Housing Support Grant (Scotland)

HC Deb 10 February 1982 vol 17 cc1029-60 7.28 pm

The Secretary of State for Scotland (Mr. George Younger)

I beg to move,

That the draft Housing Support Grant (Scotland) Variation Order 1982, which was laid before this House on 22nd January, be approved.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

It may be convenient for the House to debate at the same time motion No. 3 on the Order Paper,

That the draft Housing Support Grant (Scotland) Order 1982, which was laid before this House on 22nd January, be approved.

Mr. Younger

Under section 1 of the Housing (Financial Provisions) (Scotland) Act 1978, I am required to estimate aggregate amounts of eligible expenditure and relevant income appropriate to authorities' housing revenue accounts, and to prescribe an amount of housing support grant equal to the deficit.

Before speaking in detail about the orders, I wish to place on record my appreciation of the way in which representatives of the Convention of Scottish Local Authorities have participated in the necessary discussions leading up to the grant determination. While there were certain areas, of course, where full agreement could not be reached—for example, in relation to reasonable levels of expenditure and local income—the way in which the grant is to be distributed substantially reflects the convention's suggestions, and I am grateful for the constructive approach which it has taken in these discussions.

On the variation order, hon. Members will recall that at about this time last year an order providing for housing support grants totalling £140.7 million in 1981–82 was approved. Having due regard to the most recent information on levels of interest rates, remuneration, costs and prices, we have decided to increase our estimate of eligible expenditure, and hence the aggregate of housing support grants by £21.2 million. That 15 per cent. increase in grants arises mainly from changes in interest rates.

The distribution of grant under the variation order adheres broadly to the principles laid down in the main 1981–82 order and approved by this House. Authorities will receive increases greater or less than the increase of about 15 per cent. in the grant total, depending on factors such as their relative loan charges per house and house numbers.

In the main order on the expenditure side, the main element is the calculation of loan charges, which account for just under 70 per cent. of our estimate of reasonable expenditure. Those are based on our estimate of mid-year debt in 1982–83 and we are now attempting to have closer regard than hitherto to the needs and circumstances of each local authority.

The other principal factor in determining aggregate expenditure is the amount to be allowed for management and maintenance. I am afraid that in the present economic climate we cannot allow more for 1982–83 in real terms than we did in 1981–82. The uprating from the 1981–82 settlement as adjusted by the variation order is 7 per cent. That figure takes into account the Government's view that local authority pay settlements next year should not, in aggregate, exceed 4 per cent. and also certain other factors affecting management and maintenance expenditure.

I shall now outline the decisions taken in relation to the estimation of aggregate relevant income for 1982–83. Apart from housing support grant, local authority housing revenue account expenditure is financed mainly out of rents and rates, or the local contribution as it is known, in the housing support grant context. The main factor in arriving at a level of total relevant income is, of course, the assumptions to be made on the increase in that local contribution. It is part of my responsibility for controlling public expenditure to determine an acceptable level for the local contribution; and especially to limit the effect of the rate fund contribution on total expenditure on local authority housing. I am interested in what happens to public expenditure, but only indirectly in local authority decisions on rents. We have, nevertheless, looked carefully at the implications of our policy assumptions for rents and have provided appropriate guidance to local authorities. I shall now outline the main features of this guidance.

It is essential to contain the rate fund contribution to housing revenue accounts, so my starting point has been that rents should increase by about £1.38 per house per week over the level recommended for the 1981–82 settlement of HSG. About a third of Scotland's housing authorities can manage with increases of that order, but for many authorities rents in 1981–82 fell short of the necessary level. That means that an average rent increase of about £2.20 per house per week will now be required over current actual levels. Such an outcome will have the effect of bringing back rate fund contributions to housing revenue accounts closer to the levels I indicated in the past and will bring the average Scottish rent to about £9.87 per house per week.

I believe that it will be widely accepted that a level of rent increase of about that order is reasonable, on any objective view of the assumptions that have to be made. In the first instance, those local authority tenants in receipt of supplementary benefit, who number about 150,000, will, generally speaking, not have to meet any of the increase. Additionally, about 250,000 local authority tenants currently receive a rent rebate. Of those, many will not have to meet any of the increase, and no tenant receiving a rent rebate will have to pay more than 40 per cent. of any increase. In other words, a rent increase at the average level of £2.20 would, at most, require someone on rent rebate to pay an additional 88p per week, and for very many people on low incomes the extra payment would be much less.

It must also be remembered that many local authority households have adequate income to meet the necesary increases. According to latest available figures, about 25 per cent. of local authority households have £9,000 or more a year coming in. Surely these people must bear their share of the cost of their housing. To ask others, who may be, and often are, in greater need, heavily to subsidise local authority housing costs for people with such an income is unjustifiable and unfair. The measures that I have outlined are aimed to avoid that.

The House will wish to note an interesting point of novelty in the debate. This year, for the first time, six authorities—Tweeddale, Nithsdale, Cumbernauld and Kilsyth, East Kilbride, Eastwood and Renfrew—are estimated to have an excess of income over expenditure. As a result of the amendments to housing support grant legislation introduced in the Local Government (Miscellaneous Provisions) (Scotland) Act 1981, those authorities do not feature in the determination of grant this year. The aggregate expenditure of the remainder will be about £625,187,000 with total assessed income being £490,738,000. The total of housing support grants provided in the main order is therefore £134,449,000. The amounts of housing support grant to be received by individual authorities in 1982–83 are listed in annex C to the report. The House will, I know, wish to have an account of how this distribution has been reached.

Again, for 1982–83, the block of grant has been divided into a general portion and a hostel portion. On the general portion, the most important item is loan charges. I have already given some indication of how those have been calculated. To make the distribution as responsive as possible to changes in capital expenditure patterns, we now use forecasts of individual authorities' housing capital debts for that year. The other main component on the expenditure side of the formula is that on the management and maintenance of houses. Two refinements on previous years' practice have been introduced—separate standard amounts for supervision and management and for repairs and maintenance and two allowances for high-rise houses. In the first three years of housing support grant, the formula included an allowance for houses in sparsely populated areas. In agreement with the convention, it has been dropped from the formula this year.

Mr. Russell Johnston (Inverness)

Does the right hon. Gentleman agree that the amount of money spent on the sparsity element last year was only about £750,000, which was not a large sum? However, it was important. Will he respond to the feelings expressed by local authorities such as Skye and Lochalsh and Lochaber that he has let them down and allowed his policy to be determined by the larger authorities which do not understand the sparsity problem?

Mr. Younger

I appreciate the hon. Gentleman's point, especially as it concerns his constituency. The Government took careful pains to thrash out the matter with CoSLA. When it made known its strong and unanimous resolution that it wished that element to be discontinued, the Government raised the matter with it again to ensure that it had consulted properly and was sure of that view. We accepted the strong and unanimous view of CoSLA. In this case, I am happy to recognise that view. The hon. Gentleman might like to raise the matter with CoSLA.

Changes in formula of the type I have outlined for this year's settlement invariably bring about gains and losses, and it was agreed in discussion with the convention that the impact of losses should be cushioned by the application of a limit on the loss of grant per house of £150 when compared with 1981–82. 1 am glad to say, however, that no authority has suffered a reduction in grant large enough to bring this limiting factor into operation.

I believe that this settlement will meet the needs of housing authorities and their tenants in the circumstances in which we operate while protecting ratepayers from further increases in their contribution to local authority housing costs. I commend it to the House.

7.40 pm

Mr. Bruce Millan (Glasgow, Craigton)

The Secretary of State made a very short speech. Normally, that would be a matter for congratulation, but not on this occasion, bearing in mind the importance of the subject and the fact that this is one of the few opportunities that we have for a general debate on housing. There are many important matters that he did not mention, and I trust that some of those omissions will be remedied by the Under-Secretary when he winds up. Certainly, I intend to deal with some of the wider issues.

The right hon. Gentleman started by paying tribute to CoSLA for its co-operation in the negotiations involving the housing support grant. On the basis of the comments that CoSLA representatives made to us this morning, I can only say that that tribute is not reciprocated. CoSLA believes that there has been a lack of adequate consultation about the housing support grant—perhaps even more than about the rate support grant. Indeed, on a particular point to which I shall come later, it feels that it is being positively misled by Ministers and the Scottish Office. It is very bitter about the matter. That is part of the background to the debate, just as it was part of the background to the debate on the rate support grant.

Another part of the background is the disaster area of general housing. Housing has been singled out by the Government—for no reason that has ever been satisfactorily explained to the House and for no reason relating to the needs of people in Scotland—for the most savage reduction of all public expenditure programmes. The Shelter brief, which I think all hon. Members have received, gives some of the figures, comparing 1981 with the disastrous year of 1980 in terms of council houses started, houses approved for improvement, improvement grants in the private sector and so on. The situation is calamitous both in Scotland and in the United Kingdom.

