Commons Sitting of 16 June 1975

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS

  BROOKWOOD CEMETERY BILL [Lords]
  Order for Second Reading read.
  To be read a Second time tomorrow.

ORAL ANSWERS TO QUESTIONS
  PRICES AND CONSUMER PROTECTION

    Car Parking Contracts (Exclusion Clauses)
    Mr. Greville Jannerasked the Secretary of State for Prices and Consumer Protection whether she will now introduce legislation to ban exclusion clauses in contracts of car parking businesses.
    The Minister of State, Department of Prices and Consumer Protection (Mr. Alan Williams): This is one of the problems on which the Law Commissions' recommendations are awaited. As soon as the Commissions' report is received we shall consider urgently what needs to be done.
    Mr. Janner: Is my hon. Friend aware that we have been awaiting the report for several years and that the delay is quite disgraceful? Is he also aware that in the meantime motorists are paying very high rates to park their cars where they have no alternative but to leave their keys in the ignition and when an employee of the car park smashes up a car the motorist has to pay the bill because of an iniquitous exclusion clause in the contract? What is my hon. Friend proposing to do about this? Does he not agree that it is a disgrace?
    Mr. Alan Williams: I agree that it is a disgrace. I am sure that I do not need to spell out to my hon. and learned Friend that the Law Commissions are independent and not subject to the control of the Department. My hon. and learned Friend must make up his mind how much he wants to preserve the independence of the Law Commissions. He cannot have it all ways. We have made our position clear. I shall be happy to convey to the Law Commissions the point of view that my hon. and learned Friend has expressed.
    Mr. Janner: They know it already.
    Mr. Alan Williams: At the end of the day the Law Commissions are not subject to my control or to my Department's control.
    Mr. Britian: Does the Minister not agree that if the Law Commissions are not subject to the Government's control, the Government are not dependent on the Law Commissions and not obliged to wait until the Law Commissions produce their report? If they are so dilatory in producing their report, why will the Government not act independently of them?
    Mr. Alan Williams: If the hon. Gentleman had followed earlier exchanges on the subject he would realise that the question of exclusion clauses is more complex in relation to services than in relation to goods. The Law Commissions are within one or two months of completing their report. There are complications because of the legal differences in Scotland, England and Wales. This is causing some delay. However, nothing the Government could do in this sector could be as comprehensive as that which we hope to do in a relatively short while, based on the report which the Commissions have almost completed.

    Inflation
    Mr. Adleyasked the Secretary of State for Prices and Consumer Protection by how much the retail price index has risen since 28th February 1974.
    Mr. Giles Shawasked the Secretary of State for Prices and Consumer Protection what is the current rate of inflation based upon a grossing-up to an annual rate of the last three months' increase in the retail price index, and calculate

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    on the same basis as the three month figure of 8·4 per cent. quoted by the Chancellor of the Exchequer as being the grossed-up annual rate of inflation for August 1974.
    Sir George Youngasked the Secretary of State for Prices and Consumer Protection what is the latest rate of price inflation expressed at an annual rate.
    The Secretary of State for Prices and Consumer Protection (Mrs. Shirley Williams): The retail price index has risen 25 per cent. over the last 12 months to May 1975 and 32·3 per cent. since February 1974. The change over the last three months, grossed-up to an annual rate, is 53·1 per cent. but the figures are distorted by the measures which the Government have had to take for the reasons my right hon. Friend gave in his Budget Statement.
    Mr. Adley: No matter how much the right hon. Lady may talk about the figures being distorted, is she not aware that the disgraceful figure she has just announced is her personal contribution to 16 wasted months of Socialism? Is she not ashamed of being a member of a Government who are bringing this country to such a state that people going abroad on package holidays now purchase their currency a week in advance to avoid the effect of inflation? As the right hon. Lady is a well-advertised moderate in the present Government, will she now begin to disown the wild Socialist policies that are bringing the country to its knees?
    Mrs. Shirley Williams: The hon. Gentleman will know that over the last year-and-a-bit the Government have cut retail profits by 10 per cent., have announced a three-months' gap between price rises, introduced subsidies on basic foods, introduced investment relief into the Price Code, introduced maximum prices for subsidised food, and extended unit pricing. On every one of those measures the Opposition have attacked us, opposed us or, at best, grudgingly agreed with us. When the Opposition realise that indignation is no substitute for a positive policy I shall listen to them, but not before.
    Mr. Heffer: I entirely accept the point which my right hon. Friend has just
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    made, but will she also take into consideration the fact that the time has come for very drastic measures to be taken? Will she consider the whole question of introducing a price freeze on certain basic commodities? I accept that this is very difficult. Nevertheless, will she now consider the proposals by, for example, ASTMS and other organisations, to have a price freeze on basic food commodities?
    Mrs. Shirley Williams: I am interested in any such proposals, including those by trade union leaders. However, it must also be accepted that there must be a general restraint on incomes if a price freeze is to serve any purpose.
    Mr. Giles Shaw: Does the right hon. Lady not accept that we have moved a considerable way from the Chancellor's claim of 8·4 per cent. inflation last August, doubtless based upon a formula for the full-hearted content of the British people? Does she not further agree that over half of last month's staggering price rise was due to the action which the Chancellor took and action which probably the Secretary of State for Employment failed to take in relation to the social contract? When will the Government take some action through the Department of Prices and Consumer Protection to prevent this appalling rate of inflation continuing?
    Mrs. Shirley Williams: I have already indicated to the hon. Gentleman—and he knows it very well—that one of the main reasons for our inflation is not that we are a high-wage country but that we are a low-productivity country. The reasons for that go far back into our recent history. What is essential is to take, over the next couple of years, the investment measures that will enable us to become a high-productivity country. For the present, we require from all sections of the community, including the Opposition, acceptance of restraint for a couple of years, which will enable this process to begin.
    Mr. Dempsey: Is my right hon. Friend aware that the measures she has taken are welcomed as an effort to control the rising cost of living? But does she realise that many of the price regulations are not being enforced? I recognise that it is impossible to enforce them from trader

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    to trader, but is it not possible to have random checks to ensure that they are observed?
    Mrs. Shirley Williams: I thank my hon. Friend for what he said. Only recently I instituted a series of special inquiries into individual prices which go beyond the general control of the Price Code. The first reports from those special inquiries are expected very shortly.
    Sir George Young: is the right hon. Lady aware that she recently attracted widespread public support for her announcement in the referendum campaign that she would rather resign from public life than remain committed to an administration pursuing policies in which she did not believe? Will she apply the same high standards and resign from public life if her colleagues in the Cabinet do not introduce measures at once to bring down the disastrous rate of inflation?
    Mrs. Shirley Williams: Like so many of his colleagues, the hon. Gentleman always talks in general terms and never in specific ones. The whole difficulty about the Opposition's approach is that they try to replace policy with expressions of indignation and never face up to the problems of making a voluntary incomes policy work.
    Mr. James Lamond: To take a specific example, has my right hon. Friend had any information from the suppliers of petrol that they will now be able to reduce their prices because of the reopening of the Suez Canal, the closing of which caused them to increase prices some years ago?
    Mrs. Shirley Williams: We shall certainly be closely watching the effects on oil prices of the reopening of the Suez Canal. I also assure my hon. Friend that the Price Commission, with our encouragement, is chasing up all falls in raw material prices to make sure that they are carried through in the final prices.
    Mrs. Sally Oppenheim: As the right hon. Lady has presided over the fastest rise in prices this century—rises which were largely avoidable and which will bring serious economic and social consequences in their wake—does she agree that in the circumstances it would be honourable to resign? Instead of giving lectures and quoting statistics, will she turn
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    her attention to the consequences, in human terms, of the devastating rate of inflation—for which her Government are responsible—on the people who have not gained the spoils of the big battalions to protect them against the effects of inflation—people who will suffer a sharp cut in living standards, whose jobs are in danger—[HON. MEMBERS: "Speech."] I can understand that Labour Members do not want to hear this. Does not the right hon. Lady agree that her Government have created the most unfair society in this country since the war?
    Mrs. Shirley Williams: That was, perhaps, a speech rather than a supplementary question. I do not think that calling for resignations across the Floor of the House is a substitute for thinking about ways to solve the nation's problems. The hon. Lady knows perfectly well that her Government's efforts to deal with inflation led straight to the three-day working week. We are trying to find a better answer, based on a voluntary policy. The Opposition would do better to support us and the social contract rather than perpetually undermine it.
    Mr. Adley: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the Secretary of State's answer, and to give her an opportunity for her to hear our proposals, I wish to give notice that I shall seek to raise the matter on the Adjournment.
    Mr. Neubertasked the Secretary of State for Prices and Consumer Protection what is the latest annual rate of inflation according to the Price Commission index.
    Mrs. Shirley Williams: In the 12 months to February 1975 the Price Commission's index rose by 19·6 per cent. This index was published in the most recent quarterly report.
    Mr. Neubert: As the rate of inflation has more than doubled in the last three months, and as the Price Commission stated that any increases in prices have been due almost exclusively to increases in wages, is it not clear that a policy that seeks the control of prices, except the most important price—the price of labour—may well be in the interests of the British Labour Party but not in the

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    interests of the British people as a whole, and must be a highly damaging sham?
    Mrs. Shirley Williams: The hon. Gentleman owes it to the country not to make remarks that are quite as wild as that. It is not the case that the rate of inflation has doubled in the last three months. The figure that I gave was 19·6 per cent. on a 12-monthly basis; the figure today is 25 per cent. That is not a doubling by any mathematics. I have made it clear on many occasions, as have my colleagues in the Government, that we are concerned about the level of labour costs. Incidentally, they are not just wage costs, for labour costs generally go far beyond that. The hon. Member simply cannot wave aside the problems of establishing either a voluntary or a statutory incomes policy. We have had long experience of the latter.
    Mr. Tomlinson: Does my right hon. Friend not agree that it is somewhat over-simplistic to argue that there should be a total freeze on prices at the same time as it is argued that there should be greater investment in industry? Do not many people find motivation for investment in a mixed economy in the profitability on their return? While profits need to be controlled, to argue that there should be no return on investment is likely to have major implications in terms of jobs.
    Mrs. Shirley Williams: My hon. Friend is leaping to exactly the opposite conclusion to that to which the Opposition leapt. We have neither said nor denied that there would be a price freeze; we have simply said that all options have to be open at present. It would be as mistaken for my hon. Friend to leap to one conclusion as it is for the hon. Member for Oswestry (Mr. Biffen) to leap to the opposite conclusion. The straight truth of the matter is that these issues are under discussion at present, as the House well knows. The investment relief was introduced by the Government, for the first time, specifically because we recognised the importance of there being the highest possible level of investment in the public and private sectors.
    Sir John Hall: In view of the Chancellor's stated intention to halve the rate of inflation over the next 12 months, will the right hon. Lady say what base figure the Chancellor is using?
    Mrs. Shirley Williams: I would like the hon. Gentleman to ask my right hon. Friend that question because I am not quite sure of the exact phrase to which the hon. Gentleman is referring.
    Mr. Heffer: Is it not absolutely wrong to suggest that the basic cause of inflation is wage increases? While wage increases undoubtedly have a marginal effect on inflation, is it not the case that there are other factors of much greater importance? Is it not clear that in Chile, where a totally free enterprise system has been introduced, inflation has increased by 150 per cent.? Does my right hon. Friend not agree that it is not true to suggest that by lifting all price restrictions inflation is automatically held back? On the contrary, is not private enterprise the biggest ingredient in the creation of inflation?
    Mrs. Shirley Williams: My hon. Friend must accept, as I must, that in recent months labour costs have been the main force behind inflation.
    Mr. Heffer: I do not accept that.
    Mrs. Shirley Williams: I repeat that these are labour costs including the costs of the professions and the self-employed. It does not mean costs which fall only to trade unions. My hon. Friend and I would agree that we live in a relatively low-wage economy and that it is understandable that people try to force up their wages in this situation. The centre of our problems lies in the fact that we have to increase productivity to the extent that we can pay decent wages. These are not problems created over the last year-and-a-bit by the Government.
    Mr. Tim Rentonasked the Secretary of State for Prices and Consumer Protection what plans she has to mitigate the effects of inflation on food prices for those on below average incomes.
    Mr. Alan Williams: The food subsidy programme, together with the operation of the Price Code and other counter-inflation measures, will continue to provide substantial benefit to those on below-average incomes.
    Mr. Renton: Is the hon. Gentleman aware that, due to the failure of his Government to take action sooner, we now have the same inflation rate as Brazil, and that for it to be cured everyone in this

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    country will have to take a cut in their standard of living. During this process, what new measures has the hon. Gentleman in mind to protect the old and the weak, who will necessarily be most at risk?
    Mr. Alan Williams: As the hon. Gentleman will appreciate, the Chancellor of the Exchequer is undertaking consultations with both sides of industry on the future programme. In the meantime, the protection which we give to the lower income groups remains.
    Mr. Ronald Atkins: In view of the scaling down of food subsidies, will my hon. Friend resist the introduction of VAT on food as practised in the Common Market?
    Mr. Man Williams: I have no knowledge of any such intention, but my hon. Friend will fully appreciate that that is a question for the Chancellor of the Exchequer, and that it would be utterly wrong for me to try to answer it.

    Household Articles
    Mr. Cartwrightasked the Secretary of State for Prices and Consumer Protection if she will make a statement about the results of her voluntary agreement with retailers and manufacturers to restrain the prices of certain essential household items.
    Mr. Alan Williams: The voluntary agreement covers two lists of goods: one of items which retailers keep on continuous offer, and the other of items on which manufacturers concentrate their promotional price-cuts. The combined price of the retailers' items increased by 19·6 per cent. between May 1974 and April 1975, and that of the manufacturers' items by 22·4 per cent.; together they rose by 20·1 per cent. In the same period the retail food index rose by 25·1 per cent., and the index for manufactured foods by 34·6 per cent.
    Mr. Cartwright: I am glad to hear of that progress, but does my hon. Friend agree that this is an area of price restraint in which the housewife does not understand the system, and that on occasion it can be counter-productive, because she soon forgets the cut in prices at the beginning of the special offer period but remembers the often steep rise in prices at the end?
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    Therefore, could any indication be given of total savings to the consumer as a result of the agreement? In any renegotiation of the agreement, will my hon. Friend try to improve the public's understanding of the system?
    Mr. Alan Williams: The saving is between 5p and 6p in the pound. I fully appreciate the point that my hon. Friend makes. It is difficult for consumers to appreciate that they are continually receiving this marginal benefit from the existence of the voluntary agreement. We are discussing what price control, and so on, is to follow at the end of the voluntary agreement, or whether the voluntary agreement is to continue.
    Mr. Richard Wainwright: Will the Minister give an assurance that in his efforts to continue voluntary agreements with retailers he will explore all possible means of ensuring that small self-employed shopkeepers are fully represented in the negotiations?
    Mr. Alan Williams: We shall do what we can to ensure that that is done. We fully appreciate the importance of the small shopkeeper, particularly to those confined to shopping in a limited locality, such as the elderly.
    Mr. Mike Thomas: When the Department has this relative success with private industry, why is it so clearly unable to have any success with the publicly-owned industries, particularly electricity and gas, in keeping down the cost of their products to small consumers—for example, the cost of consuming electricity through a prepayment meter and the cost of consuming small amounts of electricity and gas? When the Department is having this success with the private sector, why cannot it achieve the same success with the industries owned by us and controlled by my right hon. Friends and the House?
    Mr. Alan Williams: I congratulate my hon. Friend in getting his speech in early. There is a subsequent Question on this subject on the Order Paper.
    Mr. Norman Lamont: Reverting to the question asked earlier by the hon. Member for Liverpool, Walton (Mr. Heffer), does the Minister agree that even if the voluntary agreement is not renewed there is no point in using Section 2 of the Prices Act for a total freeze? To

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    do that when underlying costs are rising would simply be further to lower investment and increase unemployment. Will the hon. Gentleman give an assurance that the Government will not impose a total freeze?
    Mr. Alan Williams: The Opposition call on us to take action to curb prices and then spell out their opposition to every option. We are willing to consider all options constructively.

    Price Code
    Mr. Biffenasked the Secretary of State for Prices and Consumer Protection what assessment she has made of the impact of the Price Code on the level of the retail price index in the light of the recent trends in raw material and other costs.
    Mrs. Shirley Williams: The Price Code continues to exert a useful influence on the RPI. Precise quantification is not possible.
    Mr. Biffen: Even so, is there not now ample evidence to the Price Commission and the right hon. Lady's Department to suggest that margins in both industry and commerce are narrow and competitive? In those circumstances, does she not agree that to call for a freeze on prices, or, for that matter, on wages, is misconceived and nonsensical?
    Mrs. Shirley Williams: There has been a substantial fall in profit margins in the past 12 months, and profits are not now contributing to the rise in prices, but I do not think that the abolition of the Price Code, which the present Government inherited from their predecessors, would be a very helpful prelude to a major national attack on inflation.
    Sir G. de Freitas: In view of the British Steel Corporation's reduction in the price of certain steels, how soon can my right hon. Friend give an estimate of the effect that that will have on the price of refrigerators and other household items?
    Mrs. Shirley Williams: I would need a little time to consider that question from my right hon. Friend because it takes about four to five months for the prices of raw materials and of processing materials to work their way through to the retail level. As I have said, the
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    Price Commission is already under instructions to follow through all falls in raw material and industrial material prices to the point of the retail trade.
    Mr. Geoffrey Dodsworthasked the Secretary of State for Prices and Consumer Protection whether she will review the Price Code in the light of the latest CBI industrial trends survey.
    Mrs. Shirley Williams: I have just amended the code to help exporting firms and reinforce the investment relief. I have no plans for further changes at present.
    Mr. Dodsworth: Does the right hon. Lady accept that the recent survey showing a reduction of investment intentions highlights the fact that investment relief, as it is called, is a restriction, and that 45 per cent. of investment is supported by retained profits and that for income tax purposes 100 per cent. is written off? Surely investment relief should not be substantially increased if it is an impediment rather than an assistance to investment.
    Mrs. Shirley Williams: If it is an impediment, it is surprising that industry welcomed its introduction and also pressed for its increase from 17½ per cent. to 20 per cent. It is a basic part of the Government's philosophy that where policies can be undertaken to increase investment which itself will create new jobs, it is very much in the national interest for that to be done. It is still a surprise to me that the previous administration had no investment relief of any kind in its price code.
    Mr. Evelyn King: Is it not a statistical fact that price increases have been at their steepest since we appointed a Secretary of State for Prices and Consumer Protection? Is it not possible that that is not wholly coincidental and that the more profit margins are restricted the more capital investment is restricted, and the more capital investment is restricted, the more expensive things become?
    Mrs. Shirley Williams: The hon. Gentleman's argument would be stronger if he would recognise that in the last two years there have been massive increases in both oil prices and world commodity prices, which, it is generally accepted, have been the main forces

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    behind inflation until the last few months. In the last few months, in consequence of thresholds and other claims, there has been a take-over by the cost of income from the cost of commodities. But there is no doubt that the cost of commodities was the original engine behind the rate of inflation that we now have.
    Mr. Skinner: In view of that answer, will my right hon. Friend guarantee that she will resist any further relaxation in the Price Code in foreseeable economic changes that may be coming in the near future?
    Mrs. Shirley Williams: No, I could not give that guarantee, because in certain circumstances a relaxation of the Price Code, like the recent investment relief relaxation, is directly related to the employment position. Representations have been made to me by trade unions, for instance, with a view to making such a relaxation. There must always be a balance between trying to keep prices down and keeping employment up.
    Mr. Biffen: Is the right hon. Lady aware that one of the most depressing and significant aspects of Question Time today has been her unwillingness to rebut suggestions that we might have a statutory prices freeze? Will she take this opportunity here and now to hold out relief and hope to the industrial and commercial community by saying that she would not countenance a prices freeze because of the bankruptcy that it would inevitably involve for British industry and commerce?
    Mrs. Shirley Williams: The hon. Member will appreciate that, as my hon. Friend the Minister said earlier, it is the first responsibility of the Government to leave all possibilities open in dealing with the rate of inflation.

    Garages (Code of Practice)
    Mr. Loan Evansasked the Secretary of State for Prices and Consumer Protection what report she has received from the Office of Fair Trading regarding the discussion it is having with garages on a code of practice; and what action is proposed.
    Mr. Alan Williams: The Office of Fair Trading announced on 27th May that its
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    discussions with the motor trade had led to the adoption by the Scottish Motor Trade Association of a code of practice in respect of used cars. It is hoped the rest of the United Kingdom trade associations will follow the Scottish example.
    Mr. Evans: I thank my hon. Friend for that reply. Does he not agree, however, in view of the increase in petrol and other motoring costs, that there is greater need for consumer protection for the motorist than ever before? Will he look again at the Consumer Association report, which showed that one-third of the cars leaving garages were inadequately maintained and two-thirds were dangerously inadequately maintained? Does not something need to be done, and done urgently?
    Mr. Alan Williams: Yes, Sir, but it is a matter of doing something as urgently as possible which will be effective, when dealing with a series of outlets scattered throughout the country, many of them very small. I am sure that my hon. Friend will go along with me in congratulating the Director General and the Scottish Motor Trade Association on the first breakthrough in this sector. The schedule of inspections that we have agreed to is very valuable, and no obstacle has been put in the way of progress in England and Wales; it is just that the Scots started earlier. We hope to see this extension into England and Wales, including new cars and servicing generally.
    Mr. Greville Janner: I congratulate the Scots on their forward movement, but what is my hon. Friend proposing to do to stimulate the English and Welsh into doing likewise? Can he show to the learned and independent members of the Law Commission how much progress has been made in other sectors, so that they may try to sink their international difference?
    Mr. Alan Williams: My hon. and learned Friend seems determined to return to a point that he made earlier. I would probably be rebuked by you, Mr. Speaker, if I followed his example. For England and Wales, the Director General assures me that he is not meeting any obstacle from the trade, and that the trade is co-operating fully and willingly in attempting to establish a good code

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    of practice in England and Wales. We hope that he will reach a suitable conclusion soon. We expect that he will come to some agreement by about the turn of the year, or early next year.

    Food Manufacturers' Charter
    Mr. Banksasked the Secretary of State for Prices and Consumer Protection whether she will make a statement about the Government's policy towards the proposals in the food manufacturers' charter.
    Mrs. Shirley Williams: The trade has agreed that there should be such a charter. I am discussing this question with it at the present time.
    Mr. Banks: In view of the rapidly rising costs of manufacturers, does the right hon. Lady agree that it is urgent to have a move towards a voluntary policy which will take account of all the costs with which manufacturers are faced directly as a result of the Government's voluntary wages policy?
    Mrs. Shirley Williams: It is the Government's policy to enter into voluntary planning agreements with industry, but the outline of the food charter is still in very general terms and we are discussing with them the details which the food manufacturers have in mind.
    Dr. Miller: My right hon. Friend seems rather timorous—if I may use a Scottishism—about any attempt being made to impose a wage freeze. Will she tell us that she will not agree to the blandishments of the trade to have a free-for-all in prices, and that everything she has been doing in this respect will be kept up in the months ahead?
    Mrs. Shirley Williams: My hon. Friend need have no fear that I would like or want to see any kind of free-for-all in prices at present. That would be madness.

    Food Subsidies
    Mr. Rostasked the Secretary of State for Prices and Consumer Protection if she is satisfied with the effect of food subsidies on the cost of living.
    Mr. McCrindleasked the Secretary of State for Prices and Consumer Protection by what percentage the payment of
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    food subsidies has reduced the average cost of those items to which they apply.
    Mr. Wellbelovedasked the Secretary of State for Prices and Consumer Protection what effect food subsidies have had on the cost of living; and if she will make a statement.
    Mr. Alan Williams: The present saving in the General Index of Retail Prices as a result of food subsidits is estimated to be 1·4 points, while the reduction in the average cost of subsidised foods is estimated to be about 20 per cent. These savings are particularly helpful to low-income families which have to spend a high proportion of their money on food and other necessities.
    Mr. Rost: The right hon. Lady was asking for specific suggestions. As food subsidies are making only a marginal impact on food prices, yet adding substantially to inflationary pressures because they are increasing Government spending, would it not be more sensible to reallocate these blanket, indiscriminate and wasteful subsidies to those families and pensioners who are being hit worst by the ravages of inflation?
    Mr. Alan Williams: The hon. Gentleman must have misheard what I said in my answer. I made it clear that food subsidies are making a 20 per cent. difference to the prices of subsidised foods. In terms of benefit, they are four times as valuable to a family with an income of £20 or under per week as to a family with an income of £80 or over per week.
    The Opposition are in little position to criticise when, in government, for years they pursued a policy of subsidising the nationalised industries, where the benefit was 2 to 1 in favour of the high-income groups.
    Mr. Wellbeloved: As my hon. Friend's answer clearly demonstrated that, in terms of subsidies on basic foods, the less well off are receiving substantial help, will he give an undertaking, in view of the efforts which will be made to re-vamp the social contract in the weeks ahead, that subsidisation of basic foods will continue in order to assist the less well off in our community?
    Mr. Alan Williams: It is our intention that the subsidies on food shall continue. We have announced the programme for the following year. There will be no cut in them until the next financial year. There is no question of the subsidies being terminated. It is a matter of their being phased out systematically.
    Mr. MeCrindle: I accept the point that the less well off are being benefited to some extent as a result of the food subsidy policy, but will not the right hon. Gentleman take on board the reasonable point, put by my hon. Friend the Member for Derbyshire, South-East (Mr. Rost), that if the Government wish to continue to direct most help towards these people it could be more effectively and perhaps more generously done direct through the social services benefit system?
    Mr. Alan Williams: I appreciate the hon. Gentleman's attempt to be constructive. In the Chancellor of the Exchequer's announcement of public expenditure cuts, the increases that were scheduled for the social services were not in any way cut. For example, there will be a further uprating of pensions and associated benefits in November, the non-contributory invalidity scheme, and the help for the one-parent family.
    Mr. Skinner: If the food subsidy system is so egalitarian in its nature, why are food subsidies being phased out progressively?
    Mr. Alan Williams: It was never envisaged that food subsidies would be continued permanently. As my hon. Friend will remember, at the time when he supported the original programme in the House it was made clear that food subsidies were an interim measure. My right hon. Friend made it clear that in the long term she was envisaging more on social security benefits—for example, if a new system such as that for one-parent families could be devised—and that we would move away from food subsidies. It was always envisaged that the food subsidies would be short-term, and the Act was brought in for two years.
    Mr. Ridsdale: What effect have food subsidies on the retail price index? Would it not be better, for example, to look at
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    the rating system, and methods of reforming it?
    Mr. Alan Williams: The amount being paid in food subsidies is £550 million, in real terms. I ask the hon. Gentleman to read my answer, in which I stated their impact on the retail price index.
    Mr. Hooson: If the hon. Gentleman is right—and I accept it—that the value of food subsidies to a man on £20 a week is four times that to a man in a higher income group, does this not show, in itself, that there is a great deal of waste in the system and that it distorts the value of food in relation to other commodities in our community? Would it not be much better to give the lower income groups the help they undoubtedly need much more directly?
    Mr. Alan Williams: The hon. and learned Gentleman is aware that we have looked at a whole series of alternatives. Food subsidies were introduced because they could apply immediately. In addition, experience of schemes introduced by the Opposition—I accept their motives, but their methods were wrong—such as the family income supplement, and so on, all had a low uptake and did not get to the people who most needed the help.
    Mr. Ioan Evans: Does not my hon. Friend agree that subsidies on essential foods, such as milk, bread, butter and cheese, have kept food prices in this country much lower than those in neighbouring European countries? Would it not be possible at the point of sale to show the amount of the subsidy to the consumer so that she could appreciate the benefit of the Government's action in subsidies?
    Mr. Alan Williams: The difficulty about that suggestion is that in a period of high inflation various changes would make it difficult and possibly confusing to give such information. My hon. Friend should also bear in mind the risk that if too much information is given at the point of sale, at the end of the day the consumer ends up getting no information.
    Mrs. Sally Oppenheim: Does the hon. Gentleman acknowledge that as the average family has to spend over £12 a week more than it did last year, and as poorer families need £10 a week more, and as

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    the pension for a married couple will have to go up by £5 in December to restore its purchasing power to the level of last July, in this context the 85p a week that food subsidies are saving families is insignificant and irrelevant? Could not the Government have helped people far more by restraining inflation instead of trying to conceal it?
    Mr. Alan Williams: The hon. Lady states the obvious when she says that it would be better to restrain inflation. Both parties have been trying to find effective methods of doing just that, and we have invited the co-operation of both sides of industry in achieving an agreed policy. The hon. Lady constantly repeats the record and I congratulate her on having had it played on the radio for the first time today, but no doubt the listeners will become as familiar with it as we are. So far, the Opposition have not come up with a single alternative.
    Mr. Wakehamasked the Secretary of State for Prices and Consumer Protection if she will make a statement on the implementation of the Government's proposals to scale down food subsidies.
    Mr. William Hamiltonasked the Secretary of State for Prices and Consumer Protection if she will make a further statement on her proposed phasing out of food subsidies.
    Mr. Alan Williams: We have not decided the adjustments to be made in particular subsidies in 1976–77. The position will be considered nearer the time in the light of developing economic conditions and the expected price movements for the various subsidised foods.
    Mr. Wakeham: I accept the need, expressed on all sides of the House, to help those on low incomes, but does the hon. Gentleman not agree that confidence in the pound sterling will not return until we, as a nation, stop subsidising consumption? Will that process not be painful for all sections of the community?
    Mr. Alan Williams: I do not agree with that conclusion. It is not necessarily valid. There are far more important factors which relate to confidence. I do not think it did confidence any good to have
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    such an irresponsible speech as that which we had from the Leader of the Opposition at the weekend.
    Mr. William Hamilton: Since it was the Government's argument in favour of food subsidies that they protected those on low incomes, is that not a reason to retain them? Will it not be much more difficult—
    Mr. Skinner: It is the Common Market.
    Mr. William Hamilton: It is nothing to do with the Common Market. Does my hon. Friend not agree that it will be much more difficult to get an acceptable voluntary incomes policy if food subsidies are phased out, because of the consequential rise in the price index? Does my hon. Friend not agree that the trade unions will not accept that there should be an increase in food prices at a time of income restraint?
    Mr. Alan Williams: I accept the problem put by my hon. Friend. The change that has been envisaged for next year—and I stress that it is next year; there are many months before the change comes into operation—will still add only half per cent. to the cost of living at a time when the Chancellor envisages a substantial change in the rate at which the cost of living is increasing.
    Mr. Hardyasked the Secretary of State for Prices and Consumer Protection what has been the value of food subsidies to the average family in Great Britain for each week; and the value for each person, during the last 12 months.
    Mrs. Shirley Williams: The latest estimate of the value of food subsidies to a typical family of two adults and two children is about 75p per week. During the last 12 months the estimated average value per person has varied between 15p and 23p per week.
    Mr. Hardy: Does my right hon. Friend agree that the subsidies have been of great help to millions of people and that this help has been insufficiently appreciated in the country? Does she also agree that the absence of that help would be noticed by those to whom a half of 1 per cent. increase in the price of food is a great deal?
    Mrs. Shirley Williams: I thank my hon. Friend for what he said. The Conservative administration did not see fit to increase family allowances at all, but food subsidies have been of direct help to people with several children to raise.
    Mr. Gow: Is it not the case that out of the total amount of subsidies for the current year, namely, £550 million, £280 million is going to families with more than £50 a week and only £270 million to families with less than £50 a week?
    Mrs. Shirley Williams: The hon. Gentleman is falling into the common statistical error of comparing households which are mostly one- and two-person households—that is, pensioner households—with households which are normally four- and five-person households in the upper income brackets. If he were to look at the benefit per capita, he would find, as we have said, that the proportionate benefit to low income households is between three and four times what it is to high income households.

    Advertising and Packaging
    Mr. Gwilym Robertsasked the Secretary of State for Prices and Consumer Protection what study she has made of the amount spent on advertising and packaging goods, and their respective contribution to prices; if she will take steps designed to reduce advertising and packaging expenditures; and if she will make a statement.
    Mrs. Shirley Williams: Estimated expenditure on media advertising was £870 million in 1973. A Government-sponsored study of the economics of advertising will be published later this year. Expenditure on packaging is estimated at £1,700 million for 1974. The Waste Management Advisory Council, set up by the Government, is studying the possibility of eliminating excess packaging.
    Mr. Roberts: Is my right hon. Friend aware that many of us hope that before very long the Government will introduce controls on the advertising of essential commodities? Even so, we believe that in the meantime it is essential to curb some of the obvious excesses of our society, such as unnecessary advertising and packaging. Is she aware that such a
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    curb would be generally welcomed by the community?
    Mrs. Shirley Williams: I sympathise with my hon. Friend's anxiety, especially in respect of excessive packaging, for much of which there is no justification. With advertising it is very much a matter of looking at the facts in each case. Sometimes advertising has the effect of lowering costs and at other times of raising them. My hon. Friend will be aware that my Department is in close consultation with the industry about ways in which the position may be improved.
    Mr. Rifkind: No one wishes to see excessive advertising, but will the right hon. Lady bear in mind that the survival of many newspapers, or at least their cost to the public, depends largely on the amount of advertising that they are able to carry?
    Mrs. Shirley Williams: Yes, that true. The real danger with advertising is that it can sometimes create a more inflationary climate than would otherwise exist. I have in mind the example of some of the advertising for financial credit schemes in 1973, at a time when the previous administration was trying to cope with a massive but out-of-hand boom.
    Mr. Mike Thomas: On a point of order, Mr. Speaker. May I ask my right hon. Friend either to answer my supplementary now, or Question No. 10 now, or both at the end of Question Firm?
    Mr. Speaker: That is not a matter of order.

    Diabetic Foods
    Mr. Rookerasked the Secretary of State for Prices and Consumer Protection if she will amend the Price Code so as to exclude the weighting of price increases in diabetic products with costs not related to their manufacture.
    Mr. Alan Williams: My right hon Friend told the House on 17th April that she had asked the Price Commission to look into the price of diabetic foods. It will be decided whether there is need for any action when we have seen the commission's report.
    Mr. Rooker: May I give my hon. Friend an example of the need for action?

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    One of my constituents went to complain about an increase in the price of diabetic chocolate biscuits at Boots and was told that the reason for a massive increase was the big increase in the price of sugar.
    Mr. Alan Williams: I can understand the consumer's no doubt bemused reaction. However, it is interesting to note that although the price of sugar has risen massively, the price of sorbitol, which is a substitute, is still twice as high as that of sugar. We must wait until we have received the report and then consider what action may be taken

    Central Heating
    Mrs. Sally Oppenheimasked the Secretary of State for Prices and Consumer Protection whether she will arrange for an investigation of door to door selling and financing of central heating.
    Mr. Alan Williams: The Director-General of Fair Trading is already engaged in a review of doorstep selling. The financing of central heating installations will be covered by regulations to be made under the Consumer Credit Act.
    Mrs. Oppenheim: Does the hon. Gentleman not agree that the Consumer Credit Act can be brought into this? Since some of the firms involved have been named in newspaper articles, would not this be an ideal situation for the Director General of Fair Trading to invoke Section 38 of the Fair Trading Act to warn those companies and to take whatever appropriate action may be necessary in the Restrictive Practices Court?
    Mr. Alan Williams: The hon. Lady will know that we discussed this matter at considerable length in the House last week. I am sure that we all very much regret that she was not able to be with us.
    Mrs. Oppenheim: It was an Adjournment debate.
    Mr. Alan Williams: It may have been an Adjournment debate, but it was an extended one. We would have welcomed the hon. Lady's point of view. Dealing with the point about the Consumer Credit Act, I can tell the hon. Lady that we shall be introducing licensing in the autumn. That will be an ideal opportunity for the Director General to impose further discipline upon those who
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    have behaved in what I know the hon. Lady would agree can be described as a shabby way towards the consumer. I am sure that the Director General will welcome any information that the hon. Lady can give about individual firms.
    Mr. Wellbeloved: Does my hon. Friend accept that there are Labour Members who would join with the hon. Lady in calling for stringent action to be taken against those free enterprise contractors who exploit the consumer when selling central heating? Is it not worth reminding the House and the country that the best people to give advice on central heating are at the electricity boards and gas boards? Further, is it not the case that such advice is free?
    Mr. Alan Williams: That is extremely sound advice. It is valuable for the House to warn the consumer as often as possible of the risks he faces in buying from some doorstep salesmen. Most of them are decent, genuine traders. It needs only a small proportion of people trading in high-cost goods like central heating to do tremendous harm to large numbers.

    Price Commission
    Mr. Ian Stewartasked the Secretary of State for Prices and Consumer Protection whether she will make a statement on the latest report of the Price Commission.
    Mrs. Shirley Williams: The report deals with many topics, including movements in labour costs, and material costs. The report says that prices were still being affected by the increase in oil prices but once this worked its way through, rising prices would largely be due to rising labour costs.
    Mr. Stewart: In the light of the Price Commission report, does the right hon. Lady consider that there is any further scope for restricting price increases by limitations on wholesale or retail margins? Will she say whether her plan for continuing restraint of prices will take into account the danger of promoting unemployment through the erosion of profit margins, caused in many cases by a delay in approving price adjustments at a time of high and accelerating inflation?
    Mrs. Shirley Williams: As I have already said, we are trying to strike a balance between the needs of investment and the maintenance of employment, on the one side, and the need to reduce the rate of inflation, as far as possible, on the other. It is with this in mind that I have given the Price Commission additional powers to make special inquiries about individual prices while retaining a general structure of control over the profits of enterprises.
    Mr. Lipton: What is the Price Commission doing about the excessive cost of ice-cream, hamburgers, and so on, charged by street traders in the West End? Let us forget all these airy-fairy theories. What is it doing about that?
    Mrs. Shirley Williams: Since one of my hon. Friend's colleagues has asked exactly this Question, it would be unfair of me to answer it in reply to a supplementary question.

    Consumer Advice Centres
    Mr. Cryerasked the Secretary of State for Prices and Consumer Protection if she is satisfied with the number of consumer advice centres currently available.
    Mrs. Shirley Williams: In June 1974 there were about 35 consumer advice centres now there are about 60, including mobile units. In addition, there are 670 citizens advice bureaux, an increase of 45, most of which now deal with consumer problems.
    I would like to see this development go further when the economic situation permits. But at present the Government consider that the enforcement of consumer protection legislation, much of it new, including the Consumer Credit Act, must, within the constraints on local authorities' spending, have priority over new developments in consumer advice.
    Mr. Cryer: But will my right hon. Friend accept that the implementation of consumer advice centres is an important part of the social contract? Does she agree that in Labour's Programme 1973 we stressed the importance of establishing a nation-wide system of high street consumer advice and control units to which the consumer could go immediately and ask for the price control mechanism to be operated, instead of the present rather
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    haphazard system? Will my right hon. Friend urge action to be taken on this?
    Mrs. Shirley Williams: I think that my hon. Friend will accept, coming as he does from one of the leading local authorities in this field, that there has been a very sharp jump forward in the last 12 months. Indeed, if I were to give him the figures from when the Government came to power in February 1974, he would see that there has been about a fivefold increase in the number of consumer advice centres as well as an increase in the number of citizens' advice bureaux. I assure him that I yield to no one in believing that these are of crucial importance, but it would be a mistake for Parliament to pass legislation and then not to finance the means of enforcing it as quickly as possible.
    Mr. Michael Morris: Is it not true that, on a cost-effective basis, citizens' advice bureaux are giving far better value for money than are consumer advice centres, particularly at a time when there is a great shortage of local authority funds?
    Mrs. Shirley Williams: I think that the hon. Gentleman would find it hard to sustain that argument. It depends very much on the citizens' advice bureaux at which one looks and in what area, because the citizens' advice centres are virtually all in metropolitan areas, with relatively high rent and rate costs to meet. But my strong impression from those advice centres which have been in being long enough to return effective reports is that in many cases they are more than saving their ratepayers the cost of running them. We are endeavouring to get full reports so that we can put a complete picture before the House, but as many centres have been running for only a matter of months, and in some cases weeks, the hon. Gentleman will appreciate that it will be a little time before such a report can be brought forward.
    Dr. M. S. Miller: May I draw my right hon. Friend's attention to a change in practice in the consumer advice centre in my constituency, which is one of the two consumer advice centres in Scotland? Is she aware that the control of it is now in the hands of the regional authority and that, instead of the director of the consumer advice centre being able to

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    drive a bargain with the retailer, problems now have to go through a cumbersome mechanism, with letters being written? This is disadvantageous to the customer.
    Mrs. Shirley Williams: I assure my hon. Friend that we have urged local authorities not that they devolve on the districts the major responsibility which was left with the county authorities under local government reorganisation but that, as far as possible, matters of consumer complaint should be dealt with locally, which gives a much more effective and helpful service.
    Mr. Teddy Taylor: Is the right hon. Lady aware that the high-powered and expensive expertise offered by gas and electricity consultative councils is not used a great deal by people who need the advice? Therefore, will she discuss with the gas and electricity boards the possibility of these consultative councils having officers available to help the public in consumer advice centres?
    Mrs. Shirley Williams: The hon. Gentleman will be aware that the question of the structure of nationalised industries' consumer councils has been sent to the National Consumer Council for review, and we hope that one of the things which will emerge from it is a simplification of the direct service to the consumer, who often finds it easier to go to one point of assistance rather than to many.

    Referendum
    Mr. Mike Thomasasked the Secretary of State for Prices and Consumer Protection whether she will make a statement on the referendum result as it affects the work of her Department.
    Mrs. Shirley Williams: Since I took office I have made numerous representations in the consumer interest on European Community matters, notably in relation to agricultural, competition and consumer protection policy. I shall continue to pursue these questions, and I am happy to say that the Commissioner in charge of consumer affairs will be coming here to see me shortly.
    Mr. Thomas: May I congratulate my right hon. Friend on the part she played in the referendum campaign, and may
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    I say how anxious a number of us on these benches are that this House and her Department play their full part in European matters now that we are in the Community to stay? Is she aware that a number of our Socialist colleagues in Europe will be almost as interested as I am to learn the answer to my earlier supplementary question? If she could give it while answering this supplementary question, I should be extremely pleased.
    Mrs. Shirley Williams: I am interested in all aspects of consumer affairs, and, as in Europe, I endeavoured to get the agricultural Commissioner to consider more closely the interests of consumers in drawing up agricultural policy, so domestically I am anxious to persuade the electricity and gas boards to take into account the concern of small consumers for pricing policies which are less regressive than they are at present.

    Ice-Cream and Coca-Cola
    Mr. Crouchasked the Secretary of State for Prices and Consumer Protection if, in the interests of visitors and overseas tourists, she will refer to the Price Commission the prices being charged for ice-cream and Coca-Cola outside the Palace of Westminster.
    Mr. Alan Williams: I am concerned about the reports of excessive charges by some street traders, but a reference to the Price Commission would not be the right remedy for a problem which may well involve unlicensed trading.
    Mr. Crouch: Will the Minister take from me a suggestion as to the right remedy for the traders outside this temple? If they cannot observe the prices recommended by the manufacturers of these soft drinks and ice-cream, and continue to charge prices which are three times as much as they should be, thereby rooking tourists and visitors to this country, they should be chucked out. I suggest that we put up in St. Stephen's Garden and other places, notices of recommended prices, and so safeguard our tourists.
    Mr. Williams: I am afraid that the hon. Gentleman is wrong if he thinks that this problem is confined to the immediate area of the Palace of Westminster. If it were, it would be easier

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    to solve. This sort of abuse and cheating of tourists takes place on a wide scale in London, and one of the difficulties is pinning down the people concerned. As they are unlicensed, they are often difficult to trace. For this reason, I have invited the London Tourist Board to a meeting with me this week, so that we can discuss what further measures can be taken. I am sure that this and the publicity that the hon. Gentleman has now given to the matter will help tourists. I think that magistrates could also help by not imposing such derisory fines when these people are caught.

NORTHERN IRELAND
Mr. Powell Mr. Powell (by Private Notice) asked the Secretary of State for Northern Ireland if he will make a statement on the severe recrudescence of violence in Northern Ireland in the last 48 hours.
The Secretary of State for Northern Ireland (Mr. Merlyn Rees): There were a number of incidents in Northern Ireland during Saturday and Sunday, 14th and 15th June. On Saturday 14th June two people were killed and 10 injured. The main incident was in New Lodge Road, Belfast, when a woman was killed and five persons were injured in the same attack when gunmen carried out a shooting attack; in addition, a man was killed by a gunman at the Garden Bar in the Tiger Bay area, and there were two other shooting incidents, involving injuries, in Belfast. There were also incidents involving injuries in Castlewellan, Co. Down, and Larne. On Sunday 15th June a man was injured by a gunman in the Village, Belfast. There were other attacks in Belfast but no one was hurt. The RUC is taking every possible means to deal with these incidents and 18 people have been charged with murder, attempted murder, and explosives and firearms offences in respect of those incidents.
In addition, the House will be aware of incidents which occurred last Friday, including one in which a child was killed and her father seriously injured in Belfast; and in the early hours of this morning, weapons and ammunition were stolen from the UDR centre at Magherafeld, Co. Londonderry.
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Since the Provisional IRA cease-fire, violence has continued but its nature has changed. The cease-fire has brought into sharp focus a great deal of violence in, and between, both communities. This violence has got to be stamped out if the road forward in Northern Ireland is not to remain blocked for ever. The security forces are doing everything possible; the help of the people of Northern Ireland is essential to them in this vital task. As I stated in the answer which I gave to my hon. Friend the Member for St. Pancras, North (Mr. Stallard) on 11th June, during the period 1st January to 9th June 1975 52 attempted murder charges, 199 firearms charges, 35 explosive charges, 131 theft charges and 45 other security-type charges were made. These figures do not include murder charges, of which there have been 54 so far this year.
Mr. Powell: While recognising the volume of successful action taken by the RUC, to which, despite the right hon. Gentleman's efforts, not sufficient publicity is probably given, may I ask him two questions? First, what has been the rôle in these matters in recent days of the incident centres? Second, bearing in mind that uncertainty as to the future status of Northern Ireland is the breeding ground of violence, is it not the case that those who purport to issue and to give circulation to baseless and improbable rumours as to Her Majesty's Government's action in hypothetical circumstances bear a grave responsibility for the consequences?
Mr. Rees: The incident centres have been used both ways to try to find out who has been involved in the violence of the last few days, and, indeed, of the last three or four months. But I must make a basic point that is sometimes ignored. The cease-fire is not complete, it is not genuine and sustained, but in terms of the violence within a community, sectarian violence, the killings and the murderings are taking place from both sides of the community—indeed, on balance, in terms of murders, from the majority community. It is most important to get that into perspective.
On the second question, of course uncertainty plays a part, but the more I look at it the more I realise that there

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are people in Northern Ireland who are motivated not by political ideals or ideas but by killing for the sake of killing. For instance, if the right hon. Gentleman could tell me what was involved in spraying a bus queue with machine-gun fire which killed and injured people, what that was supposed to do for the future of the community on either side, I should be obliged. I cannot sum it up. This is deeper and more senseless than perhaps any of us realises; and it is the cease-fire which has isolated it.
Mr. Flannery: I know that my right hon. Friend would not want anyone to say anything which would inflame a difficult situation, but would he not agree that the catalogue of melancholy actions is getting deeper and deeper and that, so far, the political actions which we have taken do not seem to have had the effect that we had hoped for? Therefore, is not a complete reassessment of our political approach to Northern Ireland absolutely necessary because at the moment we are getting nowhere?
Mr. Rees: My hon. Friend has fallen prey to the English disease of pretending that there is a simple answer to the problem of Northern Ireland——
Mr. Flannery: The present approach is not working.
Mr. Rees: My hon. Friend says that it is not working, which illustrates the same point. Years of hatred are involved in present events. There is one point: thank heaven the number of men in the Army who have been hurt or killed since the end of last year is much lower, which is a part of the story that I was trying to indicate of the different nature of the present violence.
What is happening in Northern Ireland now is that, with the IRA violence very much lower, this violence is taking place in working-class areas—I use the phrase advisedly—and it is sectarian, inter-sectarian, Chicagoesque, and, politically, I do not believe that even a political solution would solve this problem. It will go on even if we came up with a nice simple solution to the problem of 800 years.
Mr. Neave: While one congratulates the RUC on its efforts to deal with these terrible incidents—efforts which have been well recognised by the welcome honour
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to Sir Jamie Flanagan which we heard about on Saturday—is it not the case that the Government are resolved, whatever may be said to the contrary, that our forces shall continue in support of the civil power until normal policing by the RUC throughout the Province is possible?
Mr. Rees: Yes, Sir. Support by the Army for the civil power is marked by the presence in Northern Ireland of 13,000 soldiers. But when the Army first went there five or six years ago it was for a particular purpose. There is no denigration involved in what I say, because I am fully aware of the incredible rôle that it has played. A great deal of what I have described today is not capable of solution by soldiers; it needs detective work and the sort of investigation that the RUC is used to. This is the nature of the change which has taken place, and I am grateful for this opportunity to illustrate the changed nature of the security situation in Northern Ireland. It would be wrong to pretend that the violence comes only from the minority community. That is not the case. It comes from both sides. We have to mark that well.
Mr. Thorpe: May I ask the right hon. Gentleman about a matter for which we do have responsibility? That is the raid on the UDR depot. Is it not the case that a large number of weapons were stolen and that it is suggested that between a minimum of three and a maximum of nine people only were involved? Does that not suggest that security was very lax? In order to prevent these weapons from spreading into very dangerous hands, has the area been cordoned off and have we sought and received the support of the authorities of the Republic on the border?
Mr. Rees: Without wanting to avoid answering those questions, I must make it clear for the record that the UDR and the Army, when it comes to answering Questions in the House, are the responsibility of the Secretary of State for Defence. However, I have, of course, looked into that matter this morning. A great deal is being done in regard to the raid on the UDR armoury last night. It would be foolish of me to give any indication of what is involved. It is not easy, when this sort of thing happens, for the spread of arms to one or other of the para-military organisations to be prevented. But

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it is a bad thing and everything is being done to deal with it. Without checking on the telephone, I do not know at the moment the preliminary view of the security forces. Here again. I would advise against jumping to conclusion as to which of the para-military forces carried out this raid overnight.
Mr. Kelley: Does not my right hon. Friend agree that a monumental mistake was made when we entered, in a military sense, into the Northern Ireland situation? Would it now be wise to review the position from the point of view of a withdrawal and allow the people of Northern Ireland to try to sort out their own problems in their own way?
Mr. Rees: I have just reported that the people of Northern Ireland are trying to sort out their own problems in their own way. Their own way is not pleasant. I repeat a point of view which I sometimes hear. It is largely a working-class fight which is taking place in Northern Ireland. I refer to 1969. It is easy after the event to say that going in in that way was a monumental mistake. The Army was already there, because Northern Ireland is part of the United Kingdom. The job of this Government—as I am sure it was of the previous Government—is to obtain normal policing, with normal civilian forces to deal with this matter. It is not meant that the Army should deal with this kind of problem. However, it has a rôle to play there. I hope that when, from time to time, the number of soldiers in Northern Ireland is reduced it will not be seen as a case of pulling out but will be seen as a case of dealing with a situation in the best way.
Rev. Ian Paisley: Will the Secretary of State take it that the hon. Members on these benches from Northern Ireland agree with him that a section of the majority population has been involved in the most dastardly deeds? Will the right hon. Gentleman agree that the majority of the Protestant population in Northern Ireland completely dissociate themselves from these actions which are supposedly done in their name? Will he confirm that the Protestant population in the main are supporting, through their leaders, the members of the Royal Ulster Constabulary as it carries out its work? Will he
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say whether he takes heart that tomorrow in the Northern Ireland Convention, for the first time in Northern Ireland politics, an all-party motion proposed by the leader of the UUC, and seconded by the leader of the SDLP, condemning violence will be discussed? Does he not feel that that is an omen in the right direction?
Mr. Rees: Taking the hon. Gentleman's last point, when I first proposed to the House that there should be a meeting and a Convention, representing the people of Northern Ireland, composed of people sitting together and putting their minds to the political problems of Northern Ireland, there were many who believed that that was impossible. I do not deny the difficulty. This past weekend illustrates that. There are many signs in the Convention that the representatives of Northern Ireland stand a better chance than those from outside in working out their future. This is about the only comment I have made in recent months. Tomorrow's activities in the Convention show what can be done. I note with interest what the hon. Gentleman said. We have faced difficulties together. As he said today, he has spoken out against violence. That cannot but be helpful. The majority of both communities want peace, but there is a small group of people with guns. That is the measure of the political problem in Northern Ireland.
Mr. Duffy: Is the Secretary of State aware that the reported detention of four men almost immediately after the indiscriminate shooting in the New Lodge area is very much to the credit of the soldiers involved? It is very reassuring. Will the Secretary of State say whether that action fairly reflects the growing success of the police and the armed forces in dealing with these terrible sectarian attacks?
Mr. Rees: The difficulty, when we move into the area of cases being considered by the courts, is that I must not get involved in matters which are sub judice. On Saturday afternoon the men of the Second Parachute Regiment—I saw the Officer Commanding on Saturday evening—apprehended some people shortly after the machine-gunning took place. I must leave the matter at that point. This illustrates the fact that the police are too stretched to patrol the interfaces, and that the

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Army has a rôle to play, and that it did on that occasion apprehend a number of people. We must await the outcome from the courts.
I should like to pick up one of my hon. Friend's points. Those persons were not detained by me. They will go through the courts. That is the measure of the change which is taking place.

