HOUSING FINANCE BILL [THIRD ALLOTTED DAY]

HC Deb 08 May 1972 vol 836 cc927-1056

Order for Third Reading read.

4.28 p.m.

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

I beg to move, That the Bill be now read the Third time.—[Interruption.]

Mr. Ronald Brown (Shoreditch and Finsbury)

Does the right hon. Gentleman come here often?

Mr. Walker

I presumed that hon. Members opposite, by the time they had carefully considered this Bill in Committee and on Report, would almost certainly cheer when the Government spokesman stood up to move the Third Reading. I am pleased to see that after a careful consideration they now see many of its merits.

The period between Second and Third Reading has been one during which both sides of the Committee and the House have given a great deal of detailed consideration to the complicated Clauses. The House is grateful for the careful and diligent consideration that has been given. My right hon. Friend the Minister for Housing and Construction, supported for the main part of the Committee stage by the then Under-Secretary, now the Minister of State for Northern Ireland, steered through this important and complicated piece of legislation. With some of the major provisions affecting slum clearance and housing associations, the Committee and Report stage have been used further to improve the legislation involved in assisting these important functions.

It is interesting to recognise that it was almost exactly seven years ago that the then Government of the day considered it important to have a fundamental re-examination of housing finance. It was the then Minister of Housing and Local Government who said that this was an urgent and important matter for the Government to consider and that the Government would later be coming forward with further proposals. The review continued—one cannot say "apace "throughout all of the years of the Labour Government. From time to time, in 1966, 1968, 1969 and as late as January, 1970, pronouncements were made by various Ministers of the then Government to the effect that the review was "reaching its climax ", the review was" soon to be announced ", the review was "going apace ". Yet no announcements were made.

We shall never know what that review contained. The Labour Party decided at the last General Election not in any way to include in its election manifesto any concepts that might have come out of that review.

It is interesting to reflect that the Labour Party, having agreed the necessity for a review, went into the last Election without any policy on housing finance. One can hardly take the view, in view of what was happening in housing, that, after reviewing the subject, the Labour Party was content with what it saw. By 1970 a number of major and socially important spheres of housing were in great difficulty, including the slum clearance programme. An increasing number of authorities were finding, as they went ahead with important housing schemes, that there was either a heavier burden on existing tenants or on the ratepayers or on both.

Housing associations were facing great difficulties—other than in a number of cases where they had been given considerable help by local authorities. But nation-wide housing associations were facing great difficulties. Nobody could have denied the necessity for a review.

On coming into office this Government duly reviewed the whole basis of housing finance and came forward first with their White Paper proposals and then with the Bill. The basis of this Government's review was to see where the money injected into housing was most needed to improve housing conditions and to try to decide methods by which a fair rent could be charged for public and private housing alike.

There was an unfortunate difference between the public and private housing sectors, in that a situation was being created in the private sector where many poorer families were living in declining housing conditions because of the inability of their landlords to keep the houses in a tolerable state of repair. There was no point of difference between the parties on this issue. The Milner Holland Report clearly indicated it. The last Government, in their 1965 Act and their later legislation, recognised the need for revisions in this sphere.

This Government, on reviewing the best method to apply the finance allocated to housing, had to look at various alternative proposals. Three major proposals were put before Ministers when we first took office. Whether those three proposals were put before Labour Ministers only they can say. So far they will not say.

As to the proposals that we examined, there were three possibilities. One was based on historic cost, whereby the historic cost of all local authority housing was pooled and a resulting pool rent charged. The second alternative was the owner-occupier equivalent, whereby an effort was made to up-date housing to its current market values and to put it on a basis of purchasing the house, eliminating the capital repayment factor. However, this was a method that would have resulted in a very substantial increase in rents, resulting in rents way beyond the fair rent levels.

The third possibility was to apply the fair rent principle which the previous Government had applied to sections of the private sector in 1965 and extended still further in their later legislation. Before deciding to adopt the fair rent principle, the Conservative Government carefully examined both the manner in which it had been applied and the effects it had had on landlord and tenant alike. One of the adverse effects of the previous fair rent system in the private sector had been that the last Government had brought in fair rents for quite a large section of the private sector but had provided with them no form of rent allowances for tenants. There could have been cases where, due to inability to pay the rent, security of tenure was in some danger as a result of the non-availability of rent allowances.

The pooled historic cost idea, doubtless modified in various ways, is the one which seemingly appeals to the right hon. Member for Grimsby (Mr. Crosland), judging by the words he wrote in his Fabian leaflet on this topic. In this leaflet, with all the convenience that Oppositions have in these matters, the right hon. Gentleman concluded that this was no time for the Opposition to come to conclusions; therefore, he felt that this should be left to a later stage for the Opposition to consider further. Therefore, the Labour Party's review, which started in 1965, continues apace; and the House and the country will he interested to know that, in spite of all the debates and discussions, seemingly no conclusion has been reached

The right hon. Gentleman knows very well that the application of pooled historic cost is very unfair between one authority and another and can result in some exceedingly high rents. It would result, in certain places, in rents far higher than the fair rent level. There are many disadvantages to this system.

It was for this reason that, after examining the systems available to secure a tolerable and sensible level of rents, the Government decided to apply the fair rent levels. I believe, having studied the words spoken in Committee and on Report, that no member of the Committee has suggested a better alternative to this method for basing rents on.

Mr. Arthur Latham (Paddington, North)

The right hon. Gentleman has referred to his studying what went on in Committee and on Report. He will know that some critical questions were asked of the Minister for Housing and Construction at the end of our debates on Report about the interpretation of Clause 50. Does the right hon. Gentleman confirm that he just said that it is expected that fair rents will mean that rents in the public sector will be the same as those in the private sector for comparable properties? Will he confirm that—because it is vital?

Second, will the right hon. Gentleman tell us whether he agrees that he has an obligation to explain to the House. before the debate goes much further, whether the criteria that the Birmingham Conservative-controlled council, as it then was, applied are in accordance with Clause 50 are contrary to it?

Mr. Walker

Certainly. A number of authorities of differing political persuasions have come out with their estimates of what fair rents will be. It is not for me to make a judgment, as each authority announces its estimates, about whether the estimates are accurate. [HON. MEMBERS: "Answer the question."] Therefore, when Birmingham's suggestions come for examination, if Birmingham asks for a direction about rent increases, we shall carefully make an assessment of the situation. I am certainly in no position to do so at present.

Under the fair rents system, rents in various areas will in the coming months be definitely fixed. At this stage we shall see how very wrong and unreasonable the Opposition's propaganda campaign on the Bill has been. I believe that in cities like Birmingham, Bristol and Newcastle tenants who have been told by Labour Party organisers and campaigners that this Bill will bring about a doubling of rents will find that that does not happen.

No doubt hon. Members on both sides read the article in yesterday's Observerby Alan Day which implied clearly that on his studies the general allegation that rents will double will prove to be wrong.

The Opposition will doubtless claim that last week's local election results were closely connected with the hostility that exists to this legislation. I believe that a little more detailed examination will prove that not to be the case. However, even if it were the case, from the point of view of party politics, the Opposition are at this moment in history at their most favourable point. They have made the point nation-wide very effectively that all council house rents will double. That was the great message that they tried to get across to the country. They did so effectively. I congratulate them on having done it.

From now onwards people will see what the fair rents system means to them; and, much more important, they will see what both the rebate system and the rent allowance system mean to them. When they see how the Bill really works when enacted, hundreds of tousands of tenants will recognise the immense benefit this legislation will bring to them.

Mr. Frank Allaun (Salford, East)

We have quoted—we make no excuse for it —the estimate contained in the Department's own statement that rents will on average nearly double in each of the ten regions. The Minister now suggests for certain towns figures that are lower. I will not go into the Birmingham matter, because I understand that my right hon. Friend the Member for Grimsby (Mr Crosland) will deal with that.

Will the Secretary of State now answer the question he was asked by my hon. Friend the Member for Paddington, North (Mr. Latham)? Does the basis still exist that council rents will be put on the same level as equivalent houses in the private sector? If they are, it is nonsense for the Minister to say that rents will not be doubled, because they will more than double.

Mr. Walker

The definition of fair rents is used in legislation introduced by the Labour Party. It is quite clear. The considerations taken into account are also quite clear. Therefore, I am willing to be judged, as no doubt the Government will be, on the actual impact and effect of this legislation on council house estates.

Mr. Allaun

Answer the question.

Mr. Walker

It is interesting to see the difference at this stage between those local authorities which have decided to delay implementing the basic provisions of this Bill for as long as statutorily possible, and those local authorities which have not so decided. One can understand them taking that political view, but the surprising thing is to see those authorities which decided to bring about an increase of 50p in their rents on 1st April at the same time as they introduced the rebate scheme outlined in this legislation.

Talking of Birmingham, I should like to give two examples from a case affecting Birmingham people. In my constituency I have an overspill from Birmingham on council estates in Droitwich, built over the last two or three years and housing mainly families who moved out because of bad housing conditions in Birmingham. They are now living on two sizeable estates in Droitwich. It is interesting to note the effect of the application of this Bill in terms of its rebate schemes and rent allowances on a large number of people in those estates already. Although the scheme was circulated only a few months ago, already a high proportion will obtain rebates.

I know that hon. Members opposite have tried to hide from the public the effect of the rebates and rent allowances, but let me give an example of a family in a council house on one of these estates, paying currently a rent of £5.32 a week. The income of the family, consisting of husband, wife and two children, is £26 a week. As a result of our rebate scheme their rent is going down from £5.32 to £3.10 a week. It is not possible to convince that family that this is not a socially reforming Measure. That is the Boycott Estate consisting of Birmingham overspill.

Let us take one of the older council houses in that area where once again the income of a family—husband, wife and two children—is £26 and the current rent is £3.12. This is a pre-war council house. Under this rebate scheme the rent is reduced by nearly £1 to £2.22.

Rents for the new estates of Birmingham overspill, like so many new estates in this country, are probably at levels approaching what a fair rent level should be. All over the country—[Interruption.] —and I do not blame the Labour Party for having their last shout about this—council house tenants will soon be seeing the benefit that this rebate scheme brings.

Mr. George Cunningham (Islington, South-West) rose—

Mr. Deputy Speaker (Mr. E. L. Mallalieu)

Order. The right hon. Gentleman does not intend to give way, so the hon. Member must resume his seat.

Mr. Walker

Under the previous Government a circular went out urging all local authorities to use their subsidies in order to provide proper rebate schemes. As a result of this legislation I am pleased to say that many have already done so, and I am sure that the tenants of the various estates are pleased, too. People living in 40 per cent. of local authority areas will for the first time be eligible for a rent rebate. There will be the whole of the private sector, and I noticed that the hon. Member for Romford (Mr. Leonard) said that he felt that it was a mistake of the last Government, in six years of office, to have done nothing about allowances in the private sector. Not only did they do nothing about allowances in the private sector, but there was no sign of them so doing. It is the present Government who have acted to bring this benefit to that sector of the community.

Mr. Dick Leonard (Romford)

The right hon. Gentleman has accurately quoted. what I said the other day. The Labour Government did not seek to impose a compulsory £1 increase. If, as the right hon. Gentleman suggests, rents are not going up all that much, and Birmingham is fairly typical, why is there a compulsory £1 increase?

Mr. Walker

When the hon. Gentleman spoke the other day he was talking about rent allowances in the private sector. The Labour Government introduced legislation which imposed increases in those rents. [Interruption.] The hon. Member for Southall (Mr. Bidwell) was constantly telling us what enormous increases in rents his Government's legislation was imposing and there were no allowances available at all.

There is also the slum clearance programme. There were many local authorities, of all political persuasions, wanting to go ahead with slum clearance programmes; and they found that in the majority of cases to proceed under the former financial arrangements meant either a financial burden on the ratepayers or an increase in rents for existing tenants, or both. As a result of this, the slum clearance programme in this country did not have the acceleration in development which it so badly needed.

We have brought in legislation introducing grants for 75 per cent. of the loss involved in slum clearance development This will be retrospective to 1971–72, so there is no excuse for local authorities not to proceed immediately. They do not have to wait to take the benefit of this grant. Also it will be back-dated in respect of land held for six years prior to 1st April 1971, which will he a definite and substantial help to some of the worst authorities.

These payments will result in a massive financial benefit to the local authorities concerned. The payments by the Government are made on an annuity basis, which is the traditional form in local government finance, and therefore by 1975–76 about £20 million will be paid in this way, which is equivalent to giving a 75 per cent. subsidy on a total of about £40 million worth of slum clearance programme loss. It is, in fact, a massive injection of capital into the slum clearance campaign. In our talks with the local authority associations and others, all have agreed that this is a substantial housing reform which will take away the financial disincentive which has existed hitherto in regard to slum clearance.

For example, Liverpool, one of the major authorities, estimates that by 1976–77 it will be benefiting annually from this form of subsidy to the extent of £930,000, equivalent to a 3½p rate.

This subsidy is open-ended in the sense that the more slum clearance is done, and the more speedily it is done, the more money will be paid out as a result. Rents will not be affected. Rates will not be adversely affected. There is, therefore, an important task to be performed both by my Department and by local authorities as a whole to examine slum clearance programmes and to try to accelerate them at the fastest possible rate. Certainly, from the Government's point of view, the more we pay out under this new form of slum clearance subsidy, the better we shall be pleased.

As with all legislation, the implications of the Bill in terms of its application to individuals and to local authorities are an important aspect of the matter. In their Housing Act, 1969, the last Government brought in house improvement grants, but they did not do enough to implement that measure and bring it to the attention of the people concerned. By giving far more publicity to it and directing greater attention to the scheme throughout the country, we have brought about the massive increase—a doubling—of modernisation which is now taking place.

I hope that all local authorities, whatever their political persuasion, will make a considerable effort to see that the availability of rent rebates and rent allowances is brought to the attention of every individual concerned. The difference be-between a bad effort and a good effort here will be considerable in its effect. There is no excuse for any council tenant not to be aware how to obtain a rebate, and my Department will be only too pleased to assist. I hope that tenants in the private sector will likewise have the new rent allowances brought to their attention.

A number of authorities already, within only a short time of trying to implement the rent rebate scheme under the Bill, are finding that, with a good scheme, about 40 per cent. of their tenants are benefiting from rebates. There is no reason why, with proper energy and activity by local authorities, this process should not be continued.

I turn to the important provisions of the Bill relating to the voluntary housing movement. The housing associations and societies have an important role as a third force in the development of our future housing policy in this country. Throughout the passage of the Bill, my right hon. Friend the Minister for Housing and Construction had numerous meetings with the housing associations, the housing societies and the Housing Corporation to try to see that, when it reached the Statute Book, the Bill would give a great momentum to the housing association movement. I believe that he has achieved that objective with the Amendments and changes which have been made from the original draft of the Bill.

In future, the housing associations will be free to obtain loans from the Housing Corporation and/or from the local authorities. They will be free to obtain their subsidies direct from the Government. They will come under the fair rent scheme and, with it, the provisions for rent allowances to their tenants. This will mean, for example, that many of our older housing associations will be able to create surpluses which will enable them to go in for further extension of their activities.

We have agreed to make changes as regards meeting the deficit resulting from fair rents being below the actual cost rent of much of this accommodation. The agreement to pay 100 per cent. of the deficit for the first three years and 90 per cent. for a further seven years after that will result in a considerable improvement in their situation. I have here several expressions of view to that effect. One comes from the Help the Aged organisation: We do, of course, warmly welcome this news "— that is, the proposal, at an earlier stage of the Bill, to meet the deficit to the extent of 100 per cent. and 90 per cent.— May I ask that you will kindly do all you can to see that this is done. It will mean that our sheltered housing work for needy aged people in the United Kingdom can go forward speedily. Likewise, the National Federation of Housing Societies said, after hearing the news: We are delighted to inform you of very substantial concessions which have been granted to the voluntary housing movement in response to the many meetings the Federation has had with the Department of the Environment".

Mr. Latham

What about Shelter?

Mr. Walker

Shelter said: I welcome this unreservedly. The Minister, Mr. Amery, has acted most responsibly in accepting the validity of arguments which we have been putting to him since last September The associations concerned can now take valuable action. There is need to examine further, however, the basic organisation and legal framework of the housing associations. Some very fine work has been done by well-organised and established housing associations. On the other hand, damage could be done by a badly organised housing association which, perhaps, collapsed after a few years. As the House knows, the Cohen Committee looked into this matter. I believe that there is need to bring in legislation dealing more with administration and organisation, but the financial framework needed to give a great impetus to the movement is now made available by the Bill.

In two of the socially important spheres of housing, therefore, slum clearance and the work of the voluntary housing movement, considerable benefit will flow from the Bill. Many council tenants—far more than think so at present, will benefit considerably from the rebate scheme.

Mr. Charles Loughlin (Gloucestershire, West)

Speaking of the rebate scheme, the Minister said a few minutes ago that 40 per cent. of council tenants would have a rebate. Is that not a bit complacent? If he took the rent increases higher, he could even establish 100 per cent. rebate take-up.

Mr. Walker

The hon. Gentleman will find that large numbers of people will be paying far lower rents as a result of the Bill than they have been paying for many years past, and his political party, which has spent the last few months trying to give the strong impression that the opposite was true, will find that that will be so.

Mr. George Cunningham rose—

Mr. Alexander W. Lyon (York) rose—

Mr. Walker

I am sorry; I must get on. The rents of those tenants who do not have benefit from the rebate scheme will be limited to a fair rent as defined by the original legislation, which will be a rent certainly not in any way tough or difficult for them to meet. [Interruption.] If it is, they will benefit from the rebate scheme. But the third option open to them, which, I hope, will continue to be extended, is the option for every council house tenant to have the right to buy his own council house.

In the near future, we shall send a circular to local authorities urging them to arrange for that. I have been pleased to note the news that a number of newly elected Socialist authorities are, seemingly, intending to continue the sale of council houses. I hope that the official Opposition policy will change on this matter, though for party political reasons I would hope that it would not change. since I believe that it will be very unpopular for them to stick to their present position.

Mr. R. C. Mitchell (Southampton. Itchen)

On a point of order, Mr. Deputy Speaker. I have searched carefully through the Bill, and I can find no reference to the sale of council houses in it. This is the Third Reading debate.

Mr. Deputy Speaker

Passing references to certain matters are allowed.

Mr. Walker

I can well understand that these passing references sound particularly unhappy to the Opposition's ears.

To sum up, although we inherited a situation that in June, 1970, the slum clearance programme was in decline, this Bill will accelerate slum clearance. The voluntary housing movement was then facing considerable potential decline, and it will now gain immense benefit from the Bill. In the private sector we had the situation where 1,400,000 houses were put under fair rents by the last Government with no form of rent allowance, and now these people will benefit from the rent allowance. In the public sector 40 per cent. of local authorities failed then to provide a rent rebate scheme, and this scheme will now be available to all. The Government have already doubled the rate of houses improved. The last monthly figures for owner-occupied houses were up by 79 per cent. We shall now accelerate the work of slum clearance and housing associations. All this will result in this country being better housed than ever before.

If we are successful, as I believe we shall be, in providing a rebate scheme or a rent allowance scheme for furnished tenancies, we shall have reached the situation in this country in which no family can claim that it cannot afford to be decently housed. Every family will have the necessary financial support to see that it is. It is for these reasons that I believe the Bill commends itself to the House.

5.0 p.m.

Mr. Anthony Crosland (Grimsby)

We naturally welcome the Secretary of State back to our housing finance debates after a fairly long rest period in the Government's base camp. It is true that his return has hardly illuminated our debate and he filled me with an emotion I never thought I would feel, the emotion of: "Come back Julian, all is forgiven ".

The Secretary of State's morale was no doubt affected by the shattering events of last Thursday when the voters gave their verdict on the Government's record and on the Bill. Certainly, the Secretary of State and the Minister between them have lost all their friends in local government, save for a tiny number preserved by the aldermanic system. In the case of the Secretary of State I noted with interest that even in Worcester the Tories have lost control of the council and in Droitwich, in his constituency, the only place in Britain where he is recorded as having met a deputation of tenants, Labour won three out of the four seats.

Mr. Peter Walker

Has the right hon. Member for Grimsby (Mr. Crosland) noted that of the four elected candidates the highest poll was for the Tory chairman of the housing committee and the one defeated Labour candidate was the gentleman who led the tenants deputation.

Mr. Crosland

If we are exchanging our detailed knowledge would the Secre- tary of State deny the fact about which I am informed most accurately that this is the first time ever that Labour councillors have been elected in Droitwich?

The main question I have about the Bill is whether it is the same Bill as the one to which we gave a Second Reading on 15th November. I ask because there were some curious exchanges last week between Sir Francis Griffin, the Minister, and the House of Commons which have cast considerable doubts on what is in the Bill and what is not.

I want to concentrate on this vital question. The cornerstone of the Bill is the mandatory rise in rents of £26 per dwelling per annum in 1972–73 and in 1973–74, to be achieved in 1972–73 by a 50p increase in April or £1 increase in October. The mandatory rise of £26 per dwelling is fundamental to the Bill. It is the first essential step in the progression to fair rents. It is basic to the arithmetic of the Bill. In particular it determined the residual subsidy in Clause 2 and the withdrawal factor of £20 per annum which we discussed on Clause 2. It was assumed by the Government that this mandatory rise or perhaps the second year's mandatory rise might, in a few cases, produce rents above the level of fair rents and therefore there was provision for a refund in Clause 68.

But it was not envisaged that this would occur on a scale which would distort the basic arithmetic of the Bill. The provision for the refund took precisely two lines in a White Paper of 38 pages and it was assumed that this would be a trivial exception which underlined the basic rule. The basic rule was the mandatory increase of rents in 1972-73 by £26 per dwelling. That was what the White Paper said. That was what the Bill said. That was what the Minister said in introducing the Bill. That was how the Bill was universally interpreted. That was the explicit assumption underlying all our early debates in Committee. That was what the Minister repeated in Committee on 2nd December when he said, and it is very relevant to what I am going to discuss: the range of estimates for the new subsidies assumes average unrebated rent income— he meant rent increase— of £26 per dwelling for 1972–73, declining to E14 per dwellng for 1975–76. The decline is based on the assumption that the rents of an increasing number of dwellings will be at the fair rent level after 1972–73, and therefore before 1975–76."—[OFFICIAL REPORT, Standing Committee E. 2nd December, 1971; c. 113.] In other words, we have the reaffirmation of the commitment to the £26 mandatory, across-the-board increase. We had a clear statement that in the Government's view fair rents would be reached generally somewhere between 1972–73 and 1975–76—certainly not in 1972–73. It was this which again led the Minister in Committee on 7th December, when we moved Amendment No. 5 designed to slow down the phasing out of subsidies, an Amendment originally suggested by the Association of Municipal Corporations and which the Minister strongly resisted, to say: The main purpose of the Amendment clearly is to put off rent increases."—[OFFICIAL REPORT.Standing Committee E, 7th December. 1971, c. 230.] He rejected that because he made clear that the withdrawal factor of the residual subsidy was directly related to the mandatory rent increase, that he was not prepared to modify the subsidy arangements, and so he was not prepared to tamper with the mandatory increase of £26 per dwelling. He was completely adamant and he adhered rigidly to the 50p increase in April or the £1 increase in October. The arithmetic of the Bill was not to be distorted. That was in December.

We come to February when the Minister began to have second thoughts. He had a letter from his friend Alderman Grey, now one of his few surviving friends preserved by the aldermanic system in Newcastle. The letter said that rents in Newcastle were already near fair rents so that if the £26 mandatory increase was to be imposed a large number of rents would break through the fair rents ceiling.

So at very short notice, acting with that swift determination which we associate with him, the Minister tabled Government Amendment No. 425 to Clause 63 on 22nd February, which we termed the "Newcastle Amendment ". It said that if 10 per cent. or more of dwellings in a housing authority area would be brought above the level of fair rents by a mandatory increase, then the increase could be such lower amount than £26 as the Secretary of State would specify. The Minister, again acting with characteristic swiftness, then had third thoughts on 22nd February. During the day he tabled Amendment 425. After midnight he tabled an Amendment to his Amendment, reducing the figure of 10 per cent. to 2 per cent.—lightning decision-making, if I may say so. So, on 22nd February the wall was initially breached. We no longer had a mandatory increase of £26 or £1 in October. There could be a lesser figure at the discretion of the Secretary of State.

This, I may say in passing, is an odd story. Apparently the Minister only discovers when he corresponds with his friend Alderman Grey what the position in Newcastle might be. This suggests that either the Department did not know the existing rent levels in Newcastle and elsewhere, which is inconceivable, or that it did not know what it meant the fair rent to be, or that as a result of intense pressure from the Opposition and tenants the Government had revised downwards their notion of what they intended the fair rent to be.

Mr. Frank Allaun

How does anyone know whether these estimates have any meaning at all? The decision will be taken by the rent scrutiny board, which has not even been set up. I therefore ask the Minister through my right hon. Friend if the dramatic climb-down was just a piece of "kiddology "?

Mr. Crosland

My speech was designed to lead up to that very question. With his almost miraculous second sight and intuition, my hon. Friend has rightly drawn attention to an important point raised by the Newcastle Amendment, as we came to call it, and the Newcastle figures.

At any rate the 2 per cent. Amendment, as it came to be known, was a definite concession and we no longer had a mandatory increase of £26. But it was only a limited breach in the wall. Over the weekend I re-read the OFFICIAL REPORT of the proceedings in Committee. It is clear that the Minister was still assuming that for most authorities an increase of 50p in April or £1 in October would not bring many rents beyond the level of fair rents, and in the minority of cases when it did he was, clearly, not thinking of any large derogation from the mandatory increase. The Minister, reasonably we thought, quoted examples of a mandatory increase of £1 which might be reduced to 80p under the concession in the Amendment which he moved.

That was February. We now come on to May, and last week when events took a definitely sensational turn. The Minister received another letter—the right hon. Gentleman is a great correspondent—this time from another friend of his, Sir Francis Griffin, who, unfortunately is no longer with us in office. He has been succeeded.

The letter from Sir Francis said, in effect, "Birmingham has found that a considerable percentage of its housing would, if the mandatory increase were applied, be above the fair rent level. Birmingham wishes to take advantage of your Amendment "—of what is now Clause 63(6)—" and Birmingham is therefore applying to the Minister to allow it to put up rents in October not by the statutory £1 but by an average of 35p which, in the view of Birmingham, will bring rents on average up to the fair rent levels." Birmingham was therefore still speaking of considerable rents—existing rents plus 35p—but less considerable than would have occurred with existing rents plus £1.

It is odd, in passing, that this application from Sir Francis Griffin—which, after all, did not have to be made for months ahead; not until shortly before 1st October—was made three days before the municipal elections. I naturally do not and never would suspect any hanky-panky between the Minister and his old Birmingham friend. In any event, if there were any hanky-panky it did not pay off because I am glad to say that Birmingham has finally put the memory of Chamberlain behind it and has resumed its rightful place as one of the leading Labour-controlled authorities.

Not only was the timing of the letter from Sir Francis odd, but the response of the Minister—at any rate to anyone who still took the Bill and the Minister seriously—was even odder because the Minister did not say "Look, old friend, do not be ridiculous. The Bill lays down an increase of £26 per dwelling, with a rent increase of £1 in October if rents were not increased in April, so you cannot have an increase of only 35p. That would be only one-third of the rent increase I need ". Instead of saying that, the right hon. Gentleman treated the Birmingham figures asbona fidefigures. He threw a cloak of respectability over them and indeed absorbed them into his armoury of arguments against the Opposition about what the level of fair rents was likely to be.

