§ 10.17 p.m.
§ The Under-Secretary of State for Scotland (Mr. Hugh D. Brown)
I beg to move,That the draft Housing Support Grant (Scotland) Order 1979, which was laid before this House on 8th December, be approved.This is the first order of its type to be laid before the House under the Housing (Financial Provisions) (Scotland) Act 1978. It was accompanied by a report which explains its provisions. It may be helpful if I explain some of the background and the reasons for the introduction of the new grant.
The reasons for the new grant system were set out in a Green Paper on Scottish housing which was published in June 1977.
§ Mr. Douglas Henderson (Aberdeenshire, East)
On a point of order, Mr. Deputy Speaker. It is impossible to hear what the Minister is saying because hon. Members are making so much noise in leaving the Chamber.
§ Mr. Deputy Speaker (Sir Myer Galpern)
I sympathise with the Minister, who is doing his best. I do not want him to strain his vocal chords.
§ Mr. Brown
Normally hon. Members do not make such complaints.
The Green Paper was an attempt to outline a housing system which would respond to people's needs and aspirations and at the same time ensure that adequate Government financial support could be applied where it was most needed. HSG is therefore an important part of the whole housing picture.
In a sense the introduction of HSG is the second stage of the reform of local authority housing finance arrangements. The first stage was the introduction of housing plans from and including the financial year 1978–79. "Housing plans" is a system for planning housing policies and programmes based on a local assessment of needs, and from 1979-80 housing plans, with the complementary HSG, will provide an integrated and sensitive approach to the provision of the resources both capital and current.
The need to reform the existing housing subsidy system for local authorities was 1642 widely accepted. The basis of the new system was discussed at length with the Convention of Scottish Local Authorities and there were extensive consultations with the convention before the laying of the draft order before the House.
The present system has several serious defects. First, it still reflects the rent philosophy of the 1972 Act. The 1972 Act set a 10-year timetable for the payment of subsidies linked to direct control of rents which the Government abolished in the 1975 Act. In particular, the phasing out in 1982-83 of all housing subsidy would, if allowed to take its course, seriously disrupt the financing of local authority housing.
Secondly, present subsidy arrangement are both unduly complex and less than fair. They consist of five separate subsidies to housing revenue accounts, for one of which no authority has so far qualified. These subsidies interact in curious ways and clearly result in unfair distribution of support for different authorities, regardless of the balance of activities required to meet local needs, and leave wide differences in the level of costs which have to be met from local resources of rent and rate fund contributions.
Housing support grant was designed to overcome these defects, to secure fairness of distribution so that the burdens of housing expenditure borne locally are more consistent, to provide for adaptability to meet changing needs and circumstances and to disengage central Government from unnecessary detailed control and oversight.
The 1978 Act provided a framework of power and principles within which the amount of Government assistance and the basis of its distribution to authorities would be decided annually.
I shall give the House a brief explanation of the draft order and report.
The 1978 Act requires the Secretary of State to estimate the expenditure and income on the combined housing revenue account of the local authorities for the grant year and lays down guidance for him to follow. This he has done and the proposed aggregate amount of grants for Scotland is £.151.7 million. As can be seen from paragraphs 4 and 10 of the report, this figure might be slightly 1643 misleading in current circumstances, since the expenditure part of the calculation has been estimated at November 1978 prices while the income element had been estimated at 1979-80 outturn prices. This is a very important distinction and I am sure that everybody appreciates the significance of it. For example, if interest rates were to rise substantially during the year, full account can be taken of such an increase by the use of a variation order under section 3 of the 1978 Act. A variation order would also take care of any substantial inflation of housing revenue account general expenditure. The need for a variation order will be considered during the course of the 1979-80 financial year.
The Secretary of State is grateful for the co-operation which the convention has given throughout the long consultations leading up to the first determination of this grant—
§ Mr. Lambie
The Minister referred to the consultations with COSLA. Did the convention agree unanimously to the final figures arrived at under this formula, or was there just a general opinion, with many areas voting against?
§ Mr. Brown
The convention does not vote on these matters. There was general agreement with COSLA and the specific points on which the convention did not agree with our estimates are included in the report. It is part of the democratisation of the procedure that we are obliged to show where there has been disagreement. I am sure that the House will appreciate the fact that my hon. Friend has guaranteed that he will not make a speech.
1644 It can be seen from paragraphs 26 and 27 of the report that COSLA expressed qualified approval of the methods used in estimating eligible expenditure and relevant income. Its first reservation is a technical one concerning the interest rate applied to new borrowing between September 1978 and March 1979. The rate used was the average local authority pool interest rate in the autumn of 1978 which was based on a corrected sample collected jointly by the convention and the Scottish Development Department. Allowance has been made for new borrowing in 1979-80. However, the method used accords with long-established practice in regard to rate support grant in Scotland. The difference would affect not the amount but merely the timing of payments.
The second reservation is COSLA's preference for the use of local authorities' 1978–79 budget estimates as the base for calculation. This matter had been gone into most carefully over a long period. There were difficulties concerning the use of any particular year as a base, but the unanimous view of the working party had been that the most satisfactory year to use, since reasonably firm figures were available, was 1977–78. No arguments had so far been put forward to lead the Secretary of State to the view that that was not the right decision.
The housing support grant—HSG—for 1979–80 will be divided into three portions for apportionment purposes—the general portion, the transitional portion and the hostel portion. The method of apportionment has been determined after consultation with the convention.
It can be seen from paragraph 28 of the report that the convention was satisfied with the proposed method of apportioning the aggregate grants for 1979–80. It has been agreed that further study and refinement should be carried out for future years.
For the first year, the general portion will account for just under one-third of the total grant available. The formula for the general portion is shown in the schedule to the order and is described in paragraphs 16 to 20 of the report. First, each authority's expenditure needs are assessed using the actual 1977–78 loan charges returned by the authority, adjusted so that aggregate loan charges for 1645 Scotland equate to the total loan charges allowed for in the calculation of the total amount of HSG for Scotland. A standard amount per house, adjusted by two objective weighting factors, related to the incidence of high rise houses and sparsity of population coupled with small stocks of houses, is allowed for management and maintenance expenditure. The aggregate of those amounts equates with all expenditure other than loan charges included in the calculation of the total amount of HSG.