UGANDA (MR. D. HILLS AND MR. S. W. SMOLEN)
The Secretary of State for Foreign and Commonwealth Affairs (Mr. James Callaghan): With your permission, Mr. Speaker, and that of the House, I should like to make a statement about the two British subjects imprisoned in Uganda.
Hon. Members will know that Mr. Hills has been convicted and sentenced to death by a military tribunal on charges connected with his authorship of a book, as yet unpublished, which has been held to be critical of President Amin. Mr. Hills had previously appeared before a civil court, when similar charges against him were withdrawn by the prosecution and the magistrate stated that there was no case to answer.
Mr. Smolen has also appeared before a military tribunal on a charge of hoarding under the recently introduced Uganda economic crimes decree. Under this decree he is liable, if convicted, to a maximum penalty of 10 years' imprisonment. However, President Amin is reported by Uganda radio to have said that he too will face the death penalty if found guilty. Mr. Smolen's case has been adjourned until 18th June.
Her Majesty's Government have been embarked on an intense round of diplomatic activity since the danger to Mr. Hills' life first became apparent. I cannot at this moment indicate all the steps which are being taken, but a number of world leaders and Governments have made or will make representations to President Amin on humanitarian grounds on behalf of our two citizens. Some have requested that we should not reveal the messages they have sent, and I shall, of course, respect their confidences. It could in any case well be that their messages will thus be more effective. The
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House will wish me to express its appreciation to them and particularly to President Kenyatta, who has been in contact with President Amin on several occasions and through whom we have been aware of developments in the Ugandan position.
I have instructed our acting High Com missioner in Kampala, Mr. Hennessy, to deliver the personal message to President Amin signed by the Prime Minister, and he has done so today.
The normal means of communication between Governments are through diplomatic representatives. I have, of course, given very careful consideration to the report emanating from radio Uganda that President Amin has demanded that the message be delivered by myself or by my right hon. Friend the Secretary of State for Defence, although the Ugandans have not so notified us in any formal way. I wish to inform the House that I do not think it would assist good relations between our two countries in the long run if I were to deliver such a message under duress. [HON. MEMBERS: "Hear, hear.") But if, as I hope, humanity prevails in the cases of Mr. Hills and Mr. Smolen I should be very willing to discuss with President Amin in the near future the state of relations between our two countries. Amongst the subjects I would wish to raise with him is the future of the 700 or so Britons remaining in Uganda.
I am grateful to hon. Members who refrained from pressing me to answer questions on this subject last week. The House will appreciate that it is necessary for me to continue to exercise reticence.
Mr. Maudling: The Secretary of State has been good enough to keep the Opposition informed, through me, of what has been happening. I am most grateful for that. Is he aware that the Opposition have strong feelings of indignation and concern about this situation? I assure him that it is our intention to do everything we possibly can to help him with this tragic situation. For the time being I am sure that he is right in saying that exercising reticence is the correct procedure. The time will come when that situation no longer applies and the matter can be discussed. For the time being I am sure that the House supports the efforts being made by the Foreign Secretary.
Mr. David Steel: Although it is right that the cases of these two citizens should receive widespread publicity, does the Foreign Secretary agree that unhappily there are other citizens, some of whom are known personally to Members of Parliament, whose fate is equally uncertain? Does he therefore accept, as we accept, that diplomatic activity is the right answer, especially amongst those Commonwealth countries which are members of the Organisation of African Unity?
Mr. Callaghan: I am much obliged to the hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) and the right hon. Member for Chipping Barnet (Mr. Maudling). Yes, Sir; I think that in this matter diplomatic activity is the best chance we have of ensuring that humanity prevails. I propose to pursue this in an intense but, I hope, non-provocative way.
Mr. George Cunningham: Does my right hon. Friend appreciate that those of us who have in the past interceded on behalf of prisoners will understand the difficulties under which he has been labouring, and that it is only because of that understanding that there have not been more vocal expressions of the disquiet which so many of us feel so strongly?
Mr. Callaghan: Yes, I recognise that. It was for that reason that I volunteered this statement today, in order that I could say to the House as much as possible in the circumstances and in order that the House should recognise that I feel that I have a responsibility here.
Mr. Ridley: As Mr. Hills' brother-in-law is a constituent of mine, may I thank the Foreign and Commonwealth Secretary for his statement this afternoon? Those of us who have connections with these two unfortunate citizens wish to show forbearance in any way that we can in order to assist the excellent work which the Foreign Office and the right hon. Gentleman have done. But would he not agree that if barbarous sentences are meted out, this will be seriously deleterious to British-Ugandan relations in the future?
Mr. Callaghan: The sentence has already been announced in the case of Mr. Hill, and it is now for President
964
Amin to consider whether he will exercise clemency in this case. I believe the whole House will join in making that request to him. As regards Mr. Smolen, he has not yet been convicted, but the sentence which President Amin has said will be carried out if he is found guilty appears to go beyond what is laid down under the economic crimes decree.

BILL PRESENTED
  DEMOCRATIC ELECTIONS
  Sir Brandon Rhys Williams, supported by Mr. Clement Freud and Mr. William Hamilton, presented a Bill to amend the law relating to Parliamentary and local government elections; to enable electors to register an alternative vote; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday 11th July and to be printed. [Bill 178.]
ORDERS OF THE DAY
  SUPPLY
  [18th ALLOTTED DAY],—considered

  HOUSING
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Coleman.]
  3.53 p.m.
  Mr. Timothy Raison: There are few moments when a debate on housing is not relevant, but I think the House will agree that this is an occasion when it could not have been more relevant.
  As the Secretary of State knows full well, and has made clear in recent speeches, the country is at the moment in the throes of a grave economic crisis, and a drastic curtailing of public expenditure is clearly necessary. Yet in the matter of housing, public expenditure has rocketed and new public sector housing in particular has often become hideously expensive. Subsidies and the local authority debt burden have soared. Yet, in spite of this, housing remains, I believe, our greatest social weakness.
  I suspect that many hon. Members on both sides of the House, like myself, will join in saying from their own experience in their surgeries and through their correspondence that of all the things which are put to them, housing is again and again the most serious and most worrying.
  The purpose of this debate is to establish, first of all, exactly what is happening and to explore what can be done. But it is also to point out to the Government the folly of some of the Government's present policies and the damage that their doctrinaire blindness is doing to ordinary men and women who are desperate for somewhere to live. What we are seeing is, on the one hand, profligate and often ineffective public spending and, on the other hand, bigoted policies over private tenancies, land and so on, which are clearly cruel in their effects.
  I want to look first of all at the present situation. It is perfectly true that the
  966
  latest figures for starts from February to April are up on both the private and public sides. The private sector starts are up 40 per cent., public sector starts are up 3 per cent.—and that is something. But the comparison is with 1974 which was the worst year for house building since 1951. Has anybody any confidence at all that these present latest figures can be maintained in present circumstances?
  The percentage increase in private sector starts in particular is from a quite abysmally low level of 104,800 last year, which was the worst since 1953. I understand that the latest Department of the Environment Private Enterprise Housing Inquiry suggests that 1975 would see 135,000 private starts, which is 30,000 fewer than in any of the 15 years between 1959 and 1973. So, as I say, the improvement is only on the dreadful year of 1974.
  The fact is that at the moment we have substantial unemployment in the building industry, but we still have huge brick stockpiles. The reports from the industry on the sales side are particularly depressing. Although the improvement in mortgage availability is welcome, and the Secretary of State, I think, has been sensible in his emphasis on achieving stability, the number of mortgages supplied for purchases of new houses is slightly down between the last quarter of 1974 and the first quarter of 1975. At the same time, the £100 million cut in local authority mortgages will not help because this will hit the lower income groups who find it hardest to get mortgages.
  Taking the picture in public sector housing, the situation is clearly equally critical. Part of it was summarised in an article in The Times of 12th May when the planning reporter said:
  "The economic crisis, for perhaps the first time, has focused public attention on the enormous and ever-growing cost of public housing programmes. On March 31st 1973 the local authorities' housing debt totalled £8,889 million. By the end of the current financial year it is estimated that the figure will be some £16,500 million."
  The article goes on to say:
  "…there is a real possibility that if things go on as they are councils will find themselves unable to service their debts."
  Local authorities are faced in some parts with huge costs of building new houses.

  967
  Yet some persist in addition in enormously expensive municipalisation programmes, though it must be said that the Government at last seem to be, partially anyway, stamping down on this.
  I will not embarrass the Secretary of State by quoting the highly pertinent articles of Messrs. Booker and Gray. I will not rehearse the examples of Camden and other areas, which are proposing to pay astronomical sums of money for new house building. Hon. Members and the country are familiar with these stories. But the Secretary of State has to recognise that the cost of new housing in the London area ranges from £20,000 to £50,000 a unit, and clearly that cannot go on.
  Interestingly enough, members of the GLC, or some of them, are coming to recognise this. In the Daily Telegraph of 23rd April there was a report that the Chairman and Vice-Chairman of the Policy and Resources Committee, Mr. Harrington and Mr. Stutchbury,
  "have told the ruling Labour group that they must face drastic cuts in their programme."
  It was a gross over-simplification of the then Under-Secretary, whom we see here today, last week to
  "draw the attention of local authorities to the fact that they are able to build without a subsidy ceiling and that many local authorities could be building far more if only they had the will to do so."—[Official Report, 11th June 1975; Vol. 893, c. 402.]
  His actual words, the House will recall, were "to build without a ceiling." I think the word "subsidy" was incorporated in the course of revision of the Hansard text. His actual words were somewhat more to the point than the version which appears in Hansard.
  The public expenditure problem in housing is prodigious. It has been summarised recently in an illuminating paper by Dr. Edward Craven of the Centre for Studies in Social Policy, with which I am associated, which is to be published shortly. He says:
  "Throughout the 1960s, spending on housing represented about 5 to 6 per cent. of total public expenditure, even though this included a period during which a previous Labour Government was giving housing priority. In 1972–73, it still accounted for only 6 per cent. But then came the jump. There was a big increase in 1973–74; housing indeed was the only major programme to be specifically exempt from the December 1973 expenditure
  968
  cuts. And by 1974–75 housing expenditure represented 9.4 per cent. of total public spending. In volume terms in that two-year period, housing expenditure went up from £2,047 million to £3,616 million, a 77 per cent. increase: in cost terms, it rose by a staggering 119 per cent."
  Against this:
  "Total public expenditure increased by only 14 per cent. in volume terms, and 22 per cent. in cost terms."
  What were the consequences of this? Dr. Craven continues:
  "… the sharp increase in expenditure has not been reflected in a similar increase in housing output in bricks and mortar terms, or at least not on anything like the same scale. Almost all indicators of housing output—improvement grants, new building, level of slum clearance—fell or are to increase relatively slowly over the period 1972–73 to 197576. A very large part of the increase went into refinancing the housing programme, into transferring stock from the private to the public sector, and into cushioning families from the effects of price inflation."
  In other words, what has been happening is that in terms of additional housing—which, after all, is what really matters—the results can only be said to be bitterly disappointing.
  Why has public expenditure soared? There are a number of reasons for this. I just want to pick out two. First of all, the big drop in the sales of council houses has seriously affected the figures. In 1972 over 60,000 council houses were sold. In 1974 only 1,000 or 2,000 were sold. The consequence of this is that between 1972–73 and 1974–75 there has been a fall in receipts from this source of £276 million. Quite apart from this, there are very strong objections to the Government's policy.
  Secondly, there has been the enormous growth in subsidies, which account for a third of public expenditure on housing today. Subsidies increased by 113 per cent. between 1972–73 and 1974–75, and they now stand, according to an answer to a Question on 11th June, at £1,218 million. As Dr. Craven says:
  "This rise reflects a number of factors but the most important of these is inflation—and more specifically the Labour Government's decision to use the housing programme as an instrument of incomes policy and incomes maintenance on an unprecedented scale".
  That is at the heart of our present problems.
  Under the Government strong element of distortion has entered into housing

  969
  policy. It is perfectly true that the rent rebates and allowances which we introduced and support account for 28 per cent. of the increase in subsidies. However, the crucial factors include the rent freeze from March 1974 for one year. The loss of income from this to the housing revenue accounts was about £90 million. This rent freeze was at a time when earnings were increasing steadily.
  Over the years there has also been the general tendency for rent to provide for an ever-smaller proportion of housing revenue accounts. The net contribution after rebates is now well below 50 per cent. In 1973 unrebated rents contributed 69 per cent. towards the housing revenue accounts. Now that is down to only 55 per cent.
  I regret having to put these statistics before the House because this is never the most attractive way of arguing, but we have to examine this area in these hard times. This situation simply cannot continue. Neither the ratepayer nor the Exchequer can bear this burden, particularly where the incomes of a considerable proportion of council tenants have been rising well ahead of inflation. The fact is that average earnings have raced ahead of rents.
  The Secretary of State must now state his policy for rents in clearer terms. What does he have in mind? He simply cannot leave this matter to the local authorities. It is quite clear that this problem has become far too vast to be left simply to the decisions of individual councils. Equally, he cannot leave the whole problem until next year because the pressure on public expenditure is so great that he must take action now.
  Mr. Frank Allaun: I have listened carefully to the argument advanced by the hon. Gentleman. Is he advocating—and I hope I am not correctly summarising his argument—that the Government should compel local authorities to raise rents?
  Mr. Raison: If the hon. Gentleman is strongly opposed to that policy, he will find himself shortly fighting with his colleagues. The Secretary of State has to use powerful influence over the local authorities in this matter, which is what he will have to do anyway.
  970
  At the same time there is the long decline in the private rented sector. The House knows that in 1950 private rented dwellings accounted for 45 per cent. of households in the United Kingdom. In 1973 that figure was down to 17 per cent., including housing associations. The Labour Party revels in this. It believes that this is social progress. Labour Members say so over and over again. I believe that they are profoundly wrong. I suggest that they read an article by Dr. David Eversley of the Centre for Environmental Studies, which was published in New Society on 16th January this year. I should like to quote what he said about the consequence of not having private rented houses.
  "What are we going to do to enable people to move house when they need to change jobs? What are we going to offer, besides a council house after a very long wait, to young couples getting married and perhaps wanting to start a family? If the answer is 'nothing', then no one should be surprised if large cities cannot man their essential services, if homelessness is on the increase, and if fertility is falling faster than even the optimistic had demanded.
  There remains a further question—whether a state of affairs where there is no choice, other than ownership or local authority tenancy, represents the environmental millenium we wanted? It is a question, however, which we should ask those seeking homes, not the theorists. It is hard to see what joy the strangulation of the private housing market has brought to those most in need of a roof over their heads."
  I believe that those words would ring true with very many poorer people in our big cities if only they were to read them.
  Mr. Bruce Douglas-Mann: Perhaps the hon. Gentleman is aware that in a Fabian Society pamphlet on the subject of municipalisation similar words were written by me. Would the hon. Gentleman not take into account the fact that the greatest and sharpest decline in the stock of privately rented dwellings took place between 1957 and 1964 at a time when the 1957 Rent Act was taking premises out of control? Would he not agree that the measures taken have protected a large number of tenants from being evicted as a consequence of the lack of protection under the Rent Act?
  Mr. Raison: I fully accept that this has been an ongoing decline for a long time. However, I believe that the hon. Gentleman is wrong in a way that is

  971
  typical of his party, because it approaches this in terms of an obsession with security rather than with provisions. Above all we need provision. Whether we can ever get substantial new investment into the private rented sector is obviously a substantial question. I should like to see it, but clearly there are difficulties. What cannot be doubted is that there is real hardship at the moment arising from Labour's war on landlords. This hardship applies equally to small landlords and to the homeless alike.
  The truth is that the long years of control and, in particular, the folly of the Rent Act 1974 have taken their predictable toll. I believe that forcing landlords to subsidise tenants through control means quite simply that landlords give up. The drying up of furnished tenancies caused by the Rent Act 1974, which we predicted last year, is now taking place, with cruel results. Obviously none of us can give exact figures for what is happening. No doubt when he replies to the debate the Minister will talk about the evidence. But we all know what is happening. Every hon. Member who has people coming to him in a desperate search for housing knows that the 1974 Act has seriously diminished the stock of rented housing. There is no question about it. The evidence from estate agents, who are in a position to know, confirms this point completely. This has happened, and with cruel results.
  The Parliamentary Secretary to the Treasury (Mr. Robert Mellish): Nonsense.
  Mr. Raison: I should have thought that the Chief Whip would have cared about this.
  Mr. Mellish Mr. Mellish rose——
  Mr. Raison: I am not quite clear whether the Patronage Secretary is seeking to intervene.
  Mr. Mellish: I think that it is impertinent of the hon. Gentleman to talk about care about housing. The record of the Conservative Party when in Government is pretty grim. Most of us have spent a long time, in the House and outside it, trying to stop the Tory Party supporting landlords whose objective has been to destroy property and the initiative of those who want to buy it.
  Mr. Raison: I suggest that the right hon. Gentleman turns his powers and eloquence on to his colleagues on the Government Front Bench and tries to rub some sense into them on this matter.
  The Secretary of State must think of ways of alleviating the problem created by the Rent Act 1974. It is absolute madness to encourage under-occupation at a time when we should be thinking of the reverse. There is no question that the Rent Act 1974 is encouraging under-occupation.
  The truth is that at a time when we have enormous public expenditure and inflationary problems, the Government are making matters far worse through sheer Socialist folly. Firstly, as I have said, there is their excessive use of housing policy as a means of supplementing incomes, which in many cases do not need it. Secondly, there is total commitment on their side to housing as a social service, rather than seeing the social service element as something which should be brought in to help people in need. Thirdly, there is persistent bias against the private sector, especially the private rented sector. Fourthly, there is bias against selling council houses, which is doing nothing for our housing stock and is adding again to public expenditure.
  In addition to this, we still have the incredibly expensive demolition and redevelopment which are beloved of Socialist councils, and municipalisation for municipalisation's sake, even though we are now seeing a slowing down of the latter. We also have a very worrying picture on improvements. The figures for house renovation grants are down from 89,700 for the first quarter of 1974 to 29,900 in 1975.
  If this debate does nothing else, it should at least give the Government the chance to state what is happening. At present we have statements and circulars following each other with such bewildering and sometimes contradictory rapidity that no one knows where he stands. It is extremely difficult to follow these circulars as they come out and contradict each other. As if that were not bad enough, we have such astonishing policies as the Community Land Bill.
  I do not propose to go into detail today on the Community Land Bill, but quite apart from its other grave defects it can

  973
  only harm housing, certainly private housing, very severely indeed. The truth is that it is already, by the mere threat of its existence as an Act, drying up the supply of land. To come up at this time with a measure which does nothing to make for cheaper housing seems to me absolutely extraordinary. I beg the Secretary of State to drop it, even if it means some unpleasantness among his colleagues.
  May I also say to the Secretary of State that the way that this Bill is being handled in Committee is absolutely disgraceful. I hope that both the Secretary of State and the Chief Whip will study the leader published in this morning's edition of The Guardian on this subject.
  The situation is clearly out of hand. The question now is what should be done. Because it is so out of hand, on the public expenditure side especially, it is particularly difficult, clearly, to put it right. But we must try to pick something up out of the ashes. The need to cut Government expenditure makes it imperative that housing policy should be rethought in such a way that we get the best out of such money as there is. For a start, this means jettisoning Socialism. Socialism has nothing to offer in housing policy today. It is expensive. It pays far too little regard to the desires and needs of individuals. It is geared to mass housing, at a time when we need human scale housing. It is geared to authoritarian paternalism, at a time when we need choice and sensitivity.
  Over and over again, Conservative instincts about what people want have been proved right, not least because of our emphasis on choice and variety. We on our side accept the place for council housing, but there is a pressing need to give fresh life and stability to the private sector, both owner-occupied and rented. This is not only a matter of desires and needs. It is also a fact that support for the private sector is a much more cost-effective way of providing housing where one can do so. It is clear that the cost of subsidising each new local authority house—initally, anyway—is about three times the tax relief on a mortgage for each new purchaser. The figures come from the Government and assume loan charges based on an interest rate of only 9.6 per cent., which is well below the current borrowing rate.
  974
  How can we stimulate home ownership? First, I believe that we should return to encouraging the sale of council houses. With the rise in incomes and a static level of private house prices, this should be easier than it was a year or two ago.
  Mr. Joseph Dean: Having quoted figures for council houses sold some years ago, is the hon. Gentleman aware that most of those were "given away" for less than £2,000 and that quite a number have since had to be bought back by the authorities which sold them, because of their housing shortages, for sums ranging between £8,000 and £10,000? Does the hon. Gentleman consider that to be good economics, when the balance has to be found, in the main, by the local ratepayers, from rents and from the taxpayer in general? Is that the hon. Gentleman's philosophy?
  Mr. Raison: The figures must be approved by the district valuer. The fact that houses can be sold back seems to be an advantage in the scheme rather than a disadvantage. One of the arguments against selling council houses has always been that some people may not be able to afford to keep up their payments. If they can sell them back, that is all to the good.
  Secondly, I believe that, again for public expenditure reasons, we must give additional support for mortgages if at all possible and certainly do what we can to hold down the rate. As I have said, I think that the present supply is adequate, but I believe—the Secretary of State has, I think, acknowledged this—that the rate needs to be watched very carefully. Thirdly, we must make more available for larger loans, because a bottle-neck has built up at the higher end of the market.
  Fourthly, we must scrap the Community Land Bill and encourage people to bring forward land for sale and get on with the job of implementing Dobry. One of our charges against the Community Land Bill is that it has put the Dobry Report on the shelf at a time when it would be of great value to be able to push ahead with its recommendations.
  Fifthly, we must look closely at new forms of buying. There is the half-and-half scheme, which has received publicity lately, and possibilities of partial shares in equity, and high-start schemes, and

  975
  so on. This is not the time to adopt an excessively doctrinaire view, but the great need is to keep the market going.
  I turn to the private rented sector. For a start, clearly we must repeal the Rent Act 1974, or alternatively, at the very least, bring in some new form of short-term lease which does not confer longterm security. The North Wiltshire approach, which has been discussed recently, is a start, although I have doubts about how widespread its value might be. Better still, we should take seriously the approach of my hon. Friend the Member for Kensington (Sir B. Rhys Williams) for some form of shorthold. [Interruption.] It is no good Ministers and ex-Ministers mocking this, because at present the need is desperate. We should also seriously consider the possibility of restoring some real point in investing in private lettings. Perhaps that can be done through depreciation or through capital grants, for example. The need is clear and it is being acknowledged even within the Labour Party. The House may recall that in the Daily Telegraph of 23rd April Mr. Stutchbury said:
  "I think it is now clear that London's housing problem cannot be solved from the public sector. The main reason for this is the doubling of interest rates over the past two years."
  Later it was reported that Mr. Stutchbury argues
  "that the Government has done this, as a start to subsidising the private landlord so that he is not, as at present, subsidising his tenant. They should move towards a situation where the private landlord can get an economic return on his property and afford to keep it in repair."
  What about the council sector? The money which is available for this sector must be used for building provided it is at a reasonable cost. Secondly, there is a strong case for trying to keep the improvement programme going. Thirdly, I hope that we can maintain mortgages for those who do not meet the level of the building societies. Fourthly, there is the continuing need to keep housing associations under way.
  Clearly rents must rise and account for a substantially greater proportion of the housing revenue account than at present. We also need to attack under-occupation in the public sector as in the private sector. For example, I think we could do more to encourage transfers and ex-
  976
  changes. We could do more to increase the number of smaller units and to encourage lodgers in council houses, making it worth while to have them. At the same time, we should review management policies and move towards an effective tenants' charter of the kind which the Conservative Party has advocated.
  What about the crucial question of the council rent system? I have a suspicion that the Secretary of State may now be somewhat ruefully regretting his party's attitude to the fair rent system in the Housing Finance Act 1972. It may be true that next year's rent increases will be approximately double the 50p which would have been allowed under that Act. Whether or not fair rents should be brought back can be debated. It may be better to work through a mixture of subsidies and the proportion of the housing revenue account which is to be borne by rents. I do not begrudge the Secretary of State his present inquiry into housing finance.
  Mr. Douglas-Mann: Is the hon. Gentleman suggesting that if his party had been in office it would have limited rent increases to the 50p per annum envisaged in the Housing Finance Act 1972, when at the same time he is suggesting that we should be increasing rents still further? What is he advocating? Is he seriously suggesting that his party would have kept rent increases down to 50p.
  Mr. Raison: I am suggesting that we have to face a vast problem and that the cries which were put forward by Labour Members, including the hon. Member for Mitcham and Morden (Mr. Douglas-Mann), during the passage of the 1972 Act have now been shown to be complete hypocrisy.
  I do not begrudge the Secretary of State his present inquiry into the whole subject of housing finance although I think it is high time that he embarked on it. I also accept that there is an important need to establish the basic facts of the situation—for example, the extent to which we need new housing. However, it is certain that if the Government continue to approach their housing policy in the spirit of narrow partisanship, which characterises the Minister for Housing and Construction more than anyone else, there will be no hope of meeting the real needs.

  977
  Housing is an area in which we must achieve a great degree of agreement and stability. If the Government do not recognise that and if they persist in their bigoted and inflationary housing policies, they will do the gravest disservice to the long-suffering people of this country, and the homeless and ill-housed above all.
  4.29 p.m.
  The Secretary of State for the Environment (Mr. Anthony Crosland): As a veteran of more than five years of debates as my party's spokesman on housing, I again welcome the hon. Member for Aylesbury (Mr. Raison) to his new job. I have no doubt that, very properly, the hon. Gentleman is extremely pleased to have attained his position, but he should not allow his spirits to rise too high.
  Crosland's law states that to be appointed Tory spokesman for housing is the kiss of political death. Let us remember the roll of honour over the past five years. First, there is the position of the right hon. Member for Worcester (Mr. Walker). Where is he now? He is very much out of sight on the back benches. The right hon. and learned Member for Hexham (Mr. Rippon) wisely committed political suicide only hours before he was due to be guillotined. The right hon. Member for Brighton, Pavilion (Mr. Amery) sits sadly and disconsolately on the back benches, as does the hon. Member for Southend, West (Mr. Channon). The hon. Member for Chelsea (Mr. Scott) is in a similar position.
  It is a poor, sad, miserable prospect that lies ahead of the hon. Member for Aylesbury unless, of course, he manages to follow the one exception to this hideous tale of carnage—namely, the right hon. Member for Finchley (Mrs. Thatcher), the present Leader of the Opposition. However, to judge from the private mutterings of her supposed supporters, even the right hon. Lady does not seem to have total security of tenure.
  The hon. Gentleman showed an almost sublime impertinence in criticising the Government's housing record after his Government had been in power for four years and when we have been in power for only one and a quarter years. I must remind the House briefly of the situation which we inherited in March of last year
  978
  from the hon. Gentleman's Government. To reverse the words he applied to this Government, the Conservative Government were unsocialist, non-partisan, unbigoted and undoctrinaire. They showed care for the private rented sector and were motivated by good Conservative instincts. What did they do with that non-partisan outlook?
  First, I turn to new house building. In 1973, the Conservatives' last year in office, the total number of new houses completed was below 300,000, the lowest figure since they were previously in office in 1963. Council house building was at its lowest level for 25 years. Private house building had virtually collapsed. House prices had doubled during the years of Conservative rule. Land prices had trebled. The mortgage rate had increased from 8½ per cent, to 9½ per cent., 10 per cent. and 11 per cent. The mortgage feast of 1971–72 had given way to the famine of 1973. Generally the would-be home-buyer received a clobbering such as he had never had in living memory. There are many thousands of young couples who will never forgive the Conservative Party for what happened in those years.
  Mr. Michael Latham Mr. Michael Latham (Melton) rose——
  Mr. Crosland: No, I have only just begun. In the council house sector the determination of rents had been taken away from democratically-elected local authorities and handed over to non-accountable rent scrutiny boards. Despite the fact that, against their wishes, subsidies increased as inflation gathered pace, Conservative Ministers, through the sheer clumsiness of the Housing Finance Act and its frontal attack on local democracy, managed to alienate almost every council and council tenant in the country.
  In the private rented sector, about which the hon. Member for Aylesbury had so much to say, the Tory Government simply abdicated. There was only drift and muddle. They finally conceded, about 10 years later than all other informed commentators, that the sector could not be sustained, yet they refused to extend security to the furnished tenant, the chief victim of the decline. They refused to accept the advice on municipalisation that was given in Layfield and in other reports. They

  979
  refused for years to stop the misuse of improvement grants which was leading to gentrification.
  Finalyl, I turn to land. When I hear the hon. Gentleman attack our land Bill I become more charitably disposed towards the Bourbons. They may not have learnt anything but at least they forgot nothing. Conservative Members, however, seem to have forgotten everything. They have forgotten the Klondyke rush for land in 1971 and 1972. They have forgotten the enormous profits that were made by land speculators. They have forgotten that, contrary to their free market economics, higher prices led not to greater land availability but to land hoarding in the hope of still further profits. They have forgotten that when the land price balloon at last burst the financial position of many house builders was disastrously weakened and the task of restoring the house building programme made much harder. I find it quite impossible to give any credence to Conservative criticism of our housing policy.
  Faced with the situation that we inherited in March last year, we had to take swift emergency action right across the housing field. At the same time we wanted this emergency action to fit into the broad strategy for housing which was clearly needed. What did we do?
  First, new house building. In the public sector, we started with Circular 70/74 in April 1974, which made it clear that the Government were prepared to make available the necessary extra money for local authorities to increase their programmes. We then, in the Housing Rents and Subsidies Bill, devised a subsidy system which provides strong Exchequer support for new house building, and we greatly reduced the restraint imposed by the cost yardstick control.
  The result—although, with respect, the hon. Gentleman was extremely grudging about this—has been a heartening increase in new building in the public sector. In Great Britain, completions last year were 20 per cent. up on 1973, starts 30 per cent. up, and—most significant of all—dwellings in new contracts approved 34 per cent. up. The increased momentum is being sustained this year. The figures for the first four months of this year show further sizeable increases in completions, starts and approvals over
  980
  the same period last year. So, though I am still not satisfied, this is success No. 1.
  In the private house building sector—where one would never have gathered what was the position a year ago from listening to the hon. Gentleman—the first priorities were to bring to an end the disastrous mortgage famine and prevent the imminent rise in the mortgage rate to 13 per cent. We achieved both these objectives by the £500 million loan to the building societies—a loan which was strongly attacked at the time by the right hon. Lady the Leader of the Opposition. So the mortgage rate has been held at 11 per cent. and the building society net inflow is running at a record level. Contrary to what the hon. Gentleman appeared to suggest, the number of commitments per month has been rising substantially in recent months, and I am happy to say that all this is now being reflected in the figures for private house building. Again, this up-turn received rather a grudging response from the hon. Gentleman.
  Over the three months from February to April, allowing for seasonal fluctuations, private starts were 40 per cent. up on the previous three months and now run at about 12,000 a month. Annual completions at about the same level were 12 per cent. up on the same comparison. Confidence is returning to the market and there is no doubt that the trend is in the right direction, compared with the unprecedented slump in private house building caused by the disasters of 1973–74. So, though I am still very far from satisfied, this up-turn in private house building is success No. 2, and it derives from the Government's commitment, not just in words but in action, to the support of owner-occupation.
  The action which we took on mortgages last year was successful in tiding us over the immediate crisis, but it also had a deeper significance. It represented a first step towards mortgage stabilisation. I, personally, as some hon. Members know, have been committed to this concept for many years, and it is now a key element in our housing policy. It is not a simple matter. We are nowhere near the end of the road on this yet, but the agreement of 11th April with the building societies has given us for the first time a firm basis

  981
  for achieving mortgage stabilisation in the future. I willingly acknowledge the helpful way in which the building societies are working with us in the Joint Advisory Committee.
  Mortgage funds, although important, are not the whole answer. In January we announced a further package of measures to help the private house building industry—measures worked out by the Government in close discussion with the house builders and the building societies. The low-start scheme for the first time buyer, the emphasis on the need to cut down planning delays, and so on, have also contributed to the return of confidence to the industry.
  Despite this evidence, the hon. Gentleman again repeated today the claim that the community land scheme in some sinister way sounds the death knell of private house building. It of course does nothing of the sort. The health of the house building industry is a matter of close concern to us in the Government, and the scheme has been carefully designed with this in mind.
  Any radical measure of reform such as the land scheme involves difficult changes and adjustments. Some will inevitably have doubts as to how matters will work out and will rightly seek reassurance, in particular on the key issue of the continuity of land supply. We are still in discussion with the house building industry, and the special arrangements we propose about, for example, builders' land banks and the small sites have already shown our strong desire to help smooth the initial stages.
  Our commitment to a high level of new house building, public and private, is clear, but we must ensure that our building programmes reflect the actual needs of our population. For example, we need far more dwellings for smaller households, both for renting and for owner-occupation. I am looking here for a shift of emphasis in local authority programmes and for greater awareness on the part both of private builders and of planning authorities of the demand for smaller houses for owner-occupiers. These were the essential messages of Circular 24/75.
  From new house building, I turn briefly to the existing stock of houses. The worst problem here—to this extent I agree with the hon. Gentleman—lies in the pri-
  982
  vately rented sector. This sector, as we all know, has been declining steadily since 1918, or since even before the First World War, but the decline has been more rapid since the end of the First World War, and the decline has been as fast under Conservative as under Labour Governments. Many of us, as the hon. Gentleman fairly said, welcome this decline as a matter of social policy, but it carries with it the danger of a loss of low-income rented housing on a scale which we simply cannot afford.
  Although the hon. Gentleman had a lot to say about the private rented sector he told us nothing, except for the vaguest hints, of what the Conservative policy for that sector would be. If there were some equitable policy for the sector which could be found to prevent the loss of low-income rented housing, presumably the Conservatives would have found it between 1951 and 1963 or between 1970 and 1974, but they did not. As one of my hon. Friends pointed out, the decline has been at least as rapid—in one case more rapid—under Conservative as under Labour Governments.
  Mr. A. P. Costain: Does not the right hon. Gentleman appreciate that, whatever is Conservative policy on rented houses, the Labour Party must give an undertaking? In 1961 I said in the Chamber that if the Labour Party would give a guarantee not to interfere with or control the flow of houses we would build 50,000 houses a year. That would have given us 750,000 houses, and the problem would have been nearly solved by now.
  Mr. Crosland: The Conservatives had a fairly long period of office between 1951 and 1964, and if there were an equitable method of increasing new investment in this sector they would have found it. The hon. Member for Aylesbury mentioned the possibility of new investment but was utterly vague on how that might be achieved. That is one danger—the loss of low-income rented housing.
  The other feature in the private rented sector is that it contains a disproportionately high share—about 40 per cent.—of all older substandard housing. These two facts underline the crucial importance of municipalisation. On the one hand, this is often the only method by

  983
  which we can get substandard property improved. It is also the only method by which we can preserve in the rented sector enough property to let at rents which people can afford.
  We recognise, of course, that full social ownership cannot be achieved overnight. Public expenditure restraints have obliged us to go more slowly than we would have liked in an ideal world. In spite of these constraints, we have provided for a very substantial increase in public expenditure for acquisitions by local authorities. Last year this expenditure was running at £180 million, which compares with around £50 million in earlier years. I have recently announced that I propose to switch money to municipalisation to make sure that spending is maintained at the same figure this year as last year.
  Mr. Arthur Jones: Will the Secretary of State tell us what "full social ownership" means in housing terms?
  Mr. Crosland: In the terms in which we are immediately speaking, it includes acquisitions by local authorities and acquisitions by housing associations. Looking ahead, we hope that there will be other forms of social ownership. My hon. Friend the Minister for Housing and Construction will perhaps be speculating aloud about other possible forms in the future. Municipalisation is pointless unless we find money to improve municipalised property. Here there has been a great deal of misunderstanding. My hon. Friend the Minister for Housing and Construction, who knows all the Section 105 arguments backwards, will no doubt have some important words to say about this matter this evening.
  It has been said that we have cut expenditure on improvement of council-owned housing by about 50 per cent. That is not so. The actual reduction in England, in constant prices, is from £305 million last year to £255 million this year. That still leaves councils spending almost five times as much in real terms on improvement as they were spending as recently as 1969–70. That they are spending five times as much shows what an enormous boost has been given to the improvement of our public stock of housing.
  984
  I do not say that we have yet got the right balance in these matters. To help us try to find it, we have set up, with the local authority associations, a study group which will examine all these matters. Chaired by my hon. Friend the Minister for Housing and Construction, this study group is now hard at work and we look forward to seeing its conclusions.
  There is much else which I could say about the better use of our existing housing stock. The hon. Member for Aylesbury listed a number of points like con versions, empty houses, lodgers, the encouragement of transfers and the rest. I shall not repeat them all, but I was grateful to him for repeating almost verbatim our circular "Housing Needs and Action" which refers to the importance of every single one of the points he mentioned.
  Mr. Dafydd Wigley: The Secretary of State referred to the cut-back in England. Does he agree that the figures for Wales on the degree of rehabilitation and modernisation of publicly-owned houses shows a decrease from the £29 million of the last financial year to £9·4 million expected for the current financial year?
  Mr. Crosland: I do not have the figure at my finger tips, but I shall ask my hon. Friend to deal with that point when replying. The position in Wales is different, for reasons that the hon. Member knows very much better than I. Owner-occupied housing represents a much higher proportion of the total housing stock there than in England so that there is a different balance between private improvement and public improvement.
  Having discussed investment in housing, I now turn briefly to the cost of housing and the question of subsidies. First there is the would be owner-occupier. By the time we came into office last March, the man on average earnings wanting to buy a house had been to a large extent priced out of the market by a combination of the explosion in house prices and the rise in the mortgage rate.
  Now, however, due partly to the stability of house prices over the past two years and partly, and I fully concede this, to wage-inflation, the relationship has returned to something more normal.

  985
  Given our agreement with the building societies on mortgage stabilisation, I see no reason to expect—indeed I am determined to avoid—a price explosion of the kind we had in 1972–73.
  Mr. Michael Latham: Will the right hon. Gentleman say, supplementary to the statement he made on his agreement with the building societies recently, whether he has given them any guidance that they should impose positive restrictions on mortgages as some building societies have already voluntarily done?
  Mr. Crosland: No, I have given them no more guidance than emerges from the joint statement that we put out a very short time ago.
  1 turn now to council rents, which will present us with an extremely difficult situation in the years ahead. While house prices have gone up much faster than average earnings in recent years, rents have gone up much more slowly, and this is especially true of the two years 1974–75 and 1975–76—due partly to last year's rent freeze and partly to the special element of housing subsidy in the Housing Rents and Subsidies Act.
  Since May 1973 the retail price index has risen by 39 per cent., average earnings by 45 per cent. and average unrebated rents by 23 per cent. The consequence is that the contribution of rents to the costs of the housing revenue accounts has been steadily falling since the late 1960s. Curiously it fell even through the years of the Housing Finance Act. In 1968 it was 74 per cent., now it is 55 per cent., and these are average figures. In some parts of the country—London for example—the contribution of rents is much lower than the average figure of 55 per cent.
  This growing gap between rent income and housing costs has of course been covered by subsidies—it could not be covered from anything else—partly from the rates but mostly from the Government. This year Government subsidies will be three times in real terms what they were five years ago. They are in consequence pre-empting a higher share of the housing money we have available, and that reduces the share available for capital expenditure on improvement, municipalisation and the rest.
  986
  Now the Chancellor has announced that he is seeking a saving of £65 million in housing subsidies, of which about £50 million relates to local authorities in England. Unless I am to make deeper cuts in essential capital spending on housing, this saving can be found in only one way, and that is through rents. So rents next year will have to go up faster than they have recently.
  This year, on present indications, they will rise by only about 12 per cent.—far less than the likely rise in earnings. Next year, the increase will have to be larger. Exactly how much it will need to be is a matter for detailed discussion between Government and local authority associations in the course of the rate support grant negotiations over the next few months. We cannot yet give a figure in money terms, partly because we do not yet know what next year's inflation rate will be.
  However, it is clear that increases will have to do more—and quite a bit more—than merely to keep pace with inflation. Rents will have to start making the kind of contribution in real terms towards housing costs that they have done prior to the most recent developments.
  Despite this, housing expenditure will remain one of the Government's highest priorities. Some of my hon. Friends continually press me for still more spending on housing and my sympathies are entirely with them. But I wonder whether they realise the actual rise of expenditure on housing last year, and how it reflected the extremely high priority we give to housing.
  In 1973–74, in effect the Tories' last year in office, public expenditure on housing in Great Britain amounted to some £2,740 million at 1974 prices. In 1974–75 it rose—still at 1974 prices—to some £3,470 million. This is an increase of more than a quarter in a single year, which represents a large shift in Government priorities in expenditure.
  Now the country faces an economic crisis far more serious than any we have faced since the war. The priority claims on our national resources are the balance of payments and higher industrial investment. We therefore cannot expect any significant further increase in housing public expenditure over the next few

  987
  years. Housing did well last year—spectacularly well. From now on we shall have to do our best within what is still an enormous total, but without the freedom of manoeuvre which continuous growth would provide.
  In this situation we shall have some hard decisions to take. Priority programmes must be protected. But from now on more spent in one area means that less is available somewhere else.
  Mr. Arthur Jones: I am unable to marry up the figures the Secretary of State has given—the figure of £2,740 million for 1973–74 and £3,470 million for 1974–75 being spent on housing subsidies. Will he give us the origin of these figures?
  Mr. Crosland: I believe these are from the last public expenditure survey but if that is not the case I shall ask my hon. Friend the Minister to say so when he replies. I take it for granted that they were from that survey.
  I have no absolute confidence that we have got all our priorities completely right. I have a lot of sympathy with the comment in this month's Municipal Review:
  "What appears to be needed is a critical judgment of the allocation of housing resources across the board. It is true, as the Secretary of State has rightly pointed out, that the total national housing programme has reached a plateau with expenditure of the order of £3,500 million a year as compared with £2,500 million in real terms two years ago. But it does not seem certain that all the priorities are yet right."
  I admit that, and this is one of the basic reasons I have set up a long-term housing review.
  I am sorry that the Opposition have not put down a motion today because had they done so we might have learnt what their housing policy was. There is no more assiduous reader of the speeches by the Leader of the Opposition than myself, but if I were asked what Tory policy on housing was I would not have the faintest idea even after listening to the speech by the hon. Member for Aylesbury this afternoon.
  We had a lot of "Perhaps we should do this", "Perhaps we should do the other", "Perhaps we should look at this" or "Perhaps we should look at the other." We had a certain amount of praise for new developments last year,
  988
  almost all of which were the responsibility of the Labour Government or Labour councils.
  I turn to what the Conservatives would do and how far that differs from what they did under the 1972 Act. On this subject we are absolutely in the dark. I revert to a speech made by the right hon. Lady the Leader of the Opposition, last week. That speech was purported to be—so I understand from the Press reports—a major speech on the economy. Over and over again the right hon. Lady said and this was implied today by the hon. Member for Aylesbury—that subsidies are a thoroughly bad thing. I hope that the closing speaker for the Opposition—no doubt another new appointment—will illustrate what that phrase means. The hon. Member for Hampstead (Mr. Finsberg) is one of the hon. Members who knows most about housing, and I am delighted to learn that he is to reply. I hope that he will elucidate what "dislike of subsidies" means in the area of housing. Does it mean that the Opposition have now ditched their disgraceful election pledge to subsidise mortgage rates down to 9½ per cent.? If they have not, their Leader stands exposed as a hypocrite. If they have, it is time they said so openly to the country.
  Does it mean that it is now Conservative policy to remove or reduce the £680 million subsidy which owner-occupiers receive by way of tax relief on their mortgages? What does it mean for subsidies to council housing, for rents and for council householding?
  We know that they would repeal security of tenure for furnished tenants. We know that they dislike municipalisation. We know that they would encourage the sale of council houses. But beyond that everything is in utter darkness.
  In a brief year and a quarter we have not yet solved the housing problem. Of course we have not. But we have started firmly along the right road. Local authority house building is up. Private house building is up. The mortgage situation has been stablised. We are acting positively to improve both the condition and the use of our existing housing stock. Above all, housing is receiving a much higher priority in terms of public expenditure than it did under the Conservatives.