A headline in The Guardian of 5 February reads: Roof falls in on the building programme. That is true in Scotland, as it is in England and Wales. The National House Building Council recently drew attention to the fact that less new house building is going on in the United Kingdom at present—private as well as council housing—than at any time since the end of the First World War—not the Second World War. That gives some idea of the calamity. In Scotland, hundreds of thousands of people still live in squalid housing conditions. That is a reproach to all of us, particularly when so few resources are being devoted to housing.

I want to say a word about the background to this debate, because it is relevant to what local authorities will be in a position to do in 1982–83 in regard to repairs and improvements. I refer to the calamity that faces many Scottish local authorities following the extreme winter weather that we had over Christmas—we must pray that it does not recur—and the considerable additional expenditure that they will have to bear, for which the Government are making no provision whatever in the housing support grant and the provision that they announced recently is inadequate.

When we debated this matter recently the impression was given by the Government that they were doing exactly what the Labour Government did—first under the circular issued in 1976, and then under the further circular in 1978. That is absolute nonsense. On those occasions, we were dealing not with damage to housing—in some areas there may have been some damage resulting from plumbing or burst pipes and so on—but with snow clearance, particularly in the north of Scotland, flooding in the southwest of Scotland and damage to roads and bridges. That was the basis on which assistance was given by the Labour Government to the local authorities at that time. Incidentally, assistance was also given in other forms—for example, additional grants to farmers.

The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind)

The right hon. Gentleman should reread the circular, if he has not done so. The circular makes it quite clear that the advice that was being given to local authorities—not just for the year in question but for future years—was that local authority property, not roads and the like, should be insured. They were specifically told that if it was not insured they would not receive any payment or help. When subsequently claims were made, not a penny was given for housing expenditure.

Mr. Millan

I shall come to the matter of insurance in a moment. I want to deal with what happened in those years on the basis of the circular that was issued in 1978. Figures were supplied to my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) in a written answer yesterday. In both 1977–78 and 1978–79 we were dealing with snow clearance, damage to roads and bridges, and other expenditure. It was £4.2 million in 1977–78, and £4.5 million in 1978–79. All that expenditure was for the items that I mentioned, not for damage to housing. Thus, if there was not a parallel in 1977–78 and 1978–79—

Mr. Rifkind

What about the circular?

Mr. Millan

I shall come to the circular in a moment.

There is a direct parallel here with what happened on an earlier occasion under a Labour Government involving storm damage to houses in 1968. I have figures for what happened in Glasgow on that occasion under a Labour Government. The total expenditure there was £8.8 million of which, incidentally, no less than £6.4 million was spent on private housing, because the local authorities and the Labour Government took the view that if damage was done to a house, whether private or local authority, and had to be put right, it should be put right by the local authority and the decision as to who was to pay for it could be taken later. Out of the total expenditure of £8.8 million, I repeat, £6.4 million was spent on private housing. Some—not all—of that amount was recovered. Only £2.8 million was recovered out of the £8.8 million. The rates bore £½ million, but the Government bore the vast part of the expenditure—£5.5 million. If private houses are excluded more than 90 per cent. of the expenditure at that time was borne by the Government. That is the true parallel between the two situations.

Mr. Rifkind

What about the circular?

Mr. Millan

I shall come to the circular. The hon. Gentleman seems to think that this is a laughing matter. I have constituents who have been decanted for nine weeks without water. If the Government give no assistance to Scottish local authorities, many of those people will be out of their houses for a good deal longer. That is not a frivolous matter. It has to do not with circulars, but with the conditions in which my constituents and many others are living at present. The Under-Secretary of State is supposed to be in charge of Scottish housing, but his record is absolutely abominable. I do not expect him to treat the matter frivolously.

Whether or not local authorities were wise—they argue strongly that they cannot reasonably insure against many aspects of housing expenditure—the decisions taken by the major housing authorities in Scotland have left them without insurance. We can argue whether that is deplorable. In some cases, it might have been prudent to take out insurance. I shall not argue against that. There is an element of special pleading here. It is legitimate to tell local authorities to be prudent and to consider insurance. However, the major authorities have not done that, whatever the circulars of 1976 and 1978 may have said. If they do not get some Government reimbursement, much of the improvement and repair work that has to be done—even normally—will not be done because the money will not be available as a result of the large sums that will have to be spent on burst pipes and so on.

At the time of the 1978 circular—which is more relevant than the 1976 circular—the authority in Glasgow was Conservative-controlled, not Labour-controlled. That Conservative-controlled authority presumably decided not to take out insurance, just as the Conservative-controlled authority in Edinburgh and the Scottish Special Housing Association—now under the Secretary of State's control—did not take out insurance. Whatever blame may attach to individual local authorities, there has been a disaster. Unless additional help is given to local authorities, many innocent people will suffer.

Mr. Younger

The right hon. Gentleman admits that his circular advised authorities to insure and that the big authorities have not insured. He is now suggesting that the Government should step in and pay the costs of those that have not insured. What effect will that have on the authorities that insured? Does the right hon. Gentleman suggest that we should return their premiums? If not, will it not be grossly unfair?

Mr. Millan

I think that it was said that about half the housing authorities had insured. However, it is by and large the small housing authorities that have insured. Nevertheless, there has been a calamity. Despite our arguments about the 1978 circular and whether authorities should have insured, we expect the Government to respond as the Labour Government responded in 1968.

In 1968, we did not even ask why private landlords in Glasgow had not insured against roofs being blown off. At the Labour Government's expense, most of the money was spent on privately-owned property in Glasgow. That may have been a gift to the landlords, but we thought that, as people were living in houses without roofs, the Government were obliged to respond. Therefore, the Government also have an obligation to respond today. They will regret it if they do not respond and open the door that the Under-Secretary of State seemed to open slightly during last week's debate. I hope that the Secretary of State will not try to slide out of his responsibilities. Whatever he may say about local authority extravagance, that has not caused this disaster. The Government have an obligation to help.

The order illustrates the Government's objectives on housing policy. They were determined to reduce revenue support for housing, and they have done so. At the same time, the Government are giving increased support to those with mortgages because of the disastrous interest rates that have resulted from the Government's economic policies. Therefore, the Government have not shown any evenhandedness. I sympathise with those with mortgages, because they are suffering under the Government's policy, but they are at least being reimbursed through income tax rebates. While more money goes to the owner-occupier, the Government deliberately cut help to local authority tenants. That is part of a deliberate policy.

The second part of the Government's deliberate policy is to force up rents as high as possible. That is part of the effect of the order.

The third part of the Government's policy is to cut capital expenditure. The housing programme has been more savagely cut than any other public expenditure programme.

The fourth part of the policy is to force council house sales against the wishes of local authorities. It is humbug for Ministers to pretend that council house sales are desired in all areas and that every local authority tenant is equally interested in buying his council house. Some of us have taken the trouble to obtain information from our constituencies and know that such suggestions are misleading and hypocritical rubbish. Basically, the good housing stock is being sold and the local authorities are being left with the problem areas. That is a problem not only for local authorities but for existing and aspiring council house tenants.

The Government have used every shabby manoeuvre possible to achieve their ends, whether those ends are the forced sales of council houses or the objectives of this order. Under the order, the total grant to local authorities will be substantially reduced again. What are the figures? In 1980–81 the rate support grant was £228 million. In 1981–82 it fell to £161 million. In 1982–83 it will be reduced to £134 million. Those are at cash prices. When inflation is taken into account, the housing support grant for next year will be considerably less than half the grant for 1980–1. In that year also there was a real reduction in the housing support grant. There has been a reduction in crude terms and an even greater reduction in real terms in the amount of help given to local authorities.

The Government are trying to force up rents well beyond any level that could be justified by inflation. The rent increases that the Government seek in 1982–83—in addition to the increases of more than 30 per cent. that they have tried to force through in each of the past few years—are 29 per cent. That is well beyond any reasonable allowance for inflation. I can hardly credit the cheek and impertinence of the right hon. Gentleman when he asks people to accept 4 per cent. wage increases while he tries to force local authorities to increase rents by 29 per cent. It is apparent from the earlier debate that there will also be rate increases of more than 20 per cent.

The figures that have been used for the housing support grant are now utterly artificial and out of step with what local authorities are doing. Local authorities should make their own decisions on rents. They should do so in any circumstances and despite the penalties that the Secretary of State is once again trying to impose on them in this order.