Net expenditure is then calculated by deducting the basic income amount. That amount is calculated using two components, the first related to the number of houses of the authorities and the second related to the population of the authorities. A safety factor has been built in to ensure that authorities with small proportions of houses per head of population do not have to contribute more than a standard amount per house. That was considered to be necessary to ensure that such authorities had some incentive to continue to provide houses where there was a need for local authority housing.
Perhaps I should clarify what is meant by the distribution percentage. It has nothing to do with the total grant for Scotland, which will meet 100 per cent. of the difference between estimated eligible expenditure and estimated relevant income. It is related only to the distribution of grant—not to the total —and is considered to be necessary to ensure that each authority meets a proportion of expenditure over the basic income amount.
The transitional portion accounts for approximately two-thirds of the grant and has been apportioned in relation to each authority's estimated entitlement in 1978-79 to the subsidies which are being replaced by HSG. These estimates were based on the near actual outturns of subsidies for 1977–78. A further transitional adjustment has been made to ensure that the maximum potential increase in local contributions—due to loss of subsidy—would be an equivalent of 1 p on the rates.
The other portion, the hostel portion, which provides for deficit support for the operation of hostels and lodging houses by local authorities, accounts for a minor part of the aggregate grant and affects very few authorities.
1646 It was originally intended that another special portion of HSG should cover housing management training and, like the special hostel portion, should also be treated separately in order to give a subsidy boost to a priority activity. However, the Secretary of State decided to accept a later recommendation by the housing finance working party that such a special and complicating feature would not be justified because of the very small part of the grant involved, and because it was felt that the onus of encouraging training should be with the new housing training council. Housing management training has, however, been included in the activities of which account has been taken in the estimates of eligible expenditure.
§ Mr. George Younger (Ayr)
Will the Minister tell the House what assumption he has made about future levels of rents in coming to those conclusions?
§ Mr. Brown
It is in the order and the report which goes with the order. The assumption is that there will be an increase of earnings of 7 per cent. That is not new. That was declared by the Chancellor of the Exchequer some months ago. Therefore, that has to be reflected in the calculations which are made on local contributions—not on rent but on rent and rate contribution combined. The assumption is related to the figure that I have given for earnings. It is not necessarily in a particular year. The phrase is "year by year ", and over a period rents have to increase in relation to earnings.
§ Mr. Younger
I accept that, but the hon. Gentleman is assuming an increase in earnings of 7 per cent.?
§ Mr. Brown
That is correct.
Finally, the amounts of HSG to be received by authorities in 1979-80 are listed in Annex C to the Report. The sums shown have been calculated to the nearest £1,000 but before payment they will be recalculated to the nearest £1. These amounts are shown at order prices, that is, at the same price levels as the aggregate grant for Scotland. If there is a need for a variation order, the relative shares of total grant of individual authorities could be changed, depending on the relative movement of the different categories of expenditure.
1647 I make no apology for having been very brief on what I know seems to be a complicated subject, but I hope that my explanation has been helpful and is adequate in view of the importance of the amount of money for distribution that we are approving tonight.
§ 10.35 p.m.
§ Mr. Jain MacCormick (Argyll)
I suppose I speak for most Members on both sides of the House when I say that this ought to have been an occasion when we could have congratulated the Under-Secretary of State on bringing in this new scheme. But even though he spends so much of his time making witty pronouncements in Argyll when he is on holiday, he has to a certain extent fallen into the same trap as have his political compatriots on Clyde regional council when they think about the future provision of housing in areas such as that covered by the Argyll and Bute district council.
From my point of view as a constituency Member, and also from the point of view of others of my hon. Friends —for example, my hon. Friend the Member for Dunbartonshire, East (Mrs. Bain), who represents the area covered by Strathkelvin district council—the new housing support grant will not fulfil the aims which it sets out to fulfil.
Argyll and Bute covers the biggest area of any district council in the whole of Scotland. The people of Argyll and Bute are scattered among many islands, perhaps even more than the constituents of my right hon. Friend the Member for Western Isles (Mr. Stewart). Yet we find that this order is so framed as to exclude Argyll and Bute district council from the areas covered by the sparsity arrangements. They have been excluded simply because the Government have fixed an arbitrary figure of 5,000 houses.
I seriously ask the Minister whether it is possible to change the number of houses run by a council from 5,000 to, say, 10,000. What difference would it make anyway, when one considers the whole thing as a total? Is it suggested that the island of Coll, with about a dozen council houses, or the island of Mull, with a large area but comparatively few council houses, is to be cut off from the beneficence or munificence of the Government simply because some civil servant has 1648 chosen a particular figure as the cut-off point?
I know that I speak for everyone in Argyll and Bute, regardless of their political beliefs, when I say that we are sick and fed up not only with the present housing position but with the attitude of the central belt whereby we in Argyll are hit in relation to rates and revaluation. We are now to be hit further because it will be made that much more difficult for our local authority to provide the people of Argyll and Bute with the houses which they require.
We are sick and tired of the fact that this Government are not allowing the people in the rural areas of this country to enjoy the quality of life to which they are fully entitled, and to which they contribute as fully as anyone else in the country.
§ 10.39 p.m.
§ Mr. Robin F. Cook (Edinburgh, Central)
As this is the first time on which the House has considered the order, I should like to begin by making a few comments about the general nature of the procedure.
We are debating this matter after 10 o'clock at night, at an hour which is generally recognised outside the House as being an inane hour at which to proceed with a major financial decision. This debate can last at the most 1½ hours, which, given the hour at which we began, is perhaps merciful, and we are debating a motion which cannot be amended.
§ Mr. Cook
I shall come back to my hon. Friend's comment in a moment.
This is perhaps an odd way in which to spend £150 million of public money. I do not think that there is a legislature elsewhere in the Western world which would spend public money of that order on that kind of basis.
