HC Deb 24 July 1975 vol 896 cc1223-49

3 p.m.

Mr. Teddy Taylor (Glasgow, Cathcart)

I beg to move Amendment No. 93, in page 4, line 28, at end insert 'and will be related to the total of any subsidy paid under section 5 above having regard to the proportion of publicly owned housing stock which is located in Scotland'. Hon. Members who have been waiting throughout the night will be relieved to hear that this is the only Scottish amendment to this very important Bill. It is regrettable that, although we have present members of the Labour, Liberal and, as always, Conservative Parties, there is not one member of the Scottish National Party present. The Committee and the people of Scotland will be shocked and offended that, when we are discussing a vital issue affecting almost two-thirds of Scotland's population, namely, tenants of publicly-owned houses, no member of the SNP is here. It is plain that Scottish patriotism stops at midnight for the SNP. I am sure that Scottish Members and the Scottish people will take careful account of that fact.

This amendment is designed to do two things. First—

Mr. Tam Dalyell (West Lothian) rose

Mr. Taylor

No. I am just starting my case.

First, the amendment is designed to clarify the Government's intentions on the most unspecific of all the clauses. The clause simply states that the Secretary of State will have power to pay a subsidy as he thinks fit.

The second reason—[Interruption.] I hope that the Chancellor of the Exchequer is listening, becaue this is a vital Scottish issue. I know that he has been keeping long hours and has been listening to the matters raised by English Members, but at a time when Scotland has well over 100,000 people unemployed Scottish matters are desperately important for any Chancellor of the Exchequer.

The second reason for the amendment is that it gives us an opportunity to restate the basic philosophy of the Scottish Conservative Party. We are bitterly opposed to indiscriminate, illogical and inflationary subsidies as a principle, but if indiscriminate, illogical and inflationary subsidies are on offer we wish to ensure that Scotland gets its fair share.

Fighting for fair shares is, as the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) is well aware, the traditional job of the Secretary of State for Scotland. It is highly regrettable that the present Secretary of State has not been very successful in fighting for fair shares for Scotland, as we see from this Bill and as we have seen in many other instances. We had an example only yesterday when we were discussing the appalling problem of rates in Scotland.

Hon. Members representing English constituencies who have listened patiently to the debates on the Bill will be aware that we had an appalling problem last year. The Chancellor of the Exchequer was particularly aware of it. Because of his generosity, and because of the probing and agitation by the Secretary of State for the Environment, the Chancellor was able to announce a special rates subsidy to give help to English ratepayers faced with the alarming increases resulting from local government reform. We should pay tribute to the Secretary of State for the Environment for the hard work he did in fighting for that.

In Scotland, our local government reorganisation is a year late. It has come a year after the English local government reorganisation. In Scotland we have exactly the same problem, if not worse, because of local government reform. In the constituency of my hon. Friend the Member for Bute and North Ayrshire (Mr. Corrie) so bad has been the rate rise that ratepayers on the island of Arran have decided to stage a rate strike. Although in no circumstances would anybody in this Committee support unconstitutional or illegal action, we can understand the frustration of the people of Arran and other areas.

The Chancellor of the Exchequer had the Secretary of State for the Environment banging on his door day after day asking him to deal with the problem of the English rate rises in England, and asking him to help. The Chancellor did help. He brought in a special scheme costing £100 million whereby ratepayers facing an increase of more than 20 per cent. were able to get 60 per cent. off the cost, paid for by the Chancellor from his meagre treasury One year later, when Scotland is facing this emergency local government reform, and when he has the Secretary of State for Scotland banging on his door asking to do something similar, I should like to know why the Secretary of State for Scotland has not succeeded I mention this in connection with this amendment because our experience has been that the present Secretary of State has not been successful in fighting for fair shares, or else he has not been trying. I hope the Chancellor will clarify this point.

This clause is basically different from the previous clause because the laws of housing rents in Scotland are different from those in England and Wales—

The Chancellor of the Exchequer (Mr. Denis Healey)

The hon. Gentleman has asked me to make the position clear. I am sure he recognises that interdepartmental door bangings are covered by the Official Secrets Act.

Mr. Taylor

That is unfortunate. I was hoping that the Chancellor could make an exception here.

The people of Scotland, in one voice, are asking why the Secretary of State for Scotland, who has been banging at the Chancellor's door, has not been successful as the Secretary of State for the Environment was last year. The ratepayers in Scotland are suffering the consequences, and that is why we are having these justifiable complaints from our ratepayers.

The Scottish rents law is quite different from that in England and Wales. Whereas the English and Welsh Act of last year did not provide for any limitation on the increase in rents the Scottish Bill had an absolute limit of £39 for any one publicly-owned house. In other words, it is already contrary to the law for any local authority in Scotland to increase its rents this year by more than £39. Obviously, under the present Bill and under the White Paper, when the Chancellor says that rent increases should be limited to an average of 60p a week, it works out rather similar to the Scottish position of a maximum of £39 a year.