Local authorities should take their own decisions in the interests of their tenants and not submit to the dictates of the Secretary of State for Scotland. The Secretary of State said, "There is no need to worry because most of them are on supplementary benefit anyway". If unemployment continues to increase, they will all be on supplementary benefit. It is an astonishing defence of what the Government are doing to say that people are on supplementary benefit, rent rebates, and so on. It is true that if someone is on supplementary benefit and the rent goes up, it does not cost him a bean, but it costs the taxpayer a considerable sum.

What about the people at work, who are struggling on reasonable wages and are having to submit to 4 per cent. wage increases? They are paying 29 per cent. In many cases they are getting absolutely nothing by way of rent rebates and they are certainly not getting supplementary benefit.

The Government used to say "We want to look at the people who are working; we do not want the scroungers." The Government look on people on supplementary benefit as scroungers, but they are not even protecting those who are at work who are having to pay substantial rent increases as a result of the kind of housing support grant order that we have before us tonight.

The Government are using phoney figures for repairs, maintenance and supervision. The Secretary of State says "We are not making any increase in real terms; we are increasing the allowances only to take account of inflation." The figure for 1981–82 was completely inadequate, and next year's figure will be even more inadequate. The 1981–82 allowance for repairs, maintenance and supervision was only £226, but the local authorities budgeted for £253. Next year, under the new cash limits for 1982–83, the figure will be only £240, which will not even meet the figures for which local authorities have already had to budget for 1981–82. We are seeing repeated in the housing support grant order what we have already seen in the rate support grant order. What is put in the orders and the reality on the ground are entirely different matters but at the end of the day the artificial figures in the order put up the rents and the rates and are a penalty on council tenants or on ratepayers.

The effect of all this is that considerably less support is being given to local authorities each year under this Government. It means that certain authorities ace now falling out of grant altogether. It can be seen that authorities such as Cumbernauld and East Kilbride, with new towns within their area, would soon fall out of grant, but it has come as a big surprise to hon. Members that Renfrew has suddenly fallen out of grant altogether. Why has that happenened? According to the Secretary of State, Renfrew will have a surplus on its housing revenue account. That is not a real surplus; it is made up of all the notional figures that the Secretary of State puts into the orders.

If the Secretary of State keeps putting in notional artificially high rent figures and notional artificially low expenditure figures, what is happening to Renfrew this year will happen next year to a large number of authorities. This is only the start of a process that will eventually eliminate every local authority in Scotland from having housing support grant from the Government.

My hon. Friend the Member for Renfrewshire, West (Mr. Buchan) will no doubt want to say something about the Renfrew problem. The problem is not that Renfrew has made a surplus on its housing account. It has a very considerable deficit, for which it is at present rating. Despite that, because of the use of these phoney notional figures—completely against the spirit of the original 1978 Act—Renfrew is now falling out of grant, and it is only the first of a long queue of authorities. Whether or not Renfrew has comparatively low loan charges because of the age of its housing stock, it is an absolute disgrace, in the eyes of anyone who knows that district and its housing problems, that, on the basis of phoney formulae, it should not now receive any housing support grant whatever.

The Government are also distorting the capital allocations—not just the revenue allocations—because they have now begun to mix up what is happening on the revenue side with what is happening on the capital side. When the Labour Government introduced the housing plans, the idea was to get a realistic estimate for every local authority's housing needs and make a capital allocation on that basis. That was taking account of the existing private stock, the existing developments by housing associations, and the rest. The idea was that housing plan allocations should be based on need. If eventually it was decided that there was not enough money to pay every local authority what it wanted, in those unfortunate circumstances, although it did not happen under the Labour Government— [Interruption. ] Under the previous Labour Government, not one housing scheme was turned down. In any event, that is not the point that I want to make.

Once we begin to take the assessment of need and then make certain artificial deductions from that, we are inevitably introducing unfairness into the allocations of capital expenditure for district housing authorities, and that is precisely what the Government have done. They are doing it, first, by assuming that there will be large numbers of sales, that the expenditure on sales will be deducted from the original allocations, and that the authorities will be able to spend the additional amounts only if they achieve the necessary sales. But the sales that may be achieved in any particular area are absolutely nothing to do with the housing needs of the area, whatever else they may be. The capital allocations should be based on actual housing need, not on artificial deductions from it, because of the way in which housing sales in any year may fall out in one area as distinct from another.

As the best houses are going, it could be argued that the authorities with the biggest proportion of better houses will have the greatest amount from housing sales and will get the biggest capital allocation. That is absolutely against what should be done on the basis of need.

Mr. Rifkind

The right hon. Gentleman seems genuinely to misunderstand us. The figure is determined for each local authority in the way that the right hon. Gentleman would have done it. Within that figure, it is a question of the balance that has to be met by the local authority through its receipts from council house sales, as opposed to borrowing, which can be met by loan charges. The size of the allocation is in no way affected by the size of the receipts from council house sales.

Mr. Millan

The Minister has pretended that there is a £300 million allocation for capital in the forthcoming year. That has been reduced by £72 million, on the basis that there will be £72 million worth of sales. If those figures are not achieved, the figure will not be £300 million. If the sales are only £50 million, the figure will be about £280 million rather than £300 million.

That is not the only thing that has been done. The worst feature of all is the so-called rate fund contribution. The Government, in their desperation to get local authorities to put up the rents and not to allow local authorities any kind of decision-making in housing, are saying "Unless you reduce your rate fund contribution by a significant amount, we shall make a further reduction from your capital allocations." Whatever we may think about rent levels and rate fund contributions, those ought to be matters for local authorities.

There is no justification—indeed, it is completely offensive in principle—for reducing local authorities' capital allocations because they do not obey the dictates of the Secretary of State in terms of rent and rate fund contributions. We find that absolutely objectionable in principle. Even worse than that, in 1982–83 it was done on the basis of, assuming a rate fund contribution of so much per head of population. That is an absurdity, as we pointed out in the debate on last year's housing support grant order. Even this Government seemed to be persuaded by CoSLA that it was an absurdity. A specific pledge was given to CoSLA that the Government would avoid the use of that formula in 1981–82, and would look instead for a standard percentage reduction in the rate fund contribution. Objectionable in principle though it may be, it has a certain element of fairness because it takes account of the position between one local authority and another. CoSLA was promised that that would happen.

In the event, when the allocations were made, the Government used no fewer than five different ways of making the deductions. The local authorities are rightly accusing the Government of a breach of faith and of going back on a specific pledge that was given on behalf of the Under-Secretary. The CoSLA representatives who were here this morning expressed the strongest personal criticism of the Under-Secretary and his officials for the breach of faith that took place on the formula.

Some authorities, including Glasgow, were caught out by what happened. What I find particularly offensive is that, the offence having been committed by the Scottish Office, it has the impertinence to try to put the blame on Glasgow district council when it lies fairly and squarely on the Scottish Office for dealing with the housing support grant in its usual ham-handed way.

I repeat that housing policy is a disaster for Scotland. The Government have done everything possible to penalise housing authorities and to dictate to local authorities how they should run their housing programmes. They are imposing penalties on local authorities, on the hundreds of thousands of council tenants and on the hundreds of thousands who aspire to live in council houses. They are doing it because basically they despise council tenants, and have always done so, and wish to do them the maximum damage. Council housing has made a massive contribution to the solution of Scotland's housing problems. We deplore the constant attacks on it by the Government. This is why we shall vote against the order.

8.13 pm

Mr. Alex Pollock (Moray and Nairn)

I am pleased to have the opportunity to make a contribution to the debate. Earlier this year it seemed that I would have to make a speech highly critical of the Government. However, I am happy to inform the House and my right hon. Friend that, because of developments in recent weeks, I find myself in the much happier position of being able to give the orders a warm welcome. I should like to outline the sequence of events which has led to my change of view.

There was a meeting between the relevant Minister and CoSLA on 21 December when an indication was given that the allocation for Moray district, with which I am primarily concerned, would be approximately £2,856,000, which works out at some £264 per house. Formal intimation was later given of a revised figure for 1982–83 of only £2,294,695, equivalent to £212 per house. The result was that Moray district council found itself facing a reduction in grant of approximately £562,000, equivalent to a loss of £52 per house per annum, or, to put it more simply, of £1 per house per week.

On receipt of that information, my concern was immediately conveyed to the Scottish Office. I am delighted to advise the House that the Under-Secretary of State felt able to respond swiftly to the representations that were made to him. He decided to delay laying the relevant order before the House. The matter was looked at afresh, resulting in a revised figure of £2,812,981, the sum mentioned in the order. That represents an increase of over £500,000 on the previously intimated figure. Needless to say, that has made the task of Moray district council a great deal easier. Accordingly, I should like to convey my warmest thanks and the thanks of my council and council tenants to my right hon. Friend and his colleagues in the Scottish Office— —

Mr. Millan

Get off your knees.