Hon. Members who follow these matters, as opposed to those who happen to have joined us at this late hour, will be aware that these observations do not come from me anew. I made similar comments when we considered the financial provisions Bill in Committee.
1649 I tabled an amendment in Committee suggesting that when we considered this order it should be submitted to a Select Committee which could hear witnesses and examine the issue over a matter of weeks. That amendment was not selected for the perfectly proper reason that we cannot change the procedures of the House in the course of the consideration of any Bill. But if we were serious about examining how we spend public money we would proceed in that fashion so that we could hear those who have objections.
As I understand the comment of the hon. Member for Argyll (Mr. MacCormick), and as I understood the sotto voce comments from this side of the Chamber that were drowning his words, the rural areas feel strongly about this order. I am an urban Member and I hold no brief for the rural areas. It may be that when I get down to examining the matter I may find that I disagree with the points put forward by the rural local authorities, but it seems to me perfectly proper for those rural authorities to have a committee or some other arrangement under which they could discuss their grievances and concern with hon. Members and give those who are concerned about this issue the opportunity to hear their evidence.
I can hear some of my hon. Friends who are misguided but are trying to be helpful saying that devolution will resolve all these problems. I cannot comment on whether that will come about, but if the intention and hopes of my hon. Friends come to fruition and this House proceeds to deal with the block grant order in the way that it now disposes of the rate support grant and housing support grant orders we shall look very foolish. It is time we grasped the thistle and devised a proper system for controlling the way in which we spend money, because then the House would be more likely to command the respect of the electorate.
I believe that my hon. Friend the Under-Secretary has the two key elements of the order right. I calculate that the increase of local income is assumed to be 16 per cent. over two years. That is a reasonable and modest figure. The message should go out that there is no basis within the figures in the order for any substantial rent increase, certainly in any urban housing authority. Nor is 1650 there any basis in the order for any local authority to decide that it will not proceed with a capital building programme because of any lack of housing support money, because that money is provided.
My hon. Friend has the second element right in that when he provides for the total budget it is no less than it would have been had the previous subsidy system existed. In other words, the order does not provide for any cuts. [Interruption]. My hon. Friend the Member for Paisley (Mr. Robertson) says that is codswallop. If he is to carry on a running commentary on every speech that is made, he has an obligation to make a speech—which, since my hon. Friend is leaving, we are mercifully to be spared. If nothing else, my remarks to my hon. Friend have achieved their desired effect. When challenged to say something, his party, as usual, has nothing to contribute.
The money being provided through the new housing support grant is at least the same as it would have been under the previous subsidy system. But I am rendered nervous when I see the tripartite division of that subsidy. Under the general portion, which is intended to be the main subsidy, one-third of expenditure is provided. Under the transitional portion two-thirds of the moneys are provided.
When the Bill was debated on Second Reading and in Committee last Session, I and others expressed some concern about the wide element of discretion that was, in effect, being given the Secretary of State to alter the overall expenditure on housing susidies. I am quite happy that so long as my right hon. and hon. Friends remain in charge of housing policy in Scotland there will be no cutback in the housing subsidy expenditure. But when I look at this order and find that two-thirds of all housing subsidy is included under the heading "transitional ", I cannot help but wonder whether, and to what extent, money from that transitional subsidy would disappear altogether from the housing subsidies rather than be transferred to the general provision heading if there were a change of Government, and other people, perhaps less enlightened and perhaps less committed than my right hon. and hon. Friends are to defending the position of the council tenants and those on the waiting lists, were in charge. That very division, in which the great bulk of 1651 the money is marked as "transitional ", underlines the extraordinary extent to which the measure we passed last Session grants discretion to the occupant of the chair of Secretary of State for Scotland.
One positive merit which emerges from the order which I did not anticipate in the debates on the Bill and which I believe no other Member anticipated is that at least in the order there is a separate heading for expenditure on hostel provision. I welcome that separate identification for hostel expenditure. I represent more hostel beds than any other Member for Scotland, with the possible exception of my hon. Friend the Member for Glasgow, Central (Mr. McMillan).
I find it indicative of the priority that we attach to that type of accommodation that, out of a total expenditure of £151 million, we allocate £750,000—half of 1 per cent.—to it. Over the past 30 years, we have made genuine progress in housing the bulk of the population. I am one of the first to cavil about how much still has to be achieved and how much is left undone. Nevertheless, we have made real progress in the past 30 years. The majority of the people now live in accommodation which before the war could have been the aspiration only of a small minority.
Yet in those three decades the standard of accommodation for those who live in hostels has stood still. I could take hon. Members to hostels in my constituency which have not changed since the day when war was declared, which have exactly the same standard of accommodation as they had during the 1930s. It is the old story that the weaker one is, the more vulnerable one is, the less articulate one is, the less likely one is to get help because one is less able to demand it.
I do not blame my hon. Friend the Under-Secretary of State for this situation. I certainly do not blame him for the relative expenditure figures contained in the order. The situation is, sadly, a reflection of the sum of a number of decisions taken by local authorities. As my hon. Friend said, only a very few local authorities have chosen to get involved in this sector.
Over the last two years, I have been involved in Edinburgh in attempting to persuade the district council to take over the Castle Trades Hostel, which is the 1652 largest hostel in Edinburgh, because its management announced two years ago that it would have to close next March. Only last week did the housing committee finally commit itself to taking over that hostel, at a point which was too late to prevent notices going out to the men advising them that they would have to quit because the hostel would close at the end of March. Even then the housing committee has set aside only £250,000 for expenditure on it, and since that includes the purchase price of a large central area site it is self-evident that it does not intend to spend particularly much money on improving the quality of the accommodation at the hostel. In other words, the men in that hostel will have to put up with accommodation which is grossly inferior to anything which would be tolerated by any other tenant of the housing committee in Edinburgh.
We face an enormous task, not only in Edinburgh but in many other urban centres, if we are to provide the kind of accommodation for people in that position that the rest of our constituents see fit to demand today for themselves. It will be helpful if, in the course of meeting that task, we can preserve a separate heading for hostel expenditure in the housing support grant order so that we can monitor how the expenditure goes and so that this House can press for an annual increase in it.
