenance as well. In the terms of his argument, therefore, the hon. Member for Barrow-in-Furness is at one with us and we look forward to seeing him in the Lobby with us.

We are suggesting that the increased costs of both repairs and improvements should be taken into consideration. The Government have done more to increase the costs of both repairs and improvements than any Government in history. Therefore, in the light of the Government's record, this is a reasonable Amendment for them to accept.

[Mr. HARRY GOURLAY in the Chair]

9.30 p.m.

As to the points made by the hon. Member for Coatbridge and Airdrie (Mr. Dempsey) about the importance of rate support to rents, and how important it is to keep rents low rather than to put them up, I gathered that in Coatbridge there is a deficit on housing account on which the subsidy by the ratepayers is considerable. If that is his principle and policy, I accept that.

Mr. Dempsey

I said that I believed in a fair rent, but it is difficult to have a fair rent when there is a rent contribution to the housing account. I would remind the hon. Member that only this year my local authority increased rents by 5s. a week, the other authority by 4s. 6d. a week.

Mr. Walker

If the hon. Member means by fair rent the definition by his own Government of fair rent, we welcome him as a convert to our cause and are delighted to have him on our side. We accept "fair rent" as defined by the Labour Government in the Rent Act, and we say that those who cannot afford it should receive a rebate to meet their problem. If the hon. Member is a convert, then we have two converts, the hon. Member for Barrow-in-Furness and the hon. Member for Coatbridge and Airdrie, and we shall welcome them in our Division Lobby, and, perhaps, with the assistance of those two—

Mr. Atkinson

I should not like the hon. Member to finish his speech without defining his own point of view. Does he honestly believe that there should be a maximum figure for these increases, or that the figure should be left free and no limit mentioned? Which is it?

Mr. Walker

I make it perfectly clear that I accept the Labour Government's definition of a fair rent. I am all in favour of having fair rents applied in both the public and the private sector, and all in favour of seeing that those who cannot afford the rents receive an appropriate rebate.That is my policy.As

for these increases, for those families who cannot afford to meet the fair rent I am in favour of a proper rebate. That is the policy of this side of the Committee, and I hope that it will eventually —after years of persuasion—become the policy of that side of the Committee so that we shall have more than two converts. Meanwhile, we shall divide the Committee.

Question put, That the Amendment be made: —

The Committee divided: Ayes 131, Noes 192.