If we were to follow the same basis as Clause 5 there would be no assistance for Scotland at all. Therefore, we must have provision for something a little different. We require something special. We appear to have something special in Clause 6. Unfortunately, hon. Members will observe that Clause 6 is the most unspecific clause which has ever been in any Bill. It does not say how much the subsidy is going to be. It does not say how the subsidy is going to be calculated, and it does not say how it is going to be distributed.

The purpose of our amendment is to stiffen things up and to make the position clear. The formula of the amendment is quite simply fair shares for all. If something is going to England and Wales to help council tenants, something comparable should go to Scotland. I hope that the drafting of our amendment is correct and that the Minister will not say that it is wrong, because we tried our best at a late hour.

The purpose of the amendment is to ensure that the £80 million that is available will be distributed on a percentage basis, which should reflect the number of publicly-owned houses in Great Britain as a whole. If we were to distribute the £80 million merely on a population basis Scotland would probably be entitled to only approximately £8 million. It would be appropriate for Scotland to receive a share of approximately 16 to 17 per cent. because that is our percentage of the United Kingdom publicly-owned housing stock.

There is a precedent for this, because when the Secretary of State for Scotland told us that unfortunately public authority housing expenditure was to be cut in Scotland—it was quite hair-raising to hear him talking about cuts in housing when we remember what he said when the Conservatives were in power and pursuing a very sucessful housing policy—we had a cut of £10 million compared with the United Kingdom total of £65 million. In other words, we had far more than our share of housing cuts. The figures are all set out in answers to Written Questions that I asked. Scotsmen unanimously asked themselves the following morning "Why should Scotland have a £10 million housing cut when the country as a whole is only having a £65 million cut?" The answer was that Scotland had a larger proportion of publicly-owned houses.

We are saying that if this policy is good for housing cuts it should also be good for any extra subsidies. Our argument is that these subsidies should be distributed in Scotland to ensure that we get our 16 per cent. or 17 per cent. of the £80 million. This would be only fair, because we have a far higher proportion of publicly-owned houses in Scotland.

There are concerning the amendment a number of detailed questions I should like to ask. The White Paper says that there will be an average 60p per week increase, which is like 12 shillings in the good old money before we had all these wretched changes. That sum would appear to work out at an average of approximately £31 to £32 per year, but the Scottish housing law says that there should be a maximum of £39. If there is a £39 increase for, say, a five-roomed apartment there will obviously be a much lower increase for a one- or two-roomed apartment. On average the figures would work out at approximately £31 to £32. Does this mean that the figure of £39 no longer applies, or will it still be possible, bearing in mind the White Paper projection of an average of about £32 per year, that council house rents in Scotland will go up by the £39 set out in the Act of 1975? The answer is probably "Yes", but that the average must be 60p per week.

Secondly, will local authorities be penalised if they do not charge 60p per week extra? This matter was dealt with rather loosely in the last debate, but on this amendment it is important that we should know whether local authorities will have their grants cut if they do not put up the rents. We must get this matter clear. The Minister will regret as do many of his colleagues, that the Government ever repealed our Housing (Financial Provisions) (Scotland) Act, which called for rent increases of 50p per week on average. They are now sending circulars, threats, bribes and everything under the sun, saying "Please put up your rents". Some of the local authorities in Scotland are telling the Government to go and jump. What is the position of a local authority which refuses to put up its rents? Indeed, there have been a good number of cases reported in the papers recently, concerning Dundee, Glasgow and elsewhere.

3.15 p.m.

If the Government decide to cut their grants it would be desperately unfair to ratepayers who are not council tenants. By not increasing rents, a bigger burden would be placed on the rates, which everyone has to pay, but any reduction in the grant would have to be borne by those who are not council tenants and are not paying lower than average rents. What will be the grant position of local authorities who have already decided to charge average rent increases this year of £39? One or two authorities have done this.

We made our ideological position clear on the last clause. If the Committee agrees that we are to have these new subsidies, we want to make sure that the Secretary of State has fought hard to ensure that Scotland gets its fair share. Unfortunately, our experience of the Secretary of State is that he was probably the most aggressive Secretary of State fighting for Scotland while he was in Opposition, but he has been an abysmal failure since moving into St. Andrew's House. If we need proof of that fact we only have to remember his statement that if unemployment reached 100,000 in Scotland any honourable Secretary of State would resign. We now have well over 100,000 people unemployed in our country, but the Secretary of State has not yet made his position clear.

The amendment is fair and reasonable and I believe we can count on the support of all fair and reasonable hon. Members.

Mr. Grimond

I much enjoyed the speech of the hon. Member for Glasgow, Cathcart (Mr. Taylor), particularly his restatement of Conservative philosophy, which seemed to be: "If you cannot beat them, join them".

I think that far too high a proportion of housing in Scotland is concentrated on estates, which are dreary, to a great extent disliked by those who live on them, and the management of which should be changed. Rents are often too low, although I accept that in some cases, for some people, they may be too high. It would be to our benefit if there were some bright building in Scotland, and more home ownership. I would like to see some estates handed over to the tenants.

