HC Deb 14 July 1971 vol 821 cc500-10
The Secretary of State for Scotland (Mr. Gordon Campbell)

Mr. Speaker, with permission I wish to make a statement on the reform of housing finance in Scotland.

Since our plans were outlined in the House on 3rd November I have been discussing them in detail with the Scottish local authority associations. The White Paper which I am today presenting to the House sets out the Government's proposals, framed in the light of these discussions. Copies of the White Paper will be available in the Vote Office from 4 p.m.

We intend to introduce a national scheme providing rent rebates for all tenants of unfurnished houses who need help to pay a reasonable rent, whether their landlords are public authorities or private individuals. Under this scheme, for example, a married man with three children earning £20 a week who pays a rent of £1.42 a week, which is the average council house rent in Scotland, will have it reduced to 75p a week.

Most of the cost of these rebates will be met by the Government. In addition, we are proposing to replace the existing subsidies for house building by three new subsidies designed to give special help to those authorities which still need to build substantial numbers of houses and to those which still have slums to clear. The new slum clearance subsidy will meet 75 per cent. of the cost of slum clearance operations, and it will be payable on expenditure incurred in the present financial year.

We intend to introduce a more rational and uniform system for fixing rents in the public sector. The White Paper proposes that each local authority should be required to increase rents until its income from them, taken together with the new subsidies, meets its total housing expenditure. These rent increases, however, will be limited to an average of 50p a week for any one year, and no individual tenant will have his rent increased for any year by more than 75p a week.

In the private sector we propose to speed up the conversion of the remaining controlled tenancies to rent regulation. Here again rent rebates will prevent hardship, and the fair rent will be reached by three equal annual increases.

The changes we now propose will redirect Government help to the tenants and the areas which most need it, and they will ease the heavy burden of housing expenditure which Scottish ratepayers now bear. They will provide the right framework in which to pursue successfully the policies needed to meet the housing problems of Scotland, now and in the future.

We intend to introduce a Bill early in the next Session to give effect to the proposals in the White Paper.

Mr. Ross

I thank the right hon. Gentleman for his statement. He will appreciate that it is, necessarily, a very sketchy outline of what is a complicated business.

Am I right in thinking that basically what is going to happen is that there is to be a considerable annual increase in all rents in Scotland of tenanted properties, be they privately owned or local authority owned, and that thereafter, imposed upon that increase, there will be a rent rebate scheme? To the extent that that will alleviate burdens, so much the better, but is it still the Government's aim to save for the Treasury between £10 million and £20 million by 1975, as was stated by the Chancellor of the Exchequer on 27th October? If so, that really means that a reduced amount of subsidy will be spread over a greater number of people and, without arguing about fairness or anything else, it will mean that over a relatively short period a heavy new burden will be placed upon the shoulders of tenants in Scotland.

Who will fix the rent? The right hon. Gentleman says that local authorities will be required to do so. Does that mean that the Secretary of State will fix it? The right hon. Gentleman said that the rent rebate scheme would be imposed. Will he fix that? Has he discussed with, and got the agreement of, local authorities to that rent rebate scheme? There are many schemes in Scotland, some of them very unsatisfactory, and I should not accept as satisfactory the one mentioned in yesterday's White Paper.

Will a minimum rent scheme be incorporated in these proposals? There is no mention here that there will be a minimum of, say, 40 per cent., or £1, whichever is the more suitable. Can the right hon. Gentleman say when the new system will start, and will he confirm that there will be separate Scottish legislation for it? Further, will he say how many new local authority staff will be required to administer the scheme, and who will administer it in the private sector?

The whole thing is riddled with questions, and I hope that we shall have an early debate on the subject.

Mr. Campbell

I should like to reply to as many questions as I can. I agree that time is required to study the White Paper and the details of it.

The increases proposed compare with the increases imposed over five and a half years by the right hon. Gentleman's Government, when the average rent in Scotland was doubled. The limit which his Government placed of 7s. 6d. on the average rise per year is not very different from the limit of 10s., which now becomes 50p, which we are proposing.