Division No. 16.]	AYES	[9.33 p.m.
Allason, James (Hemel Hempstead)	Hall-Davis, A. G. F.	Percival, Ian
Atkins, Humphrey (M't'n & M'd'n)	Hamilton, Michael (Salisbury)	Pike, Miss Mervyn
Baker, W. H. K. (Banff)	Harrison, Brian (Maldon)	Pink, R. Bonner
Balniel, Lord	Harrison, Col. Sir Harwood (Eye)	Pounder, Rafton
Bennett, Dr. Reginald (Cos. & Fhm)	Hastings, Stephen	Prior, J. M. L.
Biffen, John	Hawkins, Paul	Pym, Francis
Boardman, Tom (Leicester, S.W.)	Heald, Rt. Hn. Sir Lionel	Ramsden, Rt. Hn. James
Body, Richard	Heseltine, Michael	Rhys Williams, Sir Brandon
Boyd-Carpenter, Rt. Hn. John	Higgins, Terence L.	Rodgers, Sir John (Sevenoaks)
Boyle, Rt. Hn. Sir Edward	Hill, J. E. B.	Rossi, Hugh (Hornsey)
Brewis, John	Hogg, Rt. Hn. Quintin	Russell, Sir Ronald
Brown, Sir Edward (Bath)	Holland, Philip	St. John-Stevas, Norman
Bruce-Gardyne, J.	Hornby, Richard	Scott-Hopkins, James
Buchanan-Smith, Alick(Angus, N&M)	Hunt, John	Shaw, Michael (Sc'b'gh & Whitby)
Buck, Antony (Colchester)	Jenkin, Patrick (Woodford)	Silvester, Frederick
Bullus, Sir Eric	Jennings, J. C. (Burton)	Sinclair, Sir George
Campbell, B. (Oldham, w.)	King, Evelyn (Dorset, S.)	Smith, Dudley (W'wick& L'mington)
Campbell, Gordon (Moray & Nairn)	Kitson, Timothy	Smith, John (London & W'minster)
Carlisle, Mark	Lancaster, Col. C. G.	Stainton, Keith
Cary, Sir Robert	Lane, David	Stoddart-Scott, Col. Sir M.
Chataway, Christopher	Legge-Bourke, Sir Harry	Summers, Sir Spencer
Clegg, Walter	MacArthur, Ian	Taylor, Frank (Moss Side)
Cooke, Robert	Maclean, Sir Fitzroy	Temple, John M.
Corfield, F. V.	McMaster, Stanley	Thatcher, Mrs. Margaret
Costain, A. P	McNair-Wilson, Michael	Tilney, John
Craddock, Sir Beresford (Spelthorne)	Maddan, Martin	van Straubenzee, W. R.
Crowder, F. P.	Maginnis, John E.	Vaughan-Morgan, Rt. Hn. Sir John
Cunningham, Sir Knox	Mawby, Ray	Waddington, David
Currie, G. B. H.	Maxwell-Hyslop, R. J.	Walker, Peter (Woroester)
Dalkeith, Earl of	Maydon, Lt.-Cmdr. S. L. C.	Walker-Smith, Rt. Hn. Sir Derek
Dance, James	Mills, Stratton (Belfast, N.)	Ward, Christopher (Swindon)
Dean, Paul	Miscampbell, Norman	Ward, Dame Irene
Deedes, Rt. Hn. W. F. (Ashford)	Mitchell, David (Basingstoke)	Weatherill, Bernard
Dodds-Parker, Douglas	Monro, Hector	Wells, John (Maidstone)
Eden, Sir John	Montgomery, Fergus	Whitelaw, Rt. Hn. William
Elliot, Capt. Walter (Carshalton)	Morgan, Geraint (Denbigh)	Wiggin, A. W.
Eyre, Reginald	Mott-Radclyffe, Sir Charles	Williams, Donald (Dudley)
Farr, John	Munro-Lucas-Tooth, Sir Hugh	Wolrige-Gordon, Patrick
Fortescue, Tim	Nabarro, Sir Gerald	Worsley, Marcus
Foster, Sir John	Neave, Airey	Wylie, N. R.
Clover, Sir Douglas	Nicholls, Sir Harmar
Cower, Raymond	Nott, John	TELLERS FOR THE AYES:
Grant-Ferris, Sir Robert	Page, Graham (Crosby)	Mr. Jasper More ard
Griffiths, Eldon (Bury St. Edmunds)	Page, John (Harrow, W.)	Mr. Anthony Grart
Gurden, Harold	Peel, John
NOES
Albu, Austen	Bennett, James (G'gow, Bridgeton)	Broughton, Sir Alfred
Allaun, Frank (Salford, E.)	Binns, John	Brown, Hugh D. (G'gow, Provan)
Alldritt, Walter	Blackburn, F.	Brown,Bob(N'c'tle-upon-Tyne,W.)
Anderson, Donald	Blenkinsop, Arthur	Brown, R. W. (Shoreditch & F'bury)
Atkins, Ronald (Preston, N.)	Boardman, H. (Leigh)	Buchanan, Richard (G'gow, Sp'burn)
Atkinson, Norman (Tottenham)	Booth, Albert	Butler, Herbert (Hackney, C.)
Bacon, Rt. Hn. Alice	Boston, Terence	Butler, Mrs. Joyce (Wood Green)
Baiter, William	Bottomley, Rt. Hn. Arthur	Cant, R. B.
Beaney, Alan	Boyden, James	Carmichael, Neil
Bence, Cyril	Bradley, Tom	Carter-Jones, Lewis