The reorganisation of local government carried out by the last Conservative Government, in advance of the Scottish Assembly, was one of the most expensive and inflationary moves ever made in our country. The right hon. Member for Sid-cup (Mr. Heath) particularly mentioned in his speech this week that the last time there was an attempt to enforce an incomes policy, one of the great difficulties was the very high expenditure by local authorities. One must credit the Government for paying attention to this matter this time, and attempting to enforce reasonable economies on local authorities. I welcome this, because the growth in local authorities and public bodies, in terms of numbers and remuneration, is out of this world.

This is a rather vague clause, but I take it that the position of house building is unchanged. There is great anxiety in my constituency. I presume the operations of the Scottish Special Housing Association are unchanged. I also take it that there is no intention by the Government to make any changes in the improvement grants system, although I think they provide a way in which much housing could be improved.

The clause contains no figure of the sums of money that are involved. Perhaps the Secretary of State can also give us some information about the principles on which his determination of rent limitation subsidies will be made.

I reiterate what has been said, that housing is a particularly important matter in Scotland. It has always been important in the West of Scotland, but it is becoming more important in areas which are undergoing new development. I accept that there are great savings to be made in local authority expenditure, and I do not deny that there is scope for change and economy in the Scottish housing programme, but I say that we should take care, with so much legislation going through Parliament, to make sure that we do not do things in one Bill which contradict what we are trying to do in another. I take it that the Government's policy is to maintain the flow of housing, and that they are satisfied that nothing in the Bill will run contrary to that.

Mr. Hugh D. Brown

I may have to make one or two provocative remarks in reply to the hon. Member for Glasgow, Cathcart (Mr. Taylor). I assure the hon. Member for Glasgow, Hillhead (Mr. Galbraith) that this is not a normal Friday, and if he wants to leave now he is more than welcome to do so.

The right hon. Member for Orkney and Shetland (Mr. Grimond) raised issues which do not arise in the clause. The house building programme is not involved; neither is the amount of money which is spent on improvement grants. The figure about which he asked is in paragraph 35 of the White Paper, in which the assumption is made that it should be about 40p a week for every council house in the year 1976–77.

I do not think that we should apologise for having what I hope will be a brief debate on Scottish housing. We are considering a most important matter and we are talking of a sum of around, and possibly above, £12 million, which will be available for local authorities in Scotland.

The public are often critical and a bit cynical about politicians, and the hon. Member for Cathcart has provided one of the worst examples. The Opposition voted on an amendment which dealt with indiscriminate subsidies. They voted against Clause 5, which is the English counterpart of this Scottish provision, although clearly the principle behind it was the redistribution of money. For some reason principles can be overcome by the Scottish Conservatives wherever money is involved. I had better not overdo my criticism, because I gather that the Conservatives are not planning to vote on the amendment.

Mr. Teddy Taylor

The Minister is surely aware that the Committee will decide how it will vote, depending on his answer. If he were to give us more facts and a little less arrogance we should be able to come to a decision more quickly. Does he not agree that it is the job of the Secretary of State for Scotland to make sure that irrespective of policies, if cash is coming from the Treasury it is surely right and proper that Scotland should get a share? Surely it is a condemnation of the Secretary of State that he failed totally to get what England achieved last year in the special rate subsidy.

Mr. Brown

I am talking about the additional rent subsidy. I gather that the policy of the Opposition, as evidenced by the vote on Clause 5, is that they do not want these indiscriminate subsidies. I know that there is confusion in the Conservative Party generally but there is even further confusion now, because the Scottish part of the party does not agree with the English part.

I know that the hon. Member had a long and tiring night thinking up arguments that are not very sound. I am sorry to have to disappoint him, but in my opinion the amendment is not necessary because about £12 million is the portion of the £80 million that would be due to us on the basis of the number of council houses. The irrelevant comparisons that he is trying to make about public expenditure cuts relate to housing expenditure as a whole. We are dealing here with only one narrow aspect, namely, the number of council houses. The hon Gentleman was not making a very good point.

Mr. Teddy Taylor

Does the hon. Gentleman mean council houses or publicly-owned houses? It is important.

Mr. Brown

I am talking about council houses, because, as the hon. Gentleman should know, publicly-owned houses, SSHA or new town houses do not come within normal housing finance. They are financed in a separate way, by deficit. The same provision will be taken into account in assuming what the rent increase liability is next year. In my opinion the amendment is unnecessary, because there is no doubt that the Secretary of State has got the fair share that is rightly due to the council tenants in Scotland if there is to be this subsidy.

On a technical point, the amendment is deficient because it would not have the desired effect. I am not being evasive. Hon. Members should appreciate that we cannot estimate precisely what the subsidy will cost, either for England or for Scotland. The total amount is £80 million, and we cannot give the precise figure for the obvious reason that we have not discussed in detail with local authorities how we should distribute it. We do not anticipate—this might be a minor point in Scotland but it has greater significance in England—giving subsidies to authorities whose housing accounts are already in balance. We should be prevented by statute from doing so. This is one example at the top end. Not every authority could qualify. We do not think that that will be a problem in Scotland.

