RENTS AND RATES

HC Deb 06 May 1971 vol 816 cc1654-782

Mr. Speaker

I would point out that I have selected the Amendment which stands in the names of the Prime Minister and his right hon. Friends.

3.55 p.m.

Mr. Anthony Crosland (Grimsby)

I beg to move, That this House deplores the policies of Her Majesty's Government which are designed to increase the cost of housing and the burdens of the domestic ratepayer. The operative word in the Motion is "designed". We are here talking about deliberate policies which have the effect of increasing the cost of housing and the burden on the domestic ratepayer. This point needs to be emphasised because the Government constantly try to give the impression that none of the increases in prices or in the cost of living is designed or deliberate but that these matters are all outside the Government's control. They are all the fault of the trade unions, uncontrollable wage inflation and malignant external forces which have nothing to do with the Government or with their policies.

The Secretary of State for Trade and Industry last Thursday in the debate on unemployment moved an Amendment which spoke of … cost inflation caused by excessive pay settlements. It was as though the rise in costs was wholly external to Government policies and could all be blamed on greedy and irresponsible workers. The Government cannot evade their responsibilities in this way. Their argument is nonsense, and it is increasingly seen to be nonsense as the results in the Scottish local elections have shown so devastatingly.

First, the Government's argument is totally inconsistent with all they said last June. They were then confident that they could deal with cost inflation. They fought the General Election almost entirely on the issue of prices and the cost of living. The Prime Minister then made his now notorious remarks about breaking into the wage price spiral and how he would at a stroke reduce the rise in prices. Then the Conservative Manifesto said: We will give overriding priority to bringing the present inflation under control. In other words, they then accepted full responsibility for the behaviour of prices and the cost of living. It was not something which was outside Government control. Rising prices were considered to be something that could be got rid of at a stroke. Cost inflation was to be brought under control by new marvellous Tory policies the like of which which the country had never before seen.

The General Election raises the interesting point of whether it was more or less dishonest than previous Tory election campaigns. The party opposite have always set a very high standard of unscrupulousness in General Election campaigns—right back from 1924 when there was the Zinoviev Letter, 1931 with the Post Office Savings scare, 1935 with Baldwin's lies about rearmament and 1945 with the Churchill Gestapo scare. Although it is a matter no doubt for a moralist rather than a politician to decide, I would think that last June's election campaign exceeded all others in its total hypocrisy and dishonesty.

According to what the Tories were saying last June, the present 8½ per cent. inflation from which we are now suffering was not a matter outside the Government's control, and basically they were right. It is due to the Government's policy, or rather the lack of any Government policy whatever, for prices and incomes. We have had the abolition of the National Board for Prices and Incomes, the abolition of the Consumer Council and a total absence of any powers over prices in the private sector.

It is not only a question of the total lack of any policy to contain prices, the total lack of any policy to reduce inflation at a stroke. It is also a deliberate policy of raising prices and charges in order to reduce the burden on the better off taxpayer. This is true of rent and rates, which I shall deal with in detail. It is also true of school meals, school milk, cheap welfare milk, prescription charges, dental charges, opticians' charges, commuter fares, and food prices. None of these is due simply to wage inflation, to the trade unions or to malign external forces. All are due to deliberate Government policy. It is a policy designed not only to raise the cost of living but to redistribute income, since all these charges fall more heavily on the less well off while the corresponding tax reductions primarily benefit the better off.

I turn to the two points in our Motion. The first is the cost of housing, and I start with the public sector of housing. We know that the Government intend this sector to decline. We know that from the notorious speech of the Secretary of State in June, 1969. That was the speech which contained the famous phrase … for all sorts of seemingly good reasons. The Secretary of State has moved into the stratosphere recently and is now confining himself to major matters affecting the environment. He has been making some admirable decisions and speeches about the environment, meanwhile leaving the dirty work on rents and rates to his two subordinate Ministers.

In that speech in June, 1969, when he was still involved in these matters of detail, the Secretary of State said: … the stock of 30 per cent. of housing now in local authority hands is far too high with the level of wages. So we know what to expect so far as the public house building programme is concerned.

I am concerned today with rents. Millions of our citizens live in council houses, and their rents are a matter of urgent and widespread public concern. The Labour Government introduced two Measures to keep rents at a reasonable level during a period of exceptionally high interest rates—

An Hon. Member

S.E.T.

Mr. Crosland

First, we increased greatly the housing subsidies paid to local authorities. Secondly, we limited rent increases, first, through the 1968 Prices and Incomes Act, and then through the 1969 Rent (Control of Increases) Act. Both Acts broadly restricted increases in rents to an average of 7s. 6d. in any one year. Under the former Act, 229 local authorities, mostly Tory-controlled, had their rent increases rejected, and huge increases they frequently were. In 1968, the Tory-controlled G.L.G. sought to increase rents by up to 70 per cent. Under the 1969 Act, the limitation has continued and, as the Minister told my hon. Friend the Member for Romford (Mr. Leonard) in answer to a Question yesterday, even since the June election seven proposals for rent increases have been rejected. Apparently even a Tory Government think for the moment that some control is needed.

Captain Walter Elliot (Carshalton)

Before the right hon. Gentleman leaves the subject of the Labour Government's restrictions on rent increases, he referred to the G.L.C. As a result of the restrictions placed on the G.L.C., can he say what extra burden went on the ratepayer to make up the housing account?

Mr. Crosland

I will look up the precise answer and ask my hon. Friend to give it when he replies to the debate.

There is no doubt that the previous Government, as indeed the present Government have done seven times since 18th June, prevented what they believed to be excessive rent increases. Yet it appears from Answers given by the Under-Secretary—although the Under-Secretary of State for the Environment does not by any means give unconfusing answers—and by the Minister that the 1969 Act is not to be extended when it expires at the end of June. In fact, quite the reverse is true. In the autumn we are to have legislation which, so far from limiting rent increases, will require local authorities to bring in a system of fair rents. In other words, the legislation will compel local authorities to increase their rents, often by very much more than 7s. 6d. per week.

In this case, we have not merely the Government's habitual abdication of responsibility for controlling prices. We have another deliberate decision to force up prices. It is a decision which has nothing to do with the trade unions, with wage inflation and with malign external forces. It is due to a deliberate action on the part of the Government.

While I am on the cost of housing, I heard an hon. Member opposite refer just now to S.E.T. It will be interesting if the Minister can tell us what the effect of the value-added tax is likely to be on the cost of housing. I should be surprised if it was not more severe than the effect of S.E.T.

On fair rents, the first matter that we have to try to decide is what will be the amount of the rise in rents as a result of the new policy. I wish to make two quotations, the first of which is from Housing Review of January/February, 1971, which says: It has been estimated that to raise all council rents to fair-rents might mean a global increase of £1,000 million, bringing them to about £4 a week more than at present—twice as much again as the average unrebated rent of 40s. 9d. That suggests a trebling of average unrebated rents.

We have also a reply from the Under-Secretary of State to a Parliamentary Question on 17th February, in which he said: At 31st March, 1969, the average unrebated weekly rent of council dwellings was £2.75 in Greater London and £2.04 in England and Wales as a whole. The average fair rent determined by rent assessment committees in 1970 was £5.90 a week in Greater London"— as compared with £2.75— and £4.95 in England and Wales."—[OFFICIAL REPORT, 17th February, 1971; Vol. 811, c. 1818.]— as compared with £2.04. That would suggest increases of 2½ times.

There are, of course, differences between the two groups of dwellings which are being compared. They cannot be compared accurately. But it is clear that the average increase in rents will be at least 100 per cent., that in some areas it will be very much more than 100 per cent., and that, if new houses and flats are to be fair-rented immediately, it will be greatly in excess of that. In London, already we are beginning to see unrebated rents of £8 and £9, and, on one estate in Camden, up to £12 a week.

If these calculations are wrong, no doubt the Minister will contradict them. He has all the figures available in his Department, and he has plenty of time, even between now and next Thursday, to tell us what he thinks the average increase in rents will be as a result of fair rents. However, I doubt whether he will tell us before next Thursday. If he is good enough to tell us, I am certain that his figures will not be lower than the estimates that I have given.

Mr. James Allason (Hemel Hempstead)

The right hon. Gentleman has said that he was not comparing like with like. But nevertheless he went on to say that he had made calculations. Is not it ridiculous to introduce the first figures when they do not match at all?

Mr. Crosland

The figures which I quoted first were taken from Housing Review, which obviously is a highly expert and reputable journal. The Minister knows the figures. If mine are wrong, let him give the correct ones. That will provide a simple answer to the hon. Member for Hemel Hempstead (Mr. Allason). There is considerable interest in the answer.

I am not arguing that rents should never rise, and I have never argued that the present pattern of housing finance is ideal. It is not, and it needs to be reviewed. However, so drastic a rise in rents as this will be will have a disastrous effect on the housing situation.

In passing, the Government claim that this is the most revolutionary change in housing policy for half a century. It may be that it is. In that case, it would surely have been more democratic and more consistent with the Prime Minister's views about open government if they had issued a Green Paper on the subject. We know that private discussions are going on with the local authority associations. If the Government had issued a Green Paper the whole country could have participated in this crucially important debate.

As to fair rents, I ask, first, whether the proposal for so-called fair rents has any logic. I believe the answer to be no. The Secretary of State and the Minister who is to follow me are very fond of saying that because the Labour Government introduced fair rents into the private sector therefore it is logical to introduce them into the public sector. They take surprisingly little pride of authorship here; they seem to want to appear positively in the role of plagiarists. But, as the Under-Secretary reminded us on 17th February, and as we have just agreed in another context, there are marked differences between the public and private sectors.

Fair rents in the private sector are designed to give the landlord a reasonable profit for good maintenance and improvement and to eliminate scarcity values in places like London. But no such reasons apply in the public sector. Indeed, generally, as the National Board for Prices and Incomes pointed out in a report which some Ministers, at any rate, have evidently not read: it would seem anomalous to relate the rents of the growing public sector to those of the declining private sector; and this anomaly would increase with the years ". It would certainly be the tail wagging the dog with a vengeance. So I say that there is no logic in the extension of this principle to council housing.

What will be the economic effects of introducing fair rents? I believe that they will be disastrous. Such a huge increase in the cost of housing, to begin with, will give another very sharp twist to the spiral of prices and wages; and, in the long term, the disincentive effect of the rebate scheme could be even more serious. I believe that Ministers have not thought this through. With rents as high as so-called "fair rents" will be, any rebate scheme worthy of the name will have to cover a clear majority of council house tenants. It will, for the first time, have to cover those on average earnings, and in London probably above. Indeed, if new houses and flats are to be "fair rented" immediately, and if there is to be no rent pooling, probably all their tenants would have to be rebated, unless the houses and flats are to be let either to middle-class people or to those on supplementary benefits. Brent and Camden, among the London boroughs, give us some inkling of what we are likely to see.

It is not only rent rebates; it is also rebates on school meals, prescription charges, welfare milk, dental charges, rates, and so on. As the Government put the charges up, so the rebates are extended to more people than ever before. We shall soon find that large groups of workers in particular income brackets—say, between £20 and £30 a week—will face a loss of income at the margin, if their incomes rise, of 100 per cent. or more. First, they will lose the family income supplement; then they will start to pay income tax; then they will pay heavily graduated National Insurance contributions; and, one by one, they will lose these various rebates. So we shall have a marginal rate of taxation of 100 per cent.—a remarkable achievement for the Tory Party which for years has lectured us all on the disincentive effects of high taxation. Apparently, disincentives apply only to business executives; not to ordinary workers.

What will be the social effects of "fair rents" for council houses? At one end, the better-off tenants—this is what the Government want—will be driven out of council houses into buying houses, so reducing the social mix on housing estates and pushing us back towards the disastrous and obsolete concept of one-class housing for the deserving poor. This hardly seems a notable contribution to the Prime Minister's alleged ideal of "one nation".

At the other end, what is to happen to the poorer tenants? Contrary to what some ignorant Tories believe—I hope no Tory Member of Parliament—there are a lot of poorer tenants on council estates. If we did not know it from our own experience, we know it from the detailed figures given in the report of the National Board for Prices and Incomes.

Mr. Eric S. Heffer (Liverpool, Walton)

The Tories say that all the council tenants have Jaguars.

Mr. Crosland

But these are the few without the Jaguar at the front door. These poorer tenants are to be protected, so the Government tell us, by rent rebates, supplementary benefits, and, in the private sector, the new rent allowance. I greatly welcome this allowance in principle, subject to proper safeguards about the fixing of the rent and the state of repair.

Where is all the money to come from? A great deal of money will be needed in this new situation. With "fair rents" for council houses amounting to double or more the present levels of rent, far more people will be eligible for rent rebates than now, and the average size of rebate will be much greater. On top of these more widespread rent rebates in the public sector, we have to find the money for the new rent allowance in the private sector. Clearly, the Government will not find the money. So far from finding more money, the Govern- ment have said that they will reduce by £100 million to £200 million the subsidy bill in 1973–74 compared with what it would otherwise have been. So they will not find the money.

Where will the money come from? It becomes clear, although it has not yet been recognised by the general public, that it will come from the housing revenue account. Subject to any contradiction from the Minister, council tenants, paying double or more their present rents, will produce a huge surplus in the housing revenue account. The Government, determined to save their £100 million to £200 million in the putative subsidy bill, will increasingly force local authorities to use this surplus for the payment of rent rebates, the private rent allowance and probably a contribution to supplementary benefits as well.

My firm prophecy is that the Government will more and more push the responsibility for curing poverty and for the whole rebate and allowance scheme on to the local authorities, and the local authorities will be forced to pass it on to the council tenants.

What is the equity in all this? Council house tenants will pay much more; the national taxpayer will pay much less. Rents—a regressive charge with many social implications—will go up prodigiously; national taxes, which are broadly progressive, will go relatively down. In other words, we see the regular pattern of this Government's actions—a large and deliberate increase in the cost of living and a redistribution of income from the less well off to the better off.

My hon. Friends will no doubt discuss other aspects of the Government's housing policy—the disastrous effect which the huge cut in the subsidy bill must have on local council building, the accelerated move from regulated to controlled rents in the private sector with no adequate guarantee of bringing premises up to modern standards, and the heartless refusal—heartless certainly in the context of London—to do anything about the growing exploitation of the tenant in furnished accommodation.

We cannot say anything in detail in the debate about the owner-occupier, because there is no new Government policy to discuss. We read in the Press—everything that the Government do we are able to read in the Press—about talks between the Ministry and the building societies, but so far we have no inkling as to where they may lead. So far, therefore, the Government are essentially following a continuation of the Labour Government's policies—the option mortgage scheme, 100 per cent. mortgages, a high level of local authority mortgage lending, and so on. Those policies gave unprecedented help to the owner-occupier. As a result, for the first time in British history, and under a Labour Government, over 50 per cent. of our dwellings are owner-occupied.

If and when the Government produce new proposals on this front we shall examine them with great care. I give only this warning. Some Ministerial statements about housing have a strong whiff of ideology about them. They show a strong emotional commitment to the owner-occupier and a certain contempt for the council house tenant. They certainly seem to ignore—

An Hon. Member

Rubbish.

Mr. Crosland

If the hon. Gentleman had listened, as I have, to those Ministerial statements, he would realise that there is no doubt about what I am saying. They seem to ignore the fact that although the council house tenant receives a subsidy, the owner-occupier receives considerable sums in income tax relief.

Housing should not be a matter of ideology. We are discussing what is probably the most urgent, and, indeed, desperate, social problem in the country. The problem will not be solved by prejudice and by emotional reactions for or against this or that sector of housing. It will be solved only if we recognise that both the public and the private sectors have a crucial part to play in solving it, and both will need all the help and sympathy that we can give them.

I turn to the second part of the Motion, which concerns rates. There are some things on which we can agree. We can all agree that rates are an unpopular tax. They are based on rateable values which frequently seem arbitrary to the ratepayer. Above all, they are an extremely regressive tax, and bear no relation to a person's means or capacity to pay. Hon. Members will recall the findings of the Allen Committee who took five income groups and found that the poorest group paid 8.2 per cent, of disposable income in rates, while those in the richest group paid only 2.2 per cent. There is no other tax in Britain which is more regressive.

On the other hand, rates are easy to collect, difficult to evade, and bring in a great deal of money. No Government in practice will give up this source of revenue until and unless, as my hon. Friend is clearly hinting, there is some clear and practicable alternative local tax; and, pending the Government's Green Paper on local government finance, that for the moment does not exist.

We are looking forward to the Green Paper. When we produced our White Paper on local government reorganisation the right hon. Gentleman was highly critical of us for producing it before the Green Paper on local government finance. This Government have had an extra year, and still have not produced the Green Paper.

What the Labour Government did was to keep the rating system but take a number of important steps to make it less burdensome and less regressive. We allowed payment by instalments. We introduced the rent rebate scheme, under which more than 800,000 domestic ratepayers are receiving relief—80 per cent. of them, incidentally, old-age pensioners. Over the four years of the scheme, £52 million has been paid out in rate rebates.

But we went much further in trying to protect the ratepayer, and especially the domestic ratepayer, against what otherwise would have been an intolerable burden of rising local expenditure. We increased by 1 per cent. a year the proportion of relevant local spending that was covered by the rate support grant. As a result, the proportion covered by the rate support grant rose in four years from 54 per cent, to 57 per cent., with a corresponding reduction in the proportion borne by local sources. Also, we concentrated the relief on the domestic ratepayer by means of the domestic rate element, which amounted to a subsidy rising by 5d. in the £ per year.

In other words, we pursued a deliberate policy of putting more of the burden of local spending on national taxation, and less of it on the domestic ratepayer, and the policy was strikingly successful. During the four years of the scheme, the average domestic rate poundage went up by only 1 per cent. per year in the first two years, and 3 per cent. and 4 per cent. respectively in the last two years.

Mr. Heffer

Is my right hon. Friend aware that for the last three years the Tories in Liverpool have boasted how they kept the rates down, but now that the previous policy has been abandoned by the Government rates in Liverpool are going up by 4s. in the £ this year, which is a good example of the point that he was making?

Mr. Crosland

That is a very good example, and I am grateful to my hon. Friend for giving it to the House. I shall add one or two other places by way of example to the one that my hon. Friend has mentioned.

The Government have now changed the policy. The proportion of local spending to be matched by Government grant is to rise not by 1 per cent. a year but by only ½ per cent., and the domestic rate element is to go up not by 5d. a year but only 2.8d. and 2.4d. respectively this year and next. So the protection to the domestic ratepayer is to be halved, and the burden of local spending is to be shifted away from national taxation, which is broadly progressive, towards local rates, which are profoundly regressive.

On top of that, just to drive the knife deeper into the wound, we have the so-called efficiency cut of £10 million this year, and £25 million next year. The best thing I can do is to quote the statement jointly put out by the local authority associations—Tory-controlled at the moment; things may look different soon—which said: … it will be difficult for local authorities to bear this double cut in grant without a significant increase in the rates, or some curtailment in the planned development of services, or both. That seems to be the understatement of the year.

What, then, is happening to rates this year, partly because of these deliberate cuts, and partly because of the inflation which the Government have so signally failed to control? I gave the figures a short time ago. They are taken from the figures given by the Institute of Municipal Treasurers and Accountants. The rise in the domestic rate poundage for the previous four years was 1 per cent., 1 per cent., 3 per cent. and 4 per cent. This year it is a whopping 12 per cent. If we take the total rate poundage, it is 14 per cent., the highest for a decade and a half, and a triumph for the policy of "cutting prices at a stroke".

Let us consider individual places. Let us consider some of the London boroughs. We find the following increases: in Lewisham, 25 per cent.; Lambeth, 20 per cent.; Westminster, 20 per cent.; and Camden, 22 per cent. If we go outside London we find, as my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) said, a large increase in that city of 26 per cent.; in Manchester, 18½ per cent.; in Newcastle, 18½ per cent., and so on. Hardly what the voters were led to expect last June!

We on these benches have always stood for excellence in local government.

Mr. A. E. Cooper (Ilford, South)

Rubbish.

Mr. Crosland

We have never resisted the need for rate increases when they were designed to produce better services in housing, education, welfare and all the other services which local authorities provide. But this year's rate increase—and this is the difference—will not produce better services. On the contrary, most local authorities are desperately looking for ways of economising and reducing the scope and standard of their services. This year's increases are nothing to do with better services. They are the result partly of inflation and partly of a conscious decision by the Government to put a higher financial burden on the domestic ratepayer.

I am not saying that there is no upper limit to the proportion of local spending that should be matched by Government grant. If the Green Paper proposes a fairer system of local taxation, the whole situation will look different. What I am saying is that this is not the time to impose this huge 14 per cent. increase in rates. After all, we must see this increase not in isolation but as part of the Government's total policy, including the even higher rise in council rents, higher social charges, the rise in food prices, and higher National Insurance contributions. It is a total policy which produces a continuous increase in the cost of living, which breaks all the promises the Tories made last June, and which, taken in combination with the income tax reliefs, continually shifts the burden from the better off to the less well off.

There is nothing sensible that can be said about the Government's Amendment. It is almost wholly irrelevant to the Motion. In fact, I am surprised that it is even in order. It makes no mention of the increased cost of housing, or the increased burden on the ratepayer, to which our Motion refers. It refers to the huge bonanza which the Government are giving to land speculators by abolishing the betterment levy.

Hon. Members

Will you bring it back?

Mr. Crosland

It refers to the halving of S.E.T. without any mention of the value added tax—

Mr. Cooper

Try to look sincere for a change.

Mr. Russell Kerr (Feltham)

You should talk.

Mr. Crosland

I recognise that the hon. Member for Ilford, South (Mr. Cooper) is renowned for his integrity, but what right he has to accuse me of insincerity is not clear to me at all. Will he bloody well shut up.

Mr. Cooper

Why does the right hon. Gentleman suppose we have abolished the Land Commission?

Mr. Crosland

Out of Tory ideology and to give a lot of money back to their land speculator supporters.

Also in the Motion there is a reference to the rate support grant, without even mentioning the fact that the rates are to go up by 14 per cent. There is a mention of house ownership and house improvement, where the Government are merely following policies initiated by the Labour Government.

Finally, and impertinently, at the end there is a reference to people in need. It was not the people in need who were helped by the Budget. They are not the people who have been helped by the abolition of the betterment levy. There may be measures to help the very poorest of the poor, but if we take the less well- off half of the population as a whole, many of whom are certainly in need, they were not the big gainers from the Budget, but they are the ones who lose through Government policies on rents and on rates, as well as on social charges and on food prices.

We read in the papers today that the Prime Minister, addressing the 1922 Committee yesterday, said, "We are winning the battle". The trouble is that he is not winning any battle for the nation. If he is winning a battle at all, he is winning it against a very large section of the nation. Fortunately for the nation, however, when he sees what next Thursday's local election results turn out to be he will find that he is not winning any battle of any kind.

4.32 p.m.

The Minister for Housing and Construction (Mr. Julian Amery)

I beg to move, in line 1, leave out from "House" to end of the Question and add instead thereof 'welcomes the abolition of the wasteful Land Commission and betterment levy, the halving of selective employment tax, which will help to curb the rise in the cost of housing, the increasing sale of council houses to tenants, and the substantial extra provision in the rate support grant for improvements to the environment; and congratulates Her Majesty's Government on the steps it is taking to extend home ownership and house improvement, and on its policy which is designed to concentrate support on areas of stress and people in need'. This is the first occasion on which I have ventured to address the House in a housing debate, but I crave no indulgence on that score. Indeed, after some experience of responsibility for defence, overseas affairs and advanced technology, it is rather exciting to return to the social problems which first aroused my interest in public life many years ago.

But when I took on the job, I found the prospect rather daunting. Twenty-five years after the war, and after varying political administrations, 5 million of our people were still living in unfit homes, 12 million in homes lacking basic amenities and needing repair. There was a disquieting problem of homelessness. Many people were enjoying subsidised rents who did not need the subsidy, and others were paying rents which they could ill afford to pay.

This picture, these facts, would have been less daunting if the trend of policy and of achievement had been going the right way. It had been going the wrong way. For some years now, the curve of the housing programme has been going down—and none will know it better than the Labour Party. They entered on their last term of office with the best intentions. They proclaimed a housing target of 500,000 new houses a year. In the last two years they barely achieved, in each year, 350,000—or the target which Mr. Macmillan struck in 1955, not long after the last controls had been lifted.

The figures for the three years 1968–70 are very frightening. The private sector witnessed a decline of 23 per cent.—a catastrophic fall—and the public sector a decline of 5 per cent. The cost-rent societies were brought to a halt. The Housing Corporation's efforts to foster co-ownership were frustrated by limitations of expenditure. Private lettings continued to wither away. The story of the attempts to reach 500,000 houses and the result is a record of failure which has few parallels since Napoleon's retreat from Moscow.

But I would not have been concerned by the facts if the trend had not been so bad. It just will not do for the Labour Party to blame Conservative-controlled councils for the declining house-building programme which we have inherited. The programme declined mainly because of the economic difficulties and the loss of confidence created by the last Government. But I have been looking at the figures of periods when Conservatives were in the central seat and the Labour Party in local government.

I am reminded of a story which used to be told by Lord Beaverbrook—

Mr. Heffer

Oh, no.

Mr. Amery

He used to say that when the Tory Party won the election it was despite the Daily Express and that when they lost the election it was because of the Daily Express. I found that, when the Socialist Party were in that maximum control of the great conurbations, the public sector figures were the worst ever, much worse than they have been in the last two years—

Mr. Gerald Kaufman (Manchester, Ardwick)

Give us the figures for Manchester.

Mr. Amery

In the last two years, when the Labour Party were in control of the centre and the Conservative Party in control of local government, the figures, although not good enough, were much better than they had been at the beginning of the decade.

The point is underlined by the trend of starts in the private sector. The highest total was in 1964. By 1969 and 1970, this figure had declined from 247,000 to 167,000. In a gratuitous passage early on, the right hon. Member for Grimsby (Mr. Crosland) talked about our high standards of unscrupulousness, and referred to the Zinoviev Letter. I am not prepared to take lessons in unscrupulousness from members of a Government which countenanced the gerrymandering of the constituencies.

The right hon. Gentleman also implied that my right hon. Friend the Secretary of State for the Environment should have been speaking in this debate—

Mr. Kaufman

No, we can do without him.

Mr. Amery

My researches show that, when he occupied a comparable position, the right hon. Gentleman intervened only once in our housing debates. I can understand it: he had good reason for keeping quiet. After all, in October, 1964, in his election address—

Mr. John Grant (Islington, East)

Get on with it.

Mr. Amery

—he said: We simply must build more houses and we must make housing cheaper. What happened? In 1964, the average price of a new house was £3,400. By 1970, it was £5,100–50 per cent. up. The recommended mortgage rate in 1964 was 6 per cent. and 1970 it was 8½ per cent. This means that a man taking out an 80 per cent mortgage for 25 years in 1964 would have paid £18 a month gross, and a man buying a similar house in 1970 would have had to pay £33 a month.

The right hon. Gentleman, rightly—because it is consonant with the terms of the Motion—took us to task on the subject of rents. He is certainly in no position to stand in a white sheet on this matter. The Institute of Municipal Treasurers and Accountants tells us that the average council rent on 31st March, 1964, was £1.35. By 31st March, 1970, it had risen to £2.20, 65 per cent. up. In his wildest moments in his speech the right hon. Gentleman said that our proposals might—I emphasise "might"—raise rents by 100 per cent. We know for certain that in his time they were raised by 65 per cent.

To be fair, the right hon. Gentleman and his colleagues made two attempts to control rent increases in the public sector. I am bound to tell him that most of the increases which were proposed by local authorities were approved and that only a very small number were rejected. The only effect of the controls which he and his colleagues imposed was to keep down rents for those who could afford to pay more and to give nothing to those in need.