Chapman, Donald	Hughes, Roy (Newport)	Newens, Stan
Coleman, Donald	Hunter, Adam	Norwood, Christopher
Concannon, J. D.	Jay, Rt. Hn. Douglas	Oakes, Gordon
Conlan, Bernard	Jenkins, Hugh (Putney)	O'Halloran, Michael
Da yell, Tarn	Johnson, James (K'ston-on-Hull, W.)	Orbach, Maurice
Darling, Rt. Hn. George	Johnston, Russell (Inverness)	Oswald, Thomas
Davidson, Arthur (Accrington)	Jones, Dan (Burnley)	Owen, Will (Morpeth)
Davies, Ednyfed Hudson (Conway)	Jones,Rt.Hn.Sir Elwyn(W.Ham,S.)	Page, Derek (King's Lynn)
Dailies, G. Elfed (Rhondda, E.)	Jones, J. Idwal (Wrexham)	Pannell, Rt. Hn. Charles
Davies, S. O. (Merthyr)	Jones, T. Alec (Rhondda, West)	Park, Trevor
Dempsey, James	Judd, Frank	Pavitt, Laurence
Dewar, Donald	Kelley, Richard	Pearson, Arthur (Pontypridd)
Dickens, James	Kerr, Russell (Feltham)	Pentland, Norman
Dobson, Flay	Lawler, Wallace	Perry, Ernest G. (Battersea, S.)
Doig, Peter	Lawson George	Perry, George H. (Nottingham, s.)
Dunnett, Jack		Prentice, Rt. Hn. Reg.
Dunwoody, Mrs, Gwyneth (Exeter)	Leadbitter, Ted	Price, Thomas (Westhoughton)
Eadie, Alex	Lee, Rt. Hn. Jennie (Cannock)	Probert, Arthur
Edwards, Robert (Bilston)	Lee, John (Reading)	Rankin, John
Edwards, William (Merioneth)	Lestor, Miss Joan	Richard, Ivor
English, Michael	Lewis, Arthur (W. Ham, N.)	Roberts, Albert (Normanton)
Ennals, David	Lewis, Ron (Carlisle)	Roberts, Rt. Hn. Goronwy
Ensor, David	Lubbock, Eric	Roberts, Gwilym (Bedfordshire, S.)
Evans, Fred (Caerphilly)	Lyon, Alexander W. (York)	Robertson, John (Paisley)
Evans, loan L. (Birm'h'm, Yardley)	Lyons, Edward (Bradford, E.)	Ross, Rt. Hn. William
Ewing, Mrs. Winifred	Mabon, Dr. J. Dickson	Ryan, John
Faulds, Andrew	McBride, Neil	Shaw, Arnold (llford, S.)
Fernyhough, E.	McCann, John	Silverman, Julius
Finch, Harold	MacColl, James	Small, William
Fitch, Alan (Wigan)	MacDermot, Niall	Spriggs, Leslie
Fletcher, Raymond (Ilkeston)	McElhone, Frank	Steele, Thomas (Dunbartonshire, W.)
Fletcher, Ted (Darlington)	McGuire, Michael	Swain, Thomas
Foot, Michael (Ebbw Vale)	Mackenzie,Alasdair(Ross&Crom'ty)	Taverne, Dick
Forrester, John	Mackenzie, Gregor (Rutherglen)	Thomas, Rt. Hn. George
Fowler, Gerry	Mackie, John	Tinn, James
Freeson, Reginald	Maclennan, Robert	Varley, Eric G.
Galpern, Sir Myer	McMillan, Tom (Glasgow, C.)	Wainwright, Edwin (Dearne Valley)
Gardner, Tony	McNamara, J. Kevin	Wainwright, Richard (Colne Valley)
Golding, John	MacPherson, Malcolm	Walker, Harold (Doncaster)
Gregory, Arnold	Mahon, Simon (Bootle)	Watkins, David (Consett)
Grey, Charles (Durham)	Mallalieu, E. L. (Brigg)	Watkins, Tudor (Brecon & Radnor)
Griffiths, Eddie (Brightside)	Malialieu,J.P.W.(Huddersfield,E.)	Weitzman, David
Hamilton, James (Bothwell)	Mapp, Charles	Wellbeloved, James
Hamilton, William (Fife, W.)	Marks, Kenneth	Wells, William (Walsall, N.)
Hamling, William	Mason, Rt. Hn. Roy	Wilkins, W. A.
Hannan, William	Mellish, Rt. Hn. Robert	Wiliey, Rt. Hn. Frederick
Harrison, Walter (Wakefield)	Miliar], Bruce	Williams, Clifford (Abertillery)
Haseldine, Norman	Miller, Dr. M. S.	Willis, Rt. Hn. George
Hazell, Bert	Milne, Edward (Blyth)	Winnick, David
Henig, Stanley	Mitchell, R. C. (S'th'pton, Test)	Woodburn, Rt. Hn. A.
Hilton, W. S.	Molloy, William	Woof, Robert
Homer, John	Morris, Alfred (Wythenshawe)
Howell, Denis (Small Heath)	Morris, Charles R. (Openshaw)	TELLERS FOR THE NOES:
Howie, W.	Morris, John (Aberavon)	Mr. Ernest Armstrong and
Hoy, Rt. Hn. James	Moyle, Roland	Mr. Joseph Harper.
Huckfield, Leslie	Neal, Harold

Clause 1 ordered to stand part of the Bill.