  989
  I am far from being satisfied with our progress, but at least we have begun to make progress. It hardly lies in the mouths of Opposition Members, who left us the shambles of a year ago, to carp and criticise today.
  4.52 p.m.
  Mr. Julian Amery: I have not spoken in a housing debate since I left the Department of the Environment in 1972, though naturally I have watched from the sidelines the evolution of housing policies. Both sides of the House approach the matter from rather different angles, yet what has impressed me most, from listening to the debate today and, indeed, to previous Government statements, is how much closer we are now than we appeared to be in the long days and nights when we crossed swords during the Committee stage of the Housing Finance Act 1972. Certain agreeable aspects of that Act, such as rent rebates, allowances, slum clearing subsidies, and so on, have been accepted and endorsed by the Government. That came as no surprise to me. Indeed, in Committee the right hon. Gentleman who is now Secretary of State paid tribute to some of these ideas.
  I was very glad to hear the right hon. Gentleman say today that although there had been some shortfall on housing improvement grants compared with the high point to which we had brought them, they were still a great deal better than they were in 1969–70. At least he was doing his best to keep up with the standards which we had tried to set. We must never forget the importance of housing improvement socially, even more than in terms of accommodation unit provision.
  On council house rents, we seem to be on much closer ground than we were before. In Committee the right hon. Gentleman as well as the Minister for Housing and Construction lambasted me on two grounds, first, that we were raising the rents, as they said, inordinately, and, secondly, that we were depriving the local councils of their autonomy and freedom in determining the rent level. It now seems clear that the rents will be raised in many cases substantially higher than the Housing Finance Act would have raised them.
  990
  It is all very well to say, as I think the hon. Member for Leeds, West (Mr. Dean) said, that of course if we had been in the present economic situation we too would have had to put them up higher. My reply is that we would never have allowed ourselves to get into that situation, but, of course, that is an academic answer.
  I turn to the freedom of local authorities to determine their rents. Under the limitations that seem likely to be imposed on them by the Treasury, their freedom will be what used to be termed in good old Socialist parlance as "freedom to sleep under the bridges", because that is the only place to sleep. I do not propose to go into all the details which have been raised.
  Mr. Joseph Dean: When the right hon. Gentleman says that rent increases may be in excess of what would have been charged under the Housing Finance Act, has he forgotten that the original increases were only of a limited duration, and that the Act catered for three-yearly reviews upwards? The 50p per year was for only three years, and would have been increased thereafter.
  Mr. Amery: I was saying that what we had proposed was of a fixed character. It now appears that rents will be raised still higher than we had proposed. It is all very well for hon. Gentlemen to say that "If you were in office and had the present economic situation to deal with you might have to put the rate higher than you had intended." If we had been in office, we would not have had this situation to deal with. But, as I said, this is an academic point, and I do not want to dwell on this argument.
  There is common ground between us that the rents have had to increase at least as high and almost certainly higher than we had proposed and that the freedom of local authorities to determine the rent will be severely limited.
  I do not want to go into the very important but largely administrative points that have been debated. I stand strongly for the maximum extension of private house ownership. Therefore, I hope that we shall not go back on the election pledges of my right hon. Friend the Leader of the Opposition. We must do everything to encourage home ownership

  991
  through the building societies and through the sale of council houses.
  Of course, there remain differences of emphasis between us. However, the gap between us is substantially narrower than it appeared to be in 1972. While there remain differences of emphasis which no doubt justify us in dividing the House this evening, on this major element of social policy the two parties—or, at any rate, the representative and serious elements in both parties—are closer than they have been for some time. That is an undoubted gain.
  4.59 p.m.
  Mr. Ernest G. Perry: After listening intently to what the right hon. Member for Brighton, Pavilion (Mr. Amery) said—
  Mr. George Cunningham: What did the right hon. Gentleman say?
  Mr. Perry: He said a considerable amount.
  I recall the halcyon days of 1971 and 1972. I think that about 15 of the hon. Members present served on the Committee considering the Housing Finance Bill—[Interruption.] Halcyon days and nights, I agree.
  If we examined the Official Report of the Committee proceedings, some of us on both sides of the House might find that we had to eat some of our words.
  I agree with the right hon. Gentleman that it would be devastating if the Leader of the Opposition ever went back on her pledge to reduce the mortgage interest rate for potential house buyers to 91 per cent. That was a promise, and there can be no back-tracking on it.
  In March 1974 we inherited a mortgage interest rate of 11 per cent., and it is still 11 per cent. But many people, particularly in the London area, are paying much more. The rate of 11 per cent. is the minimum. I know of many families in my constituency and elsewhere in the London borough of Wandsworth who, being unable to obtain a mortgage through the local authority or a building society, turn to finance houses. I am referring to some of my immigrant population, for whom it is not easy to find anywhere to live. They have to pay as
  992
  much as 13 per cent. and even 16 per cent. to buy a house. No one should be under the impression that 11 per cent. is the maximum rate.
  I agree with the right hon. Gentleman that we must try to encourage home ownership among ordinary people. The Labour Government achieved more than 50 per cent. owner-occupation. One of my aims in life is to see that figure reach 60 per cent. or even 75 per cent. I am sure that the right hon. Gentleman also wants to see the extension of owner-occupation.
  The invective of the hon. Member for Aylesbury (Mr. Raison) against the Government was disconcerting. If we are ever to solve the housing problem it must be done by co-operation between all those who engage in house building and all those in politics and Government. The hon. Gentleman had only two solutions to the housing problem. One was the sale of all council houses and the other was the increase of council tenants' rents. Anyone with any idea about housing knows that those are not the answers. More than 50 per cent. of council tenants live in large blocks of flats which are not conducive to owner-occupation, unless there is some form of co-operative ground landlordship by the tenants themselves. I am not averse to that. It is a good idea.
  The sale of council houses and putting up council rents do not produce one more brick or one more house for people to live in. The hon. Gentleman said that 65,000 council-owned houses had been sold to their occupiers. Later, he said that about 10,000 of these had been sold when we were in power. When the councils sold 65,000 houses to their tenants it did not produce one more house, but it gave the ownership of a council house to any people who could have afforded to buy a house on the open market, and so provide a house for people not so well off. That would have been a much better policy.
  What I am really interested in is the situation in London, and I want specifically to deal with that. The Conservative Government, through reductions in taxes of all kinds, released on to the market an enormous amount of money that they thought would be invested in industry. Instead, in 1971, 1972 and 1973 it went

  993
  into property development, into acquiring new sites. The result has been that, particularly in London, hundreds of acres are lying idle, owned by firms which are going bankrupt because they cannot meet the interest charges on the money they borrowed to buy the sites. This is happening not only in inner London but in my own borough, the London borough of Wandsworth.
  I must point out to my right hon. Friend the Secretary of State that local authorities were encouraged to buy houses where the owner-occupier could not sell to a private bidder. In my constituency the Wandsworth council has bought hundreds of houses from owner-occupiers who could not sell them and who wanted to move away. Each house was bought for conversion into two flats, but unfortunately they remain empty and their condition is getting worse every day. They are being damaged because the council does not have the necessary money to convert them. The sooner more money is made available to local authorities in London to convert them the sooner will some of the homeless and those living in overcrowded conditions find somewhere suitable to live.
  What I have just said applies to both the public sector and the private sector. One can walk through Wandsworth, Battersea, South and Battersea, North—wherever one likes—and see house after house that was privately occupied and is now empty and becoming structurally worse, week after week. One of the reasons is that although the owners can find buyers the buyers cannot obtain mortgages.
  I see in the Chamber several Members representing London constituencies. They know as well as I do that there is a barrier to people living in London obtaining a mortgage sufficient to buy a house in the area in which they live. In Wandsworth the price for the average type of house ranges between £15,000 and £28,000. As soon as the building societies know that it was erected towards the end of the last century or early in this century they tell people applying for a mortgage "We are very sorry. We do not have the funds for this type of property at present" or "We have exceeded our quota "or" The building is far too old".
  994
  This happens to many people in London wishing to buy their own houses.
  I appeal to the building societies. Surely a compromise can be found, perhaps with the Government guaranteeing the interest due on the money borrowed, and giving a guarantee if, for example, the house has to be used for development in 20, 30 or 40 years' time. I see no objection. I see no reason why thousands of houses should remain empty in London because building societies will not advance the money for their purchase As local authorities have such a dearth of money for their house purchase schemes, perhaps we can reach a compromise on the matter.
  Last week, I put down a Question to my right hon. Friend about the agreement that he had breached with the building societies in order to get some money from them to help people in the inner urban areas. His reply was not satisfactory. As the Government helped out the building societies to the extent of £500 million last year, surely they can reciprocate now that they are getting such enormous sums from investors. Surely the huge insurance companies could allocate some of their money for use in extending home ownership, or for modernisation of houses which are empty at present.
  Mr. Crosland: I am listening attentively to my hon. Friend, but it seems that there may be some misunderstanding. First, the £500 million last year was a loan, and almost all of it has been repaid. Secondly, we have announced an agreement with the building societies whereby they are willing in principle to help make good the £100 million cut in local authority lending. I hope therefore, that there will not be any cut in total mortgage lending.
  Mr. Perry: I am grateful for that intervention. But £100 million is but a drop in the ocean of the problem of home ownership and the modernisation of old property. We have to go much further than that. Thousands of houses are lying derelict. The process is always the same. First, the windows are broken, then boarded up; then a wall is knocked down; rubbish begins to be dumped in the garden; squatters may move in, and finally, methylated spirit addicts may move in. The Government must tackle

  995
  the problem of the inner urban areas and ensure that empty property that can be used is used.
  We must be prepared to do much more if we are to solve the housing problem and the social problems which that brings in its train. We must have cooperation between the Government, the local authorities and the building societies, and I would also bring in many of the institutions with enormous financial assets. They should be able to get the same return on the money they invested as the building societies should get, and it should be guaranteed by the Government.
  I am sure that hundreds of millions of pounds are lying idle in many banks and insurance companies, and a Government guarantee in such terms would surely help to release much of it in order to tackle the enormous housing problem of the inner urban areas. Unless that problem is solved in the next 10 years, it will get worse and worse and become the greatest sore on the country that we have ever known. It is getting steadily worse month by month and year by year.
  I am sorry to use such strong language, but this is an enormous problem in London. I was born in London and I still live there, and I feel sad when I see the deterioration of the capital. We see thousands of acres lying idle. We see thousands of derelict buildings. Huge stretches of land once used by industrial companies to produce goods now lie unused because those companies have gone—some of them forced out by freeholders.
  If such a situation occurred in Northern Ireland, or in Wales, or in Scotland, or in the North-East or the North-West of England, we would have debates about it in the House. It seems, however, that anything can happen in London and Londoners just have to tolerate it.
  Mr. Andrew Welsh: It has happened in Scotland. If the hon. Gentleman reads the Department of the Environment's circular on urban deprivation he will see that Scotland has 95 per cent. of the most deprived areas in the United Kingdom. The hon. Gentleman would see the sad situation in Glasgow.
  Mr. Perry: I do not deny what the hon. Gentleman has said, but I am saying
  996
  that, while other areas in the United Kingdom get a chance of public debate about their problems, London rarely does. I make the plea that London should get more time in this House, more Government money and more money from financial institutions, so that it does not sink into the slough of despond. Anyone with pride in London wants to see the present deterioration stopped.
  London's housing is not only a problem of empty property. At this time of the year, for example, a great deal of decent housing accommodation is taken over by developers and turned into hotels for the millions of tourists visiting London.
  Mr. George Cunningham: Under Government subsidy.
  Mr. Perry: Yes. But all the people of London have to suffer the consequences. The problem gets worse year by year. When my right hon. Friend is considering where to get the money from, he should think of the enormous sums which successive Governments have provided to private institutions and companies in order to keep them going. It is about time the process was reversed and that some of these huge insurance companies, building societies and other financial institutions coughed up money, under guarantee, at a fixed rate of interest, in order to help provide decent living accommodation for the people of London and, at the same time, more employment in the building industry, which needs it so much.
  I regret the terms of the motion, but at least it has given us an opportunity to bring into the limelight the conditions in London. The problem is spreading from inner London boroughs like Camden, Wandsworth and Hammersmith to outer London boroughs like Croydon and Sutton. The problem must be solved in the next decade. I urge my right hon. Friend to get some money from somewhere to stop London from sinking into slumdom.
  5.18 p.m.
  Mr. Peter Fry: Whatever our political differences, the hon. Member for Battersea, South (Mr. Perry) always tries to put some sound ideas into the debates in which he takes

  997
  part, and I want to take up two points that he raised.
  First, the hon. Gentleman queried the statement by my hon. Friend the Member for Aylesbury (Mr. Raison) about the selling of council houses, saying that it does not add a single house to the housing stock. I accept that. On the other hand, it does release cash which the council can then use to build more houses. It also enables people who would not otherwise buy their own home to do so—people who, for a variety of reasons, do not want to move from the house in which they have lived for many years but which they have probably paid for two or three times over in terms of rent. It would be wrong to deny such people an opportunity to buy their homes, and it is certainly not a retrograde policy. I believe that it is also a way of giving people a little more individual freedom. In any case, the majority of such people would never leave their homes, which would therefore not become available on the housing list because, invariably, the children take over the tenancy as their parents die.
  Secondly, the hon. Gentleman referred to London's problems. I am not a London Member, but I represent a constituency in which there is an expanding town which contains a large number of ex-Londoners. One of our difficulties is that some of the problems of London are being exported because of what I believe to be the mistaken policy of the London housing authorities.
  For example, we find that houses are being provided in our area for Londoners, but the rest of the services—the necessary infrastructure—have to be paid for by ratepayers already in the area. Many of them find that cost enormous. I agree with the hon. Member for Battersea, South that it would be much better to spend the money on providing houses in London, which most of these people would prefer if they had the choice.
  In spite of the cautious self-satisfaction of the Secretary of State, I do not think that any hon. Member has any reason for satisfaction with the current housing situation or the house building industry. Some 30 years after the war we have probably the worst housing situation in Western Europe. Even behind the Iron
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  Curtain there is more owner-occupation than we have.
  A few weeks ago, I had the privilege of visiting Yugoslavia, and I went to a province that even its inhabitants would describe as the most backward the autonomous province of Kosovo. The authorities there are in the process of bringing a largely rural population into the towns to try to develop industry. One saw the development of flats and houses usually seen in growing towns. I said in all innocence that I presumed that the homes were provided by the local authority, but I was told that more than 70 per cent. of the new homes in the province were being bought by the people who were to live in them.
  This decision has been taken in Communist Yugoslavia for the one simple reason that the authorities there have realised that they cannot possibly house all the population out of public funds—that they have to harness the desire of the ordinary individual to buy his own home. The fact that 70 per cent. of all new homes going up there are owner-occupied is a lesson for us in our mixed economy.
  I, too, wish to touch briefly on the three main areas of housing, and I should like first to consider the public sector, which is causing considerable concern. The other day figures were released of the enormous amount of loan capital required to finance the present house building programme. It is estimated that building 150,000 houses adds about £ 1.000 million to the borrowing requirement. That is in just one year.
  It is also apparent from the current figures of new council houses—I have been given the figure for Croydon as being about £17,500—that there is no hope, without massive subsidies, of doing more than touch the fringe of demand for houses in and outside London. Assuming that about £300 a year is paid in rent, the astonishing figure of £1,500 to £1,600 a year has to be provided in subsidy by ratepayers or taxpayers. It is obviously hopeless to think that we can solve the housing problem by relying almost entirely on the public sector.
  There has to be a change of emphasis on the part of the Government. They have to say clearly to the hundreds of thousands of young couples who want

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  a home "We cannot hope to provide you all with council houses in the foreseeable future. Yet in our surgeries these young people tell us that they see no other choice. They say that they cannot possibly obtain a privately rented house or flat and do not feel that they can afford to buy a house. Their only remaining choice is to go on the local housing list. It is deceiving these people not to be honest and say that, no matter how much money is poured into the system in the next few years, many of them cannot possibly be provided with a local authority home. I would much rather the Government were fully honest about this issue. They would have far greater respect inside and outside the House if they were.
  The second area needing urgent consideration is the private sector. I am getting tired of sending letters to the Minister on behalf of constituents who are almost at their wits' end because they happen to be the owners of private property that they have rented or leased. Last week, a gentleman came to see me about two houses that he owned. One, he admitted, was old and below the standard required for him to be able to apply for a fair rent. He obtained 76p a week in rent for it. At the moment it is habitable. His expenses this year alone will be about £75 or £80.
  He said "Frankly, I shall not do the essential repairs". All that will happen will be that the house will fall into disrepair and eventually have to be taken over. Its occupants, presumably, will be rehoused at the expense of the ratepayer and the taxpayer, the cost being about £25 a week.
  Mr. George Cunningham: Under the latest legislation he is able to make repairs and recover the cost as an addition to the controlled rent that would otherwise obtain.
  Mr. Fry: In this case he is unable to do so because of the low rateable value.
  He has made repairs on the other house, for which he gets 85p a week. For those repairs he has been awarded the princely sum of £2 a week, well below the economic return on any property in which a family could live.
  Mr. George Cunningham: As the hon. Gentleman has obviously not looked up
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  the latest legislation, perhaps he will advise his constituent to do so, for he may find something to his advantage.
  Mr. Fry: I am grateful to the hon. Gentleman.
  The result of this and other examples is that many people feel that property that they are able to let or lease is a millstone round their necks. Many of them, especially in view of the 1974 legislation, have decided to dispose of these properties as soon as possible, or even to take them right off the market.
  Thus, already we have two factors: the problem in the public sector, which will not be solved simply by pushing in more public money, and the problem in the privately rented sector, where the supply of accommodation is being reduced. It cannot be much sense for Government supporters in these circumstances to talk about ending the tied cottage system. In many rural areas to do so will only exacerbate the housing problem.
  An interesting survey has been made of people living in tied cottages. The majority of those who had been in such accommodation for some years were happy about living in a tied cottage and at the same time were earning more than those who were dissatisfied—generally those who had been there for only a short time. The reason is in the nature of the system.
  By having a tied cottage a farmer is able to provide accommodation for a stockman to live near a herd. The system is accepted in many other walks of life. I agree that the present Prime Minister does not live in No. 10 Downing Street, but it is a tied house. School caretakers live in tied cottages, and I understand that there are no proposals to abolish that aspect of the system.
  We have to face the fact that if we go ahead with legislation that has a doctrinal basis, all we shall do is worsen the housing situation in many areas. Farmers will find it impossible to obtain skilled workers, and the country's food production will suffer as a result.
  Mr. Andrew Welsh: In Scotland the National Farmers' Union and the farm workers favour the tied cottage system, unlike the situation in England.
  Mr. Fry: I wish that the farm workers in Scotland would talk to the union in my country to see whether they could make our workers agree with the Scottish workers.
  The third area is the owner-occupied sector. Here, the problem is more psychological than monetary. Many people, especially young couples, are nervous about embarking on buying a home of their own, and they have a variety of reasons for their nervousness. What they desperately need is the confidence that they will be able to keep their jobs, and thus maintain the repayments.
  I accept that that is largely outside the province of this debate because it is tied up with the general economic situation, but there are things which the Government could do, particularly to help the large number of people who feel that they cannot afford to buy a house. The Secretary of State made an interesting speech some time ago suggesting that local authorities should investigate new ways of providing cheaper houses more quickly. He talked, for example, about erecting mobile homes. Yet there has been remarkably little advance in that direction.
  Local authorities still seem to be steeped in age-old ways. I am disturbed because local authorities seem to be slow to take up new ideas. I have heard it said that not all housing associations can obtain sites as quickly or as easily as they would like. They find it difficult to deal with many local authorities. That is why I am doubtful about the value of the Community Land Bill. It places far too much power in the hands of local authorities. They will decide far too many things, such as what land will be made available and who will have it. We would all agree that there is a regrettable tendency in local government for empires to be built and for local officials to want more power.
  My suggestions are twofold. First, we should look more closely at system building. It has now been proved that using system building techniques a house can be built in four weeks as compared with about six months using conventional techniques. If system builders were given contracts by local authorities there could
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  be a dramatic increase in the number of housing starts and in the number of young couples who would be able to find accommodation. The Government ought to encourage this method of house building.
  Second, there is the whole question of the provision of land for private builders. It is all very well for the large firms, but the small and medium-sized builders are in a state of crisis, largely because of the high cost of land. Recently their difficulties have been made worse because the value of the land they hold has dropped. As a result, its collateral value against bank overdrafts has been reduced. Many small builders are now in desperate circumstances. They are certainly in no position to buy another plot of land These people, usually local builders, could build a small development. They need the active co-operation of Government and local authorities. Why should not many more local authorities allocate certain areas of land, leasehold, to local builders under certain conditions? In that way the builder would pay nothing towards the cost of the land. The rent on the land could be paid to the local authority.
  The small builder could erect a number of houses at the lowest possible cost to take account of those at the bottom end of the scale who would welcome the chance to buy their own homes. This could be done widely, yet it is not being done. Instead, many small builders are going out of business because they cannot obtain land. The Secretary of State should encourage local authorities to arrange this.
  Basically, the whole problem facing the industry and those who want to buy homes is to do with confidence in the future. The best thing the Government can do is to show that they will take a firm grip upon inflation. In that way people will not be so worried about what their money will be worth in a few years' time.
  The situation is becoming exceedingly critical. What we need is action, not just strong speeches. It is all very well for the Secretary of State to say that the party has got to stop. He must realise that for far too many people the housing party never started. I think that many Labour Members believe this, too. The right hon. Gentleman will find a considerable

  1003
  amount of all-party agreement if he enables more houses to be built, thus injecting confidence into the industry and into house purchasers.
  5.35 p.m.
  Mr. Frank Allaun: A fortnight ago three Labour Members—my hon. Friends the Member for Leeds, West (Mr. Dean), Wolverhampton, South-East (Mr. Edwards) and myself—wrote to the Prime Minister making three proposals of ways to resolve the desperate housing situation. This weekend we have received a reply, covering four foolscap pages, which I have here. The reply is prompt, and treats our arguments seriously.
  Nevertheless I and my two colleagues cannot accept the objections made by the Prime Minister—objections which are probably shared by the Secretary of State and his ministerial colleagues. We sought a great and immediate housing drive, a vast expansion of the house-building programme. The Prime Minister replied:
  "I do not accept that this is necessarily the right course. There can be no mistaking the Government's view of its priorities and the place held by housing among them. But we simply cannot ignore the immense economic difficulties we face and I do not think we can reasonably expect to make further additions to the much increased provisions we have been able to make for housing in spite of all the pressures we have already had to face."
  I take the opposite point of view. Far from it being economically inopportune for such an expansion I believe that it is the ideal time. In Italy and Germany, as soon as unemployment began to grow recently, those countries stepped up their already considerable housing programmes. There are today 152.000 workers in the building trade in this country, plus 30,000 in related industries such as brickmaking and furniture, who are out of work.
  It costs up to £2,000 a year to keep an unemployed building worker and his family in State benefits. Surely it would be better to have something to show for the money. We should remember that at the depth of the Depression in the 1930s in America President Roosevelt proclaimed his New Deal—the National Recovery Act. There were 16 million men and women walking the streets at that time. The New Deal not only
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  developed great areas of the country but also provided the necessary lobs. We should do the same.
  Apart from a small amount of copper the only import needed would be timber. A great deal of timber is now produced in this country. Much of it could be substituted. Light steel frames could be used for roofs in place of timber, so that there would be little strain on our balance of payments.
  Mr. Stephen Ross: Will the hon. Gentleman accept that the yards of the timber merchants are full of timber which they cannot sell, all of it bought two or three years ago?
  Mr. Allaun: I am grateful for that intervention, which greatly strengthens the argument. The same applies to brickworks.
  In his letter the Prime Minister refers to the improvement on the 1973 figures for starts and completions. I welcome this, but those figures were the lowest for almost 26 years. We must contrast the 268,000 completions last year with 413,000 houses completed in 1968. There is a mighty big leeway to make up.
  Will the growth in housing continue or will it be halted? Certain remarks made by the Secretary of State today have increased my apprehension. In 1967, the Prime Minister told us that although other social services had been cut back the housing programme was sacrosanct. You, Mr. Speaker, may remember that remark. Tragically, it was not sacrosanct.
  Mr. Deputy Speaker (Mr. George Thomas): Order. I am grateful for the promotion, but the hon. Gentleman must not remind me of my past: it is disconcerting to me.
  Mr. Allaun: Very well, Mr. Deputy Speaker, I shall never commit that crime again.
  When the International Monetary Fund and the international bankers laid down conditions for loans, I believe that a cut in housing was one of their conditions. In 1968 a cut certainly took place. We have gone down from 1968 onwards. Shall we see them crack the whip again in a few weeks' time? And will the Secretary of State stand firm against Treasury demands? He should. A certain

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  red-headed member of the Cabinet has fought hard, and, I think, successfully, to protect her corner. The Secretary of State must fight for his.
  Where is the money to come from? It will come as no surprise to hon. Members when I say that it should come partly by cutting arms spending instead of increasing it, as we are doing. To take one item in the arms budget, expenditure on military research and development this year will rise to £550 million a year. With that sum, at £10,000 a house, we could provide an additional 55,000 homes for families, which I know the people of this country would prefer. Until arms spending is cut, some of us will resist a penny being cut off any form of housing expenditure—and it is now coming off not construction but improvements, repairs and municipalisation.
  Contrast the housing situation in Germany and France, which have similar economic systems to ours and almost identical populations. Each of those countries builds more than 500,000 homes a year. It is no miracle. France builds twice the number that we build because she devotes 6·6 per cent. of her gross national product to housing compared with our 3·6 per cent.
  Secondly, in our letter we asked the Government to permit local authorities to requisition houses empty for six months or more without good reason. The Prime Minister replied:
  "… we have examined the possibilities very carefully. But it is clear that requisitioning powers, in practice, would not he a more effective or speedy way of bringing empty housing into use than administrative measures such as those that the Minister for Housing and Construction is examining, operated within the framework of existing powers."
  The unfortunate fact is that the Minister has not brought forward such measures. Meanwhile, 750,000 homes stand empty. Many of them have been empty for years and are becoming write-offs.
  I received a letter last week telling me of a house which had been vacant for 19 years—this at a time when people are in absolute misery because of the lack of homes. Last week a young newlywed couple came to see me about a house empty for a long time in Salford which they would like to buy and put in order. The owner does not live there. They
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  cannot trace her address, although they know her name, so they have asked me to forward their offer to buy the house to her via the local authority, which has her address.
  The council should be authorised to requisition in such cases. A great advantage of requisitioning is that it completely avoids the floating of huge loans to purchase the properties, which is said to be highly inflationary. Instead, the council would install tenants on its waiting list and pay the rents to the owner after deducting repairs. What could be fairer than that?
  My Private Member's Bill, supported by the majority of hon. Members, is still awaiting a Second Reading. It was interesting that when it was introduced under the Ten Minutes Rule the Government Whips voted for it, but I regret to say that the Ministers of the Department of the Environment did not.
  The third proposal which we made to the Prime Minister was that buildin9, societies should lend their surplus funds to local authorities at 11 per cent. to provide mortgages to residents unable to secure them from the building societies, usually because the houses were old or they were people on low incomes. The Prime Minister replied:
  "What we are doing is to explore urgently with the building societies how far they may be able to help in filling the gap caused by our decision to switch resources from local authority lending to municipalisation and improvement—a request that they have promised to treat as sympathetically as possible."
  But the brutal truth is that local authorities have recently received a letter instructing them immediately to cut their supply of mortgages to 50 per cent. of what they were last year. This morning I received a letter from my city treasurer about a constituent who had approached me. The treasurer wrote:
  "I am afraid that he is going to be one more of hundreds of would-be house purchasers who because of the effect of Circular 64/75 of 9th June cannot in the foreseeable future be helped by the council."
  This is happening all over the country.
  I do not share the criticisms made today by the Opposition—a lot of ideological balderdash—but I think that there is something in the criticisms that I am making and which have been made by my hon. Friends. Out of 32 London

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  boroughs, 23 have stopped lending altogether and another five have imposed restrictions, so there will be a further strain on the waiting lists for council houses.
  Councils are having to pay up to 15 per cent. interest on borrowing, compared with 11 per cent. for building societies. The Government should require the societies to transfer several hundred million pounds of surplus funds at 11 per cent. to the local authorities.
  All that I have time to say on rents is that I am bitterly disappointed that on the housing finance working party which the Secretary of State has established there is not a single representative of the people most directly concerned—the tenants. Nobody seems to think about them. The Association of London Housing Estates and other excellent tenants' associations have experts who should be appointed and serving on that committee—and it is not too late.
  Finally, I wish to say a few words about the private building firms which are exploiting the councils and the homeless, although there are honourable exceptions. Why should a new council house in the provinces cost £10,500, quite apart from the land cost, and, as we have been told today, £30,000 to £50,000 in London? Why should it cost £4,000 to improve a council flat? Ten years ago, in Salford, bathrooms with hot water and inside lavatories were being installed for £220 in terraced houses. I know that there has been inflation, but, my goodness, not to that extent. I blame some firms of architects. They are paid commission on a percentage basis: the higher the cost, the higher the commission. In a recent sheltered housing scheme in Salford costing £300,000, no less than £40,000 went on professional fees for architects and quantity surveyors.
  As for faulty work, I could provide hair-curling stories from all over the country. Let me quote one or two from Salford. In three tower blocks the columns have cracked and at this moment are having to be propped up with steel girders inside and out. In a number of other tower blocks in the city, a major job is looming because of the movement of parapet panels and suspect joints. A new bridge over the river Irwell collapsed. Yet the bridge builder was actually paid his fee!
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  Damp abounds, affecting walls, clothes, bedrooms and furniture with green, grey and black mould. There is a serious effect on health. Damp results chiefly from faulty design by architects who should have been forced to live in these flats for six months—
  Mr. Perry: And partly from shoddy work.
  Mr. Geoffrey Finsberg: Is the hon. Member indicting just private architects and developers or also local authority workers and direct labour departments?
  Mr. Allaun: I am glad that that point has been raised. If the hon. Gentleman can contain himself for 20 seconds, I shall be there.
  Then there are the high alumina cement developments. Now are added the fears over woodwool slabs. Why is something not done about the firms responsible for these faults? I have friends who are architects and they tell me that they take out huge insurance policies to cover disasters. Yet these firms are not sued or prosecuted, when things go wrong. Instead, the heads of some of them are honoured. Frank Taylor, of Taylor Woodrow, built Ronan Point, the collapse of which eventually cost this country £100 million paid for half by the taxpayers and half by tenants and ratepayers. What happened to Mr. Taylor? He was knighted. As far as I know, Taylor Woodrow did not pay a penny of compensation, and its profits of £6 million in 1967 had trebled to £18½ million in 1973.
  The answer is to check soaring contract prices by employing those direct labour departments which have proved successes. Manchester, which employs 4,500 men, has built 16,000 council houses and has a wonderful record of success. Neighbouring councils in the Greater Manchester conurbation would like to employ Manchester's direct labour department to build houses for them. That would certainly bring down the tenders of some of the building firms. But this is forbidden by some outdated circular.
  The Secretary of State told me at Question Time last week that he was permitting Manchester and Sheffield to work for other councils, but I understand that while they may do certain repair work they will not be permitted to build houses. I

  1009
  cannot see why that should be. A Manchester councillor tells me that it will be 1977 before an Act is pushed through to change that situation. Surely it is not beyond the wit of the Secretary of State, or of man generally, to alter that regulation without having to wait two years. Where there's a will there's a way.
  Mr. Joseph Dean: On this point, is my hon. Friend aware that the end of the Manchester department's massive building programme is coming very close and that it would be expedient to examine the situation to allow it to build for other authorities in the conurbation so as to assist them with their housing programme?
  Mr. Allaun: I am very grateful for that intervention. It shows that these men who have experience could be kept fully employed in building houses, which is what they want to do. I shall be listening very carefully to what the Minister has to say later tonight.
  5.56 p.m.
  Mr. Stephen Ross: I am glad to speak after the hon. Member for Salford, East (Mr. Allaun), who has made the most perceptive and common sense speech of the debate so far. I also congratulate the hon. Member for Battersea, South (Mr. Perry) who highlighted many of the problems that we see in our constituencies. He was particularly concerned with the London area, but even in my constituency we have the unheard-of situation of between 2,000 and 3,000 people on our waiting lists while properties stand empty and rotting—some owned by local authorities. We cannot understand why that is allowed to continue. In the county town of Newport, to which I am about to move, I photographed no fewer than 50 empty properties, one of which had been empty for over 20 years.
  The situation has deteriorated since our last housing debate, despite what I accept are some encouraging new starts in the public and private sectors. Some of the Government's present housing policies are very hard to understand, which is putting it kindly. We have heard about the lack of mortgage finance which local authorities are facing. I was in Cornwall on Saturday and I was told that practically all authorities there are right out of
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  money. Some are saying that they can lend no more local authority money this financial year.
  We know that about 50 authorities are unable to lend at under 14 per cent. I am sure that the Minister will have had his attention drawn to the deputation from Stevenage, which some of us met the other day. That is not in my constituency, but I was asked to attend as spokesman for my party. It was a frightening experience. Those people were in no mood to take "No" for an answer, having to face mortgage rates of up to 14 per cent. when their mortgages, on new town houses, were originally granted at 8 per cent. They could not understand that huge increase.
  In my constituency, one authority now lends at up to 14 per cent., if one can get it, and the other at 11 per cent., so anyone buying a small property tends to go to the area of the latter. But both face reductions in lending and I do not suppose that they will be able to continue lending for much longer.
  The housing waiting lists seem to grow longer. There was a period when my postbag did not get so full and not so many people came to see me on Saturday mornings. It is a forlorn experience when one has to interview decent people, often with a reasonable income, who are unable to get a home at all, sometimes suffering nervous breakdowns and seeing a doctor, and when one knows that there is nothing one can do to help except make a plea to the housing manager, who himself is at his wits' end.
  Local authority modernisation schemes are almost at a standstill. In my authority, some additional money has been released on one scheme, but it is a different story with others. Properties in London and elsewhere will have to stand empty because of the cut-back—
  The Minister for Housing and Construction (Mr. Reginald Freeson)The Minister for Housing and Construction (Mr. Reginald Freeson) indicated dissent.
  Mr. Ross: I am glad to note the Minister's disagreement, and I hope that what I have said is not so. However, improvement grants are severely restricted. I have written to the Minister twice in recent months asking for the bottom limit of £175 rateable value to be raised. Rating valuation lists prove that

  1011
  small properties valued above that figure cannot be improved.
  Turning to the speech of the hon. Member for Aylesbury (Mr. Raison), I am forced to put on record my sympathy for the Government, because of the fact that many of their problems result from the deplorable goings-on during the period of the last Conservative Government. The hon. Member for Salford, East described some of those things. A prime example is the use of high alumina cement. The cowboys who were allowed to operate in the private sector between 1971 and 1974 were a disgrace to this nation. It will take years of suffering to put that situation right.
  I have found that the whole of the drainage system of a property that I am buying is completely condemned by the local authority and that it will cost between £1,000 and £2,000 to put it right. The builder had no previous experience. In those days building houses was a "good act to get in on." Inexperienced builders built those houses. The country will live with that fact for years.
  The greatest disservice was the enormous rise in prices. It has made it almost impossible for the ordinary person to buy a small property. This is the problem with which the country is faced. Both sides of the House should arrive at a consensus so that the problem can be solved.
  I do not suppose that the hon. Member for Salford, East will agree with my following remarks. There are up to 1 million dwellings which are empty but ready for occupation now. We all know of cases in which people have left the country temporarily. There are people who own two homes. They are prepared to help the housing situation. Not all property owners have an evil intent. Many people would like to let their spare properties. I refer to those who own properties which have become unexpectedly vacant through a relative's death. Others have bought houses for eventual retirement.
  Those property owners are frightened. They are advised by their lawyers that they must not let their properties. If they do let them they may find themselves in an unfortunate situation. We all know
  1012
  what happens. Tenants make promises that possession will be given, but when the time comes they are unable to leave. Those tenants are protected. The protection applies to both furnished and unfurnished tenancies. We must give private landlords the opportunity to help in this situation. We have heard about the scheme in North Wiltshire, which is a start. That scheme provides for local authorities to guarantee short-term lettings. The local authority will take over the tenancies. That offers one way forward. However, the scheme is at present making only slow progress. The administrative costs and subsequent management charges are under £25 per annum. That scheme should be examined and extended.
  However, there is a need to go further than that. We should make special arrangements for the first letting of houses, subject to satisfactory safeguards. I do not wish to return to the 1959–64 situation. That went wrong. The rent officers must be allowed to assess fair rents. The tenants must know exactly where they stand when they enter into the agreement. The landlord must know that he will not lose all control. If a local authority can give a guarantee, so much the better. In that context, I support the Private Member's Bill in the name of the hon. Member for Kensington (Sir B. Rhys Williams). We must face up to the situation. We must make use of all our existing housing assets.
  I believe that the Rent Act 1974 was necessary at the time, but it is nonsense to talk about the effect its repeal will have. Furnished property usually commands a high rent of between £20 to £40 a week. I do not think that repealing the 1974 Act will help the situation. Even so, landlords of either furnished or unfurnished property should be allowed the unrestricted right to let for the first time.
  I do not think that the suggestion made by the hon. Member for Aylesbury (Mr Raison) about private developers building houses to let is feasible today. I do not see how anybody can build property to let at a realistic rent, as costs are now every high. Local authorities are very often at fault in that they allow their own properties to stand empty. It takes a long time for them to make a move.

  1013
  The Rotary Club in my county town tried for some years to obtain premises in the centre of town so that they could provide meals for old people. At long last something is being done. A building which has been derelict for over 10 years is being made available, because the redevelopment scheme there never got off the ground. Why should it have taken so long to do that? Why should not the local authorities provide buildings for charitable and housing associations to let on a short-term basis? They could renovate those properties and make them habitable. That would be a move in the right direction.
  I could instance schemes in other parts of the country. In Portsmouth properties scheduled for demolition are being taken over by a housing association. Accommodation is being provided for unmarried mothers. The properties are being converted into flats. Local authorities should be encouraged to set up such schemes.
  I agree with the mandatory rating of all empty premises. It should be mandatory on all local authorities to rate empty dwellings. I agree also with the requsitioning of empty properties. Where premises are flagrantly left empty the local authorities should be empowered to requisition them. However, owners of such properties should first be given the opportunity to make proper use of them.
  I believe that the financial institutions and banks should be obliged to help local authorities to grant mortgages. I do not think that the building societies should be forced to do so. I hope that the Government will direct the financial institutions to deposit funds with local authorities so that mortgage schemes can be funded. Building societies' funds are already fully taken up. I understand that the banks already run mortgage schemes for their employees at favourable rates of interest, which are sometimes as low as 4½ per cent.
  I am in favour of low-cost housing schemes. People are often satisfied with one-bedroom units or two-bedroom units. Such units can be built for approximately £6,000, or possibly less. Those schemes should be more actively promoted. I believe that local authority planning officers are reluctant to consider those schemes. I heard of a case recently where
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  a private developer was prepared to build one-bedroom units, leaving purchasers the opportunity to extend their accommodation afterwards as their families increased. I was told that the building society which was approached did not look upon this as a suitable investment for mortgage money. That is nonsense. I must make it clear that I am not referring to all building societies. I do not wish to receive letters contradicting me, as I did the last time I made remarks about a building society.
  I hope that it is not the policy of all building societies not to lend money on low-cost houses. The same remark applies to flats and maisonettes. I constantly receive letters from estate agents and others saying that the building societies do not lend money on flats and maisonettes. The building societies could do a great deal more to help, as many people could afford low cost units.
  I favour the idea of making outright grants to first-time buyers. Such grants would be of enormous assistance to them. Why is there no way in which that can be done? I know that the idea has been considered from time to time. In some areas local authorities put aside part of the rent paid by first-time occupiers and allow their deposits to build up. Perhaps that scheme will work better now that the market is stable. The idea is to build up accounts for first-time occupiers so that they have a deposit to put down on a house. Such a scheme would work to the benefit of the Government. I do not say how much grants to first-time purchasers should amount to. I suppose that the grants should range between £1,000 and £1,500.
  The Community Land Bill is a tragedy, although I agree with the basic idea behind the Bill. However the Government are approaching the matter in the wrong way. The Bill is unlikely to produce any cheaper land. The local authorities will be the speculators of the future. They will buy the land at existing use value. They will then undertake the planning and sell the land at open market value. I do not think that will help one iota.
  I can imagine people on the finance committee of a local authority saying "We are advised by the planners that we can have only eight houses per acre,

  1015
  and this is a five-acre site. If we were to erect blocks of flats we could get far more money." They will look for the biggest financial return. That is one aspect of the Bill which will not help the housing situation.
  I also wish to refer to the frustrations of housing associations, particularly charitable organisations, of one of which I am a member. We started with the intention of building up to 50 or 60 houses a year in my constituency. We started off with 30 schemes, 27 of which have now fallen to the ground through lack of co-operation of one sort or another. Very often the owner of a site will not agree a price with the district valuer, and that is a problem which we cannot overcome unless there are compulsory powers in the background.
  More often the local authority is not very helpful. I know of one which has been very helpful, but others are not. They are not prepared to provide mortgage finance. In addition, it took my housing association two years to get registered. There are many frustrations, and many good people who have come forward to help are now almost giving up in despair. The willingness has been there, and the patience of these people has been tested enormously.
  May I now refer to the Parker Morris standards. It so happens that I was at Milton Keynes New Town this morning and I saw a case in which it was unnecessary to stick to Parker Morris standards—a big bedroom wardrobe. I am not opposed to the provision of good standards but we do seem to go to excessions in providing high standards which are not required by occupiers. Very often when people move in they throw out these items which have been built to such a high standard.
  I wish to see the future of housing planned on a regional or county structure. We should put houses where they are most needed. This is very important because we are now running up against the problems of drainage and sewerage. Because we have set up these new river and water authorities, the new local authorities no longer control the water and sewage disposal, and frequently a water authority is found not to have the necessary money to provide the drainage for a new develop-
  1016
  ment. In a regional context houses could be built where there are already adequate sewerage facilities. We must have the cooperation of the building industry. A great deal more could be done to get help from the industry to assist in development on a regional basis.
  I agree with the hon. Member for Salford, East on the subject of high alumina cement and wood wool filling. We have read in the Sunday newspapers about the filling of cavity wall structure houses, and I should be grateful if the Minister would comment on this. I believe there is an inquiry into the use of high alumina cement and that there is to be a report published by July. I do not know whether people who are affected by the use of these materials can look to this report for assistance, but it would be helpful if a comment could be made particularly on wood wool filling.
  The lack of a decent home is the cause of many of our ills in society. If we cut down on costs in our housing programme we are liable to add to our health and social security burdens. Radical new policies are urgently required some of which I have tried to outline in my speech today.
  6.14 p.m.
  Mr. Andrew Welsh: If housing has been described as the great British failure, it is surely the great Scottish disaster. The recent Department of the Environment Report on Census Indicators of Urban Deprivation shows clearly that Scotland's housing is the disgrace of Europe.
  Of all the indicators of deprivation, this report shows that the West Central belt of Scotland has the greatest concentration of all kinds of multi-deprivational factors—poverty, low wages and so on—in the whole of the United Kingdom, and of these, housing is by far the most important and fundamental. In Scotland we have slum housing which is a disgrace to any civilised, self-respecting modern democracy. That is the proven record of consecutive London Governments, both Labour and Conservative.
  This report on urban deprivation, which I recommend as statutory reading for every Minister, shows clearly the extent of what is, by any reckoning, a truly formidable task. There is at present no

  1017
  adequate governmental machinery existing to undertake this vital role. Housing in Scotland at present is the responsibility of an Under-Secretary of State who deals also with farming, fishing and forestry. Housing and fishing—what a combination! What sort of ingenuity must have been required to combine those two activities?
  The Under-Secretary is responsible in turn to a Secretary of State who himself has to deal with a host of portfolios—education, health, police, housing, farming and forestry—any one of which would require all the brain power which any one man has to offer, and then demand more if they are to be dealt with adequately. Each one of them has a Minister to itself in England. No wonder Scotland has lost out. No wonder Scotland has suffered from a poverty of new ideas and initiatives.
  I ask for the immediate creation of a fully fledged Scottish housing Minister with his own Department, backed up by adequate finance, and responsible to the people of Scotland through our own directly elected Scottish Assembly, or, better still, through our own democratically elected Parliament. If the problem is to be solved, the Government machinery capable of solving it must be created. I ask the Government to initiate an immediate all-Scotland housing survey, using Scandinavian standards in order to ascertain the fitness or unfitness of each house. Our universities, local authorities and other appropriate bodies could be called upon to help in this essential task.
  There must now be a switch in emphasis in the use of housing standards. For far too long we have been too happy to accept standards of mediocrity where "minimum tolerable standards" really have been minimal. They have been the lowest common denominator under which human beings should be asked to live.
  I ask the Government to start talking in terms not of standards of mediocrity but of standards of excellence. To do this the present house building programmes will have to be drastically revised. The inadequacy of past and present house building programmes in Scotland and the potential options open to a Scottish Government can be seen in
  1018
  the actual achievements of similar small nations. The Scandinavian democracies, for example, have consistently built more and better houses than we have, and cumulatively Scotland is falling further behind. Between 1963 and 1972 Sweden built 620,000 more houses than Scotland did. Denmark in the same period built 58,000 more houses than we did. When we talk about the most prosperous nations, Finland is rarely mentioned, but even Finland has built at an annual rate of twice the number of houses that we have achieved in Scotland.
  I ask the Government to review their attitude fundamentally towards the financing of house building. The sums involved are not necessarily astronomically high. In 1973, in order to achieve a better house building record, Sweden spent only £21 million more than was spent in Scotland, and in the same way Norway spent only £18 million more, yet achieved a far better record. Sums of £18 million or £21 million more are hardly astronomical, especially for a nation with a gross domestic product in the region of £5,300 million. These sums are easily within the reach of a careful dedicated and sensible Scottish Government.
  Those who say that Scotland gets more than her "fair share" of United Kingdom expenditure should take a good look at the housing statistics. They will see that Scotland has 10 per cent. of the United Kingdom population. Yet year after year Scotland, with the worst slum housing problem in the United Kingdom, has been allocated less than 10 per cent. of the total United Kingdom house building expenditure. In real terms over the past few years the Government's allocation for Scottish housing has actually fallen.
  Mr. Robin F. Cook: Would the hon. Gentleman explain to the House how, if expenditure on public housing is so low in Scotland, Scotland has one-tenth the population and one-fifth of the council houses?
  Mr. Welsh: I was making the point that those who say that Scotland gets more than its fair share should look at the expenditure on housing. With one tenth of the United Kingdom population and a far bigger problem, Scotland has

  1019
  consistently been allocated less than one-tenth of the total United Kingdom housing.
  Mr. Douglas Crawford: Perhaps my hon. Friend would comment on the fact that the area with the worst deprivation in the United Kingdom—the West of Scotland—has been consistently ruled by Labour local authorities and it is to them that blame should be attributed.
  Mr. Norman Buchan: Does the hon. Gentleman have the figures?
  Mr. Welsh: I am happy to supply the hon. Gentleman with the figures. In the three years 1969, 1970 and 1971 Scottish authorities have achieved only a tiny fraction above the 10 per cent. I mentioned.
  Mr. Buchan: Is the hon. Gentleman withdrawing his statement?
  Mr. Welsh: I said that Scotland had consistently failed to get less than 10 per cent. I have pointed out that only in three years have we received only a tiny fraction above 10 per cent.—and I do mean a tiny fraction.
  Attitudes to housing and thus to housing standards and priorities reflect social values as well as the availability of resources. If the Government spend a small proportion of their GNP on housing, clearly they do not view housing as a major priority. By their own record and to their shame the Government, therefore, do not look upon housing as a serious priority in Scotland.
  The Scandinavian example has shown the possibilities open to us, and when the vast potential revenues from our oil are taken into account as a bonus, a Scottish housing Minister will have all the financial resources that could possibly be required for these purposes.
  I ask the Government to undertake an immediate and comprehensive attack on Scotland's poor housing standards. I ask them to create the machinery required, to allocate the finance needed and to apply Scandinavian-style determination to tackling the problem. There must be new ideas and initiatives. The traditional expertise and ability of our long-established financial institutions must be
  1020
  encouraged to create and to pioneer new methods of housing finance. Employers, trade unions, co-operatives and other appropriate organisations could be encouraged to provide Government-backed housing finance schemes as part of their service to their workers and their customers.
  All sources of help, both public and private, must now be called into play if this problem is to be tackled properly. I ask the Government for action. We have had plenty of past reports. For example, the Bowhouse Report has been in existence for three years and little or nothing has been done to cure the problems that it underlined. It is the people of Alloa who suffer while the Government dither.
  Let there be no more Bowhouses or Blackhills, no more Govan redevelopment schemes—which are now lagging 10 years behind schedule—no more part-time or half-hearted management of Scottish housing problems, no more 95 per cent. of extreme urban deprivation huddling together on Clydeside, and no massive Drumchapel or Castlemilk type of urban sprawls which were built without adequate facilities to back them up.
  I ask the Government to learn from past mistakes and to translate present potential into future reality by always keeping in mind the needs of individuals.
  6.24 p.m.
  Mr. Joseph Dean: I am surprised at the affrontery of the Opposition—because the Government have only been in office for just over 15 months—to opt for a debate which is almost a censure motion on the Government's 15-month record. Those hon. Members involved in housing problems know that it takes two to three years for a national policy to emerge in any depth. Although I was a signatory of the letter sent to the Prime Minister which asked for additional resources, I give a qualified word of appreciation of what has been done already, because the barometer is at last moving decisively in the right direction with a 30 per cent. increase during the time the Government have been in office. I shall be delighted if the momentum continues and if that 30 per cent. is compounded in the next set of figures that is published later this year.
  The hon. Member for Aylesbury (Mr. Raison) mentioned the financing of

  1021
  council house building. One of his arguments was that the sale of council houses would immediately make more finance available for the local authority to begin to build more houses. It is obvious that the hon. Member knows nothing about the effect of the sale of council houses on an authority where there is a shortage of housing.
  Whenever the Opposition talk glibly about this subject and use the sale of council houses as a popular sprat to throw to the electorate, they never talk about the sale of council flats. I know of no area where council flats have been sold or bought to any extent. In the past the more desirable council houses have been bought at low prices and where there has been a shortage a house has gone out of local authority control. The waiting list for houses in a major connurbation such as Leeds is approaching 25,000. It is glib to say that we should start to sell council houses.
  The hon. Member for Aylesbury raised the matter of the valuation of council houses. The situation arose in the last valuation of council houses that there were no adequate staff to give proper valuation because of the bonuses and discounts of 20 per cent. which were increased to 30 per cent. by the last Conservative Government. It is absolutely paramount that adequate staff are available to carry out proper valuations. The result was that some council houses were undervalued—valued below what we accept as a fair market figure. Most of the houses I would describe as being good post-war houses.
  The hon. Member for the Isle of Wight (Mr. Ross) touched on the question of Parker Morris standards, but I want to deal with this in a different concept. The hard fact of life is that while those council houses were being built to Parker Morris standards, their counterparts that were being built for sale in the private sector were not to the same standards The council houses to Parker Morris standards had 20 per cent. more cubic space, and that standard demanded certain basic features, for example, central heating, which the private sector was not required to install.
  1022
  Some very nice council houses were being valued at prices far too low just in order to get them into the pipeline because of decisions being taken locally. What would be the situation if the 60,000 council houses, which the hon. Member for Aylesbury mentioned, were sold in the one year? What would happen to the housing programme and the cost effect on the nation if we were to build 300,000 or 400,000 houses a year, half of them being council houses, and we were to sell 100,000 houses on a knock-down basis? Other houses would have to be put back into the pool because of the severe waiting list. I am referring to stress areas, because I would not oppose this on political grounds if there were a surplus of council accommodation. This is what the debate is about. What would happen? Most of the post-war houses were built for, on average, £4,000 ten years ago. It may have been a little higher or lower. They would have to be replaced at today's prices.
  Mr. Reginald Eyre: I appreciate the point that the hon. Gentleman is trying to make, but is he not exaggerating it enormously? Does he not realise that the family that bought the council house would have stayed as tenants?
  Mr. Dean: The hon. Gentleman is assuming that no one moves from a council house, when the truth is quite the opposite. There is a tremendous national wastage every year in council houses. I had an association over a long period on the subject of housing with one of our major cities, which was demolishing 6,000 slums a year. Half of this project was being met by re-lets. Therefore it is not true to say that people born in council houses die in them. They move from such accommodation as rapidly as people move in the private sector. No one in this Chamber could be sure that in 12 months' time he will be living in the same house. That premise is completely false.
  I return to my point. If we were to sell 100,000 council houses per year and they were valued as they were on the last occasion, they would be valued on a lower basis than if a private estate agent were selling them. That has been proved more than adequately. We should have to replace those houses at a cost of