Mr. Kaufman

As the right hon. Gentleman is speaking of council house rents, and because it is important that the people of Manchester know this before next Thursday, will he confirm or deny a statement made by an official spokesman of Manchester City Council that the reorganisation of subsidies which he is proposing will add £1 per week to the average Manchester Corporation dwelling?

Mr. Amery

The hon. Gentleman asks an interesting question. I will be coming to our reform of housing finance shortly, and perhaps he will await my comments then.

I had to ask myself, in taking over this job, what had gone wrong with the policy of the Labour Government. The right hon. Gentleman suggested that price increases were blamed by the Conservatives on the trade unions. We have, of course, made it plain that we think that exaggerated wage claims contribute very much to inflation, but I assure him that we do not hold the trade unions primarily responsible for inflation. We blame the Labour Party.

The Labour Party faced this problem with the best intentions. However, they produced a serious recession in the public and private sector, and inflation was, no doubt, an important reason why that recession occurred. There were high interest rates, increased costs and the curbs which they were forced to apply to loan sanction for housing in the public sector.

There is, however, more than that to it. The truth is that the old policies which had served us well since the first war were breaking down. They no longer provided sufficient help for people in need or sufficient resources to tackle slum clearance and overcrowding. During the recessions which occurred when hon. Gentlemen opposite were in office, their leaders recognised this. Indeed, the right hon. Member for Coventry, East (Mr. Crossman) said in the White Paper of 1965: … the whole question of housing finance policy needs much deeper study than this Government has yet had time to give to it. In 1965 that was fair enough, for hon. Gentlemen opposite had not been long in office. Four and a half years later thay had still done nothing to bring their study to a conclusion.

It took us just four and a half months to grasp the nettle. The Opposition Chief Whip, who I regret is not in his place, made the most pregnant comment on the housing policy of the Labour Party when he said that the only thing to do with it was to stand it on its head.

I come to our proposal for the reform of housing finance and to the right hon. Gentleman's principal questions. As hon. Members know, we are still discussing this with the local authority associations, and I cannot this afternoon dot the i's and cross the t's. However, I will do my best to help the House with the problem as it stands.

Our first objective is to do justice between one type of householder and another. The rents of dwellings in England and Wales will be brought by stages to the fair rent, both for council and for rent-controlled tenants. The concept of the fair rent is fundamental to our thinking. It is the concept of the market rent but with the scarcity element discounted, which is particularly important to the great conurbations where the greatest housing stress exists.

This was the innovation of the right hon. Member for Coventry, East, and I pay tribute to his ingenuity in devising it. We have certainly found a solid foundation on which to build and on which the Labour Party, if they should ever again be returned to power, would be glad to build.

The right hon. Member for Grismby suggested that there was no logic in extending the fair rent concept to the public sector. He spoke, as hon. Gentlemen opposite sometimes do, as if the public sector represented the majority of the country. It is, in fact, little more than one-quarter. Half our homes are privately owned. There are about five million council houses and I am not clear on what basis in logic it is suggested that they should be separated from the main stream, particularly as in many cases their going rent is already higher than rents in the private sector.

Mr. Dick Leonard (Romford)

The right hon. Gentleman has spoken of separating council houses from the main stream. Although they make up only 30 per cent. of all households, their total represents a considerably larger number than privately rented accommodation. They should, therefore, be very much in the main stream, and I trust that the right hon. Gentleman will address himself to this.

Mr. Amery

The hon. Gentleman is entitled to make that point, though I am not sure that it was worth my while giving way to enable him to make it. We should think of housing as a whole and remember that 50 per cent. of our people are already owner-occupiers.

Mr. Heffer

We are not talking about owner-occupiers.

Mr. Amery

I am talking about the lot and I am addressing my remarks to the Amendment as well as to the Motion.

Our second objective is to ensure that housing subsidies from public funds go to those who need them—[Interruption.] Hon. Gentlemen opposite would do well to remember that many owner-occupiers are a great deal worse off than people living in council houses.

As I was saying, we want to ensure that housing subsidies from public funds go to those who really need them. Those who cannot afford the fair rent will get a rebate or allowance. The Labour Party advised local authorities to give rebates, but we are making sure they do so—[Interruption.]and I am not afraid of the total bill, whatever it may be.

The Labour Party introduced fair rents for certain categories of private tenant, but they made no provision to help those who could not afford the new rents. It was left to Birmingham to blaze the trail, and I pay tribute to Sir Francis Griffin who introduced allowances in the private sector for the first time in this country. We shall introduce allowances for all in need—

Mr. Raphael Tuck (Watford) rose—

Mr. Amery

I must get on.

This is a revolutionary step. This move to fair rents will be phased—

Mr. Tuck rose—

Mr. Amery

—and every tenant affected by increases will be able from the start to obtain a rent rebate or allowance if he cannot afford the increased rent.

Our third objective will be to concentrate subsidies from public funds on areas of stress and those with big problems of slum clearance and overcrowding. The right hon. Gentleman said that we were cutting the subsidies. This is quite untrue. The total help that will be paid out in subsidies in future will be at least as great as, and may be greater than, it is today. We shall be stopping the escalation of subsidies paid out indiscriminately, which would have taken place if we had continued with the previous policies.

The right hon. Gentleman went on to say that our policy was aimed at helping the better off. Surely nothing could be fairer than to stop taxation being raised, directly or indirectly, from those who can ill afford it for distribution to those who do not need it.

In perhaps the most important passage of his speech, the right hon. Gentleman pressed me to say what would be the average increase in rents resulting from our proposals. He gave some curious figures and talked about 100 per cent. increases. I do not know how he worked out his sums. I should have thought that any right hon. Gentleman who was responsible, as he was, for the administration of fair rents, would have realised that the concept of an average is, in this context, entirely meaningless.

Mr. Frank Allaun (Salford, East) rose—

Mr. Amery

Perhaps the hon. Gentleman will allow me to answer his right hon. Friend.

In some parts of the country, existing rents are already very close to fair rents. In other parts the gap is wider. But this is not the whole story. The crux of the matter is not the rent of the dwelling but the rent paid by the tenant. The Labour Party are still obsessed with the idea that we should subsidise houses, not people. For our part, we shall ensure that every tenant who cannot afford the fair rent can obtain a rebate. When rents paid are going down, as some will be, as well as going up, as others will be, it does not make sense to talk about an average rent increase. Everything will depend upon the tenant's ability to pay the fair rent of the house which he occupies.

Mr. Allaun

Will the right hon. Gentleman give the House and the country a firm assurance this afternoon that vast numbers of both private landlords' tenants and council tenants will not have their rents more than doubled?

Mr. Amery

The hon. Gentleman cannot have listened to what I have been saying. I have said that it is quite impossible, in the context of fair rents, to talk about average increases more than doubling. If a man cannot afford to pay his rent, it cannot be more than doubled. He would benefit from the rebate.

The right hon. Gentleman questioned our decision to let the power to control council house rent increases expire at the end of June.

Mr. Kaufman rose—

Mr. Amery

He tried to make our flesh creep with the prospect, and said that he thought that wicked local authorities would take advantage of this interval to push up rents.

Mr. Kaufman

On a point of order, Mr. Deputy Speaker. A little time ago the right hon. Gentleman was courteous enough to give way to me on a question which I put to him, and he indicated then that he would reply to my question. Is it in order for him to pass from the subject without giving me the reply which he promised?

Mr. Deputy Speaker (Miss Harvie Anderson)

The hon. Gentleman knows that that is not a point of order. May I take the opportunity of drawing hon. Members' attention to the fact that many hon. Members wish to speak and that it is in the interests of the House that their speeches be heard.

Mr. Amery

As I said, the right hon. Gentleman suggested that wicked local authorities would take the opportunity to push up rents. The first concern of councils—and of many right hon. and hon. Members of the House—is to be re-elected. Nothing has impressed me more in my talks with local authorities than the vigour with which they defend their constituents' interests.

So far I have been dealing with rents, but the Motion also deals with rates. The main problem here, spanning both rents and rates, is the inflation which the Labour Party bequeathed. About two-thirds of current local government expenditure now concerns wages and salaries. This means that ratepayers' expenditure is very sensitive to wage inflation, and it means, in turn, that even if the Government maintain their contribution through the rate support grant—and we have increased that contribution—ratepayers either have to find the money or to accept cuts. My hon. Friend will deal with all this in much greater detail and with more knowledge than I can command when he winds up the debate. He will also cover the other aspects of rating which the right hon. Gentleman raised.

Right hon. and hon. Gentlemen opposite know perfectly well that under the previous Administration, the contribution which ratepayers made to the cost of housing rose steadily. In 1963–64 it was £21 million for England and Wales. In 1969 it was about £60 million, nearly three times as much. In certain authorities, particularly in London, the contribution was equivalent to a rate of over 10p in the pound. In Oldham it rose to 17½,p in the pound. So much for the Opposition's concern for the domestic ratepayer.

The reform of housing finance will not be on the Statute Book until next year. But, meanwhile, we have had to adopt first-aid measures. The abolition of the Land Commission and betterment levy was one of the first and most important. It is early days yet to say what this will lead to. But the upturn in private building suggests that this measure of decontrol has already made more land available for building. I wonder whether the right hon. Gentleman would bring it back if he had the chance.

The cuts in corporation tax, the halving of S.E.T., the better deal for close companies and the easing of restrictions on bank lending will all help to stabilise building costs, as the National Federation of Building Trades Employers and others concerned, including the unions, have been the first to recognise. Already, the January and February figures have shown a significant improvement. There is a marginal recovery in the public sector and a marked improvement in the private sector. The March figures are not yet available because of the postal strike—

Mr. Heffer rose—

Mr. Amery

Perhaps the hon. Gentleman will wait. The March figures are not yet available, or have only just been received, because of the postal strike. I had hoped to be able to announce them during my speech; it is still possible that they will reach me in time. If not, I hope that my hon. Friend will be able to give them to the House before the debate is concluded.

I have been very concerned over the last few months lest our discussions on the reform of housing finance, which have been detailed and protracted, should slow down public sector programmes. I am glad to say that my concern was wrong. The public sector is showing signs of recovery. I have recently announced an increased cost yardstick of between 7 per cent. and 12 per cent. This gives the go-ahead to the public sector programmes in the pipeline or under planning.

Mr. Heffer

Is the right hon. Gentleman aware that only last week Liverpool City Council announced that 4,100 projected public sector houses are to be abandoned? These houses, which are in the pipeline, will not be built, the argument being that in three or four years' time there will be a surplus of housing. Everybody in Liverpool knows that that argument is totally untrue. Also, there are 7,000 construction workers unemployed in Liverpool.

Mrs. Elaine Kellett (Lancaster)

And have been unemployed for the last four years.

Mr. Heffer

No, they have not. Under the Labour Government in 1968, the level was 4,000 unemployed and now it is 7,000. Is this not a clear indication that, as a result of Tory Government policy, there is slowing down of the public sector housing programme in Liverpool and that there are too many unemployed construction workers?

Mr. Amery

The hon. Gentleman was lucky, Mr. Deputy Speaker, to catch your eye for that intervention. I prefer to base myself on the official statistics, which show that for the first time for many a long month the public sector programme is on the recovery. It is up.

I note that the Buchanan Report is rather critical of house improvement but I take a very different view. Many older houses, when modernised, are even better than those built to Parker Morris standards. I pay a tribute to Lord Greenwood for having initiated this reform. My criticism of the Labour Party would be that having put their hand to the plough, they looked back. Since we came to office we have done everything we can to give an impetus to the housing improvement programme. Since 18th June my right hon. Friend and I have taken part in 25 improvement month campaigns. I wonder in how many the right hon. Gentleman and his colleagues took part. I do not know whether there was a house improvement campaign at Grimsby or at Small Heath. The other big task which must be settled is the slum clearance programme.

Mr. Denis Howell (Birmingham, Small Heath)

I am delighted to talk about Small Health. Is the right hon. Gentleman aware that the reason we have improvement area campaigns is that the legislation was passed by the Labour Government? However, because we have a Conservative Government now, and despite petitions which have been raised and speeches made by myself, unfortunately we still have not succeeded in persuading the Conservative council in Birmingham to start a scheme in my constituency. That will soon be put right by coming events.

Mr. Amery

I have just paid tribute to the decision of Lord Greenwood to launch this reform. I have inquired of Grimsby whether it is to have a house improvement month and I believe that it is to do so, but it does not appear to have done so yet. The other day I went to Birmingham on the occasion of its first improvement month.

Mr. Howell

Not in Small Heath.

Mr. Amery

It was in Birmingham. I do not know whether there was one in Small Heath [Interruption.] The hon. Gentleman appears to be misleading the House. There does not appear to have been a campaign in his constituency. [Interruption.] I do not gather that there was a house improvement month in Small Heath. I am glad that the hon. Gentleman accepts the criticism which I have ventured to make.

A central feature of our policy has been the extension of home ownership. The Labour Party paid lip-service to this cause but did not do much about it. Indeed, hon. Members opposite often talked as if home owners were a minority. In fact they represent half the households of Britain—[Interruption.]—not only that, but under the whole evolution of Britain over 1,000 years.

A vital decision in our effort to increase home ownership was our circular to local authorities and to new towns recommending the sale of council houses to sitting tenants. I am glad to say that this has met with an encouraging response.

In this connection I salute the imaginative decision of Manchester City Council, under the leadership of Alderman Field-house, to offer council houses for sale on even more favourable terms than have previously been offered by any local authority.

The 1965 White Paper announced the intention to extend building for owner-occupiers, but by July of the same year the Labour Government had begun to restrict mortgage lending by local authorities—the kind of mortgage lending which helps people who cannot easily obtain a mortgage from the major mortgage institutions. The Labour Government's decision was to restrict this lending to a level of £130 million a year. In 1968£69 they reduced this limit by stages. At one time it fell to £30 million, a miserable pittance—from which they had a deathbed repentance about 12 weeks before the General Election.

In March of this year I announced our decision to remove the money ceiling on local authority lending, leaving only the requirement to concentrate such lending on certain categories of people, especially those unlikely to be able to secure building society mortgages.

The right hon. Gentleman referred to my talks with the building societies. I want to take this opportunity to report to the House about these talks with the Building Societies Association and the British Insurance Association.

Our aim, as I have told the House, has been to bring home ownership within the reach of people who could not previously have contemplated it. The building societies are by far the most powerful agencies for the promotion of home ownership. They are at present in a stronger position than they have ever been. Their total assets at the end of March amounted to £11,119 million. Last year their gross lending was £1,986 million, or £400 million more than in 1969. They made 541,000 house-purchase advances, nearly 80,000 more than in 1969. Their commitments to new advances have risen from £424 million on 1st April, 1970, to £647 million on 1st April, 1971. These are record figures.

It has been argued in many quarters that the building societies should take advantage of their existing strength to reduce their lending rates. Of course the Government would like to see the rate come down. I have discussed this with the leaders of the movement. They are well aware of the difficulties which high lending rates cause borrowers and they have assured me that they will take any opportunities they prudently can to reduce the charges they make to home buyers. They believe, however, that their first responsibility is to keep their savings inflow at a high level. In this I believe they are right. I want to see them increase the number of advances they can make and reduce the amount of deposit they require. From this point of view it is more important that they should have enough money to lend at present rates than that they should cut the rate and have to turn people away.

My discussions with them have, therefore, been concentrated on the steps that could be taken to reduce the amount of deposit which a would-be home buyer has to put down to get a mortgage. There are many people—professional people, skilled workers and others—who can afford to meet mortgage charges out of their salaries or wages but who lack the capital to put down a deposit.

As the House knows, the building societies have always given special consideration to applications for mortgages from people who have demonstrated their capacity to save or from people who, from experience of previous mortgage transactions, have demonstrated their ability to keep up repayments—that is, from reliable savers and reliable payers.

I am delighted to be able to inform the House that the leaders of the movement will now advise their members that if a man saves regularly with them for a period even as short as six months and at a rate equivalent to his future monthly repayments, he should be favourably considered for an advance. I welcome this. It means that, provided that funds continue to be available, six months' savings could secure a mortgage without further deposit.

I have also discussed with the Building Societies Association the question of making mortgage advances more easily available to older people. There is a widespread view that people in middle age have little chance of getting a building society advance. The figures show that in 1970 nearly 10 per cent. of building society advances were made to first-time buyers aged 45 or over and nearly 22 per cent. to people aged 45 or over moving from one owner-occupied house to another.

The association has now undertaken to remind its members of two things—first, that a mortgage advance should not be limited by the age of the borrower but only by his capacity to meet the repayment and the value of the property he offers as security; second, that, in assessing his capacity to meet repayments, societies should be prepared to take into account any guarantee that might be offered—for example, by younger members of his family.

Where a mortgage advance exceeds, say, 70 per cent. or 75 per cent. of the valuation of a property, it has been common practice for building societies to require the margin—the balance between the 70 per cent. or 75 per cent. or whatever the figure may be and 100 per cent.—to be covered by a policy of mortgage indemnity assurance. This is an insurance policy paid for by a lump sum premium. The premium rate charged by the insurance companies participating in this arrangement varies from 2½ per cent. to 4 per cent. of the amount guaranteed. The building societies are normally prepared to allow the amount of the premium to be added to the advance secured on the house.

I am discussing premium rates with the insurance industry, and a number of companies have already indicated, as a result of these discussions, their intention to reduce the premium rate by ½ per cent. This means that the cost of insurance to the mortgagor will be reduced by up to one-fifth, depending on the size and duration of the mortgage advance.

Mr. Charles Loughlin (Gloucestershire, West)

On the question of building societies being prepared to give favourable consideration to those who have saved regularly for six months, the total saved substituting for a deposit, do we gather that the monthly savings will have to equate to whatever the borrower will have to pay in monthly repayments? Could the right hon. Gentleman spell this out in a little more detail, and tell us precisely the total to which the six months' savings relate?

Mr. Amery

They would be equivalent to the monthly repayments which a barrower would have to pay. They will vary, depending on the type of house in which he is interested.

I should like to say something now about the option mortgage scheme. We promised before the General Election to make it more flexible. I propose to do this in two ways.

When the scheme was introduced by the Labour Party in 1967 the choice between option mortgage subsidy and tax relief was irrevocable except in compassionate cases. A house owner who had once chosen option mortgage terms could not switch out of the scheme. In 1969 Lord Greenwood, strongly encouraged, I may say, by right hon. and hon. Members on this side of the House, made it possible for people who had chosen option mortage terms to switch back to tax relief after five years.

I am not satisfied that this is enough. I accordingly propose to reduce the period to four years. This will require legislation to amend Section 79 of the Housing Act, 1969; and provision for this will be made by Government Amendment to the Finance Bill. This will mean that, subject to the consent of the House, people who want to switch will be able to get out of the scheme by 1st April, 1972, instead of 1st April, 1973.

The second change relates to the guarantee which the Secretary of State is empowered to make in favour of option mortgagors who need a mortgage advance of up to 100 per cent. of valuation. Under an administrative decision of the previous Government, this guarantee has been limited to cases in which the purchase price of a property was £5,000 or less. I think this price too low and am raising it to £7,500. This will not require legislation.

I should like to pay tribute to the Building Societies Association and the British Insurance Association for the constructive way in which they have approached these problems.

I believe that the new arrangements I have just described, coupled with the easing of the previous Government's restrictions on local authority lending, will give a powerful impetus to the extension of home ownership. There are already encouraging signs of a revival of house building in both the public and the private sector. The March figures have been delayed because of the postal strike, and we still have not got the March figures for improvement grants.

The housing figures, however, have just reached me. They show that in the quarter January to March as a whole public sector starts are up by 3 per cent. compared with last year and private sector starts are up by 37½ per cent., giving a total increase of 20½ per cent. The March figures are even more dramatic. They show that the public sector is up by 31 per cent. compared with March last year and the private sector is up by 56 per cent., the overall increase being 28½ per cent. I think that these figures will receive a widespread welcome on both sides of the House. [HON. MEMBERS: "What about completions?"]—The completions are not so good, because they were started under the previous Government. Completions in the public sector were 3 per cent. down in the quarter, and in the private sector they were 9 per cent. up.

It would, of course, be wrong to put too much weight on one quarter's figures, though I am glad to see that the N.F.B.T.E.'s latest state of trade inquiry shows that building contractors have more orders on their books than they have had for several months.

All this suggests that our new initiatives are meeting with a new response from the public and from the construction industry. Buying your own house is becoming the "in" thing. And I do not doubt that the builders will meet this challenge with renewed confidence.

The Labour Party used to pride themselves upon being the radical, even the revolutionary party. But in the field of housing the right hon. Gentleman and most of his hon. Friends are defending the falling bastions of the past and advocating policies which are now outworn. New times call for new tunes. We are the radicals now; it is the Conservative Government who have taken up the slogan, From each according to his ability, to each according to his need". We welcome this debate. We all know that the Labour Party have chosen it with an eye on the local elections. I make no complaint of that. If they choose to use the House of Commons as a forum from which to appeal to the municipal electorate, let them try. Housing is not a issue on which either the Attlee or the Wilson Government won many votes. In any case, these issues should not be treated as a political football.

In his last speech on housing in January of last year, the right hon. Gentleman taunted us with the sudden discovery of the virtue of compassion. Today he attacked our sincerity. There is no monopoly of compassion or sincerity in this House. I am sure that we all have the right intentions. The question is our ability to achieve.

I welcome a debate on these great issues. But let us put a clear alternative to the country. We know where we are going, and we have put our cards on the table. The right hon. Gentleman said nothing of what his party would have done if they had won the election, or if ever they were to win another. His hon. Friend the Member for Small Heath was at the hub of things in the housing world right up to the election. He can tell us when he winds up the debate what a Labour Government would have done had they been returned to power. Let him take full advantage of the opportunity. We all look forward to hearing him.

It is unworthy of the right hon. Gentleman to content himself with seeking in speeches, and the kind of leaflets his party is putting out for the local elections to raise the bogey of dear rents. Our duty is to enlighten the people on what is a great social issue. Let us scorn to exploit their fears.

5.18 p.m.

Mr. Bruce Douglas-Mann (Kensington, North)

In supporting the Motion I want to concentrate on what little we know about the Government's policy on council house rents.

I listened with close attention to the Minister's speech. He said that this was the first occasion he has spoken in the House in a housing debate. I listened particularly during his 25 minutes of debating points on council house rents for the serious points, but only two points came through clearly—the Government's intention to do justice between one type of householder and another and their intention to introduce the concept of market price, less scarcity factor, in council housing. Those two objectives are mutually contradictory. The policies proposed by the Government on council house rents are wholly misconceived in logic, in equity and in economic and social terms.

There is obviously a logical attraction in the idea that local authority tenants should not be in a specially favoured situation, protected from the rigours of a housing market which everyone else must bear, but that is certainly not the case. I shall seek to demonstrate that tenants in the private sector, who are to be the pattern for council tenants in future, are paying anomalously high prices for their housing, and if we put council house tenants on the same basis we are exaggerating and aggravating an anomaly rather than ending one.

Two separate factors are involved here. First, there are housing subsidies, and, secondly, there is the question of the relationship, if any, that rents should have to any given level of cost in producing a house, and determining what the cost of occupying it should be. The point that the Minister wholly failed to make clear is that both owner-occupiers and council tenants enjoy a general housing subsidy.

For the owner-occupier it takes the form of tax relief on mortgage interest. In the last complete year the cost was £213 million. The council house tenants receive a subsidy in the form of lower interest rates on the loans to local authorities enabling them to build. In the last complete year the costs for the 30 per cent. who occupy council houses was £163 million, which is roughly proportional.

It is only the 20 per cent. of all households in the private sector who get no subsidy at all. It is that pattern of the unsubsidised private sector which would, if the Government's proposals are implemented, be the pattern for the council house sector, too. We say that there will then literally be two nations, the subsidised private owner-occupier and all the others who are wholly unsubsidised.

True, the Government are proposing more assistance to needy tenants of unfurnished private accommodation, but leaving aside the tenants in greatest need, those in furnished accommodation who will get no benefit. It is clear from the fact that the Government has announced that it is proposing to cut expenditure on housing subsidies generally by £100 million to £200 million by 1974–75, that the assistance that private tenants are likely to get will not be substantial.

It is not only in the lack of a subsidy that the one household out of five which rents a home in the private sector is at a disadvantage, which if the Government's proposals are implemented, could be transferred to council tenants. The cost of housing to owner-occupiers, and to the vast majority of council tenants, is related to the actual cost of providing the house; in the council house sector, this cost is pooled between all council tenants of a particular authority. In the private sector the question of cost is a far less relevant factor; it is a question of the profit that can be made in a classically profitable situation.

With regulated tenants, fair rents are assessed by the rent officer on a basis which the Francis Committee describes as arbitration between the demands of the landlord and the demands of the tenant. The demands of the landlord are, naturally, based on the very minute furnished sector which is the only sector that is completely uncontrolled, a sector representing approximately 2 per cent. of the entire housing market. It is in that tiny uncontrolled sector, that the pattern of private landlords' expectations with regard to rents are determined. From that sector rents throughout the entire private sector are determined to a greater or less extent.

It is now proposed that from this minute and unrepresentative sector the rents of the entire 50 per cent. who will occupy rented accommodation should be determined. That is a complete absurdity.

That is not the only aspect, the owner-occupier buying a £4,000 house and successful in getting a 100 per cent. mortgage at 8½ per cent., pays a total of £294 per annum in capital and interest payments, after taking account of the tax relief on the interest. The private landlord seeking to provide the same house, if he were lucky enough to get a mortgage on the same terms, which is unlikely, would get no tax relief on his mortgage interest payments nor on his spending on repairs, yet he will pay tax on the rent he receives.

As a result the private landlord would have to charge £500 per annum to the private tenant just to cover his costs, whereas the owner-occupier could get that house for £294 per annum. It is this factor, this discrimination in taxation—not the Rent Act—which is driving out the private landlords. I do not believe it is desirable that we should have a substantial privately-rented sector because I believe that the relationship of the private landlord to the private tenant is in general a socially unhealthy one: but while we do have a private sector it is right that the private landlord should not be compelled by our taxation system to charge a level of rent nearly double the cost which the owner-occupier has to pay for the same accommodation.

Mr. Raymond Gower (Barry)

The hon. Gentleman referred a moment ago to the undesirable nature of subsidising owner-occupiers. Would he not agree that this is the result of policies pursued by all Governments who have encouraged people to embark on the somewhat arduous undertaking of home ownership?

Mr. Douglas-Mann

If I have not made myself clear I apologise, but I hope I have been clear to hon. Members. I do not object to the subsidising of owner-occupiers. I think it would be quite impractical to abolish the subsidy to owner-occupiers who form 50 per cent. of all households. I suggest that it is completely anomalous and absurd to subsidise that one sector, which benefits in a great number of other ways, and not continue the general housing subsidy, quite apart fro mthe subsidy for slum clearance and high cost, to council tenants.

What we should be doing is extending the subsidy to private tenants, too. The owner-occupier has a great many other advantages apart from the subsidy. A substantial part of the £294 which he pays is capital repayment, genuine savings. The owner-occupier has a property which increases in value from year to year, but council and private tenants only have their rents increasing without any capital gain from the property. The annual cost to the owner-occupier remains constant. These are substantial advantages of owner-occupation. Neither I nor my party is opposed to owner-occupation but we are in favour of justice between different groups of households.

It is absurd for the Government to be protesting their intention of doing justice as between one group of householders and another and yet leave the subsidy benefits for the 50 per cent. of householders who occupy their own homes but take away the subsidy for council housing which we need to tackle the housing problems. The Minister has described these problems: neither in justice nor on social grounds should we be taking away the general subsidy to council house tenants. We should be extending the subsidies to private tenants instead.