§ 10.50 p.m.
§ Mr. Hector Monro (Dumfries)
I intervene only briefly to see whether the Minister can help us by explaining exactly what this is all about. The explanatory note is perhaps the briefest I have ever seen on an order expending so many millions of pounds, and it is not particularly helpful in explaining how the money is to be spent.
The Government keep professing their wish for open government, and I suppose that had hon. Members anticipated this debate earlier the Minister would have sent us a report by the Secretary of of State for Scotland under section 1 of the Housing (Financial Provisions) (Scotland) Act 1978. Most of us have this information only through the courtesy of Strathkelvin district council, which was kind enough to send us a copy today together with its criticism of its content.
It would seem to us to be in the interests of better government and to be 1653 helpful to us if we could have this kind of information available to us earlier. [Interruption.] It is not available in the Vote Office. The Secretary of State may live with his head in the clouds, but not everybody knows every report produced by St. Andrew's House. He would probably go in fear and trembling if we did. It would be helpful if we knew what documents were available when we were considering an order such as this. We would then be better informed in our criticism.
Hon. Members did not know that this report was available. How could they? It is all very well for the Secretary of State to sit there in that smug way. He has a large staff to explain matters to him, but we have not. All we need is a little help to enable us to know that the money is being spent in the best interests of all concerned in Scotland. I do not know whether the document the Secretary of State has which nobody else has gives a comparison. In annex C there is no comparison with last year for the district authorities. There are comparisons in annex A and annex B with the figures for the last financial year and for the coming year, but that is not so in annex C.
It would have been helpful to know what reductions or increases the various district councils were receiving. In that way we could have known whether the new formula, which is incredibly complicated to understand, is working for the benefit of our own districts.
I know that this is a revenue grant and that it is not particularly related to capital expenditure, but I am surprised that in this formula there is no comparing of housing waiting lists, which is far more important to an area. As the hon. Member for Argyll (Mr. MacCormick) said, the number of houses being built and the number of people waiting for them are far more important than the population, but they do not seem to be taken into account.
It would also be interesting to know whether the Minister takes into consideration the quality of housing in an area, because all of us, without exception, want to see a much higher quality of building in our constituencies. Many of us are particularly sad at the quality of housing built in the first 10 years after the war, housing which has deteriorated much 1654 more quickly than was expected when it was built. Many of those houses now need to be replaced after a comparatively short life. That ties in with the perennial argument about whether we should modernise or demolish the prefabs in which many elderly folk still have a great wish to live.
The Minister might comment on how he is getting on with improving the quality of houses through the district councils and the Scottish Special Housing Association, because many in my constituency require improvement at the earliest opportunity. However, I should like the Minister not to read out a complicated brief which left us none the wiser but to give us a little information, because this is hard to understand.
§ 10.54 p.m.
§ Mr. David Lambie (Central Ayrshire)
I should like to take up a point made by my hon. Friend the Member for Edinburgh, Central (Mr. Cook) on the history of the Committee stage of the Housing (Financial Provisions) (Scotland) Act. During that Committee stage, my hon. Friend, myself and a group of Labour Members were disturbed about the powers that were being given to the Secretary of State. Tonight the Secretary of State has honoured one of the assurances that he then gave us. He said that in real terms the total amount of subsidy paid under the housing support grant would be equivalent to what it would have been under the old system. He has kept to that. We are getting £151,700,000.
However, like my hon. Friend, I am disturbed that roughly two-thirds of that money is to be given by way of a transitional grant. I am more disturbed now, and astonished, that following the speech of my hon. Friend the Under-Secretary, no Tory Front Bench spokesman rose to speak. Why? The Tories are in favour of this. They see the Trojan horse that the Labour Government have put into their hands if by some chance the result of a General Election is that the Labour Government are replaced by a Conservative Government.
The Labour Government have changed the whole system of housing subsidy in Scotland, a tradition that had been built up over 50 years, in order to make roughly two-thirds of the money available for housing subsidy to Scotland next year 1655 a transitional grant. What will happen to the people in my constituency in Cunninghame if by some chance the hon. Member for Glasgow, Cathcart (Mr. Taylor) replaces my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) as Secretary of State for Scotland? If ever there were to be again a hanging judge in relation to council tenants and council rents, it would be the hon. Member for Cathcart. We would have no ground for complaint, because the hon. Member for Cathcart would say honestly" It was your Government who put this weapon into the hands of the Conservative Party."
Although I am happy that the total amount of subsidy, in real terms, is equivalent to what it would have been under the old system, I am disturbed about this Trojan horse that we have put into the hands of a possible future Conservative Government.
Also, during the Committee stage of the Bill, I and quite a number of my hon. Friends went out of our way to put pressure on the Government to make sure that we had complete negotiations with COSLA before the figure for the housing support grant was reached and before the distribution formula was settled. In spite of the assurances that have been given, I am disturbed that very little consultation has taken place between the Under-Secretary and COSLA—not through any fault of my hon. Friend but because we are finding that COSLA is too big. Following the reorganisation of local government, we have one organisation representing all the local authorities in Scotland. That organisation is too big. It does not have the machinery to negotiate on equal terms with the Government and their advisers in St. Andrew's House.
§ Mr. Teddy Taylor (Glasgow, Cathcart)
In case any of those who read what is said in this important debate might misunderstand, will the hon. Gentleman at least agree that, when he and some of his hon. Friends proposed that in the event of disagreement between COSLA and the Government there should be a form of arbitration, the Conservative Members on the Committee supported him, there was a tied vote, and we lost only because unfortunately the SNP representative on the Committee either was not there or did not vote?
§ Mr. Lambie
I accept that. Sometimes we have strange bedfellows as well. We cannot help that.
I was making the point that, although we were assured that there would be negotiations between COSLA and the Minister, those negotiations have not taken place to the extent that we expected, not through any fault of the Minister but because COSLA does not have the organisation to deal with negotiation on an equal basis with Ministers and their advisers.