The hon. Member for Glasgow, Cathcart, is quite entitled to ask whether an authority which does not increase its rent will receive a subsidy. The blunt answer is "No". Our intention is not to pay the subsidy unless there are rent increases, bearing in mind that the subsidy arises out of proposals for dealing with inflation which assume a certain level of rent increase, broadly speaking in line with price increases. It would be totally illogical to give out subsidies if such increases had not taken place.

Mr. David Lambie (Central, Ayrshire)

I would like to take up the point that no subsidy will be paid to local authorities which do not increase rents. What is the position of local authorities, especially new towns—Irvine New Town for example, where at the moment, without any further increases, the rents are the highest in Scotland? Already, tenants there are paying double the rent of tenants in corresponding local authority housing in the same area. Is Irvine Development Corporation not to be helped?

Mr. Brown

As I have explained, the means for helping new town or SSHA housing flows from a different source. I cannot give my hon. Friend that categoric assurance. This subsidy does not cover SSHA or new town housing. It is our intention to provide comparable help for such housing from other sources.

Mr. Dalyell

The intention is to provide comparable help, presumably not only for Irvine but for Livingstone and Glenrothes for instance. May we know about the time scale?

Mr. Brown

We shall look at the deficit which has been accumulated by the SSHA and the new towns as sympathetically as possible, so as to keep them broadly in line with the spirit and the intention of this Bill, which provides subsidies for local authority housing.

Mr. Lambie rose

Mr. Brown

I cannot go into more detail than that, for the reasons which I have given. We have discussed neither the details nor the method of distribution with the local authorities, although we are obliged to do so eventually. I have had an informal meeting with the housing representatives of the Convention of Scottish Local Authorities, but it was merely an exploratory meeting to assist me in obtaining their reactions to what we had in mind. That must in no way be taken as meaning formal consultations, which will certainly take place.

I wish to reply to the questions asked by the hon. Member for Glasgow, Cathcart. The £39 provision still applies. It is still on the statute book. We do not expect that there will be any reason to require that to go up.

It was said that local authorities would be penalised if they did not increase their rents by 60p. I cannot be specific about the figure. I have given the hon. Gentleman an indication of our intention that the increase must be of a reasonable level. That provision is incorporated in the Act. It is our intention to discuss what is reasonable in the circumstances of the subsidy.

Mr. Frank McElhone (Glasgow, Queen's Park)

That point will concern a great number of local authorities. Will the Minister indicate the level of rent increase before the subsidy is triggered off?

Mr. Brown

It is not that I am reluctant to go into detail. I gave a general indication that we expected increases in rents in line with rising prices. If we translated that into pounds and pence from the frozen rent level in May 1975 until April 1977, it would be about 110p per house per week. I am not saying that that is the final figure, but that is what would be required if rents had, broadly speaking, to stay in line with increased prices.

Paragraph 35 provides the basis for the calculation which we shall make. However, taking the Scottish situation into account, we see ourselves working with a kind of threshold figure which will be a lot less than that provided in paragraph 35. This figure would be applied to the increase in rent income during 1976–77 from the frozen level of rents. I suggest that that is a reasonable proposition. It will afford advantages to local authorities, for instance, in Glasgow where we are talking in terms of a possible subsidy of about £3 million. Therefore, in all the difficult economic circumstances, this is an extremely valuable and useful contribution to minimise the impact of rent increases on council tenants.

I hope that after that explanation, the hon. Member for Glasgow, Cathcart will ask leave to withdraw his amendment and that the clause will be accepted.

3.30 p.m.

Mr. T. G. D. Galbraith (Glasgow, Hill-head)

I had not intended to contribute to this debate at this early hour of the afternoon until the Minister made a thoroughly unnecessary and provocative reference to me. I do not mind him having his fun. However, he knows that I object to legislation without debate. This afternoon we are able to have a debate, and, therefore, we are able to ask questions—

Mr. Mikardo

We were here all night, mate—but you were not.

Mr. Galbraith

The hon. Gentleman must withdraw that remark, because I attended every Division, as I imagine he did.

Mr. Iain Sproat (Aberdeen, South)

The hon. Member abstained.

Mr. Galbraith

He abstained and I did not. However, I do not want to get diverted. It is on the Minister that I want to fix my guns. I have the opportunity today to question him, and on other Fridays I have never had that opportunity. I have had to shout "Objection"—a most objectionable word. One should be able to so shout "Debate", which is what one wants.

The Minister was a little unkind to my hon. Friend the Member for Glasgow, Cathcart (Mr. Taylor) in suggesting that we were running a policy of our own. The House had already decided that there was to be a subsidy, and my hon. Friend merely wanted to make certain that Scotland was getting a fair crack of the whip. There is nothing contradictory in that, as I am sure the Minister will understand.