The Minister disputed the assertion by my right hon. Friend the Member for Grimsby (Mr. Crosland) that council house rents are likely to rise to approximately double their present rate if the Government's policy is put into effect. The Minister gave no figures in his reply but I have some figures. It may be that the Minister has more recent figures than mine. The figures for council house rents for 1968–69 show an average of 1.1 times gross annual value, which is remarkably consistent throughout the country. We also have the average for fair rents which have been determined and these are something over 1½ times gross rateable value. These averages are substantially reduced by the fact that many properties are in poor repair.

With the exception of a few areas like Kensington and Chelsea, in general council properties are in reasonably good repair, and there can be no doubt that the fair rents which are likely to be assessed by rent officers for the majority of council properties will be at least double the gross value, with the result that, if we charge market rents, for all the absurdity of doing so, even disallowing the scarcity factor, the rents charged will involve an approximate doubling of council rents on average throughout the country. It is clear that the Government are contemplating approximately that.

The Government have said that Scotland will not be required to move immediately to a fair rent system, but will be required to balance its housing revenue accounts. In England and Wales we shall be moving to the fair rent system. This implies that the Government contemplate that the fair rent system will produce something greater than a balancing of housing revenue accounts, and that we shall be producing surpluses for housing revenue accounts.

If our estimate of a doubling of council house unrebated rents is correct, we shall be collecting, through housing revenue accounts, about £400 million a year more from council tenants and thereby transforming the present situation, in which council tenants get a subsidy approximately proportionate to the subsidy received by owner-occupiers, into one in which council tenants are making a profit for local authorities of about £200 million a year, and effectively raising the money to pay subsidies to owner-occu- piers. How can that be described as justice between one section of the community and another?

The Government take pride in their programme of selling off council houses. This can do nothing to improve the basic housing situation. It reduces the supply for the most deprived who are the homeless and tenants in the private sector, and in the majority of cases—and this is a point which the Government have been careful to ignore—it more than doubles the cost to the Exchequer of the subsidy received. The average cost of council house subsidies throughout the country as a whole is £26 per house. The average cost of subsidy in the form of tax relief to owner-occupiers buying their houses is approximately £60 a year on a £3,000 house.

Without being against owner-occupiers, I hope that hon. Members will accept the view put forward by the Institute of Municipal Treasurers and Accountants, already referred to by both previous speakers, that owner-occupiers, private tenants and local authority tenants in the same financial position should be able to enjoy the same standard of housing for similar costs, bearing in mind the investment aspect of owner-occupation. That is a reasonable viewpoint which is wholly ignored by the Government's policy as announced.

I urge the Government to reconsider their intention to put this load on to council tenants. There is certainly a need for rebates in case of need, and no doubt the Government have in mind that they should be paid, but these are the responsibility of the entire community and not the responsibility merely of other council tenants. What the Government are proposing means that a surplus of £200 million will be accumulated on housing revenue accounts throughout the country and that surplus will be used to finance rebates to private tenants. This is a clear case of social discrimination, of taxing the council tenants for the benefit of owner-occupiers, which is not only unjust, illogical and inflationary but socially divisive. I support the Motion.

5.33 p.m.

Mr. Arthur Jones (Northants, South)

I was interested to hear the speech of the hon. Member for Kensington, North (Mr. Douglas-Mann) but I was sorry to hear him talking in terms of the divisive nature of the Government's policy to the extent that he considers a private tenant to be different in community terms from the council house tenant. He seemed to think that we should not try to help the needy rented tenant in the private sector at the expense of the council tenant who is receiving a rent rebate which is unjustified in terms of his income. If ever there was a divisive approach to housing, it is that which the hon. Gentleman has outlined.

We must look at the problem as a whole and see that everyone in the community who needs help, whether in council accommodation or in private rented accommodation, gets help. The hon. Gentleman's remarks in advocating that we should not interfere with the existing arrangements for subsidising council tenants were of a divisive nature, and were not a sound contribution to housing policy.

In the whole post-war period our housing policy has been unsuccessful. First, we have not provided the numbers of houses needed to house our community satisfactorily. We have not made anything like the progress with slum clearance that we should have made. We have not improved living conditions, which are far below standard in many parts of the country. Our record is poor in comparison with that of our countries in Europe, especially Germany.

This follows from our not having ensured adequate resources for housing over the whole post-war period. We have not put into housing the resources in capital and in rent terms that we need to produce a successful housing policy, although annual allowances by way of subsidies and tax rebates amount to about £600 million a year. In addition, we have not ensured that the resources that are available have gone to the right people.

The hon. Member for Kensington, North said that many council tenants enjoyed a housing subsidy which could not be justified in terms of need. This is fundamental to the policy of the Government. We have reached this situation because rents in the public sector have been unrealistic. The policy of the previous Government was to keep council house rents as low as possible. That is nonsense in view of the requirement for putting additional resources into housing.

I pay tribute, as my right hon. Friend has done, to the conception of the fair rent arrangements. We need to establish a fair rent arrangement in the private sector and in the public sector so that additional resources are made available. For nearly half a century there has been control of private sector rents which has denied to the owners of private tenanted property the resources for keeping that property in good order.

I disagree strongly with the comment of the hon. Member for Kensington, North that the relationship between owner and tenant in the private sector is socially unhealthy. That statement cannot be justified except as political ideology.

Mr. Douglas-Mann

I hope the hon. Member has had the opportunity of looking at the Milner-Holland Report, the Greve Report and the Francis Committee's Report, which set out the abuses between landlords and tenants which are the inevitable result of the landlord/ tenant relationship. It is that relationship about which I was talking. I am sure the hon. Member will consider whether he or other hon. Members have any social need for the subsidies we receive as owner-occupiers and mortgagees.

Mr. Jones

I am talking about not the owner-occupier but the specific point of the relationship between owner and tenant in the private sector. Of course there are certain undesirable practices, but to go from that specific point to the generalisation that it is socially unhealthy is a very long step, and the hon. Gentleman would be open to general criticism if he took it. He would be wise to withdraw from that view of housing.

The Labour Government—and the fault lies partly also with the previous Conservative Government—depressed artificially below the market values rents in both the public and the private sectors. The effect of this has been that in family budgets the essential requirement to provide a roof over one's head has not received the priority justified. The fact that one was getting a roof over one's head for a figure substantially less than could be justified in sound economic and social terms led, I believe, to a mis-assessment of family budget priorities.

What I wish to see is, as far as may be, a loosening of the general controls right across the range of housing. I want to see—and I am disappointed that my right hon. Friend made no reference to it—a far more selective basis for housing. I want to see the utmost made of the needs in various parts of the country, both in the public and the private sectors. I want to see this linked to the necessity for slum clearance in our great cities because for many years I have been critical of the circumstances in which about 1,200 housing authorities in England and Wales have been encouraged to build council houses whether there was need or not and, indeed, the tendency for such building to become almost a status symbol among them in seeing which of them could build the most houses in comparison with similar local authorities.

What we need is a selective policy in housing provision, and where the needs are greatest is where the largest number of houses should be built. The fair rent policy has the singular advantage that with rents left to the rent officers to determine, we shall have not a general level of rents right across the country regardless of local circumstances and the level of local earnings, but fair rents reflecting, I hope and believe, local circumstances and earnings. This is essential in terms of a sound level of rent commensurate with local circumstances.

Artificial rent levels have essentially led to an insufficiency of investment of both public funds and private funds in housing. We should be directing our policies towards some method of encouraging the immense sums available in pension and life assurance funds to be put into housing, with some form of assurance that the equity content will not be the plaything of politics. I would like to see the trade unions shown the courage of their convictions and invest in housing to rent. If they get involved in a high level of strike payments, then of course they will find it difficult to do so, but many trade unions have substantial funds. Trade unions in many other countries provide houses to rent by their members, and that is an example which could well be followed by our trade unions.

It is unfortunate that the Opposition still maintain their political objection to private rented accommodation. This is what bedevils the opportunity to get substantial capital investment into housing. Such investment tends to go instead into commercial and industrial developments whereas we need an encouragement, on the basis of a fair and reasonable return, to investors to put funds into housing.

What we need now is the speedy implementation of the Government's policies following the legislation that we are promised for next Session. I hope that that will bring about a move towards a recognition of general market conditions in housing and the level of values which, sensibly, should be put on housing accommodation in both the public and the private sectors, with the ability to offer rent rebates to both classes of tenant, which is essentially a simply operation. It is not a worthwhile inquiry to see where the level of regulated rents will take us, because, as my right hon. Friend said, there is an infinite variety of place and circumstance throughout England and Wales. We need an arrangement which will reflect these differences and variations. I support what my right hon. Friend said and I am confident that when those policies are followed we shall see a complete transformation of the housing scene in the United Kingdom.

5.47 p.m.

Mr. Frank Allaun (Salford, East)

The hon. Member for Northants, South (Mr. Arthur Jones) said that Britain had a very poor housing record compared with some other European countries. That is one part—perhaps the only part—of his speech with which I strongly agree. His main theme was that rents have been too low. That is what he said. The Conservative Government believe that the solution to the housing problem can be summed up in two words: higher rents. It cannot. The solution, elementary as it may seem, is to build more houses.

The Tories are the high rent party. Their leaders are out to soak the tenants. There is to be a deliberate increase in rents, a major item in the budgets of most working class families. I challenge the Minister for Local Government and Development to deny that the Government's policy will result in at least doubling rents for great numbers of tenants, both council tenants and private landlords' tenants. The Minister for Housing and Construction did not do so when I asked him if he would make such a denial a few minutes ago.

The council tenants will have their rents increased because of the removal of the subsidy, and the private tenants will have their rents increased by the Government taking even the worst slum houses out of their present control. From my experience in some of our great cities, I believe that instead of the tenants paying the landlords, the landlords ought to pay the tenants if they have to live in some of these houses. These houses will now be taken out of rent control. This means increasing private rents on average by two-and-a-half times as is shown by the Ministry figures; the exact figure is 2.6 times. I warn the Minister that if he goes ahead with this proposal there will be civil disturbances on some council estates.

The Cabinet is keeping its housing plans dark. I suspect that it is because the Government want to get the municipal elections over first. The Government first consulted Conservative councillors way back in January, four months ago; yet no official announcement has been made. However, the unpleasant shape of things to come has already been made clear from answers which we have managed to extract from Ministers. We gather that council rents are to be fixed by the so-called fair rents system. In many cases this will mean a trebling of rent. The Government will remove £150 million a year compared with what the subsidy would have been in 1973–74—

Mr. Dennis Skinner (Bolsover)

Or more.

Mr. Allaun

Or more, as my hon. Friend says. It should be stressed that this is not just a redistribution, but a reduction, of subsidy. If the Government were arguing that some should have a little more and some a little less, there might be a case; but that is not what is to happen. There is to be a net reduction of subsidy. There will be an additional reduction because the Ministers have announced their intention to pay a subsidy to private tenants. This will come out of the total subsidy for municipal tenants.

What may not yet have been realised is that it will put many councils and their tenants in an impossible financial position.

The Labour Government granted building loans at an effective rate of 4 per cent., making up to the councils the difference between that rate and the far higher market rate of borrowing, which, at present, is about 9½ per cent. The cheaper rate was to have been paid for the whole term of the loan, usually 60 years. Without these 4 per cent. loans, council housing would have stopped altogether. We gather that the present Government are to end this commitment, even on loans already entered into in good faith. They will break this solemn undertaking.

I asked the Minister for Housing and Construction a specific Question about this matter on 10th March. He replied: It is indiscriminate in its application and needs to be entirely recast along with other existing subsidies."—[OFFICIAL, REPORT, 10th March, 1971; Vol. 813, c. 395.] The Minister was saying that even existing loans would be interfered with. I maintain that that is a serious breach of honesty, and that is how it will be regarded by many local authorities. Hundreds of thousands of council houses and flats have been built in the past four years on the firm understanding that the councils will not have to pay more than 4 per cent. If that undertaking is now broken by the Government, it will put local authority finances "in the red" in many areas, forcing tenants to bear the deficits.

As regards private landlords' tenants whose rents will be raised on average two-an-a-half times even for those without bath, hot water and inside lavatory, some are to receive a rebate, but they will be a minority. If the experience in Birmingham is any indication—and I have had this information from my hon. Friend the Member for Birmingham, Aston (Mr. Julius Silverman), who has more knowledge of that area than I have—a kind of pilot scheme has been carried out there and I understand that only 1,200 tenants in Birmingham will qualify for a rebate.

Mr. Julius Silverman (Birmingham, Aston)

I was proposing to put this matter to the Minister in an interruption, but he was not prepared to do me the courtesy of giving way. In fact, some 250 out of an estimated 60,000 private tenants are today receiving rebate.

Mr. Allaun

That makes the argument even stronger. Only an infinitely small minority on that basis will receive rebate.

Mr. Skinner

Sixpence a week.

Mr. Allaun

In most cases the rebate granted will be far smaller than the increases which the Government are to impose. Many people will lose out. Their rents will be vastly increased, with no rebate at all.

I am in favour of owner-occupation, which, along with council housing, is rapidly replacing private landlordism, but owner-occupation must be voluntary. The Government will raise rents so high—both council and private rents—that tenants will be forced against their will to buy houses which they cannot really afford.

I recently introduced a Bill to encourage owner-occupation. The Bill would permit tenants, at the point where they are taken out of their present rent control, to buy the houses from their landlords at a reasonable rent. The Government have blocked that Bill. On two occasions in the House the Government Whip has quietly said, "Object." In fact, he did it so surreptitiously that Mr. Speaker had to tell him to speak up. Therefore, that Bill has no chance of becoming law under this Government.

Mr. Silverman

Shame!

Mr. Allaun

Hon. Gentlemen opposite are supposed to be upholders of owner-occupation. I said earlier that the solution to the housing problem is to build more houses, but the number of houses has fallen, particularly in the council house sector. Most working people are dependent on council housing since they cannot afford to buy their own homes, even on mortgage. In May, 1967, four years ago, 95 per cent, of the town halls fell under Tory rule. Since then, because of ideological reasons and because Conservative councillors have had no great enthusiasm for council houses, the number has dropped calamitously. For every four council houses started in 1967, fewer than three were started last year. The number fell from 214,000 in 1967 to 154,000 last year. This year the number will fall still further.

The Minister for Housing and Construction told us a short time ago that the number of housing starts, both council and private, in the first three months of this year had risen by 20 per cent., and there were cheers from the Opposition benches. The Minister knows very well that January, February and March of this year were exceptionally warm, without the fall in building figures which normally take place in that period of the year. I am not, of course, blaming the Government for the good weather. I am saying that it is unfair to take a temporary increase in the number of starts—which amounted to 2½ per cent. in the council sector—as a good indication of the situation. Everybody in the Chamber knows that this has been an exceptionally warm winter in which the frosts which normally stop housing activity in those months did not this year occur.

Mr. Norman Tebbit (Epping)

If I recollect aright, the increase in private sector building was of the order of 50 per cent. Surely the hon. Gentleman is not suggesting that in normal winter months house-building figures slump by 33⅓ per cent. The figures do not bear out any such assertion.

Mr. Allaun

If the hon. Gentleman cares to look at the monthly figures, they will confirm that there is normally a heavy drop in starts in those three months. If that is not enough for him, in the House we have at least one expert builder on the benches opposite and one building worker who sits on this side who will confirm what I say. In any event, we shall see at the end of the year.

Mr. Silverman

At any rate, we have not been told by the Minister what the figures are. We have been given only percentages.

Mr. Allaun

That is true. However, I do not think the hon. Member for Epping (Mr. Tebbit) will challenge the long-term figures that I have given of the reduction from 214,000 in 1967 to 154,000 last year.

The serious fall which has taken place has occurred despite the generously subsidised 4 per cent. loans provided by the Government. They now intend to reduce these drastically. From this May onwards we shall have more and more Labour-controlled councils, but their subsidies will have been largely removed. So, however much they may wish to restore the housing programmes, they will be forced to axe them and increase rents, unless the Government can be prevented from withdrawing the subsidy.

Last Saturday, May Day, in one city I saw a contingent of council tenants taking part in the march. One mother carried a home-made poster saying, Hands off the housing subsidies. She was right on the ball. I should like to have seen a second slogan as well: Hands off the rent controls. I referred earlier to the fall in house building. What an indictment it is of the Government that at a time of desperate housing shortage we have the record figure of 129,000 men in the building trade out of work, the highest total since the 1930s. Building firms are crashing in large numbers, mainly because the Chancellor of the Exchequer refuses to allow banks to put loans to building firms in their priority lending lists.

The "Little Neddy" for the Building Industry says that the outlook for the building industry in the next 10 years is "virtually static". It goes on to say that council house building will be reduced. Far from cutting down housing programmes, we need to increase them. This week Professor Buchanan and his partner have produced "The Prospect for Housing", published by the Nationwide Building Society. It is a valuable piece of work. It estimates the need for a programme of 500,000 new houses and flats a year if we are to get on top of the problem.

I criticise the former Labour Government for failing to carry out that badly needed programme. At least, however, they had the excuse of the terrible deficit on the balance of payments. That cannot be used as an argument by the present Government. But, irrespective of politics, it is the duty of Parliament to see that that 500,000 a year target programme is reached. So far we have not even a programme, and I hope that my right hon. and hon. Friends will commit themselves to a large programme of that type. It can be done by devoting more of the country's resources to houses. That is the inescapable truth.

Britain's share of the gross national product devoted to housing is 3.7 per cent. That compares badly with the average in Western Europe, which is 1½ times greater. In my view, the share going to Britain could be enlarged by slashing our fantastic arms spending, which went up this year by no less than £266 million to the record total of £2,540 million. If we reduced our arms spending from 5½ per cent. of the gross national product to the 3 per cent. to which France is cutting by 1975, we should save the little sum of £950 million a year. If that were all devoted to housing, it would build an extra 220,000 houses a year.

If we do not achieve the half million houses a year, then, as Professor Buchanan says, many families will have to stay in rooms, shared houses and degrading homes for decades. Some of us come from constituencies where we see too much of that. While I think there is a political evil in what the Government are doing, it behoves both sides of the House to see that they do far more than they have in the past to end the housing shortage.

The second area to which I want to devote a few remarks is motorway building. We have the most powerful pressure group in Parliament in the shape of the British Road Federation. It combines the concrete monopoly, the petrol giants and the great construction firms in a formidable lobby. But not only are we spending several thousand millions of £s on these roads at more than £1 million a mile; we are also chopping up our towns and cities and forcing the demolition of thousands of houses. I believe that the figures are 60,000 houses in London and 2,900 in the comparatively small city of Salford. These are houses that we can ill-afford to lose.

Then I refer to the mention in the Amendment of the abolition of the Land Commission. This does not help the homeless. It will give the big land owners £31 million a year extra. According to the Department of the Environment study, the cost of land in London doubled between 1963 and 1970, so that an average three-bedroom house in London now costs £2,500 for the land alone and an average council flat £1,600 for the land alone, before a single brick is laid. That represents 30s. a week on the rent just to pay for the land.

Mr. Arthur Jones

Does the hon. Gentleman attribute that state of affairs to the activities of the Land Commission.

Mr. Allaun

I am coming to that. The Land Commission is being removed, but what will the Government put in its place? The answer is "Nothing". That means that increases in the price of land are bound to take place without let or hindrance. When we return to office, we shall need to have either the replacement of the Land Commission or some form of public ownership in land so that when the value of land increases not through the efforts of its owner but through the efforts of the community that increase goes back to the community which created it.

Mr. Jones

But the Land Commission had no control over the value of land. It made a levy on land. Surely that tended to put up the cost of land. That is the effect that the Land Commission had. Although that may not have been the intention, it was the direct result of the Land Commission's activities which brought the increased price of land into being.

Mr. Denis Howell rose—

Mr. Deputy Speaker

Order. We cannot have an intervention on an intervention. There are many hon. Members who are hoping to speak.

Mr. Allaun

I intend to bring my remarks to a close very shortly. However, I have been asked several questions, and I do not like dodging them.

The answer to the question which has just been put to me is that people selling land go for the maximum price. They go for and get the full market price in any case. If some of that price is taken away from them, it goes back to the community. They cannot obtain more than the market price.

Mr. Howell

Whilst it is true that the price of a house is decided by the market value in conditions of scarcity, if the hon. Member for Northants, South (Mr. Arthur Jones) is right that the Land Commission forced up the price of land, the inescapable logic of that argument must be that the abolition of the Land Commission will bring down prices. We have seen no evidence to support that.

Mr. Allaun

No one on either side of the House is daft enough to believe that the price of land will come down—certainly not without control.

I welcome the small improvement in the option mortgage scheme. I should like to see a considerable extension. The 2½ per cent. advantage given to the low-paid worker to bring him up to the income tax payer's benefit should be increased to, say, 5 per cent. and extended to a much wider range of the population.

6.11 p.m.

Mr. William Shelton (Clapham)

It is a great pleasure for me to intervene in the debate. I am an Inner London Member, and rents and rates are obviously of great concern to both my constituents and myself.

The one note struck by right hon. and hon. Members who have spoken so far has been of concern. I do not think that anyone in this House is complacent, satisfied or happy about housing, rents, or rates in our great conurbations. Any hon. Member who has taken an advice bureau or canvassed and talked to constituents will be aware of the great social problems caused by bad housing. I firmly believe that many social problems—delinquency, broken homes and truancy—spring from the poor quality of housing in many of our great cities. Whatever Government can solve this problem over the next generation will have done something great for the country.

It is not only a problem in this country. Anyone who has visited the United States will be aware of what they call the "city centre decay". It is far worse than in this country and should be a warning to us.

I had the pleasure of meeting an Australian Member of Parliament a few weeks ago. I asked him: "What is the principal problem which your constituents bring to you?". He replied: "Housing." So it is a great problem in other parts of the world.

I was interested in the remarks made by the hon. Member for Salford, East (Mr. Frank Allaun) about the cost of land. I cannot agree with his remarks about the Land Commission. However, the cost of land is a great problem.

In the Borough of Lambeth, part of which I have the privilege to represent, an acre of land costs £90,000. To that has to be added about £60,000 for clearing it. Therefore, it costs about £150,000 for an acre of land which may take 65 families. I make the same calculation as the hon. Gentleman. It means that it costs £2,000 to £3,000 per dwelling before a plan is drawn or the first brick is laid. This is a grave problem facing developers, both private and public, in our great cities.

These difficulties do not spring from any evilness, crookedness or desire to do ill to our people. All the people with whom I have worked over the last few years, colleagues or members of either party—I was on the Greater London Council and served on the housing committee—impressed me by their good intentions. They are well meaning people. But it is precisely many of those good intentions which have led us along the road started in the 1920s or 1930s to the difficutlies which we are encountering today.

One curious feature which has struck me about the thinking of right hon. and hon. Gentlemen opposite and their friends in the councils throughout the country, some of whom I have met, is that they are almost conservative in their policy towards selectivity, because they apply a policy of selectivity to housing.

I shall restrict my remarks more to Inner London, of which I have a greater knowledge than other parts of the country. Deliberately exaggerating, the attitude which I have encountered again and again is that council tenants are good and should be helped whether they need help or not, and that landlords are bad whether they are rich or poor.

I should like to illustrate the case of a landlady in my constituency who does not live in the house which she owns. The rent which she receives, for some obscure and complicated reason, does not cover the rates which she has to pay. The family living in that protected house enjoys a considerably higher standard of living than this lady.

Mr. Julius Silverman

Surely the hon. Gentleman cannot be right. Whether it is a controlled or a regulated rent, the rates are an additional payment.

Mr. Shelton

That is a good point. I have mentioned an exceptional case. It goes back some years to when this lady made an agreement with the council that it should be let at a special rent in return for some other consideration. In general terms the hon. Gentleman is right. But we must all know of cases where the rent does not, for instance, cover the repairs which the landlord should make.

Mr. George Cunningham (Islington, South-West)

But it does cover rates.

Mr. Shelton

Generally speaking, it covers rates; but I think we can agree that it does not cover repairs. Perhaps that was not a god illustration.

In general, private tenants are ignored even when, as we have seen over the last year or two, figures seem to show that on average they have lower incomes than average council tenants. These injustices and inadequacies create much hardship and bitterness and a great deal of difficulty. That is why I support the policies outlined by my right hon. Friend the Minister for Housing and Construction and those supported by Conservative-controlled councils over the last two to three years in Inner London.

This brings me to the question of fair rents and massive rebates for those in need. I do not wish to go into detail. I should like to put three points on the fair rent and rebate concept.

The first concerns the Social Aid Scheme, started some years ago by the Socialist-controlled London County Council. That was a form of rent rebate to council tenants in need. The intention behind the scheme was admirable. In the three years between 1965 and 1968 £200,000 to £300,000 were disbursed each year to those tenants who applied. Under the Conservative G.L.C. today, £1.7 million is being disbursed in rent rebates, which means that the hon. Gentleman who made that remark about sixpences was not talking about Inner London.

If the previous Government had allowed the G.L.C. over a period of time to lift its rents to the fair rent level, its housing revenue account would now be in balance. Instead, it is not. It has a deficit of £8.1 million, equivalent to nearly 1½p on the rates for Inner London, and 1.2p for Outer London. Because the rents were not raised to the fair rent level the ratepayers is suffering a higher rate than he would otherwise be doing.

My next point relates to a matter which I find extremely irritating and trying. A leaflet which is being distributed to council tenants in Lambeth, in my constituency—I assure the House that I am not reading selectively—says: These questions affect you. Please read them carefully", and it goes on in the form of question and answer. The first question is: What is the Conservative attitude to council rents? The answer is: The Conservatives believe that everyone, whether council or private tenant, should pay 'fair' rent. I accept that. There is no mention of rebates there, and I might add that rebates are not mentioned anywhere else in this little document. The next question is: What do they mean by 'fair'?", and the answer is: They mean that all rents should be allowed to rise to their maximum level. I am sure that right hon. and hon. Gentlemen opposite will agree with my hon. Friends on this side of the House that that is a travesty of the facts.

Mr. Denis Howell

What is a fair rent?

Mr. Shelton

We know that the fair rent is the market rent with the scarcity element excluded. We know, too, from the figures that have been supplied that on average the fair rent is 10 per cent. to 15 per cent. below the market rent. Therefore, for anyone to say that what the Conservatives mean is that rents must rise to the maximum is distorting the facts.

Mr. Tebbit

The Front Bench opposite has agreed with the statement that fair rents are maximum rents. These are the fair rents which hon. Gentlemen opposite introduced, although they now tend to call them "so-called" fair rents and the weasel words are starting.

Mr. Shelton

I am grateful to my hon. Friend for his contribution, with which I agree.

The document to which I have referred is published by the Labour Party, Transport House. The statement is not true. What is more, it is a slur on the rent officers working in Lambeth. They are a fine body of men, doing an excellent job to the best of their ability, and to circulate leaflets such as this is to do them a disservice. I hope that note will be taken of what I have said, that the leaflet will be withdrawn, and that an apology will be made.

We agree that council house building is important, but it is not the only way in which to solve the problem. It may be the most important, or less important, but there are other tools that are being used by Conservative councils—though such weapons were neglected by Labour councils, for whatever reason—and they are now bearing fruit.

Some of these tools have been mentioned today. Reference has been made to the sale of council houses, to housing advisory centres—the Seebohm recommendation—to the increasing collaboration with new towns, to offering people opportunities outside the city centres, to housing associations and the help that they are getting from the G.L.C., among other authorities, to improvement grants, to the small, burgeoning save-as-you-pay schemes being run by some councils, and so on. All those things, and many others, have their part to play, and any council which is hypnotised by council house building is losing many advantages that it could gain if it were to adopt the plan that has been adopted in Lambeth, for instance.

Lambeth, like most Conservative-controlled councils, uses all those methods to deal with the housing problem. If it were not the first to set up a housing advisory centre, as recommended by Seebohm, it was certainly among the first to do so, and I suggest to hon. Gentlemen opposite that a visit to the housing centre in that area would be well worthwhile.