In a letter to my hon. Friend the Member for Edinburgh, Central on 12th January, the secretary of COSLA wrote:The paper by our financial adviser was only issued to local authorities at the beginning of this week because the implications of the Order have proved to be very difficult to determine.He said that he could not give a brief to Members of Parliament because the implications hadproved to be very difficult to determine ".We are passing an order of which we do not know the full implications. If COSLA does not understand them after having a working party discussing the order, and after having close consultations with my hon. Friend, how are ordinary Back Benchers expected fully to understand them?
Those of us who have been consulted by our own local authorities have been told by them how they think the order will affect their own districts. I am one of the Members representing Cunninghame district council, which has informed me that the amount of money to be given to it next year by way of housing support grant will be £800,000 less than it would have received under the old system; £500,000 more would have been received under the old system, instead of an estimated £300,000 less under the new system.
I accept the concept of the order that the areas of urban deprivation should be helped, but I do not accept the principle that my electors in Cunninghame should pay for that. If the total is to be the same throughout Scotland and the Government think that certain areas, such as the urban areas of Glasgow and the greater Glasgow conurbation, should receive more, that money should be provided in addition.
1657 The £151 million is not a fair figure. Although in real terms it is equivalent to what the amount would have been under the old system, it is wrongly distributed by giving more to certain areas of Scotland and taking that away from other areas, such as Cunninghame.
We are in a difficulty tonight. We cannot amend the order. We can only vote against it, and if we do that no money will be provided for housing finance in Scotland. We cannot do that. All that we can do at this stage is to make a protest on behalf of our own district councils, and tell the Minister that if he wants money for the areas of greater need, if he wants money for the greater Glasgow conurbation, I support him, but let him introduce another order to provide extra money for those areas, and not take it from areas such as Cunninghame and the others that are not part of the greater Glasgow conurbation. I ask my hon. Friend to consider an increase in the amount of money being provided in this order to give a fairer share to areas like Cunninghame district council.
§ 11.5 p.m.
§ Mr. Jim Craigen (Glasgow, Maryhill)
The Minister sought to assure us that this order would introduce the flexibility required for housing policies in the 1980s. I hope that he is right. Like my hon. Friends the Members for Central Ayrshire (Mr. Lambie) and for Edinburgh, Central (Mr. Cook), I did not agree with this argument during the Second Reading debate. I am pleased, however, that the new system proposes to allocate more or less the same resources this year towards housing in Scotland. What worries us is not so much that this year the cloth is the same size but how the scissors will be exercised by future Secretaries of State in dealing with the housing support grant.
I understand that the city of Glasgow would have preferred to see far more emphasis on the general element within the housing support grant and less on the transitional element, which at present is by far the larger. The Secretary of State, I believe, has already accepted the city's housing plan as a sound and constructive analysis of the major housing issues. It is clear that one of the principal elements in that plan is a sizeable 1658 modernisation programme within the local authority sector. I believe that this will be the dominant feature of the city's housing development during the next five years or so.
I want to make one or two points about the housing support grant formula. It must be obvious that if there is a sizeable modernisation programme in hand there will be a loss of rental income to the local authority. Indeed, this will affect the anticipated revenue, because in many ways the housing support grant is really a housing deficit grant in the way that it operates. The Minister might be able to say how he sees the role of the Scottish Special Housing Association in assisting Glasgow with its programme of modernisation, although this would involve, in some instances, the transfer of property to the Association.
From time to time, we have discussed in this Chamber the problem of Glasgow's population decline. We shall be faced with a problem of surplus housing in Glasgow. Various calculations of the size of surplus have been made. Here again, the city could well be faced with a fairly substantial loss of rental income, which will also affect the housing support grant calculations.
I want to turn to the question of new build. The figures have been going down. I would like the Minister to say how he sees the new build programme in Glasgow. We shall require a much more specialised housing programme, with more attention and wider access to groups such as single persons, the elderly and middle-aged couples.
The explanatory notes with the order refer to the difficulties of standardising management and maintenance costs. Glasgow is about to embark on a fairly ambitious programme of opening up new district offices, which will clearly require substantial commitments of capital and staffing expenditure. The Department should be devising a formula here, as well as on the problem of demolishing local authority houses, which will loom larger over the next five years.
The recent severe weather conditions during the Christmas and new year period will land Glasgow district council with substantial bills—
§ Mr. Craigen
Yes, but I shall speak only for my own area. There will be substantial bills for repairs to houses and multi-storey blocks. Can the Minister say something about introducing a contingency element into future housing grant orders? Apart from the problems of the last month or so, more and more local authorities are having to deal with severe problems of dampness and condensation in their buildings that will be a substantial burden on housing expenditure, both present and future.
§ 11.11 p.m.
§ Mrs. Margaret Bain (Dunbartonshire, East)
It is surprising that the hon. Member for Edinburgh, Central (Mr. Cook) should complain about the procedures of the House when he is actively campaigning against the establishment of a body in Edinburgh which would allow us to discuss Scottish housing problems at a reasonable time.
I share the surprise of the hon. Member for Central Ayrshire (Mr. Lambie) at the failure of any Front Bench Conservative spokesman to reply to the Minister. Perhaps this is a day on which they are short of breath: at 10 o'clock they could hardly raise enough to force a Division.
The Minister referred to paragraphs 26 to 30 of the explanatory notes in connection with the Convention of Scottish Local Authorities. COSLA was consulted in some detail several months ago, but the director of finance for Strathkelvin district council pointed out to me that the inflexibility of the procedures in the instrument became known to the council only a fortnight ago. I congratulate the district council on its work in giving hon. Members background material for this debate. This delay is of great concern, particularly since the operation of the grant will lead to a total reduction in previous housing subsidies. In my constituency, Cumbernauld and Kilsyth district council will lose £300,000, with only two transitional stages, and Strathkelvin has estimated a loss of £1 million.
These points have been raised before with the Scottish Office, which, in a letter on 19th December 1978 to Provost Gordon Murray of Cumbernauld and Kilsyth district council, pointed out that his representations in a previous letter had been raised at COSLA.