The right hon. Gentleman formally reserved his position, as he had to do, under the Amendment. Perhaps I should say that the Under-Secretary was kind enough to reserve it for him because the right hon. Gentleman forgot to do so. Nevertheless, the Minister tacitly assumed throughout the debate that the figures were reasonable. And the Under-Secretary said that the Birmingham figures were "not astonishing at all ".

It is clear that, unless the Minister—I do not believe this for a moment—was trying to deceive the House, we must take it that the Birmingham figures are broadly acceptable, subject to the final discretion of the Government. I do not believe that the Minister could now, or even would, as a matter of his own integrity, tell the House, or write to Birmingham in three months' time saying, "I am terribly sorry but I misled Birmingham and the House. The figures are quite unacceptable ". We therefore take it that the figures are broadly acceptable.

We have then reached an extraordinary position, and I do not know whether hon. Gentlemen opposite yet fully recognise this. The second largest housing authority in the country, the largest outside the GLC, claims, and the Minister does not contradict, that to achieve the so-called fair rent needs not an increase of 50p in April, nor of £1 in October, but only of 35p in October.

This sort of thing was certainly not envisaged last July when we debated the White Paper. Nor was it envisaged when we had the Second Reading of the Bill on 15th November. If it had been envisaged we can be certain that the Minister would have made a great deal of it in those early debates. At that time the right hon. Gentleman and his colleagues were talking, as the Bill and the White Paper had talked, exclusively of a mandatory, across-the-board £26 increase per dwelling, with only the odd subsequent refund if the increase proved excessive.

Remember, we are discussing not only Birmingham. The Minister quoted Newcastle, Portsmouth and other smaller authorities as being likely to have, on their figures—we do not know the basis of their figures, of course—an increase during the year of well under £26 per dwelling.

What about the GLC? Its rents are surely, if anything, nearer the so-called fair rents than are Birmingham rents. Thus, if Birmingham is to have this sort of increase, we can be sure that the GLC will have a far smaller increase than £26, and the same will be true of many London boroughs which are now, or have been in recent years, under Tory control.

In my view this is to drive a coach and horses through the Bill. The mandatory increase of 50p or £1, at any rate of £26 in the year, with provision for only a few refunds after the event, will now not apply to Birmingham, Newcastle and elsewhere. If they do not apply to Birmingham they will not apply to the GLC and half the London boroughs. They will not apply to a considerable number of additional authorities. And the derogation from the mandatory £26 is not minor or marginal, but a derogation in respect of Birmingham from £1 to 35p, a derogation by two-thirds.

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

It would be for the convenience of the whole House, which otherwise might be sitting here until 11 o'clock, if, in view of the interpretation which the right hon. Gentleman now puts on what was always clear —our Bill—he said that he does not intend to divide the House tonight.

Mr. Crosland

I withdraw my previous remark of, "Julian, come back. All is forgiven." I at least concede to the Minister that we on this side find extremely welcome the hole through which the coach and horses can go. But it certainly bears no relation to what was in the White Paper, the Bill as drafted, or ministerial speeches. Unless the Minister is deceiving the House, it represents a major shift of policy, which makes nonsense of much of the rest of the Bill, such as the subsidy changes. Under Clause I all existing subsidies are to be swept away, and during the transition period to be replaced by the residual subsidy described in Clause 2. The residual subsidy reduces by an amount which is related each year to the so-called withdrawal factor.

In 1972–73, as the Minister well knows by now—I was not sure that he did when we discussed Clause 2 in December, but I am sure he is well informed on these matters now—the withdrawal factor is £20 per dwelling. But this £20 is related in a direct way, although, it is true, a complicated way, to the £26 mandatory rent increase. If we are not to have the £26 increase, which I am delighted to discover, what happens to the residual subsidy and the withdrawal factor? The Minister will get into trouble with the Chancellor of the Exchequer. The £26 per dwelling mandatory increase would have brought the Chancellor in about £104 million a year, money which, at any rate so he said, he badly needed to take the strain off the Exchequer, but he will now find that he will not get £104 million a year; he will not get £26 a dwelling. Certainly in the authorities I quoted he will get very much less than that.

Therefore, the Chancellor's arithmetic has now become all nonsense. On the Birmingham analogy, the Minister must have made some estimates about the rest of the country. What figure of average increase in rents this year does he expect? It will obviously not now, thank goodness, be £26 a year. It will be substantially lower. What figure is now in his mind? What figure is in his mind for the total increase in rent income during the year, which will obviously not be £104 million but substantially less? And what will happen to the subsidies for Birmingham? On 7th December the Minister said that Birmingham would receive this year a subsidy totalling £7 million, roughly the same as it had last year under the odd system. But that was based on the assumption of a rent increase of £26 a house. Now that is not occurring, and is reduced to one third of that amount. It would be interesting to know what Birmingham's subsidy entitlement will turn out to be.

There is one other curious thing about the Birmingham incident that I mention only in passing, because my hon. Friend the Member for Willesden, East (Mr. Freeson) will deal with it in more detail in winding up. Some of my hon. Friends referred to it last Thursday. I am speaking of the fact that the Birmingham figures are based on a report of the Director of Housing which used as the criteria for fair rents factors which were specifically excluded by Clause 50 and the interpretation placed on that Clause by the Minister in Committee—the level of earnings in the area, the number of people who would be eligible for rebates and so on. I will not go through them, because my hon. Friend will.

This raises a question which I must put to the Minister, which is that, despite the illegitimate basis of the figures, he quoted them with uncritical approval in the debate last Thursday. Either he knew that the basis of their calculation was illegitimate under Clause 50, in which case he was, which I do not believe he was trying to do, deceiving the House and tearing up Clause 50 of his own Bill without saying so openly, or, more likely, he had no earthly idea how the figures were calculated, no idea of whether they were calculated consistently with the Bill or not, in which case he was guilty of gross carelessness and irresponsibly using these figures against the Opposition, giving them an unmerited cloak of official approval.

Anyway, the fact is that, whether it was merited or not, he gave those figures a cloak of respectability, and the Under-Secretary found them not astonishing. So what is the position now? Birmingham has bust the barrier of the mandatory £26 a dwelling increase, and by a very large amount. Newcastle, Plymouth and other places quoted by the Minister will also have increases approved which are far lower than £26 a dwelling. The GLC and perhaps half the London boroughs will find themselves in the same position as Birmingham. Already, simply with those authorities, we have 15 per cent. of all the council dwellings in the country. That means that 15 per cent. are virtually outside the Bill already. On top of that, every Labour-controlled authority—there need be no argument about tactics now—will follow the example hallowed by the Minister and Sir Francis Griffin and make their application under Clause 63(6). Even if rents over much of the rest of the country are now somewhat lower than Birmingham's, it is very unlikely that on the Birmingham analogy most authorities will not receive some decrease from the mandatory £26 per dwelling. If there are areas which gain little or nothing from the shift of policy, where the full rigours of the Bill will still apply, those areas and we on this side will fight the Measure as hard as ever. But it is clear that our pressure has captured a very considerable salient, the Birmingham salient. The mandatory £26 increase has ceased to exist. Part VI of the Bill is made to look a nonsense. The arithmetic of the subsidies is blown sky high. The Chancellor will receive nothing like his £104 million in 1972–73. The rent scrutiny boards will either be unemployed or given new criteria to work on, and more ministerial words will be eaten in a shorter time than ever in living memory, unless—this is the only possibility which could nullify what I am saying—the Minister was deceiving the House last Thursday, which I do not believe.

Mr. Latham

There is a serious point about which I am very concerned. My right hon. Friend referred to the coach and horses driven through Clause 50. I was a little afraid that my right hon. Friend might not have jumped on the back for a moment. I understood that he would deal with the point made by my hon. Friend the Member for Salford, East (Mr. Frank Allaun) about the function of the rent scrutiny boards. Is not another possible interpretation of the situation that the Government are holding back for the moment, but that when the boards get under way we shall still have the kind of rent increase the Government envisaged in the first place? Therefore, may this not merely be a temporary abatement, even if my hon. Friend's analysis of the position is right?

Mr. Crosland

I agree with my hon. Friend that this possibility exists, and it occurred to me over the weekend. But this conceivable possibility must be based on the assumption that the Government are deliberately deceiving the House and the country. They must have a general idea of the kind of decisions rent scrutiny boards will take. If they are now quoting figures of fair rents which turn out to bear no relation to what the boards ultimately decide, they would be guilty of so gross a deception that I do not think they would be likely to do it. I accept that logically and rationally what my hon. Friend says is absolutely correct, and it occurred to me, but I do not believe that this Government can be quite so blatant and cynical as to announce these lower rents in the firm expectation that they will then be pushed up again by the rent scrutiny boards.

Therefore, I believe that we have a definite modification of the Bill. There is still much in it that we intensely dislike and which is profoundly dangerous, but at least we have some retreat from the inflexible attitude of last November. I congratulate the Minister for Housing and Construction on signalling the retreat. It is true that he tried to mute the sound out of natural pride and vanity, but there were enough alert ears about which have caught the sound, and the retreat is now in full swing, or very soon will be.

This must be especially demoralising for hon. Members opposite who, after months of silence in Committee, have finally, at this moment, found their voices to defend the Bill. They are still marching bravely up to the front, cheerfully singing their old-fashioned battle songs—only to find that under the Minister's eccentric generalship the front has begun to crumble before they get there.

It is not for me to say what happens to generals forced into humiliating retreat. The Minister, as we all discovered in Standing Committee, is a distinguished military historian, particularly fond of quoting the Napoleonic wars. I imagine that he will find the answer as to what is the proper fate of generals who signal the retreat in this way. But when a Minister is forced to retreat on the central part of a policy to which he has committed so much of his own and the Government's reputation, the answer is clear—he should resign.

In this case, I am prepared to offer a compromise. The Minister has consistently been used as the tool and scapegoat on this Bill as on the Parliamentary Question rigging, so let him stay and let the resignation be that of the true author of this whole disastrous episode—the Secretary of State for the Environment.

5.31 p.m.

Mr. James Hill (Southampton, Test)

I said last Thursday what a very amusing speaker the right hon. Member for Grimsby (Mr. Crosland) is, and I think that he put on a remarkable performance today. By extremely adept footwork, he skipped round the real problem. This is not about poor council tenants but how the Bill affects housing and the housing programme in the country in the future. After sitting for five months on the Standing Committee, it was my opinion that all the criticisms of the Bill were coming from the Opposition, but I have received a memorandum from the Royal Institute of British Architects in which it says that the Bill is a …radical revisison of housing finance, which could breach the artificial barriers between housing sectors, has long been needed and the introduction of a unified rent policy is, therefore, a significant step forward.' But then the memorandum starts to criticise the Bill. It goes on: But a rent policy is all that the White Paper provides: it does not provide any of the other things that make up a comprehensive housing policy. It reviews housing finance in the narrow sense of being concerned with finance only. This is quite wrong. All of us who have sat for many months considering the Bill know that one of the main inducements to get the Bill through is that there is a special slum clearance subsidy which, for the next 15 years, will meet 75 per cent. of any loss on the rates incurred by slum clearance operations. Indeed, 700 more slums are being cleared each month than under the Labour Government, and this is with the new subsidy only, which came in on 1st April. Surely that must be to the credit side of the Bill.

Then there is much more help tot those areas in need. The new subsidies are designed to give more help to local councils with unsolved housing problems. Perhaps not in areas like mine, but in some parts of the country there are stress areas which really have almost a horrifying housing problem. The new subsidies will meet deficits where local councils' income from rents do not meet the expenditure on new buildings, repairs. management and the cost of refinancing maturing debt. That alone should commend the Bill to those hon. Members who represent areas of housing stress.

Of course, there are weaknesses in any Bill of this size. One of the greatest weaknesses—and this will obviously be coped with in time—is the fact that at the end of 1970 there were only 320 rent officers in England and Wales, with about 450 supporting staff. There were only 15 rent assessment panels in England and only one in Wales. My fear is that the rent rebates of the whole of this progressive Bill will be delayed because the skilled and specialised staff will not be available. My right hon. Friend will have had this well in mind in that talks have already gone a long way to recruiting sufficient professional staff.

Whichever party was in Government would at this time have come to a confrontation with the Chancellor of the Exchequer. Things have grown out of all proportion. I give some figures from the National Income and Expenditure Book of 1971. The total public expenditure in housing subsidies rose from £180 million in 1966–67, or 1.1 per cent. of the total public expenditure of £15,931 million, to £320 million in 1970–71, or 1.4 per cent. of the greatly increased total public expenditure of £22,268 million. It is obvious that whoever was going to dictate our housing policy of the future would have had a confrontation with the Chancellor of the Exchequer, whoever he was.

One factor never quoted in Committee —and I have not heard it quoted in the House—is that council and private tenants are all ratepayers. How does the Bill affect the general rate in an area? Does it mean that rates will increase? Or does it mean that they will go down? Other figures from the National Income and Expenditure Book put this into perspective also. Central Government subsidies have never been the only source for council dwellings. No one who has ever served on a local authority has ever been able to get away from the fact that the rate support to the housing revenue account has always been hotly contested by whichever side of the Chamber was not increasing it.

No one seems really to understand that these subsidies from the general rate fund also have been rising at the same rate as the amount of our gross national expenditure on housing. In 1966, the ratepayers paid towards council housing £74 million; in 1967, the figure was the same; in 1968, it was £84 million; in 1969, it was £104 million, and in 1970, it was £118 million. When one talks about removing subsidies, one is giving here another hidden subsidy to the ratepayers, and if one considers the council tenant as a ratepayer this must help him towards finding his rent. [Interruption.] It is obvious. The figures are here. The hon. Member for Gloucestershire, West (Mr. Loughlin), should get to the book and bring himself up to date. The rate- payer in 1970 was paying £118 million towards the housing revenue account.

Mr. Loughlin

I am sorry to be slightly exasperating the hon. Gentleman, but will he reflect for a moment on the make up of the housing revenue account and take into consideration items that are of common concern to the council tenants and which more than offset the rate-borne subsidy to the housing revenue account?

Mr. Hill

The trouble is that a council estate cannot exist in isolation. But it has to have parking areas and roads, a better road pattern will be established. Council estates cannot live in their insularity. The £118 million is a cash saving to everyone who pays rates. I have often heard the hon. Member's contention, but it does not hold water.

It was said in Committee many times that the Government were creating another means test, another dreadful form to fill up. All hon. Members will have had a copy of their own area rent rebate forms. I have a copy of the Southampton form. The only thing the council does not want to know on this form is the colour of a tenant's eyes.

We are continuing with that rent rebate form. There is no question of wanting to find out anything other than is already known by any local authority.

5.40 p.m.

Mr. Ted Rowlands (Merthyr Tydvil)

I wish to comment not on the speech of the hon. Member for Southampton, Test (Mr. James Hill), but on the speech of my right hon. Friend the Member for Grimsby (Mr. Crosland) who spoke about the impact of Clause 63 and its new subsection. During last Thursday's debate the Government moved an Amendment which they would have called a wrecking Amendment if the Opposition had moved it. In many ways it did wreck the Bill.

The twists and turns made by the Under-Secretary in trying to explain the situation following the debacle of last Thursday added to the wreck. The absence of the Secretary of State for the Environment is bettered only by the absence of the Secretary of State for Wales although 260,000 Welsh families are affected. My own authority will certainly be claiming under subsection (6) that its existing rents are fair by any definition, particularly by the definition produced and seemingly approved by Birmingham last Thursday. I think that a whole host of other authorities will follow suit.

Subsection (6) and other major Amendments to the Bill reveal its central fallacy. It is not a point of substance that has just emerged. What has clearly emerged as a central fallacy is that there is nothing objective about the determination of fair rents. There is no objective decision called a fair rent. The fallacy of all the arguments by the Government is that they are replacing an irrational system of determining rents in the local authority sector by a rational system.

The Francis Committee, investigating the fair rent system in the private sector could not find objective, clearly defined criteria for fair rents. What is fair about the 1965 and 1968 Rent Acts is the way in which rents are arbitrated. The fairness comes not in any criteria for determining rents, but in the fact that either party, tenant or landlord, may go to a reasonably objective body to argue a case.

What strikes one more and more about the way that procedure has worked is the rough and ready down-the-middle way in which rent officers and rent assessment panels have endeavoured to determine a rent. What they have not done and what has been proved impossible over the last six years has been to provide clearly-defined, objective, rational criteria for establishing fair rents.

What is so objectionable about the Bill is that it is impossible to find objective criteria. That is what so many Opposition Members have been saying. The rents of more than 5 million families are to be fixed and yet there is nothing in the Bill to ensure fair arbitration, as in 1965 and 1968. The Government have not included an objective method of establishing fair rents.

I think it was Della Nevitt, one of the greatest authorities on housing, who, in a perceptive article on the Bill made this point. Unlike the fair rent machinery of 1965 and 1968 which allowed both parties affected by an application to go to a rent officer or rent tribunal, the Bill has no such provision. Rent officers have been doing a rough and ready rule-of-thumb job in making assessments. However, after his decision either party may appeal to a rent assessment committee. That is what is fair about the fair rent machinery of 1965 and 1968.

In a Bill purporting to apply the principle of fair rents to the whole local authority sector this fairness in arbitration does not exist. Council tenants will have no rights. They will not enjoy anything like the same rights of appeal to a rent scrutiny board.

The rent scrutiny boards are to be given administrative powers which will make George Orwell's "1984 "look as though it has occurred in 1972. For years we have been increasingly concerned about a massive extension of administrative power. This House has often expressed its concern to ensure democratic scrutiny of bodies with administrative powers, albeit sometimes understandable powers. Yet in one fell swoop we are to extend to administrative bodies, rent scrutiny boards, enormous power over one of the most delicate and important issues of all—the cost of homes and rents.

The basic and evil principle of the Bill is that of giving small handfuls of people such enormous power. That is one of its most appalling aspects. Despite all our efforts, the boards will not have to meet in public. They will not have to report the nature of their meetings. No procedure will govern their proceedings. The parties may be debarred and will have no access to the boards except by written representation.

The first and fundamental reason why we should not give a Third Reading to the Bill is the massive extension of administrative power to a body not answerable to any elected representative. There is no such thing as an objective fair rent. All that was fair about the 1965 and 1968 Rent Acts was the reasonably fair system of arbitration, but that system does not exist under the Bill. That makes the Bill all the more reprehensible.

As a result of last Thursday's decision, my own authority and other Welsh authorities will seek an amelioration of the increase in October However, as Birmingham found, we will not be able to draw on the experience of the fair rent machinery in Wales.

The number of fair rents determined are so few that they will serve no useful purpose in fixing the rents in most of the South Wales valleys. I quoted the case of my own authority last Thursday. We have fixed only 54 rents in seven years. From that experience the local authority housing managers are supposed to fix the rents for over 6,000 families in my constituency. The pattern is the same in every other South Wales authority. The experience of rent officers is totally irrelevant to fixing fair rents in the local authority sector.

We are forced to look at the alternative of gross values. We had a good hard look at this in Merthyr and we found that if we imposed an extra £1 a week from this October the ratio of rent to gross value would be three times. There is not a rent scrutiny board, a rent officer or rent assessment committee which would by any stretch of the imagination suggest that that would be anything but an excessive and exorbitant rent over and above the so-called fair rent.

South Wales authorities will find themselves in what one can call a "Birmingham situation ". We will seek under the late change in the Bill to avoid imposing anything like the £1 a week increase in October. I hope that the Secretary of State for Wales will give his premature blessing with the same degree of enthusiasm as the Minister for Housing and Construction gave to Birmingham last Thursday even though he is not facing local elections in the coming weeks.

The argument central to the point made by the right hon. Gentleman was that the great thing about the Bill is that there is a rent rebate scheme. I am not against rent rebates. They are an essential and important part of any housing scheme. I am not willing to accept the hypocritical advice of hon. Gentlemen opposite, about our introduction of rent allowances. Here I agree with my hon. Friend the Member for Romford (Mr. Leonard). Such advice coming from hon. Gentlemen, who from 1957 until 1964 unleashed the greatest known increases in the private sector as a result of decontrol, without any rent allowances, which led to Rachmanism and the necessity for the fair rent machinery in 1965, is pure hypocrisy. The last thing we will do is to take lectures from hon. Gentlemen opposite about raising the rents in the private sector.

What is remarkable about their argument is the fact that they claim so many people will qualify for rebate. Apparently, the most marvellous thing to do is to ensure that over a half and in many cases 60 per cent. or 70 per cent. of local authority tenants can come cap in hand for rebates to ameliorate the worst excesses of the rents. Is that the sort of society hon. and right hon. Gentlemen wish to create? Do they wish to increase the cost of such a basic commodity as the roof over a person's head to such an extent that over half the people have to claim rebates? What a ridiculous situation, when rents are raised so high that administrators must be employed left, right and centre to go through the means-tested system and hand back money to people from whom it should never have been taken.

The logic is surely that once a benefit of this kind covers 50 per cent. to 80 per cent. of the people then the commodity has been made too expensive. Surely the answer is to keep the rents lower rather than to create this odious situation whereby the rents of the majority of tenants have to be rebated. Hon. Gentlemen opposite fought the last General Election on the "Scroungers' Charter" basis. I remember the whispers they put around, that the Labour Government would introduce the skivers' and scroungers' society. I can tell hon. Gentlemen opopsite—and I am sorry to say it, because I do not agree with the spirit that produced such feelings—that this Bill is one of the greatest contributions to this sentiment. Time and again at meetings I have had people getting up and saying this.

I have tried to oppose the expression of such a sentiment but this Bill will unleash that sentiment on a much greater scale. It is one of the most repressive aspects of the Bill. The high rent system tied to an extensive rent rebate scheme means that social division will take place on every estate, between street and street, house and house. There will be bitterness between neighbours as they begin to compare what they are paying with what their neighbours are paying and begin to wonder whether someone is getting more than they should. This Bill unleashes that sentiment on a much greater scale than any other Measure I can think of under any Government.

And it is all a question of prejudice! This Bill started out as a prejudice against council tenants. The Tory Party thinks that all council tenants are fair game. This is a Government which has picked on Rudi Dutschke, council tenants, UCS, striking workers or the prescription-happy families whom they thought were benefiting too greatly from the Welfare State. The one central plank of the evil philosophy has been the belief that the majority of council tenants belong to the Jaguar-driving jet set, live off the fat of the land, and can pay a lot more for the roof over their heads. That has been central to the philosophy of this Bill and to the idea of charging fair or excessive rents to the majority of council tenants.

Now they are finding that they are wrong. Clause 63(6) says basically, "We did not know the rents that average people should pay ". Hon. and right hon. Gentlemen did not know what people in Newcastle were paying; the Secretary of State for Wales did not know what tenants in Merthyr Tydvil were paying. The Bill no doubt arrived on his desk in the later stages of drafting. He could not possibly have accepted Clause 63 imposing an extra £1 a week on every tenant, or most tenants, in Merthyr Tydvil. If he had bothered to find out what the rents were there he would have found, as the Secretary of State is finding out with Newcastle, Birmingham and Portsmouth, that if I is added to the rents they will go through the fair rent ceiling. We will be there at the Welsh Office to invoke the provisions of subsection (6) in October.

The most nauseating aspect of the Bill is that behind it is the belief that council tenants should pay more than £1 a week extra on their rents. The right hon. Gentleman says that we are astonished at the fair rent levels now being fixed, but it is they who are astonished—astonished to find that the majority of council tenants are paying fair and reasonable rents. This extra imposition, the largest swingeing increase that can be imposed in any one year, would drive the majority of rents in many authorities through the fair rent ceiling. The Government have only just found this out. This demonstrates that the Bill is based on the prejudiced belief that the majority of council tenants are enjoying benefits which they do not deserve, such as the benefit of a roof over their heads at too cheap a price. That was behind the philosophy which gave birth to the policy.

The Secretary of State for the Environment, who has left the Chamber—and, thank goodness, after his speech—said that the Labour Government, when they were carrying out their housing finance review, did not come up with an alternative policy. I was one of the junior Ministers involved in that review. Many of us believed—and this is one of the reasons why we did not complete our work—that housing is more than just a question of rents. We do not want a rent Bill, which is what this Bill is. We want a new housing policy which will result in better housing for the majority of our people. The Bill will not achieve that.

The 1969– housing finance review condemned out of hand the application of the fair rents principle to local authority housing for the three basic reasons why we should not give this Bill a Third Reading. First, it will impose unnecessary, savage increases in rents. That was the advice which the Labour Government Ministers received from their advisers. Secondly, it is impossible to create machinery which is workable for the arbitration of fair rents for the whole local authority sector. As the Bill demonstrates, all that it does is to produce unfair administrative machinery to ensure that tenants do not have a say in the determination of rents. Thirdly, and most important, it will mean massive profits sooner or later on many housing revenue accounts and there is no fair, just and reasonable way of distributing those profits. The Bill does not contain a fair, just and reasonable way of distributing the profits. The Government will simply cream off the surpluses on housing revenue accounts.

For those three reasons, we should not give the Bill a Third Reading. It is one of the worst pieces of housing legislation ever to come before the House.

6.2 p.m.

Mr. Geoffrey Finsberg (Hampstead)

the debate began with a fascinating exercise in geography from the right hon. Member for Grimsby (Mr. Crosland), who made anything but what I would describe as a Third Reading speech. The game was given away by the intervention of the hon. Member for Salford, East (Mr. Frank Allaun)—the evil genius of his party, who writes the housing policy of the Labour Party, even though he does not sit on the Opposition Front Bench. I recall his intervention when he advocated the outright municipalisation of all property. That point has been noted for the future.

The hon. Member for Merthyr Tydvil (Mr. Rowlands), whose speech was in part a Third Reading speech, did a great disservice by talking about tenants going cap in hand for rent rebates. He should know full well that a rent rebate, just like a rate rebate, is part of the law, and the attitude which he adopted, which might discourage people and make them think that it is humiliating to apply for a rent rebate, does no service to the people in the greatest need. The hon. Gentleman tried to draw a distinction between the fair rents principle as applied in the private and public sectors. He said that it was subject to the rough justice of the rent officer and the rent assessment panel in the private sector but there was nothing similar in the public sector. Perhaps he is used to squalid local authorities like Merthyr Tydvil trying to defy the law. He should realise that local authorities are elected bodies and are therefore the right people to deal with the question of fair rents.

Mr. Rowlands

I ask the Secretary of State for Wales, who is sitting on the Front Bench, to repudiate the appalling remarks of his hon. Friend, otherwise it will be thought in Wales that he shares the sentiments of the hon. Gentleman, who probably has never set foot in Merthyr Tydvil. If he does so, I cannot guarantee his security or safety.

Mr. Finsberg

I am sorry to know I shall require police protection for a visit to Merthyr Tydvil—a town which I have visited on many pleasant occasions and intend to visit in future. The fixing by a local authority of what it regards as a fair rent which may then be subject to the opinion of the rent scrutiny board is what is required in the public sector. I see nothing wrong in it.

I give the Bill a general welcome. As my right hon. Friend the Secretary of State for the Environment said, it repairs the monstrous injustice as a result of which there was no question of a rent allowance being given to private tenants. This is a very important concession which has been made. The question of council rents must be looked at in the context of the Bill in a common sense light. I wonder whether any right hon. or hon. Member opposite dissents from what I believe is still, if not Clause 4, then a basic tenet of the Labour Party, namely, from each according to his means to each according to his needs. This is precisely what the Bill does in the public sector and it should be difficult for any hon. Member to object to it.