The result of all that has been done in Lambeth is that in the last three years the council has rehoused 7,000 families, compared with 4,000 in the previous three years under Labour control. In 1971 it had 3,000 houses under construction, compared with 1,100 in 1968. Peterborough Week was mentioned by my right hon. Friend the Secretary of State for the Environment the other day. This was organised by Lambeth Council to draw attention to the opportunities existing in the new town of Peterborough. A public meeting was held in the town hall, which nearly 1,000 people attended. In fact, people had to be turned away because the interest in the project was so great that there was a capacity crowd. Every Saturday the council takes coach-loads of people to Peterborough to see what is happening there. A large number of applications has been received and already, within a few weeks, people are starting to move out. This shows what can be done by collaborating with the people who have housing problems.

I am fortunate that my constituency is partly in Wandsworth. I am sure that hon. Members will be pleased to hear that in the last three years there have been 3,200 completions in Wandsworth, compared with about 1,700 in the previous three years under the Socialists. Lewisham has the same sort of record—2,500 since April, 1968, compared with 1,850 in the three years before then.

Mr. Julius Silverman

Does the hon. Gentleman think that the Labour Government's Housing Subsidy Act had anything to do with the number of completions?

Mr. Shelton

The hon. Gentleman probably has a point, but not a very important one.

Lewisham has rehoused 2,800 families since 1968 compared with 2,100 in the previous three years.

One could ask, "Have not the rates increased very much in Lambeth as a result of this tremendous activity"? I am glad to assure the House that they have not. Over the last three years rates have gone up by 12p, of which the borough contributed only 3½p. The I.L.E.A. contributed 4p in that period, including the last rather remarkable rate increase, but I think that that is outside the terms of the debate.

Mr. Nigel Spearing (Acton)

As another London Member, I am very interested in the hon. Member's speech. He quoted some figures of completions. Would he not agree that it would be more accurate to reflect the different policies of councils by quoting starts, and that many of the completions which he quoted as coming during the three-year Conservative period would have been planned two or three years before, under the previous Administration?

Mr. Shelton

There is some truth in that, but the distressing figures for the previous three years were also planned under Socialist administrations.

The sort of rate increases which we have been seeing under, for instance, the Socialist-controlled Inner London Education Authority might be a warning which is borne out by the average London rates rise in 1971–72 compared with 1970–71. In Inner London, we are in the fortunate position of being able to compare the performance of Socialist-controlled with Conservative-controlled boroughs. In the four Socialist-controlled boroughs, the average rise was 18 per cent. In the 28 Tory boroughs, the average rise was only 11 per cent. Perhaps the electors next week will take heed of what I have been saying.

Several Hon. Members rose—

Mr. Speaker

Order. I am not criticising, I am just making an observation, but we have had only two back bench speeches in 45 minutes. Many hon. Members want to speak. I hope that hon. Members will have some regard to that fact.

6.32 p.m.

Mr. Julius Silverman (Birmingham, Aston)

The hon. Member for Clapham (Mr. Shelton) referred to disparities in rates. This may be due to a number of things. For instance, one would like to know how many children there are in the Labour-controlled boroughs and how many in the Tory-controlled boroughs. This may be a major factor in educational costs, which of course are the main ingredient in rate expenditure.

I want to deal mainly with rents. The hon. Member referred to what has happened in the last three years. It is significant that those three years correspond almost exactly with the operation of the Housing Subsidies Act. There is no doubt—I speak from Birmingham experience—that without that Act, with its massive subsidies, house building would have ground to a halt, certainly in Birmingham and probably throughout the country.

The Tory record of house building in Birmingham is not bad at all, certainly compared with other Tory boroughs, but without massive assistance from the Government of millions of £s of subsidy they could not have gone on with their building. The picture is the same throughout the country. Therefore, the three-year period which the hon. Gentleman mentioned is very significant. This is the point which is crucial to any debate of rents.

The Government are now proposing to dismantle the Housing Subsidies Act. We do not yet know for certain what will be put in its place. Negotiations have been proceeding behind closed doors between a Tory Government and a Tory-dominated local government cabal. What is happening we do not know. Nothing emerges from the smokescreen. It is strange that this Parliament which is supposed to be the governing body of the country, is not even told what is happening in these negotiations.

We do not know what the proposals are. We hoped—perhaps with excessive optimism—that the Minister would give some sort of elucidation today of the ideas in the Government's mind, but he gave not an additional word in information. The smokescreen remained as thick as ever.

Mr. Denis Howell

I will give some elucidation at the end.

Mr. Silverman

I am sure that we will get none from the Government.

Emerging from the smokescreen by accident are certain facts. For instance, my hon. Friend the Member for Manchester, Gorton (Mr. Marks) said that one of their Tory councillors had suggested that there would be an average increase of £1 a week in rents throughout the country. No reply was given—that was neither denied nor confirmed.

This figure corresponds with my rough calculation. If the Government are going to save on local government housing expenditure, as announced in the White Paper of 3rd November, between £100 million and £200 million a year at the council tenants' expense, and if one considers also the cost of the rebate scheme and the cost of certain other items, the figure of £1 a week would seem to be fairly realistic.

But this figure is in addition to the costs which will come from the increased cost of house building, and the cost of land. Land Commission or no Land Commission, the cost of land is still going up. With the increased costs also of repairs and administration, the figure of £1 a week for the average tenant will be totally additional. Tenants must face this.

What is the Government's policy? We know that the whole of this Act will be demolished. There is to be "restructuring", as they call it, of local council rents. We have been told that this will affect not only new house building—as has been the case in the past—but existing houses, on which there is a sort of contract in existence between the Government and the local authorities that they will get such-and-such a subsidy for so many years.

Will the Tories fulfil their promise before the election that housing subsidies would go entirely, except for selected classes of the community or for slum clearance, and be replaced by a rebate scheme for those who applied and submitted themselves to a means test? We do not know whether that policy has been abandoned. If it is still their policy, it will mean massive increases.

I can think of certain estates in Birmingham, like Castle Vale and Chelmsley Wood, where new houses may have to pay a rent increase of £3 or £4 a week. The people in those areas already pay nearly £7 a week in rent and rates. Even with the good wages in Birmingham—it is still a prosperous place, although not as prosperous today by a long chalk as it was—those figures will impose a hardship not on a minority but on the generality of tenants.

It is true that fair rents were introduced by the Labour Government. I did not object to the principle of fair rents, but I and a large number of hon. Members on this side have objected to the way that they have turned out. It is not the rent officers whom we are criticising, it is the rent assessment committees and the principles upon which they have operated. Their obligations are set out in Section 27 of the 1965 Rent Act, now embodied in, I think, Section 46 of the Consolidated Act, the 1968 Rent Act. This provided that the scarcity element should be eliminated, but one need only note the vast differences that exist between rents in, for example, some parts of Yorkshire and London and Birmingham to see that the scarcity element has not been eliminated.

How does this apply to the council sector? Whatever the faults in the administration of the scheme, the assessment of rents for the purposes of the Rent Act in the private sector was done by an individual assessment of each house. Will that happen in the council sector? Of course not. It would be administratively impossible for millions of houses to be so assessed.

It is proposed, instead, to say, "This is the sort of valuation made by rent officers in the private sector". I understand that this has been done in London by the G.L.C.; so many times the gross annual value has been the criterion in making the assessment. Is this the scheme the Government have in mind? If it is, it is quite different from the individual assessment type of operation which existed under the Rent Act, and it is not appropriate to call these fair rents.

I was a Member of the Committee which examined the Rent Act when it was introduced. There was much discussion of whether we should adopt rent control based on gross value or control based on a scheme of individual assessments. The Minister of the day rejected the idea of assessment on the basis of gross value, though what the Government propose now represents precisely that. To say that this is a principle which the Labour Party introduced is, therefore, to state an untruth.

The Minister referred to the Birmingham scheme, which I know well. I participated when the original Measure was debated and I did not oppose the Bill. I agree, in principle, that if council tenants get rebates private tenants should get them as well. But we are deluding ourselves if we think that this will make a substantial contribution to solving the hardship problem, because I assure hon. Gentlemen opposite that the Birmingham scheme has not achieved what was hoped of it.

The scheme provides for subsidies to private tenants equivalent to rebates in the council house sector. Birmingham Corporation has about 11,000 tenants in receipt of subsidy, or about 10 per cent. of all tenants in the public sector. The Birmingham scheme has been in operation for about six months. Something over 1,000 people originally asked for forms and 700 made application. Only 250 rebates are being paid, at an annual cost of £20,000. Even if one is not prepared to call the scheme a complete fiasco—because 250 tenants getting some sort of help is something—it is obviously a vast disappointment and proves conclusively that nothing very much can be expected of it. Why is this?

It has been pointed out that the poorest section of the population lives in the private rented sector. As a result, a large number of them are already in receipt of supplementary benefit and do not qualify for the rebate. I am told that of those rejected under the Birmingham scheme, a large number were in receipt of supplementary benefit and thought they could get this as well.

Then there are those in multi-occupation and furnished tenancies. Theoretically, they are not excluded from the Birmingham scheme, though I gather that they will be excluded from the Government scheme. While, theoretically, they qualify, as the assistance is not based on the actual rent paid but on an assessment—on a sort of fair rent basis—it is of little use to them because in this sector one finds the most extortionate rents being charged, especially in the multi-occupation situation. It is probably worse in London than in Birmingham. In other words, it does not matter in this context what rents they pay.

It might be argued that this type of tenant could go to his furnished lettings tribunal and obtain a reduction in rent to correspond with the amount of benefit for which he is applying. But a reduction in rent will not be of much use to him when he has the prospect of being out on his ear within a few months because of his lack of security. Incidentally, the Government have refused to extend security of tenure for furnished lettings. In multi-occupation we will continue to get the massive exploitation that exists today.

Side by side with this assistance to very few people, the Government propose to steadily dismantle rent control, or at any rate to hasten its end, and I gather that they also intend to diminish the area of regulation.

For the private sector, the Government's policy will mean benefits for very few people and probably massive increases for very many. The people of Britain have nothing whatever to expect from this policy. They will show their feelings next Thursday, but unfortunately it will take them a lot longer to have an effect on the composition of this House, which many people who voted Tory at the last election now regret.

6.48 p.m.

Mr. Idris Owen (Stockport, North)

I wish at the outset to declare my interest. I represent a family of home builders who have been providing homes for the people in the North-West area since before the turn of the century.

Before the first war we were providing terraced houses for less than £100 each, and before the second war we were providing homes for £280 each. We are now faced with the greatest inflation in building costs in the history of the industry.

In earlier years the industry was highly competitive, one company with another. There was a ready availability of land, money for building and people to do the building. It is not unreasonable, therefore, for me to dwell on the more practical aspects of the provision of homes in Britain.

When I read the Motion I marvelled at the effrontery of the hon. Gentlemen opposite. I do not wish to be unkind, but I am surprised that many eminent hon. Members have put their names to it. I am not surprised that the right hon. Gentleman the Leader of the Opposition should do that, because that is completely in character; but I am surprised that the others have done so.

The first half of the Motion concerns me most: That this House deplores the policies of Her Majesty's Government which are designed to increase the cost of housing… Let us look at the record of the Labour Administration until last June. We have heard so much about it, but it will stand re-emphasis. They introduced the Land Commission and the betterment levy. To provide for the levy alone meant thirty shillings for every week of a twenty-five year mortgage on an average priced house of £5,000. The Labour Administration imposed selective employment tax on the construction industry because they regarded it as a service industry. A colleague of mine who was a florist making up wreaths and bouquets was exempt from selective employment tax. How farcical the situation was. Selective employment tax may be regarded by some as a mere bagatelle, but it increased the weekly cost of a newly built house by 7s. 9d. per week for the thirty years of a mortgage.

Then we had the Construction Industry Training Board levy which was calculated to assist in training entrants to the industry and to give the industry greater skill and competitiveness. In spite of the millions of pounds spent by that board from its inception, the intake of youngsters from school to be trained in the craft industry began to diminish. As a result we have a shortage of labour in the industry.

Another point which has not been mentioned, and is not likely to be mentioned, is that the building industry demands heavy goods deliveries to sites, In 1964, when the Labour Party first took office, the tax on the average eight ton lorry was £63 per annum. The Labour Government increased it to £216. It was a fantastic rise which increased the delivered price of goods for homes.

Mr. Loughlin

If one is selective in one's statistics, it is very easy to make a case. But I notice that the Government do not propose to reduce any of these taxes, with the exception of selective employment tax.

Mr. Owen

And the levy.

Mr. Loughlin

If the hon. Gentleman will allow me my intervention, it will be much shorter than if he will not. The Government have reduced S.E.T. by 50 per cent. Can the hon. Gentleman tell me of any builder who has reduced the price of houses as a consequence?

Mr. Owen

I am coming to that.

Mr. Loughlin

They have told us that they would not.

Mr. Owen

There is no doubt that the Land Commission and the levy involved the most disastrous costs ever inflicted on home ownership. This began to filter through into the public sector, and it was only when local authorities had consumed the land they had for many years and had to go into the market for more land that they began to feel the impact.

Although it may be argued that land prices would not necessarily come down because of the abolition of the levy, the levy triggered off an inflationary tendency which we shall never be able to control. I admit that the construction industry is not without fault. Both the employers and the employees are deserving of criticism, and it is time that they were criticised.

Let us look at the labour situation in the industry. Housing costs are ever increasing. The hon. Member for Liverpool Walton (Mr. Heffer) told us that there is unemployment in Liverpool. That is a subject on its own. But that does not apply throughout the country. The construction industry negotiated rate for wages is 9s. 3d. per hour. That is about 46½p, but I shall confine myself to the old currency. A rate of 9s. 3d. an hour is £18 10s. a week for a standard average working week for a craftsman in the industry. I have a copy of yesterday's Evening News which carries an advertisement for craftsmen in the construction industry at £40 per week for a five-day week. Does that indicate that there is a surplus of labour in that industry? Are the construction people prepared to pay £40 a week for craft labour when they can obtain it for £18 10s. a week? Labourers in the construction industry, according to the advertisement, are being offered £35 a week for a five-day week.

All this has been put on the price of a house. We have the Ford Motors case all over again. The reason why we have not had a recent strike in the industry is that employers have acceded to every demand of labour. It is easy to have no problems if one continues to feed one's operatives with more money. There is no competition because there has now developed a vested interest in labour shortage. The intake of craft apprentices into the industry diminishes year by year. The operatives are quick to recognise that if they starve the industry of new intake they can maintain the high premium rates that they are obtaining. This is logical.

In defence of increasing housing costs, there has been a considerable improve- ment in the specification and standards of accommodation. Parker Morris standards, central heating and insulation all cost more and it is inevitable that homes are now dearer. But higher building standards have to be paid for by the community. They are all very desirable, but up goes the rent.

What can we do? Governments do not build homes competitively. That is left to the industry. On this I hope that I am on common ground when I suggest that we must be seen to be more competitive and must be given the opportunities of being more competitive. That is why I welcome Circular 10/70 which the Minister sent out in December. It is already beginning to have some effect. More land is coming on to the market, albeit extremely expensive land, and I have discerned a stabilising of acreage prices. They have not rocketed since last winter but have remained relatively static. I should like to see land becoming cheaper because it is basic to the price of the finished article.

We must create a condition where we can use the full force of competition. My right hon. and hon. Friends recognise that it is vital to have competition in the construction industry, as in other industries, because competitiveness keeps prices down. What we have is not competitiveness, because once the moguls of the land companies have acquired the vast acreages of this country they have cut away any chance of competitiveness. The hon. Member for Salford, East (Mr. Frank Allaun) and I want to reintroduce into industry that which before the war used to provide a more competitive element. The small man is undoubtedly a highly competitive machine. A man with two, three or four acres and a small labour force will beat the moguls of industry hands down. Such a man is vitally concerned about the job; he works long hours; he has pride in his work and he is determined to be competitive. We must create conditions in which such men can be offered opportunities of competing with larger units.

We cannot have labour holding the industry to ransom any more than we can have employers or landowners holding the industry to ransom. Building craftsmen are not capable of earning the rates they are receiving for the hours they are employed in the stress areas. They are receiving fantastically high rates against which other high rates pale into insignificance. I am not surprised if schoolteachers become upset when they hear that a building labourer can earn £35 a week for a five-day week. We must do everything we can to increase the intake of young school-leavers into the industry. It is no satisfaction for them to walk the streets looking for jobs. They should go into an industry which will provide the homes which are so badly needed.

To the Labour Party universality of subsidies is a sacred cow. The Labour Party believes that it should subsidise everybody irrespective of their income level provided they live in a council house. Labour Members have protested against any intrusion into the subsidising of council houses. It is not for me to complain when I find, as I did when I went canvassing, cars outside the doors of many council houses and colour televisions inside those houses. Although this is an extreme case, it is amusing to recount that I went to the door of one council house outside which stood a car and in the garden of which was a 25 ft. cabin-cruiser. That house was subsidised. I could not agree more with my right hon. Friend's statement that the principle should be "To each according to his needs".

Mr. Julius Silverman

Would the hon. Gentleman apply the same principle to owner-occupiers? Would he suggest that an owner-occupier should be subjected to a means test to see whether he is entitled to tax relief on mortgage interest, which is a form of subsidy?

Mr. Owen

I shall never be able to understand how the hon. Gentleman can equate a cash grant to a tenant with taking less from a man's earnings. Because we decide to take less from a man's earnings Labour Members call that a gift. It never has been a gift and it never will be. We are just taking less of his earnings from him.

Mr. Silverman

Is not the consequence precisely the same?

Mr. Speaker

Order. If the hon. Member for Stockport, North (Mr. Idris Owen) is giving way he must resume his seat. I again point out that many hon. Members want to speak. The more interventions there are the fewer hon. Members can be called.

Mr. Owen

According to the yearbook of the town I represent, in 1941 the general rate was 10s. 6d. in the £ with a £931,000 gross rateable value; in 1970 the general rate was 13s. 10d. in the £ with a £6 million rateable value. This was where the money was going. I served on that town council. In every debate on such matters in that council the representatives of hon. Members opposite screamed for higher rates and more services. They were not interested in lower rates. They had not a vestige of an interest in lower rates. They wanted higher rates, higher subsidies and higher benefits for those who were getting subsidies. Hon. Members opposite must not now complain if rates are rising, because it was part of their policy. This council was Labour-controlled for 14 years up to 1968.

It is hypocritical for the Labour Party to criticise the Conservative Government, who have been in office only ten months, as it does in the Motion. I suspect that the sacred cow of universality of subsidy is a form of mass bribery of council tenants for electoral purposes. It has happened. It is significant that next week is council election week. This is a Supply Day, the last day on which it was possible to have such a debate if reports were to get into local newspapers.

On every conceivable occasion hon. Members opposite work to maintain their friends in council houses at artificially low rents, irrespective of whether such tenants can afford higher rents. To me, it is tantamount to bribing the electorate with the money of the taxpayer and the ratepayer. A fair rents policy according to the principle of "To each according to his needs" would be of far greater benefit to the truly under-privileged, because wages have increased considerably. Building societies work on the principle that a mortagor's salary must be at least one-third the purchase price of the house. Applying the same criterion to a council tenant's weekly pay or annual pay he would be able to pay a much higher rent. This is not an unreasonable proposal. But saving money on those who can well afford to pay we could give undeniable benefits to those who are less well off.

I shall have the greatest pleasure in supporting the Amendment.

7.8 p.m.

Mr. George Cunningham (Islington, South-West)

When I hear a speech like that just delivered by the hon. Member for Stockton, North (Mr. Idris Owen) I dismay of the value of this place. If hon. Members intend merely to indulge in yah-boo politics of the kind in which the hon. Gentleman just engaged in the second half of his speech we might as well pack up here, because we can do that on street corners. In the first half of his speech the hon. Gentleman talked about things that he knew something about. We may or may not agree with what he said, but he knew something about his subject and it was valuable to hear him speak on that. In the second half of his speech the hon. Gentleman displayed not so much ignorance as the fact that he had not given the matter sufficient thought.

The hon. Gentleman said that the Motion is totally unreasonable and he implied that it is an indulgence in yahboo politics.

Mr. Idris Owen

I said that it was hypocritical.

Mr. Cunningham

The Motion says: That this House deplores the policies of Her Majesty's Government which are designed to increase the cost of housing… I cannot recall whether it was the Minister for Housing and Construction or the Secretary of State for the Environment who said some months ago that the difficulty with housing in this country is that people have never been prepared to spend enough money on their houses. It is no secret that the Government have said that they want to improve the housing situation by getting people to pay more for housing, so that part of the Motion cannot be hypocritical. It deals with an established and public part of the Government's policies.

The second part of the Motion deals with the burdens of the domestic ratepayer. My right hon. Friend the Member for Grimsby (Mr. Crosland) explained very carefully the difference between the policies pursued by the Labour Government in providing a successively greater contribution from the national Exchequer to subsidise the rates and the Government's policy of stopping that. This must mean that the burden carried by the rates, as compared with that which would have been carried if our policy had been continued, must be greater, so the words on the Order Paper, far from being hypocritical, are merely a reflection of the Government's published statements and actions.

The point at issue is whether the things the Government are doing make sense in the present housing situation. I was very disappointed in the Minister's speech. I had hoped that we could expect to hear some new points about Government policy on one aspect or other of the housing situation. We heard one new point, the reduction from five years to four as the period after which a house-owner may switch hack from the option mortgage to tax relief. The only part of his speech in which the right hon. Gentleman got the sympathy of the House was when he talked not about what the Government would do but about what the building societies are to do. Some of the things he mentioned may be very useful to people seeking a mortgage, but there was nothing in what he said about what the Government have been doing or are about to do. They have only been talking to the building societies about it.

I very much agreed with the Minister when he said that housing is the one sphere of policy in which we have clearly totally failed since the war. That applies to the whole 25 years since the war. In relation to the dimensions of the problem facing us, we have all failed. It is therefore unfortunate that when we are discussing a subject of this degree of importance we should not have a fuller house. Parliament can hardly expect to be treated as a serious institution if we discuss matters of such significance with such small numbers.

The housing conditions in my constituency, only two or three miles from this House, are absolutely appalling. I know of a family—husband and wife and two children—living in one room which could be fitted behind the back of Mr. Speaker's Chair. That is not a unique case, nor is it very common, but it is common enough to need emergency action to get rid of such conditions.

Cases came to my notice last week of constituents in Milner Square in Islington who have been not illegally harassed but pressurised into leaving their controlled tenancies to live elsewhere. Last week the winklers employed to do that job were saying to people concerned, "It is worth £50 or if necessary £200 from us to get you to move out." When the recipient of such advice says that he would like to consult a solicitor in many cases he is told. "Don't do that, and don't go to your Member of Parliament. This is between you and me." These things are happening within three miles of this honourable House. When we are trying to deal with a situation like that, yah-boo politics should be left aside. None of us has a totally clean record on this. It is perfectly possible for us to discuss what can best be done, and disagree about it, without indulging in that kind of thing.

There is another problem. Housing is, regrettably, now bundled up into the enormous and impossible Department for the Environment. We have a form of colonialism which needs to be stopped before it is too late. It is coming to be the case in inner London that working people on average earnings cannot afford to live where they are now. It would be said by most people looking from the outside at Barnsbury in my constituency that the environment is being improved. The condition of houses is being improved, the appearance of the streets is being improved, trees and balconies are springing up all over the place, and it is looking much better than it did 10 years ago. But the people who lived there 10 years ago cannot afford to live there now.

It is very easy to improve the environment of an area if one is not improving it for the people who live there now. We must make sure that there are at least some bits of Inner London where working people can continue to afford to live. The policies of the G.L.C. in consciously going for a social mixture in areas like Barnsbury, which is the trend of the times, are exacerbating a trend which is working to the detriment of the traditional residents of such areas.

Mr. Allason

Does the hon. Gentleman appreciate that the very Government policy which he is criticising proposes that there should be a subsidy for the tenants who he is complaining cannot now afford to live in his constituency under the policy that has been inherited?

Mr. Cunningham

If the hon. Gentleman thinks that the Minister's rent rebate scheme—when we are finally vouchsafed any knowledge about how it will work—will allow my constituents in Islington to live in the houses where they have lived for 50 years when those houses have been done up in the way that they are being done up, he does not understand that kind of area. That cannot happen. No kind of scheme could allow that to happen which did not cost £50 million or £100 million over the country as a whole. It is a much greater problem, and it needs to be tackled with far greater resources.

I had hoped that the Government's proposed scheme for private tenants was one subject we should be told something more about this afternoon. For months the Government have declined to give us any information about this new scheme on the grounds that they are in discussions with local authorities. When they go into the discussions with local authorities, the first question that must be put to them is, "How much have you got in mind?", the question that the shopkeeper puts to us when we go to buy a present for our wives. They cannot possibly make any suggestions about the kind of scheme unless they know whether the Government are thinking of a scheme costing £10 million, £50 million, or £150 million for the country as a whole. I very much agree with one of my hon. Friends who complained that it is not right, and that it is unconstitutional, that that information, which must be in the Government's heads, and some indication of which must have been given to local authorities—otherwise, the talks have been a total waste of time—has not yet been given to the House. It is time we had it.

But I mainly wanted to speak about council rents. I shall be as fair as I can, but some Conservative hon. Members seem to think that we on this side have an ideological attachment to having everyone as a council tenant. I do not know how many council tenants I have who are determined to remain council tenants, but I know that I have an awful lot who are determined to cease being council tenants as soon as they can. I have a lot of constituents who do not like living in high rise buildings. I am not determined to maintain people in such accommodation a moment longer than they wish to remain. But council accommodation is the only accommodation which anyone in Inner London, in the past at least, has had a chance of getting at a reasonable rent and in reasonable condition. High rise building is also the only way in which one can accommodate in Inner London enough people to provide the working services of Inner London. No one is attached to this as an ideological issue. It is a practical necessity.

Mr. James Hill (Southampton, Test)

Is the hon. Gentleman aware of the G.L.C. scheme for purchasing plots of land outside the London area to rehabilitate older citizens near the sea? Only last week the G.L.C. bought land in Southampton for this purpose.

Mr. Cunningham

In other words, "Take Gran to the seaside". I am sure that hon. Members opposite understand human nature as much as we do. Is it really suggested that, when people have spent all their lives in a close-bound area, with their friends and relations around them, they should be, not pressurised, but successfully persuaded to go off and live at the seaside? Some will wish to do so and that is fine, but many will not. So that is not a significant contribution to solving the problem.

Rents of council accommodation in Inner London today are fantastically high. This is something which many people do not seem to realise. Many of the 10,000 people on the Islington housing list cannot afford to go into the best council accommodation. In many cases, they would not be eligible for rebate because of family circumstances and income and so on, but they would still not be able to afford the £9 per week for new accommodation in the area. Council accommodation is not cheap these days, in the London area at least, although not normally in the other conurbations. One of the inheritances of the past is the idea that people are living in council accommodation at £1 or £2 a week. It is true no longer.

Why are the rents so high? I pick out four elements involved. The first is the land price, which is very high. The second is the extra cost of building high rise. The third is the fact that, because councils are increasing the stock of land upon which council accommodation lies, and increasing, therefore, the stock of council accommodation, the present generation of council tenants is having to bear the burden of acquiring land for future generations of council house tenants which will be larger in size. That is a contribution, if one likes, to the well being of the new generation of council tenants which there is no justification for putting on to the present generation of council tenants. That is an element in the level of council rents which must be examined in order that we may take it out and have it borne socially by the community as a whole and not by the present generation of council tenants. The fourth element is that of the rebates to council tenants, which are borne by other council tenants. The larger the number and the more generous the rebates, the greater the burden on the other council tenants who are not getting the rebates.