As the Minister is aware, I do not like general subsidies. This is a general subsidy which will go to council tenants as council tenants, irrespective of their ability to pay or their need. Will the Minister make sure that the £12 million for Scotland and the £3 million he spoke of for Glasgow are not directed indiscriminately to all council tenants but go to council tenants who need it?

Speaking as a Member for a Glasgow constituency. I know that nothing arouses more ill-feeling among people in private housing in my constituency who are not at all well off than that public money contributed through rates and taxes should be used to help to keep down the rents of council tenants when they do not need it. I ask the Minister to apply his able mind to that aspect of fairness. He has been doing well as a Minister, and he was right to rebuke his hon. Friend the Member for Central Ayrshire (Mr. Lambie), who always interrupts unnecessarily. The Minister wants to be fair, and I should like him to introduce some fairness into the Bill.

Mr. Hugh D. Brown

The hon. Member for Glasgow, Hillhead (Mr. Galbraith) makes me feel guilty by flattering me after what I said about him. I repeat that I am speaking in round figures when I refer to £12 million, and £3 million for Glasgow. There are two qualifications that will be applied.

I should have said to my hon. Friend the Member for Central, Ayrshire (Mr. Lambie) that the 110p was at least equivalent to the rise in prices. It could have been more, and perhaps should have been more, and that further strengthens our view that we are being generous.

The subsidy has no connection with the matters that concern the hon. Member for Hillhead. Rent rebates are available and perhaps it is to rent rebates that he should be directing his attention. We should not underestimate the fairly substantial increases in the rents of Glasgow council tenants. Glasgow is almost at the top of the league of local authorities. I appreciate the difficulties. I do not expect that there will be many non-implementing authorities. With Lord Hughes, I have met district authorities, and I found that many of them were genuinely taking steps to review the structure of rents. Larger increases will take effect in higher amenity areas. There are many social consequences stemming from that. I have confidence that the majority of local authorities—particularly the ones that I have met—will respond realistically to some of the matters that have been raised.

Mr. Teddy Taylor

I think that the Committee is grateful to the Minister for clarifying the main question—namely, whether Scotland is to get its fair share of the new subsidy to which in principle we object. I think it was helpful that the Minister mentioned a possible figure. I must say that our own calculations were approximately £13 million. As the Minister says £12 million, it is clear that he is working on the same lines. I am glad that he has given the assurance that we sought.

It has not escaped the notice of the Committee that the Minister has made an important statement—namely, that Government, as a result of our consideration of the amendment, are bringing in a policy whereby local authorities will be deprived of grant if they do not charge reasonable rents that are asked for under the 1975 Act. This is a dramatic new policy.

I ask the Minister to contemplate—I appreciate that he might require some time for contemplation, and I do not expect him to answer today—on some of the consequences of the new policy. Has he thought of the consequences of the policy for those who are not council tenants but ratepayers? Has he considered the position of ratepayers in Glasgow, an area in which he envisages that there is the possibility of about £3 million of extra grant not being made available as a result of our considerations today? Has he considered the effect on the non-council tenant ratepayers in Glasgow who as well as paying very high rates, had no adjustment made for the lost subsidy? I hope that that is a matter which the Minister will contemplate.

Secondly, will the Minister consider whether it would not have been fairer and more reasonable to continue the Conservative Government's Housing Finance Act instead of proceeding with the clause that we are now discussing along with the amendment? Does the Minister not accept that the Housing Finance Act called for reasonable rent increases which were less than the increases for which the Minister is now asking, increases which would have ensured that we had the same pattern throughout the country and fair play for council tenants, non-council tenants and ratepayers?

During the passage of the Bill we have seen a dramatic change in the attitude of certain Ministers who used to scream and yell at my right hon. Friends in criticism of our so-called Conservative policies. I remember what they said about our prices and incomes policy. Now we see them half-way there and going strongly towards what we had. Are they not proceeding in exactly the same way as regards council rents? The is evidence of a good educative process, if nothing else.

Our main concern was to ensure that if the subsidy was to be paid, as the Committee has now decided, Scotland would receive its fair share. The Minister has given us that assurance. If the Committee is agreeable, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Mr. Lambie

I do not intend to apologise for speaking in this part of the debate at this very late hour. Along with quite a few of my colleagues on either side of the Committee, I have been here for over 24 hours. As the clause concerns 80 per cent. of the people of Scotland and as it will establish the standard of living of the people of Scotland for the next two or three years, I claim that I have a right as a Scottish Member of Parliament, and as a Member interested in housing, to take part in this debate.

I am forced to enter the debate at this stage because my Amendments Nos. 61, 62 and 63 were not selected by the Chair. The aim of those amendments was to allow local authorities to enforce a rent freeze in the years 1975–76 and 1976–77.

3.45 p.m.