Mr. Pollock

—for showing this quick and sympathetic response to an acute problem. It would be less than gallant if I failed to do so.

Mr. William McKelvey (Kilmarnock)

Could the hon. Member give some explanation of the inconsistency and say why three different figures emerged over such a short period? Like him, I have no great knowledge of how these formulae work. If he has the information, I should be grateful if he would impart it to me.

Mr. Pollock

I should dearly like to be able to help the hon. Gentleman, but I must confess that I find the allocation of housing funds to be one of the great mysteries of life. All I know is that we are now blessed with £500,000 more than we expected last month.

In regard to this year's rates, Moray district finance committee has made a recommendation for a reduction of 2p in the pound. That likewise I commend; I trust my right hon. Friend welcomes the decision. Perhaps we are fortunate in the north-east of Scotland that the ratepayers of Moray have not got councillors who aspire to the development of a Moravian foreign policy similar to the one that occupies much of the time of the good councillors of Dundee. Again, unlike Lothian region with its Lothian Clarion, they do not feel obliged to employ staff and use ratepayers' money to publish a news sheet to put forward the virtues of the council.

The Moray councillors prefer to let the facts speak for themselves. In this case, we have an illustration of the possibility in Scottish government of creating a good working relationship between a local authority and central Government, subject to the important proviso that each side behaves responsibly and accepts the proper role of the other.

I am fortunate to have in my area a district council which takes that responsible attitude. The illustration I have given to the House shows the capacity of the Scottish Office and its Ministers for a flexible and compassionate response. I therefore give a warm welcome to the orders.

8.18 pm

Mr. Norman Buchan (Renfrewshire, West)

The definition by the hon. Member for Moray and Nairn (Mr. Pollock) of responsible local authorities means those that are willing to kowtow to and accept the diktats of central Government. The interesting thing is that few of them seem to be responsible, because even the Tory local authorities in Scotland are trying to resist the Government's savage, malicious and in some ways malevolent behaviour towards council tenants in particular. It is part of the Government's general policy of a massive redistribution of wealth and well-being away from the ordinary people and the poor towards the rich.

The figures speak for themselves. I do not quarrel over the problem facing mortgage payers, especially the young ones. Local authority tenants receive support through the housing support grant and the rate fund contribution of £234 per capita per annum. For mortgage payers the comparable figure is £366. The bigger the house and the bigger the income, the bigger the tax rebate. The position facing council tenants is very different.

That is the reason for the horror expressed by local authorities and the sense of crisis that has developed in Renfrew district since the declarations and figures came out of the Government. I shall deal at some length with the situation in Renfrew, because it requires an answer and an explanation tonight. We see the consequences of the Government's actions particularly in relation to Renfrew, and I shall say why it is different from the other five local authorities that are being clobbered by the Government. Renfrew district council is suffering a 100 per cent. cut in housing support grant.

We must consider the matter against the background of the lowest concentration on housing by any Government since the war. The effect in terms of bricks and mortar, and therefore on the workers who put up the bricks and mortar, is as follows. The figures were bad enough in 1980, when only 2,800 council houses were started. That was the lowest peacetime rate since we began council housing. But in the first six months of 198 l only 1,100 were started—a figure 38 per cent. lower than in the equivalent period in 1980. In 1980 24,000 public sector dwellings were approved for improvement, again the lowest figure for a decade. Yet in the first six months of last year only 6,900 improvements were approved—almost 50 per cent. lower than in the equivalent period in 1980.

There has been a devastating effect both on the construction of new houses and on the modernisation and repair of houses, when one in four construction workers is unemployed.

Let us examine the problem that the Government have posed to my district authority. Two matters are worth stressing about Renfrew district. The first is the clobbering that the area has had in the form of unemployment in the past 12 months. In one town alone, Linwood, where Talbot closed, male unemployment is 40 per cent. There is deep distress in the area.

We were told that there should be a responsible relationship between local authorities and central Government. There must also be a responsible relationship between local authorities and those whom they have been elected to represent and protect. Against that background, the authorities are being penalised even more when they attempt to protect their communities.

It is no use telling me that local authority tenants are no different from others who have to receive support in the form of rent and rate rebates or supplementary benefit increases. That may be so, but I advise hon. Members to look at the general level of incomes in the Renfrew district. Incomes are low, but above the level at which that support can be given. Hon. Members should also note that not all those who deserve benefit receive it. One of the nastiest actions of the present Government is the way in which they have stimulated arguments about scroungers, so that people who become unemployed, as in the case of the 40 per cent. unemployment in my area— —

Mr. John MacKay (Argyll)

No.

Mr. Buchan

In one of my towns there is 40 per cent. male unemployment, so I do not want any such comments from Government paid hacks.

We all know that the take-up of benefits is low, that those who deserve them do not always take them. About £500 million a year in supplementary benefit is lost, with a take-up of probably around 75 per cent. That means that one in four is not receiving what he needs. That is the background of the Government's behaviour towards Renfrew district council.

The Government argue that they will add two sets of figures together and that if they get a deficit or a surplus they will behave accordingly in relation to grant. The trouble is that the two sets of figures do not add up, because one set happens to be real figures and the other is a set of notional figures. The effect upon Renfrew district council stems from that entirely, because along with the notional figures—the deemed rate support, the deemed rent figure—is the actual figure of the loan charges.

Why is Renfrew different from the other five district councils? The arguments should be advanced for the others too, but we have a special case. However, I see no reason why Tweeddale, Nithsdale and Eastwood should not also be involved. The distinction is that none of the others has major council tenant housing. In Renfrew district 52 per cent. of the housing stock consists of council houses. There is a vast difference between whoever it was who marched in the song and Tweeddale and Eastwood.

As the one real figure is the loan debt and the other two are notional figures, it is the loan debt that has caused Renfrew to be excluded from any housing support grant. There are various reasons why there should be a low loan debt. One is that much of the housing stock consists of older houses. Some were built towards the end of the First World War and then were taken over by the council. I am told that in these one can sit on the lavatory seat and take one's dinner off the kitchen table. For years we have been trying to raise the money to have those houses modernised, but it still has not been done. These are not in a poor village but in one of our good villages—Inchinnan.

The housing stock was provided at different times. Older houses were built at lower cost, but, because they are older houses, they are more in need of expenditure on modernisation and repair. It is also partly that there may have been different policies applied as to the types and extent of expenditure that had been borrowed for, or indeed different methods of paying back the debts. But none of this is taken into consideration as far as we can see by this Government. They have not properly analysed the reasons for this low debt.

We believe, and the council believes, that there should be further investigation as to how these debts came about, and indeed CoSLA to some extent went part of the way and achieved some success in getting the Government to alter their method of working this out.

The effect of the low loan debt and the resultant low loan debt charges is taken together with the deemed amounts of the further items of income and expenditure, including the sale of council houses. The Government are doing two things. First, they are clobbering house building and at the same time they are encouraging the selling off of council housing, the best stock, leaving more and more of a drag and a drain on the older houses that have to be paid for in maintenance and repair. What a form of management. I thought that the capitalist supporters were in favour of intelligent financial management. What a ludicrous proposition that is.

The effect of this is that notionally the council's housing revenue account is £2.5 million in deficit. This is too low to justify central Government assistance, and accordingly we get no support grant. But of course this reflects the older houses, the little modernisation we have had, because among other things Renfrew was particularly generous in assisting in the Glasgow overspill provision. We had two problems; we had to assist in the Glasgow overspill, for instance in the town of Johnstone, and we had to participate in the building up of a new town, the town of Linwood. So there were problems because of the amounts we had to take on.

It is so unjust. If the notional figure of rents, which is deemed to be £500, had been estimated at £490—in other words, £10 a house per year less—the deficit would have become something of the order of £400,000 and the council would therefore have been entitled to a substantial housing support grant of £600,000. So the fact that the Government arbitrarily fixed a notional £500 rent of itself deprived us of a £600,000 grant that we desperately need. This is nonsense and it must be altered, and I want some answers as to what they based this on.

On the other hand, if those low debt charges reflected a past policy of meeting expenditure from revenue, or a more intelligent form of repayment, which more rapidly reduced the loan debt, it surely is not reasonable that present ratepayers and rent payers should be penalised by being deprived, through the loss of the grant of the lower expenditure generated by having incurred higher expenditure levels in the past. The present generation of rate and rent payers are being penalised because rate and rent payers in the past were paying at a higher level to clear the debt more quickly. The other thing is the theoretical housing revenue account surplus of approximately £290,000, which is a tiny figure compared to the real scale of expenditure and income.