The control of many local authorities changed hands last Thursday, and it would have been surprising if it had not in the face of one of the most vicious and scurrilous campaigns I have seen conducted in 22 years in local government affairs—a campaign deliberately designed to harp on the fears of many people who needed advice but did not get it from the Labour Party. In 12 or 18 months' time, when the Bill, as an Act, is fully implemented, council tenants will realise that they were taken for a ride by the Labour Party, and it will be the Labour Party which will suffer.

I hope that the hon. Member for Willesden, East (Mr. Freeson) who is to wind up the debate for the Opposition, will make one thing clear. Will he say, not in the Fabian Society language of the right hon. Member for Grimsby, but in his own earthy Willesden language, whether he on behalf of his party will advise local authorities to comply with the law'? Will he say to the London Borough of Camden, for example, "The Labour Opposition say to you, ' When this Bill is law, you must operate it' "? I expect the hon. Gentleman to answer "Yes" or "No ".

What we are witnessing is encouragement to people to break the law. Whether I like the law or not, I shall obey it as long as it is the law. We should remember that every local councillor, whether it be in Brent, Liverpool, Birmingham or Camden, took an oath of office which he signed before a town clerk to carry out his duties. I wish to know whether the Labour Party will encourage breaking the law.

I hope that the Governments information about the rent allowances available in the private sector will be in simple language, as clear as possible and given the most widespread publicity so that the fear campaign to which I referred earlier can quickly be countered. There is a grave danger that the misrepresentations which have taken place may already have taken hold of peoples' minds and may prevent some people applying for genuinely-needed rent allowances. I hope my right hon. Friend will deal with this situation.

I hope that the report of this debate will be noted, particularly by those people who last Thursday elected Labour councils, so that they will realise that less than 30 Labour Members of Parliament have fought this Bill today comma by comma, full-stop by full-stop, and line by line. The Labour Party is no longer interested because they know full well that, when the impact of the Bill is fully realised by council tenants, the results will rebound upon Labour since the tenants will realise that they have been taken for a ride.

I hope that my right hon. Friend in his reply will be able to say that he proposes to do something about the service charges on private tenants. I believe that the Bill, on balance, when enacted will go down as a useful piece of legislation. It continues and extends the fair rent principle which was introduced by the Labour Party, and I believe that there is no difference between us on this score.

Furthermore, it expands and continues the system of rent rebates which are a joint product of the two parties. This will give an opportunity of rent rebate to 40 per cent. of local authority tenants who, up to now, have not been able to claim a rent rebate. This does not mean that 40 per cent. of individual tenants will qualify or will need to qualify. It means that the council tenants living under 40 per cent. of authorities will no longer be regarded as second-class citizens and it must be remembered that many of these authorities are Labour-controlled. I believe that the Bill is a good piece of legislation, that it should be given a Third Reading, and that it deserves to be passed into law as quickly as possible.

6.12 p.m.

Mr. Julius Silverman (Birmingham, Aston)

The hon. Member for Hampstead (Mr. Geoffrey Finsberg) referred to rent allowances, but I must warn tenants who live in privately-rented houses not to expect too much. I am in favour of allowances and there is no reason why they should not exist, but experience in Birmingham where a pilot scheme was introduced shows that not much will happen.

It is estimated that there are about 60,000 privately rented houses in Birmingham. The total number of successful applications has amounted to less than 250 although the scheme has been in operation for 18 months. The take-up has been ridiculously low. There are various reasons for this low take-up which I do not propose to analyse today.

The Secretary of State referred to the possibility of extending the rent allowances to furnished tenancies. I am in favour of the proposal but I do not expect too much from it unless it is accompanied by the repudiation of the Francis Committee recommendation and unless there is also control in terms of security and rent fixing for furnished lettings similar to that which exists in the unfurnished sector. Unless there is such provision, I am afraid that rent allowances for furnished lettings will not get very far. I support such a suggestion but I wish to give that warning.

This debate will be dominated by what happened in Birmingham last week and by the meaning of events there. Is the Birmingham proposal, and the Minister's response to it, to be regarded simply as a disreputable electoral device in the council elections, or does it mean the beginning of the grand retreat? I do not yet know the answer. Perhaps the Minister will throw light on this matter in his reply.

The Birmingham Labour councillors believe that even if the rents proposed by Birmingham were accepted by the Minister as fair rents they would still be unjustified. It is proposed to increase rents by an average of 35p, but the Birmingham Labour councillors contend that on the basis of a £3 million surplus in the account no increase is necessary and that there should be a reduction. Even if the Minister is beating something of a retreat, I still regard this as a bad Bill. None of these increases is justified and certainly the whole machinery of the Bill is misplaced.

If an average increase of 35p is proposed—perhaps a little more in some local authorities where the present rents are at a lower level than in Birmingham —is it really necessary to introduce the vast machinery of the Bill? Let us bear in mind what these provisions will mean. There will be the housing commissioner; the Bill provides for fines of £50 on the tenant or £400 on a councillor who does not co-operate; and there is a vast mechanism of alterations and subsidies. Is this radical Bill—a Bill which affects the whole basis of subsidies—necessary just to provide for an average increase in rent of 35p? It appears to be a complete and utter nonsense. If the Minister eventually beats a retreat and accepts our arguments, why has all this legislation been necessary?

There is no doubt that the Bill's provisions, particularly those in Part V and the other parts of the Bill relating to local authority houses, are an astonishingly logical achievement. They are logical and coherent and they embody the sort of logic that is very much akin to madness. Obviously an enormous amount of ingenuity and calculation has gone into the Bill. Every device has been used to see that no tenant shall escape its provision and that no local authority is able to escape its effects. I repeat that if all these devices have been introduced to achieve an average increase of 35p, this makes nonsense of the Bill.

The right hon. Gentleman, after a good deal of questioning in Committee, gave some interesting figures on the finances of the Bill, but the figures will have to be recast if he accepts the Birmingham proposals. If the Minister decides to accept those proposals, we are certainly entitled to have—perhaps tonight—a new statement of the financial consequences of the Bill so that we may know what this will mean in terms of subsidy. We should surely know how much the rent increases will be and what will be the effect on the various subsidies. Obviously this would amount to a radical departure. If the Minister decides to retreat we shall welcome it, but it will still not make the Bill a very good one.

The hon. Member for Hampstead said it was right in law to apply for rent rebate, but he must know that every means-tested benefit is unpopular. I accept that some means-tested benefits are necessary and cannot be avoided; it is obvious that in supplementary benefit a means test cannot be avoided. A large number of people will always refuse to take up means-tested benefits because they consider that to do so would amount to a form of humiliation. Whether that view is right is another matter, but it is certainly a fact that they do not like the sort of means test forms which they have to complete. It leads to jealousy and friction between neighbours. Means tests should as far as possible be avoided, and the extension of means test by the Bill to cover high rents is bad.

I now want to refer to some matters which I raised with the Minister on Report but to which I received no answers. The Minister has by now probably examined the Birmingham document, and here may I say that I am not dealing with the assessment of rents. It says that council rents cannot be assessed upon the basis of comparability with the private sector, because in the Birmingham area there are very few equivalent rents in the private sector with which to make a comparison. This is an important matter because, during our debates upstairs, it was assumed that council rents would be decided upon the basis of comparability with the private sector.

If comparability is out, what is to be the criterion? How does the right hon. Gentleman interpret Clause 50? What on earth does it mean? What is meant by scarcity in the public sector. How does one decide the degree of scarcity? How on earth does one decide what council rents would be if there were a balance between supply and demand? Who will decide that? How will he guess it if there are no market factors upon which to base a calculation?

What guidance will local authorities receive on this issue? For that matter, what guidance will the Minister give to the scrutiny boards? Will the guidance be published? Will Members of Parliament know what guidance is given to councils and to the rent scrutiny boards? How will the Minister interpret Clause 50, and what on earth will it mean when it is applied to the public sector?

It has been assumed throughout the debates on the Bill, indeed almost taken for granted, that to apply Clause 50—I gather that this is what the working party did—one looks in the private sector for a similar house, built at a similar time, with similar amenities and in a similar locality. discovers what has been decided as the fair rent for that house and then applies that figure in the public sector. If that basis goes, how will the assessment be made?

There was a good deal of discussion in Committee on the report of the working party on fair rent and about the purloined document. I do not see why that document should have been private. Does the Minister repudiate that document? It discloses a level of rents substantially higher than the fair rents put forward by Birmingham. It was no doubt prepared by the Minister's officers, who used certain criteria. We have never been told what they were. Was it done on the basis of comparability?

The figures in that document showed that in the Birmingham area there would be an increase of about £2 a week in the first assessment and that in three years' time there would be an average increase of about £3.

Mr. Reginald Freeson (Willesden. East)

The document referred to by my hon. Friend was a public document, despite what the Minister said repeatedly in Committee. It was published in several journals before we saw it in Committee. It used the basis of comparability—or the Department did—in arriving at its conclusions, and it is important to bear that in mind. That is an important factor in the whole situation.

Mr. Silverman

I thank my hon. Friend for his intervention. It was my impression that the figures were produced on the basis of comparability, but the Minister said that the document was prepared for some unknown purpose. For what purpose was it prepared? Presumably it was prepared in order to give local authorities some idea of the rents which they would have to charge.

The document was circulated to all local authorities, and housing managers and borough treasurers saw it long before we saw it in Committee. It was not a secret document, and presumably it was produced for a purpose—namely, to show housing managers and borough treasurers what they were likely to get from fair rents. The Minister has not told us whether he accepts that document or whether he repudiates it entirely.

Mr. Timothy Raison (Aylesbury)

I am not quite clear in what respect the Birmingham proposals deviate from the conditions in Clause 50(1), which says that In determining a fair rent for a dwelling…regard shall be had…to all the circumstances (other than personal circumstances) and in particular to the age, character and locality of the dwelling and to its state of repair. In what respect does the document not follow those criteria?

Mr. Silverman

I thought I had dealt with that but I am prepared to revert to it. I take it that the hon. Gentleman is talking about the document produced by Birmingham for the Minister.

Mr. Raison

Yes.

Mr. Silverman

That document does not use the basis of comparability. There is nothing about that in the Birmingham document. It deals with gross values. It deals with rent incomes. It deals with the point that too many people should not have to apply for rebates. The last two matters are not embraced in Clause 50.

The Birmingham figures are substantially lower than those produced by the working party in respect of the West Midlands. What I am asking the Minister is whether he repudiates the working party's figures. Does he say, having examined the figures, that they are no longer valid? Why were these figures produced in the first place? The right hon. Gentleman said that the figures were produced for the purpose of working. Working for what? Presumably the document was produced—I can conceive of no other reason—for the purpose of giving local authorities some idea of the rent increases which they would have to apply, the effect which that would have upon their finances, how that would counterbalance subsidies and what tenants would have to pay. I understood that that was the purpose of the document—I can conceive of no other—and those are matters which we are entitled to have explained to the Minister.

This is a thoroughly bad Bill. Even if there is a qualified retreat by the Minister it will still be a bad Bill, and we are justified in voting against it on Third Reading.

6.28 p.m.

Mr. Christopher Woodhouse (Oxford)

Speaking for the first time on the Bill at this late stage, I do not intend to enter into any of the controversies which have understandably arisen about it in Committee and on Report, but as the hon. Member for Merthyr Tydvil (Mr. Rowlands) has adverted to Rachmanism and linked it with the Rent Act, 1957, I cannot help wondering whether he or any other hon. Gentleman on the Opposition side can specify one case in which the late Peter Rachman bought, for the purpose of exploitation, a house which was not rent controlled. If I am right in thinking that he never did so, I find it difficult to understand how the myth has grown up that it was the 1957 Act which created Rachmanism. It was, on the contrary, the first step towards cutting the ground from under the feet of Rachmanism, but that is not the point about which I want to address the House.

I want to touch on only one matter relating to the operation of the Bill when it becomes law, a matter which has not been publicly raised in any of the previous debates. That is the effect which the fair rent system will have in practice on disabled people living in accommodation specially designed and built for them by local authorities. Provision is made in the Bill for one category of disabled, the blind, in Schedule 3(7) (2), but there is no corresponding provision in the Measure for those classified as disabled in a more general sense in the terms of the Chronically Sick and Disabled Persons Act, 1970.

It is possible that an Amendment might be moved in another place to remedy this deficiency on lines which I had hoped to introduce by means of an Amendment on Report. If that should happen I hope the Minister and his colleagues in another place will look at it sympathetically. But even without waiting for that further stage my right hon. Friend could, and I hope will, give evidence of sympathy in his reply tonight to a suggestion which I have to make in regard to Clause 23, which deals with the advisory committee on rent rebates and rent allowances.

I observe that in Committee a number of suggestions were put to my right hon. Friend, without success, about the composition of the advisory committee. I had a further suggestion to make on Report which it would be possible for my right hon. Friend to put into effect without any Amendment to the Clause. It is that the advisory committee when appointed should have among its membership at least one person, preferably more, with experience of work among and of the needs of the chronically sick and disabled ". The 1970 Act provides a means of definition of the chronically sick and disabled which could easily be applied to this Bill.

It occurred to me as an alternative possibility that the same principle might be adopted in making additional appointments to the rent scrutiny boards under Clause 51(1), but those boards will of course be concerned not with rebates and allowances but with fixing fair rents. As far as I understand the process—not having been a member of the Committee and therefore not having had the opportunity of scrutinising it with the same thoroughness as other hon. Members—the rent scrutiny boards will have to operate under quite tightly drawn rules laid down for them, and that will make it difficult for them to make exceptions, even with the best of good will.

The phrase with experience of work among and of the needs of the chronically sick and disabled is taken directly from Section 15 of the 1970 Act. That Measure goes further. It adds that consideration should be given to the desirability of providing that the person or persons with that experience should include one or more persons themselves classified as chronically sick or disabled.

I am reluctant to push my right hon. Friend the Minister so far because there are disabilities of so many and such different kinds that it is hard to think of one disabled person speaking for the needs of them all—for example, of a paraplegic speaking for the needs of the blind andvice versa.That is why I would prefer it to be a person not necessarily disabled but with experience of the disabled in his professional work. One would of course not raise any objection to a disabled person being appointed. I only say that I would not insist on it.

In one way or another the special needs of the disabled in local authority housing should be recognised in the Bill. I raise this point because in my constituency the local authority has made exceptional provision for the disabled. There is, therefore, an unusually large number of people likely to he affected, it is feared adversely, under the Bill.

I have no intention of waxing emotional on this subject. The last thing those people want is an appeal to the emotion or concessions made as charity. They simply want to be enabled so far as possible to lead normal lives, to go out to work and in every way to become or remain members of the community.

It would be useless for local authorities to provide at great expense specially designed accommodation for disabled people if the disabled could not afford under the Bill to live in that accommodation. I know that many of them are living very near the margin as it is. I could easily send my right hon. Friend details of many cases drawn from my constituency, but I do not think it will be necessary for me to do so.

The local authority in Oxford has been exceptionally progressive in making provision for such cases. There are many disabled people in Oxford and elsewhere who will remain profoundly worried about their prospects under the Bill unless an appropriate Amendment is made to Schedule 3 or Clause 23 or unless the Minister is willing to exercise his discretion on a non-statutory basis to set their anxieties at rest in relation to the composition of the advisory committee and other bodies that will be concerned with rent rebates and allowances or the fixing of fair rents.

I hope that before the end of the debate my right hon. Friend will find it possible to set their anxieties at rest in the way I have suggested.

6.38 p.m.

Mr. Ronald Brown (Shoreditch and Finsbury)

Very much of the argument adduced by the hon. Member for Oxford (Mr. Woodhouse) was put last Thursday when, on Clause 50, the Opposition moved an Amendment which would have ensured that all circumstances, including those raised by the hon. Gentleman, were taken into account. The Government re- jected and defeated our proposal, which is regrettable because irrespective of politics it is clear that the point raised by the hon. Gentleman is a vital and human one which should be covered by the Bill.

I regret that the Secretary of State did not take this opportunity to answer some of the many questions that have been put to him with regularity during the many months that the Bill has been going through the House. I had hoped, for example, that he would have dealt with the subsidy question. Whenever we mention subsidies the right hon. Gentleman says, in effect, "We are redistributing them but are not cutting them ". If the right hon. Gentleman still maintains that subsidies are not being cut, will he explain why the Exchequer estimates that the subsidy bill of £330 million for 1971–72 will be down to £314 million for 1972–73?

Are the figures of £330 million for the current year reducing to £314 million for the year 1972–73 correct? Is it anticipated that by 1976–77 the figure will rise again to £348 million? In other words, is it correct that between 1971–72 and 1976–77 there will be an increase of £18 million? In six years it will rise by £3 million a year, which will not even keep pace with inflation.

Therefore, to get the subsidy argument right, will the Minister once and for all agree or disagree with those figures and put the record straight as to what he believes is the correct subsidy figure for which he is aiming by 1976–77? Many of us are quite satisfied that the Minister intends to reduce subsidies to zero. That was tried last in 1957. It was the whole purpose of the Rent Act, 1957, and it was done. As a result of that exercise. however, house building was disastrous, and we got Rachmanism and every other objectionable feature.

It seems to some of us that the Government have now come to the view that they will get to the same idea of reducing subsidies but by doing it this way. Clause 12 is the way it will certainly partially be done, by continually referring to housing revenue accounts but meaning "reckonable expenditure" within those accounts. I have put questions to the Minister and he has refused point blank to say what he means by reckon-able expenditure. Local authorities are entitled to know from the Bill; everything else is spelt out in great detail. Clauses 93, 94 and 95 spell out in absolute detail. Why cannot we have "reckonable expenditure "spelt out? Whatever the size of the housing revenue account, if the reckonable expenditure is reduced to a small proportion of the whole, the housing account will be in surplus at a very much earlier date. That is when the Minister will begin withdrawing the subsidies and taking half of the surpluses that arise thereafter. That is really what the argument is all about.

Is that what the Minister intends? Will he explain what he means by "reckonable expenditure" and not, as we have in the Bill, a statement that it will mean what the Minister wants it to mean at any time when he wants it to mean something?

I have never heard such gobbledegook. Will the Minister comment on whether, in his view, the statement his Department has made, that the very favourable financial results arising from his proposals in the Bill are due to the enhanced rent income that will arise from council tenants because of the raising of rent to fair rent levels is valid and that council tenants will be meeting the cost rather than either the Exchequer or the local ratepayer? Is that still the Minister's view? That was his view in December, 1970. Therefore any redistribution, and "the poor" and "the needy "and all that rubbish, does not apply. What the Minister is saying, as he said in December, 1970, is that the council tenants will be carrying the whole burden of housing. It is important that we should have this information from him tonight, before we send this awful Bill on its way.

My next point is about economic rents. We have had so many arguments about how this will be done that no one seems too sure. We have the argument of Clause 50, the argument for assessing in rateable value terms. Yet the 1965 Act specifically said that rateable values were not to be taken into account. That was the way it was not to be done. But Clause 50 is exactly the way that rateable values are determined. Is the Minister suggesting that rateable values will be the means by which fair rents—what he calls fair rents, what I call economic rents—will be fixed?

I have looked with interest at the figures for Birmingham and I have checked in my own constituency. After the debate last Thursday, I was rather pleased because I felt sure that as a result rents in my constituency would not rise and that they would be considered economic rents. I have looked at the post-war bungalow in Birmingham. The Minister referred to £2.59 as the present rent; £2.85 was the fair rent.

The rent of a poor old place in my constituency, a three-roomed flat built in 1927 and owned by the Greater London Council, with a bath in the kitchen over the top of which one puts a board, and if one is not using it as a bath one eats from it. is currently £3. So we have £2.85 for a bungalow with a garden back and front, post-war. and at an economic rent, but I have a wretched flat owned by the Greater London Council, unmodernised since 1927, with a bath in the kitchen at £3

Then I looked at the post-war period to get an equivalent three-roomed GLC flat. The rent was £6 a week. A threebedroomed four-roomed flat is £7.70 at present. When I see what the Minister has now agreed with Birmingham as about right, and that therefore Birmingham will have a direction which allows the council not to put up rents by £1 in October, I look with satisfaction at the Minister's statement on Thursday and shall ensure that it has very wide publicity in my area, because clearly we shall gain from that. My constituents will be extremely pleased. I hope we shall have no backing down and that the Government will not make all the usual noises and excuses, saying "He really did not actually mean it. What he said was that it would not come down; but, on the other hand, he did not say that it would not go up ".

It would be most unpleasant for our political life if the Minister changed his views simply because of an election between the time of his statement and the time at which he has been drawn up tight against the present situation.

One hon. Member on the Government side referred to the idea that in these economic rents we on these benches were being obtuse, because the 1965 Act was running and was introduced by this side of the House and therefore we should accept the position. But, as I have said so many times, that is not the situation. On 19th July, 1970, I tabled five Questions to the right hon. Gentleman asking him to put in the Bill all the relevant Clauses from the 1965 Act, which would give the council tenant exactly the same protection as the 1965 Act gave to the private tenant. The Minister dismissed those Questions with four lines telling me that it was a different case, that they did not apply and that as far as he was concerned the rents would be set by some administrative means. That was what the right hon. Gentleman said in reply to all five Questions. There was one short answer.

From that, clearly one must accept that there is a sharp difference between the 1965 Act and the setting of fair rents under that Act, and the setting of economic rents under the Bill. I have pressed time and again with Questions since then and the Minister has refused to accept that there is any correlation whatsoever between the 1965 Act and this Bill. We therefore should not keep on referring to the 1965 Act as though it had some validity in regard to economic rents as laid down in the Bill.

We have argued about rent rebates many times. The Government are aware that the take-up of rent rebates is minimal as against what people ought to have. Those of us who over the years have run rebate schemes know the difficulty of getting people to reveal their financial affairs. I tried to make it as easy as possible. I did not, as is envisaged in the Bill, go to the employers every six months in order to get them to countersign that a certain sum was the tenant's gross income. Incidentally, one can imagine employers getting a little upset at having to keep acting as accountants to local authorities. I never went to the employers, but we still had difficulties in getting people to tell us their personal affairs and incomes in order to obtain that to which I thought they were entitled.

Under this new scheme it is pretty clear, as the Minister and the Department must know from the evidence they have had from all over the country, that the take-up will be minimal. The Minister is very proud of the fact that he is giving 75 per cent. of the cost, but he knows very well that the cost to him will be very small because of the high rents the tenants will have to pay. There is a tendency for hon. Members to keep quoting the elderly widow who is to get such a lot of money that she will not have to pay anything—it seems that she will be paid to live in the premises. That is ridiculous, because in any case she would have been taken care of by supplementary benefit. Many of the cases referred to by the Government would have been looked after by the Supplementary Benefits Commission. I wonder how many of the 800 cases in Droitwich who according to the Secretary of State claimed rebate under the scheme were supplementary benefit cases already. My guess is that all of them will be entitled to supplementary benefit, so this is simply paper work accountancy with no substance behind it.

To pretend that people will be happy to pay these rents is nonsense. If his present rent is £3, a man earning £30 gross and having two children will, it is said, obtain £1 rebate, so he will be well off. What no one tells him is that he will be paying £2 more than before. So whilst his £3 rent has gone up to £5, he is getting £1 rebate to stop his rent going to £6. If he is earning only £25, it is said that he will get a rebate of £2, but what is not said is that his £3 would have gone to £4 and all that is being done is stopping it going to £6. I therefore agree with those who believe that people will be very angry when they come up against this type of rebate scheme which pretends that they will get more when they will not.

Paragraph 8(2) of Schedule 3, which is to be found in page 115 of the Bill, says that in certain circumstances people who are sub-letting do not have to account for the moneys so obtained. What does that mean? Does it mean that people being assessed for rebate will be able to have a lodger, or a sub-tenant as the Bill describes him, and that the amount of money they receive from the sub-tenant either in rent or in rates need not be declared? If that is true, a rather interesting situation can arise. The best thing a tenant can do then will be to declare everyone in the family a sub-tenant, in which case they can avoid the situation that would otherwise arise where a son or daughter may he earning more than the father. Is it the intention that any tenant can take in a sub-tenant, legally or illegally, and not count the amount received?

This is a very bad Bill. I hoped that today the Minister would have given us some idea of what he thought it would produce in terms of homes. Last July, when we debated homelessness in London, the Minister and I agreed that the important thing was to build homes for people in London. I have checked how far the Bill will help my constituents, and I listened with interest to the argument that if more houses and flats are sold it will be marvellous. I do not know who will buy a flat with the bath in the kitchen. I do not know whether it will be the right hon. Gentleman: he has not got a very high reputation in my area. They call him "Bugsy" Amery because of his association with the slum properties there. It is wrong so to describe him, but there it is. They call him the "finger man of the Mafia" because of the expert way in which he is putting the armlock on local authority landlords to charge the rents he fixes.

The Minister tonight has to justify his Bill in terms of houses in areas like mine, in the centre of London, where my constituents already pay very high rents and people live in appalling circumstances, where 10,000 families are on the waiting lists in both Hackney and Islington. We have not built any little bungalows to sell as they have in Birmingham. We have blocks of flats 10, 15 and 20 storeys high. If people living in desperate circumstances are told how they are to be rehoused as a result of the Bill, my constituents will understand it better.

The Government have failed to explain the Bill. Many questions have been asked about it. Local authorities are frustrated, housing managers cannot understand it and treasurers cannot follow it. Nor can they get any sensible answers about it. No local government association has supported the Bill. I believe it to be the only Bill that has ever gone through this House without a good word said about it by anyone. The AMC, the County Councils Association, the Rural District Councils Association—no matter what the association, the Minister will find it disenchanted. That was their feeling when they were Tory-controlled, and I think that after tomorrow their stric- tures on the Bill will be a great deal harsher. But even under Tory control none had a good word for it. Nor will they have a good word for any Bill that is launched in this way without those who have to operate it understanding it I cannot see how the Bill can succeed.

I therefore hope that even at this late stage the Minister will have second thoughts. I am extremely pleased that the right hon. Gentleman backed down on one Clause on Thursday night. I commend him for that. I do not wish him to feel that I am being churlish—it was an excellent back-down, and I accept it. It means that people will be reasonably happy at the thought that their rents will not be of such a high order. Nevertheless, the Bill is pure party political dogma. It has no relevance to the problem of providing homes for the people. The right hon. Gentleman intends to cut back the subsidy to zero. The Bill is a disaster for housing, and I shall vote most heartily against it.

7.0 p.m.

Mr. Timothy Raison (Aylesbury)

Although I shall not comment on what was said by the hon. Member for Shore-ditch and Finsbury (Mr. Ronald Brown), I shall inevitably cover some of the same ground. I sympathised with the hon. Gentleman in this respect: this is a complicated Bill to understand and it takes a great deal of reading. However, if he reads through it a little more carefully he will find the answer to his question about lodgers.

I apologise for having stated last Thurs. day that the right hon. Member for Grimsby (Mr. Crosland) was absent when we discussed in Committee the possible reactions of local authorities to the Bill and the possibility that they would refuse to implement it. As the hon. Member for Willesden, East (Mr. Freeson) pointed out, the right lion. Gentleman had begun that debate with a fairly long speech. in the course of which he stated: I wholly accept the principle that it is no part of my duty as a democrat, a socialist and still less as an elected member of my party's parliamentary committee to condone. let alone encourage, defiance of the Bill."— [OFFICIAL REPORT,Standing Committee E: 22nd March. 1972, c. 4178.] I therefore acknowledge that the right hon. Gentleman made it clear on that occasion that he could neither condone nor encourage any defiance of the law which might take place by local authorities. I provisionally withdrew my statement last Thursday, but I am now happy to do so formally.