These are four of the elements which make council rents at the moment so very high, and there are others. It is important that the element in cost which is attributable to the fact that much council accommodation in Inner London is high rise should be taken off the backs of council tenants. No one wants to live in a high rise building. People only live there because that is all there is. High rise is built because it is the only way of housing a sufficient number. So these blocks are built for social reasons, for the benefit of the community as a whole, and the extra cost of living in one of these monsters should therefore be borne by all of us and not just by the unfortunate people who have to suffer living in the places and going up and down in the inefficient and often smelly lifts. The practical, day-to-day irritations of living in high rise blocks must be suffered to be appreciated. They are no palaces of comfort which people get for £9 a week.

It is also important to find some way of taking some part of the cost of the land off the backs of council tenants and putting it on to the national Exchequer. Land, after all, is an asset which can never go away. It will be there in perpetuity for future generations of tenants or as an asset to the community. It would be reasonable to find some means of financing which would treat it as a current revenue matter and therefore reduce the burden on rents.

The hon. Member for Stockport, North contrasted the subsidies provided to council tenants with the tax relief available not to all owner-occupiers but to those who are currently borrowing money. It is important to distinguish between the totality of owner-occupiers and those who happen to be currently borrowing money. My hon. Friend the Member for Kensington, North (Mr. Douglas-Mann) indicated that the relative value of the subsidy available is much greater in the case of tax relief than in the case of council subsidy. The relative value is even less favourable than he suggested, I believe, on the basis of information given to me last July by the Minister, because the number of people currently borrowing money is significantly less than the number of owner-occupiers.

I cannot see a difference between providing an interest subsidy to council tenants, which is a straight cash value and which can be quantified easily, and foregoing some tax from the owner-occupiers. It is not at all different. Both have the effect of giving the person concerned a higher amount of buying power out of his wages than he would otherwise have, and the tax relief is wholly indiscriminate. In fact, it is worse than indiscriminate because it gives to the person with the highest income the highest subsidy. It goes to people with very high incomes. It gives to the person who borrows the most the biggest subsidy of all. I can calculate my subsidy from the community. It is £2 a week. I borrow very little—I am a very modest Member—so my subsidy is only £2 a week. But most of my constituents get nothing like that subsidy.

I think, however, that we are breaking through on this point. There was a time when even to mention the presence of tax relief was to have the point dismissed by everyone in the way in which it was dismissed by the hon. Member for Stockport, North. Most people, even hon. Members opposite, now realise that there is a point there.

Mr. James Hill

No.

Mr. Cunningham

Some still do not realise it. Some people do not realise that this is not part of the law of nature. Nor is it generally the case in other countries. Some do it and some do not. In Canada, if I borrow money to buy my house at 10 per cent., then I pay the 10 per cent. and the tax man does not subsidise it down to 6 per cent. or, if I am paying surtax, down perhaps to 5 or 4 per cent.

Let us recognise that those things are exactly the same, they are both subsidies. Let us try to equate them more and let us recognise that we do subsidise housing, not people, when it comes to tax relief and make that a general rule, given the housing situation that we have. Let us find a way of subsidising all forms of housing on a reasonably equitable basis. What we must look at to do that is the question of going over from tax relief to the option mortgage system for everyone.

That would mean, if we kept the rate the same, a reduction in the cost to the Exchequer. But it would bear hardest on those who have no need of that anyway, so that ought to be a consideration of some attraction to the party opposite. It would be a very flexible system compared with present arrangements. If we were to look into that proposal we would find some means of putting the subsidies which we provide to various classes on very different basis from that at the moment but on a much more equitable basis.

Over the last 25 years no one has been prepared to give to housing the degree of priority which it certainly requires. The social effects of bad housing have already been mentioned. I would contrast housing with roads. If we are held up on the way to Cornwall it does not make our children delinquent. If they are brought up in one or two rooms in conditions of utter squalor, dampness and so on then it is much more likely that there will be social problems later.

Despite that, successive Governments since the war have been prepared, increasingly so in recent years, to spend any amount at all upon roads to get us from A to B and very little indeed on improving the appalling conditions which exist a few miles from here. In the London area in particular we should try to ensure before it is too late—and we only have a few years in which to do this—that it does not become impossible for working people with average earnings to live in Inner London. If it does then the services of the whole of London will suffer, quite apart from the fact that we will be telling people who have contributed so much and suffered so much in the interests of the community over the years that they must move out while others move in and take over the areas in which they have lived for so many years.

7.33 p.m.

Mr. Sydney Chapman (Birmingham, Handsworth)

I admire the knowledge and integrity of the hon. Member for Islington, South-West (Mr. George Cunningham), who speaks most sincerely on this subject. I hope he will understand my point of view if I say that I agree with much of what he has said but do not share all of his conclusions. I will refer later to high-rise flats.

I share the hon. Member's belief that in the last 25 years, in a very real sense, Governments of both sides have failed in their housing policies. We should recognise that we have, in one sense, undertaken a tremendous feat in building over 7¼ million new homes for families in the last 25 years. This represents about 40 per cent. of the housing stock of 18.6 million in Great Britain. When we look round at some of the slums which still exist, at the unfitness of many houses, the overcrowding and the obsolescence it is nothing short of a scandal that these conditions still remain in a nation which claims to be civilised.

It is to these national problems rather than to petty partisan political points that I wish to address myself. Why do we have this overcrowding and obsolescence? I believe there are two reasons. The first is the tremendous increase in the population in the last quarter of a century. One of the most interesting statistics available is that 25 years ago the Registrar-General estimated that the population of the country in the year 2000 A.D. would be what it is today. In other words, we had no idea a quarter of a century ago that there would be 56 million people in the United Kingdom. I know that the Minister who is to reply is responsible for town and country planning but not even he is yet responsible for family planning. The Government cannot be blamed for the population explosion as the statisticians call it.

The main reason for the explosion is not that people are having larger families but that they are marrying at an earlier age and having children earlier. This is something that was not anticipated 25 years ago. In my constituency, and doubtless in the constituency of Islington, South-West there is a particular problem as a result of the influx of immigrants. It is an area of high immigrant concentration which has brought its own social problems.

The second reason why we have failed—and this is a technical matter—is our failure to renovate many of the old houses. If I were to suggest a slogan it would be that our housing policy for the future should be "to renovate, not demolish", wherever possible.

I recommend that for two reasons. First, on sheer economic grounds it is cheaper to bring existing properties up to the standards we expect now rather than build new dwelling units. Secondly, people like to live in the more traditional sorts of home rather than these impersonal, to me at any rate, multi-storey blocks of flats. Failure to renovate must be laid at the door of both Governments. I think the main reason why we have failed—and I ask hon. Members opposite to understand the sincerity with which I say this—the method of financing housing which both Governments have undertaken in the last 25 years.

Up to now the finance of housing has been at best irrelevant to the needs of the country and at worst nothing short of a scandal. Where subsidies are necessary—and they are necessary in housing—they should go to those in need and not be a blanket spread over the many who do not need them. As a general proposition this has not been the case in the last 25 years. Figures can conceal a multitude of things but the fact remains that the income coming into local authority dwellings is greater on average per dwelling than the income going into privately-rented, albeit unfurnished, property.

This illustrates the point not that everyone who lives in council houses does not need to be subsidised but that there are people not living in council houses who need subsidising and who do not at present receive subsidy. I put that forward as a realistic point.

In 1971 we should get rid of the emphasis we have put on the numbers game in housing. It was a mistake for the Labour Government to commit themselves to half a million homes a year by 1970. I do not want to be misunderstood. They should have been building half a million homes by 1970, but by concentrating on a figure they failed to bring to the attention of the nation other equally important things. It is not just a question of building desperately-needed homes; there should be greater concentration on saving existing homes from becoming the slums or the obsolescent houses of tomorrow.

We must try in future to build the sort of homes that people want. As the hon. Member for Islington, South-West said, most families want to own their own home. I therefore see nothing criminally wrong in encouraging council-house tenants to start the process of owning their own home. I do not want to sound patronising about this, but there are divisions in our society being created solely by our housing policies. The council estate is on one side of the railway track and the private houses are on the other side. It would be better to have a greater mixture of council-house and private development in neighbourhoods in our towns and cities, especially in the new towns.

If we want to encourage people to own their own homes, we must bridge the financial gap between the income of the average person in a council house and the income of the average person who starts to buy his own home. It is not that people do not want to start the process but that they are financially incapable of doing so. I welcome what was said this afternoon by my right hon. Friend the Minister for Housing and Construction about his discussions with the building societies. The building societies have a much greater part to play in this than they have been prepared to play—or have been until the Minister's statement this afternoon.

In speaking of the sort of homes that people want, one comes inevitably to the multi-storey blocks of flats which have been one of the curses of housing of the last decade. I do not necessarily blame either Government for this. My own profession, the architects and the town planners, have a heavy responsibility to bear. It seemed after the war that there was a simple choice. One either had to build upwards in city centres or build outwards in the green belts and on pastures new in the country. As the years have gone by we have found that we can house more people than we thought within our existing urban areas. I maintain that we can house people at almost as great a density in high-density low-level development in urban areas as in high-density high-level development. I blame successive Governments for giving greater subsidies for high-rise blocks of flats. People do not like living in high-rise blocks of flats, so we should not build them. If anyone doubts that people can be housed at the same density in low-level development, I refer them to the "in" area of London, Chelsea, where people are packed together; yet it is a highly desirable area in which to live.

Rates and the rating system come within the terms of the Motion. The rating system is a nonsense and it is unfair. Although in yesteryear rates produced the greater part of the revenue of local authorities, that is by no means so now. Although it varies from one local authority to another, the central Government block grant is generally greater than the revenue from the rates in most local authorities. The system is out of date, and it is unfair for the obvious reasons which I do not need to rehearse again.

Like many other hon. Members, I await with interest the Green Paper on local authority finance. I hope there will be a radical change in the method of raising local authority revenue. The reform of local government will give a golden opportunity for getting rid of the rating system at least on the domestic side. The rating system is as absurd today as the 18th century window tax was in that era. It is now the clear duty of the Government to state why, for example, a local income tax or a local sales tax, or a combination of both, cannot be a substitute for the domestic element of the rating system.

I do not want to fall into the trap of descending into the yah-boo politics referred to by the hon. Member for Islington, South-West. But the Motion is a political one, and it is, therefore, fair to point out that in the tenure of office of the Labour Government the average cost of building a council house went up by 40 per cent., private housing costs went up by nearly 50 per cent. and weekly local authority rents went up by almost 70 per cent.

I end on a provocative note. We have been challenged by' the other side to say that we are the party of high rents. I would far rather see rents go up if the result were that the net rents of those people who are being subsidised but do not need to be subsidised went up and the people who are not being subsidised but ought to be were able to live in pleasanter, happier and healthier conditions. It is not so simple as to say whether or not one agrees with higher rents. I am sure that the Labour Government would not have admitted when they came to power in the latter part of 1964 that local authority rents would go up by 70 per cent., as they did. I therefore think it would be irresponsible for the Opposition to be given a categorical assurance about how much rents will increase.

I hope that within a few years we shall have a better and fairer system of housing for our people. Only by the measures being brought forward by the Government, not complete in themselves but a start in the right direction, shall we get rid of some of the appalling housing conditions which, alas, exist, certainly in parts of my constituency, today.

7.50 p.m.

Mrs. Doris Fisher (Birmingham, Ladywood)

I wish to apologise to the House for not being present at the beginning of the debate because I have been attending the Standing Committee on the Immigration Bill. Therefore, many speakers no doubt may already have covered some of my points.

One thing that mazes me about the Conservatives is that they try to make out that housing is not a party political subject, when the whole Tory philosophy is based on a feeling that, because public money is being provided to build homes for people who cannot buy homes of their own, it has to be subjected to election propaganda and all the party strife which flows from it.

Knocking the council house tenant has become a low-grade parlour game. Many instances can be given that, by implication, because a council house tenant rents his property he is somehow a lesser person than anybody who is repaying a mortgage. In other words, it is being said that as a citizen he is less responsible. A pamphlet issued by the Housing Research Foundation entitled "Home Ownership in England and Wales" quotes the Secretary of State for the Environment as saying: It is the owner-occupier who makes the major improvements so as to provide the modern amenities of a bathroom and a kitchen. It is the owner-occupier who takes the most positive interest in the decisions affecting the entire community. As a representative of a Midlands constituency, I do not accept that that attitude applies only to those people. There are no properties in my area, except a few which are waiting to be cleared under slum clearance schemes, which belong to private owners. I certainly do not accept that the people whom I represent in Ladywood are any less socially responsible than people in any other constituency.

Mr. Tebbit

I wonder why the hon. Lady did not read the other part in the same pamphlet which she quoted, which appears to be by a Mr. Richard Crossman: The extension of our council housing programme is exceptional. It is born partly of a short-term necessity, partly of the special conditions inherent in modern urban life, whereas the building for owner-occupation is normal: it reflects a long-term social advance which will gradually pervade every region of the country. Does not that seem to be a bipartisan housing policy?

Mrs. Fisher

If the hon. Gentleman wants to make a speech, no doubt he can do so a little later and can then make his own points.

Almost everywhere in the world there are not enough decent houses for those who can afford only to rent. All the great capitals of the world have similar problems in finding housing accommodation for these people. I am not against owner-occupation as such, but it is important to remember that there are certain people who in the whole of their lifetime will never be owner-ocupiers. Who is to build homes for the not-so-poor? Even in the United States, where private enterprise is supposed to be successful in almost every aspect of life, the city authorities are having to spend money on providing homes for people who cannot afford to purchase their own homes. Private enterprise, wherever one looks, must provide housing at a profit.

The difference between the two sides of the House is that we believe that there should be a form of Socialist justice to people who cannot provide homes for themselves. I accept that home ownership will increase, and rightly so. However, I am concerned about the homeless families who live in appalling conditions in the centre of large towns. I know something about these shocking conditions because this kind of housing can still be found in my constituency. There are people who, through no fault of their own—because in the main they are in the category of the low-wage group—cannot, even if they find a house to purchase, go ahead because they do not qualify for a mortgage.

In the large conurbations there is the real problem of finding sufficient land on which to rehouse the people who can only afford to rent. Birmingham has a particularly serious problem of finding housing land. Perhaps we could be told this evening, when the Minister replies, whether he is to take a speedy decision about the land in North Worcestershire which is so important for housing needs. The delay has meant that Birmingham will have 4,500 fewer houses in the pipeline than it should have. The figures which I have obtained from the City of Birmingham architects' department show this quite clearly.

There is concern in my area because a building organisation which was built up to provide some 9,000 houses for the city of Birmingham has given up because the land has not become available quickly enough. Once that building labour is dissipated, we shall see a decline in the number of houses built. The Secretary of State for the Environment will have to take some responsibility for that.

We have heard from hon. Gentlemen opposite that the Labour Government were not able to provide houses in the right numbers. It must be remembered that in 1969 the then Minister of Housing was forced to write to local authorities which seemed to be acting against the best interests of the people whom they served. It was apparent that some Tory-controlled authorities were exhibiting their traditional dislike of local authority housing. We on this side know that the Tory interest in the council tenant can be likened to the interest shown by the Devil in holy water.

I was for some time chairman of the Birmingham Housing Committee. Even since the Conservatives gained control in that city, I have often come to the Minister to ask for more and more money to help to balance our housing revenue account. I hope that as a result of our negotiations with the Minister we shall certainly not receive any less than we are receiving at the moment.

The great concern of local authorities is in balancing their revenue accounts. I have always felt it wrong in a housing account which shows only income and expenditure. Nothing that appears in the housing revenue account takes cognisance of the assets owned by a local authority in respect of the houses under its control. It is easy for the Tories in Birmingham to say that £4 million has come from the houses sold to owner-occupiers in the council house zone. All they are doing is realising their assets at market prices. But there is nothing in the balance sheet to show that the assets, in fact, are very great. This problem could be overcome by including assets in the revenue account rather than merely in the form of income and expenditure.

Rents are a large item in the family budgets of workers. If the Government are to make very sharp increases, they will accentuate cost inflation. I do not know whether hon. Gentlemen realise it but an increase in rents inevitably results in greater pressure from trade unions for wage rises.

In the large conurbations, much housing has still to be provided by the local authorities, since they are trying to create better housing conditions for the people. But hon. Gentlemen opposite should realise that rents in our large cities are not low. In my constituency, I hold a weekly advice bureau. Many people come to me who live in houses which are under slum clearance orders, and they are glad at last to have the prospect of bathrooms, hot water, and lavatories to themselves, but they all tell me that they cannot afford more than £4 or £5 a week. I have to tell them to apply for rebates to help them over the hurdle. The economic rents being charged for new properties which have been built in the City of Birmingham are out of reach of the majority of families at present living in slum clearance areas. A worker earning £22 a week finds that he has very little left for his family to live on if he has to pay £7 or £7.50 for a rented house in Birmingham.

We hear a great deal about economic rents. Do the Government mean the economic rent less the Government's subsidy when they talk of a fair rent? Are fair rents to be based on a maximum figure? Should not they be below £7 a week, or must a tenant be squeezed for the maximum that he can afford to pay? Will the Minister place a ceiling figure on rents, and will he also give an income level below which rebates will be paid? All these matters concern people who live in council properties. After all, it is they who have to pay each week, and, quite rightly, they want to know at what point they will be penalised and at what point the Government may give them benefits.

Another point which concerns me is whether the Minister intends to include teenage wages in his calculations in devising a fair rent system. If the income of a working teenager is to be included in that of a family living in a council house, the result is that the household may not be entitled to any subsidy. If that is to be the position, then obviously the same must apply in the private sector so that the earnings of a working teenager are set against the tax relief which is given.

My hon. Friend the Member for Birmingham, Aston (Mr. Julius Silverman) said that just over 10 per cent. of all those who live in council properties in Birmingham at present receive rent rebate from the local authority. However, that percentage does not take into account the thousands of people, most of them elderly, who benefit under the social security system. The Department of Health and Social Security has informed me that approximately 30,000 council tenants in Birmingham receive supplementary benefit designed to help them pay their rents. In the main, it is the elderly for whom provision is made in this way. But one wonder just who will be able to pay the extra amounts in order to bring down the rents of the unfortunate. If rents are increased, at the same time one increases the number of people who will benefit from the subsidy arrangements provided by local authorities. Any increase in rent results in many more people coming into subsidy schemes.

We do not know what the Government will decide to do. When they came to office, they introduced a number of measures very quickly, and results soon began to flow. However, on housing, the Minister is always having consultations with local authorities. Since about November of last year, hon. Members on this side of the House have been asking what is to be the Government's policy on housing. The answer always comes that the Minister is still consulting local authorities. Surely by now some local authorities ought to have been able to bring forward a plan for the Minister to put into operation. I am surprised that Birmingham has not given the lead.

Is not the entire approach to fair rents based on an illusion? Does the Minister really believe that if financial aid is given only to those families in need, so much will be saved from areas of little need and from council tenants who can afford economic rents? Does he feel that from that small group of people he will create vast reserves of money to help areas of special need in both the private and the public sectors? I believe that when he begins to work out the figures he will find that he has been labouring under a complete illusion.

8.09 p.m.

Mr. Peter Trew (Dartford)

It is a great pleasure to be called immediately after the hon. Member for Birmingham, Ladywood (Mrs. Doris Fisher), who spoke with great feeling about the problems of council tenants. I do not accept what she says about the attitude of the Conservative Party to council tenants, however. Certainly we do not regard them as second class citizens. From a practical point of view, a large number of them vote Conservative, as the hon. Lady will know from her experience in the General Election. We regard their problems as being every bit as important as those of owner-occupiers.

I must first declare an interest, in that I have spent most of my working life in the construction industry and still have interests in it.

The Motion refers to the cost of housing, and the hon. Member for Islington, South-West (Mr. George Cunningham) gave us his interpretation of what this meant. However, I think that we are entitled to consider the main elements of housing costs and the previous Government's record on them; namely, land prices, construction costs, and the level of interest rates.

We have, quite rightly, buried the Land Commission. It undoubtedly helped to increase the cost of housing land in two ways. First, it slowed down the rate at which building land came on the market. In a situation where the price depends on supply and demand—this broadly describes the housing market—to slow down the supply must help to increase the price. Secondly, vendors added the levy to the price which they hoped to get, and in some cases they were successful in getting a higher price.

The hon. Member for Birmingham, Small Heath (Mr. Denis Howell) disagrees with this proposition. He suggests that land can be sold at one price only—namely, the market price—and that one cannot get more for it. Until recently I should have agreed with him. But, as a mere politician, I am always ready to defer to the experts in these matters.

I was interested to read an article by Professor Denman, who has probably thought more deeply about land prices than anybody in this country, in which he expresses a contrary view. In his article, Lessons from the Land Commission", which appeared in "The Three Banks Review" in March this year, he said: The land market was a vigorous seller's market: All admitted it by the concern over the level of land prices. It was nonsense to speak of stabilising land prices, let alone bring them down, under a policy which imposed a 40 per cent. levy on the development value passing in land transactions. There is a considerable amount of evidence that the 40 per cent. betterment levy on the development value realised from sales of interests in land stimu- lated the rapidly rising land prices, a case of latent market disequilibrium being revealed by the provocation of a new and unexpected cost goading the vendors to reach after and gain the hitherto hidden heights to which demand was prepared to take the price level. There is a great deal in that point of view.

The final test of any land policy surely is the number of houses built. Surely it is no coincidence that the only years since 1950 in which the house building programme went into decline were the years of life of the Land Commission. It is no coincidence that the dramatic increase in housing starts which my right hon. Friend announced this afternoon have followed the Government's policy of urging local authorities to make more land available—and we are seeing only the beginning.

Concerning the release of land, I ask my right hon. Friend to look hard at derelict horticultural land, particularly round London, to see whether some of it can be brought into residential use. I believe that it could make a considerable contribution.

Construction costs have been increasing steadily since 1964. I speak from experience in the construction industry. It is strange that a party which is now concerned about the cost of housing should have imposed selective employment tax on the building industry.

A point must be made on construction costs. The biggest single element in construction costs is wages. On a typical housing project, about a third of the cost is the builders' wage bill, about a third is specialist sub-contractors' costs, and the remaining third is materials. Adding together the builders' wage bill, the wages paid by sub-contractors and the labour element in manufactured items and materials delivered to the site, it is no exaggeration that about two-thirds of the cost of a house is represented by wages. If there is an inflationary situation on the wages front in general, it follows, as surely as the night the day, that there must be inflation in building costs.

If the new-found concern of right hon. and hon. Gentlemen opposite for the cost of housing is genuine, they can make a valuable contribution to stabilising costs by using their influence to discourage inflationary wage claims.

Mr. Denis Howell

Hon. Gentlemen opposite objected when we did it.

Mr. Trew

My right hon. Friend this afternoon pinpointed the fact that whereas in 1964 the average industrial wage could service a mortgage on the average new house, today it needs a weekly wage of about £33 to get a mortgage on the average-priced house. The ability of purchasers to borrow is critical to our future housing programme, particularly when we consider that we are hoping to expand the voluntary housing movement, which will also depend on building society finance. I endorse the suggestion made by my hon. Friend the Member for Northants, South (Mr. Arthur Jones) that the Government should urge upon the pension funds the possibility of their investing in the residential mortgage market.

I should like to commend another suggestion to the building societies for the future—the possibility of their offering mortgages at lower interest rates in return for a share of the capital appreciation on resale of a house. I believe that we shall have to explore new methods of housing finance if we are to make it possible for the great demand for owner-occupation to be satisfied.

The hon. Member for Kensington, North (Mr. Douglas-Mann) said today that the relationship between a private landlord and tenants was unhealthy. He later qualified that by saying that he was concerned about the abuses which take place in that sphere. We all deplore the abuses which occur, but it is unfortunate to dismiss out of hand the contribution that can be made by private rented housing. The Americans certainly do not feel that way. I believe that they are now granting double depreciation allowances for the building of flats for private letting. I hope that in time we shall do something to stimulate the building of private rented accommodation.

I put it to the hon. Member for Kensington, North—I am sorry that he is not present—whether we are satisfied with a situation where one family in four has to depend on a public body for the roof over its head. I yield to nobody in my admiration for the dedicated work carried out by local authorities and housing managers. I hope that local authorities will continue to make a contribution to housing, particularly in slum clearance and the housing of old people. But surely we want to lessen the dependence of families on the State, in effect, for housing.

If we do not want to go the whole hog towards private rented accommodation, there is a halfway house in the voluntary housing movement. I was most encouraged by the news which my right hon. Friend announced yesterday, in reply to a Written Question, of a very dramatic increase in approvals of dwellings in co-ownership schemes sponsored by the Housing Corporation. Not much has been said tonight about the voluntary housing movement. I hope that when my hon. Friend winds up he will tell us about the Government's plans for it.

Earlier today, my right hon. Friend announced some dramatic and most welcome increases in housing starts. I believe that these are the first fruits of the boldest and most imaginative housing policy which this country has seen for many years.

8.19 p.m.

Mr. David Stoddart (Swindon)

I shall not follow the hon. Member for Dartford (Mr. Trew) too closely in what he has said, although I may touch on one or two matters which he raised.

The Minister said that to own one's house had now become the "in" thing. The Minister really is not with it, because it has always been the "in" thing to own one's house. Before the war, when houses were considerably cheaper than they are now, it was certainly very much the "in" thing, and time has proved that those fortunate enough to own their own houses have done very nicely indeed because they have been able to keep pace with inflation.

There is no doubt that it is desirable to own one's own house, but there is, nevertheless, a great need for a substantial pool of rented property, for several reasons. First, although it is easy to talk about the benefits of owner-occupation, the fact is that many people are not in a position to own their own houses, even if they want to, for various reasons. There are others who feel that they cannot shoulder the responsibility of a mortgage. We must think of them, because they are citizens of this country in the same way as are those who own their own houses.

Another factor that we must take into consideration is that in the context of our present economic situation there is a need—as there will be in future, provided we can get the unemployment level down—for mobility of labour, and one of the things that helps mobility of labour is a good pool of rented property so that people can move easily from one city to another, from one area to another, without having to incur the vast costs—and they are vast—of selling one house and buying another, of having to give half one's capital appreciation to the house agent and the solicitor for the services they render, however small. When we talk about owner occupation, let us not forget the need to keep up our stock of rented property.

In the main, unless we can by some means or other encourage private people to provide rented property, it will be the local authorities who will have that duty, and it is important that they are in no way discouraged from doing that. I believe that the Government's policy will have the effect of discouraging local authorities, because what they need is confidence that they will be able to build their houses to let at a reasonable rent. If they cannot be assured of that, they will build fewer houses than they otherwise would, for fear that their houses will be left empty, and thus adversely affect their housing revenue accounts.

That is a fact, and we have seen it in a number of instances. The Minister knows that the Reading County Borough, of which I was a member, delayed starting any houses for 18 months because, it said, the adoption of Parker Morris standards would put 2s. a week on the rent. It is true that it was a Conservative authority, and that since the election of a Conservative Government it has altered its view and has now started to build again to Parker Morris standards, but there is this need to give local authorities confidence that if they build they will be able to let their houses at reasonable rents.

Mr. Ronald Brown (Shoreditch and Finsbury)

Is my hon. Friend aware that the Government's proposals are different from that? Their proposal—which the Minister refused to spell out, and he is therefore misleading the House—is to put rents up by 15s. a week every year until they reach the economic rent figure.

Mr. Stoddart

I thank my hon. Friend for that intervention. I was about to touch on that. It is quite clear that by attaching the Government's contribution—the subsidy as it is called—to the person rather than to the house, many individuals will have to pay vastly increased rents not only in one year but in many years to come.

We ought to consider, also, the problem of slum clearance. Slum clearance and its replacement with reasonable living accommodation will be the duty of local authorities. We have heard altogether too little from the Government about what additional encouragement they will give to local authorities with severe slum clearance problems, and there are many such authorities in the country.

The Minister tended to play down the impact of these proposals on individual council rents, but surely the Government's policy is bound to mean that a smaller subsidy will be distributed among a greater number of people, and that a great number of already relatively poor people will be subsidising other poor people? This is not a redistribution of wealth in the Socialist sense. This is not a redistribution of wealth from those who can well afford to pay to those who cannot. This is a redistribution of a subsidy within a poorer section of the community. We must understand that that is what the policy is all about, and I believe that council house tenants will understand it very clearly, indeed.