1660 The letter continued:The effect of the distribution of grant on the burdens of individual authorities will be monitored and each year it will be possible to give fresh consideration to its fairness in consultation with the Convention.We all endorse the view that reconsideration must be given, but the effect of this order is small compensation to those local authorities that will lose in the near future, because programmes on which they have already embarked will be seriously affected. In areas such as Cumbernauld and Kilsyth, and Strathkelvin, no compensation is built in to cover high rise or sparsely populated areas. But such councils have undertaken massive modernisation schemes in villages which they are trying to make more attractive. Strathkelvin district council has been in the van of attempts to solve the horrific condensation problem to which so many council tenants are subjected.
The cut-back in the order, in addition to the capital expenditure cut-backs which local authorities have experienced in the years of Labour Government, means that housing in Scotland, rather than being improved, will become worse.
I urge the Minister to refer to the recommendations made by Strathkelvin district council on page 3 of its report. It asks that at least paragraph 1 (1) of the schedule be amended to allow for the insertion of the charges paid by each authority in 1979-80. This would provide accurate rather than hypothetical distribution.
§ Mrs. Bain
I am sorry, but I have little time. The Conservative Front Bench has missed its opportunity in this debate.
The second recommendation is that estimated housing support grant figures should be redrafted to reflect the best estimated current charges for 1979-80 available to local authorities. This would prevent some local authorities subjecting tenants to substantial rent and rate increases.
I urge the Minister to examine the possibility of building in an alternative factor whereby consideration would be given to the percentage of housing which is local authority-owned. In some areas more than 50 per cent. of the housing stark is 1661 local authority-owned, and in others the figure is over 75 per cent., but no compensation is provided.
I ask the Minister to take back the order. It is to come into operation on 1st April. This is 16th January. It is not beyond the ability of the Scottish Office to look again at the legislation, in view of the representations that have been made from all parts of the House and by local authorities in my constituency.
§ 11.18 p.m.
§ Mr. Dennis Canavan (West Stirlingshire)
If the debate has shown nothing else so far it has revealed two of the many faces of Scottish nationalism. The hon. Member for Argyll (Mr. MacCormick) said that he had something in common with the hon. Member for Dunbartonshire, East (Mrs. Bain), but he went on to say that his constituency was being penaliised by the housing authorities in the central belt because most of the money went to those authorities. A few minutes later the hon. Member for Dunbartonshire, East, who represents a central belt constituency, complained that the central belt authorities were not receiving enough. I wonder whether she thinks that is at the expense of the people in Argyll.
However, I sympathise with the hon. Member for Dunbartonshire, East on at least one point. I reiterate the case put to us both by Strathkelvin district council, which is one of five housing authorities covering part of my constituency. The problem may also affect other authorities. It involves the method of calculating assessed net expenditure for the purpose of distributing housing support grant. The largest item in the expenditure column of the housing revenue account is in respect of loan charges, amounting usually to about 70 per cent. of the total housing revenue account expenditure. Paragraph 1(1) of the schedule, under the heading "Amounts included in Calculation of Assessed Net Expenditure ", refers toEstimated loan charges due to be debited to the authority's housing revenue account for 1977–78…multiplied by the ratio which the Secretary of State's estimate of the Scottish aggregate of such loan charges for 1979-80 bears to the aggregate of these estimates for 1977–78.I understand that the Secretary of State has used the estimated 1977–78 loan charge for each local authority as the base figure and multiplied it by 115.8 per cent. 1662 That is because 15.8 per cent. is the average Scottish growth in loan charges between 1977-78 and 1979-80. These are estimates, because we cannot get actual figures. It may be that the argument put to us by the director of finance of Strathkelvin was not strictly accurate because he referred to actual figures. There are no actual figures at this stage. We have to talk about estimates. We are talking about one estimate that might be better than another.
Strathkelvin suggested that on account of its special circumstances the Secretary of State should consider an alternative formula for the calculation. As I said, the average Scottish growth figure over the two financial years is 15.8 per cent., in terms of loan charges, but the average for Strathkelvin is 65 per cent. There may be other authorities with percentages that are considerably above the average. Instead of taking the average growth figure for the whole of Scotland, why not take the estimated growth for each local authority in the calculation of each local authority's share of the housing support grant? That appears to be a reasonable approach. Under the present system all local authorities with a higher than average Scottish growth in loan charges will be penalised, at least in the early years of their borrowing.
Strathkelvin claims that its share of the housing support grant next year will be £1.326 million. It claims that it will lose almost £1 million. The figure given was £969,000. That is the reduction compared with the previous system of subsidy. If the old system had continued, Strathkelvin would have been almost £1 million better off. It claims that the main reason for the reduction of the subsidy is the method of calculation of the distribution of housing support grant relating to increased loan charges.
The result could have a bearing on such matters as building and modernisation programmes. I am one of those who have been encouraging local authorities in my constituency to go ahead as much as possible with building programmes and much-needed modernisation programmes. It may be that Strathkelvin was a wee bit slow in getting off the ground as a new authority, but at least it is better late than never. It is now coming to a year when it proposes a sudden increase in its capital requirements. I do not see why it 1663 should be penalised. It should be given encouragement, especially by a Labour Government, to go ahead with much-needed capital projects that will affect my constituents and others in the district.
The alternative—this is latent throughout the whole argument about housing support grant—if there is not enough grant, it to put an excessive burden on the ratepayer or rent-payer, or both. It would play into the hands of those such as Provost Gordon Murray of Cumbernauld and Kilsyth district council. My hon. Friend the Under-Secretary of State knows that I have been campaigning for a long time for modernisation programmes for the prefabs in Kilsyth. If the authority includes that programme in its housing plan for next year, applies for the necessary capital expenditure, obtains borrowing permission and does not get an adequate housing support grant to meet the increased loan charges, obviously Gordon Murray will be up to his old tricks and blaming the Labour Government for increased rents. That is a point worth considering.
Strathkelvin council said that it realised the implications of the proposal only about a fortnight ago. Why were they not brought out earlier in the negotiations? Could local authorities have discovered the implications earlier if they had been better prepared?