I was interested in the right hon. Gentleman's comments today about Birmingham. Now that the local elections are over, we shall apparently have a new line on this subject from the Opposition. The Opposition having up till now done all that they could to produce horror stories and having tramped round the country saying what life will be like under the Bill, it seems that we are now to hear a somewhat different tune, judging by the right hon. Member for Grimsby and the hon. Member for Shoreditch and Finsbury.

I am reminded of a famous remark by Mr. Nigel Birch, who is now a member of the other house, when on Dr. Dalton's resignation as Chancellor of the Exchequer he said, "They have shot my fox ". I thought that the right hon. Member for Grimsby was making that sort of complaint this afternoon.

The truth which is now coming out is that there has been a great deal of scare-mongering about the Bill. As the facts come to light over the next few months, I believe that we shall see what many of us have regularly argued, namely, that the degree to which rents will increase —I acknowledge that they will increase in most cases has been greatly exaggerated by the Opposition.

All that stuff about the famous "purloined document" is an example. The Opposition set up the great Aunt Sally of that famous document, but they have now suddenly decided that that Aunt Sally has been taken away. That document was introduced into our debates and was hammered away at by members of the Opposititon. It was their Aunt Sally and their creation. It was a Government working document, but it was never designed to act as a formal statement of what rents would be. [HON. MEMBERS: "Oh."] Hon. Members must recognise that that document was exploited by the hon. Member for Salford, East (Mr. Frank Allaun). It was not, as I understand it, the Government's formal statement of what rents would be, and my right hon. Friend the Minister for Housing and Construction confirms this.

Mr. Norman Tebbit (Epping)

May I remind my hon. Friend and those who were not present during our debates in Committee that the point was made time and again by Ministers that that document was based on an extremely narrow —0[Interruption.] It is no good the hon. Member for Willesden, East (Mr. Free-son) shaking his head and behaving like that. He must have been asleep at the time. It was made clear that the document was not to be taken seriously because it was based on a very narrow assessment of the number of houses affected.

Mr. Raison

I can only confirm what my hon. Friend says.

In yesterday'sObserverProfessor Alan Day, who I think I am right in saying is not by any means a Conservative. wrote an article headed— Truth about fair rents ". In the course of the article the Professor argues first that fair rents in the private sector are at a level far below the 10 per cent. to 20 per cent. discount on market rents which is commonly quoted…any tenant who rents his home at a fair rent, assessed on such a basis. is heavily subsidised. Professor Day then turn to council tenancies and says this: …the limited researches I have been able to carry out indicate that at least some authorities are suggesting rents which are remarkably high relative to the private sector. My own borough of Camden, which was quoted by Mr. Crosland in the debate, is suggesting fair rentals—particularly of the newer property— will be markedly higher per square foot than nearby private property. And the London committee's assessments appear predominantly to be determined by the square footage. So it seems quite likely that if consistency is achieved with privately owned rented property many of the figures now being quoted are unnecessarily high. In turn this implies that in relation to market rents all council tenants (and not merely those whose incomes are sufficiently modest to justify rent allowances) will continue to enjoy very substantial subsidies. In other words, according to Professor Day, who has studied the position in the Borough of Camden, a borough which was frequently referred to in Committee, the indication is that there is alarmism and the Camden Borough Council by implication is deliberately trying to create a picture of high rents which is not justified. I do not propose to go in detail into the argument about fair rents, because I tried to cover this ground in my intervention last Thursday.

Mr. Ronald Brown

Has the hon. Gentleman in Aylesbury any three-roomed flats at £7.70 net rent, which is a current rent in my constituency?

Mr. Raison

The short answer is that we have not in the council sector. Anybody must recognise that circumstances vary greatly between one area and another. I will not comment on the hon. Gentleman's constituency, bcause I do not know enough about it.

I recognise that, overall, rents will rise. Rents have persistently risen. They rose by 75 per cent. under Labour. There has been a long term trend in that direction. This is an inevitable concomitant of the inflationary society we live in. I accept also that private ownership is, and will continue to be, relatively increasingly attractive. I accept that it is an overall part of our policy, as it has been an implicit part of previous policies, to do all we can to encourage people to own their own homes. I acknowledge that, for example, there is the tax relief available to those who buy their own homes. I believe that this is entirely right.

Local authorities which go out of their way to obstruct the sale of council houses will win for themselves a great deal of unpopularity, because they will deprive people of something they badly want such local authorities will land themselves in the position of King Canute.

It is true that home ownership imposes fairly heavy burdens. The cost of buying a house, as we know only too well, is very high. I am confident that my right hon. Friend's measures will do something to alleviate this, but I do not pretend that we shall see a dramatic fall in the cost of buying private houses. It is a heavy burden when repair and maintenance costs are added.

Nevertheless, home ownership has considerable advantages of a social nature for those who are lucky enough to own their own homes. It is a form of saving. Undoubtedly this has much to do with the present surge. People feel that if they put their money into property they are putting it somewhere where they are sure it will be reasonably safe. Another important argument in favour of home ownership is that it gives people greater independence and greater say over the way in which they lead their lives.

Arguments in favour of home ownership in terms of the sense of freedom, the feeling that people are not tied men in this respect, are of great importance. Therefore, I believe that the policy of doing all we can to encourage people to own their own homes is entirely right. It reduces peoples' dependence on officialdom. It gives them a greater chance to determine the shape of their own lives within their own environment.

Everybody knows that even it we accept this, council housing has got a continuing role. It would be folly to pretend otherwise. I also accept that it can be provided in a reasonably humane and enlightened manner. In my own constituency the quality and the general attractiveness of the new council housing going up at the moment is pretty good. They are quite pleasant places to live in.

Nevertheless, in the long term we cannot avoid the fact that council housing is prone to certain drawbacks. First, it is at the whim of national politics and national politicians. This is an indictment of ourselves, on whichever side of the House we may be, but the fact is that this is an area where, if it is run by politics, it will be subject to all sorts of changes of policy from time to time, and I do not believe this is necessarily desirable.

Secondly, council housing is prone to the paternalism which is so often a feature of local government. It is not an absolutely inevitable feature, but the truth is that local authorities, whether Labour or Conservative, tend to a sort of paternalism. They tend to look on the people who live in council houses and in the public sector of housing in a way which makes a division between the providers and the recipients, so to speak, and this is not a desirable pattern.

Thirdly, council housing is particularly subject to the dogmas, self-indulgence and occasional self-glorification or architects. We have had a lot of talk during the last year or two about the social evils of high rise housing, and I believe those social evils exist. I tried to find a way of introducing a Clause into the Bill to prevent subsidies going to authorities who put up high rise housing, but it is a concomitant of subsidies which are attached to people rather than to buildings that such a Clause is difficult to attain, which I regret.

We know that high rise housing is wrong. Yet several years after Ronan Point and after people had come to recognise that it is inhumane to stuff people 20 floors up, these buildings are still going up. When coming into London on the M40, as I do, at a point where an interchange goes to Shepherds Bush, one is confronted with a vista of new and impossibly inhumane blocks of flats still in process of erection. One has seen references to the particularly horrific form of existence which is being perpetrated in Southwark, in an estate which unhappily bears the name of the Aylesbury Estate.

There is something about local authrities which encourages them to think in terms of mass housing. Of course, there has been a great need for mass housing. The fact that there has been mass slumdom and mass need, has led to some sort of mass housing. People have had to respond in a big way. But they have responded in an unnecessarily inhumane way, and in the future we should he in a position in which the response can be much more individual and personal, which I would associate with private property and home ownership rather than with what happens in local authorities —and even sometimes among the more enlightened ones.

I and I am sure my party as a whole have no bias against council tenants. How could we, since we depend upon them to help us win elections, and more important we know them as our own constituents. When one gets to know one's constituents at one's "surgery" and so forth, one is bound to like them. This seems to me to be one of the happier aspects of politics. We have no bias against council tenants, but some of us have a bias against council housing as such. A policy which encourages people more and more to acquire their own homes is a policy which should he supported.

I should now like to say a word or two about the public expenditure aspect which has been referred to by a previous speaker and which the right hon. Member for Grimsby has talked about in the course of our Committee deliberations. The right hon. Gentleman says that this Bill is almost purely a public expenditure exercise. In saying that, I am not doing him an injustice even if I did him an injustice before. The answer to that is that to a degree this is manifestly untrue. There are very large elements of this which are to do with more public money on rent allowances, a national rent rebate scheme, slum clearance subsidies and so on. But I acknowledge that in the long term it is one of the ingredients in the Bill to peg the subsidy level. The Bill does not cut subsidies, as hon. Members opposite say it does, but it contains the increase which would otherwise have taken place. So to that extent I acknowledge that there is a public expenditure aspect.

However, we should ask ourselves whether it is a bad thing to try to control public expenditure. At the moment the Government seem to spend a great deal of energy, and I think wisely, on finding new ways of spending money. Not many days pass, including Budget Days, when we do not see substantial new developments in terms of money being made available for a variety of different projects. But these additional sums of money seem to me to be characterised by two things.

First, they are largely devoted to alleviating the cruel problem of unemployment. The priority at the moment unquestionably in additional Government spending is to try to bring down the level of unemployment, and that is a wholly admirable and sensible priority. Secondly, they are trying to introduce an additional stimulus to industry. That is also a wholly admirable and sensible priority.

These things are in a sense very immediate policies. Trying to get the unemployment figure down as soon as possible and getting industry on the march as soon as possible have a direct relevance to the problems of today. When we talk about creating a new system of financing housing in the country we are not only talking about what will happen in 1972 and 1973. We are talking in the long term. We have, in other words, to erect a system which will make sense this year, next year, 10 years time and so on. When we take the longer perspective, we can see that it makes sense to think in terms of an allocation of priorities between different branches of public expenditure. I like to think that this is what has been going on.

It is a matter for my right hon. Friends to decide where one can expect the sort of high rate of growth in the social services and the allied fields, where one can expect this to continue and where one can reasonably try to contain and restrain that. Looking at the broad picture of social policy, I can see areas where I would argue that there is a need for substantially greater spending. I would be glad to see the introduction of preschool education on a wide scale. That is a high priority. In health there are some very great needs. The treatment of the disabled, on which we make a great deal of headway but where there is a need to do much more, is a good example. A reduction in the length of waiting lists in hospitals is another example. These are areas where we need to spend more money, and one can find other areas of this sort.

However, we must be realistic. If we are going to spend more money on preschool education, on cutting hospital waiting lists and providing suitable accommodation for old people or for the mentally disabled away from the traditional long-term institutions, we must ask ourselves where this money is coming from. As I have argued before, I think that in the long-term political job of saying where lines should be drawn between the social sphere and the economic sphere, it is reasonable to say that for the wage earner with a reasonable wage and with reasonable prospects, housing should be placed in the economic sphere rather than in the social sphere.

This is one of the areas in which, so to speak, the frontiers should be shifted a little in the direction of the private sector and away from the public sector. Long-term retirement pension provision is another example. Our strategy for pensions implies, I believe, that we shall, over the years, see more of the provision for old age borne by occupational pension schemes and less by the State.

Clearly, there will be enormous needs to be met and jobs to be financed out of the Exchequer. To my mind a policy which takes the view that this particular area, housing, is one in which we can look forward to some sort of containment of the growth in public expenditure, unlike certain others, is a policy which makes long-term sense. Therefore, when the right hon. Member for Grimsby says that this is a public expenditure Bill, my answer is that there is nothing to be ashamed of in that.

I acknowledge that this is a controversial Bill which arouses, and has aroused, genuinely strong feelings on the part of many people. I do not dispute that. But I am sure that, with time, a great deal of the froth and highly exaggerated argument of the last few months will fall away, and the Bill will be seen in true perspective as a strongly positive contribution to the country's general welfare.

7.21 p.m.

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

I congratulate my right hon. Friend the Member for Grimsby (Mr. Crosland) on doing, probably, the best demolition job on any Minister which it has been my privilege to witness since becoming a Member of Parliament. Until such time as we have answers from the Minister to the questions which my right hon. Friend put, the debate will virtually remain in a vacuum. We do not know what the fair rent assessment is likely to be. Will it be on the basis of the document, the so-called purloined document? It is all very well for the hon. Member for Epping (Mr. Tebbit) to say now that it was based on a narrow point. It was a Government assessment.

Mr. Tebbit

I always did say that.

Mr. Mitchell

It was a Government assessment, by a working party, which gave £6.50 a week as the average rent for the South-East. Why should the Government be surprised if we use that document as a basis for our propaganda and our talk about the Bill?

Now, however, Birmingham has come up with a document, and, aparently, the Minister accepts it. If the Birmingham figures for assessing fair rents are right. what will be the position in Southampton? The general rent level in Southampton is higher than it is in Birmingham. In July this year, under the present proposal, there is to be a rent increase of 78p for every tenant in Southampton. But if the Birmingham figures are right. it should be not 78p but something much lower.

I hope that we can have a firm answer from the Minister tonight on that question, because many local authorities will want to know what their position is. I should like to be able to go back to Southampton and say, "You need not worry. The 78p need be only 25p." But I do not know whether I can say that until the Minister has given an answer. We must have a definite response from him tonight.

There are many features of the Bill which make it a bad Bill, but I shall refer to only half a dozen. The greatest need at the moment is to build more houses for homeless families. That is the over-riding need, yet there is nothing in the Bill which will produce one more house. In fact, many experts consider that the new subsidy arrangements will be a disincentive to local authorities to build for general housing need.

Many local authorities—Southampton is one of them—have growing waiting lists. For the last three or four years, as an unfortunate result of the policy of my local Conservative council which took control in 1967, our housing programme has been cut from over 1,000 a year to a few hundred a year, and we now have a higher waiting list than we had in 1967. But, as I say, there is nothing in the Bill to provide any incentive to a local authority to build more council houses.

The hon. Member for Aylesbury (Mr. Raison) was probably right when he implied that one of the main aims of the Bill is, in a sense, to force more people on to the house purchase market. He would use the word "encourage ", but I should probably say "force ". I have no objection to owner-occupation. I have no objection to the sale of council houses, provided that the authority which sells them is building sufficient for those in genuine need who cannot afford to buy.

In Southern England, as the hon. Member for Aylesbury well knows, we have a rapidly inflationary house price spiral. it seems silly at this time to increase the demand for house purchase by forcing more people out on to the market, for the net result must surely he to make the inflationary spiral even worse. There could, perhaps, be an argument about doing it at another point in time, but at this moment it is plainly a bad thing to do.

My third objection is that the rent increases to be paid by the vast majority of people will be quite unnecessary. Again, I take the position of my own local authority. We have a large surplus, over £300,000, on the housing revenue account. There was no need this year, and probably even next year, too, to make any increase in council house rents, which are already high. But now, under the Bill, the rent increases which my local authority will be compelled to make will mean adding to the general inflationary spiral in the country.

Obviously, the workers, through their trade unions, will put in larger wage and salary claims to meet the higher rents which they will have to pay. They will not sit back and take a reduced standard of living, which is what it would otherwise mean. It is all very well to say that people can afford it. What it comes to is that some people, as a result of paying an extra £1 or £2 a week, will have to accept a reduced standard of living. It is human nature not to sit back and accept that. They will put in extra wage claims, and the claims will be even higher than they are at the moment, adding to the general inflation.

My fourth objection is to the system of rent rebates applying to about 60 per cent. or 70 per cent. of all council tenants. I do not object to rent rebates —we have had them in Southampton for some years—but I have always considered that a rent rebate should be aimed at that section of the population, perhaps 10 per cent. or 20 per cent., who are genuinely in need. A rent rebate applying to 60 or 70 per cent., with all the form-filling entailed, and all the lack of take-up such as we have seen in other means-tested benefit schemes, will merely add to bureaucracy. It will create a new bureaucratic machine quite unnecessarily, and create bad feeling between one tenant and another.

Even worse, perhaps, is that it will accentuate what has become known as the wage trap. We all know now that within certain ranges of income, because there are so many means-tested benefits, a man may have a £2 a week pay increase and find himself worse off at the end of the day. This new rent rebate scheme will make matters even worse, and the result will again be that wage claims are higher. It is no good a man asking for a few pounds a week if, at the end of the day, he will be worse off.

Much Conservative propaganda in my area has made great play of the argument that some people will have a nil rent; they will not pay any rent at all. We have been told about that as though it were something miraculous. But what is the Minister's estimate of the number of those people paying a nil rent who do not already have their rent paid through social security?

The Bill transfers the alleviation of poverty over a considerable range from the general taxpayer and the social security system, where it should be, to the other council tenants. I object very strongly to one council tenant being responsible for another council tenant's rate rebate. Under the Bill he is responsible even for the private tenant's rent allowance, and the only good thing about the Bill is the introduction of the rent allowance. It is quite wrong that the rent allowance should be financed by the council tenant's rent. I hope we shall eventually have a negative income tax system which will eliminate all the old means-tested benefits.

My final objection is that the Bill removes from the local elected council power which it then transfers, we think, into the hands of a Government-appointed rent scrutiny board. We are not sure about this, because it may be transferred into the Minister's hands, but we shall no doubt find this out when he replies to the debate tonight. Contrary to what is promised in all the Conservative manifestos the Bill takes away from local authorities the right to fix their own rent levels in their own areas. We have seen the power of local authorities whittled away in many other matters, such as local government reform.

I could raise many other points which would illustrate how bad the Bill is, but I know that others wish to speak. I urge the House, even at this stage, to reject the Bill.

7.33 p.m.

Mr. Idris Owen (Stockport, North)

For many generations both at Westmin- ster and in the town halls housing has been one of the most emotive issues to be discussed. I am simply yearning for the day when housing is taken out of the political arena. Both sides of the House make political capital out of the deplorable housing situation when they are in office and I am not satisfied that any Government have been successful in dealing with the matter. They have been far from successful, and I hope that the Government will not be complacent when the Bill is on the Statute Book. It resolves only one aspect of housing. The provision of homes is the most critical problem and perhaps by the end of the decade, with positive action by the Government—much more positive than they have taken so far—we shall be able to build sufficient houses to provide consumer choice. When that situation is reached, and only then, we will have stability in housing costs.

This is one of the problems to which we must apply ourselves much more diligently when the Bill becomes law than we have done so far. I should like to look at the principles underlying our objective in the Bill. The White Paper clearly stated that our objectives were to provide a decent home for every family at a price within their means. No one would want to quarrel with that Another objective was to achieve fairness between one citizen and another in giving and receiving help towards housing costs. At every party conference housing has been debated. Certainly at the party conferences I have attended there has been a great deal of criticism about unfairness in housing. Examples have been quoted of people receiving subsidies who do not need them and of those who need them not obtaining them. There has been a spontaneous demand by the rank and file at our party conferences that something should be done to deal with the problem, and the Government have reacted to the pressures that have been put upon them by people from constituencies all over the country.

Since the war houses built by municipal authorities have mainly been allocated on the basis of physical need and not of financial need. That has encouraged people to apply for council houses because they could not get a home as insufficient houses were being built. The result was that many people occupied council homes and paid a subsidised rent because the subsidy related to the bricks and mortar and not to the means of those occupying the house. It was not surprising therefore that tenants obtained houses on the cheap and it was not surprising that waiting lists could not be reduced. It was always an attractive proposition to some people who did not regard housing as the most important thing in their lives to apply for a council house which was inevitably cheaper than a privately-owned house.

Mr. George Cunningham

No.

Mr. Owen

The hon. Member is wrong. The result was that irrespective of incomes rents were fixed at well below what could be regarded as the market price. I have never been able to understand why hon. Members opposite should want lower rents irrespective of the tenant's income, leaving themselves with insufficient resources to provide for the really needy.

It is more important to provide homes for those in the low income levels and this is what the Bill seeks to provide. I cannot understand why hon. Members on the Opposition side assume that a man should not be prepared to pay as large a percentage of his earnings for his house as he would for a motor car. I do not decry those with motor cars, but I am surprised that someone should be prepared to allocate 20 per cent. or 30 per cent. of his income to run a motor car and yet object to paying 15 per cent. of his income for a home.

Hon. Members on both sides have said how important a home is socially. It is the most important social objective for the people. I do not deny that hon. Members on the Opposition side are sincere in their objective of ensuring that everyone gets a home, but the person who occupies a home should be prepared to recognise its importance. Why should he relegate its importance in his spending so that he allocates a lower proportion of his earnings on his home than on other less important items? Hon. Members opposite say that a person should not be expected to pay more than 10 per cent. of his income in rent. That is boloney.

Mr. George Cunningham

At the risk of being a bore, I must ask the hon. Member to address himself to the point that we have asked him to deal with in other housing debates. If he bases his argument on fairness between one person and another in the community, how does he answer the charge that he is not achieving fairness as between the home owner and the council tenant? If the home owner borrows the money for his home, he receives an enormous subsidy by way of tax relief. The hon. Member must address himself to this point even if he does not agree with it.

Mr. Owen

I would not mind addressing myself to that point and I may come to it presently.

Let us deal with the question of home ownership. The average home owner is obliged to provide not much less than 25 per cent. of his weekly earnings for his mortgage repayments and interest. One month's repayments are equal to a week's salary. That is the building societies' criterion for repayments. The proportion of 25 per cent. is a pretty substantial sum of money. No one can say that the fair rent as proposed is anything like a market rent. In many instances it is 20 per cent. less than the market rent. There is a built-in subsidy even with the assessment of a fair rent.

Labour Members suggest that only 10 per cent. of a person's earnings should be allocated for rent. They do not recognise the importance of a home. Ordinary working people constitute 43 per cent. of the borrowers from building societies. They are prepared to recognise the importance of their home and to allocate 25 per cent. of their income to it.

Mr. R. C. Mitchell

They have an appreciating asset.

Mr. Owen

It is a matter of priorities. The White Paper spoke of: a decent home for every family at a price within their means ". If the house to be provided is not within their means, there is adequate provision in the Bill.

It is not surprising that people are protesting about the Bill. They are encouraged and the fires are stoked by Labour Members. When people have been getting something on the cheap almost from time immemorial they are bound to protest if they have to pay more for the same article. That is human nature. But it does not alter the fact that there is a fair price for a house, for a home in which to bring up a family, which is the sheet anchor of everything that human society stands for—the home and everything about the home. Surely the occupiers of those homes must recognise them as a priority.

Many people do not regard the home as the most important thing in their lives. They prefer entertainment and the motor car, and the home is about the last thing they want to provide. But we consider that there is a fair and proper price to pay for a home. I am not suggesting that it should be 25 per cent. of income, which was what I had to provide out of my income when I bought my own home on a mortgage. I was prepared to recognise that it was important for me, and I paid 25 per cent. of my salary for a home for my wife and family. I do not expect a council house tenant to do that, but 10 per cent. is a much lower proportion than it should be.

Mr. George Cunningham

Will the hon. Gentleman tell us exactly how much subsidy he was then receiving in the form of tax relief?

Mr. Owen

I was not receiving very much. Taxation in 1939 was considerably lower than it is today, and the amount of subsidy I was receiving was insignificant. It is only since we have had the postwar Labour high-taxation policy that we have been obliged to use the device of tax-saving.

Mr. Crosland

The hon. Gentleman keeps on comparing 25 per cent. with 10 per cent. They are not comparable figures. The 25 per cent. includes a very large element of saving, which results in a capital asset being possessed. The right comparison is between the 10 per cent. paid out in rent and that part of the mortgage payments which represents interest and not capital repayments.

Mr. Owen

The right hon. Gentleman, who is one of the ablest men on the Opposition Front Bench, must know that the repayment factor is minute over 25 years. An owner-occupier is paying hard interest from the very beginning, and the repayment element is negligible until after 10 years. It certainly would not make up the difference between 25 per cent. of his income and the 10 per cent. suggested by Labour Members. They suggest that a man earning £30 a week should not pay more than £3 a week rent. I do not know how they have established that figure.

It is suggested only because council house tenants have been experiencing cheap rentals for a very long time. Labour Members are not suggesting that clothes. or food should be subsidised. Council house tenants are prepared to go into shops and buy food without saying "We live in a council house and therefore we should have cheaper food." They do not say when they go out for their enjoyment "We live in a council house, and therefore this must be subsidised." It is not suggested that suits for council house tenants should be subsidised. Why single out the house to be specially subsidised. irrespective of the tenant's income? As my hon Friend the Member for Aylesbury (Mr. Raison) has said, there must be some degree of selectivity in the provision of public welfare. Without it, the benefits will be spread far to thinly and never be of value to those who need them.

Mr. Cunningham

There is no selectivity at all on tax relief.

Mr. Owen

There has been a great deal of talk about rent increases as though they were never experienced under the Labour Government. We are predicting what fair rents will be between 1974 and 1975. There may be an average 50p increase over the years up to that time. The Opposition have ignored the fact that there will be corresponding wage increases over that period. No one can tell me that we are freezing wages in 1972 and there will never be more increases

On the basis of the now normal increase in wages, a man earning £25 a week now could be earning £36 a week in 1975. A percentage of that increase, even if it is only 15 per cent. would provide for £1.70 a week more rent, 12… per cent. would provide another £1.45 a week and 10 per cent. would provide another £1.15. Therefore, the total increase from the present rent to a fair rent over the next three years is not quite such a formidable obstacle for the working man as the Opposition try to make out. The kind of wage increase he will receive over the next four or five years must be taken into account.

As the housing construction programme gathers momentum as my right hon. and hon. Friends take even more positive steps than they have so far, which are not adequate, we shall witness a degree of consumer choice within the next five years. I do not think that beyond the end of the predicted fair rent period that in 1976 it will be necessary to increase rents considerably, because consumer choice will play a very important role in assessing rents in the future.

Mr. Cunningham

In London?

Mr. Owen?

Various hon. Members have accused my right hon. Friend the Minister of retreating on the subject of rents. He has never retreated at all. Labour hon. Members have been scaring the nation on the subject. We not only heard that rents would be doubled, but in my constituency they told us that rents would be trebled. Never once did the propagandists representing the Labour Party mention rebates or allowances. They went around the council housing estates asking "Do you realise that your rents will double and treble? "Now they realise that rents will not be trebled, and they are suggesting that my right hon. Friend is retreating. It is they who are retreating. The election is over and won, and therefore they can take a more honest rùle in the matter.

I sincerely trust that the Bill will be an unqualified success, that those entitled to rebates and allowances will receive them in full measure and that those who are expected to pay a reasonable rent will pay a reasonable rent. I should like to see this Bill as one of the greatest success stories of all time.

I believe that the Bill will be far more successful that the "weary Willy" predictions of hon. Members opposite would have us believe. But, of course, no one would be more disappointed than hon. Members opposite should it be a success. One has only to sit here on Budget day and watch their expressions when the Government are offering more provision for the people to recognise how disappointed they are when, for example, they hear about increased pensions. We on this side of the House noticed, when my right hon. Friend the Chancellor of the Exchequer announced the great concessions in the Budget, how the jaws of hon. Members opposite dropped. I readily predict that no one will be as unhappy as hon. Members opposite if the Bill should be a humdinger of a success. They do not want it to be a success. They would like to be able to cry "Woe, woe, woe" so that they could go on worshipping at the council house shrine which is their sacred cow.