The average rent increase will be 50p. The maximum for any individual will be 75p. When the right hon. Gentleman was Secretary of State the equivalent of the proposed 50p was 7s. 6d., so there is not much difference there. There has been a change of currency. We are now using decimal currency, but perhaps I may give the figures again in the old currency so that right hon. and hon. Gentlemen opposite can follow them. Under the right hon. Gentleman the average increase was laid down as 7s. 6d. in the old currency. Ours will be 10s. in the old currency.

On the question of subsidies, our aim is to redirect the amount of subsidy that is being paid to local authorities. It is intended that the amount will remain the same and not be reduced.

The requirement on local authorities eventually to balance their housing accounts will be in the legislation which we propose to introduce.

We intend to standardise rate rebate schemes in a national scheme, and in this we are guided by the recommendations, amongst others, of the Brownlie Committee which looked into this in Scotland. Local authority rebate schemes in Scotland now cover no less than 91 per cent. of all council house tenants, but they differ, and it is time that there was standardisation.

The right hon. Gentleman asked about minimum rents. Some people, due to their circumstances, will not be required to pay any rent at all. Others may pay a rent and then have it refunded completely from the social security offices.

The right hon. Gentleman asked how the private sector would be looked after. His Government introduced a Bill to move from controlled tenancies to regulated tenancies, and the same system will be continued. We intend to speed it up. There should be no need for extra staff for this.

I think that that answers all the right hon. Gentleman's questions.

Mr. David Steel

Is the right hon. Gentleman aware that we welcome his attempt to move towards a more rational system of housing finance and subsidy in Scotland, but that we shall have to look carefully at the proposed rent increases in view of the unemployment situation and the low wage earning potential in Scotland at the moment? Is he aware that we shall object to any separate means test system apart from the taxation system, which is the one he ought to be using?

Mr. Campbell

The new rent rebate scheme on a national basis is to be extended into the private sector for the first time, as well as the public sector, and that, I hope, will deal with cases where incomes have become reduced owing to unemployment. I hope, too, that by the time this scheme gets going the present unemployment situation will have changed for the better.

There are now no fewer than 43 different means tests being operated for benefits. As I said a few moments ago, rent rebate schemes in Scotland already cover very nearly all council house tenants, and therefore this should not cause very much change from the present situation.

Mr. Lambie

Will the right hon. Gentleman confirm that he will apply a true rents formula to the rents of council houses and a fair rents formula to the rents of privately-tenanted houses? If so, does not that mean that private tenants will be hit harder than council tenants and that in Scotland the only people who will be subsidised are the owner-occupiers? The Government might get away with that policy in England, but they certainly will not get away with it in Scotland. The Scottish people will revolt against this policy.

Mr. Campbell

The fair rents system was brought in by the last Government—[Interruption.] Yes, it was.

Mr. Ross

Not for council houses.

Mr. Campbell

The fair rent system is operating now in the private sector in Scotland. I should have thought that the hon. Member, who I thought knew something about housing policy, judging from the number of statements he makes and letters he writes, would have known that——

Mr. Lambie

Answer the question.

Mr. Campbell

The fair rents system does exist and it will be speeded up. It was brought in by the last Government and the procedures which were followed will be continued.

In the public sector, we have devised a scheme for Scotland which meets the situation in Scotland, where there are so many more public sector tenants, and where it is difficult to make a comparison between the large majority of those houses which were built in the last 30 years and the small privately-tenanted sector, which is mostly in tenements built last century. Therefore, we have devised what are known as true rents on a pooled historic cost for the public sector.

Mr. McElhone

Is the right hon. Gentleman aware that these increases, despite the rebates, will mean a great deal of hardship for the people of Scotland? Is he aware that, in Glasgow, 2,000 people a year on average have to be evicted or abscond because of the high municipal rents imposed by three years of Tory local authority? Would he consider a suggestion that rents should be frozen during this period of high unemployment, especially for local authority houses?

Mr. Campbell

Everything that the hon. Member says will be met by the comprehensive rebate scheme, which will cover tenants in the private sector, as well as those in the public. There should be no need, therefore, for a freeze. Even the last Government did not freeze rents when they were trying to freeze practically everything else.