We now have Hobson's choice. The negotiations have taken place between the Minister and his representatives and COSLA behind our backs. No hon. Member is a member of COSLA and we were not privy to the arguments that took place in the negotiations, There is an important point of principle here. We are asked to approve or disapprove millions of pounds of public expenditure, and surely, if it is the forum of the people that it is supposed to be, the House should have the opportunity to amend orders put before us. I feel tempted to vote against the order, but that would be a vote for a zero housing expenditure and a zero grant for Strathkelvin, Cumbernauld and Kilsyth, Stirling, Falkirk and all the other housing authorities in Scotland. We are left in a difficult position‥
It may be too late to do something about it this year, but I hope that the Government will produce a better order next year and will make the formula retroactive to make it fairer to local au- 1664 thorities such as Strathkelvin with a much larger than average increase in loan charges.
§ 11.27 p.m.
§ Mr. George Younger (Ayr)
I am highly flattered that the House has felt the lack of my intervention so far. I made the usual decision that Front Bench spokesmen have to make about when is best to intervene in a debate. I thought that the hon. Members for Central Ayrshire (Mr. Lambie) and Dunbartonshire, East (Mrs. Bain) would know the procedures of the House well enough to realise that that is the custom, but I have noted that it appears to be regretted if, when I take part in a debate, I do not do so as early as possible. I shall reverse that in future, to the benefit, I hope, of the House.
It may be that the hon. Member for Dunbartonshire, East is suffering from acute embarrassment in the remarks she made about the reservations of Strathkelvin district council about the order. I hope that her constituents in Strathkelvin who read the report of the debate—I support them in raising their problems—will note that the problems that they face, of alleged unfairness in the way the formula has been calculated in their case, could have been avoided if the SNP Member had voted with us in Committee, when we took the Government to a tied vote. If the SNP representative had voted with us, Strathkelvin's problems would have been solved. I hope that the hon. Lady will, in the usual appropriate manner behind the scenes, make that known to her hon. Friend who let her down on that occasion.
I am not prepared to judge the new system of dealing with housing finance on the basis of one order, but everything said in the debate reinforces the reservations expressed about the new system by hon. Members from both sides in Committee. I accept the good faith of everyone concerned. I know that the Minister is always exceptionally anxious to provide information to hon. Members and the Opposition, and I pay tribute to him for that, but the system as it has been arrived at this year will not do for the House.
I am sure that it was not intentional, but its effect is that the details are decided in two forums behind the scene—first, among officials of local authorities on the 1665 COSLA working parties, who do by tar the bulk of the technical work on figures and so on, and, secondly, among officials of the Scottish Office, who have to do the same.
I am certain that they understand what they have done and believe that it is absolutely fair. I am certain that they have put into the report and the order the basic facts that they think are necessary. However, the Minister will agree that it is clear from what has been said that hon. Members have not had sufficient information on which to make any worthwhile judgment. I do not know whether £151 million is sufficient to carry out the housing policies that I would like; neither does any other hon. Member. Therefore, I hope that those members of local authorities who look to us to be the last long stop against any difficulties and who read the report of this debate will note that we have been absolutely unable, because of a lack of useful information, to make any worthwhile impact on the Minister.
I shall try to be constructive and state what I think should be done. What is needed is much more information for hon. Members before a debate of this type takes place. We have the order and a report by the Scottish Office which most of us have seen by courtesy of Strathkelvin district council. I understand that some hon. Members have received the report, but when I obtained my copy of the order from the Vote Office I was told, in answer to my specific question, that there was no explanatory document to be handed out with it. Therefore, had I not been able to get a copy of the report from the Strathkelvin district council I should have come to the debate armed with only the order.
Secondly, the form of the information must be much fuller and better. I ask the Secretary of State to note carefully that what we require before we can have a sensible debate is a full statement of what each local housing authority is to receive and, if possible, a comparison with what it relates to for previous years. Only in that way can we attempt to assess the accuracy of the new figures being given.
The Minister was wide of the mark in comparing the old system with the new system, and criticising the old. I am not 1666 standing up for the old system for ever and a day—it has gone, and that is the end of that—but a least we knew with the old system what the subsidies were given for and we knew what percentage they represented. We knew what the high cost subsidy was. We knew what the housing expenditure subsidy was. We could argue about it. We could say what it was. With the best will in the world, we have not the faintest idea what the transitional subsidy is for or what the general element in the subsidy is about. We are told a few of the assumptions. One of the assumptions is the somewhat startling one, in view of present events, that the average increases of earnings this year will be about 7 per cent. I hope that that is so. It is in the country's interests that it should be so, but I very much doubt that it will be so. I hope that the Minister will tell us that he will bring forward a variation order if that assumption should prove to be wrong, so that housing authorities can know that they will not be suffering as a result of it.
The main problem this evening is that we are not able meaningfully to discuss the order. As the hon. Member for Edinburgh, Central (Mr. Cook) said, it is not right to have this debate limited to one and a half hours starting after 10 o'clock. This is the only time that we shall discuss meaningfully what is to be spent on Scottish housing for the coming year. We are required to do that in one and a half hours. It is not possible for all hon. Members who wish to take part in the debate to do so. We have all been fairly brief this evening and have been as helpful as we could be The new system may be very good. I hope that it is. If it is to continue, it must involve changes in the practice of the House and the way in which we debate the subject. We must have a debate that lasts longer than one and a half hours. It would be preferable to have a debate on two mornings in the Scottish Grand Committee, or a day's debate, or at least a debate lasting several hours in the House if we are to have any chance of making an impact on the subject.
Mr. James Siliars (South Ayrshire)
Cannot we start to change the practice tonight by voting against the order? If we carry the day against the Government they are bound to produce an amended order. That will give us another hour 1667 and a half in which to elicit the information and discuss the subject further.
§ Mr. Younger
The hon. Gentleman will no doubt decide what he wants to do. I think that if we were to do that it would not give enough time for the reassessment of the whole system that I think is needed. I do not think that we shall get anywhere this year. We need a lot more information, and we need it a lot earlier.