One has only to canvass on council estates before or behind members of the Labour Party to find out the sort of things they say. At the last General Election, I had evidence. They were telling people on the council estates "If you want to stop your rent going up, vote for us ". They made no qualifications or conditions. But even so they were worried that council tenants would not make enough noise about it. They sent out frantic leaflets and called a mass rally. Altogether, 9,000 leaflets went out to 9,000 families urging them to attend a mass rally in the town hall. It was addressed by the hon. Member for Salford, East (Mr. Frank Allaun). There was a fanfare of trumpets throughout the town. The rally was emblazoned on poster sites all over the town. The posters called the Bill "vicious ". Two hundred and fifty out of a population of 150,000 turned out at the rally. That was the excitement that all this effort had generated. Now, as time goes on, hon. Members opposite say that the Government have retreated because rents are not going as high as they should have done.

I have spent a lifetime in my professional life and in local government and national politics dealing with housing, and I say that the present Government are showing more compassion in housing than any other Government this century.

7.54 p.m.

Mr. Neil McBride (Swansea, East)

The hon. Member for Stockport, North (Mr. Idris Owen) was born in the Principality and has been an ex-patriate for many years. I was shocked to realise that he had forgotten the lessons of his early childhood when he said that not many people regard homes as their first priority. I refute that in its entirety. A home is the first and most prized possession of the people I was born amongst in Scotland, and I know that in Wales, where I have lived for many years, it is the first and most prized possession of the people there.

The hon. Member talked about the measures proposed in the Budget. My commentary on that is merely, "falling investment and more than one million unemployed ". In this day and age, no one can expect that any politician or political party can fool all the British people all of the time, and when the hon. Gentleman talks about Stockport, as he is entitled so to do, I wonder how his party fared in the local elections. We are discussing the Third Reading of the Bill against the backcloth of the massive rejection of Tory philosophy in the Bill by the people of England and Wales. No explanations by the Tory Party can alter the fact that it has lost over 1,400 seats. Someone has said to me that figures can lie and liars can figure, and there may be a great deal of truth in that. But we won the seats, and the Conservatives lost them. There is no middle course there.

The Secretary of State for Wales is sitting here. He knows as I do that the Conservative Party was decimated at the local elections. As the hon. Member for Stockport, North knows, I have never been afraid to make a charge, and I am speaking here in the presence of the voice of Wales in the Cabinet, of a man who abdicated from his responsibilities and refused to take a place in the Standing Committee on the Bill. No one can excuse that; I do not, and I level the charge, and level it fairly. In the language of the profession which the Secretary of State for Wales adorns, he knows my charges to be a true bill, because we were singularly bereft of legal assistance in the Committee. The then Under-Secretary of State carried the load. Not even the most charitable could say that the Minister for Housing and Construction was an asset to the Committee.

In Wales, 11.2 per cent. of the weekly wage income is paid in rent, and that is a high enough proportion to pay for any house as rented property. I give the Minister a chance to refute that view if he thinks otherwise. The Bill will add a multitude of means test forms and an inevitable further complex to local government for the assessment and review of rebate claims. The Tory newspaper, theWestern Mail,said on 18th April that Cardiff expects applications at the rate of 60 per cent. of the city's 25,000 housing revenue account tenants and that the new staff recruited prior to the passing of the Bill into law—and we do not know how many will be required after that—would total nine, at a cost of £12,500. One rent officer in Wales will cost £5,500. There are the people needed and administrative costs to be met even before the Bill becomes law. A total of 1,350 officials will be needed in the country as a whole, nearly all paid for by the local authorities.

One can get some idea of the number of people required to administer the Bill from the Supplementary Benefits Commission. It has 20,000 staff making 2 million payments each week. Were 2 million people to apply for rent rebate. the financial cost to local authorities, including Swansea, would be tremendous. That cannot be refuted. It has been estimated that one in 12 persons in the United Kingdom are dependent on meanstested benefits. The dependence ratio in relation to these benefits in Wales is much higher than in the rest of the United Kingdom. That is without the additional application forms needed for a rent rebate scheme.

The Bill will rob local authorities in Wales—the Minister has not defended this, and I charge him with it—of surpluses in well-managed housing accounts. Swansea has been well managed by Labour for over 40 years. It has one of the largest Labour municipal majorities in Wales. Swansea's housing administration has been universally acclaimed by political opponents to be excellent and to be fulfilling all the tenets of good business. But the Bill negates good business by taking away the surpluses built up in Wales, which, compared with the rest of the country, is a low wage area. One finds low wages and low rents going together with falling interest rates to create a surplus. But the surpluses are to be taken by the Government through the Secretary of State for the Environment, who has descended to us from the Olympian heights today and in a crassly rotten speech gave us no indication of his thinking.

These surpluses will be taken away, and if the housing allowance is paid, local authorities will receive half back while the other half will be used for the redemption of anything, including the national debt. Has the Secretary of State, following the undertaking given in Committee, decided whether the multiple of £30, which is to be multiplied by the number of houses in the housing revenue account to determine the surplus and the balance to be held in the housing revenue account, is to be increased to the multiple of £50, as suggested in Committee?

We are faced with one of life's political ironies. The Secretary of State with exclusive responsibility for housing in Wales is the right hon. and learned Gentleman. The Prime Minister says there is not the slightest gap in liaison, no hiatus, but I leave it to the House to judge. In Swansea, the example I know best, there are 17,500 houses on the housing revenue account. A multiple of £30 will define the balance which this rotten Bill permits Swansea Council to retain—£515,000. Any figure in excess of that will be taken by the Government in legalised robbery. If the multiple was £50, that would provide £875,000 on 17,500 houses. The benefit of that must be plain. It would leave a reasonable margin for management contingencies, for reasonable amenities on estate, and for all the multifarious purposes to which that extra money could be applied.

It is ironical that we should attempt to teach business ethics and rules to the party of business. We are faced by a party of mediocrity, appallingly low in standard. The Prime Minister is a grey, colourless nonetity. That description may be shared by his Ministers. The Birmingham increase of 35 per cent., an amount which has not been denied—

Mr. Sydney Chapman (Birmingham, Handsworth)

On a point of correction—

Mr. McBride

I will not give way; I have nearly finished my speech.

It has been mentioned that the Birmingham increase will be 35p and that that figure is likely to be approved. Would the right hon. and learned Gentleman say whether this figure will apply to the Welsh cities?

The rents in Swansea are high enough. The present level is fair. I voice sincerely the views of the people who sent me here and among whom I live.

Mr. James Allason (Hemel Hempstead)

Has the hon. Gentleman noted that there is a difference of 90p between the average rent in Swansea and the average rent in Birmingham? Does not that make a difference?

Mr. McBride

I am not mentioning differences. I am asking whether the principle will apply in Swansea as in Birmingham.

Amendment No. 425 proposed that the figure of 10 per cent. of rents above the so-called fair rent level to be increased to the mandatory amount of £1 in October should be reduced to 2 per cent. In Swansea we have a non—pooling rent arrangement so that all housing estate rents vary. Will the council need to impose the full mandatory increase on all houses?

The Bill has one clear message. It is that the 270,000 local authority tenants in Wales will, to put it bluntly and brutally, see their rents go up. Local authorities in the Principality will be reduced in status and function.

I put it to the Secretary of State for Wales, who adorns the law, that the Bill is harshly, rigidly and legalistically drawn. It is a blatant attack on the working class of Wales and the rest of the United Kingdom. All hon. Gentlemen opposite are bound by the Tory Manifesto. To them it is politically holy writ. In it they say that there was no independence, discretion or freedom of manoeuvre for local authorities. This is what the right hon. and learned Gentleman subscribed to. In "A Better Tomorrow ", the Tory Manifesto, it is said: The independence of local authorities has been seriously eroded by Labour Ministers. On many issues, particularly in education and housing, they have deliberately overridden the views of elected councillors. We think it wrong that the balance of power between central and local government should have been distorted, and we will redress the balance and increase the independence of local authorities. One has read Aesop's fables and now one reads the modern version by Heath.

The Bill fails in many ways. I am glad that the right hon. and learned Gentleman is here because he can give us the benefit of his legal knowledge. Legal sanctions are written into the Bill and yet it is the inalienable right of the subject to appeal, a right which is violated if no provision to appeal is vouchsafed to him. For offences described in Clause 57, a tenant may be fined up to £50 for failing to observe the terms, but there is no right of appeal.

Under Clause 94 any elected councillor or council officer is liable upon conviction to a fine not exceeding £400. Again, there is no right of appeal. In Section 228 of the Local Government Act, 1933, there are the surcharges referred to. In Section 229 there is the appeals procedure with which the right hon. and learned Gentleman will be familiar. If the right of appeal is given here, it is un—British for the same right not to be given to the councillor, the council officer and the tenant. It is wrong that there should be no provision for setting aside the decision of a tribunal such as the rent scrutiny board. I ask that councillors and council officers should have the right to appeal.

In the absence of such safeguards the Government should accept my suggestion, based on common sense and the law as it applies to other matters. There is here a denial of legal and natural justice. The result could be a serious sense of disquiet between such boards, local authorities and tenants. Certainly, as an amateur student of the law, not being a qualified lawyer and not therefore being dogmatic but applying common sense, I can see the possibility of this serious effect. The social relations between local authorities of England and of Wales, part of which I am proud to represent, will be harmed by the lack of the right to appeal.

There is a bestowal of authoritarian powers on these boards, constituting them courts of administrative tribunals, consequent upon Clause 55. I make special reference to lines 31–33 of Clause 55. The rent scrutiny board does not need to have any regard whatever to any representations made to it about the provisional rent assessment submitted by the local authorities. We are dealing with 270,000 heads of households in Wales, 5… million people in the United Kingdom. Surely if there is any sense of justice in this authoritarian Government they should listen to my representations. The Government are wrong in law if on the one hand they say that appeal procedures are available in one direction with regard to the Bill and yet on three other occa- sions they say that there is no appeal procedure. Surely we have departed from British justice, from the sense of fairness, of extending to the subject the natural justice which is his right?

These nominated boards make arbitrary and final assessments We will be advised by the right hon. and learned Gentleman on this because it is a legal and not a political point. He should consider making available to the tenant or anyone affected by the decision of an administrative tribunal the right to set aside that decision through the obtaining of an issue of order of certiorari—

Mr. Eddie Griffiths (Sheffield, Brightside)

Hear, hear.

Mr. McBride

—which means the setting aside of a verdict. If there is no right of appeal then surely in the name of justice, looking at it objectively, this should be given as of right to everyone in these islands. Their home is their castle. If they are held to have infringed the law, if they are affected by a court they should have the right of appeal through the issue of order ofcertiorari. The House should agree to the inclusion of such a safeguard, because this matter impinges on ministerial responsibility.

In Part V of the Bill there is a dangerous infringement of the right of the subject to obtain legal and natural justice. This is exacerbated by the vesting in the Secretary of State of absolute legal powers. If this is considered coldly it must be conceded that the tenants, half the population of the country, must have some right of appeal against such boards which are not publicly accountable and not elected.

Because of the close relationship between the Secretary of State and the rent scrutiny boards it is imperative to insert legal checks so that impartiality can be achieved, so that the local authority tenant may judge whether the decisions are acceptable. That is entirely right and just. The tenant may wish to dispute a decision at law through the issue of order ofcertiorarior prohibition. Both orders are simple. The decisions of magistrates' courts can be set aside by the first. Surely the boards are not setting themselves above the law? If this is persisted in Ministers are saying that such boards, with no public accountability and making decisions affecting millions of tenants are to be above the law. It would enable the local authority tenant to feel that justice was his of right as a higher court could quash the decisions of this minor administrative tribunal.

The Minister should say something about this matter. He should consider the need to provide legal checks, thus achieving a sense of balance in relation to the activities of the rent scrutiny board. The decisions of magistrates' courts can be set aside by issue of order ofcertiorari.The rents scrutiny board is a more minor tribunal than a magistrates' court. By giving the power to review the decisions of a board a public service would be performed. I am sure that the Minister would not like to go down in history as the Minister who said that he did not accept that there should be legal checks or that justice should not be accorded to even the most humble of our subjects. All of us have the right to justice, and is the Government negate this right they will stand convicted of authoritarian government, disregarding the extension of a right which is admired the world over —the right of justice for the most humble of our people.

I have described the Bill as bad. The opposition to it in Wales is overwhelming. The Secretary of State for Wales knows that it is not news to him. I look forward to the day when the Labour Party returns to government and the number of Tory Members in Wales is reduced from the lucky seven. In Committee I spoke for my constituency. But I also spoke for the other 26 Labour Welsh Members. Wales is a Labour nation it always has been. There is no room in the Principality for Tories. I speak in the name of Wales when I say, "Throw out this Bill. It is as unwanted as this Government ".

8.23 p.m.

Mr. Norman Tebbit (Epping)

I do not wish to follow the line of thought of the hon. Member for Swansea, East (Mr. McBride). As a fellow member of the Standing Committee, I certainly recollect his claim to speak for 26 other Members. I also recollect that he said quite enough for 26 other Members. That is about all I can refer to in what has been another long reiteration of the same old points which were dealt with time and again in Committee.

There was much more interest in the points raised by the hon. Member for Southampton, Itchen (Mr. R. C. Mitchell). He gave some odd figures. He spoke of 60 to 70 per cent. of people getting rebates as opposed to 10 per cent. in need. I accept that he probably did not say what he meant because clearly he was thinking of 60 to 70 per cent. of the 30 per cent. of people who are council house tenants—perhaps of the 50 per cent. who are tenants of any kind. But about 40 per cent. of local authority tenants are expected to qualify for rebates, and 40 per cent. of 30 per cent. is getting precious near to the 10 per cent. which he said was about right.

It is interesting to hear an hon. Member opposite these days suggesting that only 10 per cent. of the population are in need. I get the impression, when I listen to hon. Members opposite, that at least 50 per cent, of the people are in dire financial distress. Now we have a figure of 10 per cent. and I hope that the Opposition will remember it. The hon. Member for Itchen mentioned the building of new homes. After the high hopes and low achievements of the last Government. I was surprised that he did.

The right hon. Member for Grimsby (Mr. Crosland) was very rash. He slipped into military terminology. I am sure he did not mean to do so, but he brought to my mind some other military terminology, namely, that the task of housing the nation should be conducted like a military operation. That was part of the famous "promise not lightly given but pledge solemnly made "of the Leader of the Opposition. What has happened to it? The right hon. Member for Grimsby may wish to tell us what has happened to it. Apparently he does not wish to do so— and well he should not. Sitting where he is and noticing the rapidity with which right hon. Members opposite fall off their perches on the Opposition Front Bench. he is well advised not to say a word about it.

Mr. Alexander W. Lyon

Get on with the Bill. Stop all this nonsense.

Mr. George Cunningham

On a point of order.

Mr. Tebbit

I will give way to the hon. Gentleman.

Mr. Lyon rose—

Mr. Deputy Speaker (Miss Harvie Anderson)

Order. I understood that the hon. Member for Epping (Mr. Tebbit) gave way to the hon. Member for Islington, South—West (Mr. George Cunningham). If I was wrong. I call Mr. Tebbit.

Mr. Tebbit

I am grateful, Mr. Deputy Speaker, that you are much more perceptive than hon. Members opposite and can even hear when I say that I will give way. although these days hon. Members opposite do not seem to want to take advantage of the opportunity.

For a long time in these debates—and I can understand it—we have had a club atmosphere. Only a few newcomers have taken part in this discussion on the Bill. I was glad to hear the speech of the hon. Member for Shoreditch and Finsbury (Mr. Ronald Brown) today. I am glad that the hon. Gentleman got into the debate because he was always saying how much he regretted not being with us on the late nights in Committee. He could have come to listen to the debates but he never came very late at night—or, if he did, it was only occasionally.

Usually there is nothing new to be discussed on a Bill which reaches Third Reading, but from all the fuss and bother last week one might think that this Bill was a great exception. There was what one might call the Birmingham affair. We have always said the whole way through the passage of the Bill that if housing had been well managed. as Birmingham's housing has been for some years, the rises in rent would be modest. However. hon. Members opposite refused to believe us and would not accept what we said. Now they have suddenly realised that we might have been right.

Hon. Members opposite refused to believe the earlier figures and thought that Newcastle and the like were fantastic exceptions. Since more exceptions are possible, they still do not know what to do about it. Anybody can make a mistake, and certainly right hon. and hon. Members opposite are always at it. For many months they have risked causing grave and unnecessary distress. [Interruption.] They seem to think that that statement is funny. They may laugh when they think about the pamphlets they issued which threatened people with a doubling and trebling of their rents. They now have to get themselves off the hook since they have to admit that what we said is right. They cannot at one moment play upon people's fears and then say how sorry they are that the rent rises are not bigger to justify their propaganda campaign. We have made clear that it has always been Labour councils which for many years pursued unrealistic rent policies which envisaged enormous rises.

My hon. Friend the Member for Aylesbury (Mr. Raison) shot my fox too today when he quoted the article by Professor Day who observed that in the borough of Camden the local council had adopted scaremongering tactics. It was certainly clear in Committee that claims were made about the shoving up of rents, and those concerned did not care how much distress was caused to people as long as they gained a few more votes. [Interruption.] They may not have been voting in Camden, but we all know how often the Camden figures were quoted in places which were voting last week. This was used as a further scaremongering tactic. as has always been the case with hon. Members opposite.

I see that the hon. Member for Willesden, East (Mr. Freeson) has now joined us, and I would like to give him an opportunity to have a little say at this stage. He had some rash words to say last Thursday. He went so far as to say that he could quote the housing figures and the amount of profit which would he made in the constituencies of nearly all those who were members of the Committee. Perhaps he did not bother to look at my constituency, but I should like to give him the chance to do so. I want him to reply without any shilly-shallying or wriggling. I should like all the figures, not some of them. No doubt the hon. Member has the figures for Harlow Urban District Council, Harlow Development Corporation, Waltham Holy Cross Urban District Council, Epping and Ongar Rural District Council, Epping Urban District Council and the London Borough of Waltham Forest. Perhaps I have just made a case for local government reform rather than for anything else, but if the hon. Gentleman does not have those figures I shall gladly give them to him.

Mr. Freeson

I can select one, and I shall be taking part in the debate a little later this evening, if I have the opportunity to do so. One set of figures which is in my mind relates to Waltham Forest, which is subject to the new subsidy system proposed by the Government. On the present system it now has a deficit of about £350,000 on the rates. By the third year of the new rent system, with the operation of the fair rent provision, this will produce an additional income of about £500,000 a year as compared with that £350,000 deficit which the borough now takes on its rates.

Mr. Tebbit

I notice that the hon. Gentleman chose one authority out of half a dozen, and it was not the biggest by a good margin. There are 20,000 houses in public ownership in the Harlow Development Corporation, and the hon. Gentleman said nothing about that. He has dealt with the figures in the London Borough of Waltham Forest. He can make up figures, but he cannot have the figures for the London Borough of Waltham Forest because that is one of the boroughs whose Labour council has decided not to implement the provisions of the Bill. It has not assessed fair rents in relation to the Bill and therefore the hon. Gentleman is making up another set of fairy tales tonight. Will he tell me where he gets his fair rent figures from? I am afraid that once again the hon. Gentleman is rather quicker with his mouth than with his brain. He would have done well to have remained seated and made sure of his facts before intervening.

There is another matter relating to the London Borough of Waltham Forest about which the hon. Gentleman will have plenty of opportunity to talk, and I hope he will. It is not the subject of rents, because no one can know what the rents are as they have not been assessed. The hon. Gentleman can talk to us about what advice he will give his Labour colleagues on that council over their opposition to the Bill. In that borough, led as ever from the rear, the local Labour Party has decided that it will not implement the Bill. I want to hear what the Opposition spokesman will advise his friends there—[Interruption.] The Minister is implementing the Bill as we always expected it to be implemented. It is no good the hon. Gentleman just sitting there. Can he answer that question?

What will be the advice of the Opposition Front Bench to those in Waltham Forest who have decided to defy the Bill and break the law? Will right hon. and hon. Gentlemen opposite tell them that they are wrong to do that, or will they tell them that they are right in what they are doing? Perhaps we can have several interventions at this stage, because we have had several different versions. There is the Grimsby theory, there is the Willesden theory, there is the Salford. East theory and there is the Bolsover theory. At least we know what the Bolsover theory is—break the law and to hell with it. It is a straightforward approach. The hon. Member for Bolsover (Mr. Skinner) advocates breaking the law.

The point is, what will the hon. Gentleman advocate? Will he write to his colleagues and tell them to break the law, or not?

Mr. McBride

On a point of order. I submit that it is an abuse of the rules of the House, Mr. Deputy Speaker, to suggest that anyone should express an opinion about breaking a law which has not yet been made.

Mr. Deputy Speaker (Mr. E. L. Mallalieu)

Nothing that has been said so far is against the rules of the House.

Mr. Tebbit

If what I have said causes offence, I shall put the question in a different way. In the event of the Bill becoming law and the Labour group on the Waltham Forest Council continuing to say that it will not implement the Act and thus becoming in breach of the law, what advice will Opposition spokesmen give that group'? Or will they just sit there with their heads hanging down and give no advice? Nobody having intervened, I presume that the answer is "None ".

Mr. Crosland

I spoke at some length on this subject in Standing Committee. I should now amend my advice and say "Follow the example of Sir Francis Griffin ".

Mr. Tebbit

I wonder whether the right hon. Gentleman would like to stop what may be described as his deviations round the point at issue and say whether he will advise the Labour group on the Waltham Forest Council to implement the Bill when it becomes an Act, or not? There is no answer to the eternal question that is put to the Opposition: do they believe in law or in anarchy?

There is a question to which my right hon. Friend must give consideration. What will be the fate of the Justices of the Peace in the borough who have voted to defy the law? I trust they will not be allowed to continue to sit on the bench.

It is no good claiming, as hon. Gentlemen opposite did on Thursday night, that the Bill has the full-hearted dissent of the people of Liverpool because of a majority in a poll of about 50 per cent. or 30 per cent. If that is full-hearted dissent, then, whoopee, we have it made whenever we want to claim full-hearted assent for anything.

The Bill before us tonight has the same main aims as it had when it received its First Reading. One purpose is to rationalise rents and bring public and private sector rents throughout the country on to a comparable and similar basis. I take it that no hon. Gentleman objects to that. The Bill also has the aim of rationalising rebates and allowances throughout the country, and I take it that no right hon. or hon. Gentleman opposite objects to that either. Indeed, they issued circulars asking people to do it but did nothing when their circulars were ignored.

For the first time rebates of this kind will be extended to the privately rented sector. By the time the Bill returns from the other place it may contain provisions for rebates in the furnished sector. Hon. Gentlemen opposite have made strong demands for this to be done. When they had an opportunity to do it they said the difficulties were too great. Now we have in power an Administration which, on this as on other important matters, has the will to overcome the difficulties which defeated the Labour Government. The Bill will bring more help to the worse off, both individuals and areas.

Argument has raged about the Bill between hon. Members on both sides for over half a year. Throughout this time I have supported the Bill while hon. Gentlemen opposite have opposed it. The argument will not end tonight or for some years to come. We have waited for a long time to know the housing policy of the Labour Party but always we have been told "It will be made known shortly ". Talk about the dance of the seven veils; this has been the dance of the seven years while we have been waiting for Labour's housing policy to arrive [Interruption.]

The right hon. Member for Grimsby said he would repeal the whole of the Bill. Then he said that he would reenact the good parts of it and scrap what he described as the bad bits. He did not tell the Committee which parts he would re-enact, though I find in theLocal Government Chronicleof 5th May an interesting speculation. This reasonably non-partisan publication, which was quoted by hon. Members on both sides in Committee throughout the deliberations on the Bill, contained a journalist's impression of Reg Freeson's rather equivocal statement on Labour housing policy is that the party is gradually hacking away from its pledge to revoke the Housing Finance Bill. Mr. Crosland made the threat as Shadow Secretary of State but Reginald Freeson, the Shadow Minister. now says that there are more important things to be done by an incoming Labour Government. It is to be welcomed that Mr. Freeson made the party's housing policy clear.… That would certainly be welcomed. The article went on: …apart from on the Bill. I also welcome the cooling off on the Bill because it may discourage those councils who are at present considering defying the Government.

Mr. Freeson

I was on the telephone to the journalist in question this morning soon after I read that article, and he has undertaken to print a correction next week.

Mr. Tebbit

I am looking forward to reading the rest of the saga next week. I hope the hon. Gentleman told the journalist which parts of the Bill will be repealed or whether the Measure will be repealed in its entirety. We look forward to discovering, after all these years, Labour's policy on housing—and it took three paragraphs in theLocal Government Chronicleto get it. What a victory for journalism! I will make sure of getting my copy next week. The housing policy of the Labour Party has been made clear in a telephone call. I hope it will extend to more than three paragraphs.

Mr. Frank Marsden (Liverpool, Scotland)

Get on with it.

Mr. Tebbit

That is strange advice coming from the hon. Gentleman.

Mr. Marsden

I know what I am talking about.

Mr. Tebbit

The hon. Gentleman must not speak from a seated position, whether or not he knows what he is talking about.

It is clear that we are to be denied an authoritative statement from the Labour Party on what they intend to place in the stead of this Bill, when or if they repeal it—and, of course, if or when they become the Government. We await with interest next week's Local Government Chronicle.

Presumably, it would be vain of us to say that those who are not prepared to state what their policy would be in relation to these matters, if they were to form a Government, have no right to vote on the Bill. [Interruption.] Hon. Gentleman opposite find it amusing. But it is tragic that they can sit there waiting for next week's Local Government Chronicleto know what the policy of their party is and yet know that they will vote against a policy which is here on the Table tonight. That is not funny; it is tragic. I am sure that the electorate will think it tragic tonight. If right hon. and hon. Members opposite do not know what their policy is, what they would do or which parts of the Bill they would re-enact after its repeal, if they ever have the chance, all they have the right to do at 11 o'clock tonight is to sit there, as ever, divided, irresolute, unknowing, waiting for the Local Government Chronicleof next week to tell them which Lobby to enter.

8.46 p.m.

Mr. Harry Lamborn (Southwark)

Thank you, Mr. Speaker, for calling me so early in my membership of the House. I pay tribute to my predecessor, Ray Gunter, who earned such a fine reputation here.

I should like to make a brief reference to my constituency, the historic Borough of Southwark. Perhaps it should be more than a borough. A borough with two cathedrals should be accorded the status and dignity of a city.

I was prompted to enter the debate by the reference of the hon. Member for Aylesbury (Mr. Raison) to Southwark and what he called the mass housing, and the suggestion that the Bill, which would encourage houses for sale, could in some way provide a solution to the housing problems of Southwark. The particular development to which the hon. Member was referring, the Aylesbury development, is a development at 130 to the acre. But the problems in areas such as Southwark are that we are at present engaged in clearing outworn tenement blocks which have been in private ownership for years and are a disgrace for people to live in. In one example, cleared within the last 12 months, people were living at a density of 600 to the acre. To suggest that a housing finance Bill which will encourage the provision of houses for sale will be any solution to the problems of the Southwarks and the Inner London area is a fantasy.

In my maiden speech I shall endeavour to be as uncontroversial as I can, but on such a subject as the Housing Finance Bill it will be rather difficult for me to do that. The suggestion that the encouragement to produce houses for sale will provide a solution to future housing needs has already been disproved. The tremendous escalation in housing prices over the past six months has been caused largely by the fact that many council tenants, seeing nothing but rent increases staring them in the face for years ahead, are entering the market for houses for sale, a market with already more would-be purchasers than sellers. All that we shall succeed in doing as a result of the Bill is to escalate the price of housing.