Whether the Bill has any good effects or not, it will have no effect on the standard of living of the Scottish people till 1976–77_ Prices are rising now. The Secretary of State for Scotland and the Under-Secretary of State, my hon. Friend the Member for Glasgow, Provan Brown) are practically breaking their legs going round Scotland to force local authorities to increase rents to the maximum allowed under present legislation—75p or £39 a year. The Under-Secretary of State has been forcing local authorities, or encouraging them by the threat of withdrawal of grant if they do not, to increase rents, and this is in the year 1975–76, which is not covered by the clause. At this moment, people not only in Scotland but in England and Wales are faced with rent increases, with the highest rate increases ever in our history, with tremendous increases in bus and rail fares, with air fares also to go up soon, and enormous rises in the cost of food and clothing. For everything they need people are having to pay escalating costs.

The present Bill—I put this to my right hon. Friend the Secretary of State for Employment—does nothing at this stage to help people to meet those costs. We shall have to ride those costs, but as a result of riding them the people of Scotland, in common with the rest of the United Kingdom, will find their standard of living fall.

I remind the Secretary of State for Employment of what happened in the 1930s when a Labour Minister set up the May Commission to investigate the level of national insurance contributions. That commission reported not to a Labour Government but to a Conservative Government, who used the good intentions of the Labour Government to introduce the fiercest means test in our history. In fact, people still look back with horror at that means test—our fathers look back on it—and it can be fairly said that it was that means test which made most of us Socialists and brought a good many of us to these benches today. I can see the same sort of thing happening now.

This clause gives the Secretary of State for Scotland tremendous powers, just as the main framework of the Bill gives enormous powers to the Secretary of State for Employment. We spent 14½ hours earlier last night debating Clause 1 because hon. Members on both sides were so disturbed about the extent of the discretionary powers being given to the Secretary of State for Employment.

With our present Secretary of State for Employment, my right hon. Friend the Member for Ebbw Vale (Mr. Foot), we have no worries, but he stated in the debate last night that, if the Bill at present on the touch lines is introduced, he will have to reconsider his position. In the autumn, we may find that my right hon. Friend is no longer there and we have another hatchet man in his place. [HON. MEMBERS: "Another one?"] No, I do not mean that my right hon. Friend the present Secretary of State is a hatchet man. I am thinking of some of the other members of the present Labour Cabinet who in their policies are hatchet men. [HON. MEMBERS: "Name them."] Perhaps, in the autumn, after having a good Bill and a good Secretary of State for Employment, we shall have a very bad and dangerous Bill for the working people of Scotland, and a different Secretary of State.

This Clause 6 introduces a new subsidy for the year 1976–77. Its basis will be determined by the Secretary of State for Scotland. A new principle is involved. We do not know the framework within which the subsidy is to work. All we do know is that its basis will be determined by the Secretary of State for Scotland. It is also on the cards that the present Secretary of State might not be there in the autumn. We are giving a tremendous discretionary power to a Secretary of State who might be worse than the present one.

The Government are also saying that the Secretary of State is to introduce the subsidy …to enable payments to be made to local authorities in respect of shortfalls in rent income where rent increases have been kept in line with the level of price rises generally. Having listened to my hon. Friend the Under-Secretary of State I still do not know what that means. It does not affect price increases in this year but in 1976–77. What is more important is that it does not affect the 83,000 tenants of the Scottish Special Housing Association and the tenants of new towns in Scotland. In the new town I reperesent we have side by side new town corporation houses, SSHA houses and local authority houses, for which differences in rent are charged greater than the difference between the rents of England and those of Scotland.

Unless I get proper assurances I am not prepared to support this clause because, in view of the history of previous Secretaries of State for Scotland, I am not willing to give any power to any Secretary of State for Scotland to fix, without parliamentary control, rent levels.

If one wants to find out more about the intentions of the Bill one has to go to the White Paper, in which there is a special paragraph on rents. It claims, rightly, that local authority rents were frozen between March 1974 and March 1975, but that increases are now in the pipeline because of pay increases and other inflationary costs. The White Paper accepts that the people of Scotland are going to pay higher rents this year, when we are to get no subsidy for the increases. The most important part of the paragraph says: For 1976–77 the Government propose to limit rent increases so that rents do not rise faster than prices generally. This will mean that on average rent increases next spring should be of the order of 60p per week rather than £1 a week….

The Government are giving a subsidy of £80 million to compensate local authorities. The White Paper deals with the United Kingdom, but the paragraph dealing with rents relates only to England and Wales and has no relevance to Scotland, because, under the present law, local authorities in Scotland cannot increase rents by more than 75p per week. We are not, therefore, talking in Scotland about increases of £1 a week. In preparing the White Paper—a United Kingdom White Paper—why did the Government not take into account the rent position in Scotland but in the Bill deal specifically with it, but say nothing about it beyond stating, in effect, that we are to have tremendous faith in the Secretary of State for Scotland?