I should have liked to talk about the vital things affecting Scottish housing. I should have liked to talk about the disastrous fall in house building over which this Government have presided. I should have liked to talk about the very difficult problem of condensation—I know the Minister shares my concern about it—which affects thousands of council houses in Scotland. Tenants are finding their houses very difficult to live in, due to condensation, and no one has a solution. Up till now, no one—I except the Minister from this criticism—has shown that he really cares about it. Some of us care very much indeed.
I should have liked also to talk about the other very great problem of Scottish housing—I hope that it is covered in the order, and that the money is provided for it—which concerns the declining areas in every town, where there are houses which, through the vicious circle of deprivation, problem tenants and falling standards of maintenance, are going downhill all the time. These are comparatively modern houses, which will become out of date long before their time, yet we have not time to discuss that or to ask the Minister how much there is in the housing support grant to deal with those matters. This is an area in which an immense amount of leadership is needed from the Scottish Office. It seems to have run out of ideas on these matters, and we do not get a chance to probe these things properly.
I have always applauded the Minister for his approach to housing, which is becoming nearer and nearer to that which has for many years been advocated by the Opposition. His approach to housing is one that I have very much appreciated, as have all Conservative Members. He is, I think, the best person to tell his Department that if, in a future debate of this importance, the House of 1668 Commons is given so little and such inadequate information, it simply will not stand for it. I ask him to do something about it.
§ 11.38 p.m.
§ Mr. Hugh D. Brown
I prefer it when the hon. Member for Ayr (Mr. Younger) attacks me, Mr. Deputy Speaker. I have enough trouble with my hon. Friends without the hon. Member complimenting me.
I apologise to the House. I was not aware that there had been any printing difficulties over the explanatory report. I know that when it was laid at the beginning of December there were difficulties, and that it was typewritten. Members will recall that that was on 8th December. I had assumed that everything was in order at least for the last three or four weeks. I rather suspect that it has been. If I am wrong, I regret it. I will check up on it. Part of the whole exercise is in giving more information, and the Government are entitled to some credit for this. Under the rate support grant system or order there is no obligation to show where there has been disagreement or failure to agree even with COSLA. This is a genuine and complete fulfilment of the commitment that was given to the Committee about providing more information. There is no question of that.
The only respect in which feel that we have not gone far enough is still a matter for the House, and that is in terms of the lack of time. That will not be amended or altered in the context of one housing support grant order, albeit that we are talking about £151 million. I think that this is an argument for an Assembly, or at least for some improvement in the procedure in this House and for more time to he given. I have always held this view—I make no secret of it—and I regret that circumstances have not permitted us to do anything about it on this occasion.
As hon. Members will appreciate, have only a few minutes in which to deal with the detailed questions that were asked. With regard to Argyll and Bute, I gave a personal assurance when I last met COSLA—it is contained in the minutes agreed between COSLA and myself—that the problem of Argyll, and the sparsity allowance point, would be looked at urgently in the context of next 1669 year's order. I repeat that assurance, because it was a real point that was raised.
It is no good the hon. Member for Argyll (Mr. MacCormick) making nice, parochial speeches. I know that there is no responsibility on the part of any Opposition party, particularly the SNP, because it is not likely to be in government and can therefore be totally irresponsible, but it is not good enough to take a constituency-by-constituency attitude.
§ Mr. MacCormack rose—
§ Mr. Brown
I cannot give way, because of the time. In other words, if Glasgow comes out of this too well at the expense of rural authorities, I would expect the SNP group in Glasgow to say "No, we do not want the money. Give it back to the rural authorities ". The point about Argyll or any other remote area with sparsity problems has been taken into account by COSLA. There is general agreement that the authority with an outstanding query is Argyll, and I have already given a commitment to review it.
My hon. Friend the Member for Edinburgh, Central (Mr. Cook) repeated comments that he made in Committee. To some extent he raised the same point as that raised by my hon. Friend the Member for Central Ayrshire (Mr. Lambie) when, having suggested that it was all right under the present Government, he asked what safeguards there were if there was a change of Government. We have absolutely none in strict accountancy terms, although we have the check of public opinion at both local and national level. In other words, the system, commended for its flexibility on the one hand, presents opportunities for any unscrupulous Government who want to cut the element of support for housing. I admit that quite frankly. But they must still come before this House, and I would hazard a guess that no Government at present would contemplate cutting resources on housing, because the demands are still there to be met.
Now that authorities have been in existence for a few years and have been required to assess their real needs, they are beginning to create more demands on Government, which will have to be met sooner or later. The authorities them- 1670 selves are becoming more efficient and more confident in their own ability to spend money.
§ Mr. Brown
The hon. Member for Glasgow, Cathcart (Mr. Taylor) queries that. I assure him that that has been my impression of the many and varied authorities that I have met. Indeed, I welcome it.
I am afraid that the calculation on Cunninghame, to which my hon. Friend the Member for Central Ayrshire referred, is not correct. It is £300,000, not £500,000. To some extent it is hypothetical. This applies equally to Strathkelvin, because it depends on certain expenditures taking place before we can assess accurately whether the authorities' calculations are right.
It is not true that there has been a lack of consultation. There has been more than adequate consultation with COSLA. I cannot give a guarantee that the degree of housing support is adequate to meet every demand from every authority. Authorities must choose their own priorities. We have asked them to do so. If dampness or condensation is a problem in Kilsyth it should merit a priority in that authority's budgeting and programming. We shall not be able to meet the demands of every authority for every item of expenditure this year or in any single year.
The hon. Member for Ayr (Mr. Younger) was very fair in presenting this issue. He said that he wanted more time to discuss housing policy. I could not agree more. But we are not tonight discussing housing policy. There are other opportunities for that. We are discussing the detailed mechanism of a new system of calculating how much support is needed for Scottish housing generally and the formula for distributing that amount of aggregate grant.
There are winners and losers. There is no secret about that. But I am satisfied that the new system is fairer, and is capable of adjustment and flexibility. What is needed is a stronger will on the part of more people, including government, to spend more on housing, so that the people of Scotland can look forward to better housing than they now have.
§ Question put and agreed to.1671
§ That the draft Housing Support Grant (Scotland) Order 1979, which was laid before this House on 8th December, be approved.