One can well understand the reason for this: the council tenant realising that if he becomes an owner occupier he will, every three years, or every year, or, at the present rate, every six months, have a tremendous capital appreciation, will see nothing in the future as a tenant but a rent appreciation. We are dividing our housing, as we are so many other things, into two classes. The hon. Member for Epping (Mr. Tebbit) spoke of the advantage the rent rebate scheme will have for the less well off tenant, but my hon. Friend the Member for Shoreditch and Finsbury (Mr. Ronald Brown) has already made the point that people who will benefit are those who merely transfer from social security. We have some evidence of how fair rent and rent rebates work, because we know what has happened in the three years during which the Greater London Council has worked a rent rebate scheme.

It is interesting to note that in order to publicise the much vaunted fair rent and rent rebate scheme, a friend of the hon. Member for Epping asked the Greater London Council how many people in Southwark would benefit as a result of the generous rent rebate scheme which had been introduced together with fair rents. The figure given was 6,200. I thought that such a very interesting figure that it should be investigated further, so I asked how many of those 6,200 tenants in Southwark would not have needed rent rebate at all if the rents had not been put up under the fair rents scheme. The figure I was given was 3,000, so half of them would not have needed the rebate if the rents had not first been put up.

I also asked what was the net amount, more or less, that they would have received after the rent had gone up and they had received a rebate. I was told: It appears that the aggregate rent taken from the 6,200 likely to get rebates in October is roughly the same as the aggregate rents they are now paying. So having done all that they finished up where they started from.

I thought that was interesting, so I waited another 18 months, because the figures I had been given were only estimated figures, and then I asked how many of the lucky 6,200 tenants in Southwark actually received a rent rebate. The answer was that there were 1,600 …but the earlier estimate was based on the assumption that the rents would be the fair rent level of 1967 and merely made reference to the fact that the previous Government intervened to stop them accelerating as fast as they otherwise would have done. It is a very interesting exercise in rent rebates, and the House will be very concerned in 18 months' time to see in practice what is the effect of rent rebates and how many people actually benefit. I am certain that the whole object of this exercise is to get more rent from council tenants, and to place them in an entirely different category from others in the housing market.

The hon. Member for Epping asked whether a Labour Government would repeal this Measure. I am quite certain that the electors of Southwark who sent me here last Thursday with such a magnificent majority, with the largest ever percentage poll in Southwark, will expect, as I do, a Labour Government to repeal it.

8.55 p.m.

Mr. Sydney Chapman (Birmingham, Handsworth)

I count it a privilege to have caught your eye, Mr. Deputy Speaker, immediately after the maiden speech of the hon. Member for Southwark (Mr. Lamborn). It is my privilege to welcome the hon. Gentleman and to congratulate him on his interesting and magnificent contribution. I have learned that the hon. Gentleman represents a twin-cathedralled constituency. 1 know that it is a very great part of a very great city. The hon. Gentleman spoke with clarity, conciseness, sincerity. and knowledge of a subject which is obviously at his command. We all greatly respected his predecessor. If the hon. Gentleman's future contributions are like the one he made this evening, he will come to be as great a man as his predecessor

This is a controversial Bill. It took a long time in Committee. I sometimes think that though the dusts of controversy and the mists of time some of the basic philosophy behind the introduction of the Bill has been forgotten. It is as if we cannot see the wood for the trees in all the controversy that has blown up.

My point of view is slightly different from that of most hon. Members. One of the basic problems in housing is what I call the rot of housing that took place during the last two or three decades and which is still taking place. Governments of both complexions since the war have increased the housing output, although both sides when in opposition have criticised the party then in power for not doing as much as the opposition party claimed it would do if it was in government.

Whilst we are building all the new houses, many other houses are going into obsolescence and many others are becoming slums. It is not just a question of trying to clear existing slums. By the time we have done that, new slums have to be cleared. Whether we talk about shortage, about overcrowded conditions in some areas or about obsolescence, some of the housing conditions that remain, particularly in our great cities, two of which are represented, in part at any rate, by the hon. Member for Southwark and myself, are a scandal. This problem has defeated Governments of both complexions since the war.

We cannot excuse ourselves by saying that one of the main causes of the problem is the population explosion which nobody foresaw, least of all the Registrar-General. Nor can we excuse ourselves by saying we did not know that people would get married younger, have children earlier and want homes of their own earlier. Nor can we excuse ourselves by saying that, thanks to medical science, people now live longer and that this in itself causes a problem.

I do not think we can excuse ourselves by saying that it is not our fault and that it is because some parts of the country have had so many immigrants so quickly as to cause social problems and to hinder the solution of the housing problem. I believe sincerely that the main reason for the housing problem is that the system of financing housing is out of date, irrelevant and unfair. It is as if, on the one hand, when building houses we are pouring hot water into the bath and at the same time, with the obsolescence that is occurring, somebody is pulling the plug out.

One of the main criticisms of the existing system of financing housing which we shall face until the Bill gets on to the Statute Book is that the subsidies we have been giving have been indiscriminate in the sense that they have not necessarily been going to the families who need help most. As my hon. Friend the Member for Aylesbury (Mr. Raison) said, whether we are talking about education or hospitals or houses, obviously one can make a case for spending far more money on all these things, and yet we have to face the fact that we have limited resources with which to do so. We shall never spend as much as hon. Members on both sides of the House want to spend on housing. It therefore seems to me all the more important that we should ensure that the limited resources we have—and there may be some argument as to the exact amount —should go to those most in need.

Whether one is talking about housing or other social services, the flat-rate benefit of the Beveridge era, however good it was then—and it was a wonderful thing then—however relevant it was to the 1940s and 1950s, became increasingly irrelevant in the 1960s and is even more irrelevant today. One could make the point—I do not want to be too emotive about it—that of the £220 million that we are spending on housing subsidies at the moment, perhaps only 10 per cent. is going to those families who most need help.

Whatever criticism can be made of the Bill, it has three points in particular that I welcome. It extends the rent rebate system and, of course, in relation to council house tenants it introduces the rent allowance system. Surely that cannot be a bad thing. Secondly it extends the principle of the fair rent, first introduced in the 1965 Act and extended in subsequent legislation.

Thirdly, it gets rid of some of the absurdities and anomalies which exist in our housing policy today as between one local authority and another on the one hand, and between one family and another on the other hand. The rationalisation of this system, provided that it is a fair rationalisation, is a good thing and therefore, if for no other reason, I welcome the Bill.

Mr. George Cunningham

Following the principle which the hon. Gentleman is enunciating, may we take it that he will move an Amendment to the Finance Bill to restrict tax relief for owner-occupiers to those who are most in need?

Mr. Chapman

No, I shall not be moving any Amendments to the Finance Bill. After serving on the Committee on the Housing Finance Bill I shall be taking a slight rest. However, I take the hon. Member's point. I can see that he has a debating point, but I still stand by what I said. The existing system is full of unfairnesses, absurdities and anomalies, but at least we are moving in the right direction.

I will return to that point later if I have time and talk about the question of homes for owner-occupiers. However, since the hon. Gentleman has challenged me and obviously many hon. Members opposite will challenge me on other points concerning the Bill, I sometimes wonder whether some of the criticism that there has been of the Bill from people outside this House as well as from hon. Members opposite arises from the fact that under the Bill some or most rents will go up. If that is the case, I think it is fair to make three points.

First, if the Bill does not get on to the Statute Book, in time all rents will go up in any case. That is a fact which has to be faced, and it is not sufficient to criticise the Bill because certain rents will go up. This is perhaps a debating point and I do not want to put too much stress on it, but if one needs any proof of what I have been saying I would point out that under the last Administration rents increased. They went up in six years by about 70 per cent. Under this new system as proposed in the Bill many rents will go up. but many will come down for families most in need.

I refer here—perhaps hon. Members are bored by this now—to the Birmingham figures. We all know that these figures—I accept that they still have to be confirmed suggest that certain rents will not go up at all and others will go up by not quite £I. The average is 35p. The hon. Member for Swansea, East (Mr. McBride) first gave the figure of 35 per cent.; in fact it is 35p.

Hon. Members opposite and their party supporters challenge those figures and have argued throughout that rents would necessarily double. I shall make one or two criticisms of the Bill in a minute or two, but I must stress the case from this side of the House that the likelihood and extent of an increase in rents has been, to say the least, grossly exaggerated.

Mr. Denis Howell (Birmingham, Small Heath)

I know that the hon. Gentleman approaches these matters in a very fair-minded way. One of the reasons for our doubts about the Birmingham figures is that there is in Birmingham now, as there is elsewhere, a rent assessment committee which is already establishing fair rents in the private sector, and that rent assessment committee is fixing rents for accommodation comparable to municipal accommodation at figures far higher than those which the Minister and the Conservative chairman in Birmingham have given. If their figures are right, one can only say that they bear no comparison to the actual rents now being determined by the rent assessment committee. This is the dilemma which hon. Members opposite have not yet faced

Mr. Chapman

The hon. Member very properly raises that point, and I understand what he means. My own researches. for what they are worth—they have been extremely amateurish—always suggested that rents would not go up to anything like double. I take the hon. Gentleman's point but I can only say that the rents I have looked at do not support the Opposition's case, though I concede that my constituency may not throw up proper averages or necessarily reflect the state of affairs in other Birmingham constituencies.

I come now to one of the criticisms which I have of the Bill, which I think will be shared by other hon. Members on both sides. When making a fundamental change—a change for the good, in my view—in housing finance policy, it is best if the rents which people will have to pay are established before the Bill reaches the Statute Book. [HON MEMBERS: "Hear, hear] They still can be, and in many cases they will be. But it would have removed the opportunity for, if I may say so, petty parochial political points to be thrown across the Floor in the way they have been. There is great sincerity on these matters on both sides, I know, and I feel that it would have been best if the fair rents could have been established so that people would know at an earlier stage what they would have to pay.

Mr. Frank Allaun

The hon. Gentleman is aproaching the matter in a very fair way. He tells us that he never thought rents would rise by very large amounts. Why then, if they would rise only by between 15p and 97p a week, did the Government insist on £1 a week in October, if it had not been for the pressure from the movement outside which caused them subsequently to climb down?

Mr. Chapman

The hon. Gentleman is an expert on these matters and he spoke eloquently and ably in Committee, though I did not necessarily agree with him. With respect, 50p on 1st April. 75p on 1st July or 100p on 1st October in no sense represents a contradiction of what I am saying. I have never denied that rents would go up. But when one speaks of rents going up by £ 1 a week in October, if they are not put up before, that, presumably, takes into consideration inflation and the time when they were last increased. That is in no sense a contradiction of the figures which have come from Birmingham, which have yet to be confirmed. There has certainly been no climb-down as a result of lobbying by tenants' associations and so on. I am quite certain of that.

The second point I would make, which was brought out in Committee with great sincerity on both sides, is the question of half the surpluses going to the Exchequer. I know this brings into consideration the whole question of hypothecated taxation. I know the Treasury will say that the money it receives from the surpluses on the housing revenue accounts, if there are surpluses, will go back into housing in one form or another with much more besides. Examples are the urban aid programme, improvement grants, grants for derelict land and all those sort of things. I accept that but there is the valid point of public relations that people should see that that money is being used for housing.

I would have preferred a system which might sound hypocritical but which would have helped to remove this problem. The housing authorities that made a surplus on their housing revenue account should be allowed to keep the surplus and, if necessary, the rate support grant they receive from the Exchequer should be adjusted. I think that this could not be done because of the law and this would be the official reply, but if so the law should be changed. This is notwithstanding the fact that the rating system is out of date. Proof of that is shown by the fact that on average 60 per cent. of local authority revenue has to come from the Government block grant instead of being raised by the system of rateable values.

It is important on Third Reading of a Bill of this sort to refer, as my hon. Friend the Member for Aylesbury did, to the question not only of providing homes for people but of trying to work out what sort of home or what type of dwelling should be provided. I make no apologies for going back to a survey published by the Opinion Research Centre almost five years ago in 1967 which said two things which 1 believe still hold true today. The survey was done very responsibly and people were asked, recognising the financial situation of their family, what sort of house they would like to live in. I think 68 per cent. of those questioned wanted to become owner-occupiers. The survey included all those people very happily settled in local authority housing. This indicates that there is a tremendous demand, given the financial opportunity, by people to start the process of owning their own home.

Whichever Government are in power should bear that in mind. Because of that there seems nothing wrong necessarily in upsetting the balance of about fifty-fifty between owner-occupiers and those in rented accommodation in favour of producing more homes for those who want to buy them. If that is true the parallel should be accepted. Again I do not put it emotionally in a naïve political fashion, but there seems nothing wrong in therefore continuing the process of selling council houses.

I am worried about the social divisiveness that can be caused by past housing policies. I am sure it must worry many others who have the problem, which is not as great in my constituency as it may be in some Birmingham constituencies. The divisiveness is illustrated by the attitude that council house tenants live on one side of the railway track and we, if we are fortunate enough to be able to say so, live in the nice houses on the nice side of the town.

It is a good thing to break up some of the massive estates in the sense of having willing owner-occupiers playing their part in these communities and making the whole system, from the social point of view, much more open and ultimately much more equal.

It will come as no surprise to hon. Members on both sides to learn that the survey discovered that only 1 per cent. of our families want to live in multi-storey blocks of flats. After the Ronan Point disaster the writing is on the wall for multi-storey blocks of flats as a general rule, if not the exception. I very much hope that is the case. I ask my right hon. and hon. Friends seriously to consider what we can do about the mistake politicians and planners made after the war in thinking that the only choices were to build upwards in our existing urban areas or to sprawl out into suburbia and into our countryside. The planners have now found that it is possible to obtain as great a density with low-level buildings in our existing urban areas as with the multi-storey blocks of flats. Such blocks have almost become virility symbols among local authorities —if one authority has so many blocks 20-storeys high, another must have so many more 30-storeys high.

It should be remembered in comprehensive redevelopment schemes in our cities that multi-storey blocks of flats not only destroy the character of the area that existed before but in many cases destroy the souls of those who have to live in them. There should be a national competition not so much to discover the ideal home and the best design for a house as to discover how attractively we can lay out housing estates at maximum densities and yet make them to the designs that people want to live in, and make a positive contribution to the neighbourhood in so doing.

We talk in the Bill about the politics of housing. Perhaps it is a cheap and easy thing to say outside this Chamber but I believe that the public are beginning to say "A plague on both your parties" in regard to housing policies as they have been for the past 25 years. It is indisputable that housing has suffered from the economic uncertainties caused by or brought about during the periods in office of Governments of both parties since the war.

This massive Bill tries to deal with a massive problem in a fair way. I believe it will put housing in Britain in the last third of the twentieth century on a more rational, more reasonable and more realistic basis. If not on that score alone, but on that main issue, I welcome and support the Bill.

9.18 p.m.

Mr. Michael Meacher (Oldham, West)

I first echo what has been said about the well-argued and forceful speech of my hon. Friend the new Member for South wark (Mr. Lamborn). I particularly congratulate him on his skill in treading the narrow line, the perhaps invisible line, between being relatively uncontroversial and making some emphatic com- ments about the Bill. I am especially pleased to do this not only because I spent some time going around the estates about which he spoke before his dramatic victory last Thursday, and therefore have some experience of what he was talking about, but also because I believe that his constituency has the largest number of tenants of any in the country—98 per cent., I believe. For that reason my hon. Friend's words carry weight. We all look forward to further contributions from him on housing and other matters.

On a Bill that is more concerned with finance than housing, it is remarkable how coy the Minister has been about telling the House the true facts about the financial changes it will bring about. The central factor about the Bill is that it is not, as Ministers have repeatedly claimed, a shift in subsidy from bricks and mortar to families and people. but rather a straight cut in subsidy to council tenants.

According to the latest available figures, the central Government's housing subsidies, plus rate fund contribution and supplementary benefit rent payments. amounted in 1970–71 to £465 million. By 1975–76, when the fair rent system is operational, the best available figures suggest that rent rebate and rent allowance subsidies, plus supplementary benefit rent payment. will amount to only £240 million. If one adds the rate fund contribution to the housing revenue account deficits, the figure rises to about £280 million. But the central point is that this represents a swingeing cut of little short of £200 million, and simply to achieve this central fact it is proposed to build a means test apparatus of unprecederuted bureaucratic proportions.

What it means for the local authorities and the private tenants, if we extrapolate from housing trends of the last five years, is a cut in subsidy from £63 to £33 a year, a reduction on average of almost half. By contrast, over exactly the same period the total of mortgage interest tax relief to owner-occupiers will rise from £300 million to about £400 million, representing on average a rise for the owner-occupier of from about £62 a year to about £68. It is this shift from the poorer half of the nation in favour of the better off other half that lies at the heart of the Bill, and it is entirely consistent with the whole anti-welfare ethos of the Government.

It is equally clearly inconsistent with the principle enunciated in paragraph 5 of the White Paper "Fair Deal for Housing ", which has already been quoted, somewhat curiously, by hon. Members on the Government side. It refers to fairness between one citizen and another in giving and receiving help towards housing costs The size and coverage of some of these rent increases can only properly be described as penal.

Here I take it that we are going by the original figures and not those produced at the last minute by the Minister in a moment of panic opportunism last week. It is therefore likely that 750,000 council tenants will be faced with a compulsory rise, even after rent rebate has been taken into account, of between £1.50 and £2 a week. It is also likely that a million and a quarter tenants with incomes of only up to £10 a week above the national average—the previous figures were below average—will, after rebate, have to pay an extra £3 per week for their homes.

These are huge increases by any standard and they are nevertheless still understatements, because in every case allowance has been made for appropriate rebate being received and all past experience suggests that this is wildly optimistic. It is a bad and sad augury for the Bill that at a time when it is proposed to extend three million means-tested rebates to tenants, the family income supplement, after a publicity campaign costing £500,000, has had a take-up rate over the last few months of under 50 per cent. If the means-tested rebate has a take-up of under 50 per cent., as is likely, the size of future rent increases will be substantially bigger than the Government have tried to predict and quite the reverse of what the Minister tried to make out last week.

Leaving that aside and assuming that rebates are wholly taken up, optimistic though that is, it is clear from existing housing statistics of rent levels and household income that local authority tenants will lose all across the board. That does not in any way exclude those on the lowest incomes. The average council tenant still stands to lose about £50 of his present annual £86 subsidy, which includes supplementary benefit rent payments which are often omitted from calculations. The higher income council tenant will stand to lose £60 a year. Even the lowest income council tenants, those the Bill is intended particularly to help, so we are told, those with incomes of less than £20 a week, will still lose on average about £25 a year, including supplementary benefit rent payments. These are not fair rents: they are grossly unfair rents. and they are made to seem all the more unfair because of the stark contrast in the different treatment between housing groups.

While 4 million tenants with incomes below £40 a week will lose—even with supplementary benefit rate payments taken into account—£150 million. 21 million owner—occupiers with incomes over £40 a week will stand to gain about £57 million over the same period in extra housing aid. These are the financial facts. They have been worked out extremely carefully on the basis of all the information the Minister has given and all the existing housing statistics.

There is another way in which the poor are to be forced to subsidise the rich. It is clear that areas with low rents will produce the most surplus. These rents are to be forced up to the fair rent levels, just as it is true that areas of high rents, which are near the so-called fair rent levels, will need help in order to pay rebates. By this means surpluses as well as subsidies will be drawn from relatively low rent areas to relatively high rent areas. Yet it is low rents that are chiefly in poor regions and high rents that are chiefly in well-off regions.

That means that the areas that have been picked out by the Hunt Report, for instance. as those most in need of economic aid will lose one of the few economic advantages they have left to alleviate the housing problems of better off areas. There is another redistributive distortion in the Bill. It is the power given to local authorities to refuse to pay rent rebates if they are considered to he too large because the accommodation is deemed to be unsuitable for the tenant.

The general tendency following from this can be only for the better-off tenants to he channelled into the better-class areas and for the poorer tenants to be channelled into the lower-class areas. Apart from the ugly discrimination by income that this will inevitably evoke, in the long run there will not be a great saving of public expenditure. This crystallisation, the stratifying, of districts by rent and income is likely in the long run to attract the requirement of costly positive discrimination in both education and environmental programmes. It would be foolish to assume that public expenditure will necessarily be cut by anything like as much as Ministers have indicated.

Even if low income tenants were awarded better class accommodation and given large rebates, many would still not be able to pay a higher rent because, so long as their income exceeds the needs allowance, they are obliged to pay 40 per cent. of the fair rent. The better the accommodation is, the larger is the 40 per cent. in cash terms. Nor is the tenant necessarily better protected since we have been told that the allowance will be only a proportion of the fair rent if the dwelling is much larger than the tenant is supposed to require or is situated in an area of high property value.

We have been given no adequate assurance about the fate of, say, an elderly couple who have been living for many years in a flat in a relatively low income area but who find because of middle-class colonisation that their area becomes popular, relatively fashionable and expensive, a fact quickly reflected in a rapidly rising fair rent. At the same time the local authority refuses to pay the full rebate because the dramatic rise in property values is regarded as making the area unsuitable for these persons. There must be millions of such persons.

It is this social divisiveness even more than the income levels which will tell against the poor man. It is this divisiveness by area which is paralleled by the domestic divisions which will be produced under the Bill, by the sharp cutback in rebate as a result of every extra adult non-dependent member of the household. It is unforgivable that many poor families will have to make a choice between keeping their grandmother with them and losing a rebate or a greater part of it or preserving the rebate and rejecting the grandmother. These things are unforgivable because they are not done as a result of economic necessity but as an odious side-effect of a policy of retrenchment in favour of the rich.

I see the Secretary of State smiling but this Bill is aimed at cutting public expenditure on council tenants to give several hundreds of millions of pounds to the better off, particularly those earning over £5,000 a year. Far from the Bill being an example—as the right hon. Gentleman said with a rather curious irony on another occasion—of practical Socialism, a title by which he chose to geld rather than gild, this Measure, it is the biggest step this Government have taken in the introduction of a new poor law.

9.28 p.m.

Mr. James Allason (Hemel Hempstead)

I am sorry that the right hon. Member for Grimsby (Mr. Crosland) is not with us because I had hoped to address him personally on his remarkable speech when he suffered the most extraordinary loss of memory. He built up a gigantic edifice of an argument based on the premise that the average rent in Birmingham now is only 35p less than what is likely to be a fair rent. He used the most extraordinary phrases, speaking of "illegitimate figures ".

This is strange, since we had figures in Committee. The right hon. Gentleman said that Newcastle and Portsmouth were in a similar position. The figures for Birmingham given by my right hon. Friend were a current rent of £3.25 and a likely fair rent of £3.60, an increase of 35p. The Newcastle figure is a little different although the right hon. Gentleman tried to say it was much the same. The Newcastle rent last year was £2.85 and the average fair rent as quoted by my right hon. Friend in Committee was £3.55 to £4. It is not an increase of 35p but 70p at the minimum. In Portsmouth the average rent last year was £4 and the likely future rent £5.50. So the right hon. Gentleman cannot call Portsmouth in aid. My right hon. Friend gave many other figures—Liverpool, Manchester and Stockport, £3.85; Leicester, £4; Cardiff and Swansea, £3.40. These figures should be compared with the Birmingham figure of £3.60, which the right hon. Gentleman considered to be deliberate deceit.

I know that the situation in Birmingham is an intense embarrassment to the Labour Party because it shows that those rents will not double. The impression which the Opposition have given throughout their fight on this Bill is that rents will double. My right hon. Friend paid tribute to the Opposition's effective propaganda in explaining the Bill to the public. The effect of it is that most tenants believe that profits from wealthy tenants will be used to subsidise needy tenants. They say, "Why should we do this? We already pay our rates and taxes and that is what should be used to subsidise needy tenants ".

There is a deliberately organised confusion in this matter. I do not wish to be harsh on the hon. Member for Oldham, West (Mr. Meacher), because he is an ex-constituent of mine, but he added to the confusion by saying that the most needy tenants would find that they were paying £25 a year more in rent. He managed to prove figures to himself which were totally inaccurate. Taking the typical case of a family with two children and an income of £20 a week, if their rent was £2, they would pay 94p. If their rent was £5 they would pay £1.94, so they would pay under £2 a week. How the hon. Gentleman can pretend that that implies that under the rent rebate scheme that family will have to pay £25 a year more in rent is amazing.

Mr. Meacher

It is not amazing if one takes into account the question of supplementary benefit rent payments plus local authority subsidies. The situation will change because there will be a substantial cutback in supplementary benefit rent payments and after five years it will be the lowest income groups who stand to lose most in the cutback of supplementary benefit payments. That will produce the effect to which I referred.

Mr. Allason

The hon. Gentleman has a certain expertise in this matter and he surely knows that people on supplementary benefit have the whole of their rent and rates paid, and they will continue to have them paid under the Bill. [HoN. MEMBERS: "No."] Yes, they will. They will be paid either by way of relief in rent rebates or by way of supplementary benefit.

Mr. Meacher

Read the Bill.

Mr. Allason

The hon. Gentleman has not had the benefit of listening to 250 hours discussion in Committee.

Mr. Ronald Brown

It did not do you much good.

Mr. Allason

There is a deliberately organised confusion in this matter, with scare talk of high rents and huge profits. It is therefore necessary to consider the total effect of the Bill. The hon. Member for Oldham, West picks out one figure and then tries to prove to his intense satisfaction that it does something. We need to look at the matter in the round. We have a pledge from the Government that the existing level of subsidies will continue to be paid by way of rent rebates and rent allowances. Where there is a profit it will be used for those areas where the housing revenue account is still in deficit.

We know that some local authorities will make a profit and some a loss, and they will continue to make a loss because of the very high cost of housing in some areas. The fact that some of the money goes to the Government and the Government pay it out again is irrelevant. What matters is where the money ends up. The profit will go from the areas which make a profit to those which do not.

This is all a matter of pooling, and every council already has such a pool. There are some rents on which a profit is made on historic costs and that is then used to subsidise the higher costs of later buildings. It is not considered immoral to use the pooling of historic costs. Indeed this was considered by the Labour Government as one means of resolving the great difficulty which lies in the fact that housing subsidies under the 1967 Act are likely to increase to a quite unacceptable level.

The essence of the Bill is that the rebate should be provided for those in need. We know that one-tenth of the present rebate goes to those in need and the rest goes to reduce the general level of housing rents.

Mr. Loughlin

Sit down. You do not know anything about

Mr. Allason

Perhaps the hon. Member for Gloucestershire, West (Mr. Loughlin) would keep quiet for a little while. I know he finds it very difficult at this time of night.

It is self-evident that subsidies should be directed to those in need. Hon. Members opposite who generally support subsidies to those in need now find themselves in difficulty. Therefore, they have tried to find arguments for objecting to this subsidy. One of the arguments involves means tests. The fact that there are 42 other means tests does not worry them, but they do not like this one and they feel that they must condemn it. They use objectionable phrases such as going "cap in hand" to ask for help. This is not the way to regard the matter. Housing is an expensive commodity and help should be given to those who need it. In order to judge the situation we need to have a means test.

This means test is not the old means test of the 1930s. It is on similar lines to income tax. Everybody has to complete a tax form declaring income. And so here it is reasonable, if one wants a reduction in rent, to be asked what one's income amounts to. There is no stigma in this and it is surely reasonable that anybody who needs it should get a rebate.

Another argument against this provision is that it is a disincentive to earnings, and we have heard elaborate arguments about that related not to the Bill but to other matters such as family income supplement. The disincentive in the Bill is that if someone earns an additional pound he will lose 17p of his rent rebate. That seems to be reasonable. It cannot possibly be a disincentive. It is a gradual tapering off in the way that I should expect such a subsidy to go. A subsidy which tapers off at 50 per cent. is unacceptable, and that is where we want to attack the tapering off of subsidies.