Mr. Strang

Is the right hon. Gentleman aware that he is proposing a massive extension of the means-test State, and that these proposals, combined with the family income supplement and all the other means-tested benefits, are creating a situation in Scotland in which hundreds of thousands of workers will be deterred from working overtime or from seeking better-paid jobs because that would mean that they were worse off?

Mr. Campbell

No, I entirely disagree with the hon. Member. I have just mentioned that there is a large number of means tests in existence. The rate rebate scheme and the means test for that were brought in by the last Government. Rent rebate schema were also advocated by the last Government in circulars to local authorities ; they are well understood and have been used in many cases. What we will do is make sure that there is a standard one to cover all the points which need to be covered in such schemes.

Sir J. Gilmour

I congratulate my right hon. Friend on bringing forward this Measure to deal with housing in Scotland, which has bedevilled industrial development in Scotland for many years. Does he estimate that these changes will encourage local authorities to sell houses to tenants, so that we get a larger increase of owner-occupiers in Scotland?

Mr. Campbell

Yes, I think that it will lead in this direction. One of the first things that I did on arriving in office was to give local authorities the permission which my predecessor had denied them to sell council houses in appropriate cases.

Mr. Dempsey

The Secretary of State says that he consulted local authority associations. Can he give us some idea how they reacted to his proposals enormously to increase rents over a period of years? Did they unanimously agree? Did they partially agree, or did some of them oppose the suggestion?

Mr. Campbell

They were not asked to comment themselves upon these proposals, for which the Government take full responsibility. But I should like to pay tribute to the co-operation and help which the local authorities gave and the constructive contributions which we received in these discussions.

Mr. Hamish Gray

I congratulate my right hon. Friend on his announcement. May I remind him that, despite what hon. Members opposite may say, thousands of families in the lower income groups in Scotland will thank him for this?

Mr. Campbell

I thank my hon. Friend for having so quickly seen the point of these reforms.

Mr. Sillars

May I ask the right hon. Gentleman three questions? First, would he agree that this measure means that the vast mass of council tenants will get substantial increases in rent from now over the next five years? Second, if a miner from my constituency faces a rent increase of 75p, is he not entitled to demand an increase in his wages to offset it? Third, is the right hon. Gentleman aware that we have experience of national rent rebate schemes in Scotland in the Scottish Special Housing Association, that most tenants regard that national rebate scheme as camouflage for eventually raising the general level of rents for everyone, and that that is unacceptable to us—or at least to a number of us on this side?

Mr. Campbell

I see that there is a split in yet another direction in the Labour Party. No, I do not foresee that this will mean huge increases in rents over the next five years for most of the population. In many cases, the rents of individual families are likely to be reduced in both public and private sectors as a result of rent rebate schemes. The S.S.H.A. has operated a rent rebate scheme, but our intention is that all these separate schemes should be brought together in one standardised form.

The right hon. Member for Kilmarnock (Mr. Ross) asked me earlier about the amount of subsidy involved. I have explained to him many times in the House that the amount of subsidy from the Government, it is intended, will remain the same. But had the previous system continued, much more money would have been spent indiscriminately on subsidies—[HON. MEMBERS : "What about the owner-occupiers?"]—in future years than under this proposal, and that is where the saving takes place. Further, at present, the Scottish ratepayer is paying 37 per cent. of the cost of council houses in Scotland. The equivalent figure in England is only 7 per cent.

Dr. Dickson Mabon

In what substantial way does this White Paper differ from the one presented yesterday by the Secretary of State for the Environment? Is this simply a carbon copy of the English White Paper? Second, if the right hon. Gentleman has done any calculation of rent rebates, how many Scottish households, on the figures available to him—he gave us one example—will get a rent rebate? How does he see this operating in the winter ahead and in the years ahead which this very rapid conversion will embrace? Can he consult his right hon. Friends, so that, in the Scottish Grand Committee, if not on the Floor of the House, we can debate the White Paper before we rise for the Summer Recess?

Mr. Campbell

First of all, there are differences between the Scottish White Paper and the English one. The hon. Member will see this when he has had a chance to study both. The main one, of course, is the way in which the rent system in the public sector is to be carried out. In Scotland, certainly in the early years, it is proposed that there will be a calculation of the pooled historic cost, as I explained, whereas in England the fair rent system is being introduced in the public sector.