The next point, quite apart from the cost to the tenants—and I am going to look at some of the cost figures in a moment—concerns the effect that this will have on the capital housing programme, because unbelievably the whole thing is linked to the effect on capital expenditure on housing. If we do not go along with the Government's policy regarding rates, our capital allocation is clobbered. For the year 1982–83 there has been a provisional consent to £9.5 million given to the council, of which £3.2 million is calculated to be covered by receipts from sales of council houses, leaving £6.3 million as a net allocation from Government. Therefore, we are likely to be able at least in theory to embark on a capital programme that would involve a cash outlay of £9.5 million, offset by £3.2 million of capital receipts from council house sales. In the first place, the £9.5 million allocation is totally inadequate when compared with our housing financial plan of £13.2 million, which has already been notified to the Scottish Development Department as part of the Department's financial planning structures and system. So the first point is that it is seriously below our estimated needs.

The policy of restricting local authority expenditure, relating the capital expenditure to revenue expenditure, will be permitted only if the council rates fund contribution to its housing revenue account does not exceed £2.5 million. To the extent to which the rate fund contribution goes over the £2.5 million, the £6.3 million will be reduced. The consequences of this are that if we project a rate fund contribution for 1982–83 without a rent increase, which would of course diminish the rate fund contribution, of £9 million, so that the excess of £9 million over the target of £2.5 million is £6.5 million, that will completely wipe out the net allocation of £6.3 million. In order to obtain that net allocation in full rents would have to be raised from 1 April this year by £3.37 per week. That would be required to make these figures tally, or expenditure on repairs and maintenance would have to be reduced and rents raised to achieve that sum per house.

So the district council's present annual average rate of £374 would have to be increased to £550 per annum—a 47 per cent. increase. Most likely it will aim at a compromise, and if the district were to aim for the housing support grant notional rent per house of £500 that would mean a 34 per cent. increase in rents from 1 April, plus a residue in capital expenditure of some £2 million. Rent increases of that magnitude are totally unacceptable also because virtually all would come from a cessation of house building and vast cuts in the repairs, modernisation and maintenance that are needed. That is a false and stupid economy.

If we do not go along with it, the consequence will be that any capital allocation might be cut. A total of £4.2 million will be spent in the coming year in respect of our existing legal commitments. We are legally bound to spend £4.2 million. If we do not receive any allocation above that which we need to meet our legal commitments, the effect will be disastrous. We would be unable to issue any new contracts for new houses or modernisation schemes, and housing action area programmes would stop completely.

One of the problems is that pledges of intent that have been given to tenants will now have to be broken. I have already described how the kitchens and lavatories are located side by side. I have already given those tenants the pledge I received from the council that the houses will be modernised, starting in April this year. Now we shall be accused of a breach of faith because of the behaviour of this disastrous Government.

I want some answers about the Renfrew position. Above all, the Government must rethink the matter. They cannot throw together one notional set of figures and one actual set of figures without, at the very least, analysing the nature of the actual figures—the loan charge figures. The reductions arise almost entirely from the low level of loan charges. That is absurd, because there is no connection between those figures and the needs.

By cutting the housing support grant, forcing up rents and rates and clobbering those areas that are trying to introduce an element of fair income redistribution, the Government have ensured that the areas most in need of repair, maintenance and new housing will be prevented from obtaining them. It is a stupid and malicious policy, and I wish that the Govermnent would chuck it.

8.38 pm

Mr. Barry Henderson (Fife, East)

I am sure that the hon. Member for Renfrewshire, West (Mr. Buchan) will forgive me if I do not take up the local aspects of his constituency experience that he mentioned.

"Redistribution of wealth" has long been one of the cries of the old Left. There are various definitions of that phrase. One concept is of a Robin Hood type operation, where one takes from the rich and gives to the poor.

Mr. William Hamilton (Fife, Central)

It never happens.

Mr. Henderson

The hon. Member for Fife, Central (Mr. Hamilton) approves of that concept. As a fair man, the hon. Member for Renfrewshire, West will accept that, in practice, when a policy of redistribution of wealth has been tried, the net result has been that one takes from the rich and poor alike and gives to the bureaucrats.

Mr. Buchan

Give me a chance.

Mr. Henderson

Not on your life.

In a wider vein the hon. Member for Renfrewshire, West asked whether rents were fair and reasonable and referred to the balance of subsidy between council tenants and owner-occupiers. As far as I can make out, the average council house rent in Scotland is about £4 a week less than it is in England. Therefore, taking one measure of comparison, we see that the order is favourable to our constituents.

The other measure must be the relationship between typical earnings by typical council house tenants and typical rents. No doubt the Minister has the precise and up-to-date figures. I suggest that the average male manual income is about £143 a week. The average rent proposed after this year will be about £9 a week. That does not seem to be a wholly unreasonable balance between potential income and potential rent.

Mr. Neil Carmichael (Glasgow, Kelvingrove)

Is the hon. Gentleman willing to attend meetings other than those of his constituents and suggest that the average take-home pay is anything approaching £143 a week') From where did he get his figure? I know that the Department of Employment issued a figure like that for the average wage, but it was speaking of industrial workers, working all week, without holiday or sickness. The hon. Gentleman is using an artificial figure.

Mr. Henderson

No doubt my hon. Friend will give us the authorised figures. I think that the way that the hon. Member for Glasgow, Kelvingrove (Mr. Carmichael) expressed his question to me showed that there is a broad average.

Mr. George Foulkes (South Ayrshire)

Where did the hon. Gentleman get that figure?

Mr. Henderson

I accept that not everybody earns that kind of money or has that kind of income. Surely that Ls why about half the council house tenants do not pa) rents, or have substantial rent reductions. That is right and proper. We should be in the business not of subsidising bricks and mortar but of ensuring that everyone should have the opportunity to have a decent house, and that in doing so those who can afford to pay should pay the price for that house. Those who cannot pay should be assisted by the rent and rate rebate schemes which were introduced originally by a Conservative Government.

The other matter raised by the hon. Member for Renfrewshire, West concerned the subsidy as between private and public sector house-occupiers. As far as I can make out, the amount of subsidy to the public sector tenant is about the same, perhaps a little more now, as it was when the previous Labour Government left office.

What is also interesting is that the figure of the subsidy, which is almost £300, taking into account rent rebates, compares with average relief on mortgage tax relief and option mortgage schemes per owner-occupier of about £170. On that basis the council house tenant is not necessarily in a bad position.

Mr. Buchan

Will the hon. Gentleman repeat those figures and give us the sources so that we can get them right?

Mr. Henderson

I cannot tell the hon. Gentleman what the source is.

Mr. R. McTaggart (Glasgow, Central)

The figures are confidential.

Mr. Henderson

Not at all. It is merely that I have made some notes, before coming to the Chamber, on some figures that I came across. I can assure the hon. Gentleman that the source was impeccable.

In 1978–79 the average subsidy per tenant, including rent rebate, was £253, in 1979–80 £358, and in 1980–81 £391. The estimate for 1981–82 is £376 and for 1982–83 £295, By this means, I came to the figure that I originally mentioned of a marginally greater subsidy this year than in 1978–79. These are the figures for which the hon. Gentleman asked.

A much more important point—

Mr. Buchan

Is this also an impeccable source?

Mr. Henderson

—to which the right hon. Member for Glasgow, Craigton (Mr. Millan) referred was the question of burst pipes, damage, insurance and so on. I listened this afternoon to an eloquent plea from a representative from Glasgow district council who said that Glasgow—he was quite honest about this—had calculated that it would cost more to insure over a number of years than to take the risk of experiencing a bad freeze that might require payments to be made. It seems to me that Glasgow took a calculated risk. When a calculation goes wrong, one does not go whining to the Secretary of State.

What worried me was whether Glasgow had made its calculations on correct figures. The representative of the council said that the council thought that it would cost £7.5 million to insure against burst pipes. There are, I understand, 150,000 houses in Glasgow. If the average value, for the purposes of insurance, is £25,000, the total value of the housing stock would be about £3.75 billion. That is a great deal of money. I would have though that one would want to take some protection to insure against any disaster that might occur to such a substantial investment.

Mr. Buchan

In view of the success of my last intervention, I should like to put another question to the hon Gentleman. The argument relates surely to the recent storm damage suffered in Glasgow and elsewhere. I suggest that the hon. Gentleman looks back to the period when there was massive storm damage in Glasgow, during which 70,000 roofs were blown off. As a Minister in the Scottish Office at the time, I recall that we willingly paid for the damage. The success of that policy has been shown. If the hon. Gentleman consults his hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie) he will be told how helpful public support can sometimes prove to be.