  1023
  £10,000 per unit. The Conservative Party is saying "Let us protect the taxpayer and the ratepayer", but Conservative Members have almost said "Never mind about council house tenants." What would that load on to an authority which had to keep building, if it had to discard council houses which had been built at what was at the time a high cost but which, because of inflation, has become a relatively low cost? It would be disastrous.
  I have always viewed the ploy of selling council houses as nothing but a legalised bribe by the Tory Party. I can go back to my history as the housing chairman of Manchester. I think that it was in 1971 that because of the forthcoming municipal elections—in that area it was a mini-General Election; it was a full organisation—the Conservatives upped the "anti" from 20 per cent. to 30 per cent. in an attempt to buy the votes of council house tenants. But they were massacred. They returned 18 councillors, I think, out of 99. That is how attractive the idea was.
  However, the people who would remain in council houses would be the overwhelming majority. If one valued these houses properly, there would be no rush to buy them at today's mortgage interest rates. This would once again mean a quite disproportionate and unfair burden being unloaded on the backs of the remaining council house tenants.
  On the question of council house rents, mention has been made of over-protection, and it has been said that the Housing Finance Act, introduced by the previous Conservative Government, was a very good thing. But there has been an inference from a previous Minister that rises in the rents may eventually exceed what was envisaged in that Act.
  I was very deeply involved in that Act once it had left Parliament. I was then the chairman of the AMC Housing Committee. There was to be a 50p increase if the Act was implemented in the spring and an increase of £1 if it was implemented in the October. But the Conservative Party was talking of cloud cuckoo land. I happened to be part of a general deputation from the TUC and the AMC which met the then Secretary of State, the right hon. and learned Mem-
  1024
  ber for Hexham (Mr. Rippon). I produced figures which showed that between the provisional coming into effect of the Act in March, and the period to October of the following year, which was the 18 months when the second obligatory increase in the October had to be brought in, a large number of council house tenants in the stress areas and major conurbations were being asked to pay 40 per cent. more in total, rents and rates, than hitherto.
  Let us not forget that this was in a period of freeze and semi-freeze, when the then Prime Minister, now the ex-Leader of the Opposition, was asking people for restraint. The case that we put forward was heard in muted silence. It was accepted. It was not denied. Nevertheless, it went by default, and people had to pay.
  Let us not retain any ideas that in the past councillors were able to depress rents and keep them artificially low. There may be grounds for saying that in relation to some areas, but only minimal grounds because by law councillors had to balance their housing revenue accounts annually. There was no other option. If such accounts had been overweighted by raiding the rate fund, I am sure that the councillors would have taken the consequences at the local elections which were held every year.
  I am glad that the hon. Member for Birmingham, Hall Green (Mr. Eyre) intervened, because his area was outstanding as one in which the Act made nonsense. I think that Birmingham then had a surplus of £3 million. The Act said that half of that was to go back to the Government. That money had been collected in rents. Some subsidy had been involved, of course, but can anyone imagine anything more autocratic than saying to a local authority "You have collected £3 million from your people, but we want half of it back"? These are the people who are talking about fair treatment for council house tenants.
  I received some criticism within my party for the stand that I took on that Act. It was a thoroughly bad Act. I implemented it finally on the basis that I was not prepared to break the law, but I did not do so with any enthusiasm. As my right hon. Friend the Secretary of State said, it is true that rent scrutiny

  1025
  boards were set up. But by the time the present Secretary of State brought in legislation to nullify and destroy that Act, there was no major housing authority that had had a rent level set by a scrutiny board. They were increasing rents by Government direction and did not know what they were paying for.
  This idea wants nailing. In the future the council house tenant may have to pay more rent. However, what we must do as public guardians is to make sure that such tenants are not asked to pay a disproportionate increase to redevelop a city in which they have lived all their lives, for someone else to draw the benefit. That is the unfairness of what was proposed. It is true that the Act initially covered only three years and that rents would have been reviewed under it—and drastically upwards in my opinion.
  I want now to deal with the question of the housing programme. The peak reached during the term of office of the previous Labour Government was about 400,000 houses. Just over 50 per cent. of those were built by the private sector, and the rest by the public sector. I am not against owner-occupation in the right sense by the private sector. I am myself an owner-occupier. However, it is quite apparent that because of inflation, unless we go to Common Market wages—and that will not go down well with some, nor will the prospect of Common Market prices—the ordinary working class person can forget about owner-occupation. Therefore, if we are aiming at a target of 400,000 houses, it is obvious that we must go for a much bigger slice of the global sum for local authority building.
  I should be the last to suggest that local authorities are the ideal that everyone would desire in housing. Each house built can be a problem. Each child born into the world becomes a potential housing problem. Even with the difficulties that have been experienced—not all local authorities are the best of landlords—I am sure that local authorities do a tremendous job. At present 6 million families are housed in local authority houses. If they were not so housed, no one would bother about them. I think that our care must be on an increasing basis and above the level of 50 per cent. being built by local authorities.
  We must also consider the prerequisites in terms of building houses. One import-
  1026
  ant factor is money. As my right hon. Friend the Secretary of State for the Environment has said, there has been a generous increase in the amounts that have been allocated and the amounts that are in the pipeline. Land is one of the most difficult problems and I think that the Community Land Bill will go a long way towards providing local authorities with a vehicle for taking land under their control where there is a shortage. We must also consider building resources. It is clear that we have adequate building materials. We have ample supplies of wood, bricks and glass, for example. Supplies are stockpiled everywhere.
  Here I issue a word of warning on system building and gimmickry. Alumina cement was a gimmick and it has soon caught up with us. I used to represent an authority that proceeded with about four huge gimmicks. Deck access flats became fashionable. All that we did was to lift slums off the ground and put lifts in them. It is easy to say that it will not happen again, but we must keep a careful watch on these matters. I speak forcibly against gimmickry and against messing around with industrialised systems.
  My hon. Friend the Member for Salford, East was correct when he said that upwards of 150,000 building workers are drawing unemployment benefit. Some statistics that I saw several years ago showed that on the basis of a balanced building force it took 0·9 of a man a year to build one council house by traditional means. That means that if we have a balanced building force of 152,000 unemployed—and I have no reason to say that it is not a balanced force—we could build in excess of 150,000 in addition to the number we are already building. That reinforces some information to which I referred when I last spoke in the House on housing. I had been in touch with the secretary of the National Federation of Building Employers. He said that manpower resources existed amongst his members that would make it possible to build another 150,000 council houses a year in addition to last year's programme.
  This debate amounts to almost a motion of censure on the Government's housing record. I would have expected the big guns to be brought to bear. The big guns that we have heard today from the Opposition remind me very much of the big gun that Charlie Chaplin tried to

  1027
  fire in "Modern Times". That gun did not go off. I think that the Opposition will have to do a little better themselves if they are to criticise the Government's performance.
  I have some reservations about our programme and I would like to see it increased. I am hoping that when the economic situation improves my right hon. Friend the Secretary of State for the Environment will ensure that housing has an increasing share of the national cake in the interests of people who remain on the ever-growing waiting lists. A greater share of that cake will give local authorities the chance to build the houses that are so desperately needed.
  6.44 p.m.
  Mr. Jim Spicer: The hon. Member for Isle of Wight (Mr. Ross) has already spoken of the problems of rural areas. Although most people accept that the major problems are to be found in the urban areas, it should be emphasised that the rural areas have their share of misery and hardship. I accept that the problem may be on a much smaller scale.
  In the countryside there is a sense of identity with the area in which a person lives. As matters stand, a movement of 15 miles, 20 or 30 miles can involve personal hardship and the loss of identity for a family that has lived all its life in one area.
  We must now face the realities of our situation. I shall raise three smallish points in a general sense and then go on to one particular matter which might be of some help to the Government. I do not believe that we can accept the situation that has arisen over the past 10 years. The housing deficit has risen from £150 million in 1965 to £1,250 million in 1974. Some people may feel that that is right, but I do not believe that we can continue along those lines. It has already been illustrated by the Secretary of State in another context that that trend is not acceptable.
  I do not believe that we can exist in a world in which subsidies on council house rents range from £25 to sometimes £60 a week. I am sure that none of my right hon. and hon. Friends has any objection to a subsidy being paid when it is needed by the person to whom it is
  1028
  being paid. What I find difficult to accept is that so many people are now paying for the subsidies through rates and taxes when very often they are less well off than those who are receiving them. That is a situation that almost everyone must deplore.
  Mr. Julius Silverman: Does the hon. Gentleman apply the same principle to mortgage relief, which is given irrespective of income?
  Mr. Spicer: No, I do not.
  The hon. Member for Leeds, West (Mr. Dean) referred to the turnover that takes place amongst council house tenants. One of the saddest things that we have experienced in west Dorset over the past three years is a turnover of council house tenancies of 3 per cent. and rising, dropping to 1 per cent., and falling with the change of Government. There is a static population and the people at the top of the income scale were moving out as their incomes became high enough to allow them to buy a house of their own. Those people are now sitting tight because they know that they are on to a good thing. I was grateful to the Secretary of State when he said that there is to be an increase in council house rents next year. I hope that it will be so modulated that those people at the top of the income bracket will once again be in the position where they will find it better to purchase a home of their own.
  I do not believe that we can continue along the present lines. We are all waiting with anticipation, and possibly some trepidation, for the economic cuts that the Government are to announce in the near future. When they are announced, undoubtedly the housing sector will suffer along with every other facet of our national life. It is for the Government to decide how they will operate the cuts in the housing sector, but today it is for us to give our advice and to try to help, even though it may be in a very small way. That is what I want to try to do in this debate. I am looking at the matter in a strictly parochial sense, but I am certain that the point that I am about to put forward could be extended to many other areas, and particularly rural areas.
  In west Dorset we have a camp in an area called Piddlehinton. It lies four miles from Dorchester. The camp was

  1029
  built during the war to house 1,500 troops. It was used to house Asian refugees from Uganda some two years ago. At that time some £50,000 was expended on it. The camp comprises some 85 brick-built units of accommodation with cavity walls and damp coursing. Not all the units have main services laid on but there are some 40 wooden huts on good, solid concrete bases with all the servicing that one would expect to go into such a camp. The camp has its own septic tank disposal unit. There is main drainage lying in straight lines all the way through the camp.
  When the camp was vacated by the Asians some two years ago the first proposal was that it should be bulldozed down and put back to agricultural use. At the time the cost of doing that was about £68,000. The camp comprises an area of 91 acres. We moved on a little, and the second proposal was that the local district council should take over 18 of the brick-built units to house 22 homeless families and that in the fullness of time the rest of the brick and wooden huts should be bulldozed down leaving the bases in situ because the cost of removing them was too high. That would mean that on the rest of the 91 acres the weeds and the grass would grow up all round the 22 homeless families who moved there.
  I have written to the Department about this in the hope that we shall be able to consider an alternative scheme for this camp and for others which exist in Bridgwater and in many other parts of the country. When the need is there we must make use of what we have.
  My proposal is as follows. There are 85 individual brick-built units in the camp. They could first be offered as they stand to council house tenants in the area for purchase at about £1,000 or £1,500 for each unit. A clerk of works could be installed to act as guide and mentor to the people who would buy the properties so as to enable them to build their own houses. There are many people who are capable of doing that. I welcome the suggestion, made again this afternoon, that there should be a grant to first-time buyers. That would make it possible for young married couples and people who had been looking for a home
  1030
  for many years to purchase these properties.
  The 40 wooden huts should be bulldozed off the concrete bases, and instead of just leaving the concrete bases we should put on them mobile homes. The Department has been conducting an investigation into the rôle of mobile homes and considering what better use can be made of them. As a result of that investigation I hope that the Department will propose ways in which better use can be made of mobile homes.
  There are many other buildings in the camp, a gymnasium, various messes, workshops and so on, all of which lie derelict but all of which could be used to serve the newly built village lived in by people who had themselves done a large part of the work. That sounds perhaps a little too much like a dream, but I think that it could be done and it would provide homes for people who had not had them before.
  In dealing with problems of this sort it is necessary to look at the list of the other people who are involved. That list includes the Department of the Environment, which has been acting for the Ministry of Defence in selling the site to the county council. The county council is giving a 10-year lease to the district council which wants to put up 22 units of accommodation, but is not too sure about it. It is not beyond the bounds of possibility for the Minister to bring all those people together and to listen to the views of the planners—who originally wanted to bulldoze the camp—of the county council, the district council and the many homeless people who would be only too ready and willing to move in.
  I hope that the newly-appointed Under-Secretary of State, the hon. Member for Durham, North-West (Mr. Armstrong), who played a large part in helping one village in my constituency to get the school it so desperately needed, might be involved in this exercise. We should welcome him in west Dorset. This camp, and many others in a similar condition, could provide homes for many thousands of people who would otherwise be on the homeless list for many years to come.
  6.55 p.m.
  Mr. Julius Silverman: I shall follow the speech of the hon Member for Dorset, West

  1031
  (Mr. Spicer) in one comment only—his reference to the admittedly high cost of financing public sector housing. The private sector costs the Government no less. Indeed, it costs more. If one adds up the total benefits to the private sector in mortgage relief, improvement grants to the owner-occupier and exemption from Schedule A, one finds that a higher benefit is given to the private sector than to the public sector. Mortgage relief is a subsidy. In this I declare an interest as a mortgagor. I have a mortgage with a building society and I derive these benefits. I am not asked to declare my means before I get these benefits or subsidies and I see no reason why a council house tenant should be treated less well.
  Mr. Eyre: I am sure the hon. Gentleman appreciates that the tax relief received by the average mortgagor is nowhere near as great as is the subsidy which has to be paid on a new council house.
  Mr. Silverman: The hon. Gentleman is referring only to new council houses not to the average council house. I do not accept some of the extravagant figures which have been mentioned, but it is true that a high level of public expenditure is involved in building new council houses. The council house sector caters for a housing demand which cannot be catered for in any other way. It is no good telling would-be council house tenants to buy a house because it is entirely beyond their pockets. That is the justification for building council houses, although I admit that the cost is very high.
  Talking generally the public sector and the private sector, the private sector gets more benefits than does the public sector. I hope that hon. Members will not concentrate upon the high cost of this public service. The high cost of building council houses has largely been caused by the cost of private sector houses sold in the free market almost doubling within about three years. That has resulted in hardship in the private sector and has also caused the cost of housing in the public sector to rise.
  The Opposition attack on the Government in the debate has proved to be a fiasco. I am amazed that when the Government have been in office for just over
  1032
  one year the Conservatives, with their record, should venture to introduce a debate on housing. I cannot understand their tactics. Naturally, the debate has resulted in comments on their past misdeeds and has shown up their bankrupt policies. Nothing has shown up that bankruptcy more than has the speech of the hon. Member for Aylesbury (Mr. Raison).
  They have no alternative policy. Any legitimate criticism, therefore, must come from the Government side of the House, and I have one or two things to say to the Government. I should like to deal with the point mentioned by the Secretary of State concerning the reduction in improvement grants for council houses. I hope we shall hear more about this when my hon. Friend the Minister replies to the debate. From 1964, and certainly under the Housing Finance Act 1969 under a previous Labour Government, a new strategy was introduced into housing. It was the strategy of conservation of the existing stock. It seemed then to make sense and it makes sense today.
  This policy is necessary not only in the private sector where there is bad housing requiring the provision of amenities, but in the public sector where hundreds of thousands of council houses lack amenities, some of them the basic amenities. Even in Birmingham, which is a progressive housing authority, many thousands of houses have outside toilets and many others are deficient, if not in the basic amenities, then in some desirable amenities.
  It is therefore necessary if we are to preserve and improve our housing stock that these houses should be given attention. I would have thought that was an elementary aspect of the Government's strategy. In order to pursue that policy local authorities have recruited staff, developed their labour forces and entered into arrangements with contractors. My right hon. Friend's announcement of the reduction has come as a considerable shock to them. If the figures that my hon. Friend gave today—I believe the reduction is from £310 million to £255 million—are correct I fail to see what all the fuss is about. I do not know why the Government ventured upon this reduction, especially since some of it hits the areas of greatest housing stress.

  1033
  I understand that in Camden, for instance, the amount asked was £13·7 million. The figure accepted by the Government was £6 million. The respective figures in Lewisham were £10 million and £2 million and in Islington £19 million and £8 million. These are the reported figures and they could be incorrect. In Birmingham, which is certainly an area of housing stress, £10 million was asked for, and taking account of inflation that should by now be £13 million. The figure accepted by the Government was £5 million. I am happy to say that after the Minister's statement and the arrangements he made in Birmingham the figure was increased to £7·1 million, although that is still little more than half what was originally sought.
  The consequence of all this is that staff must be laid aside or transferred, the overall policy is put entirely out of joint, and it will obviously be extremely difficult to resume the programme at the same pace as hitherto. Basically this is a policy of stop-go in housing. One of our greatest economic disasters under all Governments in the last 20 years has been the adoption of stop-go policies, and I can think of no worse way of seeking to introduce economies than by the stop-go method.
  These short-term shock economies always prove to be uneconomic. They do not make economic sense. We have been told of the resources which are available. In view of the number of unemployed building workers there is even less reason for pursuing such a policy.
  Perhaps I am addressing my remarks to the wrong Minister when I direct them to my hon. Friend the Minister for Housing and Construction. I should be talking to the Treasury, for without the slightest doubt it is from the Treasury that the instruction comes, and the timetable proves that to be the case. I hope that the Treasury will listen to what I have to say because what is proposed makes both housing and economic nonsense.
  I understand, although I believe the Minister might disagree on this score, that in London this may result, according to reports in the Local Government Chronicle and The Guardian, in large areas of estates in Haggerston, Hackney, being vacant because of the lack of
  1034
  improvements. The same will apply to the St. Katharines area at Tower Bridge. I know a little about that matter because I am a member of the environment subcommittee of the Expenditure Committee which has been looking into the development of dockland. It would be a tragedy if this sort of development were delayed by the denial of what in economic terms is not a very large sum of money. I hope that the Minister will look into this and make a more determined approach to the Treasury, telling it that these proposals are nonsense and unjustified.
  There is this point about the reduction of funds for council mortgages. The main function of a council mortgage in the past has been to cater for the type of housing which building societies will not provide mortgages for. This generally means older housing and sometimes leasehold housing. The reduction will leave a serious gap in the mortgage system. I do not wish to be dogmatic on this point and I say only that the Government must find some method of filling that gap. I leave them in consultation with the building societies to decide what it should be.
  There is the question of systems building. This method makes sense at a time of shortage of building labour, and I am sure that my hon. Friend the Member for Leeds, West (Mr. Dean) would agree with me on that point. When there was a shortage of site labour it made sense to construct as much as possible in a factory with the components being assembled on site in a short time. However, the system does not make sense when there is a huge reservoir of unemployed building labour in almost every category. I know of no systems building method which is significantly cheaper, or even cheaper at all, or better than the traditional method. I am always prepared to consider new systems but they do not make sense unless site labour is scarce, which it is not at the present time.
  I agree entirely with what many of my colleagues have said about the sale of council houses, because we have experienced this in Birmingham. People come to my weekly or fortnightly surgery and say, "We do not want to live in a flat. We want to live in a house." It appears that they would prefer to have the older pre-war type of house which, whilst it may have certain deficiencies, is a comparatively low-rent house. I have to tell

  1035
  them that I am sorry, but there are not sufficient houses and that the number has been significantly reduced by the sale of council houses.
  Bearing in mind all these facts certainly the sale of council houses does not produce a single additional house. It is simply a gimmick that undoubtedly results in increased hardship to those people who at present desire a council tenancy and especially a council house.
  I hope that the Minister will not follow the seductive Opposition voices calling for a large increase in council rents and a reduction in the amount of money spent on council houses.
  I am not suggesting that there is no case for an increase in council rents. If costs rise, the council tenant must pay his contribution towards those costs. If I tell a council tenant that the cost of repairs, management and interest has increased, I can reasonably go on to say that therefore he must pay more. He will object—and in my view quite reasonably—that if new houses are built at very high cost he should not have to pay any significant contribution towards them except as an ordinary ratepayer. This is one of the major items in the increasing cost of the housing programme at present.
  Therefore, I hope that although there may have to be increases in rent, those increases will be reasonable and not excessively onerous to council tenants. Beyond that, I congratulate the Government on what they have already achieved, in the short time they have been in office. I hope that my short speech will act as an encouragement and an incentive to them to improve their ways in certain respects.
  7.13 p.m.
  Sir Brandon Rhys Williams: It is proper to declare that I have an interest in the relationship between landlord and tenant.
  The housing problem is one of our most acute social difficulties. It is only partly a physical problem. It is much more a legal and cash problem which we have created for ourselves. There may be a physical shortage in some areas where there is an absolute shortage of accommodation of all kinds or where the housing stock has seriously deteriorated or
  1036
  is incapable of improvement because it is too old. But to take the example of Kensington, which is often regarded as the most acute example of housing stress, there is no shortage of housing: there is a shortage of availability of the houses for the people seeking them. The real shortage is of Government ideas for solving the cash and the legal difficulties.
  Let us examine the legal side. The Minister must surely soon be ready to admit that the Rent Act 1974 has created difficulties. The evidence of that is so obvious both inside and outside London that it is fruitless to deny it. It would be much better if we could go on together to try to solve the problems.
  The Rent Act aggravates the legal obstacles, because owner-occupiers are not clear what their rights are. Unless a person has access to expert legal advice it is extremely difficult to ascertain exactly what the position is. Then one can take the example of widows who are afraid to let their property—even though they are obviously owner-occupiers—because they know that when they die their relatives will not want to move into the same house and if they bequeath their house with a tenant in it the house will have a much lower value than if they bequeath it with vacant possession. So they come under pressure from relatives not to let although they would willingly do so and often need to do so.
  I have often pointed to the difficulties of people who have semi-commercial properties, such as a shop on the ground floor with empty accommodation above, which they dare not let because they will eventually need to sell the shop to obtain a reasonable asset for their retirement.
  Another difficulty is that rents are unattractive. The trouble of letting and the inconvenience caused of having someone in to ones own house is not necessarily compensated for by the rent which is obtainable.
  Another aspect of the same problem is that conversions are often not worth while. There are hundreds or perhaps thousands of basements which could be made into attractive small flats, but only at quite considerable outlay. They are left rotting and vacant all over London. Grants are available but the trouble, and the anxiety about what they might run into if they

  1037
  embarked on the expense of conversion makes many owners timid. There are also legitimate fears about the interminable difficulties and the unpleasantness of obtaining possession even if one is entitled to claim it.
  I believe that local authorities in one or two areas are pioneering a new idea—or perhaps they are reviving an old idea—of moving in as intermediaries. I would welcome this development if I were convinced that it would be a real solution, but I doubt if it will prove to be a popular idea. However, it may have a part to play.
  I have sought to make a specific recommendation to solve the legal difficulties in my Housing (Shorthold Tenacies) Bill. I recognise that it may only provide a partial solution, but it would take us a long way in an area where the parties concerned—the landlord and the tenant—are in need of a new legal framework and are entitled to look to the Government to provide it. I have made it clear that there have to be precautions. I suggest that property should only be let on short-hold subject to planning consent, with the prior establishment of a fair rent and only where the properties conform to the standards which would make them eligible for grants. Naturally I have chosen to set the criteria precisely where the grants would be available. And the tenant must know his rights and be sure exactly where he stands from the start.
  The point I want to emphasise to the Minister, who does not seem to have understood the position, is that these provisions would deprive no one of their existing security of tenure. Everyone would gain, no one would lose. I believe the Minister will be judged by the time he takes to get round to this idea. I am handing it to him and to his advisers; of course, with his considerable knowledge of housing, he could improve on the suggestions I have made; but I implore him not to reject the idea out of hand, considering the amount of misery that the present situation is causing—and quite unnecessarily. We have got ourselves into a legal tangle. We could easily cut ourselves out of it.
  I know that shorthold is a concept that cuts across the Department's policy of the euthanasia of the private landlord. It cuts across the Minister's own obses-
  1038
  sion with giving security of tenure even to people who do not want it or need it. The idea of the euthanasia of the private landlord does not apply in all cases. It brings misery and hardship to landlords. Of course, it is no good pleading to Labour Members to consider the landlords. But they should consider the wretched and unnecessary conditions of deprivation in which the tenants are having to live if they have to move; and they must also consider the continuing problem of the homeless.
  We have the housing, but we are not making use of it because of our prejudices and lack of willingness to adopt radical solutions. There is an urgent need for greater mobility which is all the more urgent now because of the problems of employment. Those seeking to move for the sake of their career or to look for jobs must have an opportunity to get themselves fixed up, if only on a short-term basis, while they are settling into their new job or waiting for a council house.
  Shorthold would be ideally suitable for such people. It would be ideal for people getting married and without many resources, wanting to make a fresh start outside the existing home of one or other of the families; those wanting temporary accommodation for professional or family reasons; and those looking for a smaller place. Not everyone needs to live in the family house after the children have grown up. Many would be willing to move into something smaller.
  So much for the legal side. On the cash side, I am much afraid that the fair rent system has become no longer fair, mainly because of inflation. We cannot pretend that it is fair any more. It has become an imposition on landlords. I think that many rent officers and tribunals recognise that the structure of rents that they built up by perhaps rather artificial concepts a few years ago has now been left behind.
  The Secretary of State recognised in his speech that rents must rise, and it is obvious that they must if we are to get housing improvements going again. But higher rents will certainly mean hardship for some. They will not mean hardship for everybody, partly because of rises in wages and other circumstances which go along with inflation. However there will

  1039
  certainly be hard cases if rents rise, and we need to apply our minds to them, to look for fresh solutions. We need to ask ourselves "Are we using the existing housing subsidies to best effect?"
  Let us look at the whole range of housing subsidies—rent allowances, rent rebates, option mortgage schemes, tax concessions for freeholders through building societies and other means, and local authority subsidies of all kinds. The national insurance scheme contains a subsidy within the structure of benefits for pensioners and those with industrial injuries and for the unemployed and the sick, although it is not called a household allowance. Anybody who studies the structure of the benefits sees that it is undeniable that a housing subsidy is included in the national insurance scheme. It is also included in supplementary benefit, because the element for housing must be identified.
  All this money pouring into subsidies constitutes a large sum. All too little is going to the people in real need, and too much is going to the people who could well afford to pay higher rents without hardship.
  We must end the housing subsidy chaos by a wholesale reorganisation. The time has passed when we would tinker with a little here, make adjustments there or switch subsidies between one sector and another or between local authorities of different characters. All that thinking must end. We must produce something which really reaches those who need help. We must determine the level of income of the recipients to decide how much in the way of housing subsidy they should qualify for.
  Local authorities are not the right people to carry out inquests into personal income and circumstances in order to decide on eligibility for housing subsidies. Those determinations in the end can be done only through income tax. Therefore, I again recommend a housing allowance as part of an overall tax credit scheme.
  We must also go forward quickly to the reform of rating, particularly to help freeholders on small fixed incomes. I am sure that it is not only in Kensington that we have many of such people suffer-
  1040
  ing acute hardship during the present inflation.
  Taxes and subsidies on housing are capricious, unfair and ineffective aspects of public policy. The Secretary of State and the Minister have it in their power to lose the Government the next election, and they are going a long way along the road to doing so, as I am sure Labour Members are aware. The Secretary of State has the opportunity to show himself a doer and not just a brilliant polemicist, but he and his hon. Friend must escape from the Labour Party's dogmas. I am glad that the Minister is listening to me, because he does not generally do so.
  We must look at housing policy as a matter of legal and cash problems which are unnecessary and soluble. This is a challenge for the Minister, and I hope that he will prove equal to it. I shall be the first to congratulate him if he improves on ideas that I have put forward. He could and should. I trust that he will admit that we are not getting anywhere as we are.
  It is within our society's ability to solve the legal and cash problems of housing, but a fresh mind, unprejudiced by party dogma, is needed. We shall not solve the problems while we have a Government bent on keeping Britain as two nations. But the mood of the hour is to move forward to something new, more harmonious and less retrospective, no longer concerned with the problems of the past.
  7.26 p.m.
  Mr. Maurice Orbach: I have listened to most of the debate, and I have been enlightened in many ways. I thank Conservative Members for having made housing the topic for this Supply Day debate. They have given me an opportunity for which I have been waiting a long time—not to discuss the general national housing problem but to discuss the problem in my constituency, and perhaps to relate it to some other constituencies.
  My hon. Friend the Member for Battersea, South (Mr. Perry) stressed the difficulties in London, where we all spend a great deal of our time. We are aware of the difficulties that arise not only from the peculiar housing situation but from

  1041
  transport problems—the great size of the metropolis, and the difficulty of obtaining work in the centre of the city, except for certain skills. To that extent, London is a little different from the other big cities or even smaller cities that most of us represent.
  Representing part of the town of Stockport, I am grateful to the Opposition for raising the subject, because for the past two years, since the reorganisation of local government, I have been placed in a most invidious position. Like every other hon. Member who runs a surgery, I have 20 or 30 people coming to see me every weekend, the vast majority of them concerned about their housing problems. Time and time again I write to the local authority or see the housing manager, who is now Director of the Environment and Housing Department of the Metropolitan Borough of Stockport. He has been upgraded.
  I hope that none of my colleagues suffers from the disadvantage that I have had for the past two years. After we were returned last October, my secretary told me in November "During the election I have been going through your correspondence, and I find that 24 different cases you submitted last March to the housing authority have not been answered." She produced the letters. I had copies Xeroxed and sent a further letter to the Stockport Department of the Environment and Housing. I have had replies to most of them. The last came, I think, a month ago. That is well over a year to receive replies to simple housing inquiries.
  Last week my secretary told me of 14 letters that had not been answered since last November. So this goes on and on. People ask me week after week or fortnight after fortnight "What about the replies?" The delays are a matter of great annoyance to me, and they are costly, particularly in view of the allowance we receive for secretarial purposes, because I have to ask my secretary to write two or three letters on the same subject without receiving a reply.
  I complained to the chief executive officer, who acknowledged my letter, with someone else signing the acknowledgment. I did not get a reply from him, but I was told in a letter that no housing case would be accepted from a Member
  1042
  of Parliament unless it was submitted by a local councillor. I wrote back what I hope he thought was an impertinent and rude letter. I said that I was not prepared to follow the advice of the chairman and chief officer of the department. Again, I got no reply.
  I followed it up after two weeks with a threat that I would raise the matter in the House on the ground of deprivation of some of my rights as a Member of Parliament in approaching local authorities. Since then, the chairman of the housing committee has declared at a public meeting that he will not be badgered by one of the Members of Parliament for Stockport who wants a house. I have had to threaten him with legal action, because I have not asked for a house for myself. I have merely asked for a house on behalf of a constituent.
  They must have been aware in Stockport that this matter was being brought up today by the Conservative Party because the Conservative council there has now come out with the information that 9,250 pre-1920 homes in its area are below standard and that it has little money to put any of them right. Of this figure, 5,700 have only outside toilets. I could go on to describe the number which have no bath and no central heating whatever, but I shall not weary the House with more figures because I know that Members representing Scotland, the North-East and the North-West of England have similar problems.
  At my request, my hon. Friend the Minister for Housing and Construction and the then Under-Secretary of State for the Environment—now moved to the Department of Industry—went to Stockport last year. They were rather scathing in dealing with the local authority, and they demanded that something be done to increase the size of the labour force responsible for the rehabilitation of old houses. The council has received £1,250,000 for that purpose, which it has declared to be paltry, yet it cannot even use that sum because it has bought so many non-municipal houses and in any case it has got rid of most of its labour force.
  In the meantime, to add insult to injury, in the seven years, with one short interruption, that Stockport has had a Conservative council, not a single municipal housing unit has been built.

  1043
  The council has used housing associations, which in turn employed private builders, who in turn went broke and have left houses, built about a year ago, derelict, with broken windows, sashes torn out and floorboards taken up. Perhaps as a result of publicity which may be given to this speech, something will be done to pull Stockport Metropolitan Borough Council and its officers into line.
  I want now to discuss a question which has been brought up by a number of hon. Members. Some of my hon. Friends have referred to it as a "gimmick", while hon. Members opposite have referred to it as the necessity for standardisation. I take the middle view. Certain things could be standardised and should be. My son, an alderman of Islington Borough Council, travels 20 times a year as a professor to the United States. I have been appalled by what he has told me about the cost of fittings. He says that their cost in the United States is one-third of the price here. He can bring such things as hinges, door locks and electrical fittings back with him and, including freight charges and whatever duties have to be paid, still make them available at a price lower than they are being offered to the local council.
  That brings me to a personal matter. I live in a flat in London. The bath is rather scarred. I have been living there for 34 years. My wife insisted upon a new bath. The landlord refused to put one in and said that I would have to pay for it myself. My wife insisted on a new white 5 ft 6 in bath—the size we had before. The old bath had got grubby because of the water. I set out for an estimate. This is what I got:
  "To shut down the supplies, disconnect and take out old bath and clear away.
  To supply a 5'6" white…bath complete with new trap, bath taps and a hardboard panel. Fit new bath in position, make all necessary connections and test and fit panel.—£190·08."
  But I am a hard-headed business man and a landlord, so I asked for an estimate from someone else. That produced one of £138. I thought that that was still rather dear since I could buy a bath for £25 as an ordinary customer. The trouble was I could not carry it or fit it.
  1044
  I got a third estimate. This one was for £75. We took it. The man and his mate brought the new bath, took away the old one and finished the job in five and a half hours, including time for food. They did not do badly out of it. I wish that hon. Members were paid as well as they were paid that day.
  This sort of incident illustrates the situation I found as chairman of hospitals in the London area—that many firms give a price and hope for the best. If a firm does not really want a job, it will ask £200; if it does want the job, it will ask £138; if it is really serious about the work, it will ask £75, still making anything up to £40 as a result. It illustrates that our architects and clerks of works are not pulled up sufficiently when they do municipal jobs, as I have tried to pull them up as an individual.
  While I have said nothing about the national problem—which I concede to be extremely serious—I emphasise once more that I must be concerned as a Member of Parliament in raising the problem we face in Stockport. It has become not only aggravating, annoying and tedious, but it gives one a weekend that is no respite from the House of Commons. It is bad enough being here for four and a half days a week without the necessity of tackling problems that one finds insoluble as an individual and in which one gets no assistance from the local authority.
  I have not yet approached the Minister on any of these problems except to ask him, "Please come to Stockport and shake these blighters up." My hon. Friend has tried and now gets blamed in the local Press for not giving enough money. Yet the local authority has not even spent the money it has already been given. I hope that Stockport will look up and I hope that the Minister will be prepared to listen to some of my hon. Friends who have talked such very good sense in the debate.
  7.40 p.m.
  Mr. Dafydd Wigley: I will not follow the hon. Member for Stockport, South (Mr. Orbach) into his bath, if he will forgive me, although I must say that I, too, have problems with local authority housing. I am not sure whether I feel more sympathy than animosity for the local authority, because in

  1045
  my area, as in his, it is in an invidious position. In my area, a rural area, there are serious housing problems.
  I have very little sympathy with the Conservative Party for initiating this debate today. Although we have some criticism of the present Government's failure to reach their targets, the record of the Conservatives when in office between 1970 and 1974 was dismal, particularly in Wales. It is nothing short of hypocrisy for them to have made some of the comments that have been made today.
  Despite the Government's denial, the housing situation in Wales remains chronic, and it is chronic in rural as well as urban areas. In 1974, completions amounted to 11,800, the lowest number since 1959 and 1960, when they were about the same level. Public authority completions in the year were 3,674 for the whole of Wales. In my constituency alone there are upwards of 2,000 families on the local authority waiting list and yet only 3,000 houses are available for the whole of Wales. That shows the size of the problem. That number of completions compares with 3,400 in the previous year, the lowest levels since 1946.
  This situation is scandalous. When we talk about housing it is not just a matter of figures and percentages. Many hon. Members have mentioned their surgeries on Saturday mornings when we meet the individual families and the individual situations resulting from a lack of adequate housing—husbands and wives living apart because there is no room under one roof, children separated from parents, people living in circumstances totally inadequate in the twentieth century. The problems of housing today are the problems of the social services tomorrow, because we are building problems for ourselves if we allow the housing situation to get out of hand.
  The 2,000 families on the waiting list in my area represent 9 per cent. of the equivalent housing stock, and this is a rural area. This surpasses the problems of many urban areas such as Cardiff and Newport where the absolute numbers are higher, but where the percentages are lower. There has been little change in the local situation since last year.
  Yet last year the Secretary of State for Wales assured the Welsh Grand Com-
  1046
  mittee that no administrative problem would be allowed to hold up the crash programmes that the Government wished local authorities to undertake. He said that there would be no red tape and added:
  "I have instructed my officials and technical officers to bring every problem that may get in the way of the programme to the attention of my hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands) the Under-Secretary of State. For this purpose I would hope that he is 'Mr. Housing' in Wales to ensure that this crash programme really does get under way, as I have already stated."—[Official Report, Welsh Grand Committee, 8th May 1974; c. 7.]
  The crash programme has crashed and it is not only because the Under-Secretary has been swapped to the Foreign Office, which may be a suitable office in the circumstances. I have every sympathy with him for having left his job. Last year he went around Wales urging every local authority to go ahead with its housing programme at the maximum speed, and yet in the financial environment of this year he is not in a position to deliver the goods. In the circumstances one sympathises with his move.
  The problem of new housing in absolute terms is one aspect. The problem in my area is that of second homes, to which I have referred previously. It is a problem that persists. The Government have taken some steps to a solution in that they have done away with grants towards improvement for second and holiday homes, but that in itself is not enough.
  In Gwynedd there are villages where many families are waiting for housing and yet where 20 or 30 or even 40 per cent. of the houses are owned as second or holiday homes. They are empty for ten months of the year. That makes one's blood boil. There is need for further action, and planning sanctions are needed so that houses that would normally be fully residential all the year round are not acquired as holiday homes without planning permission.
  Local authorities need more specific powers of acquisition to take over second and holiday homes. More flexibility is needed in the standards that local authorities apply to houses bought from the private sector. After all, it is much better for a family to have a home that is 90 per cent. of the required standard

  1047
  than to be without a home if the standards are rigorously applied.
  There is also a need to take over many old rural houses. Some houses in my constituency are let for only £20 a year, but the owners refuse to do any remedial work, refuse to introduce water or sewerage, but simply wait until the occupants die so that the houses may be sold as second homes. Local authorities need greater powers of intervention in such a situation.
  In my area there is also a problem about maintaining houses. In one district in my constituency there are 600 council houses in sub-standard condition and in some of them the conditions are appalling. One person came to see me two weeks ago to complain that for months he had had to keep five buckets in his attic to hold the water that dripped through the roof. Bringing more houses into public ownership is not a full solution if conditions are allowed to deteriorate in this way.
  Arfon Borough Council, the council concerned, had a meeting on this subject last week with the Welsh Office and was told that the outlook was "very depressing and gloomy". In a small village in Snowdonia, Deiniolen, 100 council houses are in severe need of repair. The cost would be £180,000 for that small estate alone, and there are many similar estates in the villages around.
  This morning I had a very sad letter from a constituent whose mother came to see me a few months ago about getting repairs to her house, which was damp and in need of major renovation. The letter said that his mother had died from bronchitis and he had no doubt that her living conditions in a publicly owned house had contributed to her death. He is following that up in his own way, but that must be on the conscience of anyone who has anything to do with public authority housing.
  I have referred earlier in the debate to the cut-back in the money available for repairs in Wales from £29 million in 1974–75 to £9 million in 1975–76. The Secretary of State suggested that the differences in Wales were because of the different proportions of owner-occupiers. The proportion in Wales has not changed
  1048
  much in the two years and certainly that cannot be the sole reason for this tremendous decrease.
  The change must be reversed. In Wales 15,000 houses were approved for repairs in 1974 compared with 30,000 in 1973. That is the first setback since the figures were first compiled in 1961. A chronic part of the problem in my area is that repairs cannot be done because local authorities do not have sufficient manpower—and this in an area where there is 14 per cent. male unemployment. That is the size of the problem.
  We do not have the ability as Parliament and as a system of Government to bring the manpower resources to solve the problems that are staring us in the face. We have combined with a housing shortage a situation of derelict houses in Caernarvon, a situation caused by a road scheme which the Welsh Office insisted should go ahead, against local opposition, and which has now been put on ice, leaving a source of local blight, empty houses in which people could be living,— a disgraceful situation likely to last for several years.
  The total number of unfit houses in Wales increased from 92,000 in 1968 to 150,000 in 1973. The problem is getting progressively worse year by year. We were promised a Welsh housing condition survey last year. It still has not appeared. I urge the Government, if there are no figures which they are trying to hide, to publish this survey so that we may see the magnitude of the problem.
  I turn now to a problem which has been touched on by several hon. Members, namely the economics of building houses in the public sector at present. I understand that at the Public Works Loan Board rate of 14⅞ per cent. interest the capital and repayment costs over 60 years on a £10,000 house would be about £89,300—a staggering figure. When we compare that with the cost of a £10,000 mortgage with income tax relief at 35 per cent. over 25 years which amounts to £9,625 we can see that at the present going rate it would be more economical for the Government to consider making a substantial grant to first-time home buyers.
  This is something which the Government should examine seriously, not from a dogmatic point of view but from a

  1049
  practical point of view. In 1973–74 the subsidy to council houses was about £105 per annum per household in Wales. The comparable subsidy to the owner-occupier was £101 per annum per house. By now there is a much greater disparity. It would be economically worth while making a fairly significant grant to help people buying homes for the first time. If this can be done we can take some of the pressure off the public housing sector, which is already under enough financial pressure.
  Each of these statistics is a personal case. It can be a personal tragedy. If there have to be cuts in public expenditure I urge the Government in all seriousness to put housing at the end of their list of cuts. Every cut in housing means that there will be additional expenditure in some other sector in future.
  7.53 p.m.
  Mr. Frank Hatton: I welcome the opportunity to make some comments in this debate. I have every sympathy with the Minister because he inherited some large housing problems. As the hon. Member for Caernarvon (Mr. Wigley) has said, these are pressing social problems. I have spent a lifetime in local government with education as my premier interest. I am more convinced than ever that all of our social resources must be channelled into methods of dealing with the housing problem because of the widespread social difficulties that we still face as a result of the number of families living in intolerable conditions.
  I have no major complaints about the determination of my local authority in tackling the housing problems of a major provincial city. It is some time ago that the last houses considered unfit for human habitation were put into the slum clearance pipeline. The city of Manchester is now moving slowly towards the end of its slum clearance problem. At the end of the last war there were about 100,000 unfit properties. This is a major achievement and I am proud to pay my tribute to my city for the way in which it has tackled this task.
  We are still left with many extremely difficult housing conditions. I hope that that the Minister will lend a sympathetic ear to some of them which I will put before him. I firmly believe that even
  1050
  though we have built different types of new accommodation, what ultimately matters is the quality of life. Unfortunately we have not always improved this. I great regret much of the multistorey development that now defaces many of our major cities. People are herded together in a most inhuman way in what we term "deck access" dwellings. When we have cleared our slums some of the major provincial cities, my own included, will have to look at many of the social problems that remain as a result of this unsatisfactory development.
  I am especially concerned about two problems. When I return to my constituency at weekends I hear heartrending stories from people who are unable to obtain satisfactory accommodation. The most frequent complaints come from those who are trying to buy their own homes in view of the great length of the council waiting list. I speak mostly of those who wish to buy houses in the lower price bracket. I had a letter last Friday from a constituent who said that he had obtained promotion in his employment and was now able to think of buying a home. He said that he had found a house costing £8,500 in one of the suburbs of Manchester but that no one would give him a mortgage. This is one of the difficulties.
  The local authorities used to be able to assist and were more helpful than the building societies. Now no one wants to know such people. I hope that when he discusses the problem with the building societies my right hon. Friend will look closely at the possibility of channelling available funds through local authorities so that people such as my constituent may be assisted.
  There are also those people living in what are known as housing improvement areas in the big cities. I know that my right hon. Friend is sympathetic towards this type of development. Many local authorities are looking at such schemes because of the unsatisfactory nature of multi-storey development. There are, however, problems in obtaining land. Many housing improvement areas were making good progress but are now meeting difficulties in obtaining a loan to meet the cost of improvements. I hope that my right hon. Friend will look carefully at ways of getting building society funds into the hands of local authorities so that

  1051
  this important aspect of housing improvement can be accelerated and so that we can improve the whole quality of life in these run-down areas of the cities.
  This is one of the major areas of our social life for which resources must still be found, even in these difficult times. We must raise the quality of life.
  8.0 p.m.
  Mr. Reginald Eyre: It is a pleasure to follow the hon. Member for Manchester, Moss Side (Mr. Hatton) who spoke of the housing problems in the city areas. Many of the points he raised apply with equal strength and accuracy to the city of Birmingham, my own city, and to a number of other large centres of population throughout the country. Against today's economic background the speech of the Secretary of State this afternoon was somewhat unreal. Perhaps all of our debates suffer from this fault at present.
  It is due to the fact that the Government still have not put forward measures to deal with the imminent crisis of undeniably enormously serious proportions. The Secretary of State, to his credit, has used ominous words about discarding the present situation. For example, he has said to local authorities that the party is over and, referring to increases in incomes, that the country is on a suicide course. The Chancellor of the Exchequer is calling for the halving of the rate of inflation within a year, and, as hon. Members appreciate the great difficulty of achieving this, it is clear that the severe economic measures must be brought into operation very soon, probably before the House rises for the Summer Recess.
  Against this enormously threatening economic background, we must realise that the brunt of the measures to correct the Government's mistakes will be borne in the heavily populated urban areas, because it is in those areas that the most serious problems, including housing, exist. We should, therefore, discuss the steps most likely to minimise the harm which is bound to follow in the difficult years ahead.
  I refer to a number of heads of policy. The Government should hold on to as much of the improvement grant or renovation policy as possible because it is a
  1052
  wise spending policy in that it prevents older housing that is structurally sound from deteriorating into slums. I strongly support the points made by the hon. Member for Birmingham, Erdington (Mr. Silverman). The policy of renovation, when sensibly administered, is cheaper than having to provide entirely new housing in its place. As my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) has said, the improvement grant or renovation programme is socially of considerable importance to families in the inner wards of large towns and cities. I therefore hope that the Government will do everything possible to maintain that programme at as high a level as possible.
  There is good value, in public spending terms, in keeping local authority mortgage lending at as high a level as possible because, concentrating as it does on the older villa-type house, it is particularly helpful to first-time purchasers who can afford only this type of property and of whom it can be said on their behalf that they are making determined efforts to help themselves. They therefore deserve encouragement. Economically, it means that prudent use is being made of public funds.
  Having mentioned two important though by no means major spending areas for public money in housing terms I want to refer to the area of vast housing expenditure in which, I believe, the Government will be compelled to review and cut their disastrously tangled spending policy, and that is in the provision of what are as a consequence of inflation extremely expensive new house building programmes in the public sector.
  Despite the increase in council rents that will have to be made throughout the country—and the Secretary of State was admirably frank today in saying that council house rents will have to rise even more next year—the cost of new building is now so high and the rents charged so relatively low that the general body of ratepayers, including council tenants, who sometimes mistakenly think that they do not make rate payments, will not countenance the continuation of the huge additional burdens being thrust upon them. The Government will be in no condition to maintain their present subsidies. The cut of £65 million in housing subsidies which has been announced is, in my view,

  1053
  only the beginning of a policy under which further severe cuts will have to be made. Therefore, despite the fact that increased interest charges affecting the whole public sector financing system are already likely to have to be introduced, the ratepayers and taxpayers will undoubtedly be calling for a halt as this year proceeds. Certainly there are strong signs in Birmingham that that will be so.
  It follows that we must realistically seek better value in housing for less public expenditure. Because of the seriousness of the crisis we must do this most vigorously in the next two or three years, otherwise there will be a danger of any housing programme collapsing.
  I come to a disappointing and ominous omission from the Secretary of State's speech of a subject which could be of great help in cities such as Birmingham and other large urban areas. The Secretary of State made no reference to the contribution which sponsored low-cost housing schemes could make to providing good accommodation for many thousands of people on the housing lists. The lists include people with a wide range of incomes since there is no qualification for going on the list other than that of residence or employment. Therefore, local authorities should be making available thousands of sites to small builders for the erection of low-priced houses so that people can embark with confidence on their first purchase of a new home.
  It is very disappointing that so little development of this kind is going on in Birmingham. Many thousands of young couples wishing to buy their first new house are driven out of the city to distant places such as Brownhills, Tamworth and Aldridge where small private builders provide them with what they want—small modern attractive houses at prices they can afford. Unfortunately, they are not helped in their journey to independence and self help because they have to pay high travelling costs to and from their jobs in Birmingham. It is shameful that Birmingham Council, which owns more than 17,000 housing sites and has more in the pipeline, makes practically no provision for schemes of this kind.
  Mr. Crosland: I hope that I can reassure the hon. Gentleman. We are strongly in favour of sponsored low-cost
  1054
  housing of the kind that he has in mind. Whether the building is done by private builders or occasionally by the local authority itself, as long as the result is the low-cost housing, we are strongly in favour of it. This plays a prominent part in the circular that we recently issued, "Housing Needs and Action".
  Mr. Eyre: I am grateful for what the Secretary of State has said. I realise that a circular has gone around, but as a result of my own experience I feel that not enough notice is taken of some of the good circulars which sometimes emanate from his Department. Sponsored low-cost housing is very important in cities like Birmingham and the large urban areas, and I feel that local authorities are not taking enough notice and not pursuing vigorous enough policies.
  No provision is made in Birmingham for older owner-occupiers who wish to sell their own semi-detached or detached houses on retirement and move to small units near their old neighbourhood. In a situation like that in Birmingham, where the local autority has a near monopoly—under Socialist control the city has pursued that policy—it is essential that the local authorities should sensitively and imaginately cater for such needs. In solving those problems they contribute towards solving the total housing problem in the city.
  The present situation in Birmingham and so many Socialist-controlled large towns gives an ominous warning of what the position will be when the Community Land Bill strengthens the monopoly power of local authorities in the allocation of land. They have not shown that they recognise these other needs and are sensitive enough in developing policies and actions to meet them.
  I should like to know why we heard nothing from the Secretary of State about the Housing Corporation, which is supposed to be assisting in these policies in all the industrial areas. It would be worrying if, for doctrinaire reasons, the Socialist councils in those areas were not co-operating with the Housing Corporation in providing sites. I believe that the corporation could play a useful part in bringing along development of small low-cost houses of this kind.
  Mr. Crosland: Birmingham is co-operating.
  Mr. Eyre: Yes, it is beginning to, now.
  As the standards of construction of the National House-Builders Registration Council are good enough for the owner-occupiers and the need for economy in housing will be so great it cannot be justifiable to maintain the expensive Parker Morris standards for all public sector housing. I do not believe that we shall be able to afford them in the years immediately ahead. I hope that the Minister will say what thought has been given to this possible adjustment, which could help enormously to save costs at this difficult time.
  The Secretary of State today lost an opportunity to explain how the Government would realistically amend their policies in these circumstances to lessen the damage through housing problems which could occur in what will be desperately difficult times ahead.
  8.14 p.m.
  Mr. George Cunningham: A number of hon. Members have referred to the under-occupation of houses. Looking around the Chamber tonight I am tempted to think that there are few houses in the country more under-occupied than this one. I mean that both in the sense of being under-used and in the sense of there being few people in the Chamber.
  I am undoubtedly in order, since we are debating the Adjournment, and might not have been if we were technically debating housing, in adding that some people feel that for this kind of House to debate such an important subject is a terrible reflection on Members of Parliament. I think it shows very good sense that they do not come in for a debate like this to talk about the subject, because they know that it will not make a bit of difference what they say on one side of the issue or the other. They prefer to use their efforts for something more practical elsewhere.
  There is a moral and a lesson to be drawn—namely, that instead of sticking to the anachronism of debate, as if no one had invented writing and reading and committees, the House should conduct more of its affairs in its working Committees. We should, of course, have a Select Committee on housing—and not just some hotchpotch sub-committee of the Enpenditure Committee which, with
  1056
  due respect to those who are members of it, covers housing among many other things. All the points which a small band of us—it is always the same small band—make in this Chamber could be made to more effect and in an up-to-date manner in a Committee discussion—
  Mr. Crosland: Hear, hear.
  Mr. Cunningham: I am glad to hear the Secretary of State agreeing. He once confessed to me that he had never served on a Select Committee. I hope that, in future, that will be regarded as a terrible confession by a Front Bench spokesman.
  To move on from that non-irrelevance, the hon. Member for Aylesbury (Mr. Raison) did an injustice to those of us who are present by indulging in a bit of "yah-boo" politics and putting forward no serious proposals, as it is his responsibility to do when the Opposition are not challenging the Government but moving their own motion.
  I want to address myself to some small detailed points and then come to what I regard as the essential principle which should guide our housing policy at a time when everyone should recognise that there is nothing like enough money to do all the things that we want to do. First, in the private rented sector, I regard it as very unwise that we have chosen to freeze the decontrol of the lowest controlled rents, those of the lowest rateable value. There is great resentment, and I think justified resentment, among landlords who are receiving derisory rents even for the bad accommodation that they are frequently providing. But they alone, only the last tranche, are frozen still in controlled rents. It is illogical to freeze the rent but then say to the landlord, as we do now under the legislation, "We recognise that this rent will not even let you do repairs which you are obliged by law to do. Therefore, if you do the repairs, we will let you recover their cost, in addition to the controlled rent, over a period of years." It would have been much more straightforward and sensible to provide that decontrol should continue and conclude and allow the landlord to pay for the repairs out of his normal rent.
  Then there is the question of fair rents being charged by housing associations. There is some confusion on this subject, at least in my mind, and I think among a