What the Bill is still short of is something which I have sought to get all the way through, and that is rent rebates for furnished tenancies. We have had a fairly satisfactory undertaking from my right hon. Friend that they will be introduced. I hope that they will be introduced in this Bill, and soon. My right hon. Friend mentioned the date of 1st April, 1973, as a possibility.

Mr. Loughlin

On a point of order, Mr. Deputy Speaker. It is an axiom that on Third Reading an hon. Member can speak only to what is in the Bill. As furnished tenancies are not referred to in the Bill, the hon. Member for Hemel Hempstead (Mr. Allason) must be out of order.

Mr. Deputy Speaker (Mr. E. L. Mallatieu)

I was allowing the hon. Member a little liberty. I hope that he will confine himself to what is in the Bill.

Mr. Allason

I think you will recall, Mr. Deputy Speaker, that passing references are in order and have been so ruled to be during the course of this debate which the hon. Member for Gloucestershire, West has seldom attended.

The House knows the fight that I have put up for better housing during all the years that I have been a Member. For many years I have criticised both Governments for the size of their housing programmes. I have always believed in the need to fight for more houses than the Department considers is necessary. The abandonment by the previous Government of a target of 500,000 houses a year was a tragedy.

The Bill is a milestone of progress. Nobody in this country need starve. A beggar in the street who says that he is starving need not worry, because help is always available for him. Help is always available for anyone who is sick. This great reform will mean that nobody will be refused a decent home because he cannot afford it. The help will be there for him.

9.49 p.m.

Mrs. Doris Fisher (Birmingham, Ladywood)

In Committee I often remarked that the Government's Housing Finance Bill was different from the one being considered by the Opposition, and it is obvious from the remarks of the hon. Member for Hemel Hempstead (Mr. Allason) that that is so.

My hon. Friends and I have been accused of scaring council tenants. The responsibility for the present situation is entirely the Minister's. At the beginning of the debate in Committee he could easily have said "The maximum rent which I shall allow under the Bill will be £x." The scare has arisen because of the Minister's campaign, not least because even at this stage the right hon. Gentleman has not said what he expects fair rents to be.

I assure the House, having had considerable experience in local government, including in Birmingham, that 10,000 tenants in the Birmingham area were, under the old scheme, enjoying rebates, not taking account of those in receipt of social security payments in respect of rents.

Rebates for council house tenants have been accepted as a part of life since 1919, when the need to subsidise housing was appreciated because of the great shortage. The same goes for income tax rebates or subsidies paid to owner-occupiers. Perhaps the original subsidy in the public sector was open-ended, but over the years it has been adapted to meet the needs of individual local authorities, each of which has appreciated the need for local authority housing subsidies.

The fundamental change made by the Bill—this represents a fundamental difference between the two sides of the House —will mean that eventually, and probably as early as 1981, the whole philosophy of public sector housing as compared with private sector accommodation will alter. The point will be reached when the private sector will be getting subsidy by way of income tax relief while the municipal sector will be getting nothing. The Minister does not deny that considerable surpluses will be built up in many areas.

I have very few minutes in which to speak, and many of the points that I would have made I will not make. Under the 1957 Act local authorities had a stautory obligation to make what were called reasonable charges for their dwellings. The vast majority of councillors and officials are conscientious people and have interpreted" reasonable charges "fairly and in such a way as to reflect building costs, the cost of land, the employment situation locally and wage rates in their areas. Reasonable rents were being charged in Birmingham because those various factors had been taken into account. This applies to the majority of local authority tenants.

In my view a fair rent is a rent that a person can afford to pay without needing a rebate. The council tenant should be able to have rights as an individual. The council tenant has to preserve his dignity in some way. Therefore. he ought to he able to afford the rent of the dwelling in which he lives without going cap in hand and filling in lots of forms. In what we call a fair rent assess- ment, the dignity of the individual is not taken into consideration in the Bill. If rents are fixed under the Bill in such an unfair way that they cannot be paid without rebates by the average person receiving an average wage, the average wage becomes too low and we ought to shift the balance and argue for fair wages instead of fair rents.

It seems a strange phenomenon that those on the Government benches argue in support of a policy for higher rents on the one hand and in the same breath support a reduction in taxes to ease unemployment. That is a complete fallacy. If we accept that 5¼council house tenants are what we call the big spenders in the economy, they are some of the people who are constantly spending their money and keeping the money cycle going. In the main they are not the savers in society generally. If we take money from them in the form of higher rents, obviously we take away from the economy the purchasing power they have in their hands and we increase unemployment.

As for the points of view expressed from the Government benches about housing developments and flats, I become a little weary sometimes about the platitudes used about the kind of local authorities that develop high density flats. I now that Birmingham has more than its fair share of high density flats. But why have all these local authorities more than their fair share of them? My hon. Friend the Member for Southwark (Mr. Lamborn) gave an example of the great densities in his constituency. It is the same in my constituency. But why do we have them in the stress areas? It is because the Aylesburys, the Richmonds, the Sutton Coldfields and the Worcesters will not have us in their areas.

Mr. Raison

Will the hon. Lady give way?

Mrs. Fisher

Not at this time of night, because I have only two minutes left Those are the reasons why the stress areas have to build to such densities. We have no alternative but to build high. We have to get the numbers to the acre

Members on the Government benches are fond of platitudes about this, saying that we ought not to be doing this sort of thing. hey could easily solve the problem. The housing situation in Greater London could be much more easily solved if some of the more affluent boroughs would give some of their land for council properties.

As I said last week, the Bill is vicious and socially divisive, and it saps away all local initiative. It is wildly inflationery. What we ought to condemn it for more than anything else is that it does nothing to relieve the serious housing situation of thousands upon thousands of people who have no prospect of a decent home unless the local authority provides it.

9.59 p.m.

Mr. Reginald Freeson (Willesden, East)

I first had the pleasure of welcoming the maiden speech of my hon. Friend the new Member for Southwark (Mr. Lamborn). Whatever the views are on either side of the House about the Bill and other aspects of housing policy, we can all be agreed that his speech was admirable, to the point, and very well informed. I am sure that my hon. Friends will look forward very much to his future contributions to our consideration of housing policy, just as we look forward, as the people of London look forward, to a Labour victory, with his help, at County Hall this time next year.

It being Ten o'clock, the debate stood adjourned.

Oredered,

That the Consideration of Lords Amendments to the Employment Medical Advisory Service Bill may be proceeded with at this day's Sitting, though opposed, until any hour. —[Mr. Goodhew.]

Question again proposed, That the Bill be now read the Third time.

Mr. Freeson

Before proceeding to deal with the two or three main points that have concerned us in this debate, I want to take up the point made by my hon. Friend the Member for Birmingham, Ladywood (Mrs. Doris Fisher), when towards the end of her remarks she said that the Bill had nothing to contribute towards the solving of the housing problems of thousands, I would say millions, of people living in our stress areas on anywhere near the scale on which we should be tackling them.

I have no doubt that the Bill reflects an aspect of policy, or a total policy on the part of the present Conservative Government seriously to cut back on local authority house building. I am prepared to put a figure to it, and to say that it is in the Government's mind to aim in the local authority house building sector at about 100,000 starts a year and no more.

That is very much in line with the inheritance of the previous Labour Government when they took office from the previous Tory Administration which had talked for years about making slum clearance and the clearance of obsolescent property a first priority. While those Ministers were making grand speeches the Tory Government of that time proceeded to cut the local authority house building programme year by year until it came down to just over 100,000 housing starts —until the 1964 General Election spurt, that is to say. That was the one exception. In all the previous years the programme has steadily dropped.

That is what is in the mind of the Government today in spite of all their talk about solving the problems of obsolescence, and this Bill is part of that policy. They have had nothing to say whatsoever either in the White Paper or in our consideration of the Bill about the urgent need to expand in a major way public investment in house building. That could not have been shown more clearly than in their own White Paper on public expenditure published earlier this year.

We have had a long time on the Bill since last year, and it continues to be either a very bad Bill or an irrelevant Bill. It is bad if its logic, which has been argued by the Government week after week and month after month ever since last autumn, is to be carried into effect. It is irrelevant if the logic of what the Minister and the Under-Secretary had to say on Thursday evening following their consultations with their Tory friends in Birmingham is carried into effect. It is one thing or the other. If it is irrelevant, we have wasted a tremendous amount of time in the House and in the country.

The Bill creates a giant structure of interference. There has never been a housing Bill like it in respect of interference down to the minute detail of what local authorities must do in rent policy to produce something like 10 per cent. in rents in Birmingham overall, for example, if what the Minister has said is to be accepted in the spirit in which he spoke on Thursday.

I want to continue the arguments we have had on the cornerstone of the Bill, which is the so-called fair rents provision. In some areas it will be the market rent less scarcity value. What lies behind the Bill is the concept of the market being introduced into what until now has been a non-profit making public service. For the last half-century that has been the central principle of public authority housing, for the most part undertaken by local authorities, although in some areas housing associations have entered the scene. The non-profit making element will be killed by the Bill if it is carried into effect.

The advocates of so-called fair rents habitually argue that this is the rational way of handling rents in considering housing as a whole. They take the cost value of owner-occupation and, indeed, the more expensive elements in private rented accommodation, at today's costs and set this against rents in the council sector taken at historic costs. They then argue that today rents should be taken at today's costs, no matter how old the houses are and no matter what they cost to build or to maintain.

The logic should be that, if tenants should pay today's costs, so should everybody else, andvice versa. If a large section of the public are paying on the historic costs of their dwellings, so should all tenants. Market rents, based on today's value of property, are not rational, fair or relevant.

All owner-occupiers did not buy their houses yesterday or today. Half of them bought them long ago and own them today outright. The other 50 per cent. bought them at any time in the past 20 or more years and pay today on the amount of the mortgage they raised at the time of the purchase, heavily if they bought recently, very little if they bought their homes 15 or 20 years ago. They enjoy the benefit of historic cost. Every owner-occupier, once he can save the deposit and raise a mortgage for the balance, will have a burden which grows less as he pays off his mortgage in depreciating pounds out of a growing income in most cases. He is protected from future increases in cost. There is a steady fall in the proportion of his income he pays for his dwelling. There is a steady appreciation in the capital value.

Where is the logic and the fairness as between tenant and owner-occupier in denying the benefit of historic cost to tenants while owner-occupiers benefit so greatly from it? This is a complete reversal of 50 years of public authority housing policy. The past objective has been to provide non-profit making houses at rents which the vast majority of tenants can afford to pay. In future, rents will be at levels which nearly half the tenants will not be able to pay without rebates and there will be profits in most local authority areas.

Mr. Peter Trew (Dartford)

Does the hon. Gentleman agree that the cost to the owner-occupier of maintaining, repairing and insuring his house increases yearly, whereas the council tenant has no responsibility for these elements? [An HON. MEMBER: "He has."] If an owner-occupier falls ill or loses his job, he has no recourse to a rebate as the council tenant has.

Mr. Freeson

On the last point, there is recourse to the Supplement Benefits Commission. But there is a very serious question of poverty among many owner-occupiers which has not yet in any way been dealt with by the Government, and I certainly know that up to the change of Government there was a study in process in the Department of Health and Social Security.

On the other point, the hon. Gentleman is wrong. I believe he has had experience of housing in local government.

Mr. Trew indicated dissent.

Mr. Freeson

I stand corrected on that point. But may I draw the hon. Gentleman's attention to the fact that until the Bill becomes law all local authorities operate a housing repairs fund, and a proportion per year per dwelling is put into that fund, calculated as part of the expenditure in the housing revenue account, according to which rents have to be fixed as well as other charges by way of income. Therefore, the hon. Gentleman is wrong. Tenants have to pay their part of the repairs, and in many areas it has been the wrong practice to withdraw the responsibility of local authorities for internal repairs and decorations, particularly in recent years under the administration of the Conservative Party.

Returning to the main theme of my argument, my statement of the position of the owner-occupier has been factual. Otherwise most of us who are owner-occupiers would not be owner-occupiers. We would find it more economic to continue to rent properties.

On the earlier built local authority houses—probably all those built before 1960—rents are paid which either marginally or to a considerable extent exceed the cost of providing or maintaining the dwellings. I am sick and tired of this nonsense from the other side of the House —we had it again this afternoon and this evening—that there is some kind of indiscriminate subsidy paid out to council tenants. The vast majority of council tenants are not subsidised—that applies to practically every local authority dwelling built before 1960—unless they are in receipt of individual family rebates under the existing rebate schemes. As for the later houses, those built within the last decade or 12 years, far less is paid than the cost of providing and maintaining those houses. This applies probably in all areas.

All occupiers pay rents which fairly reflect the relative size and quality of the dwellings they occupy. At least, this is so if a local housing authority is doing its job well, and the vast majority have done so. That is another thing that I am tired of hearing—this constant denigration of local authority housing. We should be proud of our local authority housing. It is an example to the world.

The effect of this policy of what is described as rent pooling is to channel subsidies which are received on all houses to the benefit of the latest and most expensive or to people receiving rent rebates. That is how it should be. If rents are sufficient to cover outgoings, what can be the justification for further rent increases? How can the Conservative Party justify further rent increases in such circumstances, and with even further rent increases, according to the Bill, at three yearly intervals for ever after? We say it should not be done. If on no other ground, it should not be done on a fair comparison of the position of owner occupation and fair treatment for those in the public sector.

If we are talking about freedom of choice, let us get as near as possible to a fair basis of comparison. We have not had that from the Government, and I am trying to correct that position now. I have said that the owner-occupier has the benefit of the historic cost of his property as well as security against future inflation. A new owner-occupier will have the benefit of historic cost during the life of his mortgage. No one suggests that he is not entitled to retain that historic cost benefit, but, in our view in the Labour Party, it follows that tenants also should not be denied a share of such historic cost benefit. In the public sector, the tenant gains as soon as he becomes the tenant, as a result of rent pooling. On the other hand, he must expect rent increases over the years to come, so that, in one way or another, it balances out.

In my view, it is the strength, not the weakness, of public sector housing that historic costs and rent pooling system can restrain the impact of rising costs on tenants of new properties. It is a strength of the system, it should be retained, and this can be done only by large-scale ownership of properties which are then subject to equalisation of rent policies through rent pooling on the historic cost basis.

There can be variations according to local circumstances, there can be flexibility as regards rate contributions and Exchequer contributions, but the basic principle is one towards which local government has correctly been moving on a large scale over many years now, certainly since the Second World War, greatly to the benefit not only of tenants but of the community at large.

I go further and assert that the present intense spiral of inflation in the housing market, about which so much concern is being expressed, might be checked effectively only by reversing present Government policy in public authority housing, that is, by rapidly increasing the scale of local authority building and by retaining a policy of charging reasonably based rents rather than market rents. This could make a major contribution, in my view, in restraining the present rate of inflation in the housing market generally. There is a strong case for retaining a general subsidy system, whatever variations there may be for stress areas and high cost areas, alongside the system of subsidy through tax remission to owner-occupiers in the private sector.

But all that I am saying in opposition to Government policy is sound argument only if the definition of fair rents is market less scarcity value, as in Clause 50. This is the cornerstone of the Bill, the market rent system. We argued in Committee and in the House, as well as in the country, that criteria other than market less scarcity value should be used to establish what could be correctly described as the fair rent, in contrast to what the Government propose.

We argued for various criteria. We argued that housing accounts should be allowed to remain in balance and that, if they went into surplus, local authorities should be allowed to retain the moneys and plough them back to the benefit of their housing estates and local communities. Our Amendments to that end were rejected by the Government. We argued that the basis for rent fixing could be gross values. That also was rejected, or, at best, it was suggested that it might be taken as a marginal criterion only.

We argued that local authorities should be allowed to take into account the general economic circumstances of their area, the wage levels, for example, in arriving at rents. Again, our Amendments were rejected. We argued that they should be allowed to fix rents, as they have in the past, in such a way as to avoid a high proportion of their tenants being compelled to apply for a rent rebate if they were to be able to retain their tenancies and have a reasonable standard of living.

Again, this was rejected by the Government. But now a different situation seems to be emerging. It started before our debate last Thursday. Some of us follow what I believe we inaccurately call the provincial Press. We saw the emergence of this new tale to tell in Birmingham several days before the Minister announced with a great flourish the figures for the proposals he had received from Birmingham.

Some of us obtained copies of the report of the director of housing which has gone through the council and is now presumably in the Minister's hands. There was some denial of this last Thursday. As a result of the report a different picture emerges. The Minister intervened quietly to say there was no denial. We were told no information was yet available to the Minister about the criteria that Birmingham had used to arrive at the figures that the Minister had quoted.

I think I can rightly challenge that statement now. There is reason to believe the information was known to the Department at the time of the debate last Thursday. But if what the Minister and the Under-Secretary said last Thursday about Birmingham was accurate, why have the Bill, as my right hon. Friend the Member for Grimsby (Mr. Crosland) asked at the beginning of the debate? Why go through all this to produce a 10 per cent. increase? It will happen again in London, in Newcastle, Liverpool, Manchester and in every major town and city in this country when similar proposals will be put forward.

I was asked during the course of the debate what my advice would be to Labour councillors. To those who are already in control and to those who have now come into power, my advice would be that as quickly as possible they should instruct their officers to use all the criteria which Labour Members advocated during the Committee stage as the right basis for arriving at genuinely fair rents, in order to prepare their proposals to submit to the Minister. First, they should examine gross values, contrary to what the Minister said in Committee. Second, having done that they should discount shortage in their area by a factor of at least 20 per cent. so that the figure arrived at is at least 20 per cent. below gross value figures. Third, they should seek to obtain accurate figures of average earnings in their area and they should ensure that a large proportion of their tenants will not be forced to apply for a rebate. They should aim for something less than half the 40 per cent. to 45 per cent. that the Government have proposed as the numbers eligible to apply for rent rebate under the Bill. Fourth, they should take account of the type of occupation of their properties—for example, where old people or families with special needs are occupying dwellings in their estates. Fifth, they should ignore, or treat at best as quite marginal, the comparability with rents that have been registered for equivalent properties in the private sector.

All these things they should do to produce rents which will be somewhat in line with the kind of policy that we advocated time and time again in great detail in Committee—criteria which Birmingham has used for presenting its figures to the Minister. We trust that now there has been a change of control in Birmingham that the Minister will not renege on the spirit with which he introduced these figures in the debate last Thursday. We trust that just as he was pleased to announce them in support of the Bill, supported by the Under-Secretary, and notwithstanding the fact that they produce criteria which are out of line with Clauses 50 and 58 of the Bill, he will not now go back on them because his gimmick can no longer be used for political ends in the local elections.

Mr. Tebbitt

May I then confidently tell the Waltham Forest Borough Council that the advice from the Opposition Front Bench is that the Bill should be implemented?

Mr. Freeson

I am pleased to give the advice to my Labour colleagues throughout the country who wish to take it that they should implement the Bill in the same way as the Minister indicated last Thursday on the Floor of the House. I am a great believer in the rule of law, and I trust that all local authorities will follow the implied advice of the Minister and the example of Birmingham in its application and the criteria it used in calculating the rent proposals that have now been put to the Minister. If he is proud to present those figures to the House he cannot at the same time deny their basis, the criteria which the Birmingham Council used to calculate the rents it put to him.

My advice to every Labour authority in the country is to use the same criteria and put forward rent proposals along similar lines to the Government. I do not give a damn whether that blows a hole through the Government's policy. I am concerned, as is everyone in the Labour Party, to get rents on to a basis which is as near non-profit-making as we can have in our society. It is for that reason that I give this advice.

If the Minister wants to fudge tonight, it will not be good enough, and the matter will not end in this debate. I trust that all councils will do precisely what I have advised them to do, so that we get back to some principle in housing—[An HON. MEMBER: "What principle? "] It should be as near as possible to having no profit in public service housing, the principle that all money made by way of rent should be ploughed back into housing and into improving the neighbourhoods where housing estates are established. We argued along those lines in Committee, and sought to table Amendments which time and time again were rejected by the Government. We are glad to have had at least some measure of success in the campaign which we waged throughout the country and which we shall continue to wage after Third Reading. When we come back to office we shall repeal the Bill and introduce into local authority housing fairness, sound principles in finances, and willingness to support local authorities in building homes rather than cutting back on their house-building programmes.

Let the Minister say tonight that his Bill and his policies will drastically increase the rate of local authority house building, and at least there will be some measure of acceptance of his intentions in other directions. At present we are on the road to the lowest number of housing starts by local authorities for the past 15 years. We are running at the 1961 rate. We are 10 years back in the number of houses being built by local authorities.

The Minister has a great opportunity. All over the country Labour councils have been returned within the last few days, councils which, unlike the people they have replaced, have some enthusiasm for solving the housing problems of their areas. We look forward to seeing some co-operation from the Tory Government in support of their endeavours to solve their problems, instead of the undermining, denigrating campaign the Conservatives have been waging in Opposition and in Government against the whole concept of public service in housing.

10.30 p.m.

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

We come towards the end of the Third Reading of this long and controversial Bill. First, I join the hon. Member for Willesden, East (Mr. Freeson) in offering congratulations to the hon. Member for Southwark (Mr. Lamborn) on the occasion of his maiden speech. I had great respect and, indeed, affection for the hon. Gentleman's predecessor. I did not have the privilege of hearing the hon. Gentleman's speech, but from what I have been told it was one which would encourage us to hear him often again.

We have had six debates, including the Report stage, since the fair rents policy was first outlined by my right hon. Friend the Secretary of State for the Environment in 1970. We spent 248 hours in Committee, where we had 57 sittings. It is true that we had a guillotine Resolution, but only after an offer of time, of unprecedented generosity, of five days a week, which was rejected. Since then, we have had what I might call broad debates on issues of principle on Report, in which we have not always had our way. Some of my hon. Friends have made me sit up a bit, and I would like to say to my hon. Friend the Member for Hampstead (Mr. Geoffrey Finsberg) that I hope to meet him at least some of the way in the days ahead, and I fully endorse what my hon. Friend the Member for Paddington, South (Mr. Scott) had to say about the importance of public relations where rent allowances are concerned.

Our Third Reading debate has been much more like a Second Reading debate, and indeed the Opposition's root and branch opposition to the Bill has been a little modified today. By and large they are still clinging, as far as I understand it, to the existing system, but we on this side are convinced that it is no longer appropriate to our needs. It now costs some £200 million a year, excluding supplementary benefit. It would more than double before the end of the decade, involving more taxation and higher rates. All this in itself would be highly inflationary, which would he contrary to the anti-inflation aspects of Government policy. Clearly, nothing would be more inflationary than taxing people as a whole, including people less well off, in order to subsidise people better off than themselves.

Mr. Austen Albu (Edmonton) rose—

Mr. Amery

I will not give way at this stage.

The right hon. Member for Grimsby (Mr. Crosland) has often stigmatised the Bill as essentially a finance Bill, essentially designed to save money. I am not so sure that it will. I have always made it clear in every speech I have made on the subject that I think the re-organisation and re-distribution of subsidies we propose stands on its own merits whether or not it effects a reduction in public expenditure.

Of course, the increase in public expenditure, which under the old system would have been called for, would have been acceptable if it had gone to the people and the areas in need. But most of it does not do so today, and certainly would not do so tomorrow, and we cannot accept a situation where there is no rebate opportunity for a million council houses and where there are many more council houses which get no adequate rebate. Nor can we accept a situation where some three million people in the private sector get no rebate scheme of any kind. Our Bill recognises this through the rent rebate system and the rent allowance system.

Nor can we accept a situation where millions of people still live in slums and substandard housing. As the Bill makes clear, our slum clearance subsidy will be of immense help to those areas which still have a slum problem. Hence our decision to decontrol the private sector to enable landlords to improve their properties in conjunction with improvement grants.

I should have thought that both sides of the House would agree that bad housing conditions were a social evil and marred the environment in which we live. The Bill will give a new impetus to slum clearance by introducing a subsidy for the first time directed specifically at the clearance of slums. It will relieve local authorities of 75 per cent. of any loss on slum clearance whatever the end use to which the cleared land is put. It will remove any financial obstacle to the clearance of our slums.

I do not often quarrel—at least, not in public—with my right hon. Friend, but when referring to slum clearance earlier this afternoon he said that our slum clearance subsidy of £20 million covered a good deal of the loss on slum clearance of £40 million. I have to say that he was wildly inaccurate. Indeed, an error of that size would have been serious in Slater Walker. No doubt the true figure should be known to the House: it is not £40 million, but £400 million; so my right hon. Friend seriously underestimated the amount of good which he is doing to the country.

This subsidy will meet any slum clearance loss incurred from 1971–72 onwards, but the Bill has been amended to make the subsidy available for losses arising from land acquired as long ago as 1st April, 1965—when the Labour Party was in power—if the land was still held for slum clearance on 1st April, 1971. Equally, by converting private controlled tenancies into regulated tenancies, the Bill makes it possible to preserve many houses which would otherwise have become slums. With the help of the fair rent, which has so long been denied them, there is a good prospect that the landlords of these dwellings will now be able to maintain them properly, and this will benefit about 1 million private tenants.

I have often thought that when looking at this subject dispassionately hon. Members on both sides of the House have told themselves that the problem of coping with the slums and sub-standard houses was so daunting as to be impossibly beyond what we could do in our time. This is not true. I am just beginning to get the first returns from the National House Condition Survey. I shall be publishing the full figures quite shortly, but what they show is that the number of slums in clearance areas has dropped from 1.1 million to 700,000 and that the number of sub-standard houses, those lacking basic amenities, has dropped from nearly 4 million to less than 3 million.

There is a prospect, which all of us can see, of clearing up the problem of slums and sub—standard houses within this decade. That is why my right hon. Friend and I have said that there is no financial reason any longer—though we did not know the returns of the survey when we said it—why we should not get rid of the slums and clear up the sub-standard houses within the decade ahead of us.

Nor can we on this side of the House accept the overcrowding that exists today in London and the other conurbations, and our Bill seeks to solve this problem through the rising cost subsidy. Those local authorities who most need to build new housing to meet the housing need are protected from intolerable escalation and the burden on the ratepayers is limited to 25 per cent. The authority will know that this activity will not push up existing rents.

I do not ask the party opposite to endorse every aspect of our proposals. [Laughter.] Let hon. Gentlemen laugh. I ask them to say that rent rebates for all, rent allowances throughout the private sector, a new slum clearance subsidy and a rising costs subsidy to end overcrowding are good things. I ask them to accept that we have made a genuine effort to solve the human problems which they never tried to tackle, in office or since.

Mr. Thomas Swain (Derbyshire, North-East)

You are a problem they cannot solve.

Mr. Amery

The basic principles of the Bill have stood up to the test of a long debate. I confess that the Bill has been improved in many ways since it was first introduced. The national rent rebate scheme has been made more generous by a substantial increase in the needs allowance, by treating one-parent families in the same way as two-parent facilities and by increasing the rebate or allowance when there are pensioners residing with the tenant and his wife. I was much attracted by the suggestion of my hon. Friend the Member for Oxford (Mr. Woodhouse) that at least one member of the Advisory Committee on Rent Rebates and Allowances should have experience of the problems of the chronically sick and disabled and I will ensure that this is carefully looked into.

I come to slum clearance—

Hon. Members

You have done that! Turn over.