Mr. Henderson

I was not a Member at the time of the storm damage in Glasgow some years ago. I am concerned about what happened this year. The chance of frozen pipes in Scotian during the winter has to be expected. The representative of Glasgow district council told me this afternoon that Glasgow had decided that it would be better financially for the council not to insure rather than to insure. I was worried that he appeared to have made his assumptions on the basis that the cost of the insurance would be £7.5 million. I do not know how those figures or quotations were obtained.

Mr. Buchan

An impeccable source?

Mr. Henderson

If it is right that the value of Glasgow's housing stock is £3.75 billion, and if insurance was obtained, as I know is the case in other district councils, to cover burst pipes and also storm and tempest, at a penny per £100, the premium for the whole of the city of Glasgow would be only £375,000. I do not know where Glasgow got the figure of £7.5 million. I hope that it did not base its calculations on false assumptions.

The council took a calculated risk, which has been openly admitted, that it might cost it more over the years to insure against the damage than to pay for it once in a while when it arose. It was the council's privilege to make that decision. It seems rather unfair that, when other local authorities take a different calculated decision and decide to pay the insurance premiums, they should then lose the possibility of receiving money from the central pool of resources available for local authority housing. That money would go instead to paying the local authorities which knowingly and calculatingly undertook not to have insurance. How many people take out endowment life insurance in the hope that they will die so that it may be collected?

The important aspect of the order is the assumptions made about sales of council houses. I am glad that the Minister has made the changes, because those authorities that have shown willingness to encourage the sales of houses to their tenants will have an opportunity, if they sell more than has been assumed as a Scottish average, to receive new resources to help in the development of new housing and to meet 'particular needs.

The Opposition have told us often that only houses in good areas will be sold. That has not been the experience of most authorities so far. It is certainly not the experience of the two district authorities in my constituency. Kirkcaldy district council, a Labour-controlled authority, and North East Fife district council, a Conservative-controlled authority, have found that there is no common factor in the type, age, or quality of house that affects their sales.

One matter that has bedevilled Scottish housing for many years is the number of voids—houses unlet—which is especially serious in the cities. Houses that were extremely difficult to let have not always proved difficult to sell. Once they have been sold to owner-occupiers, the areas into which tenants have been thrust almost unwillingly begin to rise in the esteem of the population generally, which has been of great benefit to the housing stock. One must recognise that the policy of the sale of council houses—to give the tenants who wish to buy an opportunity to own their home—has not only been welcomed by the tenants but has been of great benefit to the improvement of the housing stock and will be even more so in the future.

I hope that my hon. Friend will consider the fact that there has been a move to define categories of housing that would receive consideration under the housing support grant formula. Perhaps we should go a little further in that direction. In Scottish housing now some areas of need are much greater than others. In my experience that includes Shelter housing—housing that is suitable for single persons. Perhaps we should consider adjusting the formula of the housing support grant to ensure that taxpayers' money would go to those much-needed schemes.

I ask my hon. Friend the Minister whether it is possible, within the traditional and customary practices of the management of public finance, to allow district councils to plan a little further ahead than in the past. Often it would not be excessive for it to take at least three years from inception to completion of a housing project and the handing over of the keys. That is a long time if one is catering on an annual basis only for the known finance. I hope that in future it will be possible to give councils a clearer indication of finance. Two years ahead would be of considerable help. One year ahead is not enough. If councils could look further ahead, we could expect more efficient use by local authorities of the funds available to them through the orders.

8.56 pm

Mr. William Hamilton (Fife, Central)

My hon. Friend the Member for Renfrewshire, West (Mr. Buchan) and the hon. Member for Fife, East (Mr. Henderson) referred in general terms to the redistribution of wealth in the context of housing. I agree with the hon. Member for Fife, East in admitting that no Government since the end of the war have made a great impact on the redistribution of wealth. However, the most successful Government since the end of the war in terms of doing that have been the present Government. They have actively redistributed wealth from the poor to the rich. They have done that successfully over the last two and a half years. It is in that context that I want to examine the problem that we are debating tonight.

Like many other hon. Members, I am a little shy of bandying about the statistics in the formulae in the orders. One of the best and measurable ways in which wealth has been distributed and redistributed in favour of less well off people since the last war has been in the public provision of housing, health services and education services. The Government are being condemned, rightly in our view and in the view of the great majority of ordinary people up and down the United Kingdom.. for doing the opposite in the three areas that I have mentioned. To use a horrible word, they have been privatising the provision of housing, privatising the provision of education and privatising and encouraging the provision of private hospitals and all sorts of private health services.

Like many ordinary people in Scotland as well as England, many hon. Members, such as my hon. Friend the Member for Central Ayrshire (Mr. Lambie) do not understand the intricacies of what we are debating. Neither do 1. However, I understand the general propositions. Ordinary people do not understand and are not interested in the intricacies of what we are debating. What they are interested in is how much rent and rates they will have to pay, how the electricity bill to heat the house will be paid and how they will keep on their jobs so that they can pay those costs. Those are the problems that are disturbing every citizen up and down Scotland and elsewhere. They know that those costs must be met. They cannot avoid them. They know that they have an uncertain wage coming in week by week.

The hon. Member for Fife, East talked about average earnings of £143 a week. I dare him to go on a platform in East Fife with me and to say to the people that they are all well off and earning an average £143 a week. They are mostly farmworkers in his constituency. He dares to come to the House and say that people earn such money in Fife or anywhere else.

Of course, the average can prove anything. If a fellow catches a train at 9 o'clock in the morning, is at the station one minute to nine three days of the week and one minute past the other three days, on average he catches the train every day. That is the falsehood of using averages. The Government's purpose on housing policy has always been very clear. It is a nefarious policy that compels local authorities, in the interests of a property-owning democracy, to sell their best council housing. The hon. Member for Fife, East referred to the Kircaldy district council. Has he got its figures showing how many houses it sold and where they are being sold?

Mr. Henderson

I have not got those figures with me tonight, but I received figures from the council which show exactly what housing it has sold and its conclusion that there was no discernible pattern of houses to any particular type or area.

Mr. Hamilton

The Kircaldy district council does not want to sell houses because it has so many people on the waiting lists. The Government are not contributing a single house to help solve its problems. The same applies in every other area where there are housing shortages.

The Government will force councils, with financial penalties, to sell houses if they do not want to. That is not being done in the name of freedom of choice. There is no freedom for a democratically elected local authority. It does not have the choice because it is mandated by its local electors not to sell houses. However, the Government dictators in Dover House and St. Andrew's House say "Whether you, as elected representatives, like it or not, you must sell houses."

Mr. Rifkind

To the tenants.

Mr. Hamilton

Of course to the tenants, but mandated elected authorities should have the freedom and right to, determine their housing policy. That is the basic and fundamental principle of local government.

Mr. John Home Robertson (Berwick and East Lothian)

Whatever evidence there may or may not be from the Kircaldy council, I assure my hon. Friend the Member for Fife, Central (Mr. Hamilton) that the East Lothian council has ample evidence that the majority of houses sold under the scheme are the most desirable. It is those houses in small villages and on the East Lothian coast—the better quality and more modern houses—that are going. Therefore, those on waiting lists must move into the lower quality houses in due course and will have to wait longer.

Mr. Hamilton

Common sense dictates that that must happen. Given the facts of the situation, it stands to reason, when a person is living 16 storeys up in a high-rise block of flats, that he will be less willing to buy than if he were living in a semi-detached house with a back and front garden.

The Government are also forcing up rents and rates to intolerable levels. Whether a local authority likes it or not the Government lay down what the rent increases shall be and, at the same time, say, "We shall restrict the wages of those paying the rents to not more than 4 per cent." The rents and rates are increasing far more than that.

Therefore, the Government say "We shall discipline you on wages coming in and rents and rates going out so that we have an incomes policy based on the discipline of fear; fear of the dole queue, fear of the rent man, fear of the electricity bill and fear of everything.

From experience of travelling round the surgeries in my constituency, I know that there is fear, wonderment and anger about how the local authority is to meet its week by week outgoings, not knowing whether the work force of a factory will be given 24 hours' notice. Workers are being thrown out on their necks almost every week in Scotland.

Reference has been made in these two debates to the all-party gathering with CoSLA this morning, It was an interesting exercise. I felt like saying to the Tories "It serves you right, because you all voted for that woman, you all voted for a Tory Government, and you have got what you asked for". Or did they? Were they conned?

Certainly, the figures that we were given by the representative from Perth and Kinross were very interesting. I remember going to the last local district council elections when that council was fighting two or three years ago. The Labour candidate who, incidentally, won the election, showed me an advertisement that the council had inserted in the local paper to conform with this Government's economy drive at that time. It concerned rat catchers, who in future were to be a charge on the private individual. The local authority would no longer provide the rat catcher. It said that in future if people had rats they had to sort them out for themselves. The chap this morning said, "We showed that we were bending over backwards to accept the edict of our Tory Government by putting the rat catching out to private enterprise". Freddie Laker would have made a good rat catcher. That is the kind of policy that that authority was pursuing. Nevertheless, it said that it was being clobbered by this Government as a result of these rate support grant and housing support grant proposals.