  1057
  number of housing associations. Housing associations are not obliged to charge fair rents but they are pressed to do so by circulars by the Department. What is still, so far as I can discover, unclear, is this. If a housing association is receiving housing association grant in respect of any dwellings it is, in practice, required to charge fair rents for those dwellings. Many associations, and more particularly many of the old-fashioned housing trusts, have a large number of dwellings in respect of only a few of which do they receive grant. Some of them seem to feel that they are obliged to charge fair rents for all their dwellings as a consequence.
  The circular was unclear on one point. In so far as people infer a meaning from it they seem to think that it means what I have just said. There is another difficulty. The Department said that if a housing association gets into trouble in future and looks to the Department for the emergency deficit assistance which was built into the Housing Act 1974, against the wishes initially of the Government, the Government would not be prepared to give that assistance unless the housing association had charged fair rents. If that is so—and that formulation of the position is taken, according to a letter to me from the former Under-Secretary—I invite the Secretary of State to reconsider the matter. If housing associations have no need otherwise to charge fair rents it would be foolish for them to do so and to build up a surplus, just to guard against the possibility that at some time in the future they might have to run to the Department of the Environment for emergency deficit assistance.
  It has been suggested, at least by the hon. Member for Aylesbury that Labour Members of Parliament are stuck ideologically on the proposal that a large proportion of the population should live in council accommodation. I wish that the Opposition would stop repeating that nonsense. Over the past 10 years only one step had any practical effect towards introducing more people to owneroccupation—which was the option mortgage scheme. That scheme was introduced by the Labour Government. That was the only practical step in this matter. It was the only step which led those people who could not otherwise afford to
  1058
  be owner-occupiers to buy houses. It is no good increasing the tax relief for people who would buy their own houses anyway. That does not enable more people to own houses. We must operate at the margin. The Labour Government have done that, but the Conservative Government did not do so.
  Those of us who have spent our lives in council housing accommodation have more reason than the Opposition to know the disadvantages of doing so. It is usually hell, because normally a local authority is inefficient in dealing with its tenants, whose repairs are not carried out and who are treated like dirt at the counter. When we retire we continue to pay for the accommodation which most people who own their houses have paid off long before.
  It was also said that the subsidy provided to each unit of council accommodation is far in excess of the subsidy provided to an owner-occupier by means of tax relief.
  Mr. Raison: If the hon. Gentleman is referring to me, I was talking about the subsidy for new council housing against that for new private housing.
  Mr. Cunningham: The hon. Gentleman put a qualification in his presentation of this point. He compared the subsidy for a new unit of council accommodation with the subsidy for an owner-occupier purchasing a house. He overlooked—the presentation of the statistics normally overlooks this—that in the case of the owner-occupied house the tax relief is provided every 15 years. As one would-be owner after another buys the house he obtains full tax relief, starting afresh, whereas the assistance to the council accommodation is spread over 60 years and then stops. The whole process is then finished and the council house is entirely paid for. The result is that the present generation of council tenants are paying for the final total acquisition of the bricks and mortar and the land, whereas the Government repeatedly, and with no ending, have an obligation in respect of tax relief.
  Mr. Raison: Once the purchaser has completed buying his house he ceases receiving tax relief—in other words, when he reaches the stage when tax relief does not apply. The same is true of housing in the council sector.
  Mr. Cunningham: There is a fundamental difference. In the case of council property the subsidy exists for 60 years and attaches to the property. In the case of the owner-occupied house it attaches to the owner and to its successive occupiers, who will attract tax relief time after time. There is a difficulty in comparing the two, as one subsidy attaches to the bricks and mortar while the other attaches to the person. It is not reasonable to compare the two as if only one lot of tax relief were directed at the owner-occupied house.
  In these difficult circumstances I should like to see the Department of the Environment draw up an action list of a number of practical points, each of which may be small but which in combination would achieve over the next two or three years a great deal. First it must do more to prune housing revenue accounts. This is an old story. The maintenance of estate streets is paid for from the housing revenue account, whereas streets outside council housing states are maintained on the normal rate fund. Some pruning has been done, but there is still room for a good deal more. This is not only a financial matter. It is important socially that there should not be council estates. There should be council houses and council blocks on normal streets. There is no reason why the streets which pass between and amongst council blocks should not be public streets, publicly financed and open to the public. That is financially and socially desirable.
  It is high time that the Department of the Environment carried out some research—as local authorities will never get round to doing this—into central heating in council accommodation. Many council tenants in modern accommodation pay an enormous proportion of their rent for bad central heating. The architects who have exercised their diseased imaginations on a variety of inefficient methods, putting the heating units in the ceilings, in the floor, by electricity, or by other undesirable methods, should be advised and guided from the centre on the cheapest and most efficient ways of providing central heating in modern conditions.
  The Department might also sponsor research into vandal-proof lifts. There is nothing more irritating than to live at the top of a tower block the lifts
  1060
  in which do not go out of order once in a blue moon but do so frequently. One needs to devise lifts which can resist the vandals.
  It is also time that the Department thought of pressing councils in the direction of a policy whereby minor repairs would be the responsibility of council tenants and not of councils. The story which one of my hon. Friends told about his bath is quite significant. The cost of doing minor repairs, especially to houses which are currently occupied—where on the first time of calling nobody is in, and one has to call a second time, only to find that again nobody is in—is enormous. Council tenants have to pay for that. They ask for the service because they know that they are paying for it and they think they might as well get it. If the system were changed they would realise that, although they would never be able to quantify the profit to themselves, they would be able to have lower rents than they would otherwise have if they were made responsible for minor repairs, with the provision that those who are unable to pay for the repairs would have them done by the council.
  I should like the Department to have a second look at home loss payments. I dare say that in many constituencies the home loss payments do the job that they are designed to do. A person loses his home as a result of the construction of a road, for example, and he receives a proper and due payment for the inconvenience of having to move, but I should like to refer to the way in which these home loss payments sometimes operate in an area like mine. A person may be living in damp, rat-infested accommodation. He may have been plaguing the life out of his councillors, quite rightly, for years to get him out of that accommodation. When finally he gets out of it and is moved to a modern flat he is astonished to find that he gets not only a modern flat but £200 or £300 as home loss payment. Human nature being what it is, he does not hand it back. When he hears that his neighbour has got it, first he is incredulous, and then he checks up and finds that he is entitled to it and he gets it.
  This is an appalling waste of public money. The system is too unsophisticated. If the case to which I am referring

  1061
  is very rare in relation to the total, let us overlook it, because it is an important payment for those who deserve it, but I have found it impossible to get from the other half of the Department information on the amount of money spent on home loss payments. Let us remember that the burden of the home loss payments is borne by council tenants in the end, in the accommodation built on the land which is acquired.
  Finally in this series of many improvements which could be made, I should like the Department to do a bit more than it is doing in giving assistance to the local authorities in housing management. As I said before, most of them are colossally inefficient in the way in which they deal with tenants, and I have treated the House on past occasions—and do not intend to do so again tonight—to the particular failures of the Greater London Council in that respect. The way in which council tenants are dealt with at the counter and the way in which their notifications of repairs and so on are dealt with are a proper subject for investigation—into the improvement of procedures. I am delighted at one change made by the Government, namely the reappointment of an adviser on housing management, an office which had been terminated by the previous Government. I hope the Minister does a bit of bottom-spanking during his tenure in office.
  The watchword which must characterise the Government's policy is discrimination. It is because policy has lacked discrimination in the past year that I have found myself so much in disagreement with it. We have had the improvement fiasco, in which every local authority applying for money to rehabilitate old accommodation had its bid cut down by an amount which bore no relation to the needs of different areas. I think the policy will become more discriminating now. It will certainly have to be.
  One cannot just assume that a rural municipality has the same degree of need as part of one of the inner cities. I understand the difficulty which the Department of the Environment has in discriminating. Each Member of this House would want the Department to discriminate in favour of his own constituency, and he would, no doubt, make a good case for that, but not all of them would be as good. The
  1062
  Department also has the difficulty that if it gets into this business of saying "So many millions for Manchester and so many other millions for Birmingham" the Department will be popular in at least one of those two places, and probably in both.
  However, at a time when we certainly do not have enough money to do all we need in the housing sector, we shall have to discriminate or else fail badly in the areas of highest housing stress.
  There have been some alternatives to discrimination. The Department seeks them as an easier way out. One of these is the obsession with areas—housing action areas, priority neighbourhoods, and general improvement areas. It is as if the Department were saying to local authorities "You decide for us where we should spend money and then we shall concentrate the money on those areas". Circular 64 /75, which the Department issued last week, sets out new categories where approval of expenditure will not be specifically required. I note that in paragraph 18(b) there is particular reference to housing action areas, priority neighbourhoods and general improvement areas.
  My local authority cannot be the only one which does not intend to have many—perhaps not any—housing action areas. It is not that my authority is being overly difficult towards the Department; it is just that it does not feel that this is a solution to any problems that we have in Islington. My authority wants, and it is right to want, to exercise a flexible policy to take action in respect of one house, one street or five streets, according to the nature of the problem and its extent. It does not see any point in drawing lines on the map and calling these areas housing action areas only in order to attract the greater priority that the Department of the Environment wants to accord to some areas as against others.
  Therefore, I hope that when the Minister replies he can assure me that if a local authority declines, for its reasons and with its knowledge of local circumstances, to declare many or any housing action areas, its application for funds and for CPOs will not be prejudiced by that decision. If we are allowed to exercise our authority more flexibly in an area such as Islington we shall do a great deal

  1063
  more good than we shall if we feel constrained to delineate these areas only because we feel this will please the Department of the Environment and lead to our getting more money for our essential purposes.
  8.38 p.m.
  Mr. Arthur Jones: I followed with considerable interest what the hon. Member for Islington, South and Finsbury (Mr. Cunningham) described as minor improvement proposals. I am sure that hon. Members of all parties would agree with many of the points that he made and many of the suggestions that follow from them. I also noticed that he both opened and closed his speech by saying that we have not enough money to do all that we need. Certainly that comment has been echoed in most of the speeches which have been made during the debate. Many of the hon. Members who have made that reference have also made the assumption that it is taxpayers' money that should meet the bill of increased resources in housing. This is a view which I shall try to contest.
  Certainly there is increasing concern over the level of housing subsidies. This has been admitted by the Secretary of State. Although he did not refer to it this afternoon, his comments today were quite out of line with the remarks that he has made in the past about the great economic and financial difficultes with which the country is faced. What the Secretary of State said last week in answer to a supplementary question from my hon. Friend the Member for Aylesbury (Mr. Raison), was very much nearer the great issue of resources in housing. The Secretary of State, referring to my hon. Friend the Member for Aylesbury, said:
  "…the hon. Member is right in saying that over the last few years rents have covered a substantially decreasing proportion of total housing costs, and we are likely to reach a situation in which the taxpayer and ratepayer combined will simply say 'we cannot go on indefinitely footing the bill'."—[Official Report, 11th June 1975; Vol. 893, c. 398.]
  I entirely agree with the Secretary of State. One is entitled to ask, however, where the view that he expresses carries in terms of the Government's housing policy.
  We all recognise that it is in part the escalation of the cost of building that has
  1064
  led to an intolerably high housing subsidy situation. Certainly this is adding to the burden of housing subsidies that cannot be described as running other than at an alarming rate.
  The House Builders Federation tells us in a recent memorandum:
  "Moreover the full public spending and public borrowing implications of these figures should also be noted. For if it is assumed that 150,000 local authority houses are built in each of the next five years and if it is assumed that the cost of building each of these houses is £10,000 and that the annual subsidy cost of £1,000, then by the end of the fifth year the recurrent annual subsidy on these houses alone would be running at about £750 million while the total public borrowing needed to finance their construction over the five-year period would be some £7,500 million."
  That is the magnitude of the requirement of capital availability and housing subsidies if—as the Secretary of State and other spokesmen for the Government and hon. Members on the Government side of the House are anxious to see—there is this continued high level of provision of public housing.
  An escalating situation such as this surely cannot be acceptable to the Government. We are entitled to ask how long they are prepared to let housing subsidy figures rise at this rate unchecked.
  What does the Secretary of State mean by saying
  "The taxpayer and the ratepayer combined will simply say 'We cannot go on indefinitely footing the bill'"?
  It is his duty to speak up for himself in this context. Does he not agree that the Government cannot go on indefinitely with a policy of this description, looking to the ratepayer and the taxpayer to foot the bill? When will the Government do something about this escalating problem?
  Mr. William Molloy: I have been interested in the figures given by the hon. Gentleman. I am sure that he would want to be fair to the House and to a large proportion of his fellow British subjects who live with their families in council houses. It might have been fair to mention among all these figures the fact that they pay rates and rent and that this contributes to the cost of the houses, and that the major cost of such houses is borrowing the cash. What the hon. Gentleman has just related—I am sure that the figures are correct—is

  1065
  the massive continuing victory for the principle of the three brass balls.
  Mr. Jones: The cost of borrowing is high, of course, and has a tremendous effect on the housing subsidy situation. This is an important factor to which we must have regard when considering the sort of housing policy which the country wants and, essentially, what it can afford. This is the dilemma with which the Government and all of us who have this matter close at heart are concerned.
  What of Government expenditure as a whole and the continuing cries for its curtailment from the right hon. Gentleman and some of his more responsible colleagues? He has said that central Government and local government expenditure must be contained, yet on the housing front very little regard is had to this advocacy. What the right hon. Gentleman and other Government spokesmen are continually referring to is the containment of local government expenditure. He is continually advocating that. It ill becomes them when they allow—indeed, encourage—the misdirection of resources, as we see in housing subsidies made available with almost complete disregard of need. I am in agreement with the hon. Member for Islington, South and Finsbury (Mr. Cunningham) when he says that housing should be selective. I have always maintained that much larger resources should be directed to the cities than are directed generally in the countryside. It is in the cities and great urban areas that the great deprivation of housing is to be found and where essentially our problem lies. I speak as someone who represents a country constituency, but that is the view I have always maintained.
  The escalation of rising subsidies is to be seen in the context of the Government's legislation against the fair rent policy of the previous Conservative administration, the Government leaving the question of rent levels and demands upon central Government funds entirely in the hands of local authorities. They in turn are caning their ratepayers, as the figures for rate contributions to the housing revenue accounts demonstrate. I will give the rate fund contributions for the current and the two previous years. In 1972–73, £73 million was put into the housing account from rate funds. For
  1066
  last year, 1974–75, the figure was £165 million. It is expected that the figure for the current year will be £200 million. Therefore, we have increments from the rate fund in addition to what is provided by central Government.
  Of course, local authorities have responsibility for the proper management of houses in their ownership, both council built and those acquired. This is another of the mini-improvements suggested by the hon. Member for Islington, South and Finsbury which I find entirely acceptable. But we must bear in mind the vacancies in council-owned property and the existence of voids.
  We had the disturbing information in the Daily Telegraph of 9th June that the total rent debt for every council in the country was nearly £26 million. That information was contained in a report by Mr. Gerald Bartlett which I have not seen contested in the past week. Responsibility for that debt must fall on local authority management. I know that there are some authorities which have greater problems than others. Those authorities should acquire the extra skills which are available and the extra determination to solve the problem. A little intelligent anticipation would be bound to reveal the solution. This must be a matter of serious concern for Government and for local authorities, the responsibility clearly resting on the authorities.
  In the circumstances, one wonders what sort of excuses are being given to the Department of the Environment and whether the Secretary of State and his colleagues have raised any questions with the local authorities concerned. It would be interesting to know the Government's policy or attitude as regards rapidly escalating rent arrears. From the Government spokesmen there is a complete denial of the growing inadequacy of Government policy, but the facts speak clearly for themselves.
  Today the Secretary of State gave the impression that he was almost entirely satisfied with his policy. I accept that he recognised the problems, but it seems that there is no new thinking and that Government policy is merely an adjunct to the pride and prejudice which is attached to their thinking. There is growing homelessness and an escalation of building costs. There is the lack of a rent policy

  1067
  to meet the rapidly deteriorating position. One inescapable conclusion is that political objectives are being given priority over the reality of our economic position and the wholesale mess into which our housing policy is drifting.
  We have seen evidence of the Government's approach in their legislation to protect tenants of furnished accommodation. That legislation has had the effect of a denial of tens of thousands of units of accommodation being available. The Government are now proposing to interfere with the perfectly satisfactory arrangement of tied houses for agriculture. When will they learn?
  Clearly, in the whole of the post-war period insufficient financial resources have gone into housing. When was it sensible to make available substantial subsidies to council tenants regardless of their ability to pay? It is nonsense for any Government to pursue a policy of that character. It has meant that many less well-placed have had partially to foot the bill of subsidised rents. As a social priority, the main responsibility for providing himself with shelter and a roof over his head should lie with the individual. Indeed, the wish to ensure this is fundamental to the character of man and his heritage and is essentially denied by the Government's housing policies.
  Mr. George Cunningham: Will the hon. Gentleman face the logic of what he has just said and say that tax relief for people who borrow money to buy a house should also take account of the needs of the beneficiary of that tax relief? The hon. Gentleman knows perfectly well that tax relief is worth more to a rich man than it is to a poor man, and more to the man who owns two houses than to the man who owns one—until the Government corrected that recently. That is directly contrary to the principle enunciated by the hon. Gentleman. Will he be consistent?
  Mr. Jones: I shall not follow that course. I shall continue my advocacy for the position I wish to see adopted and that is to ensure additional resources—
  Mr. Cunningham: Face up to it.
  Mr. Jones: The inadequate resources which have gone into housing lie at the root of a situation which, although it has
  1068
  significantly improved over the past 25 years, has led to widespread need for help. That help is a charge to public funds—that is, to the taxpayer and the ratepayer. Despite prohibitive costs, no solution to our housing problem is in sight. That is a fact of life which both sides of the House must face. None of the advocacy we have heard leads to a solution. The Secretary of State recognises this. When I asked what the Government intended to do about it, his colleague the Under-Secretary of State replied:
  "My right hon. Friend has instituted the most far-reaching housing finance review which has ever been conducted. The results will be available within the next year."—[Official Report, 11th June 1975; Vol. 893, c. 402.]
  So presumably nothing to alter the present policy will be done in the foreseeable future.
  A prerequisite to any positive steps in the right direction is a fair rent policy, and subsidy arrangements which direct help to those in genuine need. We need not waste a year in seeking justification for this or delaying its implementation—a delay which I suspect is, again, on political grounds.
  To look at the figures for housing subsidies is to recognise the enormity of the public expenditure involved. At 1969–70 prices, and during that year, United Kingdom subsidies totalled £281 million. At that time there were no rent rebates or allowances, but that figure included a rate fund contribution of £103 million. Cmnd. 5897 gives the figures at 1974 survey prices for the curent financial year: housing subsidies, including rate fund contributions and rent rebates and allowances £1221·2 million, improvement and renovation grants £124 million, local authority improvement investment £297·9 million, a total of £1643·1 million. I found it difficult to isolate the figures.
  The Under-Secretary of State has been moved elsewhere, but I give a warm welcome to his successor. I am sorry that he is not to join in the debate today, but I suppose that he has first to do his homework, although as a one-time teacher he knows much about housing problems in the urban area from which he comes.

  1069
  For England only, these figures include for housing subsidies and so on £1014·5 million, improvement and renovation grants £102·3 million and local authority improvement investment £210·8 million—that is, for England only, £1327·6 million. If one converts those to current prices—because all the figures are given at 1974 constant survey prices—the figures for England alone, are, respectively, £1218·4 million, £116·6 million and £290 million, a total of no less than £1625 million. This shows that inflation from last year to this has increased the bill for housing subsidies by about £247·7 million.
  With inflation for the last 12 months running at 25 per cent., clearly housing subsidies will continue to rise and, with increased local government expenditure by way of additional contributions to housing revenue accounts, including substantial rent arrears, housing subsidies are likely to be running at £2000 million per annum at the end of this current financial year.
  We have seen this tremendous escalation of housing subsidies. When I intervened in the Secretary of State's speech he said that they would cost over £2,000 million for 1973–74 and over £3,000 million for 1974–75.
  Mr. Freeson Mr. Freeson rose——
  Mr. Jones: I know that the right hon. Gentleman suggested that the Minister would be correcting those figures if necessary when he replied.
  Mr. Freeson: I need not wait until I make my speech to state that the figures quoted by my right hon. Friend were not subsidy figures but were amounts of total expenditure.
  Mr. Jones: Am I right in thinking that they include capital sums as well?
  Mr. Freeson Mr. Freeson indicated assent.
  Mr. Jones: It will be interesting to know the source of those figures, and I look forward to having the information from the Minister.
  At Question Time last week the Secretary of State said that total subsidies to local authority housing had roughly doubled in the last two or three years. He has now said that they have gone up by three times in the last five years.
  1070
  We have had repeated assurances from Socialist spokesmen that they wish to see an expansion of owner occupation. The Government are essentially committed to council housing, whatever lip service they may pay to the contrary. I call in aid a statement prepared by the conference of the chairmen of new towns on the consultation document "New Towns in England and Wales" of December of last year. In dealing with the sale of houses in new towns it reveals in stark terms the political content of the Government's recommendation.
  Referring to housing in new towns the Government make plain in their document at paragraph 4.13 that there will be no further sales. In their document the chairmen of the new towns say in paragraph 2.16,
  "The facts remain that most people would prefer to own their own homes."
  They go on to say in paragraph 2.18,
  "We strongly hope, therefore, that development corporations and the Commission will be allowed in the near future once again to offer tenants the opportunity to buy the homes they occupy."
  In referring to the escalation that must come in rents the Secretary of State said that they had risen 12 per cent. in the current year. He would not say how much they would go up next year, but on this score perhaps I could quote from a piece in this evening's Evening Standard by Mr. David Wilcox. In it he refers to Mr. John Mills, who is chairman of Camden Council and is widely recognised as an authority on housing difficulties. He is a member of the advisory group working on the subject at the Department of the Environment. Referring to rents in Camden Mr. Mills says:
  "In Camden total housing costs are about £30 million a year, of which some £7,000,000 is management, maintenance and repairs. Taxpayers provide £20 million subsidy, ratepayers £5,000,000 and rents about £5,000,000".
  In the article Mr. Mills is reported as saying that rents will need to go up very significantly in Camden which is considering putting up rents by £1·81 per week in October. This is an indication of the tremendous increase there will be in housing rents.
  The Government can never succeed in a housing policy in which political objectives so blatantly determine their policy. It is only by ensuring that substantial additional private resources go into

  1071
  housing that a solution will be found. This should, and if housing conditions are to be improved, must mean fairer rent policies, improved management by local authorities and encouragement to owner-occupation, including sales of council houses on a significant scale to existing tenants. Without the positive pursuit of these objectives progress cannot be made with regard to adequate housing for British people and early accommodation for the homeless.
  9.1 p.m.
  Mr. Geoffrey Finsberg: The debate has been useful in clarifying several issues. Opposition Members have tried to examine various solutions free from hard political preconceptions. Certainly the Government and their supporters appear to be bound by the dogmas and self-delusions that have marked the Labour Party ever since the war.
  When opening the case for the Government the Secretary of State was at pains to take credit for having held the mortgage rate at 11 per cent. He did not remind the House that this is not so in respect of local authority mortgages. We have had many promises that something will be done about this, but no results. I can only conclude that too much thought has paralysed action.
  Opposition Members welcome Circular 24/75 and its change of emphasis. It was necessary that the emphasis should be changed from the odd strategy upon which the Government originally embarked. A further circular is now needed from the Government to local authorities telling them to concentrate more priority and more sympathy on exchanges and transfers instead of leaving that area as the Cinderella section of all local authorities. I do not believe that there is any hon. Member, on either side of the House, who has not, week after week, had the frustrating experience of trying to persuade a local authority that a mere transfer or exchange between existing tenancies did not in any way prevent a further programme of decanting. Unfortunately, one gets a lesser grade of official in charge of transfers and exchanges. Much unhappiness in local authorities could be avoided by giving more priority to this area.
  The Secretary of State did not know what the Conservative policy was on
  1072
  housing. He must know, as one of the leading intellectuals of the Labour Party, that Oppositions can only formulate policies over a period of years. This is what we are now doing. He admitted that in one and a quarter years his Government had not solved the housing problem, but he had had four years to prepare for office. So it is five and a quarter wasted years. I can assure the right hon. Gentleman that long before that period has elapsed, if this Government should survive, there will be a detailed housing policy available.
  When opening the debate my hon. Friend the Member for Aylesbury (Mr. Raison) outlined some of the ideas which had to be examined. The Secretary of State then talked about the subsidy cuts suggested by my right hon. Friend the Leader of the Opposition. He asked how they would be carried out. One method by which housing subsidies will be cut is by higher rents, as the Secretary of State himself advocated today. That will be a major contribution towards reducing subsidies. I say "reducing", because I do not believe that it is possible to eliminate all housing subsidies in the foreseeable future, and no one on the Opposition benches has ever suggested it.
  We next had a warm and human speech from the hon. Member for Battersea, South (Mr. Perry), who spoke of acres of land lying vacant, land owned by private developers which could provide homes and be swiftly built on. It is fair to point out that the Greater London Council has a land bank equivalent to more than 10 years' building at its present rate, but it is still grubbing around to obtain more land. There is no possible apportionment of blame in which one can join the hon. Gentleman, except to say that anyone who possesses land should build on it. Certainly the Community Land Bill will not help in that direction.
  The hon. Gentleman appealed to the Secretary of State to ask building societies to lend more to would-be buyers in London, and he thanked the Secretary of State for his intervention. I think that the hon. Gentleman was rather misled by his right hon. Friend, because all that has happened is that the Secretary of State has cut the amount of money available for local authorities to make home loans, in order to make up some of the cuts made in

  1073
  improvement grant requests from local authorities. The right hon. Gentleman is now to ask building societies to try to help out. He has cut the amount of money that local authorities themselves can lend. Twenty-three London boroughs have already stopped lending, yet the only benefit from the slight reallocation of money will be that the municipalisation programme may be allowed to continue in some ways unchecked. Certainly there will be no benefit to home buyers. This is a great pity.
  My hon. Friend the Member for Wellingborough (Mr. Fry) spelt out the stark reality of the situation, and called for honesty. He asked for a statement by the Government and local authorities that they could never rehouse all those who want to go on council housing lists. That is a self-evident truth. I assure my hon. Friend that that sort of honesty does no harm. I made that statement in Hampstead one year after first being elected to the council in 1949. I said that it would be impossible for everyone then on the list to be rehoused. It apparently did me no harm, because it did not stop me being being re-elected on seven subsequent occasions. Sometimes people like to hear the truth, however unpalatable. That is why the Secretary of State might have told us in more detail of the measures he knows he will have to introduce in the not-to-distant future at the dictate of the Treasury.
  The hon. Member for Salford, East (Mr. Allaun), who always has a large heart in these matters of housing, but rather too little understanding of our grave economic position, told us why he was unhappy about a letter he had received from the Prime Minister. We should all like to see that interesting exchange of correspondence. But in the end all that the hon. Gentleman could do was to say that the extra money for housing could be found by further defence cuts. Let him be quite certain that there is a substantial majority of opinion in this country that does not want a defenceless Britain. Some of the people who would suffer most from the hon. Gentleman's defence cuts are those who would he added to the growing list of unemployed under this Government.
  The Liberal spokesman, the hon. Member for the Isle of Wight (Mr. Ross),
  1074
  described our suggestions for building for letting as unrealistic. I am not willing to accept that any proposals for helping this essential arm of our housing strategy are unrealistic. They want examination.
  The hon. Member for Leeds, West (Mr. Dean), one of the practical hon. Members who understand local government housing, was right to attack the gimmickry in building that is all too prevalent today, the idea that system building is necessarily all that much better than traditional building.
  My hon. Friend the Member for Dorset, West (Mr. Spicer) made a valid point about high council rents which in themselves ought to make purchase by council tenants attractive. After all, the late Richard Crossman made it clear that he did not wish to subsidise the well-off council tenant. Yet the rent freeze and the abolition of the Housing Finance Act have contributed to helping far more the wealthy tenants than those in the greatest need.
  The hon. Member for Stockport, South (Mr. Orbach) made a fascinating speech on his constituency. He is one of the two dozen or so Labour Members I have to represent in this House. I have an attractive constituency otherwise. I shall look with interest to see what is said in Stockport about his attack on one letter he received from his local authority.
  My hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre) forewarned of the economic storm ahead and urged the Government to be ready to buttress two vital parts of their housing strategy—renovation projects and first-time house purchase.
  The hon. Member for Islington, South and Finsbury (Mr. Cunningham) gave some fascinating ideas. He always contributes to housing debates some gems of information. All of us were hoping for further instalments of the saga of his properties. Instead, he talked to us about Select Committees and the like. I wish that the Prime Minister would put him in the Department of the Environment, perhaps with a limited term—a shorthold. One year in the Department would produce a very interesting result and some very shaken-up civil servants.

  1075
  My hon. Friend the Member for Daventry (Mr. Jones) stressed the dangerous imbalance of subsidies, which is growing, between tenants on the one hand and ratepayers and taxpayers on the other.
  Certain points require reiteration. I will leave the devastating statistics quoted by my hon. Friend the Member for Aylesbury because they speak for themselves. In my judgment they are incontrovertible and the Government would do well to look at them again.
  I am happy that there is to be a closer examination of housing finance. There was such a close examination for some 15 months before the 1970 General Election. We did not see results from it, and I seem to remember one or two unhappy gentlemen at the time of the election. I hope that this new examination will produce somewhat quicker results than the last one.
  One facet which needs urgent examination throughout the country is the mounting scandal of rent arrears—and I say bluntly that it is a scandal. I shall merely quote one of the larger authorities, the GLC. In April 1973 its rent arrears totalled £970,000. By September 1973 this had risen to £1,888,000. That was six months after the change of control at County Hall. In September 1974, when Mrs. Jenkins—a name not unknown in this House—had become chairman of the Housing Committee, she said that the arrears had risen to £1,960,000 and that they would now be reduced. By May 1975 the total had risen to £2,412,000, and that excluded £578,000 owed by former tenants who had disappeared and other sums which had been written off.
  It cannot be a question of staff shortage because about 1,200 extra staff have been engaged by the GLC housing department since 1973. The situation reflects scandalous mismanagement, and it is the ratepayers, both private and council tenants, who are having to meet the cost.
  I hope that the Government will take drastic action against those authorities which are allowing rent arrears to amount to such appalling levels. It may well be that attachment of earnings orders is the way to deal with these tenants who are behaving so anti-socially towards their
  1076
  fellow tenants. Eviction is not the answer, because that throws an even heavier burden on the rates. Anti-social behaviour deserves something; what it does not deserve is no action by the majority of local authorities.
  The Labour Party took office with some grand ideas of social ownership, municipalisation and the end of the private landlord. The trouble, as in so many Labour policies, is that they were not thought through. Labour Members had not appreciated the vast costs, but these are now coming home to them Many authorities were encouraged by the Government to buy property virtually regardless of condition and virtually regardless of whether vacancies were purchased. I recently quoted at length some decisions of the Department of the Environment refusing consent to the GLC for buying even more properties when it was getting virtually no vacant accommodation. At least the Government have at last realised that municipalisation for its own sake is not worth the candle at this stage.
  The evil of a massive municipalisation programme ill-thought through is that the properties stand empty and become occupied by squatters. There are two categories of squatters, the genuine homeless and the parasites, and the majority of people on council waiting lists resent the fact that many of these parasites are jumping ahead of them in the waiting lists.
  We need the Government to realise that it is not necessary to go on even with a reduced level of municipalisation. That is not the answer. Whether or not it is true, as some Labour Members have said it is, that the sale of council houses does not help the total stock, equally the purchase of houses does not add to the total housing stock. It is the Government's job to concentrate on adding to the council housing stock, not to go on building new schemes regardless of cost.
  There are two schemes at present under way in the London borough of Camden where costs will produce figures in excess of £100 per week per unit, possibly as high as £130 per unit, and the rents may well be producing only £10 a week. Those two schemes had loan sanction refused by my own Government and yet

  1077
  the present Government have given the green light to such monstrously expensive schemes. They are indulging in what I can only call profligate expenditure. The right hon. Gentleman does himself no credit to give that sort of approval to that sort of authority.
  We contend that owner-occupation is a better bargain for the council tenant and a better bargain for the taxpayer. I go along and my party goes along with saying that there should be no objection to the sale of council flats to their tenants. The Scots are years ahead of us ignorant Sassenachs in the sale of flats in the private sector, and there is no reason why it cannot be done in the public sector on a co-ownership basis, the local authority of necessity keeping the freehold or letting it go to a committee of tenants. This is a better way. Why should the council tenant alone, after paying rent for 40 years, be deprived of having something to pass on to his children? This is unfair discrimination by the Labour Party.
  Mr. George Cunningham Mr. George Cunningham rose——
  Mr. Finsberg: The hon. Gentleman had 24 minutes in which to develop his argument. I have about the same time and I have to comment on observations.
  The February 1975 figures show that the average three-bedroomed council house in 1974 cost £10,000 to build. Loan charges, management and repairs cost about £1,000 a year. With an unrebated rent of approximately £300 a year, that leaves a subsidy of £700 a year. The tax relief—and I shall not be pushed away from this factual argument—for the first-time purchaser amounts to £241. Therefore the private owner buying his house does not get such a good deal as a council tenant.
  I turn to the problem of the private tenant. In Committee on the Housing Bill 1974 much was made by Government Ministers of the need to produce a comprehensive charter for tenants. The Minister for Housing and Construction made many passionate and eloquent speeches saying that he was considering this and that something would evolve. What he said was enough to prevent at least two of his hon. Friends, having spoken in favour of an amendment I tabled. [Interruption.] The Minister says that it was a stupid amendment. It
  1078
  may have been, but, as he knows, this was something that was wanted by tenants. He did nothing about it. Two of his hon. Friends who had supported the idea in their speeches in the Committee were dissuaded from voting by his siren voice. The amendment was made in another place and when the Bill came back to this House the Government had to accept it, although they said that it was not perfect. It was imperfect only because the Government had not produced something much greater, much more grandiose.
  The Minister has produced nothing. Now he has a duty to put this and other amendments into working order. If he does not do so he stands condemned as being more cynical than some of us think he is about the rights of private tenants.
  The Minister knows that the private tenants' associations and distinguished people like Muir Hunter want him to make regulations dealing with tenants' associations. They want him to clarify such points as how to deal with estimates for jobs costing £2,000. The Minister has a duty and he cannot just sit back smiling and expect to get away with it.
  We believe that owner-occupation deserves encouragement, even if only on the grounds of cost effectiveness, which we have proved to the satisfaction of fair-minded people. We have heard about the Birmingham 50–50 scheme. I noticed that when that was mentioned there were Labour Members who said that the idea came from a Labour council. So what? If it is a good idea, jolly good luck to it. We are not so hidebound as to reject good ideas coming from Labour local councillors. Incidentally, it is now only a Labour council because of the fiddling over the casting vote of the Lord Mayor—[Interruption.]—as the Minister of State, the hon. Member for Birmingham, Small Heath (Mr. Howell) knows fully well. I am happy to pay tribute to those in Birmingham who thought up this idea. I hope many more local authorities will adopt it.
  Equally we need to accept ideas which other people have been floating, such as that put forward by my hon. Friend the Member for Tonbridge and Mailing (Mr. Stanley) about equity sharing. That cannot be dismissed. It deserves close

  1079
  examination. It should not be laughed at.
  I turn now to direct encouragement tor the private sector. I do not say that the Opposition have worked out schemes in detail here. What we say is that there are ideas which have to be examined. The Government, backed up by the Civil Service, ought to be able to say whether some of the ideas are workable. When we were in Government we did not dismiss any ideas in such a cavalier fashion, no matter what quarter they came from.
  My hon. Friend the Member for Kensington (Sir B. Rhys Williams), in an excellent speech, mentioned his Bill dealing with shorthold. This concept would produce thousands of new lettings. It would not deny security of tenure to anyone who now enjoys it. New tenants obtaining shorthold leases would be in the same position as anyone who takes out a contract with London Transport to buy a fourpenny bus ride. They know the limit of the journey and that is the end of it. If they want to go on they pay more. There can be nothing wrong in this unless the Labour Party says that it is wrong for people to honour agreements.
  What can we do to encourage fresh money to come into the private rented sector? Provided the will is on the Government benches and that sheer dogma will not say "No more private rented accommodation", private developers could be told "If you will put up blocks of flats, make them available in the private rented sector, let the rents be fixed by the rent officer and guarantee that they will be left in the private sector for a minimum of 20 years, the Government will consider making, as the Labour Government of the 1960s did in respect of hotels, a capital once-and-for-all grant towards the cost of providing the accommodation". That would be far cheaper than many of the grandiose schemes being put forward by local authorities. That suggestion deserves close examination.
  Our first indictment of the Government and of Socialist councils is that they talk big to win elections and then forget that elections are about people. It is all very well for their study groups to say "We have all the ideas. We shall introduce a rent freeze. We shall make cer-
  1080
  tain that there will be no reduction in the amount of money available to local authorities to lend." The Government's manifesto went further and said "We shall make available an increasing amount of money to local authorities to lend." Within the last couple of weeks, they have cut it. I do not notice any screams from the guardians at Transport House of Labour's election manifesto. Perhaps they are selective guardians and, having been beaten as a result of the referendum are shy about saying what else should remain sacrosanct. [Interruption.] If the hon. Member for Ealing, North (Mr. Molloy) had been present at the beginning of the debate and had listened to my hon. Friend the Member for Aylesbury he would have heard some ideas. I cannot help him further.
  Our second indictment is that the Government have deceived those most in need—the homeless.
  Our third indictment is that they cannot think through a coherent and fair housing policy. Whenever ideas are put to them they look to see what the catch is. They ask, "Will it help somebody and not everyone?" They take grave exception to ideas which do not help everybody. In housing it is necessary to have priorities, and this is what the Government have failed to do. They have told local authorities to buy houses and are now letting them stand empty.
  No amount of juggling the figures will disprove the fact that most local authorities feel cheated by having been asked to put in bids for money to put property right and then having those bids substantially reduced. Therefore, those properties still lie empty. Many of them were not the best of properties, but if the private owners had had some encouragement to get a better return they would not have been allowed to drift into the condition they were in.
  The more hon. Members opposite put forward the view that there is to be an end of all private rented accommodation, the more difficult it will be to persuade anyone in the private sector to keep his property in good repair because he knows that it will be taken from him. That is not the way to proceed.
  Let me give a word of caution to the homeless and council tenants: put on the armour of doubt against the missionary

  1081
  spirit in Labour policy; remember that meddle and muddle, even under the banner of Socialist idealism, are still meddle and muddle. If I had to sum up 1¼ years of the Labour Government's housing policy, I should say that it was a question of meddling with the private sector and muddling the local authorities. One has only to talk to the officers in local government or the leaders of local authorities to know that they despair of ever getting through to the Ministry in Marsham Street the needs of local government.
  We offer what we believe to be an alternative free from dogma. We offer an alternative which is fair to all sections of society, and, without hesitation, we ask the House to support us in the Lobby tonight.
  9.30 p.m.
  The Minister for Housing and Construction (Mr. Reginald Freeson): I congratulate the hon. Member for Hampstead (Mr. Finsberg) on the vigour of his speech, but its content was rather sad.
  I should like to come down to specifics in housing policy. If I cannot deal with all the detailed points raised, I undertake to correspond with the hon. Members concerned. Although there has been some sloganising and the parading of shibboleths in the debate, it has to be accepted on both sides that an attempt to censure Government policy and action in housing has fallen flat, to say the least.
  Our objectives are clear even if the methods to fulfil them may have to be complex and an intertwining of many policies, and even if the attempts to get those policies applied are made even more difficult and complex by our difficult economic situation. Those objectives can be stated as the provision of the right kind and quantity of new houses, the achievement of social justice in housing, the renewal of the fabric of our towns and cities and building for the community not simply to achieve statistics but to provide environments worth living in.
  To achieve all this, we must organise to use our resources much more effectively, in good times as well as bad, we must seek and apply much more knowledge of the housing markets and social situations at local as well as national level than hitherto, and, above all, we must concentrate on the customer
  1082
  and the community we are supposed to be serving.
  The housing and urban problems with which we are confronted today and have been for many years are a complex of interrelated issues in our conurbations and in the countryside. We shall never tackle the problems of homelessness, squatting, insufficient building, under-occupation, lack of choice, substandard dwellings, environmental messes and the host of other symptoms of housing stress unless we understand that they are all interlinked and cannot effectively be treated in isolation, and that underlying them all are economic factors which have to be changed.
  What is needed from Government is a combination of policies to interact with one another, a comprehensive social and economic approach to the symptoms of housing stress and urban decay. At local as well as national level what is needed is corporate executive action, by various departments, using a wide range of agencies now acting separately—for example, and only for example, the Housing Corporation and the National Building Agency. Whatever the economic constraints which slow down the movement towards the development of such a policy, or inter-relationship of policies, this remains the underlying need.
  I will return to developments at the local level in a moment but I should like to spend some time outlining what, even in our short time in office and in a time of economic trial unprecedented since the Second World War, we have achieved so far in our attempt to create a comprehensive strategy for housing.
  First, the Housing Act 1974. I would have preferred and still would prefer a much more radical urban renewal measure and in due time we must come to this, but urgent action was needed when we came into office—to reform the Housing Corporation and housing association movement and to step up action in areas of severe housing stress, to avoid the bulldozers always having to be brought in as a solution to housing decline.
  The Housing Act 1974 provided the immediate mechanisms for these ends. Our aim is to transform the run-down residential areas of our towns and cities into decent civilised neighbourhoods by a

  1083
  careful mixture and phasing of redevelopment and rehabilitation which will result in gradual and continuous urban renewal over the years rather than excessive bulldozing and rebuilding. Disturbance and disclocation of resident communities which is both socially and economically damaging must be minimised.
  The new code for house renovation grants was geared to this new approach. Housing associations were provided with a new charter in that Act. They now receive much more support and more efficient management. Their resources and special experience with particular housing needs—for example, the elderly or the handicapped—and their experiments in varied forms of tenure can now be extended, bringing a useful flexibility into housing provision. The Act created the concept of the priority neighourhood and the housing action area to add to that of the general improvement area in the Housing Act 1969.
  I know of, and I appreciate considerably, the feeling in some quarters, which I largely share, that this kind of approach is still too small in dealing with run-down neighbourhoods. But we are working on other aspects of this policy. I hope that the time will come—I expect that the time will come—when further measures will develop in tackling, on a broader and more integral basis, the intermixture of housing and social and economic problems in our city areas.
  However, for the present these moves towards priority neighbourhoods and housing action areas, together with general improvement areas, provide the starting basis for comprehensive action based on overall assessments of needs, priorities and resources for the gradual renewal of decayed urban areas. Naturally the period since the 1974 Act, in these past seven months or so, has been one of reassessment for local authorities as they formulate their renewal strategies. But already up to the end of last month 26 housing action areas had been declared in England, seven of them in one authority and six in Wales.
  Although I deal briefly with this background it is not done in any way so as to understate the situation. To me the problem of urban renewal lies at the centre of any developing Government
  1084
  strategy in housing, whatever else needs to be done in the housing sphere. No one should understate the scale of obsolescence in private rented property, especially in our inner urban areas.
  The hard facts, as shown by the 1971 house condition survey, are that while the private rented sector constitutes only 16 per cent. of the total housing stock, 40 per cent. of the dwellings involved lacked at least one standard amenity, and were in that sector, while 23 per cent. of all the private rented sector stock was unfit. Of the national total of unfit dwellings 60 per cent. was in the private rented sector.
  That, briefly stated, is the justification for Labour's programme of designating stress areas within which local authorities should socialise rented property, with financial aid from the Government. When resources, both financial and organisational, allow, this policy will be extended. But already we have made a vigorous start by direct municipalisation, by expanding housing association action, by sponsoring already the tenants' co-operatives—which were put forward as if they were the result of a new idea sprung on us by the Tory Front Bench. We have legislated for them already, and by sponsoring them under our Housing Rents and Subsidies Act 1975 have provided for the shared equity or tenant ownership schemes now being mooted in Birmingham and elsewhere.
  Some £180 million was spent last year on municipalising 23,000 dwellings, large numbers of which were empty and were needed to be brought into use as quickly as possible. This impetus will be maintained in 1975–76—no matter what has appeared in the media recently. These purchases are mainly directed to housing stress areas so as to turn obsolescent houses into modern homes, but also to prevent a runaway situation in the rented market. This has been declining at the rate of about 100,000 dwellings a year for the past 15 years, whatever the Government, and possibly for even longer than that. It is estimated that in the three years before the Labour Government came back into office the loss was about 120,000 a year. However, the figure has varied from year to year. Some 100,000 a year is a rough average over the past 15 years.