Another factor that we must consider—I do not disagree with this policy, although I should like to see more money put towards it—is that by subsidising the rents of private tenants the Government will inevitably increase the pressure on private rents. Let there be no mistake about that. That is precisely what the effect of the Government's policy will be, because they will be subsidising private landlords, and the tendency will be to ask for more rent for the houses that are let.

Mr. Ronald Brown

Will my hon. Friend bear in mind that the Government have no intention of subsidising rent rebate schemes? They intend to pay 50 per cent. of the cost of the rent allowance. That money will come from the ratepayer, but the Minister did not mention that today either.

Mr. Stoddart

I again thank my hon. Friend for his intervention. It is well known that the Government's policy is to swing more of the burden of taxation on to local sources.

I now come to the criticism that council tenants are being feather-bedded, and that they are subsidised pets of the Labour Party. They are not the subsidised pets of the Labour Party, and I think that we ought to get one thing clear. Far from being subsidised, council tenants probably contribute more than any other body of people to the general public ownership of property. This is something which is unfortunately not realised by the party opposite, or perhaps by the public. But it was mentioned by my hon. Friend the Member for Birmingham, Ladywood (Mrs. Doris Fisher), when she said that we should consider not the income and expenditure account but the balance sheet. That would give quite a different picture.

When local authorities fix rents, they take into account the capital cost of the house, the interest paid on it, the repairs over sixty years and the housing management finance, and from that they deduct the annual subsidy. So the council tenant pays all the costs, including the cost of land, except for the subsidy. If hon. Members drew up a balance sheet for any local authority, they would see that the housing assets exceeded by many millions of pounds—if it was a large authority—the amount which is paid into the housing revenue account from public funds. So the ratepayers and taxpayers are getting a very good deal. Unlike the owner-occupier, at the end, the council tenant owns nothing. I hope that we will hear less in future about "featherbedded" council tenants.

There is a serious housing shortage. We have to build many more houses. But Ministers could bring a great deal of influence to bear on one aspect. We are destroying perfectly good houses for dubious purposes—merely to put through roads and other things at the whim of a local authority which might not have examined the implications closely enough. I hope that, when he has such proposals before him, the Minister considers them not once but twice or three times. One of the greatest sins in this country is to destroy a good house. We simply cannot afford to go on doing so.

The Minister announced his consultations with the building societies. It is all very well talking about assisting owner-occupiers to save through the building societies, but many of these young people are already paying £5 and £6 a week for a bed-sitting-room. How on earth one can expect them also to save through a building society, at about the same rate, a deposit for a future house, I do not know.

The Minister should think this through again, because there may be other methods of assisting young people to buy their own houses. One possibility is allowing them to commute future income tax relief in order to get a deposit. This is done in one part of the United Kingdom already, and it is a system which might commend itself to the Government.

The housing situation in Britain is serious and will be made a lot more serious by Government policies. For that reason I shall certainly support the Motion.

8.33 p.m.

Mr. Norman Tebbit (Epping)

As I shall probably be critical of the Opposition later—after all, it is their day, so I guess it is our day to be critical of them—I should first like to mention the speech of the hon. Member for Salford, East (Mr. Frank Allaun). He is such a nice man that I wonder how he manages to hold on to such extraordinary ideas. I would exclude him from every stricture which I intend to make about the Labour Party because, to his credit, he has never made any bones of the fact that he disagreed about the previous Government's policy on housing in many respects. I do not agree with him, but I respect him greatly for it.

The hon. Member raised an interesting point about the number of bankruptcies in the construction industry. He may recollect that I asked the Minister this very question not long ago. In 1969, the number of bankruptcies was 857, and in 1964, it was under 600. So that is another creditable achievement of the Labour Party—they managed to increase bankruptcies in that industry. [Interruption.] I still suspect that the Motion has a lot to do with the local elections.

I am surprised, in view of the record of the Labour Government, that they have been able to find eight supporters with the gall to sign this Motion. The hon. Member for Islington, South-West (Mr. George Cunningham) described the Motion as a reflection of our announced policies. It is certainly a reflection, but in a mirror—it is back to front, twisted right round because it uses the words designed to increase the cost of housing". I imagine they have the gall to table a Motion in these terms because their policies were not designed to do anything. They just happened by accident and incompetence, which hon. Gentlemen opposite have to forgive because they have to live with them whenever they are in office.

It is extraordinary how words can be used so that they change their meaning. The right hon. Member for Coventry, East (Mr. Crossman) established fair Tents which according to hon. Gentlemen opposite were fair rents. Ours, on the other hand, are not fair rents but "so-called" fair rents. [Interruption.] I understood that what constitutes a fair rent has been made clear to hon. Gentlemen opposite time and again.

Hon. Gentlemen opposite believe that when they impose a tax which raises the cost of living, and particularly the cost of housing for everyone, it can be called "selective", whereas when we propose to get rid of it and hold back the increase in the cost of housing for everyone it is called "divisive". This is an extraordinary use of words, though "divisive" has become the new parrot cry on the benches opposite.

I am willing to bet that on Judgment Day as the Lord divides those on the left from those on the right somebody at the back will be heard to shout, "It is divisive"—and I know on which side he will be standing.

Mr. James Hamilton (Bothwell)

The hon. Gentleman will not be there.

Mr. Tebbit

Everyone turns up on Judgment Day. [Interruption.] I do not know what hon. Gentlemen opposite read into that clap of thunder and bolt of lightning, apart from the fact that we are heading for some bad weather.

Mr. David Stoddart

I suggest that the hon. Gentleman has upset somebody.

Mr. Tebbit

Hon. Gentlemen opposite should not underrate the powers of this Government.

Mr. Frank Allaun

On a point of order, Mr. Deputy Speaker. Could it be that the hon. Gentleman had been guilty of a breach of privilege and somebody is very upset about it?

Mr. Deputy Speaker (Sir Robert Grant-Ferris)

Maybe the hon. Member for Epping (Mr. Tebbit) has angelic powers One never knows.

Mr. Tebbit

The thoroughly churlish way in which announcements made by my right hon. Friend are received by hon. Gentlemen opposite is equally surprising. He is taking steps in the right direction, and they are not the first such measures he has introduced. They are designed to help people who are seeking homes, yet he gets not a word of praise from hon. Gentlemen opposite. They only sneer.

It is an achievement for my right hon. Friend to have got the building societies to agree that after only six months of regular saving they will consider advances of 100 per cent. to new borrowers. This worth-while advance deserves a better response from hon. Gentlemen opposite, who have not referred to the new effort which the Minister has announced to look at the whole stock of housing. I have previously badgered my right hon. Friend about the minimum period during which one can stay on the option mortgage and am grateful for his announcement. Though I am reminded of a favourite grace of my grandfather: We thank you Lord for what we've had, If it had been more we would have been glad. Just for a while I ask them to accept that this matter is too serious just to be thoroughly partisan because it is local election week. Let them stop for a while imputing bad motives to everyone with whom they disagree. Let them accept that Conservatives as well as Socialists want to see a nation that is decently housed. If that strains their credulity—clearly it strains the credulity of some of them—they should consider what sort of attitude I have when I go electioneering. When I turn into a street which is neat, tidy and trim, where the houses are well cared for and the hedges are trimmed, I think that it is good territory for my party. I know members of Labour Parties who describe those as bad areas electorally. I get no electoral advantage out of run down, decayed housing and deplorable housing standards. I want to see that ended, as we all do. I get sick and tired of imputations to the contrary. Why do not hon. Members opposite sometimes come out from under their white sheets and admit that the policies which have been followed, not just in the disaster era from 1964 to 1970 but for the last 25 years, have not provided the answers?

Mr. James Hamilton

I am not electioneering. In Scotland we have had our local elections, and therefore the hon. Gentleman will not accuse me of electioneering. Is he aware that in Scotland during the last five years of Labour Government we had record house building and that in Glasgow, which has the worst housing record in Europe and is a deplorable city for housing, in the first three months of a Conservative-controlled local authority not even 300 houses have been built.

Mr. Tebbit

Scottish Members have recently been making much play of the fact that the Labour Party made substantial gains in the recent elections in Scotland. If anything, that underlines what I have been saying rather than the reverse. I leave other hon. Members to speak for their constituencies. I speak for mine.

My constituency is lucky in most ways. In its housing it is very fortunate. But I am constantly dealing with constituents who find themselves in trouble because they are some sort of tied tenant, in effect, of public housing authorities to whom they are often expected to pay some sort of tribute out of gratitude and turn out at the right time. Often they want to move from one rented home in public ownership to another, sometimes for a better job, sometimes to be near to another member of their family, or sometimes because they do not like the neighbours. But what do I find? If a tenant of a new town home in Harlow wants to work in Brentwood he cannot move to Basildon new town to be nearer his job. How absurd it is that there is no provision for this sort of thing. He is a prisoner of the system. A son or a daughter who wants to set up home but cannot get a job in Harlow new town is banned from Harlow. What an absurdity it is. The family become divided. Thoughts of having the liberty to move just because one dislikes the neighbourhood or wants a different garden are just too absurd in the public sector to be endured.

I have a constituent in Chingford who fell on hard times. He had to sell his house. Eventually things improved and he now has a decent job again—but no home. He cannot get on the council housing list because he was a householder. He does not want a subsidy or assistance. He can pay his way. However, because of what we have done in the last 25 years there is no rented accommodation available for him. What a nonsense it would be to continue the politics of the last 25 years when they have failed in this manner.

Today we have had a display of vindictiveness towards private landlords. Why? What is wrong with owning a house and hiring it out as opposed to owning a television set or a car and hiring it out? These are proper economic activities, and the sooner we can return to them the better.

We hear constant carps about what is called the subsidy to the home owner or to the mortgagor. Cannot hon. Members opposite ever tell the difference between a subsidy and not paying a tax that might otherwise be levied? There is a difference, unless one belongs to the school of thought that thinks that the whole of a man's earnings should be taxed and that anything that he is allowed to keep is a concession. We have had hypocrisy in plenty.

Mr. Stoddart

The council tenant or any other tenant is paying rent in the same way as an owner-occupier is. Would it not be right for the rent to be allowed as a tax benefit in exactly the same way as mortgage interest is?

Mr. Tebbit

The hon. Gentleman just misses the point. It is as simple as that. Clearly he is stuck with the idea that all income should belong to the State or should be taxed and anything left to him who earns it is a concession.

We cannot continue with this humbug that supports 32 per cent. wage claims here and 40 per cent. wage claims there and opposes fair rents. I am not one of those who think that high wages are necessarily a bad thing. In many cases wages at the bottom of the scale have been too low. However, hon. Members can no longer support rising wages and consistently say that those who over the last 25 years have attained such standards that they now think in terms of holidays abroad and all the other things which used to be regarded as luxuries but which are now commonplace should continue to get a free ride or a cheap ride on the backs of others whose need is greater.

Last night the hon. Member for Ebbw Vale (Mr. Michael Foot) made an impassioned plea for selectivity in aid to the development areas—the needy areas. Tonight we have a series of equally impassioned pleas for no selectivity in aid in housing: it must go right across the board, irrespective of need. We are told that we are being thoroughly wicked to think of taking from those who are sufficiently well off to pay a fair rent and using that money to help those who have been denied aid by the conscience-stricken Opposition who were not conscience-stricken when they were in Government.

Variety is the spice of life, but when two such contradictory pleas are made on successive nights it is not variety. It is more like Northern Music Hall. I shall never accept a society which is rigged to prevent the ordinary decent family from being able to stand on its own feet, pay its own way, and pay its full rent or buy the roof that is over its head. That we have failed to get in the past 25 years. Thank God we now have a Government with the courage and humanity to stand the racket of this sort of Motion, which is throughly hypocritical and full of humbug, and to move towards the new policies that we need.

8.50 p.m.

Mr. Charles Loughlin (Gloucestershire, West)

When I heard some Conservative hon. Member saying earlier, with their hands on their hearts, that they were not anti-council house tenants, I thought they might be being honest, but they were schizophrenic. For the past 20 minutes we have heard from the hon. Member for Epping (Mr. Tebbit) the expresssion of a classic Tory class attitude towards the people of this country. The hon. Gentleman laughs and thinks it is funny, but if he tells me that I can determine my electorate on the basis of the kind of gardens people have, in the way that he described, then if that is not the sort of snob, snide Toryism that we have had for too long, I should like to know what it is.

There are a number of things that I should have liked to deal with, but I want to talk for a minute or two about how far it will be possible, if at all, to expand the housing programme. The Minister for Housing and Construction presented certain proposals to the House, which we shall have to examine carefully before we can evaluate them completely. There may be an area here in which the Government's actions can increase the houses available. The six months savings scheme, under which a person who saves regularly for six months can possibly obtain a mortgage without an additional deposit, may have some attractions, but it will be only very limited.

The scheme will not affect a very broad band of people, because there are two factors in it which militate against its being acceptable over a wide area. First, when a large number of people are having to pay excessively high rents for private rented accommodaton they are not in a position to save regularly, and, consequently, will not come within the scheme. Second, there are two valuations for secondhand houses, the market valuation and the valuation arrived at in the building society's survey. Many people who would want to enter the scheme would find themselves in difficulty, particularly in the purchase of secondhand houses, because of the difference between the market value price and the valuation upon which the mortgage is apparently bound to be based.

Has the Minister examined in more detail la scheme that has been very close to my heart for a long time, which would not cost the Government a great deal of money? I know that the Government will be very interested in that aspect of it. I am referring to the guarantee mortgage scheme, a very simple scheme applying to a very broad band, particularly young executives and the young graduate leaving university who has a distinct earning potential but a potential which will not be realised for five or 10 years. These are people who could afford to pay the outgoings but could not afford, because of the slow development of their earnings, to raise the mortgage. In many jobs, the starting salary is low but the earning potential increases rapidly.

If the Government were prepared to introduce a scheme whereby they guaranteed that portion of the money required for deposit and solicitors' fees, and so on, they would thereby expand the building industry or at least stimulate it as it should be. The Minister for Local Government and Development has knowledge of the scheme, and I hope he will tell us whether the Government are prepared to consider putting it into effect. I believe that it would not cost the Government a great deal of money because in the event of there being a defaulting in the purchase of the house the Government would have a lien on the property to the extent of the difference between the mortgage of the building society and the amount guaranteed.

One of our greatest difficulties in producing houses at an economic cost which people can afford lies largely in the incompetent and badly-organised building industry. I do not say that there are not efficient firms but, as a whole, the industry still lives in the early part of the century. Far too many firms have not got the technological means to do the job. Far too many have not got the capital with which to do the job. When we hear of bankruptcies in the building industry, we do not blame the Government. One of the greatest factors in the creation of bankruptcies in the industry has been the amount firms have been having to pay for their money from finance houses. Many firms are under-capitalised and, as soon as they overreach themselves by two inches, go into bankruptcy.

In the last Government, I served at the Ministry of Public Building and Works. I recall that the Minister of the time asked the building industry whether, if selective employment tax was removed—and it averaged £125 on ordinary houses—it would be prepared to knock that amount off the price. The industry would not do so then, and it will not do so now. If the Minister were to ask the building industry why it is not reducing the price pro rata with the reduction in selective employment tax, he would be doing a duty to the House.

The Government are going to increase rents for council tenants, and the Tory Party believes that this is the right thing to do. The housing revenue account of a local authority has to be balanced each year, and if one takes into account the sort of charges levied on it one realises that a substantial number of council tenants are not receiving subsidies but are actually paying subsidies to the rest of the community. The sooner the Tory Party gets away from its bitter hatred of council house tenants, the better.

9.0 p.m.

Mr. Denis Howell (Birmingham, Small Heath)

This debate, as the hon. Member for Epping (Mr. Tebbit) reminded us, is about the design of Government policy. That design on the whole has not been stated by the Government. After almost a year of Tory Government we still have no authoritative statement of policy. We have the Secretary of State's statement of last November but he will not mind my saying that it was couched deliberately in the most vague and nebulous form. The Government have been in office for 11 months, and they have been negotiating with the local authorities for at least four or five months, but still they refuse to publish any White Paper giving details of their proposals.

Since the Government have had these detailed discussions and I believe they ended some time ago, there can be only one explanation for this deafening silence, and it is that the Government are anxious that the effects of their policies over rents and rates should not become known before the local elections are over. The jigsaw can now be put together. The design of Government policy is becoming clear.

The most remarkable thing about the speeches of hon. Members opposite is that not one mentioned the increase in the rate burden which Conservative council after Conservative council has imposed on ratepayers this year.

Mr. Tebbit

Not Waltham Forest.

Mr. Howell

The hon. Member for Epping has already made eight speeches in this debate, a remarkable achievement upon which I congratulate him, but I cannot allow him to make another in the middle of my speech.

There is no doubt that the Government's policy is that rates will rise; they have already gone through the roof, and rents will do the same thing. Under the proposals of the Government tenants will be forced to pay fantastic increases in weekly rents, or, alternatively, join the growing army of people who have to submit themselves to a means test. A means test as a way of relieving poverty is one thing, and something which is justifiable, but a means test which applies to a large proportion of council tenants means that we have ended the concept of council housing as a social service which has been the basis of all Government policy in this country over the last 50 years.

Mr. Ronald Brown rose—

Mr. Howell

I hope my hon. Friend will excuse me but I have tried to condense a two-hour speech into half an hour and I find it very difficult.

Such a policy, which is to be imposed upon us, is certainly not in the tenants' interests. As my hon. Friend the Member for Birmingham, Ladywood (Mrs. Doris Fisher) said, it is not in the interests of the country as a whole. If there is one thing that is certain as a result of a dramatic rise in rents and rates, it is that it will lead to applications for further dramatic wage increases. This policy will be grossly inflationary and will certainly multiply the burdens on taxpayer and ratepayer alike. That is the charge we make today.

There can be no doubt that the ratepayer has had very good value for money from the last Labour Government. The Minister for Local Government kindly gave the figures on 28th April last. I will tell the House of the increase in rate poundage, according to the Minister's figures. In 1965–66, 10.4 per cent; in 1966–67, 9.5 per cent.; in 1967–68, 0.6 per cent.; in 1968–69, 1.8 per cent.; in 1969–70, 3 per cent.; in 1970–71, 5.3 per cent. That represents a successful policy of stability for the ratepayer. This year the increase in the rate poundage is 14 per cent. as a result of Government policies. By their policy on rates the Government have delivered a bloody nose to the ratepayers.

As every Minister knows, anyone who is trying to keep down the rates faces the dilemma of providing good services and making sure that the local government employees—the teachers, policemen, nurses, road men, water men and sewerage men—are not subsidising the ratepayer in their wages. The Labour Government tried to deal with this dilemma, first, by their prices and incomes policy. [Interruption.] Hon. Gentlemen may poke fun at the prices and incomes policy, but the figures I have given show that it succeeded in keeping down the rates. The abolition of the policy has proved disastrous to the ratepayers and the tenants. We were trying to achieve a fair deal for the worker in local government while at the same time expanding the local authority social services.

Secondly, the Labour Government dramatically increased the aid given by central Government to local government. This was done in two ways, first by giving a subsidy equivalent to a 5d. rate every year—this has now reached 1s. 8d. in the £—and, secondly, by increasing the amount of Government help to local authorities by 1 per cent. each year. At the end of our five years in office the amount of financial help to local government was increased from 54 to 57 per cent. with a corresponding decrease in the burden on the ratepayer.

The Government propose not to give the equivalent of a 5d. additional rate this year but only a 2½d. rate. They are thus halving the help to the domestic ratepayer this year. Secondly, instead of increasing the proportion of Government assistance to local government by a further 1 per cent. they have cut it to ½ per cent. So, with the bloody nose they have already delivered they are giving two black eyes. The poor ratepayer cannot win with this Government. This has nothing to do with wages or inflation. It is the deliberate political design of the Government to impose greater burdens upon the ratepayer.

As if a broken nose and two black eyes are not enough, the Government in their negotiations are screwing the local authorities down almost to the last penny. After they have got every penny they can out of individual services such as education and health, the Government say "For good measure, we will dock £10 million from local authority grants this year and £25 million next year." Almost every local authority association in the country—and they are all Tory-controlled—has told the Government that it is impossible to make savings of that sort in local government. It is adding to the bloody nose and the two black eyes a kick in the backside. That is the sum of the Tory measures.

This is only half the story. This policy has not only forced up rates by 14 per cent. It has involved all the mean and miserable interruptions in services which Conservative council after Conservative council has been forced to in the present situation. I have noted down one or two in various parts of the country which show the effect of the other part of Conservative policy.

I am told by the Labour group on the Teesside council: Next year will see a complete suspension of all recreational capital spending; there will be practically no spending on community centres or child guidance clinics and a considerable proportion of our welfare expenditure is to he phased over a longer period. Tories sent a deputation to see the Secretary of State for the Environment but had to be content with civil servants and were turned down. They asked for a further meeting but Mr. Walker intimated that no useful purpose would be served by such a meeting. If that is how the Secretary of State treats his friends, how does he treat his opponents?

A similar situation has been reported to me from Newcastle-upon-Tyne. In regard to the next year's estimates four residential homes for the elderly, three mental health hostels and one day nursery, due to start next year, have been cut out of the programme. The swimming baths have been deleted from the programme, and £50,000 of the cleansing department's original estimate for public conveniences also has been deleted. One can go on quoting similar examples—

The Minister for Local Government and Development (Mr. Graham Page)

I am a little confused. I think the hon. Gentleman is now dealing with capital expenditure and not rate support grant. Is that so?

Mr. Howell

We are talking about the whole range of local government finance. We are talking about the effect of the Government's policies in both capital and revenue terms. [An HON. MEMBER: "You have not done your homework."] I have done my homework. I must say this to the Secretary of State, whom I welcome back after an interval of four hours absence from the debate—

The Secretary of State for the Environment (Mr. Peter Walker)

The hon. Gentleman was not here himself for a good deal of the time.

Mr. Howell

Yes, I have been here most of the time.

I come to another example of the Government's policy. I have had a note from Southampton where the effects have been very severe. Southampton decided to make its cuts in services in the field of revenue. In Southampton, I am told, there will be no maintenance of roads and footpaths and lighting and no road-sweeping. The city engineer at Southampton has calculated that in view of what the Tory council has done to the maintenance budget next year, if matters go on at the present rate the money available will be enough to repair only one stretch of road in the town once in every 40 years. This is the other side of the picture.

We cannot let Waltham Forest get away with it—

Mr. Tebbit

What happened to its rates?

Mr. Howell

I will tell the House why the hon. Gentleman is able to make that interjection. At Waltham Forest—can meanness go any further than this?—the daily charge for day nurseries has been increased by the council from 11s. 6d. to 28s. [HON. MEMBERS: "Shame!"]. Who on earth can afford to put children in a day nursery at Waltham Forest?

Mr. Tebbit

That is not the reason why the council has been able to hold its rates steady. It is good management. It contrasts with the position at the other end of my constituency, where in Harlow the rate has been increased because the Socialists have put up the allowance of the chairman of the council to £3,425 a year, which is more than hon. Gentlemen opposite get.

Mr. Howell

I shall continue with Waltham Forest, because it is a very good example of the meanness of which I complain. It has saved the paltry sum of £1,000 by cutting out the extra nourishment service to the sick at home. It has saved £1,880, or a third of a penny rate, by cutting holidays for old and disabled people. Presumably in order to encourage vandalism in the borough—and if the hon. Member for Epping is anything to go by, obviously there are a great many vandals trotting round the borough—it has withdrawn attendants from all children's playgrounds and public lavatories, and my information is that that has had the effect that one would imagine.

Mr. Tebbit

They have been replaced by a mobile patrol.

Mr. Howell

That is the effect which the policies of the Government have had upon rates and ratepayers. There can be no doubt that the charge that the burden on every ratepayer in the country has gone up by the design of this Government has been more than substantiated in the debate.

I now turn to rents. This is a very interesting subject, and we all listened with great attention for anything that the right hon. Gentleman had to tell us. He had nothing to say of any importance. We know about the charade of consultations going on with the local authorities. We listened to the principles which the right hon. Gentleman enunciated today. We know that there will be a dramatic rise in the rents that municipal tenants will have to pay.

The first thing to say about the fair rent principle and the formula that the Government are proposing is that because there will be a rigid formula and a fair rent, whatever that is, the subsidy which will be given in future will have no effect upon the rents which most municipal tenants have to pay. They will not be helped by the subsidy. A fair rent will be determined, and a tenant will have to pay it unless he qualifies, on the poverty line, for a rent rebate. I agree with the right hon. Gentleman that this is the most revolutionary change that has occurred.

When we ask ourselves what is a fair rent, I agree with my right hon. Friend the Member for Grimsby (Mr. Crosland) that we are unable to compare like with like. Under the present fair rent system for private tenants, any individual ten- ant can contest the rent decided by his landlord. He can say that there are reasons why his rent should not be as high as others in the neghbourhood. But no municipal tenant will have that privilege.

I have a great many examples from all over the country of fair rents which have been decided by rent assessment panels. If this is the basis on which fair rents are to be determined, it will mean astronomical rents for the ordinary municipal tenant.

The treasurer of Hemel Hempstead, Mr. Aughton, recently delivered an excellent paper to the Rating and Valuation Institute. In it he says that at the moment rent tribunals are assessing fair rents at 11 times gross values. The G.L.C. assumes twice the gross value. He says he believes that, allowing for the 5 per cent, inflationary effect on the fair rent procedures which the Government intend to accept, the fair rent will be three times the gross rateable value. That is a fantastic increase which will mean a fantastic surplus in the housing revenue accounts of most local authorities. We want to know what will happen to that surplus. We have not heard a word about it. Does it mean that the municipal tenant is expected to subsidise the rent allowance in the private sector or to subsidise the ratepayer generally? We are entitled to an explanation. We have not had one yet.

1 now come to what I believe to be some of the Government's detailed proposals. We got to know a bit about the picture which is emerging not least because of an excellent article which appeared in the Liverpool Daily Post on 3rd February, 1971. I understand that the Government propose—I hope the right hon. Gentleman will correct me if I am wrong, because we want to know where we stand—that a fair rent will be determined, but not by the local authority; neither will the nature of the rent rebate scheme. Out of the window will go that concept of Lord Redcliffe-Maud and what Tories have said since time immemorial about freedom for local authorities to determine their own affairs.

Mr. John Wells (Maidstone)

On a point of order, Mr. Speaker. Could you persuade the hon. Gentleman to address you, because it is difficult to hear him if he must address the Liberal Party Chief Whip?

Mr. Howell

I am glad to record that you, Mr. Speaker, were showing an intelligent interest in my remarks, which is more than I can say for some hon. Gentlemen opposite.

I want to come to what I believe to be the nature of the Government's proposals. Once a fair rent has been decided, they will progressively reduce subsidies by £20 a year at least and they are to take the tenant up to the fair rent by increasing his annual rent by not less than £26 a year—10s. a week. My hon. Friend the Member for Shoreditch and Finsbury (Mr. Ronald Brown) probably has some later information. He says that the rise will be about 15s. a week. My information is that it will be 10s. a week.

Just imagine the picture for the average municipal tenant living in a relatively new house now. He faces the prospect of successive rises in his rent over the next six to eight years, apart from rises due to inflation, wage costs and so on, which will mean an eventual increase of possibly £3 to £4 a week.

I understand that the Government will be putting into the housing revenue fund a new rebate scheme to which hundreds of thousands more people will have to apply. It will be costly to administer. I am told that at the end of the day the Government will probably come along and say: "If what you have to pay out in administering your housing departments and the rebate scheme exceeds what you get in"—in most cases it will be the other way round—"we shall give you a new deficiency subsidy of 90 per cent. a year to start, reducing to 75 per cent. a year." That will be an additional 25 per cent. burden for local authorities in future. That is the prospect before most municipal tenants.