Mr. Speaker

Order. The hon. Member for Willesden, East (Mr. Freeson) was listened to in silence. Hon. Members must listen in the same way to the Minister.

Mr. Amery

I come to the slum clearance subsidy which has been made retrospective to 1965. In this context I should like to say that we have been able, as a result of our proposed reforms, to make the yardstick a good deal more elastic. [Interruption.] Where the rising cost subsidy remains the yardstick will remain. Where an authority comes into surplus the yardstick will be advisory. There will be a tolerance of 15 per cent. not borne by the ratepayers. In case the jollifications of hon. Members opposite impeded their hearing, what I said was that the rising cost subsidy remains. There will not be a change in the yardstick but where there is a surplus on the authority's housing revenue account there will be a 15 per cent. tolerance not borne by the ratepayer.

Provision has also been made to reduce the rate of progression to fair rents when tenants would otherwise have to pay more than the fair rent.

Mr. Eric S. Heifer (Liverpool, Walton)

Quarter of an hour to go yet.

Mr. Amery

I do not think I am worried by that. I have time enough.

The Newcastle and Birmingham figures indicate that in a number of cases the provision to reduce rate of progression to fair rents would be needed. We have had the figures from Newcastle which have been studied in some degree by the Department of the Environment. We have had the figures from Birmingham which we are still studying. It is clear that they give the lie to the grotesque allegations of the hon. Member for Salford East (Mr. Frank Allaun) that they involve a doubling of rents.

Mr. Frank Allaun

Four times today the Minister has been posed this question, and will he now answer it: Does he accept that there will be an average 35p increase in Birmingham? If he does, it makes nonsense of his Bill. It is a climb-down, a victory for the tenants, and a return to consensus politics. If he does not accept it, he is deceiving the House by giving credence to these figures.

Mr. Amery

The hon. Gentleman is talking through his hat. I cannot tell today whether the figures are right or wrong, but whether they are right or wrong they do not make nonsense of the Bill. We never said that the Bill would double rents: that was what he said. That was the basis of the scaremongering and irresponsible campaign which he foisted on the country and which I am glad to say had very much less effect at the local elections than some people had expected.

But it was not only the hon. Gentleman who took that view. The right hon. Member for Grimsby said as recently as 4th May: I am not prepared to withdraw the estimate that we on this side of the House have made that unrebated rents will on average double by 1976–77 ".—[OFFICIAL REPORT, 4th May, 1972; Vol. 836, c. 613.] I thought that the right hon. Gentleman had climbed down to the figure of 50 per cent., but on reading HANSARD I saw that he had not come that far to meet the croupier in his demand. The truth is clear. A great many responsible authorities, with responsible officers and responsible members, have put forward their estimate—

Mr. Frank Allaun

How many?

Mr. Amery

I was glad to see that we won the local election at Newcastle handsomely. I have no doubt that the hon. Gentleman saw that even in Manchester there was a 12 per cent. swing to the Conservatives.

Mr. Dan Jones (Burnley)

Answer the question.

Mr. Amery

Every hon. Member is entitled to say, "What about so-and-so?" but it is clear that the figures quoted by Birmingham, a serious local authority, give the lie to the grotesque allegations of doubling of rents and throw a great deal of doubt on the idea that there may even be a 50 per cent. increase in Birmingham. There may be certain areas where the increase will be of some importance. But it would be wrong to draw general conclusions as to fair rents elsewhere on the estimates from Birmingham or Newcastle. Equally, it would be wrong for hon. Members to take the view that, because these estimates are surprisingly encouraging from the point of view of the tenants, they were wrong. [HON. MEMBERS: "Are they right? "] We cannot say. What we can say is that the local authorities concerned—and they are serious local authorities—have confirmed them to us and that they must be treated with respect. They reveal that talk about the doubling of rents is grotesque and place a large question mark on any talk about increasing rents by as much as 50 per cent.

I now come to the central issues of the criticism raised by the Opposition. The Opposition argue that the relief of poverty should be a national and not a local responsibility. They have said that it would be wrong to place this burden on the local authorities and on the rates. But what is happening today? What is the situation as we sit here gathered in the House this evening? In many boroughs—many Socialist boroughs—there are rate fund contributions to keep council house rents down.

Mr. Frank Allaun

Why not?

Mr. Amery

The hon. Gentleman asks, why not? Why is it right to ask ratepayers to contribute towards keeping council rents as a whole down, but wrong to ask them to help towards relieving housing need in both the public arid the private sector through rebates and allowances? Why is it right to subsidise council housing and call on ratepayers to contribute to that, but wrong to tell ratepayers that their money should go towards helping need, whether in council or in private houses?

Hitherto the policy has been to subsidise bricks and mortar. That has been done by both Governments. There is no party point here. That has been done under both Conservative and Socialist Governments since the war. We are changing the policy in order to subsidise, not bricks and mortar but people, human beings, families. Why is it right for ratepayers to contribute towards subsidising general council housing, but wrong for them to contribute towards subsidising the relief of housing need of individuals, whether council house or private sector tenants?

Mr. Dennis Skinner (Bolsover)

If I, as a ratepayer and a mortgagee, get some assistance with the house that I am buying from a council tenant, whether he is better or worse off than I am, what is wrong with the opposite happening and I, as a ratepayer, subsidising a council tenant, whether he is better or worse off than I am?

Mr. Amery

I am coming to that point, and I am glad that the hon. Gentleman has raised it. I see no equity in asking ratepayers to keep down council rents but not to keep down private rents.

The other great question is the one raised by the hon. Member for Bolsover (Mr. Skinner) and that is the question of fair rents and local authority freedom. What should be the criteria? There is no easy answer, but under the previous Government rents went up on council estates by 68 per cent. What is to be the answer? Historic costs are pooled. The right hon. Member for Grimsby talked about the historic costs pool. This would leave local authorities more freedom, but the anomalies and inequalities would be indefensible. In some cases historic costs would be higher than fair rents. In others they would be much lower. What would be paid under the pooled historic costs system would bear no relationship at all to market value or to what the tenant could afford. It would be related only to what the city fathers paid 40 years ago.

Mrs. Renée Short (Wolverhampton, North-East)

Sing us a song.

Mr. Amery

I could understand if, in another place, where there is still some respect for the system of heredity, the idea of pooled historic costs won support as a kind of endorsement—[Interruption.] Hon. Gentlemen opposite who think seriously of adopting pooled historic costs as a criterion should accept that that would make absolutely certain that rents were lower, but for authorities which would never build again, and that is why we took on board the idea of fair rents advocated first by the Labour Party.

We have applied the fair rents principle to council rents for the same reason that hon. Gentlemen opposite applied it to certain private rents; because it is fair that tenants who can afford to pay should pay rents which reflect the fair value of the accommodation, and determining the fair rent is basically a matter of valuation which has been made much easier by the fact that over 300,000 fair rents have now been determined in the private sector.

Hon. Gentlemen opposite argue that rents in the public sector cannot be determined—[Interruption.]—because the procedures for determining them in the private sector are different. But they take into account all the circumstances, including personal circumstances, and—[Interruption.] Hon. Gentlemen opposite are reduced to arguing against fair rents for council tenants on the ground that we are not changing the arrangements for tax relief on mortgage interest paid by owner-occupiers. But this argument could be valid only if the present system was fair as between council tenants and owner-occupiers, which it is not.

The owner-occupier pays the market value for his home and he usually has to find the deposit. He maintains the house at his own expense and receives no rebate. At the beginning of 1971 the average unrebated council rent in England and Wales was £2.50, while the average purchase price of a semidetached house built since 1919 was about £4,700. On the most common terms of a building society mortgage for a first—time purchaser, his average outgoings were about £6 a week after taking account of tax relief, or about two and a half times the average council rent.

It is curious to see hon. Gentlemen opposite adopting a policy which is so opposed to a party supposedly dedicated to equality—[Interruption.]—with their deep-rooted dislike of landlords, however poor, their instinctive suspicion of private ownership—[HON. MEMBERS: "Sit down."] They never thought of allowances in the unfurnished, let alone the furnished sector. Hon. Gentlemen opposite have little concern for tenants in the private sector. They have an instinctive suspicion—[Interruption.]—and non cooperation—[HON. MEMBERS: "Get on with it."]

As for default powers, the right hon. Member for Grimsby said that hon. Gen-

tlemen opposite would have—[Interruption.]—comparable default powers. It might be idle to remind the party opposite in the midnight of their intoxication that they will have a bitter awakening.

Will hon. Gentlemen opposite restore universal subsidies—[HON. MEMBERS: "Enough."]—following the Brighton Conference? Ask Roy—[Interruption.] —and ask Dennis. Will they repeal the rebates, allowances, and—[Interruption.] —what about slum clearance and rising costs? Here we have an Opposition split down the middle like some primitive organism. We witness their ancestral suspicion of landlords and jealousy of ownership—[Interruption.]—as they curry favour with those on council estates. But where is their policy on housing?

It being Eleven o'clock, Mr. SPEAKERproceeded, pursuant to Standing Order No. 43 (Business Committee) and the Orders [13th March and 24th April], to put forthwith the Question already proposed from the Chair.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 292, Noes 268.

Division No. 169.]	AYES	[11.0 p.m.
Adley, Robert	Carlisle, Mark	Fenner, Mrs. Peggy
Alison, Michael (Barkston Ash)	Cary, Sir Robert	Fidler, Michael
Allason, James (Hemel Hempstead)	Chapman, Sydney	Finsberg, Geoffrey (Hampstead)
Amery, Rt. Hn. Julian	Chataway, Rt. Hn. Christopher	Fisher, Nigel (Surbiton)
Archer, Jeffrey (Louth)	Chichester-Clark, R.	Fletcher-Cooke, Charles
Astor, John	Churchill, W. S.	Fookes, Miss Janet
Atkins, Humphrey	Clark, William (Surrey, E.)	Fortescue, Tim
Awdry, Daniel	Clarke, Kenneth (Rushcliffe)	Foster, Sir John
Baker, Kenneth (St. Marylebone)	Cockeram, Eric	Fowler, Norman
Baker, W. H. K. (Banff)	Cooke, Robert	Fox, Marcus
Balniel, Lord	Coombs, Derek	Fraser, Rt. Hn. Hugh(St'fford & Stone)
Barber, Rt. Hn. Anthony	Cooper, A. E.	Fry, Peter
Batsford, Brian	Cordle, John	Galbraith, Hn. T. G.
Beamish, Col. Sir Tufton	Corfield, Rt. Hn. Frederick	Gardner, Edward
Bell, Ronald	Cormack, Patrick	Gibson-Watt, David
Bennett, Dr. Reginald (Gosport)	Costain, A. P.	Gilmour, Ian (Norfolk, C.)
Berry, Hn. Anthony	Critchley, Julian	Gilmour, Sir John (Fife, E.)
Biffen, John	Crouch, David	Glyn, Dr. Aan
Biggs-Davison, John	Crowder, F. P.	Godber, Rt. Hn. J. B.
Blaker, Peter	Davies, Rt. Hn. John (Knutsford)	Goodhew, Victor
Boardman, Tom (Leicester, S.W.)	d' Avigdor-Goldsmid, Maj.-Gen. James	Gorst, John
Body, Richard	Dean, Paul	Gower Raymond
Boscawen, Robert	Deedes, Rt. Hn. W. F.	Grant, Anthony (Harrow C.)
Bossom, Sir Clive	Digby, Simon Wingfield	Gray, Hamish
Bowden, Andrew	Dixon Piers	Green, Alan
Braine, Bernard	Douglas-Home Rt. Hn. Sir Alec	Grieve, Percy
Bray, Ronald	Drayson, G. B.	Griffiths, Eldon (Bury St. Edmunds)
Brinton, Sir Tatton	du Cann, Rt. Hn. Edward	Grylls, Michael
Brown, Sir Edward (Bath)	Dykes, Hugh	Gummer, Selwyn
Bruce-Gardyne, J.	Eden, Sir John	Gurden, Harold
Bryan, Paul	Edwards, Nicholas (Pembroke)	Hall, Miss Joan (Keighley)
Buchanan-Smith, Alick(Angus. N& M)	Elliot, Capt. Walter (Carshalton)	Hall, John (Wycombe)
Buck, Antony	Elliott, R. W. (N' c' tle-upon-Tyne, N.)	Hall-Davis, A. G. F.
Bullus, Sir Eric	Emery, Peter	Hamilton, Michael (Salisbury)
Burden, F. A.	Eyre, Reginald	Hannam, John (Exeter)
Butler, Adam (Bosworth)	Farr, John	Harrison, Brian (Maldon)
Campbell, Rt. Hn. G.(Moray& Nairn)	Fell, Anthony	Harrison, Col. Sir Harwood (Eye)
Haselhurst, Alan	Marples, Rt. Hn. Ernest	Royle, Anthony
Hastings, Stephen	Marten, Neil	Russell, Sir Ronald
Havers, Michael	Mather, Carol	St. John-Stevas, Norman
Hawkins, Paul	Maudling, Rt. Hn. Reginald	Scott, Nicholas
Hayhoe, Barney	Mawby, Ray	Scott-Hopkins, James
Heath, Rt. Hn. Edward	Maxwell-Hyslop, R. J.	Sharples, Richard
Heseltine, Michael	Meyer, Sir Anthony	Shaw, Michael (Sc' b' gh & Whitby)
Hicks, Robert	Mills, Peter (Torrington)	Shelton, William (Clapham)
Higgins, Terence L.	Miscampbell, Norman	Simeons, Charles
Hiley, Joseph	Mitchell, Lt.-Col. C.(Aberdeenshire, W)	Sinclair, Sir George
Hill, John E. B. (Norfolk, S.)	Mitchell, David (Basingstoke)	Skeet, T. H. H.
Hill, James (Southampton, Test)	Moate, Roger	Smith, Dudley (W'wick & L'mington)
Holland, Philip	Money, Ernle	Soref, Harold
Holt, Miss Mary	Monks, Mrs. Connie	Speed, Keith
Hordern, Peter	Monro, Hector	Spence, John
Hornby, Richard	Montgomery, Fergus	Sproat, lain
Hornsby-Smith, Rt. Hn. Dame Patricia	More, Jasper	Stanbrook, Ivor
Howe, Hn. Sir Geoffrey (Reigate)	Morgan, Geraint (Denbigh)	Stewart-Smith, Geoffrey (Belper)
Howell, David (Guildford)	Morrison, Charles	Stodart, Anthony (Edinburgh, W.)
Howell, Ralph (Norfolk, N.)	Mudd, David	Stoddart-Scott, Col. Sir M.
Hunt, John	Murton, Oscar	Stokes, John
Hutchison, Michael Clark	Nabarro, Sir Gerald	Stuttaford, Dr. Tom
Iremonger, T. L.	Neave, Airey	Sutcliffe, John
Irvine, Bryant Godman (Rye)	Nicholls, Sir Harmar	Tapsell, Peter
James, David	Noble, Rt. Hn. Michael	Taylor, Sir Charles (Eastbourne)
Jenkin, Patrick (Woodford)	Normanton, Tom	Taylor, Edward M.(G'gow, Cathcart)
Jennings, J. C. (Burton)	Onslow, Cranley	Taylor, Frank (Moss Side)
Jessel, Toby	Oppenheim, Mrs. Sally	Taylor, Robert (Croydon, N.W.)
Johnson Smith, G. (E. Grinstead)	Orr, Capt. L. P. S.	Tebbit, Norman
Jones Arthur (Northants, S.)	Osborn John	Temple, John M.
Jopling, Michael	Owen, Idris (Stockport, N.)	Thatcher, Rt. Hn. Mrs. Margaret
Joseph, Rt. Hn. Sir Keith	Page, Graham (Crosby)	Thomas, John Stradling (Monmouth]
Kellett-Bowman, Mrs. Elaine	Page, John (Harrow, W.)	Thomas, Rt. Hn. Peter (Hendon, S.)
Kershaw, Anthony	Parkinson, Cecil	Thompson, Sir Richard (Croydon, S.
Kilfedder, James	Percival, Ian	Tilney, John
Kimball, Marcus	Peyton, Rt. Hn. John	Trafford, Dr. Anthony
King, Evelyn (Dorset, S.)	Pike, Miss Mervyn	Trew, Peter
King, Tom (Bridgwater)	Pink, Rr. Bonner	Tugendhat, Christopher
Kinsey, J. R.	Powell, Rt. Hn. J. Enoch	Turton, Rt. Hn. Sir Robin
Kirk, Peter	Price David (Eastleigh)	van Straubenzee, W. R.
Kitson, Timothy	Prior, Rt. Hn. J. M. L.	Vaughan, Dr. Gerard
Knight, Mrs. Jill	Proudfoot, Wilfred	Vickers, Dame Joan
Knox, David	Pym, Rt. Hn. Francis	Waddington, David
Lambton, Antony	Quennell, Miss J. M.	Walker, Rt. Hn. Peter (Worcester)
Lane, David	Raison Timothy	Walker-Smith, Rt. Hn. Sir Derek
Legge-Bourke, Sir Harry	Ramsden, Rt. Hn. James	Walters, Dennis
Le Marchant Spencer	Rawlinson, Rt. Hn. Sir Peter	Ward, Dame Irene
Lewis, Kenneth (Rutland)	Redmond, Robert	Warren, Kenneth
Lloyd, Rt. Hn. Geoffrey(Sut'nC'dfield)	Reed, Laurance (Bolton, E.)	Wells, John (Maidstone)
Lloyd, Ian (P'tsm'th, Langstone)	Rees, Peter (Dover)	White, Roger (Gravesend)
Longden, Gilbert	Rees-Davies, W. R.	Wiggin, Jerry
Loveridge, John	Renton, Rt. Hn. Sir David	Wilkinson, John
Luce, R. N.	Rhys Williams, Sir Brandon	Woodhouse, Hn. Christopher
MacArthur, Ian	Ridley, Hn. Nicholas	Woodnutt, Mark
McCrindle, R. A.	Ridsdale, Julian	Worsley, Marcus
McLaren, Martin	Rippon, Rt. Hn. Geoffrey	Wylie, Rt. Hn. N. R
Macmillan, Maurice (Farnham)	Roberts, Michael (Cardiff, N.)	Younger, Hn. George
McNair-Wilson, Michael	Roberts, Wyn (Conway)
McNair-Wilson, Patrick (New Forest)	Rodgers, Sir John (Sevenoaks)	TELLERS FOR THE AYES:
Madden, Martin	Rossi, Hugh (Hornsey)	Mr. Walter Clegg and
Madel, David	Rost, Peter	Mr. Bernard Weatherill.
NOES
Abse, Leo	Booth, Albert	Cohen, Stanley
Albu, Austen	Bottomley, Rt. Hn. Arthur	Coleman, Donald
Allaun, Frank (Salford, E.)	Boyden, James (Bishop Auckland)	Concannon, J. D.
Allen, Scholefield	Bradley, Tom	Conlan, Bernard
Archer, Peter (Rowley Regis)	Broughton, Sir Alfred	Corbet, Mrs. Freda
Armstrong, Ernest	Brown, Bob (N'c'tle-upon-Tyne, W.)	Cox, Thomas (Wandsworth, C.)
Ashley, Jack	Brown, Hugh D. (G'gow, Provan)	Crawshaw, Richard
Ashton, Joe	Brown, Ronald (Shoreditch & F'bury)	Cronin, John
Atkinson, Norman	Buchan, Norman	Crosland, Rt. Hn. Anthony
Bagier Gordon A. T	Buchanan, Richard (G'gow, Sp'burn)	Crossman, Rt. Hn. Richard
Barnes, Michael	Butler, Mrs. Joyce (Wood Green)	Cunningham, G. (Islington, S.W.)
Barnett, Guy (Greenwich)	Callaghan, Rt. Hn. James	Cunningham, Dr. J. A. (Whitehaven
Barnett, Joel (Heywood and Royton)	Campbell, I. (Dunbartonshire, W.)	Dalyell, Tam
Baxter, William	Cant, R. B.	Darling, Rt. Hn. George
Benn, Rt. Hn. Anthony Wedgwood	Carter, Ray (Birmingh'm, Northfield)	Davidson, Arthur
Bennett, James (Glasgow, Bridgeton)	Carter-Jones, Lewis (Eccles)	Davies, Denzil (Llanelly)
Bidwell, Sydney	Castle, Rt. Hn. Barbara	Davies, Ifor (Gower)
Blenkinsop, Arthur	Clark, David (Colne Valley)	Davis, Clinton (Hackney, C.)
Boardman, H. (Leigh)	Cocks, Michael (Bristol, S.)	Davis, Terry (Bromsgrove)

Deakins, Eric	Jones, Gwynoro (Carmarthen)	Pentland, Norman
Dell, Rt.Hn. Edmund	Jones, T. Alec (Rhondda, W.)	Prentice, Rt. Hn. Reg.
Dempsey, James	Kaufman, Gerald	Prescott, John
Doig, Peter	Kelley, Richard	Price, J. T. (Westhoughton)
Dormand, J. D.	Kerr, Russell	Price, William (Rugby)
Douglas, Dick (Stirlingshire, E.)	Kinnock, Neil	Probert, Arthur
Driberg, Tom	Lamborn, Harry	Rankin, John
Duffy, A. E. P.	Lambie, David	Reed, D. (Sedgefleld)
Dunnett, Jack	Lamond, James	Rees, Merlyn (Leeds, S.)
Eadie, Alex	Latham, Arthur	Rhodes, Geoffrey
Edelman, Maurice	Lawson, George	Richard, Ivor
Edwards, Robert (Bilston)	Leadbitter, Ted	Roberts, Albert (Normanton)
Edwards, William (Merioneth)	Lee, Rt. Hn. Frederick	Robertson, John (Paisley)
Ellis, Tom	Leonard, Dick	Roderick, Caerwyn E.(Br'c'n&R'dnor)
English, Michael	Lestor, Miss Joan	Rodgers, William (Stockton-on-Tees)
Evans, Fred	Lever, Rt. Hn. Harold	Roper, John
Ewing, Henry	Lewis, Arthur (W. Ham, N.)	Rose, Paul B.
Faulds, Andrew	Lewis, Ron (Carlisle)	Ross, Rt. Hn. William (Kilmarnock)
Fernyhough, Rt. Hn. E.	Lipton, Marcus	Rowlands, Edward
Fisher, Mrs. Doris (B' ham, Ladywood)	Loughlin, Charles	Sandelson, Neville
Fitch, Alan (Wigan)	Lyon, Alexander W. (York)	Sheldon, Robert (Ashton-under-Lyne)
Fletcher, Raymond (Ilkeston)	Lyons, Edward (Bradford, E.)	Shore, Rt. Hn. Peter (Stepney
Fletcher, Ted (Darlington)	Mabon, Dr. J. Dickson	Short,Rt.Hn.Edward(N'c'tle-u-Tyne)
Foley, Maurice	McBride, Neil	Short, Mrs. Renée (W'hampton.N.E.)
Foot, Michael	McCartney, Hugh	Silkin, Rt. Hn. John (Deptford)
Ford, Ben	McElhone, Frank	Silkin, Hn. S. C. (Dulwich)
Forrester, John	McGuire, Michael	Silverman, Julius
Fraser, John (Norwood)	Mackenzie, Gregor	Skinner, Dennis
Freeson, Reginald	Mackie, John	Small, William
Galpern, Sir Myer	Mackintosh, John P.	Smith, John (Lanarkshire, N.)
Garrett, W. E.	Maclennan, Robert	Spearing, Nigel
Gilbert, Dr. John	McMillan, Tom (Glasgow, C.)	Spriggs, Leslie
Ginsburg, David (Dewsbury)	Mahon, Simon (Bootle)	Stallard, A. W.
Golding, John	Mallalieu, J. P. W. (Huddersfield, E.)	Steel. David
Gordon Walker, Rt. Hn. P. C.	Marks, Kenneth	Stewart, Donald (Western Isles)
Gourlay, Harry	Marquand, David	Stewart, Rt. Hn. Michael (Fulham)
Grant, George (Morpeth)	Marsden, F.	Stoddart, David (Swindon)
Griffiths, Eddie (Brightside)	Marshall, Dr. Edmund	Stonehouse, Rt. Hn. John
Griffiths, Will (Exchange)		Summerskill, Hn. Dr. Shirley
Hamilton, William (Fife, W.)	Mason Rt. Hn. Roy	Swain, Thomas
Hamling, William	Mayhew, Christopher	Thomas, Rt. Hn. George (Cardiff,W.)
Hannan, William (G'gow, Maryhill)	Meacher, Michael	Thomson, Rt. Hn. G. (Dundee, E.)
Hardy, Peter	Mellish Rt Hn Robert	Thorpe, Rt. Hn. Jeremy
Harper, Joseph	Mendelson, John	Tinn, James
Harrison, Walter (Wakefield)	Mikardo, Ian	Tomney, Frank
Hart, Rt. Hn. Judith	Millan, Bruce	Torney, Tom
Hattersley, Roy	Miller, Dr. M. S.	Tuck, Raphael
Healey, Rt. Hn. Denis	Milne, Edward	Urwin, T. W.
Heffer, Eric S.	Mitchell, R. C. (S'hampton, Itchen)	Varley, Eric G.
Hooson, Emlyn	Molloy, William	Wainwright, Edwin
Horam, John	Morgan, Elystan (Cardiganshire)	Walden, Brian (B'ham, All Saints)
Houghton, Rt. Hn. Douglas	Morris, Alfred (Wythenshawe)	Walker, Harold (Doncaster)
Howell, Denis (Small Heath)	Morris, Charles R. (Openshaw)	Wallace, George
Huckfield, Leslie	Moyle, Roland	Watkins, David
Hughes, Rt. Hn. Cledwyn (Anglesey)	Mulley, Rt. Hn. Frederick	Weitzman, David
Hughes, Mark (Durham)	Murray, Ronald King	Wellbeloved, James
Hughes, Robert (Aberdeen, N.)	Oakes, Gordon	Wells, William (Walsall, N.)
Hughes, Roy (Newport)	Ogden, Eric	White, James (Glasgow, Pollok)
Hunter, Adam	O'Halloran, Michael	Whitehead, Phillip
Irvine,Rt.Hn.SirArthur(Edge Hill)	Oram, Bert	Whitlock, William
Janner, Greville	Orbach, Maurice	Willey, Rt. Hn. Frederick
Jay, Rt. Hn. Douglas	Orme, Stanley	Williams, Alan (Swansea, W.)
Jeger, Mrs. Lena	Oswald, Thomas	Williams, Mrs. Shirley (Hitchin)
Jenkins, Hugh (Putney)	Owen, Dr. David (Plymouth, Sutton)	Williams, W. T. (Warrington).
Jenkins, Rt. Hn. Roy (Stechford)	Padley, Walter	Wilson, Alexander (Hamilton)
John, Brynmor	Paget, R. T.	Wilson, Rt. Hn. Harold (Huyton)
Johnson, Carol (Lewisham, S.)	Palmer, Arthur	Wilson, William (Coventry, S.)
Johnson, James (K'ston-on-Hull, W.)	Pannell, Rt. Hn. Charles	Woof, Robert
Johnson, Walter (Derby, S.)	Perry, Robert (Liverpool, Exchange)
Jones, Barry (Flint, E.)	Pavitt, Laurie	TELLERS FOR THE NOES:
Jones, Dan (Burnley)	Peart, Rt. Hn. Fred	Mr. James Hamilton and
Jones,Rt.Hn.Sir Elwyn(W.Ham,S.)	Pendry, Tom	Mr. Ernest G. Perry.
Question accordingly agreed to.
Bill read the Third time and passed.