The clause attacks one of the major principles of the Housing Rents and Subsidies (Scotland) Act 1975, the Act that replaced the old Tory Housing (Financial Provisions) (Scotland) Act, the Rent Act for Scotland. Under the 1975 Act the Government restored the right of local authorities to fix their own rents. In fact we fought two elections on that issue. This clause takes the power back. If local authorities fix rents at a level that the Government do not like, they lose subsidy and will have to put up the rates, which means that they will find themselves out of business at the next council elections because of the revolt of ratepayers. Why has this principle of the independence of local authorities to fix rents been violated?

I was surprised that the hon. Member for Glasgow, Cathcart (Mr. Taylor) accepted the Under-Secretary's statement that local authorities were to get £80 million extra subsidy in 1976–77, that Scotland is to get £12 million or £13 million and Glasgow £3 million. What is not said is that although the Government are giving £80 million with one hand they are taking £80 million with the other.

In the last Budget, in their attack on public expenditure, the Government started by proposing reductions of £65 million at 1974 prices in housing subsidies for 1976–77. That represents about £80 million at current prices. Thus the Government have already decided to cut subsidies by the amount they propose to give under this clause. The Under-Secretary spoke of how much Glasgow will get from this clause. How much will Glasgow lose when the Budget proposals come into operation?

The Government are not playing fair with Labour voters in Scotland. They are asking us to tighten our belts and accept a lower standard of living and they say that they are ending indiscriminate subsidies to council tenants. What they are doing in fact is to take money from the people of Scotland in an attempt to solve international financial problems which they will not solve by Tory policies.

4 p.m.

Mr. Teddy Taylor

Like the hon. Member for Central Ayrshire (Mr. Lambie), I have some reservations about the clause and a few questions which I wish to ask.

It was strange to hear the hon. Member for Central Ayrshire talking about the concept of freedom outlined in the Housing Act 1975. We have seen in various parts of the Bill what the Secretary of State for Employment and his colleagues meant when they argued for freedom when we were in government. They said, "We want freedom to negotiate wages in free collective bargaining". The hon. Member for Central Ayrshire said that the local authorities want the freedom to charge rents which they think fit. We see in the Bill an example of the new freedom of the Labour Government. The Secretary of State for Employment says, "You are free to negotiate wages, but if you do not do what we want we shall put up your prices and ruin your business and you will be out of work". The Secretary of State for the Environment says "You are free to determine your rents, but if you do not do what I say you will lose grant". This is a pathetic policy, which is based on threats as opposed to the clear determination of law, which is infinitely preferable.

I do not agree with the hon. Member for Central Ayrshire on a number of issues. He tabled amendments which have not been selected in which he proposed a total freeze on rents. I ask him to contemplate the effect of a total rent freeze. Rates would go up considerably and the council tenants of Scotland, who form the vast majority of our house dwellers, pay rates just like other people. There would not be pure gain if what the hon. Gentleman suggests were done.

The Under-Secretary of State must answer a number of detailed questions. First, will there be a formula determining how the grant will be distributed? On the previous amendment he gave an assurance that Scotland would get its fair share of the total sum, but local authorities are entitled to know whether there will be a formula relating the grant to each district council according to the number of houses it has, the number of slums it has, or whatever it might be. Will there be a formula which will give them guidance on how the money will be distributed, or will the Secretary of State simply say, as the clause would allow, "I shall decide how much grant you will get, authority by authority". Under the clause it would be possible for the Secretary of State simply to say that he will decide that Glasgow will get so much, Dundee will get to much, and so on. Therefore, will there be a formula?

will it be published? If so, when will it be published, and how shall we learn about it?

The Secretary of State has made a new policy announcement indicating for the first time that local authorities will lose grant if they do not increase rents. Local authorities are entitled to know whether they will be given guidance on what the Secretary of State regards as a reasonable rent level. The Minister has said that in his view—and the figures prove this—Glasgow is high and others are low in the rents league. The authorities are entitled to know what the Secretary of State would regard as a reasonable rent in their case so that they would not lose the new subsidy.

In view of the Minister's threat that local authorities may lose grant, they are entitled to know what they need to do to avoid losing their share of grant. If a district council in any area in Scotland were to contact the Scottish Office or anyone else we recommend, would it be told the minimum rent which the Secretary of State wants it to charge if it is not to lose grant? The Minister may say, "We cannot do that now. All that we have at present is a rough idea of averages". It is desperately important for councillors who are deliberating on the question of local authority rents to have guidance from the Scottish Office or the Secretary of State. Will general advice be available? If so, when, and who will give it? Will it be possible for an hon. Member to table a Question asking the Minister what he would regard as the reasonable rent levels for each district council in the following year, or will the matter be dealt with more informally? It is important that local authority councillors who are being threatened with the loss of extra grant should know what to do if they are to get the Minister's favour and are not to lose the grant.

The fourth question which is vital, and was touched on by the hon. Member for Central Ayrshire, is whether the Minister will relate this new provision in Clause 6, allied to the White Paper, to a previous announcement of a reduction of £10 million in housing expenditure in Scotland. The hon. Member for Central Ayrshire made the same mistake as I was tempted to make in thinking that this was a straight cut of £10 million in housing subsidies. I asked the Secretary of State, and he replied that it was nothing of the sort. It is, in fact, a reduction of £10 million in housing expenditure in Scotland.