The Government are advocating increased rents for 1981–82 to 1982–83 of up to £9–59 a week. The rents in the authority of the right hon. Member for Western Isles (Mr. Stewart) are going up nearly £12 a week. I wonder what the average pay is in the Western Isles? Is it £143 a week? In Shetland the rent increase figure is £10.77 and in Glasgow £11.34. The representative of the Perth and Kinross authority told us this morning that it put up its rents last year by £2.65 a week, this year they are going up by £2.85 a week, and that in future all new houses built in that area will be financed, and must be financed under these proposals, wholly by the tenants. For every new house that is built in that area, the rent of every tenant will go up by 50p a week.

Mr. Bill Walker (Perth and East Perthshire)

rose—

Mr. Hamilton

No, I shall not give way. The hon. Gentleman should have been there. He should have listened to those people, because they spelt out these matters. I assume that the hon. Member, who represents that constituency, will vote in the Lobby tonight in support of the proposals that were condemned by his own representative who met us this morning. We heard that the average rent there now is £12 a week, and that is a low wage area.

Mr. Walker

rose—

Mr. Hamilton

I shall allow the hon. Gentleman to intervene on condition that he tells me that those people in his constituency who earn £143 a week will be well able to pay £12 a week. How many of his constituents are getting £143 a week?

Mr. Walker

I cannot give the hon. Gentleman the precise figure because I do not have it. But there is no shortage of people who wish to take up housing lets in Perth and Kinross at the rents that the authority charges. There are two reasons for that. Those who cannot afford to pay the rents receive substantial help from the Government, and those who can afford the rents pay them.

Mr. Hamilton

The hon. Member for Perth and East Perthshire (Mr. Walker) should have a good talk with the representatives who visited the House today. [Interruption. ] I am giving the facts as he gave them to us this morning. The facts are undeniable.

From now on the burden of public authority housing will be put wholly on the tenants and taken away from the taxpayer. That is the whole purpose of the Government's housing policy. In future local authorities that want to build houses—there are 160,000 people on the waiting list in Scotland—will have to sell some houses first. That is the only condition on which they will be allowed to build. From April they will be able to borrow for new building only if the income from house sales is satisfactory not to the local authority, but to the Government. A quarter of all capital allocated to local authorities for house building will have to come from the cash obtained from house sales. That policy makes absolutely no contribution to the enormous housing problem that still faces Scotland. That is why the policy is being bitterly attacked by all parties in Scotland—the Labour Party, the Tory Party, the Liberal Party and the SNP. We heard that this morning. It could not have been clearer. My hon. Friends have also quoted Sandy Mutch. The Government's policy is breathtaking in it mendacity, its manifest injustice and crass ignorance of the real housing problem facing Scotland.

9.12 pm

Mr. Gordon Wilson (Dundee, East)

One of the interesting aspects of this debate is the scale on which housing subsidies are being withdrawn. In common with many other hon. Members, I received the survey from Shelter which shows that in real terms the cut is about £23.1 million, or about 15 per cent., which compounds the drastic 33 per cent. cut made last year. If so, the burden borne by the public sector is substantial. The scale of the cuts is breathtaking to the local authorities that have to implement them and to the tenants who have to pay the higher rents resulting from the cuts in housing support grants.

I want to concentrate on the six councils that have been excluded from grant. Do the Government intend to phase out housing support grant altogether? If, as has been suggested, the six councils are joined next year by another four or five, and so on, we may end up with no housing support grant at all and with tenants bearing 100 per cent. of the housing cost. That could go further. In certain circumstances, tenants could find themselves contributing towards the general revenue costs of the local authority and consequently subsidising the ratepayers. That would be a remarkable inversion.

The Minister must come clean with the House tonight. He must let us know whether the Government intend to remove the housing support grant. There is great suspicion that that might happen.

The director of housing for Dundee district council told me this morning about the situation. He said that it was very difficult for the council to guess what the Government's policies might be. If they intend to take away that support over a period, but are not prepared to admit it, the uncertainty will continue.

My second point relates to the philosophy behind the changes made by the Government. The hon. Member for Fife, Central (Mr. Hamilton) rightly said that the Government are clearly involved in some redistribution of wealth. Those Government supporters who pay interest on mortgages and receive tax relief should know that the logic of the Government's actions will inevitably lead to the removal of that relief. The Government seem to have started in the public sector by stripping away the housing support grant bit by bit until it reaches a minimum level. Once they have done that, they will be able to provide the rationale for removing all or part of the Treasury subvention to those who are buying their homes. Therefore, those who have been supporting the Government should carefully consider what has happened and impress upon their Members of Parliament that they would be very worried if they suddenly found that their tax relief had been taken away. In the same way, council tenants are worried about the way in which their rents have been jacked up.

There are proportionally more council house tenants in Scotland than in England. It is often pointed out that the subsidy given for housing in Scotland is far greater than that given in England. However, it is forgotten that the tax subsidy towards house purchase is greater in England than in Scotland. The changes that are being made without any corresponding reduction in tax relief on mortgage interest will lead to a widening gap between Scotland and England. We must keep an eye on that.

Hon. Members should direct their attention towards those who do not pay all their rent and who receive some assistance. There is an article in one of today's newspapers that suggests that because higher rents are payable in England, arrears are beginning to accumulate. Perhaps the situation in Scotland should be examined before we find that the Government's policy on high rents leads to a similar situation.

Even if those who are unable to pay their rents receive help through social security contributions, they will still have to pay the higher charges for fuel and food. This year, in particular, the payment of fuel bills will be difficult for many ordinary families, especially those in which the breadwinner is unemployed. That is also true of those who work but who do not receive the high wage of £143 that has been mentioned. This year and last year wage increases have been restricted while inflation has surged ahead. Low wage earners have had to face increased rents. In addition, the cost of food and of clothing children has increased. Therefore households with inadequate funds face substantial pressure, particularly when they seem to be hemmed in by rising prices.

I turn to the impact of the Government's policies on the capital available for new build and modernisation. The debate has concentrated on rent levels, but over the past year there have been more and more complaints about the shortage of new houses and the lack of modernisation. Modernisation schemes are being pushed out of sight or into infinity. The Government have not considered that problem properly. The innovation of withdrawing capital, because of an overspend on revenue account, together with the clawback from the previous year, means that many local authorities face a lack of adequate capital to meet the pressing need for housing. That is true particularly in terms of modernisation, because it had been accepted policy among all parties for a long period that a better investment would be for more resources to be put into housing to safeguard and build up the existing stock.

Unless we are careful, some housing estates may slide downhill simply because environmental or other housing improvements cannot be made. It is easy for that sort of situation to start, as many of us know, but it is difficult and extremely expensive to put it right once it occurs.

I ask the Government to think again about the capital allowance that was raised four or five years ago—in terms not of vast new building programmes but of specialised buildings for old people and more houses for the disabled or to fill gaps in the housing stock of each local area.

We must talk in terms not only of improved quality of housing, but of quantity. If the availability of capital from the Government to local authorities declines, obviously the quality of our public sector housing stock is also likely to decline.

What the Government have done by making two substantial reductions in the housing support grant over the last few years has been bad. It will put tremendous pressure on the available housing. It will also have a substantial impact on jobs in the building industry.

There has been much talk of the unemployed 25 per cent. of building workers. In Dundee at present about eight in 10 building workers are unemployed. That is a very high figure. If the Government want to reduce unemployment and get the economy going again, one of the quickest ways to get more people back to work in worthwhile activity and to improve the quality of life is by greater investment tn public sector housing. The Government could turn on the tap almost immediately and provide new jobs. The Minister must look at this aspect again.

We all know that the Scottish Office team is unable to put pressure on the Treasury. It is the slave of the Chancellor of the Exchequer. It has no influence whatever on the Government. Time is running out. If the Government do not understand and that one of the basic decencies of life is the housing of our people, let them consider their future at the next election.

9.22 pm

Mr. Dennis Canavan (West Stirlingshire)

The order represents yet another savage attack by this Government on the living standards of thousands of council house tenants throughout Scotland. As has been pointed out, the cut in real terms is over £23 million, or 15 per cent. That is over and above the 33 per cent. cut that we suffered last year.