  1085
  With the growth of owner-occupation, this has been largely inevitable, and to some extent it has been made good by local authority building. But in recent years the rate of its decline in relation to a decreasing base figure, along with a sharp cut-back of local authority building, has added much to stress, while conditions of shortage are being exacerbated by the growing number of small households, partcularly single young people, in these same areas.
  So the need for social intervention is two-fold. Extending security of tenure to most furnished tenants was an essential stop-gap until the programme of social ownership has been carried out. This situation points also to the need, set out in our policy circulars on "Housing Needs and Action" and "Housing the Single", for a much greater variety of provision for smaller households by local authorities, and indeed by private builders. [HON. MEMBERS: "Rents."] I said, "The provision of additional smaller accommodation by local authorities and by private builders"—and that has not to do with any attempts to break through the Rent Act 1974.
  Municipalisation is not simply a method to bring houses into direct ownership by local authorities. It is a means by which a greater variety of social ownership and tenures may be provided, and also a means by which housing can be treated as a means of improving the increasingly alienating conditions in the community for today's urban residents.
  The Housing Act 1974 stimulated the provision of dwellings by housing associations, and the higher level of direct municipalisation and repair recently achieved will be maintained. But there are other ways to extend social ownership which hopefully would add to housing resources and stimulate the creation of community and neighbourhood in our vast and growing conurbations, by involving more and more people at the grass roots within municipal and national housing strategies.
  I believe strongly in a pluralistic, rather than a monopolistic approach to social ownership, and I wish to apply this in housing policy. This is why the Housing Rents and Subsidies Act 1975 gives scope for financing and aiding tenant co-operative management and co-
  1086
  operative ownership schemes. The same Act also enables tenant/owner-occupier schemes such as those which the Housing Corporation and Birmingham City Council are now proposing. But there are other ways.
  Even were there no public expenditure constraints under present economic conditions, simply using the present methods of purchase by local authorities would be well below the rate of contraction and decay of the private rented sector, which are the main grounds for the Government's policy of social ownership.
  I am, therefore, considering the feasibility of local authority and housing association leasing, joint management arrangements between local authorities and owners, the equivalent of "producer-co-operatives" for small owners, landlord-tenant "co-ownership" schemes, community purchase by local authorities' associations and co-operatives and other forms of social tenure. These are being examined in the Department and they will be applied as soon as we can work out the details, which will take time, but this is the policy which we are embarking upon and we intend to pursue it.
  There is a need to retain and to bring fresh resources—both financial and managerial—into housing, and they would probably be beyond the capacity of any single institution to provide on the necessary scale, with the necessary flexibility, in the time required to get the job done—and we cannot talk in terms of decades. The job, in our inner city areas particularly, is too serious and urgent for that.
  Mr. Eyre: I should be grateful if the Minister would say what the Government propose to do to increase the degree of participation by tenants in the existing large council estates.
  Mr. Freeson: We already have legislation in the Housing Rents and Subsidies Act, as I explained to the House on Report, for sponsoring co-operative management schemes in local authority estates, as well as purchase and new building schemes, and also for sponsoring co-operative ownership schemes on a leasehold basis. We appointed the working party last autumn under the chairmanship of Harold Campbell to look into various forms of tenants' co-operatives. Part I

  1087
  of the draft report has been submitted. The report will be completed in about a month or so from now. The working party will be going out for consultation as a basis for future policy development. Work is being done. We do not leave it to sloganising exchanges across the Front Benches.
  From what I have said, it will be clear that improvement of dwellings, particularly those occupied by owner-occupiers and tenants lower down the earnings scale, has high priority. We have introduced rateable value limits, about which one or two hon. Members and others around the country have complained, on the issue of improvement grants to owners, the object being to get the money spread down the scale and not applied, as it has been increasingly applied in recent years and until now, for the better properties at the upper end of the scale.
  Apart from the £180 million being spent by local authorities and the £80 million being spent by housing associations on social ownership and repair of houses this year, about £255 million will be spent on capital improvements. This is an area which has caused considerable controversy and argument in recent times.
  First, I must make it clear that the figure we have provided is a good deal higher—despite the strictures of the hon. Member for Hampstead (Mr. Finsberg)— than the figure which was originally intended by the last Conservative Government in their White Paper on Public Expenditure. What is more, the method of control, about which the hon. Member complained, is based upon the very method of control that was in the draft Bill that the previous Conservative Government left behind when they lost office. Therefore, there is no distinction between us about procedures. However, there is a distinction about the levels of resources that we are prepared to put into this work.
  In a circular that was issued recently we made it clear that the municipalisation fund that local authorities will be spending can cover initial work on the repair of properties, including the provision of standard amenities and work carried out on properties that they purchased before
  1088
  the introduction of this control. The £255 million applies simply to improvement schemes and capitalised repairs. I wish to see more—make no mistake about that. As soon as economic conditions permit, that is what our Department will be aiming at. However, we cannot spend more than is provided at present.
  It is, therefore, my task—and I make no apology for this—to make sure, as far as it is within my power, that improvement capital expenditure is spent on the properties that are most in need. We have to recognise that in recent years a high proportion of the £250 million to £300 million a year that has been spent by local authorities has been spent on purpose-built estates which, although it was desirable for them to be improved and refurbished, were not priority cases. They were largely properties that already had the basic amenities, while millions of properties—both those in local authority ownership, and those which are now coming forward for municipalisation and other forms of social ownership—remain without the basic amenities. The least amount of money has been spent on the property that is in the worst condition. Within the limited resources, we have to get that application switched around so that more money is spent on the worst properties, if necessary deferring expenditure on the somewhat better properties until such time as more resources are available.
  It is our policy to continue the level of social ownership and repair of out-of-date properties. The recent policy circular that has been issued underlines this. It has not cut back the total expenditure. It seeks to establish that that expenditure, which will be running at the same level in real terms as last year—the increased level—will be spent on modernising the properties more urgently requiring it.
  Our aim, as I hope I have made clear in threading through all these policies, is to obtain a variety of tenure and the enhancement of social actions and values in the housing situation—a blend and balance where now there is increasing dominance of one or two kinds of tenure in far too many localities. It is against this background that the Government set their objection—and I make this clear—to the indiscriminate sale of council rented dwellings, which is a panacea

  1089
  trotted out by the Opposition for our housing problems.
  We are neither for all sales or for no sales. It is the job of a local authority—and of Government and Parliament—to look at the facts and to decide what action should be taken. If, for example, it was objectively shown that the rate of re-lets available to a council was cut by a given rate of sale of dwellings at a time when new lets were down and demand up, then clearly it would be wrong to continue such sales notwithstanding what is put forward by Opposition Members here or in town halls around the country. Clearly the reverse is true. Where it is possible to achieve a variety of provision by local authorities without harm to the ability to meet urgent needs in the rented sector, so be it—let us provide that variety of tenure. Indeed we shall see it undertaken.
  I have asked my officials in the Department to do some objective analysis of this question which could be of help to local authorities, as well as the Government, in future action. Meanwhile, I am considering how local authorities may help to meet the need for more houses to be built for sale to lower-income owner-occupiers, in addition to building for rent, and I am considering how housing associations might also contribute in this direction.
  As well as measures and proposals on tenure and ownership, the Government believe that it is essential to make the fullest use of our housing investment and housing stock. In March this year my Department issued the Circular "Housing: Needs and Action". It made specific recommendations for action to make fuller use of the existing stock of houses, to build more dwellings for small households where the need, through demographic change, is increasing, and to streamline costly and lengthy procedures in the development and planning process.
  Increasing attention will be paid to the better use of housing stock—often in conjunction with the advance of social ownership—to ensure that the waste caused by unused and underused properties, especially in stress areas, is minimised. I expect to come forward in the near future with practical proposals designed to enable speedy and effective action to be taken
  1090
  to bring such properties into full and appropriate use.
  Such action, together with our new building programme and the gathering momentum of urban renewal, offers the best scope for eliminating the phenomena of squatting and homelessness—at least to the extent that they are functions of a housing problem. In the coming months my Department will place a new emphasis on housing management, which grows ever more important as the size of municipal holdings and responsibilities grows. We shall aim to offer a higher level of professional guidance in this sphere to local authorities.
  We shall certainly take on board the several points strongly and rightly put to the House by my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham). But we must go beyond these kinds of initiative in building, improvement and management, important though these may be.
  One of the central tasks confronting anyone seeking to enhance the quality of life in our towns and cities is that of improving the wider physical and social environment, a point rightly commented on by my hon. Friend the Member for Manchester, Moss Side (Mr. Hatton). Of course, there are certain design solutions which can be prepared readily—tree planting, play areas, traffic management schemes and those rather fussier schemes that I recently saw described as "environmental diddy-patches". But in reality we are only just beginning to learn about what features of their surroundings people really regard as important, and what aspects positively reinforce the health and stability of a community and a neigh bourhood.
  Some improved knowledge will flow from the public involvement in housing action areas and general improvement areas. But we are also now engaged on a nationwide study of people's attitudes towards the areas in which they live so that we shall be in a much better position to decide what types of housing are likely to be regarded by people as socially unacceptable, and what policies are needed to bring about the necessary changes.
  We should remember that the existing definition of "unfitness" in the Housing Acts has been virtually unchanged for 50 years. It is high time we began

  1091
  seriously to consider what minimum environmental standards should be adopted, what the views of ordinary families up and down the land are on this subject—and they are the people whose views really matter—and what effect any change in minimum standards would have upon expectations, upon the pattern of housing demand and upon the kind of legislation needed to bring about sensible changes and more sensitive urban renewal. These are the kinds of issue we are acting upon and studying for future action.
  I have outlined the beginnings of a policy which in themselves are worthwhile and which in the long term will lead to efficiency and social justice. None the less, they are only beginnings. As my right hon. Friend the Secretary of State has said, the Department is engaged—
  Mr. Frank Allaun: This is a very interesting brief, Mr. Deputy Speaker, but I put it to my hon. Friend that he is winding up a debate and that he has not dealt with the arguments that have been put to him. I do not think that my hon. Friend is playing fair with the House. He is capable of much better than this.
  Mr. Freeson: So, with respect, is my hon. Friend. I hope that I have been dealing with some important matters of housing policy that have been raised today in various ways by hon. Members on both sides of the House. If my hon. Friend is dissatisfied, I can only hope that he will show an interest in some of these aspects of housing policy in future.
  My right hon. Friend has referred to a review of housing finance upon which the Department has embarked. During the course of the review we shall not stop at undertaking the most challenging investigation of all—[Interruption.] I suggest that Conservative Members who have just entered the Chamber should go back
  to the dining-room. We shall not hesitate in challenging the most basic concepts and assumptions that we have accepted over many years when dealing with housing. There are a number of fundamental questions which the review will need to answer and we shall not fall short of tackling the questions. We shall have to consider many important financial questions concerning the use of resources which have been put forward today by hon. Members from both sides of the House.
  Mr. Charles Irving Mr. Charles Irving (Cheltenham) rose—
  Mr. Freeson: At the end of the day I have to say as a Minister in a Labour Government that, given the measure of resources available to us, our first objective must be to get more houses built, more houses modernised and municipalised and a greater extension of social ownership. Those are the first priorities and others must fall in behind them. I stand by such a view of our priorities, given our resources. That is a view that I took when I was in local government before coming to this place. It is a view which I held throughout my years of membership of the party and it is a view that I shall put forward as a Labour Minister when dealing with housing policy.
  Mr. Michael Brotherton: The Minister has said that he stood by the view that the Government would municipalise more houses. Does that mean that the Government are firmly committed to a policy of bringing into the public sector all houses that are available for rent? One of the great problems at the moment is—in fact, I fear, it is that I must sit down because of the time.
  Question put, That this House do now adjourn:—
  The House divided: Ayes 266, Noes 294.

  Division No. 234.]

  AYES

  9.59 p.m.]

  Adley, Robert

  Bell, Ronald

  Boyson, Dr Rhodes (Brent)

  Aitken, Jonathan

  Bennett, Dr Reginald (Fareham)

  Braine, Sir Bernard

  Alison, Michael

  Benyon, W.

  Brittan, Leon

  Amery, Rt Hon Julian

  Berry, Hon Anthony

  Brotherton, Michael

  Arnold, Tom

  Biffen, John

  Brown, Sir Edward (Bath)

  Atkins, Rt Hon H. (Spelthorne)

  Biggs-Davison, John

  Bryan, Sir Paul

  Awdry, Daniel

  Blaker, Peter

  Buchanan-Smith, Alick

  Bain, Mrs Margaret

  Body, Richard

  Buck, Antony

  Baker, Kenneth

  Boscawen, Hon Robert

  Budgen, Nick

  Banks, Robert

  Bowden, A. (Brighton, Kemptown)

  Bulmer, Esmond

  Burden, F. A.

  Howe, Rt Hon Sir Geoffrey

  Price, David (Eastleigh)

  Carlisle, Mark

  Howell, David (Guildford)

  Prior, Rt Hon James

  Carr, Rt Hon Robert

  Hunt, John

  Pym, Rt Hon Francis

  Chalker, Mrs Lynda

  Hurd, Douglas

  Raison, Timothy

  Channon, Paul

  Hutchison, Michael Clark

  Rathbone, Tim

  Churchill, W. S.

  Irvine, Bryant Godman (Rye)

  Rawlinson, Rt Hon Sir Peter

  Clark, Alan (Plymouth, Sutton)

  Irving, Charles (Cheltenham)

  Rees, Peter (Dover & Deal)

  Clark, William (Croydon S)

  James, David

  Rees-Davies, W. R.

  Clarke, Kenneth (Rushcliffe)

  Jenkin, Rt Hon P. (Wanst'd & W'df'd)

  Held, George

  Clegg, Walter

  Jessel, Toby

  Renton, Rt Hon Sir D. (Hunts)

  Cockcroft, John

  Johnson Smith, G. (E. Grinstead)

  Renton, Tim (Mid-Sussex)

  Cooke, Robert (Bristol W)

  Jones, Arthur (Daventry)

  Rhys Williams, Sir Brandon

  Cope, John

  Jopling, Michael

  Ridley, Hon Nicholas

  Cordle, John H.

  Joseph, Rt Hon Sir Keith

  Ridsdale, Julian

  Cormack, Patrick

  Kaberry, Sir Donald

  Rifkind, Malcolm

  Costain, A. P.

  Kershaw, Anthony

  Rippon, Rt Hon Geoffrey

  Crawford, Douglas

  Kimball, Marcus

  Roberts, Michael (Cardiff NW)

  Critchley, Julian

  King, Evelyn (South Dorset)

  Roberts, Wyn (Conway)

  Crouch, David

  King, Tom (Bridgwater)

  Rodgers, Sir John (Sevenoaks)

  Crowder, F. P.

  Kitson, Sir Timothy

  Rossi, Hugh (Hornsey)

  Davies, Rt Hon J. (Knutstord)

  Knight, Mrs Jill

  Rost, Peter (SE Derbyshire)

  Dean, Paul (N Somerset)

  Knox, David

  Royle, Sir Anthony

  Dodsworth, Geoffrey

  Lamont, Norman

  Sainsbury, Tim

  Douglas-Hamilton, Lord James

  Lane, David

  St. John-Stevas, Norman

  Drayson, Burnaby

  Langford-Holt, Sir John

  Scott, Nicholas

  du Cann, Rt Hon Edward

  Latham, Michael (Mellon)

  Shaw, Giles (Pudsey)

  Durant, Tony

  Lawrence, Ivan

  Shelton, William (Streatham)

  Eden, Rt Hon Sir John

  Lawson, Nigel

  Shepherd, Colin

  Edwards, Nicholas (Pembroke)

  Le Marchant, Spencer

  Shersby, Michael

  Elliott, Sir William

  Lester, Jim (Beeston)

  Silvester, Fred

  Evans, Gwynfor (Carmarthen)

  Lewis, Kenneth (Rutland)

  Skeet, T. H. H.

  Eyre, Reginald

  Lloyd, Ian

  Smith, Dudley (Warwick)

  Fairbairn, Nicholas

  Loveridge, John

  Speed, Keith

  Fairgrieve, Russell

  Luce, Richard

  Spence, John

  Farr, John

  McAdden, Sir Stephen

  Spicer, Jim (W Dorset)

  Fell, Anthony

  MacCormick, Iain

  Spicer, Michael (S Worcester)

  Finsberg, Geoffrey

  McCrindle, Robert

  Sproat, Iain

  Fisher, Sir Nigel

  Macfarlane, Neil

  Stainton, Keith

  Fletcher, Alex (Edinburgh N)

  MacGregor, John

  Stanbrook, Ivor

  Fletcher-Cooke, Charles

  Macmillan, Rt Hon M. (Farnham)

  Stanley, John

  Fookes, Miss Janet

  McNair-Wilson, M. (Newbury)

  Steen, Anthony (Wavertree)

  Fowler, Gerald (The Wrekin)

  McNair-Wilson, P. (New Forest)

  Stewart, Donald (Western Isles)

  Fox, Marcus

  Madel, David

  Stewart, Ian (Hitchin)

  Fraser, Rt Hon H. (Stafford & St)

  Marshall, Michael (Arundel)

  Stokes, John

  Fry, Peter

  Marten, Neil

  Stradling Thomas, J.

  Galbraith, Hon. T. G. D.

  Mather, Carol

  Tapsell, Peter

  Gardiner, George (Reigate)

  Maude, Angus

  Taylor, R. (Croydon NW)

  Gardner, Edward (S Fylde)

  Maudling, Rt Hon Reginald

  Taylor, Teddy (Cathcart)

  Gilmour, Rt Hon Ian (Chesham)

  Mawby, Ray

  Tebbit, Norman

  Gilmour, Sir John (East Fife)

  Maxwell-Hyslop, Robin

  Temple-Morris, Peter

  Glyn, Dr Alan

  Mayhew, Patrick

  Thatcher, Rt Hon Margaret

  Godber, Rt Hon Joseph

  Meyer, Sir Anthony

  Thomas, Dafydd (Merioneth)

  Goodhart, Philip

  Mills, Peter

  Thomas, Rt Hon P. (Hendon S)

  Goodhew, Victor

  Miscampbell, Norman

  Thompson, George

  Goodlad, Alastair

  Mitchell, David (Basingstoke)

  Townsend, Cyril D.

  Gorst, John

  Moate, Roger

  Trotter, Neville

  Gow, Ian (Eastbourne)

  Monro, Hector

  Tugendhat, Christopher

  Gower, Sir Raymond (Barry)

  Montgomery, Fergus

  van Straubenzee, W. R.

  Grant, Anthony (Harrow C)

  Moore, John (Croydon C)

  Vaughan, Dr Gerard

  Gray, Hamish

  More, Jasper (Ludlow)

  Viggers, Peter

  Grieve, Percy

  Morgan, Geraint

  Wakeham, John

  Grist, Ian

  Morgan-Giles, Rear-Admiral

  Walker, Rt Hon P. (Worcester)

  Grylls, Michael

  Morris, Michael (Northampton S)

  Walker-Smith, Rt Hon Sir Derek

  Hall, Sir John

  Morrison, Charles (Devizes)

  Wall, Patrick

  Hall-Davis, A. G. F.

  Morrison, Hon Peter (Chester)

  Walters, Dennis

  Hamilton, Michael (Salisbury)

  Mudd, David

  Warren, Kenneth

  Hampson, Dr Keith

  Neave, Airey

  Watt, Hamish

  Hannam, John

  Nelson, Anthony

  Weatherill, Bernard

  Harrison, Col Sir Harwood (Eye)

  Neubert, Michael

  Wells, John

  Harvie Anderson, Rt Hon Miss

  Newton, Tony

  Welsh, Andrew

  Hastings, Stephen

  Nott, John

  Whitelaw, Rt Hon William

  Havers, Sir Michael

  Onslow, Cranley

  Wiggin, Jerry

  Hawkins, Paul

  Oppenheim, Mrs Sally

  Wigley, Dafydd

  Hayhoe, Barney

  Osborn, John

  Wilson, Gordon (Dundee E)

  Henderson, Douglas

  Page, John (Harrow West)

  Wood, Rt Hon Richard

  Heseltine, Michael

  Page, Rt Hon R. Graham (Crosby)

  Young, Sir G. (Ealing, Acton)

  Hicks, Robert

  Pattie, Geoffrey

  Higgins, Terence L.

  Percival, Ian

  TELLERS FOR THE AYES:

  Holland, Philip

  Peyton, Rt Hon John

  Mr. Adam Butler and.

  Hordern, Peter

  Pink, R. Bonner

  Mr. Cecil Parkinson

  NOES

  Abse, Leo

  Archer, Peter

  Atkins, Ronald (Preston N)

  Allaun, Frank

  Armstrong, Ernest

  Atkinson, Norman

  Anderson, Donald

  Ashton, Joe

  Bagier, Gordon A. T.

  1094

  1095

  Barnett, Guy (Greenwich)

  Gilbert, Dr John

  Mendelson, John

  Barnett, Rt Hon Joel (Heywood)

  Ginsburg, David

  Mikardo, Ian

  Bates, Alf

  Golding, John

  Millan, Bruce

  Bean, R. E.

  Gould, Bryan

  Miller, Dr M. S. (E Kilbride)

  Benn, Rt Hon Anthony Wedgwood

  Gourlay, Harry

  Mitchell, R. C. (Soton, Itchen)

  Bennett, Andrew (Stockport N.)

  Graham, Ted

  Molloy, William

  Bidwell, Sydney

  Grant, George (Morpeth)

  Morris, Alfred (Wythenshawe)

  Bishop, E. S.

  Grant, John (Islington C)

  Morris, Charles R. (Openshaw)

  Blenkinsop, Arthur

  Grocott, Bruce

  Morris, Rt Hon J. (Aberavon)

  Boardman, H.

  Hamilton, James (Bothwell)

  Moyle, Roland

  Booth, Albert

  Hamilton, W. W. (Central Fife)

  Mulley, Rt Hon Frederick

  Boothroyd, Miss Betty

  Hardy, Peter

  Murray, Rt Hon Ronald King

  Bottomley, Rt Hon Arthur

  Harper, Joseph

  Newens, Stanley

  Boyden, James (Bish Auck)

  Harrison, Walter (Wakefield)

  Noble, Mike

  Bradley, Tom

  Hart, Rt Hon Judith

  Oakes, Gordon

  Bray, Dr Jeremy

  Hatton, Frank

  Ogden, Eric

  Brown, Hugh D. (Provan)

  Hayman, Mrs Helene

  O'Halloran, Michael

  Brown, Robert C. (Newcastle W)

  Healey, Rt Hon Denis

  O'Malley, Rt Hon Brian

  Brown, Ronald (Hackney S)

  Heffer Eric S.

  Orbach, Maurice

  Buchan, Norman

  Horam, John

  Orme, Rt Hon Stanley

  Buchanan, Richard

  Howell, Denis (B'ham, Sm H)

  Ovenden, John

  Butler, Mrs Joyce (Wood Green)

  Hoyle, Doug (Nelson)

  Owen, Dr David

  Callaghan, Jim (Middleton & P)

  Huckfield, Les

  Padley, Walter

  Campbell, Ian

  Hughes, Rt Hon C. (Anglesey)

  Palmer, Arthur

  Canavan, Dennis

  Hughes, Mark (Durham)

  Park, George

  Cant, R. B.

  Hughes, Robert (Aberdeen N)

  Parker, John

  Carmichael, Neil

  Hughes, Roy (Newport)

  Parry, Robert

  Carter, Ray

  Irvine, Rt Hon Sir A. (Edge Hill)

  Pavitt, Laurie

  Carter-Jones, Lewis

  Irving, Rt Hon S. (Dartford)

  Peart, Rt Hon Fred

  Cartwright, John

  Jackson, Colin (Brighouse)

  Pendry, Tom

  Clemitson, Ivor

  Jackson, Miss Margaret (Lincoln)

  Perry, Ernest

  Cocks, Michael (Bristol S)

  Janner, Greville

  Phipps, Dr Colin

  Cohen, Stanley

  Jay, Rt Hon Douglas

  Prentice, Rt Hon Reg

  Coleman, Donald

  Jeger, Mrs Lena

  Prescott, John

  Conlan, Bernard

  Jenkins. Hugh (Putney)

  Price, C. (Lewisham W)

  Cook, Robin F. (Edin C)

  Jenkins, Rt Hon Roy (Stechford)

  Price, William (Rugby)

  Corbett, Robin

  John, Brynmor

  Radice, Giles

  Cox, Thomas (Tooting)

  Johnson, James (Hull West)

  Rees, Rt Hon Merlyn (Leeds S)

  Craigen, J. M. (Maryhill)

  Johnson, Walter (Derby S)

  Richardson, Miss Jo

  Crawshaw, Richard

  Jones, Alec (Rhondda)

  Roberts, Albert (Normanton)

  Crosland, Rt Hon Anthony

  Jones, Barry (East Flint)

  Roberts, Gwilym (Cannock)

  Cryer, Bob

  Jones, Dan (Burnley)

  Robertson, John (Paisley)

  Cunningham, G. (Islington S)

  Judd, Frank

  Roderick, Caerwyn

  Dalyell, Tam

  Kaufman, Gerald

  Rodgers, George (Chorley)

  Davidson, Arthur

  Kelley, Richard

  Rodgers, William (Stockton)

  Davies, Bryan (Enfield N)

  Kerr, Russell

  Rooker, J. W.

  Davies, Denzil (Llanelli)

  Kilroy-Silk, Robert

  Roper, John

  Davies, Ifor (Gower)

  Kinnock, Nell

  Rose, Paul B.

  Deakins, Eric

  Lambie, David

  Ross, Rt Hon W. (Kilmarnock)

  Dean, Joseph (Leeds West)

  Lamborn, Harry

  Rowlands, Ted

  de Freitas, Rt Hon Sir Geoffrey

  Lamond, James

  Ryman, John

  Delargy, Hugh

  Leadbitter, Ted

  Sandelson, Neville

  Dell, Rt Hon Edmund

  Lee, John

  Sedgemore, Brian

  Dempsey, James

  Lestor, Miss Joan (Eton & Slough)

  Selby, Harry

  Doig, Peter

  Lever, Rt Hon Harold

  Shaw, Arnold (Ilford South)

  Douglas-Mann, Bruce

  Lewis, Arthur (Newham N)

  Sheldon, Robert (Ashton-u-Lyne)

  Duffy, A. E. P.

  Lewis, Ron (Carlisle)

  Shore, Rt Hon Peter

  Dunn, James A.

  Lipton, Marcus

  Short, Rt Hon E. (Newcastle C)

  Dunnett, Jack

  Litterick, Tom

  Silkin, Rt Hon John (Deptford)

  Eadie, Alex

  Lomas, Kenneth

  Silkin, Rt Hon S. C. (Dulwich)

  Edelman, Maurice

  Loyden, Eddie

  Sillars, James

  Edge, Geoff

  Luard, Evan

  Silverman, Julius

  Edwards, Robert (Wolv SE)

  Lyon, Alexander (York)

  Skinner, Dennis

  Ellis, John (Brigg & Scun)

  Lyons, Edward (Bradford W)

  Small, William

  Ellis, Tom (Wrexham)

  Mabon, Dr J. Dickson

  Smith, John (N Lanarkshire)

  English, Michael

  McCartney, Hugh

  Snape, Peter

  Ennals, David

  McElhone, Frank

  Spearing, Nigel

  Evans, Fred (Caerphilly)

  MacFarquhar, Roderick

  Spriggs, Leslie

  Evans, loan (Aberdare)

  McGuire, Michael (Ince)

  Stallard, A. W.

  Evans, John (Newton)

  Mackenzie, Gregor

  Stewart, Rt Hon M. (Fulham)

  Ewing, Harry (Stirling)

  Mackintosh John P.

  Stott, Roger

  Feulds, Andrew

  Maclennan, Robert

  Strang, Gavin

  Fernyhough, Rt Hon E.

  McMillan, Tom (Glasgow C)

  Strauss, Rt Hon G. R.

  Fitch, Alan (Wigan)

  McNamara, Kevin

  Summerskill, Hon Dr Shirley

  Flannery, Martin

  Madden, Max

  Swain, Thomas

  Fletcher, Raymond (Ilkeston)

  Magee, Bryan

  Taylor, Mrs Ann (Bolton W)

  Fletcher, Ted (Darlington)

  Mahon, Simon

  Thomas, Jeffrey (Abertillery)

  Foot, Rt Hon Michael

  Mallalieu, J. P. W.

  Thomas, Mike (Newcastle E)

  Ford, Ben

  Marks, Kenneth

  Thomas, Ron (Bristol NW)

  Forrester, John

  Marquand, David

  Thorne, Stan (Preston South)

  Fowler, Gerald (The Wrekin)

  Marshall, Dr Edmund (Goole)

  Tierney, Sydney

  Freeson, Reginald

  Marshall, Jim (Leicester S)

  Tinn, James

  Garrett, John (Norwich S)

  Maynard, Miss Joan

  Tomlinson, John

  Garrett, W. E. (Wallsend)

  Meacher, Michael

  Tomney, Frank

  George, Bruce

  Mellish, Rt Hon Robert

  Torney, Tom

  1096

  1097

  Tuck, Raphael

  Weitzman, David

  Wilson, Rt Hon H. (Huyton)

  Urwin, T. W.

  Wellbeloved, James

  Wilson, William (Coventry SE)

  Varley, Rt Hon Eric G.

  White, Frank R. (Bury)

  Wise, Mrs Audrey

  Wainwright, Edwin (Dearne V)

  White, James (Pollock)

  Woodall, Alec

  Walden, Brian (B'ham, L'dyw'd)

  Whitehead, Phillip

  Wool, Robert

  Walker, Harold (Doncaster)

  Whitlock, William

  Wrigglesworth, Ian

  Walker, Terry (Kingswood)

  Willey, Rt Hon Frederick

  Young, David (Bolton E)

  Ward, Michael

  Williams, Alan (Swansea W)

  Watkins, David

  Williams, Alan Lee (Hornch'ch)

  TELLERS FOR THE NOES:

  Watkinson, John

  Williams, Rt Hon Shirley (Hertford)

  Mr. J. D. Dormand and

  Weetch, Ken

  Williams, W. T. (Warrington)

  Mr. David Stoddart.

  Question accordingly negatived.

  BUSINESS OF THE HOUSE
  Ordered,
  That the British Leyland Bill may be proceeded with at this day's sitting though opposed, until any hour.—[Mr. Coleman.]

  BRITISH LEYLAND BILL
  Considered in Committee.
  [Mr. OSCAR MURTON in the Chair]

  BRITISH LEYLAND BILL
    Clause 1

      ACQUISITION OF SHARES
      Question proposed, That the clause stand part of the Bill.
      10.17 p.m.
      Mr. Michael Heseltine: I welcome the Under-Secretary of State for Industry in a personal capacity to his new place on the Front Bench. It is no fault of his that he should be expected, after just a weekend in the Department, to steer this Bill through Committee. But the Committee may feel it strange, to say the least, that the Secretary of State for Industry is not here himself. The Government's commitment, at £2·8 billion, is the largest single commitment ever made to one British company. As he has had three days longer in the Department than the Under-Secretary, it is strange that the Secretary of State is not here at least to listen to the arguments.
      But my surprise is tempered, because over the weekend I saw the right hon. Gentleman described as a consummate politician who never entered a room by an open door unless he could see another open door by which he could leave. Therefore, I well understand his reluctance to be at the Dispatch Box tonight.
      The Bill and the strategy it represents form an integral part of the Government's policy towards British Leyland. It is, in reality, an open-ended and undisciplined commitment of taxpayers' resources to a company that, for whatever reasons, has now no other alternative source of finance open to it.
      Indeed, for the past year, the company was encouraged to behave in a way that
      1100
      was bound to lead—what was intended to lead—to the very solution that the Committee is being asked to consider tonight. Mr. John Barber, in his evidence to the Select Committee on Expenditure on the motor industry, explained the attitude which induced the then Secretary of State in his negotiations with the company. Mr. Barber said:
      "We had been working on the assumption, from the middle of last year onwards in Lord Stokes' discussions with the Minister, that we would not be allowed to go to the wall In other words, we had not started retrenching in the way in which, if we had been a completely independent company, we would have had to do in order to stay in business."
      There is only one conclusion from those words—that the then Secretary of State had quite consciously led British Leyland to behave in a way which might have seemed attractive to him at that time but could not conceivably have been considered as being in the best interests of the company, or of its work people, or, in the last resort, of the taxpayers, who are now called upon to repair the damage done in that period of drift and vacillation.
      The position we consider in examining Clause 1 of the Bill is that no private investor could prudently invest new money in the company today. There are four reasons for that. First, the return by way of dividends will be nominal for years to come; secondly, the generation of adequate profits is expected so far in the future as to make the forecasts upon which those profits are based speculative and, at the most, charitable; thirdly, the assumptions about the company's ability to improve its performance and increase its market penetration are at odds with its past record of achievement; finally, there is not a shred of evidence to suggest that any person in the company, either employee, manager or director, feels one bit of commitment to the strategy which the Government have devised on behalf of the company.
      Indeed, the reverse is the case. The mere fact that the Government have devised and accepted the strategy has already provided the alibi which will be used in future to explain that deviations from that strategy were the failure of judgment by the Government and not failure of judgment by employees or managers. So it is important to ask how it is

      1101
      that the Government came to accept the strategy upon which the Bill is based.
      Once again, we have the evidence of Mr. John Barber to the Expenditure Committee. He said:
      "We were asked in British Leyland to develop a concept study over 10 years on certain assumptions. The two main ones were the rate of inflation and a fairly free availability of cash."
      I hope that the Committee will not lose sight of the fact that the only two inputs that the Governments felt competent to make into the study of the motor industry at the time were the free availability of cash and predictions about the future rate of inflation. That was the basis upon which British Leyland, on behalf of the Ryder team, undertook the investigation about the future markets available to it.
      The evidence is clear that British Leyland, putting forward the figures that it put forward, did not itself believe that those figures represented a realistic basis upon which investment judgments could be taken. The moment it had put forward those figures, it set about a realistic assessment of the conclusions and, indeed, costed alternative proposals upon which the company itself might well have proceeded if it had been in a position so to do.
      But the important question is whether either the Ryder team or the sponsoring Minister responsible for the report ever asked British Leyland what its opinion was of the strategy which emerged from its figures. The Committee will want to understand why, first of all, the Ryder team never asked British Leyland whether the figures which were produced on behalf of the Ryder team in order to chart the way forward were realistic figures upon which such investment proposals should be made.
      Even worse than that, when the Ryder Report was published the sponsoring Minister did not ask the Ryder team whether there was an alternative range of strategies, some lower, on a various scale lower, some involving a different organisation of the company, and some involving different priorities for development within the company. None of those questions was ever asked by the Secretary of State for Industry at the time.
      The reality is that the conclusions were produced and accepted without question by the Government. That is a totally
      1102
      inadequate way in which to expect management and employees to respond to the challenge facing British industry. It is a totally reckless way to dispose of taxpayers' money on any scale, let alone the largest scale ever undertaken in this context by any British Government.
      I want briefly to spell out the sort of reasons why acceptance of this strategy is misconceived. First, the Government as a whole do not believe the figures upon which the forecasts themselves are based. If they do, why have they commissioned CPRS to undertake a long-term marketing forecast of world demand for motor cars and trucks? In fact they know perfectly well that the figures are not reliable, and it has therefore been necessary to set up a Government inquiry of the sort now going forward.
      If anyone considering the basis of the figures upon which the calculations are made asks whether it is not the collective wisdom of the motor industry, which to some extent it is, I would merely point out that it is the same collective wisdom that has led to a situation in which there is a world capacity to produce 20 million vehicles when the realistic demand is for only 12 million.
      Secondly, the most important new business upon which the new development of British Leyland is based is an assumed doubling of car sales to Western Europe by 1985. As British Leyland exports are now lower by volume and by percentage of output than when the group was formed in 1968, it is difficult to encourage investment on that sort of prospectus.
      Thirdly, the involvement of this company permanently with the public sector will raise a number of questions for the company that are serious and damaging for its future. First, no attempt has been made by the Ryder team, which perhaps should not have responsibility for it, or by the Government, who certainly are responsible, to show that the future returns to be derived merit the equivalent of the entire investment for British manufacturing industry for no less than six months. That is to say, the commitment to British Leyland amounts to the entire investment programme for the entire range of British manufacturing industry for six months.
      Secondly, it has not been shown what profitable opportunities exist for the funds

      1103
      now being committed, funds that will be denied others because the resources will be committed to British Leyland. Perhaps even the most ardent enthusiast on the Labour benches for the White Paper "The Regeneration of British Industry" would like to contemplate for a moment just how much regeneration the National Enterprise Board will produce in circumstances in which it has £750 million and British Leyland has now cleaned up £2·8 billion.
      The submergence of the British Leyland investment programme in public sector investment can have no alternative but the inevitable stop-and-go techniques that have affected every investment programme, particularly recently in the steel industry, as it comes under ministerial political or Treasury accounting.
      Perhaps the single most serious objection to the whole strategy is one I have referred to earlier, namely that it is not the strategy of the unions, the employees or the directors. It is solely the strategy of the Government. Every failure, every deviation, will be blamed on the defective judgment of the Ryder strategy because no one in British Leyland has any incentive to do otherwise.
      10.30 p.m.
      Mr. Eric S. Heffer: Is the hon. Gentleman aware of the fact that in Western Germany the Volkswagen company is now contemplating laying off 25,000 workers? That company's strategy is to solve its problems with unemployment. Is the hon. Gentleman suggesting that this Government should contemplate such action rather than seek to rescue the jobs of the workers involved? Is he suggesting that the Government ought not to invest in industry but simply allow those workers to be thrown on the streets without any action being taken on the part of the Government? If that is what he is suggesting, I am certain that the car workers and workers throughout industry will note what he is putting forward on behalf of the Conservative Party.
      Mr. Heseltine: The hon. Gentleman makes a fair point and I will answer his question in clear and coherent terms which he will understand. It is that question which lies at the heart of the inability of this country to agree about
      1104
      industrial policy. It is the fear of unemployment, often exploited for political ends, that makes it difficult for management and unions to be reconciled with the gut problem facing us.
      The hon. Member knows, in asking the question, that what the German Government did with the Volkswagen company was to provide the most generous redundancy payments at a level which vastly exceeds those available here. They produced retraining schemes relevant to redeploying labour where it can be permanently and profitably employed. They gave incentives for alternative sources of employment to be provided by other private sector companies so as to give more secure jobs for those employees. They said to the German worker. "Let us understand that this company cannot any longer guarantee your security and therefore this Government will help you."
      Is that not more realistic than what the Government have done, which is to produce a report in which they say that there will be economies from the labour redundancy programme worth £400 million and then send Ministers round the country trying to pretend that not a single man will lose his job in any circumstances?
      Mr. Heffer: Is the hon. Gentleman aware that the trade union involved in West Germany opposed the Government strategy, as did all the supervisory workers? The German workers were bitterly opposed to the proposal. Is it not clear why this was so? There are now over 1 million unemployed in Western Germany. Is the hon. Gentleman suggesting that this is a strategy we should adopt?
      Mr. Heseltine: I have listened at over 40 Sittings of the Industry Bill to the hon. Member speaking on behalf of the British worker. It is a refreshing change, in this post-referendum phase, to find him speaking on behalf of the German worker. I am sure that the German worker will feel all the better for his support. The reality is that the German trade union movement is prepared to contribute a degree of constructive support to the capitalist philosophies of Western Germany of a sort which has led to the prosperity of the German worker on a scale with which we cannot begin to compete.

      1105
      This House will meet over the year or so ahead to hear of unemployment reaching the 1½ million mark at a time when the German unemployment figures will be decreasing and at a time when the real living standards of the German people will be continuing to outstrip the standards of workers in this country. Perhaps for the best of reasons the hon. Member is not prepared to allow the truth to emerge. The truth is that unless we cure the gut issue of overmanning, wherever the fault may lie, there is no way in which we can equal the real standard of living anywhere in the western world, let alone Germany.
      Mr. Hal Miller: Does my hon. Friend accept that the Ryder Report is based on a significant manning reduction in British Leyland and that one of the objections to continued injections of public funds is that there has been no commitment by the management, unions or employees to the size of that reduction, and until that bench mark is established there must be great caution about further injections of public money into this outfit? I am one of those who voted for the additional £50 million until that bench mark was established.
      Mr. Heseltine: I am aware that my hon. Friend voted in that way. In all the circumstances, I am grateful that he was the only one who did.
      My hon. Friend is right in saying that there is no commitment, not just from the trade union movement—because that would be a start, although perhaps the least likely start—but from the employees, the management or the directors of the company. Unless one understands that the essence of running any company depends on the people in it, and unless one gets their wholehearted support for the policies of the company, there is no way in which one will make a success of that company.
      When the Government lay down the precise management formula and management command chain, when Sir Don Ryder, on the morning of the report, sacks the chief executive of the company without asking the board of directors or the unions, and without, as far as I can see, owning a share in the company, when it is said that £400 mil-
      1106
      lion worth of economic benefit will come from reductions in labour and increased productivity and one does not spell out to the people concerned what that means, one is deceiving the employees of the company. Because the Government will reap the wrath of the people who believe that they have been given a licence to go on behaving as they have behaved without being called to check, the Government have badly mishandled the way in which the report was conceived, prepared and presented to the people of British Leyland and this House.
      There is another example along the lines of the £400 million, and it is another curious, almost unbelievable, omission from the report. How can the Committee make a serious judgment about a situation in which Chrysler has 13 plants and Ford has 21 plants in this country producing between three and four models and British Leyland has 55 plants producing 18 models and yet the rationalisation of those 55 plants, which everybody knows is necessary, does not merit a single sentence in the report? What interpretation are the employees of British Leyland to put on that omission other than that the business will go on as before? If it is to go on as before, there is no prospect of selling the cars on the scale and at the price that the strategy says they must be sold to bring the company back to profitability and respectability.
      The reality is that the report has had the effect of glossing over the challenge which faces not just British Leyland but the entire range of manufacturing industry. The devastating charts which have been produced time and again showing that we are virtually bottom of every manufacturing league in output per man can no longer be avoided if we are to do what has to be done in matching the competition which is increasingly thrust on us from the outside world.
      It is comprehensible to argue for this strategy only if it is hoped that some miracle will change the approach of the company and its personnel. They have not been asked to make a commitment. there has been no explanation what the commitment is and that is why the commitment cannot be expected and will nor be forthcoming.
      There remains the central, hard-line British problem. We have to improve our

      1107
      productivity. This is a classic case in which the Government could have moved forward, decisively and generously, to do so. They have missed an opportunity and have failed to respond to the need of that moment.
      We shall not solve this critical problem if the Government pray for it or the taxpayers pay for it. But that is all that the Clause offers, and I ask the Committee to reject it.
      Mr. Maurice Edelman: The hon. Member for Henley (Mr. Heseltine) has made a typically negative and destructive speech. From his apologia for the past management of British Leyland, one would have thought that all the ills from which the company now suffers had been created since the dismissal of Mr. John Barber. But, as is clearly spelled out in the Ryder Report, the problems of British Leyland were due to an accumulation of causes for which the past management of must take responsibility—the facts that there were too many models, that the plants were irrationally distributed, that there was over-manning not of workers but of management. All these things were well-known and have been confirmed by the Ryder Report.
      When shareholders write to me complaining about the fact that workers have gone on strike and saying, wrongly, that workers have been responsible for the low output at British Leyland—the facts speak against them, because the level of strikes at British Leyland has been relatively low—I feel that they should be directed towards the directors and the management of the past who had full responsibility for the conduct of affairs and at whose door the near-bankruptcy of the company must be laid.
      The company came to this sorry condition because it failed to invest adequately and to modernise and re-equip. The hon. Member for Henley talks of increasing productivity. He must know that the main reason for the debacle was that there was a lack of new equipment, which made it one of the most backward complexes of motor firms in the whole Western world.
      Mr. Percy Grieve: Does not the hon. Gentleman appreciate that sui-
      1108
      cidal strike after suicidal strike in the Ley-lands factories, particularly Cowley and Longbridge—
      Mr. Ray Carter: Rubbish.
      Mr. Grieve: —have resulted in a lack of confidence which itself has produced a vicious circle of lack of investment. That is the key to the problem.
      Mr. Edelman: I fear that the hon. and learned Gentleman has the facts wrong. What he calls "suicidal strike after suicidal strike" was simply strike after strike for which there were legitimate occasions. If he suggests that a strike is itself illegitimate, he is on a different point, but as long as workers who have a grievance have the right to strike, they are entitled to exercise it. That is what happened at British Leyland. The fault for these strikes, as my hon. Friends know who represent British Leyland constituencies, must be laid at the door of past management.
      I want to talk more constructively. There is a lot which needs to be said about the Ryder Report. We are dealing with the livelihood of 170,000 men and their families and with the injection of £1 million a day for about eight years of public money into British Leyland and other issues of public accountability. These matters, despite the late hour, should not be decided on the nod, but require debate.
      10.45 p.m.
      I regret the conclusion of the Ryder report that there should be a hybridisation of the company. I should have preferred nationalisation of the company, which would have created the basis of public accountability so that the firm could become thereafter more directly answerable to the House than in the indirect ways which are proposed in the Ryder report. Nationalisation would have provided a simple and direct way of doing that. There would not have been the conflict of interests which is bound to emerge later on.
      At a later stage it is inevitable that the regular shareholders in the company will have different criteria for judging the success of the company, whereas those who are concerned with public investment in the company will ask how much re-equipment and modernisation

      1109
      has taken place. The shareholders will want to see the payment of dividends as rapidly as possible so that they may receive a return on their shareholdings. There will be a conflict of interests inside the company, which is likely to lead to danger.
      The major shortcoming of the Ryder report, on which the hon. Gentleman touched briefly, is the fact that there is no general strategy ahead. We can see only a bottomless well into which this money will be poured. No one can see the shape of the strategy for this company.
      Today the British machine tool industry is in grave difficulties. It is clamouring for the investment of about £16 million to put it on its feet. British Leyland will absorb as part of the rescue operation—and rightly so—£l million a day for purposes which we do not know in any detail. What harmonisation will there be between the purposes of British Leyland and those of the British machine tool industry? Will the £1 million a day be spent in a great orgy of buying foreign machine tools? Will the money be spent in some rapid exercise of buying machine tools in Switzerland, Austria, Germany or France, or will there be an attempt, by means of a mechanism, to harmonise the purposes of the British machine tool industry with those of the British motor industry?
      Mr. John Biffen: Does the hon. Gentleman accept that in the context of the referendum and the continuing British membership of the Community there is an obligation upon any public sector ordering agency not to discriminate against other Community machine tool suppliers? Is not he therefore misleading British machine toolmakers to suppose that the Government will be in a position to adopt a buy-British policy?
      Mr. Edelman: I am sorry that the hon. Gentleman, with his normally acute mind, does not see the difference between discrimination against a foreign machine tool exporter and positively harmonising the interests of the British machine tool industry with those of the British motor industry. There is nothing in the Treaty of Rome saying that the managing director of British Leyland, or one of its divisions, should not go to the managing director of Alfred Herbert in
      1110
      Coventry and say "Let us plan together our future programme for the next five years, so that your firm can produce the numerical control machines which we need, so as to develop a logical process in our motor factories."
      When I speak of the logical process of production, let me instance the manufacture of Renault cars in France. There we can see a piece of metal going in at one end and emerging as a motor car at the other. There we can see the difference between the techniques of production, which exist through a highly integrated system of production, and what existed in the United Kingdom in the past, when some of our machine tools were over 30 years old. The Ryder report failed to emphasise the need for a broad strategy for the integration of the motor industry with the machine tool industry.
      I should like to say a few words about a major point touched on in the Ryder Report which has not been developed and which is of great concern to those who work in the industry. The hon. Member for Henley very properly said that the only way in which the British motor industry can achieve success is by those who are involved in it feeling that they belong to it and that they have some part to play in it, so that they can all work together in the general interest. In the Ryder Report a whole chapter is devoted to industrial democracy and participation.
      The Ryder Report is a kind of package in which the money is being offered to the company and in return the expectation is that there will be a form of industrial democracy in which the workers will be allowed to play their part, not simply by standing day by day in the production line and slogging it out in every shift but by having some sort of participation in the running of the firm. In the Ryder Report there is a sub-clause which says that until the Government's intentions are made clear about industrial democracy and participation, and the recommendations in the Labour Party Green Paper and the TUC report on industry have been crystallised, nothing can be done.
      If my hon. Friend imagines that he is going to pour money into British Leyland without involving the workers of British Leyland in the judgment of its expenditure, then indeed he is riding for a fall,

      1111
      and so are the Government and the country. Until and unless there is a proper structure of participation by the workers from the shop floor upwards, we shall not get that sense of involvement in the firm which is necessary for its success.
      We live in an age of patronage. We live in an age of Government intervention which Mr. Gladstone when he produced his Northcote-Trevelyan Report had not dreamed of. The Civil Service Commission which was created in those days has long failed to cover the whole area of Government intervention, as patronage has reached a degree such as Walpole himself never dreamed of. This is directly relevant to the Ryder Report and to this Bill.
      We have to ask ourselves how the appointments to the company are to be made. We know that in the NEB it is the Minister who has the statutory duty, and that the appointments are within his gift. While one has a benevolent and efficient Minister—the Secretary of State for Industry, as we have had and as we have—we have certain guarantees. But the fact is that in connection with British Leyland, unless there is some form of structural arrangement for the workers to participate, through councils or committees, in some kind of autogestion within the firm, we shall have the old confrontations of the past which have led to so many troubles and even to the illusions held by the hon. Member for Henley about what he called, I think, suicidal strikes.
      If we are to inject a new spirit into British Leyland we must have some constitutional structure in which the workers will be as much shareholders, with their own persons and energies, as those who have financial investments in the firm. Therefore, if there is any question of obtaining the wholehearted co-operation of the workers of British Leyland—and I believe that is the case—this very day when there are wage claims put forward and when the old discussion across the table is still as sharp and acute as it ever was, unless some sort of new structure of worker participation is married to this Government involvement in the firm, we shall get all the evils and the abuse and no benefits from this massive outpouring of money.
      1112
      I fear that unless there is some sort of participatory monitoring, we shall get a Concorde situation with the same sort of open-ended commitment in which, because the Government and the taxpayer are tied to an enterprise and so profoundly committed, we shall see an outpouring of public expenditure without any adequate and relevant return.
      Mr. Tim Renton: I do not altogether follow the hon. Gentleman's reasoned remarks. I wonder whether he has read a sentence in the Ryder Report which said
      "Efforts by British Leyland to set up a consultative council at corporate level have not been welcomed by the trade unions".
      Can he explain why he thinks union members will take a very much different attitude when they are nationalised than they have taken in recent years?
      Mr. Edelman: It depends on the nature of the council. It is possible to have the sort of sham councils we have seen in the past when people have been concerned with the working of the canteen and not the working of the company. There must be a much more profound participation by workers from the shop floor upwards. It is also not enough—and I say this boldly—to pluck out some trade union official and put him in a post of authority on the board of this company.
      I do not believe that the traditional arrangements referred to in the TUC report on industrial democracy are adequate. There must be a real form of industrial democracy in which workers from the shop floor have direct participation so that their interest in the place of work finds proper expression.
      I hope that my hon. Friend, when he replies, will tell us something about the monitoring of the public money which is being spent. Does this mean that somebody from the Treasury will go along to Oxford or Coventry, look at the books, see that the accounts tally and then go away again?
      If that is what is meant by monitoring, it is not monitoring in the concept which I and many hon. Friends have of public accountability. The problem now facing British Leyland is to make sure that public accountability is concerned not only with the arithmetic but with the wisdom of the expenditure.