I am told that the Government will adopt the same kind of formula for the rebate schemes. The relief of poverty ought not to be the exclusive business of municipal tenants through the housing revenue account. The relief of poverty for people who cannot afford municipal houses and high rents ought to be an obligation accepted not by the ratepayer but by the taxpayer, because it is the nation's business. Right hon. and hon. Gentlemen ask what our Policy is. It is to make the nation accept the responsibility for looking after the worse-off members of our society.

A lot has been said about the owner-occupier. We have heard it suggested that more council houses should be sold. When we deal with this Government on these matters we are dealing with the economics of cloud-cuckoo-land. The Under-Secretary of State for the Environment in an answer the other day—it was an interesting answer—made it clear that the average price of a council house sold by the Greater London Council was between £3,050 and £4,600 and that the average cost of providing a new house to replace it was between £4,500 and £6,400. In other words, the ratepayers and the taxpayers cannot win. Every time the Government succeed in selling a council house which should be there for someone with a housing need, it costs 50 per cent. more than they receive to build another one to replace it for someone on the housing list.

I turn now to the general housing programme. I do not want to say too much about this because of time, but the dramatic drop in the building of local authority houses can be traced from the moment that most councils went over to Conservative control—and they were doing exactly what right hon. Gentlemen opposite asked them to do.

We all know the speeches of the Secretary of State—[HON. MEMBERS: "Very good."]—I suppose they were, since they got the effect which he hoped for—when he said that there were too many 'Tory authorities trying to be Socialist and trying to build too many council houses. In another dramatic speech to the Westminster Forum he actually said: We shall curb the building of local authority houses.

Mr. Peter Walker indicated dissent.

Mr. Howell

That is what the right hon. Gentleman said, and I was in the House when it was put to him in the middle of a debate, and he never denied it. I have the HANSARD here. If he would like me to take time from the Minister who is to reply I can read him chapter and verse.

One cannot solve the problem by a dramatic extension in owner-occupation. To get a £4,500 mortgage in London, one must be earning £34 a week, and the average industrial wage is £22. On that sort of figure, it has been calculated that 82 per cent. of the wage earners who are not in council houses have no hope of qualifying for a mortgage.

I warmly welcome what the Minister said today, and I hope that it has a significant effect. However, I doubt whether it will be as significant as he thinks. Obviously, people cannot save for six months if they are having to pay dramatically high rents to private landlords, as most of them are in London and other large cities. It has taken the right hon. Gentleman a long time to produce this advance—

Mr. Peter Walker

It took the Labour Party six years.

Mr. Wiliam Ross (Kilmarnock)

Be quiet.

Mr. Howell

It took the right hon. Gentleman a long time. But, shining through every word which the right hon. Gentleman uttered today, was the fact of his great disappointment that he has not been able to do anything with the building societies over the current high interest charges for most owner-occupiers.

I took down the words of the Minister when he told us their dilemma—whether they would give more mortgages, or a greater proportion of mortgages, to enable more people to be owner-occupiers, of whether they would use their existing fund to bring down interest charges. We can all remember the cry which used to go up in debate after debate about the imposition on the owner-occupier. What the right hon. Gentleman has done is surrender the interests of existing owner-occupiers. The Bank Rate has come down twice; yet the mortgage rate has not come down at all.

What every owner-occupier wants to know is why it is that when the Bank Rate goes up the mortgage rate goes up the next day, but when there have been two reductions in Bank Rate there has been no reduction in mortgage rate—

Mr. Walker

The Labour Party put the rates up.

Mr. Howell

But it was the right hon. Gentleman and his friends, in election broadcast after election broadcast, who said that this was a disgraceful cost of living which they would reduce. The right hon. Gentleman has sold the pre- sent mortgage holders down the river in his negotiations with the building societies just as he has sold the ratepayers and the municipal tenants down the river.

This debate has revealed a massive indictment of this Government and their housing policies. [Interruption.] I will spell it out for the benefit of hon. Gentlemen opposite, and particularly for the Secretary of State for the Environment. They stand idle when the interests of mortgage holders demand that they take action to get mortgages down; they have added to the burdens of ratepayers by reducing the help the Government have given to domestic ratepayers in the last five years, and their policies towards local authority housing will be disastrous for both the municipal tenant and the economy of the country. The case for the Motion has been overwhelmingly made out.

Mr. Walker

I must say that the hon. Gentleman is looking very happy about it.

Mr. Howell

I always adopt a cheerful attitude in the face of ignorance. I am certain that the case which we have made out today will be sustained at the polls next week.

9.31 p.m.

The Minister for Local Government and Development (Mr. Graham Page)

The hon. Member for Birmingham, Small Heath, (Mr. Denis Howell) can always be guaranteed to entertain the House, and today he managed to do that and keep in order at the same time, though he did not mention a word about his party's policy [Interruption]. I do not know what hon. Gentlemen opposite are complaining about. He chose this day on which to expound these matters, but not a word about his party's policy did he put forward. Nor did he say a word of appreciation for the exciting news about mortgage arrangements which my right hon. Friend announced. Only grave disappointment did he show for the improved housing figures. Perhaps he did not hear them. I will repeat them later.

The Motion speaks of the increase in the burdens of the domestic ratepayer. The House should realise who it was who humped that increased burden on to the back of the domestic ratepayer. There can be no doubt that it was the last Labour Government and the inflationary spiral for which their last months have become famous.

It seemed from the speech of the right hon. Member for Grimsby (Mr. Crosland) that he was arguing that inflation is due to Government policy except when a Labour Government are in office. Then, I suppose, it is something to do with the gnomes of Zurich or the fairies at the bottom of the garden.

On 10th December last year this House approved the Rate Support (Increase) Order and an increase in the taxpayer's contribution to the ratepayer. The House gave its approval to the increase on information contained in House of Commons Paper No. 173. Since the rate support grant had been fixed two years previously by the Labour Government, prices, costs and remuneration in local government had increased in the year November, 1969, to November, 1970, by £254 million, of which £178 million was in respect of pay awards.

It cannot be denied that such increases stemmed from the closing policies of the Labour Government. How astounding was that figure one can see when one appreciates that in previous years those increases had not been more than £9 million—but £178 million in pay awards was a magnificent run up to a General Election. It was £178 million of local government money handed out by the Labour Government.

It may be easier to comprehend if I express it in terms per household. The domestic ratepayer pays about one-half the rates, while commercial and industrial property pays the rest. That one year's increase due to pay awards is the equivalent of £5.50 per household. It would have been £7.50 per household in respect of the whole increase, taking goods and services into account. That is the measure of the increased burden which the Labour Gvernment's policies imposed on the ratepaying householder.

Mr. Kenneth Marks (Manchester, Gorton)

Has not about one-third of these wage awards gone to the Government in income tax and should there not have been increased help from the Government as a result?

Mr. Page

There has been an increase of the contribution by the taxpayer to the ratepayer, and I will come to that. Despite the generous gestures of the Labour Government with the ratepayers' money, a number of local authorities kept their rates down by using money that had been saved in previous years. The Rating and Valuation Association in a recent statement said: It is also clear that the extent to which balances had been accumulated is a very important factor in comparing one authority with another. Obviously many councils had scraped the bottom of the barrel last year in their desperate efforts to stave off the ever-growing inflationary pressures. This year saw the reckoning. In that recent statement it was pointed out that the total rates bill will be some £1,860 million, and a further £117 million will come from the Government to help householders with their rates.

I look a little closely at the contributions from the Government towards the rates to help householders meet the rate bill. The Labour Government's help to each household in its last year of office, on an average—I will express it again per household—was £4 10s. per year in 1969–70. In our first year it rose to £6 5s. per household per year. This year it will be £7. Next year it will be £8 5s., nearly double the help which the Labour Government saw fit to give. It is suggested that we are increasing the burdens on the ratepayer. This is nonsense when one looks at the figures.

I am mentioning now what we know as the domestic element in rates. The domestic element was devised to get the anticipated increase in rates down to about half for the domestic ratepayer in a certain time. The noble Lord, Lord Kennet, speaking for the Labour Government in another place when he introduced this on 28th April, 1966, said that they were not looking beyond the first three years. The right hon. Member for Coventry, East (Mr. Crossman), introducing it in the House on 14th June, 1966, gave the figures of the domestic element for three years and he said: Clearly, this could not go on for ever. It can be done only for a period."—[OFFICIAL REPORT, 14th June, 1966; Vol. 729, c. 1275.] That was the Labour Government's policy. We extended that help to the domestic ratepayer for the whole period of the rate support grant, increasing it every year. In the rate support grant we have made provision for a very substantial increase—and consequently an increase of Government financial help to the ratepayer—in those local government services which directly affect the neighbourhood, the quality of home life and the pleasure in the surroundings of one's home—in short, the environment.

The right hon. Member for Grimsby made the extraordinary statement that rate increases will not produce better services. Let me mention just one or two of the kind of services which are being increased over the next years. For slum clearance, house improvements, clean air, public health matters, and so on, £24 million more a year at June, 1970, prices will be spent for the next two years than the Labour Government agreed to in its last year of office. On town and country planning, £4 million more a year will be spent than the Labour Government was spending in its last year. For parks, the figure is £5½million more, for refuse it is £15 million, for libraries it is £5½ million, and for sewerage it is £23 million.

These are the current expenses. I am not dealing with capital figures such as the hon. Member for Smallheath started explaining to the House. Those would be much greater figures. They are very formidable figures and nearly 12s. in every £ of the figures which I have quoted will come from the taxpayer to help the ratepayer. I believe that this is what the public expect from a Government—that they ensure a decent environment for our homes. The Opposition, in criticising us for rate expenditure on that sort of local government service, misjudge the mood, and indeed the demands, of the public.

Because of good management, while making provision for those services we can say that never has the rate-paying householder had to find out of his own pocket a smaller proportion of the rate bill, nor has he ever had such a large contribution from the Exchequer. Therefore, what complete misrepresentations are the words of the Motion on the subject of rates.

Whatever may be the terms of the Motion, either about rates or about rents, what we are debating is the cost of a home and the effect of Government policy upon it. How the costs soared under the Labour Government—the purchase price of a house up 50 per cent., mortgage payments doubled, council rents 65 per cent. up. That is the sort of record which the Opposition have to put before the public.

Whether the householder is an owner-occupier or a tenant, he has no cause to regret the replacement of a Labour Government by a Conservative Government last June. Indeed, he has every reason to rejoice. For example, if he is an owner-occupier, thanks to a Conservative Government he no longer has the fear that if he has to move and sell his house he will have to part with part of the proceeds. Thank heavens the Land Commission levy has gone. We have killed that tax on moving home. It was the previous Government's invention for increasing the price of houses and increasing the cases of hardship. Would the Opposition, if they were the Government again, which heaven forbid, bring back the Land Commission and the land levy? [Interruption.] I want an answer to that question that I have asked before I answer any interruptions. If the hon. Member for Salford, East (Mr. Frank Allaun) were in a future Government, which heaven forbid, there would be public ownership of land.

Mr. George Cunningham

Did the Minister say that where an owner-occupier who owned only one house moved house tax was taken arising from the increase in the value of those premises?

Mr. Page

He would be relieved of that under capital gains tax and he had to pay the betterment levy if there was an increase in value. [HON. MEMBERS: "No."] If a householder, instead of being an owner-occupier, is the tenant of a private landlord he also has cause to reioice in the change of Government last June. The great majority of such tenants—

Mr. Crosland

Will the hon. Gentleman confirm what he said just now, that when one owner-occupied house changed hands the proceeds of a sale were subject to betterment levy? On reflection, will the hon. Gentleman confirm that?

Mr. Page

Yes, of course, if there was a development value in the house, as in many cases there was. The whole point of the levy was that there should be a tax on that. [Interruption.] I know that the Land Commission Act was the most complicated Act ever passed through the House, but after all it was the Opposition, when they were in government, who passed that Act through the House, and they had to amend it a good many times. I am right in what I told the House just now.

The great majority of private tenants are in the older houses, and a substantial number of them are now benefiting from the energetic campaign of my right hon. Friend the Minister for Housing and Construction on improvements grants. It was true that the Labour Government, with Conservative Opposition support, increased the possible amounts of the grants, but having set the figures the Labour Government sat back and, with an air of take it or leave it, left the grants alone. There was no substantial increase in the improvement grants while they were in office.

The improvement policy of the Conservative Government has none of the languid, lethargic indifference which is such a charming characteristic of the right hon. Member for Grimsby. First, we have had a campaign on improvements in 50 cities, and we are starting on a campaign in the next 50 cities. We have mounted this campaign in 100 cities, headed personally by Ministers. Nearly half as many more homes are benefiting as a result—significantly, not just from the installation of the essentials like the inside 100, the hot water system and so on, but from the far more extensive modernisation of homes by the discretionary grants. It is the bigger grants which have shot up as a result of the campaign.

If the householder is not an owner-occupier or a private tenant but is a council tenant, he too has causeto be happy that there was a change of Government last June. He can now buy his home if he wishes, and he can do so at 20 per cent. less than the market value without having to put down any deposit. He finds himself in a much better position under the present Government than under the last.

There is nothing very extraordinary about any of the points I have put forward—getting rid of an unpopular tax, campaigning to persuade people to take advantage of a grant, letting people buy the houses in which they live. Why, then, did the Labour Government fail to carry out these very reasonable policies? They were so obsessed with the hatred of certain sections of the public—developers, speculators, or that great bogeyman of the right hon. Member for Coventry, East, the landlord, that they completely failed to observe how many ordinary citizens were getting hurt in the course of their private feud against a few whom they suspected.

Like existing householders, potential householders too can rejoice. They can buy without having to contribute in higher prices to the vendor's liability under the levy. They will soon be able to buy without having to pay some £60 towards the builder's S.E.T., thanks to my right hon. Friend the Chancellor of the Exchequer. And when they become owner-occupiers they need not feel guilty about the assistance which they receive from tax allowance. This matter has been raised several times in the debate. The figures are that the mortgagor owner-occupier last year got tax relief of an average £47 50p. The council tenant received from subsidy and rate fund contribution an average of £48. So there is really level pegging between the two.

My right hon. Friend the Minister for Housing and Construction gave today some very valuable assurances from the building societies, and some interesting points were raised by the hon. Member for Gloucester, West (Mr. Loughlin). We are still talking with the building societies, and we shall certainly consider the hon. Gentleman's points. The present arrangement means that a young couple can save while they are engaged and have the home ready for when they are married.

Mr. George Cunningham

We are having some difficulty in isolating the small grain of truth that there sometimes is in what the hon. Gentleman says. He gave figures for the relative subsidy to council tenants and owner-occupiers, which are in straight conflict with the figures given by his Department last July. Do the figures he has just given take account of the fact that council tenants are ratepayers too and, therefore, contributes to the subsidy that they may or may not get through the rates?

Mr. Page

Of course the owner-occupier is a ratepayer too. We very much appreciate that there are many families who cannot even think of affording to purchase their own home—and this point was rightly put by the hon. Lady the Member for Birmingham, Ladywood (Mrs. Fisher)—or who need some help from more experienced persons in realising how they can best use their small resources in obtaining for themselves a home. There are some—perhaps too many—living in areas of special housing stress. Early in the life of the Government my right hon. Friend the Secretary of State called upon local authorities to establish housing aid centres to give advice and help upon housing problems. These are proving immensely helpful in enabling people to make the best of their resources in providing themselves with a home. Last month my right hon. Friend the Minister for Housing and Construction followed this un in a new way with the London boroughs in which there are special housing stress areas, making practical proposals to tackle the problem.

In terms of better housing and human happiness, great advances can be made by these comparatively simple actions, in co-operation between the central Government and local government, to reach and help directly those families with housing problems. Again, I do not claim any brilliant and novel policy here, but I do claim that we are doing it energetically and with better results than the last Government achieved.

We have acted more energetically than the last Government did in securing a revival of housing building. But that was not difficult. The Labour Government gave up the struggle. They threw in the sponge and retired from the housing ring. They did nothing to prevent the tragic collapse of the housing programme during their term of office. After only six months of Conservative Government the growth started, as from January, 1971. My right hon. Friend gave the figures today. Starts in the first quarter of this year were up by 20½ per cent. on those of the first quarter of 1970. I have calculated that this means 11,900 more houses in the first quarter this year than last year. That is a rate of 47,600 more houses per year. The hon. Member for Salford, East was so disappointed about this that he had to blame it on the good weather.

Mr. Frank Allaun

The hon. Gentleman has so far spent 25 minutes on his speech and has not yet come to the point of the removal of the council house subsidy and the decontrol of private landlords' tenants. I repeat the question I put to his right hon. Friend. Will he give the House and the country an assurance that hundreds of thousands of tenants in both sectors will not have their rents at least doubled?

Mr. Page

Of course and many more tenants are going to have proper rebates. Our policy is fair rents and fair rebates. The hon. Gentleman did not like the figures of housing because his Government said all the time that it could not be done. These figures show that it could be done. The Labour Government's run-down of house building has been turned into a start-up and an acceleration.

There are two major matters of policy which have resulted in this start-up and acceleration. First, there was the kicking out of the Land Commission and the putting of local authorities into their rightful place as encouragers of development. Secondly, there was the removal of the monetary ceiling on local authority lending for house purchase. These two measures are a complete reversal of the two biggest mistakes the previous Government made in housing.

That Government demoted democratic local government from development powers and deprived democratic local government of the power to help its own citizens provide their own homes. We intend in our future policies to—

Mr. Dan Jones (Burnley)

—double the rents.

Mr. Page

—see that our policies are rational and compassionate. They will be rational because they will end the wasteful and indiscriminate distribution of subsidy, irrespective of need, and compassionate because for the first time our policies will ensure that no tenant is prevented from obtaining decent, unfurnished accommodation because of his inability to pay the rent. I am sure that our policies will have a tremendous impact on what has seemed up to now the solid and intractable problem of the homeless. Our future policy is based on fair rents and fair rebates.

The right hon. Member for Grimsby used a most fantastic argument against his own Government's fair rents. He said they must apply to some private tenants, not to others, and never to council tenants.

Mr. Crosland indicated dissent.

Mr. Page

If they are fair rents for one tenant, why are they not fair rents for another? The right hon. Member complained that the proposed rebates would cover the majority of council tenants. Those were his words. Subsidies at present cover council tenants but they are not concentrated upon those in need.

The hon. Member for Islington, South-West (Mr. George Cunningham) wanted to apply this subsidy to bricks and mortar, even as far as the owner-occupier. Is this the sort of policy the Labour Government want to put forward? We will ensure that the subsidy goes to the tenant in need. Housing associations and housing societies, the Cinderellas of the Labour Government's housing policy, will play their full part in our programme. We are bringing sense and sensitivity into housing.

Question put, That the Amendment be made:—

The House divided: Ayes 293, Noes 260.

