HC Deb 21 April 1971 vol 815 cc1165-7
21. Mr. William Hamilton

asked the Secretary of State for the Environment if he is yet in a position to make any firm estimate of the saving he intends to make in the next five years on expenditure on housing subsides.

Mr. Peter Walker

Under the reform of housing finance the rent of dwellings will be the fair rent and will not depend directly on the subsidy paid to the authority. My right hon. Friend is now discussing with the local authorities how much subsidy should be paid to tenants who cannot afford the fair rent and to authorities with special housing problems. The level of subsidies may well be as high in total as at present or even higher. The essential point is that they will go to those tenants and authorities who need the help.

Mr. Hamilton

Is it not the case that a footnote to Appendix A of the recent White Paper on Public Expenditure mentioned the specific figure of £150 million? If that is the saving in housing subsidies, there must be a swingeing increase in rents. Does not the right hon. Gentleman agree that if that follows, enormous wage demands will follow as surely as night follows day and that the responsibility will be fairly and squarely on the shoulders of the Government?

Mr. Walker

No, Sir. The figures are concerned with future projections and not with the present level of housing subsidies. As I said in my reply, the level of housing subsidies will remain as high as, if not higher than, the present level. I remind the hon. Gentleman that at present £6 out of every £7 of subsidy is an indiscriminate subsidy and that only £1 goes to those who really need help.

Mr. Allason

Would my right hon. Friend make it clear that any saving will be a saving in the very large increase in public expenditure which the Labour Government intended to impose on the taxpayers rather than a saving in existing levels of subsidy?

Mr. Walker

My hon. Friend is right. Under the existing system, there would not have been a great increase in help to the really bad areas of housing which our proposals will help.

Mr. Crosland

Is the right hon. Gentleman aware that there are literally millions of council tenants who know that, as a result of the fair rents policy and the cut in the subsidy bill, their rents will go up probably by astronomical amounts, but who have no idea by how much they will rise? Will he tell us when he will put these millions of tenants out of their uncertainty by making an announcement, for example before 13th May?

Mr. Walker

I am surprised by the attitude of the right hon. Gentleman, who was a Cabinet Minister in the Government which introduced the fair rents policy. He is saying that he was a member of a Cabinet which not only introduced the system but extended it last year to 400,000 more tenants, but now he is saying that those rents are extortionate.

Mr. Crosland

In view of that reply, perhaps the right hon. Gentleman will now read the relevant report of the Prices and Incomes Board, which shows in considerable detail that while the principle of fair rents has some logic when applied to the private sector, it has no logic of any kind when applied to the council house sector?

Mr. Walker

But it is still the basis of the fair rent policy which the right hon. Gentleman helped to introduce and which he extended. Unlike the right hon. Gentleman, we are introducing rebates for everybody.

Sir G. Nabarro

Would my right hon. Friend observe the buoyancy of the house mortgage market, which is the real manifest of the success of his policy and of the Tory policy of increasing owner-occupation of houses and lessening dependence on the building of council houses?

Mr. Walker

I am delighted that the figures indicate that we are now getting out of the decline in house building which we inherited from our predecessors and that an increase is beginning.

Mr. Blenkinsop

When will the right hon. Gentleman let the House know the result of his discussions with local authorities and so put millions of people out of their misery and anxiety?

Mr. Walker

I am glad that the hon. Gentleman agrees that our proposals will stop the misery created by the false propaganda of the Labour Party.

Mr. Frank Allaun

Is not the truth of the matter that the Government will raise rents so high that they will force tenants to try to buy their own houses? While it is true that the right hon. Gentleman may not reduce the present subsidy, will he not reduce the subsidy from what it would have been in 1975 by £150 million because more houses will be built by then and, naturally, the subsidy at that date would have been more than it now is?

Mr. Walker

It ill becomes an hon. Member from Salford to oppose a system which will provide far more financial help for places like Salford.