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      The real issue facing the Committee is not so much whether we should pay out the money provided for in the Bill. I think most sensible people would agree that the company has to be rescued and that the livelihood of the people involved has to be preserved. Few, except the most extravagantly doctrinaire, would want to drop the axe on those many people who have spent their lives in British Leyland and turn them on the streets overnight. That would be not only foolish, but iniquitous. If hon. Gentlemen opposite vote against the clause tonight, they will be voting in favour of a cruel and ruthless policy which will lead to a great misery and do damage to our greatest exporting industry.
      The worker in his place of work has as much right to consideration as the shareholder in his own remote position. We are concerned today with the rights of the worker and the opportunities for him to fulfil his duty in his place of work, not simply by turning a part but by exercising and contributing his wisdom to the well-being of his firm.
      11.0 p.m.
      Mr. Michael Marshall: I am glad to have the opportunity of speaking after the hon. Member for Coventry, North-West (Mr. Edelman). From many of his remarks, I felt that there were at least certain reservations which I could share. In a recent article he described very effectively the "bran tub approach" to doling out Government money, which certainly covers some of the problems I want to discuss.
      I join with my hon. Friend the Member for Henley (Mr. Heseltine) in expressing some reservations about the Ryder Report, which, after all, is virtually enshrined in the measure we are considering. The first basic problem which has to be restated is that the whole of the report seems to ignore fundamental changes in the whole of our economic situation. The changes which came upon British Leyland as a result of the energy crisis do not receive the recognition which it is self-evident should have gone into the report. I do not see how the problem of that great company can possibly be divorced from the similar problems of so many other major car manufacturers throughout the Western World.
      1114
      It has been rightly stated as a fact that there are four major car companies in this country, and yet in the whole of the United States four major car manufacturers are sufficient for that vast market. The problem is, therefore, self-evident. As The Economist pointed out recently, there is indeed the argument, which must hold water, that car manufacturing companies must either merge or die. It is this first point that strikes me as a notable omission from the Ryder Report.
      Some of us—and perhaps some Labour Members—have had opportunities of questioning Lord Ryder on these matters, but we have got very little change out of suggestions that the merger aspect has been closely considered. This has been pushed to one side, with the suggestion that it was looked at but not thought appropriate. All the way through in considering this report, one has the feeling that the judgments reached in many cases are far too shallow.
      Similarly, we have had very little evidence of a serious examination whether other sources of money could have been found to help the company in this situation. The opportunities to seek re-cycled Arab investment, opportunities for investment consortia in this country—[Interruption.] Hon. Members may laugh, but these are possibilites which should be considered with the greatest care. I do not think that Labour Members would necessarily want to put all their eggs into one basket. After all, we are talking now about a massive investment which is outstripping the technological development costs of Concorde or even the cost of the Channel Tunnel. In considering measures of this sort we are entitled to ask why every other possibility was not fully explored and made clear to us as representatives of the taxpayers and the future shareholders of British Leyland.
      I have reservations about the Ryder Report in general and I share the views which have been expressed frequently on both sides of the Committee that there are problems within the company which run, as it were, not in any one quarter but right across the spectrum of the company. One of the problems the report brought out was the lack of consultation with middle management. The Government must address themselves to this factor, in

      1115
      a way which at present they appear not to be doing by looking at the National Enterprise Board as their chosen instrument, talking in terms of top management and in terms of the shop floor via the trade unions. This is an important element to which the Government must address themselves.
      There is also the worry which anyone who has read the report must have that it seems totally to ignore the effect of the energy crisis on other motor-car manufacturers—in other words, on the major competitors of British Leyland. Many hon. Members have read accounts of the report by Euroeconomics, which speaks of the unreality of the export projections in the Ryder Report. This is a grave concern to many people. If those projections are adrift and if one takes any kind of view as to the impact of the energy crisis on buying habits—the fact that people who were thinking in terms of a second car will no longer be doing so—all this brings one to the inescapable conclusion that it is not as easy as many would suggest simply to seek extra business outside this country. There is a fear that the level of trading demand may be drastically curtailed.
      It is for that reason that I welcome the Government's intention to use the think tank in reviewing the situation. I hope that the Under-Secretary of State will tell us a little more about that. The fact that the CPRS has been put into bat so soon after the Ryder Report suggests to many of us that perhaps there have been some second thoughts about Ryder and points to the importance of the study as regards future borrowing requirements.
      The problems that British Leyland faces—and they are not unique—add up to what Ford recently described as being in the survival business. Being in that business is clearly a fact of life for many major motor manufacturers. In that situation there must be once more a return to some consideration of commercial principles.
      Anyone who has had anything to do with industry must sometimes find it hard to accept the way in which the political battle lines are so quickly drawn up over the fate of a great company such as British Leyland. It is an inescapable fact—I move straight into the sensitive
      1116
      ground—that no one in the Committee can honestly deny that the Ryder Report could have been rather more blunt and honest and have said that British Leyland, as presently constituted, could have the same output and yet have a workforce some 30,000 to 40,000 smaller than it is today. That is the estimate of judges whose judgment we are entitled to respect. What are the Government's policies in that area?
      We must address ourselves to the problems concerning the workforce. On such matters I have respect for what the hon. Member for Liverpool, Walton (Mr. Heffer) says. When dealing with great companies and manufacturing industry, is it not one of the cruellest deceptions to suggest that we can prop up a workforce which is inflated when it is clear that there must come a point at which people will not buy motor cars which they do not want.
      Mr. F. A. Burden: Does my hon. Friend agree that the situation is somewhat the same as when the Secretary of State for Energy said in the House on 2nd August 1971, in another capacity, that in June 1969 he had written to Upper Clyde to the effect that unless management was reorganised, restrictive practices done away with and the labour force slimmed by 7,000 there would not be one more penny forthcoming from Government in support?
      Mr. Marshall: I entirely agree with what my hon. Friend says. That points to the fact that across party lines there are moments when reality comes through. I believe that that was one such instance. I suggest that in the present situation we must have from the Government some clear-cut view as to their policy on job protectionism. That is the underlying ethos to be put forward and it should be put forward by the Prime Minister.
      I was arguing that it is the cruellest deception to suggest that there is an opportunity for people to continue their careers in a company after the moment at which cars cannot be sold in sufficient numbers. I think that everyone accepts that there is a limit to what any Government and to what the nation can afford. Surely it is not merely a matter whether demand will meet productivity. Is it not one of the cruellest things we can do in this technological age to try to keep

      1117
      large numbers of people under-utilised? In a country where people have far greater opportunities for education, is it not a sad reflection on our society that we seem to be endeavouring, through the Government's industrial policy, to keep too many people doing jobs that many clearly find boring when we should be able to introduce machines to make work more interesting and less onerous? That is what the package is supposed to he about.
      Mr. Leslie HuckfieldIf 15,000 or 20,000 of my constituents lose their jobs through the reorganisation which the hon. Gentleman foresees, where will they find alternative employment?
      Mr. Marshall: The hon. Gentleman should put that question to his own Front Bench. The Government's thinking is devoid of constructive proposals for the meshing in of redeployment, retraining and redundancy payments. That is the constructive approach, as opposed to the protectionist approach.
      There are one or two matters which are particularly worrying in relation not so much to the Ryder report as to the Government's policy. The danger of massive Government finance has to be spelt out clearly. The first obvious danger of massive Government finance is that over-manning is difficult to handle and becomes a political argument. We have seen that again and again. Hon. Members on both sides of the Committee, will have to face the constituency problem referred to by the hon. Member for Nuneaton (Mr. Huckfield). These are not easy options, but the nettle must be grasped. If we continue to treat arguments of this sort on a short-term political basis, any hope of long-term economic judgment goes out of the window.
      Each British Leyland situation creates A precedent. It adds massively to the public borrowing requirement and to the economic strains, as even the Treasury Bench has to acknowledge. The public are being forced to buy this pup.
      I hope that the Under-Secretary of State will show his hand tonight in his "new broom" ministerial approach in the Department of Industry. Will he say whether job preservation is or is not the prime purpose of Government industrial
      1118
      policy? Will he recognise the problems which I have enunciated? Will he say whether the Government believe in the creation and preservation of giant monoliths? The Government bear a special responsibility. It was the former Secretary of State for Industry who, with the IRC, brought this corporation into being—a massively mistaken planning judgment, as history shows. That decision was made with insufficient capital backing by the IRC.
      That raises once more the basic question which hon. Members must answer for themselves. Do we want to go on creating massive monolithic organisations, when we know the problems which result? It is possible for parts of companies to be hived off. For example, it is possible to split specialist car production from mass consumer car production. That would give individual companies the opportunity effectively to stand on their own feet. In a sophisticated economy such as ours it should not be beyond the wit of the Government and the City to come together in an effective working arrangement to facilitate that type of development.
      I come to the question of Government planning versus commercial judgment. If the Bill goes through, the Government must tell us how they expect to implement the package. I do not believe the suggestion in the Explanatory Memorandum that no further staff will be required as a result of this legislation. I do not see how this can be so. If it is so, it is of great concern to us all.
      One of the great lessons from the Rolls-Royce situation is that there are insufficient people with commercial judgment in Whitehall. Whether it is in the National Enterprise Board or the Department itself, somewhere along the way there must be found people of ability in commercial matters if the Government are to play any meaningful role in the dialogue with the future British Leyland.
      11.15 p.m.
      Finally, any Government's general investment strategy, in which they force the taxpayer to become an investor, should, if it is to be helpful, back some of the winners in this country and not just some of the lame ducks. I accept that all Governments have not shown the best judgment in trying to be more selective and more effective.

      1119
      If we cannot be clear that the Government have a coherent industrial strategy, the Bill is simply throwing money down the drain and bringing in a short-term political judgment about unemployment for motives which I am sure attract many of the best feelings of many hon. Members. But I believe it enshrines a cruel deception that somehow all will be well if we can keep everyone doing what they are doing at present. I do not think that any hon. Member who hopes to see the regeneration of British industry could give such a deception his support.
      Mr. Richard Wainwright: I hope that the Under-Secretary of State, whom we wish well in his new appointment, will realise the deep interest and concern in the matter put to him by the hon. Member for Coventry, North-West (Mr. Edelman) on the role of the British machine tool industry in the proposed re-equipment of British Leyland. I hope that the hon. Member for Coventry, North-West will get a full and detailed answer. It will also be of great interest to other hon. Members.
      I want to approach the question from a different angle. I want to press the Under-Secretary of State to say how far he considers the machine tool industry is at present ready to fulfil the orders which will arise from the first and second tranches of Government money to British Leyland in its new shape. The hon. Gentleman must be aware that the pattern of re-equipment, and, from that, the sources of re-equipment, will be largely determined by where the orders go arising from the first and second tranches of new capital.
      If the British machine tool industry is not equipped to meet most of the orders arising from this early expenditure, its chances of catching up later, even if it becomes harmonious, will be very much less. I hope that we shall have a full statement of the entire rôle of the machine tool industry in this matter.
      Is it too much also to hope that, even at this stage of the Bill, we shall have at last, with the change of personnel at the Department, some effort to put this vast sum into the context of the general needs of British manufacturing industry. Everyone knows that many sectors in British industry are desperately in need of invest-
      1120
      ment. Yet there appears to be no inventory. The former Ministers at the Department were not even willing to guess at an inventory of the total requirements of British industry, alongside which this vast sum has to be judged.
      For instance, as a random example, the national economic development council associated with the British clothing industry—a great employer of labour and in many ways one of our leading industries—recently made a detailed recommendation that a comparatively modest sum should be allocated to its requirements. Yet the Department has dragged its feet week after week on the issue, presumably because there has been such a massive pre-emption of Government funds for British Leyland and the purposes associated with the Bill. If Parliament is to retain its self-respect there must be an attempt before we send the Bill to another place to give us the context in which the whole matter falls.
      Is it too much to hope, now that there has been time for the new set-up at British Leyland to do some stocktaking, that there might be a gesture from British Leyland's side, when all this money is being voted, to offer some of its peripheral activities as a means of providing a small part of the money? There are Aveling-Barford, Coventry Climax and Prestcold. Surely it would be reasonable—some people might think decent—for British Leyland to say "We are not supermen, and maybe others could manage these non-manufacturing businesses just as well as we could, or almost as well, and they would fetch a tidy sum on the market". That would be some contribution from within to set alongside the vast contribution the long-suffering British taxpayer, or the long-suffering creditors of the British Government, are being dragooned into making.
      This is all being done on a prospectus which, if it were introduced in a normal commercial context, would be criticised throughout the financial Press as flimsy, if not extra-statutory or illegal. [An hon. Member: "Fraudulent."] It may turn out to be fraudulent, but I am not prepared to go that far now. I simply say "flimsy and inadequate". In our professional or personal capacities, or in advising our maiden aunts on their investments, we would never dream of recommending investment on the basis of the

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      Bowdlerised version of the Ryder Report and the speeches of the former Secretary of State for Industry.
      But the Government have the chance if not to open a new chapter at least to turn a page tonight. I hope that we shall be treated more frankly and with more care and respect by the incoming administration at the Department than that with which the House was treated by the previous incumbents. Nevertheless, however eloquent and frank the Under-Secretary is tonight, I shall recommend the Liberal Members to vote against the clause standing part of the Bill.
      Mr. Leslie Huckfield: We have all noted the shift of Government resources on the Front Bench from mobile homes into mobile cars. I welcome my hon. Friend the Under-Secretary to the Committee's deliberations.
      What intrigued most of us who sat through the Second Reading debate, and still intrigues all of us on the Government benches, is precisely what the Opposition intend to do if the Bill does not go through tonight. I ask exactly what the Opposition would do, because as far as I can judge from all the speeches last time, and all that we have heard from the Opposition tonight, if they had their way most of my constituents would be on the dole.
      In particular, we are anxious to hear what the Opposition would do with Austin-Morris, because we have all heard now what they would do with Aveling-Barford, Coventry Climax, Prestcold and the rest of the more profitable parts of the British Leyland empire. What will the Opposition do with the Austin-Morris part of the combine? They did not tell us last time, and my bet is that they will not tell us tonight. I hope that my constituents and the constituents of my hon. Friends representing Longbridge and the other parts of the British Leyland combine have noted that.
      Mr. Tom King Mr. Tom King (Bridgwater) rose—
      Mr. Huckfield: If the hon. Gentleman is prepared to tell the Committee what the Opposition intend to do with Austin-Morris, I shall give way.
      Mr. King: The hon. Member is about to vote for a Bill which carries very severe implications for his constituents.
      1122
      What assessment has he made of the implications of the Bill for them?
      Mr. Huckfield: That only proves the folly of giving way to the hon. Member He still has not answered my question. Conservative Members bemoan the losses that Austin-Morris is supposed to have made. One of the biggest losses of that division was probably in 1969–70 when it lost about £16 million. What is £16 million when set beside the £144 million loss of Volkswagen last year? What is £16 million when set beside the loss of £100 million by Citroen last year in France? If we are to examine Austin-Morris losses we should compare them with the performance of Continental manufacturers and then consider the way in which European Governments have been prepared quickly to help them out because those Governments appreciate the desirability of having a domestic car industry. I hope that that lesson will rub off on to the Opposition tonight.
      In that big loss-making year Austin-Morris lost less than Vauxhall lost last year—£18 million—and less than Chrysler last year—£17 million. If the Conservatives want Austin-Morris to go bankrupt—and I am sure that it what the hon. Member for Oswestry (Mr. Biffen) will say if he catches your eye, Mr. Murton—they must compare that division's performance with losses in other parts of the industry. If the Opposition believe that Austin-Morris should go to the wall what is their feeling about the other companies with even larger losses? I believe that Austin-Morris is well worth saving. I am glad that the Ryder Report recommends that it should be saved and that this is what is planned.
      The Conservatives talk about overmanning. If they saw some of the First World War equipment with which my constituents have to work in Coventry they would understand why there is overmanning. By the time they have got together the man who puts the fag packet in the right place, the second man who is needed to turn the handle because one man is insufficient, the men who have to push the cars round at the end of the track—and bearing in mind some of the self-pushing tracks which are used in British Leyland—there is no wonder that by comparison with plants on the Continent there is overmanning here. Hon. Members will not find men having to

      1123
      push cars down the track in BMW. They will not find it happening in Daimler-Benz, Peugeot or Renault, but they will find it in British Leyland. It is because of the antiquated, almost antediluvian equipment in British Leyland factories that the extra men are required.
      Mr. Michael Marshall: Does the hon. Gentleman accept as the logic of his argument that if modern equipment is put in there should be a rapid reduction in the manning force where those workers are being used ineffectively?
      Mr. Huckfield: I have never concealed the fact—and if the hon. Gentleman had attended the Second Reading debate he would have noted then that I made the point—that if we equip British Leyland to the same level of capital output ratio as Datsun, Nissan or Fiat it will be necessary to use a smaller workforce. I accept that, and I questioned my hon. Friend who was then on the Front Bench on exactly that kind of point.
      11.30 p.m.
      I have taken up several of these matters with the Prime Minister and with the previous Secretary of State for Industry. But I should still like more reassurance, because I know that some of my constituents would, about the proposals in the Bill to integrate the quality car parts of British Leyland with the volume parts of British Leyland.
      I speak as one of those who believe that the whole corporation should be preserved. I do not believe that Austin and Morris should be jettisoned, for the reasons I have just enumerated. But I doubt the wisdom of going in for a strategy that, as far as I and many of my constituents can see, will integrate Jaguar, Rover and Triumph with Austin and Morris.
      When I took up this matter last time, I got half an answer and the answer my constituents have been given in Coventry is that a committee has been set up which is supposed to be looking into ways of preserving Jaguar, for example, as an independent entity. It will take a bit more than that committee to persuade me and my constituents that we shall see the Jaguar car company preserved as an entity in five years' time, because we very much fear that the next Jaguar to be produced will be not a Jaguar but a Rover with a Jaguar badge on the front.
      Mr. Alan Clark: Would the hon. Member give way.
      Mr. Huckfield: If the hon. Gentleman has a good point to make.
      Mr. Clark: I leave that to the hon. Member's judgment. Would he not agree that if the Jaguar car company were to be offered in the City as a single independent entity, it would be perfectly possible to raise the capital not only to produce the Jaguar car but probably to expand its production more effectively and to maintain the whole work force now employed at Browns Lane?
      Mr. Huckfield: The hon. Member knows that some of my constituents work at Browns Lane and Radford and other places. He also knows that the strategy that I have put forward and the strategy that the Government have put forward are to save not just Jaguar but the whole of British Leyland. That is why I support the implementation of the Ryder Report.
      But in the implementation of the Ryder Report we have to take a lesson from what has happened to Fiat and Lancia. The Lancia car company got into considerable difficulties and was bought out by Fiat. Now Fiat is trying to produce a Fiat car with a Lancia badge, and that just will not work. I hope that British Leyland will not produce an Austin-Morris car—and I say this with the greatest respect to my hon. Friend the Member for Birmingham, Northfield (Mr. Carter) who represents Austin—or a Rover car, with a Jaguar badge on the front, because that will not work.
      I return to the subject of the wisdom of fully integrating the quality car parts of British Leyland with the volume car parts. I apologise for enmeshing my hon. Friend the new Under-Secretary in the details of the car industry so soon after his appointment but my next question is where British Leyland is to produce its sports cars. I declare an interest as an MG owner. I am not particularly convinced by the great rash of publicity that is trying to persuade people to buy more MGs under the slogan "You can do it in a MG". [HON. MEMBERS: "Can you?"] You can in the GT version. [HON. MEMBERS: "What about the gear lever?"] In the automatic version. I am not entirely persuaded that British Leyland intends to maintain sports car production

      1125
      at Abingdon. Nor am I persuaded that British Leyland intends to maintain production of the Triumph Stag at the Triumph works at Coventry.
      What concerns me is that in future sports car production by British Leyland will be concentrated on Speke with the production of the Triumph Bullet in Liverpool. That may be welcome to my hon. Friends who represent Merseyside, but we should hear from my hon. Friend about the rationalisation and the centralisation upon which the changed management is now or should be embarking.
      My constituents in Coventry want to know what kind of production facilities we can expect to see concentrated there. My hon. Friend knows that at the moment British Leyland is not doing too well in the truck and bus division, although it is not doing too bady with its heavy truck range. No one seems to be keen to take the Leyland National bus. My hon. Friend must know that British Leyland intends to concentrate production on the Park Royal factory for its new National double decker. What concerns me is that unless we have some policy decisions fairly quickly about where British Leyland is to concentrate bus production it will be the buses of the Swedes and the Germans that we shall see on the roads of many more of our cities.
      I ask my hon. Friend to bear in mind the point of view of the municipal operators, the National Bus Company and the GLC, all of whom have to take some replacement decisions in the near future. I hope that he will be able to tell us something about the strategy of British Leyland in this direction, particularly about what it will do in future to produce standard single and double deckers.
      My constituents need some kind of assurance that the Jaguar Car Company, in particular, will not be too integrated with other parts of British Leyland. I hope that my hon. Friend will tell us something about where British Leyland intends to concentrate sports car production and where the company intends to concentrate its single and double decker bus production.
      I recognise that this Bill ought to pass through speedily because it is a Bill which will guarantee this country its own car
      1126
      industry for what I hope will be a long time.
      Mr. Nicholas Fairbairn: Unlike the hon. Member for Nuneaton (Mr. Huckfield) I do not have the privilege of representing one person employed in the car industry. But it should not be overlooked that this Bill involves every constituent in every constituency. Constituents are being asked to commit their money to this Bill. The extent to which they are being asked to do so should not be misunderstood. Although large in area—being 8,000 square miles—my constituency has only 35,000 constituents. Under this Bill, which, like all Bills involving large amounts of money, is short, they will be committed over the next eight years to raising £2,100,000 between them.
      Before any hon. Member overlooks that point he should make the same computation in respect of his own constituents and ask himself whether he is prepared to go home and tell his constituents what he has committed them to. This commitment is to be made on the basis of what I believe is a bad report. That report assumes a rate of inflation which neither the assurances of the Prime Minister nor the Treasury Bench, would cause me to regard as reliable. That is the basis of the Ryder Report.
      I come to this word "shareholder". It is a word hated by the Labour Party below the Gangway. But, by God, every single constituent of mine will become a shareholder in British Leyland, whether he likes it or not. They will not be able to restrict their investment and they will not receive even a controlled dividend from it.
      Mr. Peter Rost: Not a vote.
      Mr. Fairbairn: Yes, not a vote.
      When we talk about the great concept of democracy of those involved in industry, let us be clear that every person in the country will have to be an investor, and there will be no democracy for them about how much money they invest, what return they will get or what the company does.
      The second fallacy of this proposed investment on behalf of our constituents is that it is based on a report which involves

      1127
      itself in a concept which the House of Commons has for far too long assumed to be wise, namely, the concept of the shifting of blame or committee decisions. I find it strange that when the British Leyland company was politically created it was seen as reasonable, when it failed commercially, that one could bring together a small group of men who, in a few months, would produce a report which the House assumed to be total wisdom.
      I do not think that it is a good report, a reliable report or an accurate report, but for some reason the House always accepts the reports of those to whom it shifts political and commercial responsibility. Every time it does, so every time it gets it wrong. It is time that the House stopped taking the attitude that commercial responsibility can be shifted to a committee whose decisions it can accept with alacrity and whose results it assumes to be accurate. This is a false approach.
      I come to the immense and responsible matter of employment. I have the priviledge of serving on the Industry Bill Committee and I have heard many speeches on that matter, the most significant being that of the hon. Member for Bethnal Green and Bow (Mr. Mikardo). Nothing is more important to the dignity of the human being than that his employment should be an extension of his personality and a right of his existence. But nothing could be less likely to promote it than that an inefficient business should be allowed, by taking money from other people who are employed, to give a false manning to a bad company.
      I have seen no commitment by the management, unions or work force to the concept of making the company more efficient or making the jobs more intelligent and more fulfilling. A commitment of £1 million a day to be paid out of the pockets of other employed people will not, in the long run, guarantee the jobs of those employed. People will have to change their jobs unless this country is to commit itself to a political situation in which the employed remain for ever employed in an increasingly unviable industry or commitment. The message of the Bill seems to be that we shall take a badly organised and managed company, over-manned, inefficient and unattractive, and keep it as it is for ever at the expense
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      of those who earn their livelihood in every other way.
      11.45 p.m.
      Let us relate the commitment of £265 million to reality. In our constituencies, it may be difficult for the noblest of charities, with the greatest effort, to raise £500. The Government own no money. We are committing the money of individual, human working people. We are not getting it out of the ground or issuing it from treasuries. We are extracting it from the efficient to give to the inefficient. [An HON MEMBER: "Printing it."] Printing it is just another way of demoting the salaries of those who earn.
      The Bill should not cross party political boundaries. I know that the Labour Party would like to think that it guarantees employment while we deny it——
      Mr. Huckfield: Hear, hear.
      Mr. Fairbairn: That is exactly what they like to imagine. But I believe that if one insists on anachronising society—[HON. MEMBERS: "What?"] I know that none of those who have been comprehensively educated will understand language—[HON. MEMBERS: "Cheap."] If hon. Members opposite do not want a relevant——
      Mr. J. W. Rooker: Get on with it.
      Mr. Fairbairn: If hon. Members do not want a relevant observation on their interruptions, they have the opportunity not to interrupt.
      Let us be clear what we are talking about. We are committing a vast amount of the money of individual human beings in order to ensure that a firm will not be competitive with any of its international competitors. We may decide to do that, but in the long run it will ensure that all those whom Labour Members pretend to care about will he infinitely more damaged.
      Mr. Rooker: Until the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) spoke, this debate had moved on from the hysterical meanderings of the hon. and learned Member for Solihull (Mr. Grieve) who, in an intervention was once again screaming at the top of his voice about suicidal

      1129
      strikes, singling out the workers at Cowley, who can be adequately defended from this side. But they do not need our defence. That of the former industrial relations manager at Cowley should be sufficient. Writing in The Guardian 10 days ago, Mr. Richardson, who was industrial relations manager from 1966 to 1970, was talking about the introduction of the Austin Maxi in 1969. Production lines were laid down, he said, to flow at a rate of assembly which could not be matched by the production of body panels and which was subsequently found to be at a higher rate than that at which engines could be manufactured. The mess that that created among the labour force was never overcome, however good the industrial relations.
      Those hon. Members who say that the Government are by implication not telling the truth about likely job losses in British Leyland are not doing justice to the Ryder Report. The hon. Member for Henley (Mr. Heseltine) said that there was not one sentence in the report that suggested that there would be any transfer or rationalisation of labour or loss of jobs. He knows that that is not true. The summary of the chapter headed "Production" reads:
      "(i) BL should reorganise its car manufacturing operations to provide for specialisation in body assembly work, power train and transmission or parts manufacture.
      (ii) The existing plants in the body assembly group should be engaged in all operations from receipt of stamped panels to final assembly of complete vehicles…
      (vii) BL should undertake an urgent programme to introduce plant layout."
      That passage should be coupled with the sentence which says that careful forward manpower planning will be needed, particularly in the areas where major rationalisation of production facilities is undertaken.
      It is all very well looking at those passages through the jaundiced eyes of the Opposition. However, looked at through the eyes of someone working in the industry, those words can be reinterpreted. My constituents, who are most affected, work in an old-fashioned British Leyland plant, where I once worked. There will be job losses. Anyone reading this report who does not think that British Leyland workers must move or lose their jobs is living in a fool's para-
      1130
      dise. The facts are in the report. It is not true to say that when the rationalisation takes place the Opposition will cry that the Government did not tell the truth, or that the Ryder Report did not tell the truth. It is all in the report.
      Some plants produce the body panels, weld them together, paint them and put the windows in, but they do not fit the engines or wheels. The bodies are transported 10 or 15 miles on the back of a lorry, six at a time. That must stop. Ryder will put a stop to that. The alternative will be either to put the engines in at the one factory, or not to assemble the paint and bodies at the factory where that work now takes place. The Ludlow plant will become a body pressing plant, or the assembly tracks will be moved from Longbridge, with the consequent loss of jobs. We cannot have it both ways.
      It is not true to say that the Ryder Report did not indicate that there would be job losses and job rationalisation. They will take place on a massive scale. Only someone reading the report through the jaundiced eyes of a politician would deny it.
      What will be the situation of outside directors on the new British Leyland board? We often hear about the contribution which outside directors can make to our great public companies. The name of Jim Slater appears on the list of outside directors of British Leyland. He has served on the board for years. What contribution has he made to British Leyland? Will he be reappointed as an outside director? I should be glad if the Under-Secretary would answer that question.
      Another point worth raising concerns the present state of industrial relations at British Leyland. We are supposed to see a clean sweep of management and a change in attitude. One example came to my attention at the weekend. At the Fisher Ludlow plant the management has constituted and, at long last, allowed a few trade unionists to sit on the joint consultative safety committee. The management has laid down all the rules in that plant, including how long the members will serve on the committee. There were no negotiations. This was a post-Ryder decision. If that is how British Leyland management intends to
      conduct itself at the local plants we are buying a pig in a poke.
      Mrs. Jill Knight: Less and less does this House do what the people want it to do. Let there be no misunderstanding about this. If a referendum were to take place on whether this Bill should be passed, the people of Britain would overwhelmingly reject it.
      We are talking about spending £265 million of taxpayers' money. We are discussing this matter without being in possession of all the necessary facts. Where is the company's circular? It is essential that the company's circular, under the Companies Act arrangements, should be made available. Where is it? It is certainly not in the Vote Office. It is rumoured that it is in draft, but if it is in draft why have we not had it for this debate? How can even the Government properly discuss this issue without it? There are many questions yet unanswered. What about the employees? How will the shareholder stand? At the moment they do not know whether they should stay in with the Government as a partner or sell out at the derisory sum offered.
      I am also gravely concerned at some of the things which are happening in the motor car industry. I have here a report from The Guardian of 20th May pointing out that one senior British Leyland executive last year received payments totalling £2,400 from the company which supplied Jaguar with more than £600,000 of assembly equipment. He worked at that time for Jaguar. He now works for British Leyland.
      Mr. Leslie Huckfield: On a point of order. Is it in order for the hon. Lady to discuss a matter which is now before the courts?
      The Chairman (Mr. George Thomas): My attention was for the moment taken up with other matters. The hon. Lady will have heard the point of order, and she will know that we are discussing the Question, "That the clause stand part of the Bill."
      Miss Knight: It is all right, Mr. Thomas. I have finished discussing the point. It is scandalous and ought to have been checked by the Government
      1132
      that the Jaguar management and unions—I hold no brief for either of them—have connived together in a scheme which will cheat the taxpayer because the management have agreed with the union that they will form the men's work pattern so that, working full time, they can still draw unemployment pay. This is an appalling scandal, and I put down a Parliamentary Question about it and asking that such cheating—[HON. MEMBERS: "Oh!"] It is always very revealing that hon. Members opposite think it is very amusing that people should cheat the taxpayers. I do not. I asked the Minister to look into this practice and to stop it, and the answer that I received was a curt "No".
      Many things are wrong with the British car industry. I have mentioned merely two. But let the Government not for one moment imagine that what they are trying to do tonight has the support of the people of Britain.
      The Under-Secretary of State for Industry (Mr. Gerald Kaufman): I thank the hon. Member for Henley (Mr. Heseltine) and others for their kind welcome to me in my new Department.
      I confess that listening to the hon. Member for Henley when he accused the Government, in this Bill, of entering into an open-ended and undisciplined commitment of the taxpayers' resources, I thought that I was back in my old Department, listening to the Leader of the Opposition talking about 9½ per cent. mortgages.
      It is the Opposition who have blazed this trail that we are following tonight. The hon. Member for Henley quoted Mr John Barber on the subject of retrenchment. Retrenchment is not an issue in this debate. It may be an issue in so far as the Opposition are demanding it of us. What we are calling for and what the Ryder team call for in their report is rationalisation based on new investment.
      The hon. Gentleman said that the assumptions for the future in the Ryder Report were at odds with the past record of British Leyland. But that past record, as my hon. Friend the Member for Coventry, North-West (Mr. Edelman) has pointed out, is based upon a sorry record of under-investment. As the Ryder team point out in chapter 9 of the Report, one

      1133
      of the main reasons why British Leyland workers produce less than workers at Fiat or Volkswagen is that so much less has been spent by British Leyland on new plant and equipment. One of the objectives of the new regime is to increase investment.
      Mr. Rost: Will the hon. Gentleman give way?
      Mr. Kaufman: I will not give way.
      Mr. Rost Mr. Rost rose——
      The Chairman: Order. We cannot have two hon. Gentlemen on their feet at the same time.
      12 midnight.
      Mr. Kaufman: The hon. Gentleman had the opportunity to take part in the debate had he wanted to do so. He had the opportunity of intervening in the speeches of his hon. Friends or mine.
      The hon. Member for Henley claimed that no one accepted the strategy that had been put forward, but the company and the workers both accept the strategy and a great deal of work is in hand to implement it.
      Substantial progress has been made in the preliminary work needed to approach the shareholders for approval of the scheme. The court has now directed that meetings of shareholders should be held, and these are expected to take place on 14th July. A document giving full details of the proposed scheme, together with a covering letter from the board of British Leyland, is being despatched to all shareholders and convertible unsecured loan stockholders on 18th June.
      The company has continued to make progress to bring about the re-organisation of the business along the lines proposed by the Ryder Report. Preparatory work on the scheme of arrangement is at an advanced stage and, as I shall be pointing out to my hon. Friend the Member for Coventry, North-West, who raised the matter, the Ryder Report proposals for involvement of the work force in decision-making processes have been the subject of preliminary discussions.
      Mr. Heseltine: As the hon. Gentleman says the work force has accepted the strategy, can he fill in details of how many redundancies there will be this
      1134
      year, next year and the year after on the basis of which the work force accepted the strategy?
      Mr. Kaufman: I am coming to that very point. The hon. Gentleman has been in correspondence with the Secretary of State on this matter.
      The hon. Member for Henley claimed that this scheme had been forced on British Leyland and on the Ryder team by the Government, but the Ryder team makes clear in its report that it examined all possibilities before arriving at the scheme it put forward.
      The hon. Gentleman also suggested that the money being employed for investment and loans for British Leyland could be used more profitably in some other way, but that would mean doing away with British Leyland and creating a hole one would then try to fill. But one would not have the same amount of money.
      The Opposition Members who claim that the best solution would be to let British Leyland or Austin-Morris go to the wall do not take into account the massive sums of redundancy pay that would be necessary and the social cost of allowing British Leyland or Austin-Morris to go to the wall. They seem to assume there would be gross sums rather than net sums available for investment.
      Nor do they take into account the massive effect on our balance of payments of letting British Leyland or Austin-Morris go under. This was one of the main reasons advanced by the Prime Minister for the Government's action over British Leyland. The company's direct exports in 1973–74 were worth £485 million. There would also be a very large flood of imports sucked in to fill the vacuum created by the failure of British Leyland.
      The hon. Member for Henley has asked about possible redundancies and he was supported by the hon. Member for Bromsgrove and Redditch (Mr. Miller). But the hon. Member for Henley has totally misunderstood what the rationalisation will bring about. He seems to assume that rationalisation and money saving automatically means redundancies. Indeed, he wrote a most learned and complicated letter to my right hon. Friend the Secretary of State for Industry, in which he set out various computations,

      1135
      based on even reduction, variable reduction and parabolic reduction, of what saving would mean in terms of redundancies.
      But my right hon. Friend the Secretary of State clarified the situation—and totally undermined what the hon. Gentleman was putting forward—when he said in his reply to the hon. Gentleman,
      "I am somewhat surprised that you have attempted to convert all the effects of improvements in efficiency envisaged in paragraph 14.11 into redundancies. It is quite clear from the sentence in the report that you have quoted that redundancies are not the only path to increased efficiency envisaged by the Teams: mobility and interchangeability of labour is involved here too".
      My right hon. Friend concluded,
      "I can only say that it is quite incorrect to suppose that the total saving of £400 million can be simply converted into an equivalent number of net redundancies. Sir Don Ryder has said publicly that if British Leyland achieve the sales targets and increased efficiency envisaged in the report, he expects the company's total manpower requirements in the early 1980s to be broadly similar to present employment levels".
      Mr. Heseltine: As the Under-Secretary will be insisting, under the Industry Bill which he will be recommending to the House, that every British company explains precisely the number of people it employs in any given three-year period, will he now say what is the number of people who will be employed by British Leyland over the next three years and what it amounts to in the Ryder Report, and explain clearly the basis upon which the calculations amounting to £400 million-worth of savings are made?
      Mr. Kaufman: My right hon. Friend has replied very fully to the hon. Gentleman's invalid calculations. As for the future of British Leyland, this is clearly a matter for the British Leyland board. We are only now starting out upon this path. The company has not yet been set up. The hon. Gentleman is asking for impossible information at this stage, and he knows that very well.
      Mr. Heseltine: I have listened to the hon. Gentleman's refusal to give the information which will be demanded from every major British company under the Industry Bill. Will the hon. Gentleman now say that if a British company replies to his right hon. Friend in the same terms as those in which the hon. Gentleman
      1136
      has replied to the Committee, it will be deemed to be sufficient excuse for not providing the facts which the Industry Bill gives his Department the ability to demand?
      Mr. Kaufman: The hon. Gentleman knows very well that that is an invalid question. He knows the pitfalls of trying to tell the House one thing and then having to put it right later. From personal experience, the hon. Gentleman is very well aware of those pitfalls, and the necessity to apologise to the House if one misinforms it deliberately.
      Mr. Tim Renton: Will the hon. Gentleman give way?
      Mr. Kaufman: No, I have given way several times.
      Mr. Renton Mr. Renton rose——
      The Chairman: Order. If the Minister is not giving way——
      Mr. Renton: He has done so. The Minister must have given way as soon as I turned my head.
      The Chairman: I should have turned it sooner.
      Mr. Renton: I apologise, Mr. Thomas. I thought that the Under-Secretary had given way. Perhaps from the back benches I could help the Under-Secretary on the point that my hon. Friend the Member for Henley (Mr. Heseltine) has been making. Is it not a fact that within the motor industry most people believe that 50,000 jobs at British Leyland will have to go if British Leyland is to get anywhere near continental levels of efficiency?
      Mr. Kaufman: The hon. Gentleman is retailing rumour second hand. The Ryder Report is backed by a great deal of background information and I prefer the word of Ryder and his experts to that of the hon. Gentleman.
      The hon. and learned Member for Solihull (Mr. Grieve) waxed eloquent on strikes, but the Ryder Report states clearly that the team did not subscribe to the view that all the ills of the company should be laid at the door of any kind of strike-prone or work-shy labour force. The report pointed out the handicap of operating with plant and equipment older than that in comparable firms. My hon.

      1137
      Friend the Member for Nuneaton (Mr. Huckfield) described that situation graphically. The report reads:
      "it is both essential and feasible to look for…more realistic manning levels and more mobility and interchangeability of labour."
      Later it reports:
      "The improvement of productivity will inevitably mean a gradual reduction in the number of workers required to produce a given number of vehicles…".
      Of course, that is the position.
      My hon. Friend the Member for Coventry, North-West (Mr. Edelman) and the hon. Member for Colne Valley (Mr. Wainwright) asked valid questions about the purchase of machine tools. We very much hope that our machine tool manufacturers will take the utmost advantage of the great opportunities presented by British Leyland's intention to equip itself with new machine tools. Meetings with the representatives of the machine tool industry have already taken place. From what I hear of the outcome of those meetings, the outlook is promising. What we want to do is precisely what my hon. Friend and the hon. Gentleman have asked for—namely, a phased operation so that the machine tool industry can get itself ready to respond in a phased manner to the needs of British Leyland as it expands.
      Mr. Edelman: I welcome my hon. Friend's answer, but is it the intention to set up some ongoing constitutional committee, as between the motor industry and the machine tool industry, so as to keep in being a continuing dialogue?
      Mr. Kaufman: Without guaranteeing a constitutional framework, I can assure my hon. Friend that the ongoing dialogue for which he asks will be—[Interruption.] Conservative Members below the Gangway would do a great deal better telling us about civilisation rather than having an ongoing dialogue. That kind of relationship is needed if what my hon. Friend and the hon. Member for Colne Valley rightly ask for is to be brought about.
      It has been implied that the reorganisation which was being proposed disregarded the wishes of British Leyland. Lord Stokes, in the letter which he sent out on 1st May to his shareholders, made it quite clear that a high proportion of the conclusions and recommendations of the Ryder Report are not regarded as in
      1138
      any way controversial. Lord Stokes said that they were derived from the corporation's existing plans and from various contributions made to the team by management.
      The hon. Member for Henley implied that the report did not refer to the need for rationalisation. However, as my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) pointed out, the report refers to rationalisation in various places. I refer the hon. Gentleman to paragraphs 8.6, 8.7 and 8.10.
      My hon. Friend the Member for Coventry, North-West rightly stressed the need for the implementation of the industrial democracy and industrial participation that is mentioned in the report. Mr. Harry Urwin, the Assistant General Secretary of the Transport and General Workers' Union, served on the Ryder team. He made it clear again and again in his evidence to the Trade and Industry Sub-Committee of the Expenditure Committee that the machinery proposed, while not ideal from his point of view, was the best of its type operating in any company in British industry.
      12.15 a.m.
      I assure my hon. Friend that the Ryder Report identifies "Progress towards industrial democracy" as the most crucial factor in improving industrial relations at British Leyland and creating the conditions for improved productivity. The Ryder report made specific proposals for new consultative arrangements between the management and the work force.
      The proposals have since been discussed at a meeting between Sir Don Ryder and my right hon. Friend the Secretary of State for Energy and a joint committee of officials from the CSEU and shop stewards from British Leyland. At this meeting the union side expressed its keenness to begin discussions with the company about the new arrangements. An initial meeting between management and a small group of work force representatives has already taken place within the company to discuss these proposals, and further discussions are planned for the near future.
      In reply to my hon. Friend's question about monitoring arrangements, I refer him to the statement made by my right hon. Friend the Prime Minister on 24th April.

      1139
      My hon. Friend the Member for Nuneaton (Mr. Huckfield), was, rightly, concerned about the future of Jaguar. As he said, he has been in correspondence with my right hon. Friend the Prime Minister, and I trust that he was satisfied with the assurance he received. I am in a position to add to the assurances given by my right hon. Friend to my hon. Friend the Member for Nuneaton.
      The Ryder Report recommends that British Leyland Cars should be run as a single profit centre. The report also stressed the need to make the most effective use of all the design, engineering, manufacturing and marketing resources of the new car company. However, Ryder considered that this structure need not detract from the distinctive product identities of the specialist cars.
      British Leyland has adopted this structure, and the new managing director for British Leyland Cars, Mr. Derek Whittaker, has been appointed. He has given a good deal of attention to finding the most efficient form of organisation and has publicly stated that he is determined that Jaguar should retain its pre-eminence and reputation for high quality and distinction. He has also said that the recently announced decisions to make Jaguar Engineering report directly to him, and to set up a "Jaguar Operating Committee" will play a vital part in maintaining the Jaguar image and reputation.
      We have listened to a number of speeches from the Opposition benches tonight, and it is perfectly clear that there has emerged from those speeches no coherent policy on this issue. In the Second Reading debate, the right hon. Member for Down, South (Mr. Powell) and the hon. Members for Cirencester and Tewkesbury (Mr. Ridley) and Wolverhampton, South-West (Mr. Budgen) put-forward a logical but disastrous alternative to the Government's policy—the alternative of allowing British Leyland to slide into bankruptcy. They speak only for themselves.
      The right hon. Member for Leeds, North-East (Sir K. Joseph) in a speech he made at the week-end appeared to agree with them when he said:
      "All ideological expenditures must be stopped sine die: nationalisation plans for British Leyland".
      1140
      One must read the message carefully, because the right hon. Gentleman went on to say:
      "The message must be got over: no more wholesale rescues."
      Like his hon. Friend the Member for Henley—who advised workers in Cowley to take up bucolic pursuits in the Chilterns—the right hon. Member dared not propose closing down the whole concern because it would be too serious a blow for the economy, too serious a blow to Tory prospects in marginal seats. Like the Leader of the Opposition, he wants to avoid having a policy at all. The dangers to the Opposition of not having a policy in this matter were validly pointed out by the right hon. Member for Sidcup (Mr. Heath) in a speech in which he warned his right hon. Friends the Leader of the Opposition and the hon. Member for Leeds, North-East that people are no longer prepared to be the passive victims of soulless textbook theory, seeing their living standards suddenly cut or finding themselves jobless. He, at least, has had to administer these matters and he knows the problems.
      Our policy, unlike that of the Opposition, is clear. It is to save British Leyland as a national asset, an asset in terms of jobs, in terms of regional policy and in terms of the balance of payments. This is a rescue operation, but it is not merely a negative operation. It is a positive attempt to fashion a new, more efficient, more productive, more prosperous concern, with maximum participation by the working force. This is not pessimistic Toryism. It is constructive Socialism.
      12.20 a.m.
      Mr. John Peyton: There was a time during this debate when I was a little nervous that we were not going to hear from the Government. Now I am not sure that I would not have been right to be content to live with my apprehensions and that it would not have been better not to hear from the Government.
      Although the Under-Secretary of State is to be congratulated on his new appointment, and to be welcomed at the Dispatch Box in it, he nevertheless deserves sympathy in having been landed with this unpleasant job tonight. The Secretary of State is to be even more congratulated on his discretion in staying

      1141
      away. Obviously there was very little for him to say.
      Perhaps I can help the Under-Secretary of State on the question with which he was not able to deal—on the redundancies in particular. It was put by my hon. Friend the Member for Henley (Mr. Heseltine). Mr. Pat Lowry, the industrial relations director of British Leyland, who is retaining his job, is even more positive. He has said:
      "We have to persuade people, whether there is a Ryder Report or not, that the need to reduce manning levels is absolutely paramount."
      He went on to say that there was a danger that, with the large amounts of capital that the Government were investing, many employees would think they had arrived at Eldorado. So the Government have not changed anything very basically.
      As my hon. Friend pointed out, large sums of public money are involved. We greatly regret that the Government business managers should have seen fit to push this proposal through at this late hour of the night, with only an Under-Secretary here to support it. I do not want to go into that subject at the moment, but the way the House is being treated at this time by the Government—for instance, in the proceedings on the Community Land Bill—is an outrage and a current indication of the Government's scant respect for Parliament. I know there must be limits to your patience, Mr. Thomas, and you know that there are virtually no limits to my tolerance, so, although I am entitled to make that point, I shall not press it any further.
      What we are complaining of tonight is that the Government, in their handling of this matter, have been guilty of providing a deficiency of information, of a deficiency of courtesy, of a deficiency of fairness, and of a deficiency of prudence.
      Mr. Heifer: The right hon. Gentleman is suffering from a deficiency of argument.
      Mr. Peyton: Deficiency of argument is something on which the hon. Member for Liverpool, Walton (Mr. Heller) has long been an expert. He has long been good at covering up his own deficiency
      1142
      of argument. If he likes to press the point tonight, he can do so, but it will be at the price of keeping his right hon. and hon. Friends out of their beds.
      On my first complaint—of deficiency of information—I am informed that the Secretary of State has in his possession now a draft circular, addressed to British Leyland shareholders, which gives fuller information that is yet available to this Committee. It the hon. Under-Secretary of State can deny it, I am only too happy to give way so that he can do so now.
      Mr. Kaufman: There is certainly a letter that is being sent out to shareholders of British Leyland, but my reading of it—and I have read it—[Laughter.] It is dated later this week, which is why I have not—[Interruption.] I have read the letter, and it very closely parallels the information in the Ryder Report. It also offers certain advice to shareholders. But it would be highly inappropriate for me to quote in the Chamber a document which will not be published until later this week. It would be most discourteous, unfair and wrong. I am sure that the right hon. Gentleman will accept that.
      Mr. Peyton: I had not thought too much of this point until the Under-Secretary rose to deal with it. The fact that the letter is dated later this week is a matter of no importance to the Committee. It would have been of interest to all of us to have a chance to see the information it contained. If it means anything at all, that letter must deal with the way in which large sums of public money are to be handled. The Government are perhaps being less than—[An HON. MEMBER: "Frank?"] I think that is the word, but I was going to use a rougher word. The Government are falling short of the standards which we are entitled to expect, in not making such a letter available before the debate.
      I also complained about a deficiency of courtesy. I wonder whether the management of British Leyland has been treated with the courtesy to which, as human beings, it is entitled. My information is that it was given the expurgated version of the report at about the same time as its contents were made available to the House and the Press.

      1143
      I also complained that there had been a deficiency of fairness. In this respect I wonder whether Sir Don Ryder—[An HON. MEMBER: "Lord Ryder."] Sir Don Ryder has not yet informed us what exact nomenclature he will adopt. I wonder whether he and his colleagues who have sat in judgment upon the management of British Leyland would have been happy to be treated in this way themselves. It is very hard for people who have the burdens carried by the managements of immense industrial enterprises to be condemned upon the basis of a report the full version of which they have not yet seen.
      The expurgated version that we have before us was rightly described by my hon. Friend the Member for Arundel (Mr. Marshall) as containing judgments which were too shallow. It would have been better if the report had been both more blunt and more honest.
      There are some very important omissions from the version of the report which is before us. Chapter 2, "Prospects for the industry", is omitted. Chapter 5, the "Product range and markets", is aslo left out, although it is true that reference is made to the prospects in the summary, in which paragraphs 5 and 6 deal with the marketing prospects for cars, paragraph 5 dealing with the home market and paragraph 6 with the overseas market. These are very short paragraphs dealing with immensely complicated matters. The Committee would be well justified in concluding that the information given to it is of the most superficial and meagre kind possible to imagine.
      The management has been greatly chastised on the basis of a report it has not seen. Only the most delicate hints have been given to the fact that all is not well on the industrial relations side—and it is important that we should make this point quite clearly. Although these enormous sums of Government money will be applied to this company over a fairly long future, nothing has been discussed, nothing demanded and certainly nothing offered by the trade union side.
      1144
      No arrangement has been made for monitoring the progress of the company with the backing of this huge investment. The interesting remark by the hon. Member for Coventry, North-West (Mr. Edelman), who could manage to say only that it was essential to have some sort of adequate monitoring or we should be faced with a Concorde situation, is the kind of vagueness we are living with in this quite unacceptable proposal.
      The right hon. Member for Bristol, South-East (Mr. Benn), who was until recently the Secretary of State for Industry and is now the Secretary of State for Energy, has been fond of making the point that the nationalised industries are responsible to Ministers who are answerable to Parliament. Anybody who has been in this House for a number of years must know that the process of making nationalised industries accountable to Parliament is one of the thinnest and hollowest farces known to our democratic procedures. No one on either side of the Committee is entitled to take any comfort from the reflection that there will be some means from time to time of challenging Ministers as to progress. It is highly unlikely, judging by past experience, that Ministers or their Departments will be capable of exercising any effective control until matters have gone beyond the stage at which they can be put right.
      We have been challenged to say what we would do. We never would have put Austin-Morris together with Leyland, Rover Triumph and the rest. That was a very bad mistake. There is now a great deal to be said for separating them. The Government have far more information than we do. I greatly regret that they should have sought the assistance of Sir Don Ryder, who has produced a report which it seems to me is superficial and thin in its recommendations and unfair to the people it criticises and which pays very little regard to the public interest and the enormous sums which are involved at a time when the country can hardly be said to be at the peak of its prosperity.
      Question put, That the clause stand part of the Bill:—
      The Committee divided: Ayes 285, Noes 242.

      Division No. 235.]

      AYES

      [12.34 a.m.

      Allaun, Frank

      Fernyhough, Rt Hon E.

      McElhone, Frank

      Anderson, Donald

      Fitch, Alan (Wigan)

      MacFarquhar, Roderick

      Archer, Peter

      Flannary, Martin

      McGuire, Michael (Ince)

      Armstrong, Ernest

      Fletcher, Raymond (Ilkeston)

      Mackenzie, Gregor

      Ashton, Joe

      Fletcher, Ted (Darlington)

      McMillan, Tom (Glasgow C)

      Atkins, Ronald (Preston N)

      Ford, Ben

      McNamara, Kevin

      Atkinson, Norman

      Forrester, John

      Madden, Max

      Bagier, Gordon A. T.

      Fowler, Gerald (The Wrekin)

      Magee, Bryan

      Bain, Mrs Margaret

      Freeson, Reginald

      Mahon, Simon

      Barnett, Guy (Greenwich)

      Garrett, John (Norwich S)

      Mallalieu, J. P. W.