The hon. Gentleman asked me to say how many families would be likely to fall within the rent rebate scheme. I should need to be omniscient to be able to do that. However, the hon. Gentleman will find in the appendix to the White Paper a number of tables setting out many variations of income of, and numbers of children in, a family and the results in terms of rent rebate. I suggest that he examines those statistics.

The hon. Gentleman will appreciate that the question of debating this subject is a matter for my right hon. Friend the Leader of the House. However, we had a very full two-day debate in the Scottish Grand Committee recently——

Mr. Ross

Not on this subject.

Mr. Campbell

I suggested through the usual channels that we should postpone that debate until we had been able to make this statement, but we were told that the Opposition wanted to hold the debate at that time.

Mr. Ross indicated dissent.

Mr. Campbell

I am sorry if I have misunderstood the position. The right hon. Gentleman will accept that we should naturally have wished to have had that debate after this statement. Nevertheless, I was able to outline our policy clearly during that debate—[Interruption.]—so that hon. Gentlemen opposite knew what was coming.

Dr. Dickson Mabon

I trust that the right hon. Gentleman will think about this again. There seems to have been a misunderstanding. It was thought to be for the convenience of Ministers, but not for the convenience of my hon. Friends and back benchers, for the debate to take place at a later date. Had we known of the immediacy of this statement, we would have reconsidered the position.

As the English Minister is favourably considering the possibility of debating this subject before we rise for the Summer Recess, should we not in our turn have an opportunity to debate this White Paper fully in Committee upstairs? This is a House of Commons and not a party point, and I urge the right hon. Gentleman to ensure that a debate occurs before we rise.

Mr. Campbell

I am always keen to debate these matters.

Dr. Dickson Mabon

May we have a debate?

Mr. Campbell

It is a matter for the Leader of the House. I said that it would have been better for the housing debate to have been held later, because a Government statement was imminent.

Hon. Members


Mr. Ross

What effect will these proposals have on the house-building programme? [Interruption.] I do not expect hon. Gentlemen opposite to care very much about the trials and tribulations of the cities of Scotland, which will be hit by these changes. The right hon. Gentleman said that differential subsidies would be paid to authorities in need of more houses generally—that is, beyond the figure of 75 per cent. for slum clearance, which is the only figure he has given. We in Scotland have always resisted this differentiation because much of our problem has been related to overcrowding. Will the right hon. Gentleman now say exactly what effect this will have—he must know because he says that he has had consultations with the local authorities—on the house-building programme in Scotland, because, to my mind, it will fall disastrously.

Mr. Campbell

My view is entirely in the opposite direction. The effect of these clear proposals should be to give an impetus to building, both in the private and public sectors.

I emphasise that there are three new subsidies—the housing expenditure subsidy, the special high cost subsidy and, most important, the slum clearance subsidy, which is related to the point made by the right hon. Gentleman about city centres. It will be retrospective and will apply this year. There will, therefore, be an incentive to local authorities to get cracking.

Several Hon. Members rose——

Mr. Speaker

Order. We must get on. Mr. Walker.

Mr. Lawson

On a point of order. More than 70 per cent. of the houses in my constituency are local authority properties. We have just had a statement which suggests that the Government intend to welsh on agreements under which most of those houses were built. Am I not to have an opportunity to question the Minister on this matter, Mr. Speaker?

Mr. Speaker

The Chair is always in difficulty in matters of this kind. We have three statements today. I allowed nearly 20 minutes for the first. This statement and the discussion on it began at 3.49 p.m. and it is now 4.14 p.m. I must try to safeguard the time of the House.

Mr. Ross

Further to the point of order raised by my hon. Friend. Is not the situation worsened by the fact that the Secretary of State, unlike the English Minister, has refused to ally with us in asking for a debate on this important subject?

Mr. Speaker

That is not a matter for the Chair.

Mr. Campbell

I thought I said that I was always keen to have debates on this subject. I added that it was not within my power to arrange one and that the question of having a debate was for the Leader of the House.