I asked the Secretary of State how he would achieve this, and he said that he hoped to achieve it by increasing rents. If rents went up by £10 million, there would effectively be a reduction of £10 million in public expenditure on housing. Obviously, if we are going to have a moderation in rent increases it will not be possible for the Secretary of State to make good to the Chancellor his pledge to cut housing expenditure by £10 million.

If, as a result of this clause, we are not going to be able to make that £10 million in extra rent revenue, I should like to know where the housing expenditure is otherwise to be cut. Is there to be a cut in improvement grants, in new house building, or in general improvements in the private or public sector? What is going to be cut if the £10 million which the Secretary of State has pledged himself to deliver to the Chancellor cannot be obtained through rent rises? We are entitled to know.

On Monday the Chancellor said that there would be further severe cuts in expenditure generally in the forthcoming year. We shall have cash limits. This will mean further reductions in net housing expenditure. I should like to know how the Minister is going to do this. We are at least entitled to know, in relation to the moderation in rent increases, where we shall get the £l0 million if it cannot be obtained from the rents. Some local authorities have decided to increase rents by a much lower amount than would enable the Minister to get the £10 million in one year.

I hope the Minister will accept that if we approve this clause we shall go further than any previous Parliament has done in giving the Secretary of State virtually a blank cheque to do what he thinks fit with a sum of money which may be about £12 million. It is a totally blank cheque which we are giving to the Secretary of State. Therefore, we are entitled to ask him to give us a general idea of his views on the spending of the money and to answer the detailed points which have been raised in this debate.

Mr. Hugh D. Brown

The hon. Friend the Secretary of State for Employment has heard the complimentary remarks made about him by my hon. Friend the Member for Contral Ayrshire (Mr. Lambie). I thought my hon. Friend was a little unfair on my right hon. Friend the Secretary of State for Scotland in suggesting that he was a hatchet man. I regard the hon. Member for Central Ayrshire as a better hatchet man than I am, given that he gets his hatchet into the right things. I thought he was unfair also in saying that he would not support the clause, which is quite narrow and which is aimed at giving £12 million to council tenants in Scotland. I despair of his political judgment at times, if he is seriously suggesting that they should say that they do not want it.

I am not sheltering behind the Chair, hoping that I may be ruled out of order, but I have to say that housing is subject to the limitations in public expenditure, as has already been announced. We have made it clear that on new housing there is no limitation, but on improvements, modernisation and almost every other aspect of housing expenditure, there are decided limitations on public expenditure, including rents.

Mr. Teddy Taylor

The hon. Gentleman has not said that.

Mr. Brown

I have said it regularly.

Mr. Taylor

This is important. When has the Minister announced, at any time in the House, that there will be reductions or limitations on housing improvements, or grant of this sort? In every question he has been asked the only reference has been to rents.

Mr. Brown

Three was no need to make a specific announcement. In the debate on urban deprivation two or three weeks ago the limitations under which we were operating for housing expenditure were fully explained.

I was asked whether there will be a formula. The answer is "Yes". I was also asked whether it will be published. There is nothing secret about what we have in mind. Obviously we shall discuss it with the local authorities in such a way as to give them guidance about precisely what they need to be to attract the subsidies. I cannot be any more specific than that at this stage. If it will be valuable to give advice to hon. Members during the Recess, I shall be delighted to do so once we have had discussions.

I was asked whether this was a new principle, local authorities losing a grant because we want to make it dependent on their imposing what we determine a reasonable rent increase is. I do not think that it is unreasonable. My hon. Friend the Member for Central Ayrshire said that we were taking away the freedom of local authorities. We are doing nothing of the kind, but when we are attempting to conquer inflation we have a right to relate the subsidy to reasonable rent increases. That is the purpose of the subsidy. Therefore, it would be quite wrong for us to hand out money aimed at reducing the impact of rent increases to local authorities which have not increased their rents. That would be totally illogical.

We are approaching the matter in a reasonable manner. My hon. Friend the member for Central Ayrshire is most dangerous when he puts into my mouth words that I did not use. I did not say that local authorities would get £3 million, but that is what will be quoted outside. I have no doubt that my hon. Friend will regularly misquote me outside when it suits him. All I say is that, given certain criteria achieved by housing authorities, it could amount to about £3 million. That is not chicken feed. I shall do my best not to threaten Glasgow but to encourage the council to produce rent increases that are reasonable, bearing in mind that if it does what is reasonable it Will get an additional £3 million. I do not think that anybody could be fairer than that.

All this is in the context of steps taken by the Government to conquer inflation. It will not be easy for anybody. The contribution we are making will make it less difficult than it might otherwise have been.

Question put and agreed to.

Clause 6 ordered to stand part of the Bill.

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