      Bates, Alt

      Garrett, W. E. (Walisend)

      Marks, Kenneth

      Bean, R. E.

      George, Bruce

      Marquand, David

      Benn, Rt Hon Anthony Wedgwood

      Gilbert, Dr John

      Marshall, Dr Edmund (Goole)

      Bennett, Andrew (Stockport N.)

      Ginsburg, David

      Marshall, Jim (Leicester S)

      Bidwell, Sydney

      Golding, John

      Meacher, Michael

      Bishop, E. S.

      Gould, Bryan

      Mellish, Rt Hon Robert

      Blenkinsop, Arthur

      Gourlay, Harry

      Mikardo, Ian

      Boardman, H.

      Graham, Ted

      Millan, Bruce

      Booth, Albert

      Grant, George (Morpeth)

      Miller, Dr M. S. (E Kilbride)

      Boothroyd, Miss Betty

      Grant, John (Islington C)

      Mitchell, R. C. (Solon, Itchen)

      Bottomley, Rt Hon Arthur

      Grocott, Bruce

      Molloy, William

      Boyden, James (Bish Auck)

      Hamilton, James (Bothwell)

      Morris, Alfred (Wythenshawe)

      Bradley, Tom

      Hamilton, W. W. (Central Fife)

      Morris, Charles R. (Openshaw)

      Bray, Or Jeremy

      Hardy, Peter

      Morris, Rt Hon J. (Aberavon)

      Brown, Robert C. (Newcastle W)

      Harper, Joseph

      Moyle, Roland

      Brown, Ronald (Hackney S)

      Harrison, Walter (Wakefield)

      Mulley, Rt Hon Frederick

      Buchan, Norman

      Hart, Rt Hon Judith

      Murray, Rt Hon Ronald King

      Buchanan, Richard

      Hatton, Frank

      Newens, Stanley

      Butler, Mrs Joyce (Wood Green)

      Hayman, Mrs Helena

      Noble, Mike

      Callaghan, Jim (Middleton & P)

      Healey, Rt Hon Denis

      Ogden, Eric

      Campbell, Ian

      Heffer, Eric S.

      O'Halloran, Michael

      Canavan, Dennis

      Henderson, Douglas

      O'Malley, Rt Hon Brian

      Cant, R. B.

      Horam, John

      Orbach, Maurice

      Carmichael, Neil

      Howell, Denis (B'ham, Sm H)

      Ovenden, John

      Carter, Ray

      Hoyle, Doug (Nelson)

      Owen, Dr David

      Carter-Jones, Lewis

      Huckfield, Les

      Padley, Walter

      Cartwright, John

      Hughes, Rt Hon C. (Anglesey)

      Palmer, Arthur

      Clemitson, Ivor

      Hughes, Mark (Durham)

      Park, George

      Cocks, Michael (Bristol S)

      Hughes, Robert (Aberdeen N)

      Parker, John

      Coleman, Donald

      Hughes, Roy (Newport)

      Parry, Robert

      Conlan, Bernard

      Irvine, Rt Hon Sir A. (Edge Hill)

      Pendry, Tom

      Corbett, Robin

      Irving, Rt Hon S. (Dartford)

      Perry, Ernest

      Cox, Thomas (Tooting)

      Jackson, Colin (Brighouse)

      Phipps, Dr Colin

      Craigen, J. M. (Maryhill)

      Jackson, Miss Margaret (Lincoln)

      Prentice, Rt Hon Reg

      Crawford, Douglas

      Janner, Greville

      Prescott, John

      Crawshaw, Richard

      Jay, Rt Hon Douglas

      Price, C. (Lewisham W)

      Crosland, Rt Hon Anthony

      Jeger, Mrs Lena

      Price, William (Rugby)

      Cryer, Bob

      Jenkins, Hugh (Putney)

      Radice, Giles

      Cunningham, G. (Islington S)

      Jenkins, Rt Hon Roy (Stechford)

      Rees, Rt Hon Merlyn (Leeds S)

      Dalyell, Tam

      John, Brynmor

      Richardson, Miss Jo

      Davidson, Arthur

      Johnson, James (Hull West)

      Roberts, Albert (Normanton)

      Davies, Bryan (Enfield N)

      Johnson, Walter (Derby S)

      Roberts, Gwilym (Cannock)

      Davies, Denzil (Llanelli)

      Jones, Alec (Rhondda)

      Robertson, John (Paisley)

      Davies, Ifor (Gower)

      Jones, Barry (East Flint)

      Roderick, Caerwyn

      Deakins, Eric

      Jones, Dan (Burnley)

      Rodgers, George (Chorley)

      Dean, Joseph (Leeds West)

      Judd, Frank

      Rodgers, William (Stockton)

      de Freitas, Rt Hon Sir Geoffrey

      Kaufman, Gerald

      Rooker, J. W.

      Delargy, Hugh

      Kelley, Richard

      Roper, John

      Dell, Rt Hon Edmund

      Kerr, Russell

      Rose, Paul B.

      Dempsey, James

      Kilroy-Silk, Robert

      Ross, Rt Hon W. (Kilmarnock)

      Doig, Peter

      Kinnock, Neil

      Rowlands, Ted

      Dormand, J. D.

      Lamble, David

      Ryman, John

      Douglas-Mann, Bruce

      Lamborn, Harry

      Sandelson, Neville

      Duffy, A. E. P.

      Lamond, James

      Sedgemore, Brian

      Dunn, James A.

      Leadbitter, Ted

      Selby, Harry

      Dunnett, Jack

      Lee, John

      Shaw, Arnold (Ilford South)

      Eadie, Alex

      Lestor, Miss Joan (Eton & Slough)

      Sheldon, Robert (Ashton-u-Lyne)

      Edelman, Maurice

      Lewis, Arthur (Newham N)

      Shore, Rt Hon Peter

      Edge, Geoff

      Lewis, Ron (Carlisle)

      Silkln, Rt Hon John (Deptford)

      Edwards, Robert (Wolv SE)

      Lipton, Marcus

      Silkin, Rt Hon S. C. (Dulwich)

      Ellis, John (Brigg & Scun)

      Litterick, Tom

      Sillars, James

      Ellis, Tom (Wrexham)

      Lomas, Kenneth

      Silverman, Julius

      English, Michael

      Loyden, Eddie

      Skinner, Dennis

      Ennals, David

      Luard, Evan

      Small, William

      Evans, Gwynfor (Carmarthen)

      Lyon, Alexander (York)

      Smith, John (N Lanarkshire)

      Evans, Ioan (Aberdare)

      Lyons, Edward (Bradford W)

      Snape, Peter

      Evans, John (Newton)

      Mabon, Dr J. Dickson

      Spearing, Nigel

      Ewing, Harry (Stirling)

      McCartney, Hugh

      Spriggs, Leslie

      Faulds, Andrew

      MacCormick, Iain

      Stallard, A. W.

      Stewart, Donald (Western Isles)

      Urwin, T. W.

      Willey, Rt Hon Frederick

      Stewart, Rt Hon M. (Fulham)

      Varley, Rt Hon Eric G.

      Williams, Alan (Swansea W)

      Stott, Roger

      Wainwright, Edwin (Dearne V)

      Williams, Alan Lee (Hornch'ch)

      Strang, Gavin

      Walden, Brian (B'ham, L'dyw'd)

      Williams, Rt Hon Shirley (Herford)

      Strauss, Rt Hon G. R.

      Walker, Terry (Kingswood)

      Williams, W. T. (Warrington)

      Summerskill, Hon Dr Shirley

      Ward, Michael

      Wilson, Gordon (Dundee E)

      Swain, Thomas

      Watkins, David

      Wilson, William (Coventry SE)

      Taylor, Mrs Ann (Bolton W)

      Watkinson, John

      Wise, Mrs Audrey

      Thomas, Dafydd (Merioneth)

      Watt, Hamish

      Woodall, Alec

      Thomas, Jeffrey (Abertillery)

      Wcetch, Ken

      Woof, Robert

      Thomas, Mike (Newcastle E)

      Weitzman, David

      Wrigglesworth, Ian

      Thomas, Ron (Bristol NW)

      Wollbeloved, James

      Young, David (Bolton E)

      Thompson, George

      Welsh, Andrew

      Thorne, Stan (Preston South)

      White, Frank R. (Bury)

      TELLERS FOR THE AYES:

      Tierney, Sydney

      White, James (Pollock)

      Mr. David Stoddart and

      Tinn, James

      Whitehead, Phillip

      Mr. Laurie Pavitt.

      Tomlinson, John

      Whitlock, William

      Torney, Tom

      Wigley, Dafydd

      NOES

      Adley, Robert

      Fox, Marcus

      Le Marchant, Spencer

      Aitken, Jonathan

      Fraser, Rt Hon H. (Stafford & St)

      Lester, Jim (Beeston)

      Alison, Michael

      Fry, Peter

      Lewis, Kenneth (Rutland)

      Amery, Rt Hon Julian

      Galbraith, Hon. T. G. D.

      Lloyd, Ian

      Arnold, Tom

      Gardiner, George (Reigate)

      Loveridge, John

      Atkins, Rt Hon H. (Spelthorne)

      Gardner, Edward (S Fylde)

      Luce, Richard

      Awdry, Daniel

      Gilmour, Sir John (East Fife)

      McCrindle, Robert

      Baker, Kenneth

      Glyn, Dr Alan

      Macfarlane, Neil

      Banks, Robert

      Godber, Rt Hon Joseph

      MacGregor, John

      Bell, Ronald

      Goodhart, Philip

      Macmillan, Rt Hon M. (Farnham)

      Bennett, Dr Reginald (Fareham)

      Goodhew, Victor

      McNair-Wilson, M. (Newbury)

      Berry, Hon Anthony

      Goodlad, Alastair

      McNair-Wilson, P. (New Forest)

      Biffen, John

      Gorst, John

      Madel, David

      Biggs-Davison, John

      Gow, Ian (Eastbourne)

      Marshall, Michael (Arundel)

      Blaker, Peter

      Gower, Sir Raymond (Barry)

      Marten, Neil

      Body, Richard

      Grant, Anthony (Harrow C)

      Mates, Michael

      Boscawen, Hon Robert

      Gray, Hamish

      Mather, Carol

      Boyson, Dr Rhodes (Brent)

      Grieve, Percy

      Maude, Angus

      Braine, Sir Bernard

      Grist, Ian

      Maudling, Rt Hon Reginald

      Brittan, Leon

      Grylls, Michael

      Mawby, Ray

      Brotherton, Michael

      Hall, Sir John

      Maxwell-Hyslop, Robin

      Brown, Sir Edward (Bath)

      Hall-Davis, A. G. F.

      Mayhew, Patrick

      Bryan, Sir Paul

      Hamilton, Michael (Salisbury)

      Meyer, Sir Anthony

      Buchanan-Smith, Alick

      Hampson, Dr Keith

      Mills, Peter

      Buck, Antony

      Hannam, John

      Miscampbell, Norman

      Budgen, Nick

      Harrison, Col Sir Harwood (Eye)

      Mitchell, David (Basingstoke)

      Bulmer, Esmond

      Harvie Anderson, Rt Hon Miss

      Moate, Roger

      Burden, F. A.

      Hastings, Stephen

      Molyneaux, James

      Carlisle, Mark

      Havers, Sir Michael

      Monro, Hector

      Carr, Rt Hon Robert

      Hawkins, Paul

      Montgomery, Fergus

      Chalker, Mrs Lynda

      Hayhoe, Barney

      Moore, John (Croydon C)

      Channon, Paul

      Heseltine, Michael

      More, Jasper (Ludlow)

      Churchill, W. S.

      Hicks, Robert

      Morgan-Giles, Rear-Admiral

      Clark, Alan (Plymouth, Sutton)

      Higgins, Terence L.

      Morrison, Charles (Devizes)

      Clark, William (Croydon S)

      Holland, Philip

      Morrison, Hon Peter (Chester)

      Clarke, Kenneth (Rushcliffe)

      Hooson, Emlyn

      Mudd, David

      Cockcroft, John

      Hordern, Peter

      Neave, Airey

      Cooke, Robert (Bristol W)

      Howe, Rt Hon Sir Geoffrey

      Nelson, Anthony

      Cope, John

      Howell, David (Guildford)

      Neubert, Michael

      Cormack, Patrick

      Hunt, John

      Newton, Tony

      Costain, A. P.

      Hurd, Douglas

      Nott, John

      Critchley, Julian

      Hutchison, Michael Clark

      Onslow, Cranley

      Crouch, David

      Irvine, Bryant Godman (Rye)

      Oppenheim, Mrs Sally

      Crowder, F. P.

      Irving, Charles (Cheltenham)

      Osborn, John

      Davies, Rt Hon J. (Knutsford)

      James, David

      Pattie, Geoffrey

      Dean, Paul (N Somerset)

      Jenkin, Rt Hon P. (Wanst'd & W'df'd)

      Percival, Ian

      Dodsworth, Geoffrey

      Jessel, Toby

      Peyton, Rt Hon John

      Douglas-Hamilton, Lord James

      Johnson Smith, G. (E. Grinstead)

      Pink, R. Bonner

      Drayson, Burnaby

      Jones, Arthur (Daventry)

      Powell, Rt Hon J. Enoch

      du Cann, Rt Hon Edward

      Jopling, Michael

      Prior, Rt Hon James

      Eden, Rt Hon Sir John

      Joseph, Rt Hon Sir Keith

      Pym. Rt Hon Francis

      Edwards, Nicholas (Pembroke)

      Kaberry, Sir Donald

      Raison, Timothy

      Elliott, Sir William

      Kershaw, Anthony

      Rathbone, Tim

      Eyre, Reginald

      Kimball, Marcus

      Rawlinson, Rt Hon Sir Peter

      Fairbairn, Nicholas

      King, Evelyn (South Dorset)

      Rees, Peter (Dover & Deal)

      Fairgrieve, Russell

      King, Tom (Bridgwater)

      Rees-Davies, W. R.

      Farr, John

      Kitson, Sir Timothy

      Renton, Rt Hon Sir D. (Hunts)

      Fell, Anthony

      Knight, Mrs Jill

      Renton, Tim (Mid-Sussex)

      Finsberg, Geoffrey

      Knox, David

      Rhys Williams, Sir Brandon

      Fisher, Sir Nigel

      Lamont, Norman

      Ridley, Hon Nicholas

      Fletcher, Alex (Edinburgh N)

      Lane, David

      Ridsdale, Julian

      Fletcher-Cooke, Charles

      Langford-Holt, Sir John

      Rifkind, Malcolm

      Fookes, Miss Janet

      Lawrence, Ivan

      Rippon, Rt Hon Geoffrey

      Fowler, Norman (Sutton C'f'd)

      Lawson, Nigel

      Roberts, Michael (Cardiff NW)

      1148

      1149

      Rodgers, Sir John (Sevenoaks)

      Sproat, Iain

      Tugendhat, Christopher

      Ross, Stephen (Isle of Wight)

      Stainton, Keith

      van Straubenzee, W. R.

      Rost, Peter (SE Derbyshire)

      Stanbrook, Ivor

      Vaughan, Dr Gerard

      Royle, Sir Anthony

      Stanley, John

      Viggers, Peter

      St. John-Stevas, Norman

      Steel, David (Roxburgh)

      Wainwright, Richard (Colne V)

      Scott, Nicholas

      Steen, Anthony (Wavertree)

      Wakeham, John

      Shaw, Giles (Pudsey)

      Stewart, Ian (Hitchin)

      Wall, Patrick

      Shelton, William (Streatham)

      Stokes, John

      Walters, Dennis

      Shepherd, Colin

      Stradling Thomas, J.

      Warren, Kenneth

      Shersby, Michael

      Tapsell, Peter

      Weatherill, Bernard

      Silvester, Fred

      Taylor, R. (Croydon NW)

      Wells, John

      Skeet, T. H. H.

      Taylor, Teddy (Cathcart)

      Whitelaw, Rt Hon William

      Smith, Cyril (Rochdale)

      Tebbit, Norman

      Wiggin, Jerry

      Smith, Dudley (Warwick)

      Temple-Morris, Peter

      Young, Sir G. (Ealing, Acton)

      Speed, Keith

      Thatcher, Rt Hon Margaret

      Spence, John

      Thomas, Rt Hon P. (Hendon S)

      TELLERS FOR THE NOES:

      Spicer, Jim (W Dorset)

      Townsend, Cyril D.

      Mr. Adam Butler and

      Spicer, Michael (S Worcester)

      Trotter, Neville

      Mr. Cecil Parkinson.

      Question accordingly agreed to.
      Clause 1 ordered to stand part of the Bill.
      Clause 2 ordered to stand part of the Bill.
      Bill reported, without amendment.
      Motion made, and Question put, That the Bill be now read the Third time:—
      The House divided: Ayes 284, Noes 239.

      Division No. 236.]

      AYES

      [12.50 a.m.

      Allaun, Frank

      Deakins, Eric

      Heifer, Eric S.

      Anderson, Donald

      Dean, Joseph (Leeds West)

      Henderson, Douglas

      Archer, Peter

      de Freitas, Rt Hon Sir Geoffrey

      Horam, John

      Armstrong, Ernest

      Delargy, Hugh

      Howell, Denis (B'ham, Sm H)

      Ashton, Joe

      Dell, Rt Hon Edmund

      Hoyle, Doug (Nelson)

      Atkins, Ronald (Preston N)

      Dempsey, James

      Huckfield, Les

      Atkinson, Norman

      Doig, Peter

      Hughes, Rt Hon C. (Anglesey)

      Bagier, Gordon A. T.

      Dormand, J. D.

      Hughes, Mark (Durham)

      Bain, Mrs Margaret

      Douglas-Mann, Bruce

      Hughes, Robert (Aberdeen N)

      Barnett, Rt Hon Joel (Heywood)

      Duffy, A. E. P.

      Hughes, Roy (Newport)

      Bates, Alf

      Dunn, James A.

      Irvine, Rt Hon Sir A. (Edge Hili)

      Bean, R. E.

      Dunnett, Jack

      Irving, Rt Hon S. (Dartford)

      Benn, Rt Hon Anthony Wedgwood

      Eadie, Alex

      Jackson, Colin (Brighouse)

      Bennett, Andrew (Stockport N.)

      Edelman, Maurice

      Jackson, Miss Margaret (Lincoln)

      Bidwell, Sydney

      Edge, Geoff

      Janner, Greville

      Bishop, E. S.

      Edwards, Robert (Wolv SE)

      Jay, Rt Hon Douglas

      Blenkinsop, Arthur

      Ellis, Tom (Wrexham)

      Jeger, Mrs Lena

      Boardman, H.

      English, Michael

      Jenkins, Hugh (Putney)

      Booth, Albert

      Ennals, David

      Jenkins, Rt Hon Roy (Slechford)

      Bottomley, Rt Hon Arthur

      Evans, Gwynfor (Carmarthen)

      John, Brynmor

      Boyden, James (Bish Auck)

      Evans, Ioan (Aberdare)

      Johnson, James (Hull West)

      Bradley, Tom

      Evans, John (Newton)

      Johnson, Walter (Derby S)

      Bray, Dr Jeremy

      Ewing, Harry (Stirling)

      Jones, Alec (Rhondda)

      Brown, Robert C. (Newcastle W)

      Faulds, Andrew

      Jones, Barry (East Flint)

      Brown, Ronald (Hackney S)

      Fernyhough, Rt Hon E.

      Jones, Dan (Burnley)

      Buchan, Norman

      Fitch, Alan (Wigan)

      Judd, Frank

      Buchanan, Richard

      Flannery, Martin

      Kaufman, Gerald

      Butler, Mrs Joyce (Wood Green)

      Fletcher, Raymond (Ilkeston)

      Kelley, Richard

      Callaghan, Jim (Middleton & P)

      Fletcher, Ted (Darlington)

      Kerr, Russell

      Campbell, Ian

      Ford, Ben

      Kilroy-Silk, Robert

      Canavan, Dennis

      Forrester, John

      Kinnock, Neil

      Cant, R B.

      Fowler, Gerald (The Wrekin)

      Lambie, David

      Carmichael, Neil

      Freeson, Reginald

      Lamborn, Harry

      Carter, Ray

      Garrett, John (Norwich S)

      Lamond, James

      Carter-Jones, Lewis

      Garrett, W. E. (Wallsend)

      Leaobitter, Ted

      Cartwright, John

      George, Bruce

      Lee, John

      Clemitson, Ivor

      Gilbert, Dr John

      Lestor, Miss Joan (Eton & Slough)

      Cocks, Michael (Bristol S)

      Ginsburg, David

      Lewis, Arthur (Newham N)

      Coleman, Donald

      Golding, John

      Lewis, Ron (Carlisle)

      Conlan, Bernard

      Gould, Bryan

      Lipton, Marcus

      Corbett, Robin

      Gourlay, Harry

      Litterick, Tom

      Cox, Thomas (Tooting)

      Grahamm, Ted

      Lomas, Kenneth

      Craigen, J. M. (Maryhill)

      Grant, John (Islington C)

      Loyden, Eddie

      Crawford, Douglas

      Grocott, Bruce

      Luard, Evan

      Crawshaw, Richard

      Hamilton, James (Bothwell)

      Lyon, Alexander (York)

      Crosland, Rt Hon Anthony

      Hamilton, W. W. (Central Fife)

      Lyons, Edward (Bradford W)

      Cryer, Bob

      Hardy, Peter

      Mabon, Dr J. Dickson

      Cunningham, G. (Islington S)

      Harper, Joseph

      McCartney, Hugh

      Dalyell, Tam

      Harrison, Walter (Wakefield)

      MacCormick, Iain

      Davidson, Arthur

      Hart, Rt Hon Judith

      McElhone, Frank

      Davies, Bryan (Enfield N)

      Hatton, Frank

      MacFarquhar, Roderick

      Davies Denzil (Llanelli)

      Hayman, Mrs Helene

      McGuire, Michael (Ince)

      Davies, Ifor (Gower)

      Healey, Rt Hon Denis

      Mackenzie, Gregor

      McMillan, Tom (Glasgow C)

      Price, William (Rugby)

      Thomas, Jeffrey (Abertillery)

      McNamara, Kevin

      Radice, Giles

      Thomas, Mike (Newcastle E)

      Madden, Max

      Rees, Rt Hon Merlyn (Leeds S)

      Thomas, Ron (Bristol NW)

      Magee, Bryan

      Richardson, Miss Jo

      Thompson, George

      Mahon, Simon

      Roberts, Albert (Normanton)

      Thorne, Stan (Preston South)

      Mallalieu, J. P. W.

      Roberts, Gwilym (Cannock)

      Tierney, Sydney

      Marks, Kenneth

      Robertson, John (Paisley)

      Tinn, James

      Marquand, David

      Roderick, Caerwyn

      Tomlinson, John

      Marshall, Dr Edmund (Goole)

      Rodgers, George (Chorley)

      Torney, Tom

      Marshall, Jim (Leicester S)

      Rodgers, William (Stockton)

      Urwin, T. W.

      Meacher, Michael

      Rooker, J. W.

      Varley, Rt Hon Eric G.

      Mellish, Rt Hon Robert

      Roper, John

      Wainwright, Edwin (Dearne V)

      Mikardo, Ian

      Rose, Paul B.

      Walden, Brian (B'ham, L'dyw'd)

      Millan, Bruce

      Ross, Rt Hon W. (Kilmarnock)

      Walker, Terry (Kingswood)

      Miller, Dr M. S. (E Kilbride)

      Rowlands, Ted

      Ward, Michael

      Mitchell, R. C. (Soton, Itchen)

      Ryman, John

      Watkins, David

      Molloy, William

      Sandelson, Neville

      Watkinson, John

      Morris, Alfred (Wythenshawe)

      Sedgemore, Brian

      Watt, Hamish

      Morris, Charles R. (Openshaw)

      Selby, Harry

      Weetch, Ken

      Morris, Rt Hon J. (Aberavon)

      Shaw, Arnold (Ilford South)

      Weitzman, David

      Moyle, Roland

      Sheldon, Robert (Ashton-u-Lyne)

      Wellbeloved, James

      Mulley, Rt Hon Frederick

      Shore, Rt Hon Peter

      Welsh, Andrew

      Murray, Rt Hon Ronald King

      Silkin, Rt Hon John (Deptford)

      White, Frank R. (Bury)

      Newens, Stanley

      Silkln, Rt Hon S. C. (Dulwich)

      White, James (Pollock)

      Noble, Mike

      Sillars, James

      Whitehead, Phillip

      Ogden, Eric

      Silverman, Julius

      Whitlock, William

      O'Halloran, Michael

      Skinner, Dennis

      Wigley, Dafydd

      O'Malley, Rt Hon Brian

      Small, William

      Willey, Rt Hon Frederick

      Orbach, Maurice

      Smith, John (N Lanarkshire)

      Williams, Alan (Swansea W)

      Ovenden, John

      Snape, Peter

      Williams, Alan Lee (Hornch'ch)

      Owen, Dr David

      Spearing, Nigel

      Williams, Rt Hon Shirley (Hertford)

      Padley, Walter

      Spriggs, Leslie

      Williams, W. T. (Warrington)

      Palmer, Arthur

      Stallard, A. W.

      Wilson, Gordon (Dundee E)

      Park, George

      Stewart, Donald (Western Isles)

      Wilson, William (Coventry SE)

      Parker, John

      Stewart, Rt Hon M. (Fulham)

      Wise, Mrs Audrey

      Parry, Robert

      Stoddart, David

      Woodall, Alec

      Pavitt, Laurie

      Stott, Roger

      Woof, Robert

      Pendry, Tom

      Strang, Gavin

      Wrigglesworth, Ian

      Perry, Ernest

      Strauss, Rt Hon G. R.

      Young, David (Bolton E)

      Phipps, Dr Colin

      Summerskill, Hon Dr Shirley

      Prentice, Rt Hon Reg

      Swain, Thomas

      TELLERS FOR THE AYES:

      Prescott, John

      Taylor, Mrs Ann (Bolton W)

      Miss Betty Boothroyd and

      Price, C. (Lewisham W)

      Thomas, Dafydd (Merioneth)

      Mr. John Ellis.

      NOES

      Adley, Robert

      Cormack, Patrick

      Gower, Sir Raymond (Barry)

      Aitken, Jonathan

      Costain, A. P.

      Grant, Anthony (Harrow C)

      Alison, Michael

      Crltchley, Julian

      Gray, Hamish

      Amery, Rt Hon Julian

      Crouch, David

      Grieve, Percy

      Arnold, Tom

      Crowder, F. P.

      Grist, Ian

      Atkins, Rt Hon H. (Spelthorne)

      Davies, Rt Hon J. (Knutsford)

      Grylls, Michael

      Awdry, Daniel

      Dean, Paul (N Somerset)

      Hall, Sir John

      Baker, Kenneth

      Dodsworth, Geoffrey

      Hall-Davis, A. G. F.

      Banks, Robert

      Douglas-Hamilton, Lord James

      Hamilton, Michael (Salisbury)

      Bell, Ronald

      Drayson, Burnaby

      Hampson, Dr Keith

      Bennett, Dr Reginald (Fareham)

      du Cann, Rt Hon Edward

      Hannam, John

      Berry, Hon Anthony

      Eden, Rt Hon Sir John

      Harrison, Col Sir Harwood (Eye)

      Biffen, John

      Edwards, Nicholas (Pembroke)

      Harvie Anderson, Rt Hon Miss

      Biggs-Davison, John

      Elliott, Sir William

      Hastings, Stephen

      Blaker, Peter

      Eyre, Reginald

      Havers, Sir Michael

      Body, Richard

      Fairbairn, Nicholas

      Hawkins, Paul

      Boscawen, Hon Robert

      Fairgrieve, Russell

      Hayhoe, Barney

      Boyson, Dr Rhodes (Brent)

      Farr, John

      Heseltine, Michael

      Braine, Sir Bernard

      Fell, Anthony

      Hicks, Robert

      Brittan, Leon

      Finsberg, Geoffrey

      Higgins, Terence L.

      Brotherton, Michael

      Fisher, Sir Nigel

      Holland, Philip

      Brown, Sir Edward (Bath)

      Fletcher, Alex (Edinburgh N)

      Hooson, Emlyn

      Bryan, Sir Paul

      Fletcher-Cooke, Charles

      Hordern, Peter

      Buchanan-Smith, Alick

      Fookes, Miss Janet

      Howe, Rt Hon Sir Geoffrey

      Buck, Antony

      Fowler, Norman (Sutton C'f'd)

      Howell, David (Guildford)

      Budgen, Nick

      Fox, Marcus

      Hunt, John

      Bulmer, Esmond

      Fraser, Rt Hon H. (Stafford & St)

      Hurd, Douglas

      Burden, F. A.

      Fry, Peter

      Hutchison, Michael Clark

      Carlisle, Mark

      Galbraith, Hon. T. G. D.

      Irvine, Bryant Godman (Rye)

      Carr, Rt Hon Robert

      Gardiner, George (Reigate)

      James, David

      Chalker, Mrs Lynda

      Gardner, Edward (S Fylde)

      Jenkin, Rt Hon P. (Wanst'd & W'df'd)

      Channon, Paul

      Gilmour, Sir John (East Fife)

      Jessel, Toby

      Churchill, W. S.

      Glyn, Dr Alan

      Johnson Smith, G. (E. Grinstead)

      Clark, Alan (Plymouth, Sutton)

      Godber, Rt Hon Joseph

      Jones, Arthur (Daventry)

      Clark, William (Croydon S)

      Goodhart, Philip

      Jopling, Michael

      Clarke, Kenneth (Rushcliffe)

      Goodhew, Victor

      Joseph, Rt Hon Sir Keith

      Cockcroft, John

      Goodlad, Alastair

      Kaberry, Sir Donald

      Cooke, Robert (Bristol W)

      Gorst, John

      Kershaw, Anthony

      Cope, John

      Gow, Ian (Eastbourne)

      Kimball, Marcus

      1152

      1153

      Silvester, Fred

      Morgan-Giles, Rear-Admiral

      Smith, Cyril (Rochdale)

      King, Evelyn (South Dorset)

      Morrison, Charles (Devizes)

      Smith, Dudley (Warwick)

      King, Tom (Bridgwater)

      Morrison, Hon Peter (Chester)

      Speed, Keith

      Kitson, Sir Timothy

      Mudd, David

      Spence, John

      Knight, Mrs Jill

      Neave, Airey

      Spicer, Jim (W Dorset)

      Knox, David

      Nelson, Anthony

      Spicer, Michael (S Worcester)

      Lamont, Norman

      Neubert, Michael

      Sproat, Iain

      Lane, David

      Newton, Tony

      Stainton, Keith

      Langford-Holt, Sir John

      Nott, John

      Stanbrook, Ivor

      Lawrence, Ivan

      Onslow, Cranley

      Stanley, John

      Lawson, Nigel

      Oppenheim, Mrs Sally

      Steel, David (Roxburgh)

      Le Marchant, Spencer

      Osborn, John

      Steen, Anthony (Wavertree)

      Lester, Jim (Beeston)

      Pattie, Geoffrey

      Stewart, Ian (Hitchin)

      Lewis, Kenneth (Rutland)

      Percival, Ian

      Stokes, John

      Lloyd, Ian

      Peyton, Rt Hon John

      Stradling Thomas, J.

      Loveridge, John

      Pink, R. Bonner

      Tapsell, Peter

      Luce, Richard

      Powell, Rt Hon J. Enoch

      Taylor, R. (Croydon NW)

      McCrindle, Robert

      Prior, Rt Hon James

      Taylor, Teddy (Cathcart)

      Macfarlane, Neil

      Pym, Rt Hon Francis

      Tebbit, Norman

      MacGregor, John

      Raison, Timothy

      Temple-Morris, Peter

      Macmillan, Rt Hon M. (Farnham)

      Rathbone, Tim

      Thatcher, Rt Hon Margaret

      McNair-Wilson, M. (Newbury)

      Rawlinson, Rt Hon Sir Peter

      Thomas, Rt Hon P. (Hendon S)

      McNalr-Wilson, P. (New Forest)

      Rees, Peter (Dover & Deal)

      Townsend, Cyril D.

      Madel, David

      Rees-Davies, W. R.

      Trotter, Neville

      Marshall, Michael (Arundel)

      Renton, Rt Hon Sir D. (Hunts)

      Tugendhat, Christopher

      Marten, Neil

      Renton, Tim (Mid-Sussex)

      van Straubenzee, W. R.

      Mates, Michael

      Rhys Williams, Sir Brandon

      Vaughan, Dr Gerard

      Mather, Carol

      Ridley, Hon Nicholas

      Viggers, Peter

      Maude, Angus

      Ridsdale, Julian

      Wainwright, Richard (Coine V)

      Mawby, Ray

      Rifkind, Malcolm

      Wakeham, John

      Maxwell-Hysiop, Robin

      Rippon, Rt Hon Geoffrey

      Wall, Patrick

      Mayhew, Patrick

      Roberts, Michael (Cardiff NW)

      Walters, Dennis

      Meyer, Sir Anthony

      Rodgers, Sir John (Sevenoaks)

      Warren, Kenneth

      Mills, Peter

      Ross, Stephen (Isle of Wight)

      Weatherill, Bernard

      Miscampbell, Norman

      Rost, Peter (SE Derbyshire)

      Wells, John

      Mitchell, David (Basingstoke)

      Royle, Sir Anthony

      Whitelaw, Rt Hon William

      Moate, Roger

      St. John-Stevas, Norman

      Wiggin, Jerry

      Molyneaux, James

      Scott, Nicholas

      Young, Sir G. (Ealing, Acton)

      Monro, Hector

      Shaw, Giles (Pudsey)

      Montgomery, Fergus

      Shelton, William (Streatharn)

      TELLERS FOR THE NOES.

      Moore, John (Croydon C)

      Shepherd, Colin

      Mr. Adam Butler and

      More, Jasper (Ludlow)

      Shersby, Michael

      Mr. Cecil Parkinson.

      Skeet, T. H. H.

      Question accordingly agreed to.
      Bill read the Third time and passed.

      ADJOURNMENT
      Motion made and Question proposed, That this House do now adjourn.—[Miss Margaret Jackson.]

      A19 (ROAD WORKS)
      1.2 a.m.
      Mr. Ian Wrigglesworth: The case which I want to bring before the House is one of the disruption and distress which have gone on in my constituency for a very long time. At this late hour I do not wish to go into the full and lengthy details of all the disruptions and distress which have been caused by the A19 road to the residents of Newport and Whinney Banks, but I cannot refrain from mentioning that they began substantially with the public inquiry into the route of the road in September 1970 when one of my predecessors, Dr. Jeremy Bray, now the hon. Member for Motherwell and Wishaw,
      1154
      called the road that was to be put through the centre of the constituency a barbaric thing that would cause the area to become a "derelict wilderness". He was challenged on that phrase at that time, but in fact he is now proved to be correct because many areas in Newport and Whinney Banks in my constituency have become a derelict wilderness as a result of the building of this road through the constituency.
      I should like to thank the Minister for the help and sympathy that he has shown to the residents and the organisations which have been affected by this road, and, indeed, if I may say so, by the other major road works proposed in my constituency in the Thornaby area, the A66 road works. He has been most helpful in alleviating the distress which has been caused. My criticism is not of the present administration. It is of the system.
      I first took up the case of distress that has been caused to my constituents when I became the candidate in the constituency in 1973. I have had a constant series of complaints—of which I shall mention one

      1155
      or two—from different organisations and constituents since that time, which have led to my raising the matter in the House tonight. One of the principal organisations affected is the Allotments Club which is both a recreational and, more important, almost a business enterprise for many of the constituents in that area of Middlesbrough. The new road cuts right through their property and separates the clubhouse from the allotments. The most recent complaint I have had from them was that a meeting they wish to have with the Department of the Environment and the contractors took nine months to organise.
      These are ordinary working men who have their allotments and are members of the social club. They have to work during the day and can get to meetings only in the evenings. Their lives have been disrupted and their recreation in their allotments has been disrupted by the building of the road. It has taken them nine months of frustration and annoyance to get that meeting organised. Access to their allotments has been constantly interrupted, the club's property has been trespassed on by contractors, and they have had to spend £1,000 on solicitor's fees and £1,000 on surveyor's fees as a result of the building of the road. Pipes supplying water to the allotments have been burst and the bill for 150 allotments has gone up from £60 a year to about £1,000 a year. All this has caused a tremendous amount of disruption and inconvenience to the people who have allotments there. The club premises, unlike other properties affected by the road, are not to be double glazed—and that is another of the irritations they have had as a result of the building of the road.
      I have had very strong complaints from Captain Beck of 216 Stockton Road, and other residents that, although their windows are to be double glazed, no double glazing has been supplied for the french windows at the back which are only a few feet from the road. The whole impact of double glazing the houses is being spoilt because of the regulations stopping the double glazing of french doors.
      In Ashford Avenue, the residents of 67 to 73 were left isolated at the end of the road, sticking out at the bottom of the avenue right next to the road works. One
      1156
      or two of the residents felt very strongly that, with the road being so close, their houses should have been compulsorily purchased. After a battle of two years, in which I was involved as a candidate and Member, their houses have finally been taken over. But it has caused an enormous amount of inconvenience, stress and strain.
      Probably the worst example of the way in which people's lives have been upset is in the Crathorne Crescent and Maldon Road area where the ratepayers' association has been complaining to the Department and the contractors ever since work on the road began in July 1972. They have complained about vibration from heavy equipment, mud, noise, damaged water pipes and property and dangers to children. They have had to employ a solicitor, and in the file I got from him there are more than 70 letters—correspondence between them and the Department, the contractors and their insurers.
      The Minister has told us in correspondence that there is no simple solution and that people can claim damages for injury or neglect against those responsible. But as the correspondence with which I have been presented clearly shows, time and again there is evidence of buck passing—it is time that came to an end.
      The residents have to decide whether they should act individually or together. They have to contend with two major contractors, Cementation and Earthstrip, consulting engineers and their solicitors, and insurers and their solicitors. They have to appoint and pay their own solicitors and surveyors for technical reports on the effect of the road works on their property.
      All this is because the community wants that road to go right past their property. They did not ask for the road. It was the community which wanted it to go there. It seems quite wrong in these circumstances that they should be put to the added inconvenience of having to fight to get compensation through this awful maze, this plethora of firms and legalities, at considerable expense and inconvenience, when they have already had all the dirt, inconvenience and disruption of three years of road building.
      My view is that in these circumstances the Department should do two things.

      1157
      First, from the very earliest stages of a road building exercise such as this, the Department should appoint a troubleshooter, preferably someone from the locality, to whom the residents and organisations affected by the building of the road can go in order to get answers to their queries. Way back in 1972 the Department and the contractors organised meetings for the residents, but they were not continued. The residents were promised bulletins which would keep them in touch with developments, but they did not come. Much of the confusion, unrest and disruption has been caused by the lack of information.
      It is my firm belief that if, as I suggested back in 1973, the Department had appointed a trouble-shooter, as Middlesbrough Council did when it was responsible for building a road right next to this one, the Northern route going through Middlesbrough, many of the problems that have arisen over the last three years would have been easily overcome, and all the irritations and difficulties that may constituents have had to put up with would have been greatly lessened.
      If the Department is embarking upon similar road works in other parts, and certainly if they come to the other part of my constituency, the A66 in Thornaby, the Minister should carefully consider appointing someone, preferably from the locality, who could receive all the complaints and reply to them adequately and be a source of information about what is going on and why it is going on.
      Secondly, the Department and the Minister must accept the responsibility for the claims for compensation. Perhaps the legal responsibility under the contracts does rest with the contractors. But I have seen the correspondence. It is an intolerable situation for people who have been put to this trouble to have to find their way through this maze of solicitors and other individuals and organisations involved. At the very least, the Department could give much greater assistance to individuals who are suffering from the effects of major road works such as these. It could guide them much more carefully and give them information about their rights and about what action they should take in order to satisfy their demands for compensation for the inconvenience and
      1158
      for the damage to their property which has been sustained.
      If the Minister could give me some reassurance that there will be greater co-operation as the last stages of this road are completed and that some guidance will be given to the residents and organisations still affected by these road works, my constituents will be well satisfied. We cannot turn the clock back to 1972 when these road works started and begin talking at this stage about appointing the trouble-shooter I have mentioned. However, I hope that my hon. Friend will bear this suggestion in mind in relation to future road works.
      When I wrote to the Minister in March of this year, I said that I should be grateful if he could give me an assurance along these lines. In his reply the Minister told me that basically the residents, the people who are claiming compensation, must go through the legal processes. They are prepared to do that, but they would appreciate any gesture of good will to assist them in doing so. Mrs. Dorothy Wedlake, the Chairman of the Crathorne and Maldon Ratepayers' Association, wrote to me only this week. She wrote:
      "All the members of our association are disgusted at the evasive actions being taken by the Department of the Environment and wish to give you their sincere thanks for your involvement. Regardless of the outcome we press on through the courts."
      I hope that if they have to press on through the courts—they did not want to be involved in this way but they have been forced into it by the circumstances—they will have at least the guidance and co-operation of the Department from this point onwards.
      1.16 a.m.
      The Under-Secretary of State for the Environment (Mr. Neil Carmichael): I am grateful to my hon. Friend the Member for Thornaby (Mr. Wriggles-worth) for giving me this opportunity to speak on the importance of the A19 for the area which he represents. I congratulate my hon. Friend on the courteous but forceful way in which he has made his points both personally and in correspondence.
      For the benefit of hon. Members who may not be familiar with the area, it may

      1159
      be helpful if I could attempt to place the road works with which my hon. Friend is particularly concerned in the context of the improvement of the A19 as a whole. The A19 forms the main part of the major trunk route carrying heavy traffic from the A.1 at Dishforth, near Ripon, to Cleveland and the other industrial areas on the North-East coast between the Tees and the Tyne. It is being virtually replaced by a new road.
      The need for this new route was recognised in the White Paper entitled "The North East, a programme for Regional Development and Growth", which recommended, among other improvements in the communication system of the North-East, the replacement of the present A19 north-south route through Stockton by a new route probably crossing the Tees between Stockton and Middlesbrough. Thus the new road is being built as part of the economic regeneration of the North-East of England.
      Improvements of the A19 recently completed include the Thirsk Bypass and the dualling of the route between there and the North Yorkshire boundary. The section between Billingham and Easington, and the Sunderland Bypass, have also been dualled. The Teesside diversion, which is the part that particularly concerns my hon. Friend, is currently under construction. Immediately to the north of it will be the Billingham diversion, on which the general public were consulted about a number of alternative routes last year. An announcement of the preferred route for that section was made in April this year. The public are currently being consulted about alternative lines for the continuation of the route southwards beyond Dishforth in order to provide a link with the M1.
      Let me now deal in a little more detail with the Al9 Teesside diversion. This part of the new road will start approximately one mile south of Crathorne and terminate approximately a quarter of a mile north-west of Haverton Hill Road south of Billingham. There will be grade separated interchanges with the existing A19 just north of Crathorne with the new Teesside Parkway north of Maltby, with Mandale Road and Stockton Road in Thornaby and with Haverton Hill Road. There will be two major bridges, one
      1160
      1,130 ft. long over the Leven valley and one 6,350 ft. long between the Stockton Road and Haverton Hill road interchanges, carrying the new road over the existing A66, the railway marshalling yards and the River Tees.
      We hoped that the whole of the Teesside diversion would be complete and open to traffic by the end of this year. However, because of difficulties and delays with the Leven Valley and Tees Bridges, this will not now be possible. Construction of the Leven viaduct was hampered by ground conditions which necessitated redesigning the foundations, and the Tees Bridge was delayed by the energy crisis of 1973–74, bad weather and a hold-up in the supply of steel reinforcing.
      We now propose to open the Teesside diversion in phases as those parts of the road which form a viable link with the existing highway network are completed. We hope to open the length of new road between the Teesside Parkway and Haverton Hill Road interchanges and the Mandale Road interchange in November this year. The northbound carriageway of the Tees Bridge will carry both northbound and southbound traffic.
      Both carriageways of the Tees Bridge will be opened in February 1976 and the Stockton Road interchange will be opened in the autumn of 1976 on completion of the roads with which it will connect. The Leven viaduct will also be completed in the autumn of 1976 and the whole of the Teesside diversion will then be open. Until then the section between the Crathorne interchange and Teesside Parkway will be used by contractors' traffic only. These proposals will make the maximum use of the road works while they remain partially completed.
      I appreciate that the arrangements are not wholly satisfactory but, nevertheless, they will provide a considerable measure of relief in the area. I can assure my hon. Friend that my colleagues in the Department and I are well aware of the serious human problems which can be caused to those whose living conditions are changed by the building of new roads. I share his concern that as much as is reasonably possible should be done to ensure that those who are obliged to live close to these roads should not suffer as a result.

      1161
      As my hon. Friend described, part of the Teesside diversion passes very close to a densely developed industrial and residential area, and it is the effect on this area, especially in the neighbourhood of the Stockton Road interchange, that caused us most concern and gave rise to most complaint. It is, unfortunately, inevitable that in such an area the construction of such a major new road, particularly when it includes a complex interchange, will be a cause of distress and disturbance to those living nearby.
      It was in an effort to be able to provide means of reducing these adverse effects as far as possible that the Land Compensation Act 1973 was passed. I think most people would agree that this Act has meant a significant step forward in the past year or two towards improving the lot of those who, against their will, happen to find themselves adjacent to new public works of one kind or another.
      Part I of that Act created a new right to compensation for people from whom no land is taken for the works but whose property when in use loses value because of its closeness to the works. Owners of many properties may now be compensated for any depreciation of more than £50 in the value of their property caused by such physical factors as noise, smell, fumes, vibration and dust, and so on from any new or improved highway which came into use on or after 17th October 1969.
      Part II of the Act contains powers to make regulations about sound insulation. The Noise Insulation Regulations 1973 provide certain rights to insulate residential property—for example, double glazing and supplementary ventilation if necessary—against noise from traffic on new or improved roads. Properties may be insulated against noise from road construction. My hon. Friend asked about double glazing of french windows. A way has now been found to remedy the problem, and he will receive fairly soon a letter from me explaining this to him.
      It is obviously not always possible because of physical and financial limitations to eliminate entirely features which are visually intrusive or which result in disturbance to neighbouring areas. We have tried treatments such as earth mounding on the Al9 scheme which can both hide the new road and lower the
      1162
      level of noise imposed on the surrounding area. However, I must reiterate that it is unrealistic to hope to build a major road in an urban area entirely without noise and other nuisances, but we have tried to minimise the problem on the Al9 during the construction period.
      The Teesside diversion was one of the large number of schemes which were actually being built when the Land Compensation Act 1973 came into force, and while it was obviously not possible to introduce major design changes, measures were taken to implement the Act as far as possible.
      Full use continues to be made of these powers in connection with the Teesside diversion, and, to date, some 85 properties have been identified as eligible for insulation which has been authorised, and about half of this work has already been carried out. Some properties have been purchased under powers conferred by Part II of the Act.
      I turn now to some of the specific complaints which my hon. Friend has drawn to my attention. He has told me that the Newport, Middlesbrough, Co-operative Allotment Society has a number of grievances which it wished to discuss with representatives of the Department and that the North-Eastern Road Construction Unit had failed to hold a meeting promised some eight or nine months ago.
      I have since written to my hon. Friend about this. The unit did indeed have approaches from members of the society and also from the society's solicitors. Unfortunately, the precise details of the complaints were not always clear. A date was fixed for a meeting in January, but this was cancelled at the request of the society. I am pleased to be able to say, however, that a meeting did take place on Tuesday, 27th May, at which various matters were discussed and understandings reached. I very much hope that this will have dealt with all the society's immediate problems.
      My hon. Friend has also mentioned that he has been approached by residents of Malden Road and Crathorne Crescent whose property, he said, had been damaged as a result of the construction of the new road at the rear of their houses. He maintained that, since the contractors employed by the Government

      1163
      were responsible for the damage caused, the Government should accept responsibility for claims for compensation.
      It is a basic principle of the existing law, however, that an independent contractor is responsible for his own actions and omissions. The Department, like other public authorities, adopts the practice, invariably followed in construction contracts, of requiring the contractor to indemnify it against claims arising out of his performance of the contract, and to cover his liability under that indemnity by insurance.
      The Department's unwillingness to be involved—to the exasperation of my hon. Friend and others—in such claims is due not to perversity but to sheer practical necessity. If anything goes wrong in the performance of the contract, for example, the chances are that the contractor is more likely to know about it than the authority employing him. It is up to the contractor to see that his work people and sub-contractors behave carefully and avoid causing injury to other people. He is in a much better position to do this than the Department.
      Negotiations must, in the end, take place between the claimant and the person with ultimate legal responsibility for payment, so the Department does not negotiate directly with the claimant or settle claims which probably lie within the contractor's or his insurers sphere of responsibility.
      I have also been conscious of the effect on traffic on the existing roads in the area. In order to reduce to a minimum any adverse effects created by the construction of the Teesside diversion, a special consultative committee has been in existence since the early days of the contract. Representatives of the Department, of the contractor, the consulting engineer, the local authority, the police and major industrial interests have all
      1164
      taken part. Representatives of the bus operators attend the meetings when required. The meetings are held regularly about every two months, and any major problems likely to involve the public, such as temporary road closures or the diversion of bus routes, are discussed, and steps are taken to ensure adequate publicity through the Press.
      In this way, difficulties are anticipated, and, as far as possible, dealt with in advance. I am not aware of any serious failure in these arrangements, and I think the committee is to be congratulated on successfully avoiding any major interference with existing traffic flows.
      I have considerable sympathy with my hon. Friend's constituents in the disturbance I know they are suffering while these major road works are in progress. I am concerned that their discomfort should be reduced to the minimum. The powers of the Land Compensation Act are at our disposal in an attempt to achieve this, and I am sure that my hon. Friend will continue to bring to my attention any instances where he thinks we can do more than we are doing. I hope that he and his constituents appreciate the difficulty we would be in if we as a Department attempted to take responsibility for claims for damage arising from the performance of the contractor, and I hope that his constituents' difficulties in this respect will soon be resolved. In the meantime, I think that as the works are completed over the next few months they can now look to a progressive reduction in the disturbance to which they are subjected.
      I shall read with care the points made by my hon. Friend in his eloquent speech. I shall give them more consideration and perhaps speak to him or write to him about them later.
      Question put and agreed to.
      Adjourned accordingly at half-past One o'clock.