Division No. 357.]	AYES	[9.58 p.m.
Adley, Robert	Costain, A. P.	Harrison, Brian (Maldon)
Alison, Michael (Barkston Ash)	Crowder, F. P.	Harrison, Col. Sir Harwood (Eye)
Allason, James (Hemel Hempstead)	Curran, Charles	Haselhurst, Alan
Amery, Rt. Hn. Julian	d'Avigdor-Goldsmid, Sir Henry	Havers, Michael
Archer, Jeffrey (Louth)	d'Avigdor-Goldsmid, MaJ.-Gen.James	Hawkins, Paul
Astor, John	Dean, Paul	Hay, John
Atkins, Humphrey	Deedes, Rt. Hn. W. F.	Hayhoe, Barney
Awdry, Daniel	Digby, Simon Wingfield	Heath, Rt. Hn. Edward
Baker, Kenneth (St. Marylebone)	Dixon, Piers	Hicks, Robert
Baker, W. H. K. (Banff)	Dodds-Parker, Douglas	Higgins, Terence L.
Balniel, Lord	Douglas-Home, Rt. Hn. Sir Alec	Hiley, Joseph
Batsford, Brian	Drayson, G. B.	Hill, John E. B. (Norfolk, S.)
Beamish, Col. Sir Tufton	du Cann, Rt. Hn. Edward	Hill, James (Southampton, Test)
Bell, Ronald	Dykes, Hugh	Holland, Philip
Bennett, Sir Frederic (Torquay)	Eden, Sir John	Holt, Miss Mary
Bennett, Dr. Reginald (Gosport)	Edwards, Nicholas (Pembroke)	Hordern, Peter
Benyon, W.	Elliot, Capt. Walter (Carshalton)	Hornby, Richard
Berry, Hn. Anthony	Elliott, R. W. (N'c'tle-upon-Tyne,N.)	Howe, Hn. Sir Geoffrey (Reigate)
Biffen, John	Emery, Peter	Howell, David (Guildford)
Biggs-Davison, John	Fair, John	Hunt, John
Blaker, Peter	Fell, Anthony	Hutchison, Michael Clark
Boardman, Tom (Leicester, S.W.)	Fenner, Mrs. Peggy	Iremonger, T. L.
Body, Richard	Fidler, Michael	Irvine, Bryant Godman (Rye)
Boscawen, Robert	Finsberg, Geoffrey (Hampstead)	Jenkin, Patrick (Woodford)
Bossom, Sir Clive	Fisher, Nigel (Surbiton)	Jennings, J. C. (Burton)
Bowden, Andrew	Fletcher-Cooke, Charles	Jessel, Toby
Boyd-Carpenter, Rt. Hn. John	Fookes, Miss Janet	Johnson Smith, G. (E. Grinstead)
Braine, Bernard	Fortescue, Tim	Jones, Arthur (Northants, S.)
Bray, Ronald	Foster, Sir John	Jopling, Michael
Brewis, John	Fowler, Norman	Joseph, Rt. Hn. Sir Keith
Brinton, Sir Tatton	Fox, Marcus	Kaberry, Sir Donald
Brocklebank-Fowler, Christopher	Fraser,Rt.Hn.Hugh(St'fford & Stone)	Kellett, Mrs. Elaine
Bruce-Gardyne, J.	Fry, Peter	Kershaw, Anthony
Bryan, Paul	Galbraith, Hn, T. G.	Kilfedder James
Buchanan-Smith, A lick(Angus, N&M)	Gardner, Edward	Kimball, Marcus
Buck, Antony	Gibson-Watt, David	King, Evelyn (Dorset, S.)
Bullus Sir Eric	Gilmour, Ian (Norfolk, C.)	King, Tom (Bridgwater)
Burden, F. A.	Gilmour, Sir John (Fife, E.)	Kinsey, J. R.
Butler, Adam (Bosworth)	Glyn, Dr. Alan	Kirk, Peter
Campbell, Rt.Hn.G.(Moray&Nairn)	Godtocr, Rt. Hn. J. B.	Kitson, Timothy
Carlisle, Mark	Goodhew, Victor	Knight, Mrs. Jill
Channon, Paul	Gorst, John	Knox, David
Chapman, Sydney	Cower, Raymond	Lambton, Antony
Chataway, Rt, Hn. Christopher	Grant, Anthony (Harrow, C.)	Lane, David
Churchill, W. S.	Gray, Hamish	Langford-Holt, Sir John
Clark, William (Surrey, E.)	Green, Alan	Legge-Bourke, Sir Harry
Clarke, Kenneth (Rusholiffe)	Grieve, Percy	Le Marchant, Spencer
Clegg, Walter	Grylls, Michael	Lewis, Kenneth (Rutland)
Cockeram, Eric	Gummer, Selwyn	Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)
Cooke, Robert	Gurden, Harold	Lloyd, Ian (P'tsm'th, Langstone)
Coombs, Derek	Hall, Miss Joan (Keighley)	Longden, Gilbert
Cooper, A. E.	Hall, John (Wycombe)	Loveridge, John
Cordle, John	Hall-Davie, A. G. F.	Luce, R. N.
Corfield, Rt. Hn. Frederick	Hamilton, Michael (Salisbury)	McAddien, Sir Stephen
Cormack, Patrick	Hannam, John (Exeter)	MacArthur, Ian
McCrindle, R. A.	Parkinson, Cecil (Enfield, W.)	Sutcliffe, John
McLaren, Martin	Pike, Miss Mervyn	Tapsell, Peter
Maclean, Sir Fitzroy	Pink, R. Bonner	Taylor, Sir Charles (Eastbourne)
McMaster, Stanley	Pounder, Rafton	Taylor, Edward M.(G'gow, Cathcart)
Macmillan, Maurice (Farnham)	Powell, Rt. Hn. J. Enoch	Taylor, Frank (Moss Side)
McNair-Wilson, Michael	Price, David (Eastleigh)	Taylor, Robert (Croydon, N.W.)
McNair-Wilson, Patrick (NewForest)	Prior, Rt. Hn. J. M. L.	Tebbit, Norman
Maddan, Martin	Proudfoot, Wilfred	Temple, John M.
Madel, David	Pym, Rt. Hn. Francis	Thatcher, Rt. Hn. Mrs. Margaret
Maginnis, John E.	Quennell, Miss J. M.	Thomas, John Stradling (Monmouth)
Marples, Rt. Hn. Ernest	Ralson, Timothy	Thomas, Rt. Hn. Peter (Hendon, S.)
Marten, Neil	Rawlinson, Rt. Hn. Sir Peter	Thompson, Sir Richard (Croydon, S.)
Mather, Carol	Redmond, Robert	Tilney, John
Maude, Angus	Reed, Laurance (Bolton, S.)	Trafford, Dr. Anthony
Mawby, Ray	Rees, Peter (Dover)	Trew, Peter
Maxwell-Hyslop, R. J.	Renton, Rt. Hn. Sir David	Tugendhat, Christopher
Meyer, Sir Anthony	Rhys Williams, Sir Brandon	van Straubenzee, W. R.
Mills, Peter (Torrington)	Ridley, Hn. Nicholas	Vaughan, Dr. Gerard
Mills, Stratton(Belfast, N.)	Ridsdale, Julian	Vickers, Dame Joan
Miscampbell, Norman	Roberts Michael (Cardiff, N)	Waddington, David
Mitchell, Lt.-Col.C. (Aberdeenshire.W)	Roberts, Wy (conway)	Walder, David (Clitheroe)
Mitchell, David (Basingstoke)
Moate, Roger	Rodgers, Sir John (sevenoaks)	Walker, Rt. Hn. Peter (Worcester)
Molyneaux, James	Rossi, Hugh (Hornsey	Walker-Smith, Rt. Hn. Sir Derek
Money, Ernie	Rost, Peter	Walters, Denis
Monks, Mrs. Connie	Russell, Sir Ronald	Ward, Dame Irene
Monro, Hector	St. John-Stevas, Norman	Warren, Kenneth
Montgomery, Fergus	Sharples, Richard	Weatherill, Bernard
Morgan, Geraint (Denbigh)	Shaw, Michael (Sc'b'gh & Whitby)	Well, John (Maidstone)
Morgan-Giles, Rear-Adm.	Shelton, William (Clapham)	White, Roger (Gravesend)
Morrison, Charles (Devizes)	Simeons, Charles	Whitelaw, Rt. Hn. William
Mudd, David	Sinclair, Sir George	Wiggin, Jerry
Murton, Oscar	Skest, T. H. H.	Wilkinson, John
Nabarro, Sir Gerald	Smith, Dudley (W'wick & L'mington)	Wolrige-Gordon, Patrick
Neave, Airey	Soref, Harold	Wood, Rt. Hn. Richard
Nicholls, Sir Harmar	Speed, Keith	Woodhouse, Hn. Christopher
Noble, Rt. Hn. Michael	Spence, John	Woodnutt, Mark
Nott, John		Worsley, Marcus
Onslow, Cranley	Sproat, lain	Wylie, Rt. Hn. N. R.
Oppenheim, Mrs. Sally	Stainton, Keith	Younger, Hn. George
Orr, Capt. L. P. S.	Stanbrook, Ivor
Osborn, John	Stewart-Smith, D. G. (Belper)	TELLERS FOR THE AYES
Owen, Idris (Stockport, N.)	Stoddart-Scott, Col. Sir M,	Mr. Reginald Eyre and
Page, Graham (Crosby)	Stokes, John	Mr. Jasper More.
Page, John (Harrow, W.)	Stuttaford, Dr. Tom
NOES
Abse, Leo	Conlan, Bernard	Fletcher, Raymond (Ilkeston)
Allaun, Frank (Salford, E.)	Corbet, Mrs. Freda	Fletcher, Ted (Darlington)
Allen, Scholefield	Cox, Thomas (Wandsworth, C.)	Foley, Maurice
Archer, Peter (Rowley Regis)	Crawshaw, Richard	Foot, Michael
Armstrong, Ernest	Cronin, John	Ford, Ben
Ashley, Jack	Crosland, Rt. Hn. Anthony	Forrester, John
	Crossman, Rt. Hn. Richard	Fraser, John (Norwood)
Ashton, Joe	Cunningham, G. (Islington, S.W.)	Freeson, Reginald
Atkinson, Norman	Dalyell, Tam	Galpern, Sir Myer
Bagier, Gordon A. T.	Darling, Rt. Hn. George	Garrett, W. E.
Barnes, Michael	Davidson, Arthur	Gilbert, Dr. John
Barnett, Joel	Davies, Denzil (Lianelly)	Ginsburg, David
Beaney, Alan	Davies, G. Elfed (Rhondda, E.)	Gordon walkar, Rt. Hn. P. C.
Benn, Rt. Hn. Anthony Wedgwood	Davies, Ifor (Gower)	Gourlay, Harry
Bennett, James (Glasgow, Bridgeton)	Davies, S. O. (Merthyr Tydvil)	Grant, George (Morpeth)
Bidwell, Sydney	Davis, Clinton (Hackney, C.)	Grant, John D. (Islington, E.)
Bishop, E. S.	Deakins, Eric	Griffiths Eddie (Brightside)
Blenkinsop, Arthur	de Freitas, Rt. Hn. Sir Geoffrey	Griffiths, Will (Exchange)
Boardman, H. (Leigh)	Delargy H J.	Grimond, Rt. Hn. J.
Booth, Albert	Dell, Rt. Hn. Edmund	Gunter, Rt. Hn. R. J.
Bottomley, Rt. Hn. Arthur	Dempsey, James	Hamilton, James (Bothwell)
Bradley, Tom	Doig, Peter	Hamilton, William (Fife, W.)
Brown, Bob (N'c'tle-upon-Tyne, W.)	Dormand, J. D.	Hannan, William (G'gow, Maryhill)
Brown, Hugh D. (G'gow, Provan)	Douglas, Dick (Stirlingshire E.)	Hardy, Peter
Brown, Ronald(Shoreditch & F'bury)	Douglas-Mann, Bruce	Harper, Joseph
Buchanan, Richard (G'gow, Sp'burn)	Driberg Tom	Harrison, Walter (Wakefield)
Butler, Mrs. Joyce (Wood Green)	Duffy, A. E. P.	Hart, Rt. Hn. Judith
Campbell, I. (Dunbartonshire, W.)	Eadie, Alex	Hattersley, Roy
Cant, R. B.	Edelman, Maurice	Healey, Rt. Hn. Denis
Carmichael, Neil	Edwards, Robert (Bilston)	Heffer, Eric S.
Carter, Ray(Birmingh'm, Northfield)	Edwards, William (Merioneth)	Horam, John
Carter-Jones, Lewis (Eccles)	Ellis, Tom	Houghton, Rt. Hn. Douglas
Clark, David (Colne Valley)	English, Michael	Howell, Denis (Small Heath)
Cocks, Michael (Bristol, S.)	Evans, Fred	Huckfield, Leslie
Cohen, Stanley	Faulds, Andrew	Hughes, Rt. Hn. Cledwyn (Anglesey)
Coleman, Donald	Fernyhough, Rt. Hn. E.	Hughes, Mark (Durham)
Concannon, J. D.	Fisher, Mrs. Doris (B'ham, Ladywood)	Hughes, Roy (Newport)
Hunter, Adam	Mayhew, Christopher	Silkin, Rt. Hn. John (Deptford)
Irvine, Rt. Hn. Sir Arthur (EdgeHill)	Meacher, Michael	Silkin, Hn. S. C. (Dulwich)
Janner, Greville	Mellish, Rt. Hn. Robert	Sillars, James
Jay, Rt. Hn, Douglas	Mendelson, John	Silverman, Julius
Jeger, Mrs. Lena (H'b'n&St.P'cras, S.)	Millan, Bruce	Skinner, Dennis
Jenkins, Hugh (Putney)	Miller, Dr. M. S.	Small, William
Jenkins, Rt. Hn. Roy (Stechford)	Milne, Edward (Blyth)	Smith, John (Lanarkshire, N.)
John, Brynmor	Molloy, William	Spearing, Nigel
Johnson, Carol (Lewisham, S.)	Morgan, Elystan (Cardiganshire)	Spriggs, Leslie
Johnson, Walter (Derby, S.)	Morris, Alfred (Wythenshawe)	Stallard, A. W.
Jones, Barry (Flint, E.)	Morris, Charles R. (Openshaw)	Stewart, Rt. Hn. Michael (Fulham)
Jones, Dan (Burnjey)	Morris, Rt. Hn. John (Aberavon)	Stoddart, David (Swindon)
Jones, Rt. Hn. Sir Elwyn(W.Ham, S.)	Moyle, Roland	Stonehouse, Rt. Hn. John
Jones, Gwynoro (Carmarthen)	Mulley, Rt. Hn. Frederick	Strang, Gavin
Jones, T. Alec (Rhondda, W.)	Murray, Ronald King	Strauss, Rt. Hn. G. R.
Judd, Frank	O'Halloran, Michael	Summerskill, Hn. Dr. Shirley
Kaufman, Gerald	O'Malley, Brian
Kelley, Richard	Oram, Bert	Swain, Thomas
Kerr, Russell	Orbach, Maurice	Taverne, Dick
Kinnock, Neil	Orme, Stanley	Thomas, Rt. Hn. George (Cardiff, W.)
Lambie, David	Oswald, Thomas	Thomas, Jeffrey (Abertillery)
Latham, Arthur	Owen, Dr. David (Plymouth, Sutton)	Thomson, Rt. Hn. G. (Dundee, E.)
Lawson, George	Palmer, Arthur	Thorpe, Rt. Hn. Jeremy
Leadbitter, Ted	Pannell, Rt. Hn. Charles	Tinn, James
Lee, Rt. Hn. Frederick	Pardoe, John	Tomney, Frank
Leonard, Dick	Parker, John (Dagenham)	Torney, Tom
Lestor, Miss Joan	Parry, Robert (Liverpool, Exchange)	Tuck, Raphael
Lever, Rt. Hn. Harold	Pavitt, Laurie	Urwin, T. W.
Lewis, Arthur (W. Ham N.)	Peart, Rt. Hn. Fred	Varley, Eric G.
Lewis, Ron (Carlisle)	Pendry, Tom	Wainwright, Edwin
Lipton, Marcus	Pentland, Norman	Walden, Brian (B'm'ham, All Saints)
Lomas, Kenneth	Perry, Ernest G.	Walker, Harold (Doncaster)
Loughlin, Charles	Prentice, Rt. Hn Reg.	Wallace, George
Lyon, Alexander W. (York)	Prescott, John	Watkins, David
Lyons, Edward (Bradford, E.)	Price, William (Rugby)	Weitzman, David
McBride, Neil	Probert, Arthur	Wellbeloved, James
McCartney, Hugh	Rankin, John	Wells, William (Walsall, N.)
McElhone, Frank	Reed, D. (Sedgefield)	White, James (Glasgow, Pollok)
Mackenzie, Gregor	Rees, Merlyn (Leeds, S.)	Whitehead, Phillip
Mackie, John	Rhodes, Geoffrey	Whitlock, William
Makintosh, John P.	Richard, Ivor	Willey, Rt. Hn. Frederick
Maclennan, Robert	Roberts, Albert (Normanton)	Williams, Alan (Swansea, W.)
McMillan, Tom (Glasgow, C.)	Roberts, Rt. Hn. Goronwy (Caernarvon)	Williams, Mrs. Shirley (Hitchin)
McNamara, J. Kevin	Robertson, John (Paisley)	Williams, W. T. (Warrington)
MacPherson, Malcolm	Roderick, Caerwyn E.(Br'c'n&R'dnor)	Wilson, Alexander (Hamilton)
Mahon, Simon (Bootle)	Rodgers, William (Stockton-on-Tees)	Wilson, William (Coventry, S.)
Mallalieu, E. L. (Brigg)	Roper, John	Woof, Robert
Mallalieu, J. P. W. (Huddersfield, E.)	Rose, Paul B.
Marks, Kenneth	Ross, Rt. Hn. William(Kilmarnock)	TELLERS FOR THE NOES:
Marquand, David	Sheldon, Robert (Ashton-under-Lyne)	Mr. John Golding and
Marsden, F.	Shore, Rt. Hn. Peter (Stepney)	Mr. William Hamling.
Mason, Rt. Hn. Roy	Short, Mrs. Renée (W'hampton.N.E.)

Main Question, as amended, put:—

The House divided: Ayes 294, Noes 259.

Division No. 358.]	AYES	[10.12 p.m.
Adley, Robert	Boscawen, Robert	Clegg, Walter
Alison, Michael (Barkston Ash)	Bossom, Sir Clive	Cockeram, Eric
Allason, James (Hemel Hempstead)	Bowden, Andrew	Cooke, Robert
Amery, Rt. Hn. Julian	Boyd-Carpenter, Rt. Hn. John	Coombs, Derek
Archer, Jeffrey (Louth)	Braine, Bernard	Cooper, A. E.
Astor, John	Bray, Ronald	Cordle, John
Atkins, Humphrey	Brewis, John	Corfield, Rt. Hn. Frederick
Awdry, Daniel	Brinton, Sir Tatton	Cormack, Patrick
Baker, Kenneth (St. Marylebone)	Brocklebank-Fowler, Christopher	Costain, A. P.
Baker, W. H. K. (Banff)	Bruce-Gardyne, J.	Crowder, F. P.
Balniel, Lord	Bryan, Paul	Curran, Charles
Batsford, Brian	Buchanan-Smith, Alick(Angus, N&M)	d'Avigdor-Goldsmid, Sir Henry
Baxter, William	Buck, Antony	d'Avlgdor-Goldsmid, Maj.-Gen. James
Beamish, Col. Sir Tufton	Bullus, Sir Eric	Dean, Paul
Bell, Ronald	Burden, F. A.	Deedes, Rt. Hn. W. F.
Bennett, Sir Frederic (Torquay)	Butler, Adam (Bosworth)	Digby, Simon Wingfield
Bennett, Dr. Reginald (Gosport)	Campbell, Rt. Hn. G. (Moray&Nairn)	Dixon, Piers
Benyon, W.	Carlisle, Mark	Dodds-Parker, Douglas
Berry, Hn. Anthony	Channon, Paul	Douglas-Home, Rt. Hn. Sir Alec
Biffen, John	Chapman, Sydney	Drayson, G. B.
Biggs-Davison, John	Chataway, Rt. Hn. Christopher	du Cann, Rt. Hn. Edward
Blaker, Peter	Churchill, W. S.	Dykes, Hugh
Boardman, Tom (Leicester, S.W.)	Clark William (Surrey, E.)	Eden, Sir John
Body, Richard	Clarke, Kenneth (Rushcliffe)	Edwards, Nicholas (Pembroke)
Elliot, Capt. Walter (Carlshalton)	King, Evelyn (Dorset, S.)	Redmond, Robert
Elliott, R. W. (N'c'tle-upon-Tyne, N.)	King, Tom (Bridgwater)	Reed, Laurance (Bolton, E.)
Emery, Peter	Kinsey, J. R.	Rees, Peter (Dover)
Farr, John	Kirk, Peter	Renton, Rt. Hn. Sir David
Fell, Anthony	Kitson, Timothy	Rhys Williams, Sir Brandon
Fenner, Mrs. Peggy	Knight, Mrs. Jill	Ridley, Hn. Nicholas
Fidler, Michael	Knox, David	Ridsdale, Julian
Finsberg, Geoffrey (Hampstead)	Lambton, Antony	Roberts, Michael (Cardiff, N.)
Fisher, Nigel (Surbiton)	Lane, David	Roberts, Wyn (Conway)
Fletcher-Cooke, Charles	Langford-Holt, Sir John	Rodgers, Sir John (Sevenoaks)
Fookes, Miss Janet	Legge-Bourke, Sir Harry	Rossi, Hugh (Hornsey)
Fortescue, Tim	Le Marchant, Spencer	Rost, Peter
Foster, Sir John	Lewis, Kenneth (Rutland)	Russell, Sir Ronald
Fowler, Norman	Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)	St. John-Stevas, Norman
Fox, Marcus	Longden, Gilbert	Sharples, Richard
Fraser, Hn. Hugh, St'fford & Stone)	Loveridge, John	Shaw, Michael (Sc'b'gh & Whitby)
Fry, Peter	Luce, R. N.	Shelton, William (Clapham)
Galbraith, Hn. T. C.	McAdden, Sir Stephen	Simeons, Charles
Gardner, Edward	MacArthur, Ian	Sinclair, Sir George
Gibson-Watt, David	McCrindle, R. A.	Skeet, T. H. H.
Gilmour, Ian (Norfolk, C.)	McLaren, Martin	Smith, Dudley (W'wick & L'mington)
Gilmour, Sir John (Fife, E.)	Maclean, Sir Fitzroy	Soref, Harold
Glyn, Dr. Alan	McMaster, Stanley	Speed, Keith
Godber, Rt. Hn. J. B.	Macmillan, Maurice (Farnham)	Spence, John
Goodhart, Philip	McNair-Wilson, Michael	Sproat, lain
Goodhew, Victor	McNair-Wilson, Patrick (NewForest)	Stainton, Keith
Gorst, John	Maddan, Martin	Stanbrook, Ivor
Gower, Raymond	Madel, David	Stewart-Smith, D. G. (Belper)
Grant, Anthony (Harrow, C.)	Maginnis, John E.	Stoddart-Scott, Col. Sir M.
Gray, Hamish	Marples, Rt. Hn. Ernest	Stokes, John
Green, Alan	Marten, Neil	Stuttaford, Dr. Tom
Grieve, Percy	Mather, Carol	Sutcliffe, John
Grylls, Michael	Maude, Angus	Tapsell, Peter
Gummmer, Selwyn	Mawby, Ray	Taylor, Sir Charles (Eastbourne)
Gurden, Harold	Maxwell-Hyslop, R. J.	Taylor, Edward M.(G'gow, Cathcart)
Hall, Miss Joan (Keighley)	Meyer, Sir Anthony	Taylor, Frank (Moss Side)
Hall, John (Wycombe)	Mills, Peter (Torrington)	Taylor, Robert (Croydon, N.W.)
Hall-Davis, A. G. F.	Mills, Stratten (Belfast, N.)	Tebbit, Norman
Hamilton, Michael (Salisbury)	Miscampbell, Norman	Temple, John M.
Hannam, John (Exeter)	Mitchell, Lt.-Col.C.(Aberdeenshire, W)	Thatcher, Rt. Hn. Mrs. Margaret
Harrison, Brian (Maldon)	Mitchell, David (Basingstoke)	Thomas, John Stradling (Monmouth)
Harrison, Col. Sir Harwood (Eye)	Moate, Roger	Thomas, Rt. Hn. Peter (Hendon, S.)
Haselhurst, Alan	Molyneaux, James	Thompson, Sir Richard (Croydon, S.)
Havers, Michael	Money, Ernie	Tilney, John
Hawkins, Paul	Monks, Mrs. Connie	Trafford, Dr. Anthony
Hay, John	Monro, Hector	Trew, Peter
Hayhoe, Barney	Montgomery, Fergus	Tugendhat, Christopher
Heath, Rt. Hn. Edward	Morgan, Geraint (Denbigh)	Turton, Rt. Hn. R. H.
Hicks, Robert	Morgan-Giles, Rear-Adm.	van Straubenzee, W. R.
Higgins, Terence L.	Morrison, Charles (Devizes)	Vaughan, Dr. Gerard
Hiley, Joseph	Mudd, David	Vickers, Dame Joan
Hill, John E. B. (Norfolk, S.)	Murton, Oscar	Waddington, David
Hill, James (Southampton, Test)	Nabarro, Sir Gerald	Walder, David (Clitheroe)
Holland, Philip	Neave, Airey	Walker, Rt. Hn. Peter (Worcester)
Holt, Miss Mary	Nicholls, Sir Harmar	Walker-Smith, Rt. Hn. Sir Derek
Hordern, Peter	Noble, Rt. Hn. Michael	Walters, Dennis
Hornby, Richard	Nott, John	Ward, Dame Irene
Hornsby-Smith, Rt. Hn. Dame Patricia	Onslow, Cranley	Warren, Kenneth
Howe, Hn. Sir Geoffrey (Reigate)	Oppenheim, Mrs. Sally	Weatherill, Bernard
Howell, David (Guildford)	Orr, Capt. L. P. S.	Wells, John (Maidstone)
Hunt, John	Osborn, John	White, Roger (Gravesend)
Hutchison, Michael Clark	Owen, Idris (Stockport, N.)	Whitelaw, Rt. Hn. William
Iremonger, T. L.	Page, Graham (Crosby)	Wiggin, Jerry
Irvine, Bryant Godman (Rye)	Page, John (Harrow, W.)	Wilkinson, John
Jenkin, Patrick (Woodford)	Parkinson, Cecil (Enfield, W.)	Wolrige-Gordon, Patrick
Jennings, J. C. (Burton)	Pike, Miss Mervyn	Wood, Rt. Hn. Richard
Jessel, Toby	Pink, R. Bonner	Woodhouse, Hn. Christopher
Johnson Smith, G. (E. Grinstead)	Pounder, Rafton	Woodnutt, Mark
Jones, Arthur (Northants, S.)	Powell, Rt. Hn. J. Enoch	Worsley, Marcus
Jopling, Michael	Price, J. T. (Westhoughton)	Wylie, Rt. Hn. N. R.
Joseph, Rt. Hn. Sir Keith	Proudfoot, Wilfred	Younger, Hn. George
Kaberry, Sir Donald	Pym, Rt. Hn. Francis
Kellett, Mrs. Elaine	Quennell, Miss J. M.	TELLERS FOR THE AYES:
Kershaw, Anthony	Raison, Timothy	Mr. Reginald Eyre and
Kilfedder, James	Rawlinson, Rt. Hn. Sir Peter	Mr. Jasper More.
Kimball, Marcus
NOES
Abse, Leo	Ashley, Jack	Barnett, Joel
Allaun, Frank (Salford, E.)	Ashton, Joe	Beaney, Alan
Allen, Scholefield	Atkinson, Norman	Benn, Rt. Hn. Anthony Wedgwood
Archer, Peter (Rowley Regis)	Bagier, Gordon A. T.	Bennett, James (Glasgow, Bridgeton)
Armstrong, Ernest	Barnes, Michael	Bidwell, Sydney
Bishop, E. S.	Harrison, Walter (Wakefield)	Orme, Stanley
Blenkinsop, Arthur	Hart, Rt. Hn. Judith	Oswald, Thomas
Boardman, H. (Leigh)	Hattersley, Roy	Owen, Dr. David (Plymouth, Sutton)
Booth, Albert	Healey, Rt. Hn. Denis	Palmer, Arthur
Bottomley, Rt. Hn. Arthur	Heffer, Eric S.	Pannell, Rt. Hn. Charles
Bradley, Tom	Horam, John	Pardoe, John
Brown, Bob (N'c'tle-upon-Tyne, W.)	Houghton, Rt. Hn. Douglas	Parker, John (Dagenham)
Brown, Hugh D. (G'gow, Provan)	Howell, Denis (Small Heath)	Parry, Robert (Liverpool, Exchange)
Brown, Ronald (Shoreditch & F'bury)	Huckfield, Leslie	Pavitt, Laurie
Buchanan, Richard (G'gow, Sp'burn)	Hughes, Rt. Hn. Cledwyn (Anglesey)	Peart, Rt. Hn. Fred
Butler, Mrs. Joyce (Wood Green)	Hughes, Mark (Durham)	Pendry, Tom
Campbell, I. (Dunbartonshire, W.)	Hughes, Roy (Newport)	Pentland, Norman
Cant, R. B.	Hunter, Adam	Perry, Ernest G.
Carmichael, Neil	Irvine, Rt. Hn. Sir Arthur (Edge Hill)	Prentice, Rt. Hn. Reg.
Carter, Ray (Birmingh'm, Northfield)	Janner, Greville	Prescott, John
Carter-Jones, Lewis (Ecoles)	Jay, Rt. Hn. Douglas	Price, William (Rugby)
Clark, David (Colne Valley)	Jeger, Mrs. Lena (H'b'n&St.P'cras, S.)	Probert, Arthur
Cocks, Michael (Bristol, S.)	Jenkins, Hugh (Putney)	Rankin, John
Cohen, Stanley	Jenkins, Rt. Hn. Roy (Stechford)	Reed, D. (Sedgefield)
Coleman, Donald	John Brynmor	Rees, Merlyn (Leeds, S.)
Concannon, J. D.	Johnson, Carol (Lewisham, S.)	Rhodes, Geoffrey
Conlan, Bernard	Johnson, Walter (Derby, S.)	Richard, Ivor
Corbet, Mrs. Freda	Jones, Barry (Flint, E.)	Roberts, Albert (Normanton)
Cox, Thomas (Wandsworth, C.)	Jones, Dan (Burnley)	Roberts, Rt. Hn. Goronwy (Caernarvon)
Crawshaw, Richard	Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)	Robertson, John (Paisley)
Cronin, John	Jones, Gwynoro (Carmarthen)	Roderick, Caerwyn E. (Br'c'n&R'dnor)
Crosland, Rt. Hn. Anthony	Jones, T. Alec (Rhondda, W.)	Rodgers, William (Stockton-on-Tees)
Grossman, Rt. Hn. Richard	Judd, Frank	Roper, John
Cunningham, G. (Islington, S.W.)	Kaufman, Gerald	Rose, Paul B.
Dalyell, Tam	Kelley, Richard	Ross, Rt. Hn. William (Kilmarnock)
Darling, Rt. Hn. George	Kerr, Russell	Sheldon, Robert (Ashton-under-Lyne)
Davidson, Arthur	Kinnock, Neil	Shore, Rt. Hn. Peter (Stepney)
Davies, Denzil (Llanelly)	Lambie, David	Short, Mrs. Renee (W'hampton, N.E.)
Davies, G. Elfed (Rhondda, E.)	Latham, Arthur	Silkin, Rt. Hn. John (Deptford)
Davies, Ifor (Gower)	Lawson, George	Silkin, Hn. S. C. (Dulwich)
Davies, S. O. (Merthyr Tydvll)	Leadbitter, Ted	Sillars, James
Davis, Clinton (Hackney, C.)	Lee, Rt. Hn. Frederick	Silverman, Julius
Deakins, Eric	Leonard, Dick	Skinner, Dennis
de Freitas, Rt. Hn. Sir Geoffrey	Lestor, Miss Joan	Small, William
Delargy, H. J.	Lever, Rt. Hn. Harold	Smith, John (Lanarkshire, N.)
Dell, Rt. Hn. Edmund	Lewis, Arthur (W. Ham N.)	Spearing, Nigel
Dempsey, James	Lewis, Ron (Carlisle)	Spriggs, Leslie
Doig, Peter	Lipton, Marcus	Stallard, A. W.
Dorman, J. D.	Lomas, Kenneth	Stewart, Rt. Hn. Michael (Fulham)
Douglas, Dick (Stirlingshire, E.)	Loughlin, Charles	Stoddart, David (Swindon)
Douglas-Mann, Bruce	Lyon, Alexander W. (York)	Stonehouse, Rt. Hn. John
Driberg, Tom	Lyons, Edward (Bradford, E.)	Strang, Gavin
Duffy, A. E. P.	McBride, Neil	Strauss, Rt. Hn. G. R.
Eadie, Alex	McCartney, Hugh	Summerskill, Hn. Dr. Shirley
Edleman, Maurice	McElhone, Frank	Swain, Thomas
Edwards, Robert (Bilston)	Mackenzie, Gregor	Taverne, Dick
Edwards, William (Merioneth)	Mackie, John	Thomas, Rt. Hn. George (Cardiff, W.)
Ellis, Tom	Mackintosh, John P.	Thomas, Jeffrey (Abertillery)
English, Michael	Maclennan, Robert	Thomson, Rt. Hn. G. (Dundee, E.)
Evans, Fred	McMillan, Tom (Glasgow, C.)	Thorpe, Rt. Hn. Jeremy
Faulds, Andrew	McNamara, J. Kevin	Tinn, James
Fernyhough, Rt. Hn. E.	MacPherson, Malcolm	Tomney, Frank
Fisher, Mrs. Doris (B 'ham, Lady wood)	Matron, Simon (Bootle)	Torney, Tom
Fletcher, Raymond (Ilkeston)	Mallalieu, E. L. (Brigg)	Tuck, Raphael
Fletcher, Ted (Darlington)	Mallallieu, J. P. W. (Huddersfield, E.)	Urwin, T. W.
Foley, Maurice	Marks, Kenneth	Varley, Eric G.
Foot, Michael	Marquand, David	Wainwright, Edwin
Ford, Ben	Marsden, F.	Walden, Brian (B'm'ham, All Saints)
Forrester, John	Mason, Rt. Hn. Roy	Walker, Harotd (Doncaster)
Fraser, John (Norwood)	Mayhew, Christopher	Wallace, George
Freeson, Reginald	Meacher, Michael	Watkins, David
Galpern, Sir Myer	Mellish, Rt. Hn. Robert	Weitzman, David
Garrett, W. E.	Mendelson, John	Wellbeloved, James
Gilbert, Dr. John	Millan, Bruce	Wells, William (Walsall, N.)
Ginsburg, David	Miller, Dr. M. S.	White, James (Glasgow, Pollok)
Gordon Walker, Rt. Hn. P. C.	Milne, Edward (Blyth)	Whitehead, Phillip
Gourlay, Harry	Molloy, William	Willey, Rt. Hn. Frederick
Grant, George (Morpeth)	Morgan, Elystan (Cardiganshire)	Williams, Alan (Swansea, W.)
Grant, John D. (Islington, E.)	Morris, Alfred (Wythenshawe)	Williams, Mrs. Shirley (Hitchin)
Griffiths, Eddie (Brightside)	Morris, Charles R. (Openshaw)	Williams, W. T. (Warrington)
Griffiths, Will (Exchange)	Morris, Rt. Hn. John (Aberavon)	Wilson, Alexander (Hamilton)
Grimond, Rt. Hn. J.	Moyle, Roland	Wilson, William (Coventry, S.)
Gunter, Rt. Hn. R. J.	Mulley, Rt. Hn. Frederick	Woof, Robert
Hamilton, James (Bothwell)	Murray, Ronald King
Hamilton, William (Fife, W.)	O'Halloran, Michael	TELLERS FOR THE NOES:
Hannan, William (G'gow, Maryhill)	O'Malley, Brian	Mr. John Golding and
Hardy, Peter	Oram, Bert	Mr. William Hamling.
Harper, Joseph	Orbach, Maurice

Resolved, That this House welcomes the abolition of the wasteful Land Commission and betterment levy, the halving of selective employment tax, which will help to curb the rise in the cost of housing, the increasing sale of council houses to tenants, and the substantial extra provision in the rate support grant for improvements to the environment; and congratulates Her Majesty's Government on the steps it is taking to extend home ownership and house improvement, and on its policy which is designed to concentrate support on areas of stress and people in need.