I should like to reiterate the point made by the hon. Member for Dundee, East (Mr. Wilson), that the Government seem hell-bent on phasing out the housing support grant altogether. Six Scottish local authorities are not receiving a single penny in housing support grant under the terms of the order for the financial year 1982–83. One of those local authorities lies partly within my constituency, Cumbernauld and Kilsyth district council. It has 4,363 council houses, most of them in my part of the district, in Kilsyth itself and in surrounding villages such as Queenzieburn, Kelvinhead and Banton.

Kilsyth set an example to the whole of Scotland. The town council in Kilsyth was one of the pioneers of council housing in Scotland. Even before the war good quality public sector housing was built on such a scale and to such a high standard that people from all over the country visited Kilsyth in order to see that model town with such good quality council housing. Yet now we have a Government who are taking out the hatchet to destroy much of the good work that was done by the Labour pioneers on the old Kilsyth town council. The district council will not get a penny in assistance from the Government if the order goes ahead.

Conservative Members are fond of telling us that council house tenants are over-subsidised anyway. That is the thinking behind the housing support grant order. The Government are trying to reduce the subsidy and possibly phase it out altogether.

I am glad that hon. Member for Fife, East (Mr. Henderson) is back in the Chamber, because he was quoting from some unknown source—he claimed that it was impeccable—for the levels of subsidy. I question his figures. The estimates that I have for 1982–83 come from Shelter, which is probably a more impeccable source than that of the hon. Member. The average support given to council tenants through housing support grant and through the rate fund contribution is £234.60 per head, yet the average subsidy or tax relief given to people with mortgages is £366.70 per head. In other words, council house tenants are getting less by way of subsidy than people with mortgages are getting.

I live in a council house. I sometimes hear Conservative Members saying that people such as myself should not be living in a council house and that we should not be getting a subsidy. I would get a higher subsidy if I were to take out a mortgage. There are many people on low incomes living in council houses. The average income of families living in council houses is considerably lower than that of people living in private houses. I am not against people in the private sector getting some form of subsidy by way of tax relief, but surely, if we are to be equitable, the greatest help should be given to the people most in need. The figures that I have quoted show that the very opposite is happening. People in council houses are getting less subsidy per head than the people with mortgages who are living in the private sector.

Mr. Henderson

I said that my figures included rent rebates. I suspect that the hon. Gentleman's figures do not include rent rebates. In that context, is it not the case that rent and rate rebates ensure that those least able to pay are able to meet their rents?

Mr. Canavan

I shall be coming to rent rebates in a moment. It is some time since the hon. Gentleman's last contribution. Perhaps before the end of the debate he will intervene in someone else's speech in order to tell us the source of his figures.

The cuts imposed by the housing support grant order will mean further rent increases. There will be an average rent increase throughout the whole of Scotland of £2.20, or 29 per cent. That is over and above the recent massive rent increases which council house tenants have already suffered. Since the Tory Government came into office in May 1979, council house rents in Scotland have more than doubled. It is not good enough for the hon. Member for Fife, East to say that if a family income falls below a certain level it will qualify for a rebate, and that many tenants are getting rebates.

The truth is that the amount of assistance by way of rebate has not kept pace with inflation. Last November the needs allowance—the method of calculating whether the family income justifies a rent rebate—was increased by only 8 per cent. at a time when the retail price index had increased by 12 per cent. In other words, the rent rebate scheme is not keeping pace with inflation.

I mentioned an average rent increase of £2.20 throughout the whole of Scotland. Some local authorities will have a higher than average increase. The Government seem to be trying to impose an increase of over £2.50 on some district councils, including Falkirk district council, which lies partly within my constituency.

The housing committee of Stirling district council had a meeting last week. Unfortunately, because my good friend the convenor was sick, the Tories had a majority on the committee and used that temporary majority to recommend an average increase of £2.24 for the tenants in Stirling district. That is still to be ratified by the full council, and I hope that the Labour group will be able to get a full turnout at the full district council meeting so that the council may have another look at the matter.

The council is in a dilemma. The Government are linking the amount of capital allocation which it will get to the level of rent. That also creates many unfairnesses. I should like to quote from a copy of a letter which a constituent, Mrs. Sandra Rooney, secretary of Bannockburn tenants association, sent to the Secretary of State for Scotland. It refers to the Orlit housing in Bannockburn: These houses were built after the last war as temporary accommodation, and are now in such a state of disrepair that they are virtually unfit for human habitation …have recently been informed that if the current rent rise does not go through in full the Government will cut the district's budget, and therefore a major renovation within the district will be shelved. The tenants association is afraid that the Orlit renovation scheme will be axed. The council is in a dilemma: either it freezes the rents and gets no capital allocation, which will mean the abandonment of the modernisation schemes, or it goes ahead with the modernisation schemes, gets the capital allocation from the Government to assist but has to put the rents up by an amount far in excess of the rate of inflation and of the average wage increase which the people have had over the past year.

The Secretary of State is not here, but I hope that the Under-Secretary will remind him of the invitation in the letter to a public meeting to be held on 22 February in Bannockburn miners welfare hall. A representative of the Department has been invited. I would go one better: why should the Secretary of State himself not go to the meeting? He might be worried about getting out alive, but I will guarantee him a safe passage. I will see that he gets home all right afterwards to his own house at Gargunnock, which is not all that far away. I hope that he will be able to attend the meeting. I wonder sometimes whether some Tory MPs ever meet council house tenants face to face. It would be good for the Secretary of State or his junior Minister to attend the meeting and explain the disastrous effects of Government policy if this order is passed.

It is unfair to tie the amount of capital allocation to the level of rent increases. Earlier this evening we were discussing the powers of central Government virtually to dictate rate levels. Now we are discussing the powers of central Government virtually to dictate local government rent levels. Whatever the rights and wrongs of all this may be, it is a direct threat to local decision making and local democracy.

Just as it is unfair to tie the amount of capital allocation to the level of rent increases, it is also unfair to tie it to the number of council house sales within an authority's district. The provision of council housing in Scotland began in 1919. For the first time we are seeing a reduction in the number of council houses. Until now, under Governments of various complexions—Tory, Labour or whatever—before and after the war there have been increases in the numbers of counil houses. Now this most reactionary of all Tory Governments are turning the clock back by reducing the number of council houses.They have a twofold plan to do it.

First, the Government are forcing the local authorities to sell off their houses, irrespective of local needs and demand. In the year to September 1981 4,937 were sold. In the first half of 1981 only 1,123 council housing starts were made. Apart from forcing the local authorities to sell off their housing, the Government are causing more difficulties by the reduction of housing subsidy and of capital allocation, as a result of which the councils are not receiving enough money to replace the houses that are being sold off or to modernise those which they have managed to retain.

It is a sad day when we see the Government attempting to turn the clock back. They cannot argue that there has been a radical change in circumstances. There is still a need for more council houses in Scotland. My right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) said that the construction of council housing in Scotland had played a notable part in the solution of many families' housing problems.

It is no use saying that the time has come for a change, because there are still many people, including many young married couples, waiting for a house. Their only chance is a council house, yet the Government seem to be telling them "Sorry; there is no chance. You will have to wait years." They will drive them and many other people into the hands of the money lenders.

I shall not tolerate any Government being allowed to treat council house tenants like second-class citizens. They are first-class citizens, just like anyone else. This vicious, nasty order should be rejected, because it is an attack on the living standards of council house tenants and an attempt to turn them into second-class citizens.

9.37 pm

Mr. William McKelvey (Kilmarnock)

When I listened to the Secretary of State introducing the order, almost with a perverted admiration, I was astonished by his unmitigated gall in trying to establish that he was doing the housing authorities in Scotland a good turn. He produced figures to show that there was an increase in the grant in real terms.

Mr. David Lambie (Central Ayrshire)

The right hon. Gentleman was twisting the figures.

Mr. McKelvey

I do not know about the twisting and turning of figures, but they can be made to do anything. While my ears hear that the figures are increasing in real terms, when I return to my constituency my eyes tell me a different story. I see that in constituencies throughout Scotland housing is deteriorating rapidly, because local authorities are being squeezed to death by cash restrictions and the Government's squeezing their grants.

We have all received a brief from Shelter, which claims that about £134.5 million in Housing Support Grant to local authorities for 1982/83 … compares with £140.7 million in the original order for 1981/82, which, revalued using a 12% inflation factor, —slightly less than the correct factor— amounts to £157.6 million at 1982/83 prices. Thus, in real terms, the cut is about … 15%". Oddly enough, the Secretary of State's figures showed that it was an increase in real terms of 15 per cent. It makes one wonder how the calculations can be made in the Scottish Office to provide the Minister with that kind of brief.

The latest cut is only one in a series that the Government will tell us was started by the Labour Government. As we keep telling them, that is a very lame excuse. At that time I served as a councillor on the Dundee district council and I was proud to be one of those young lions who went to the barricades on the question of rents. Not only did we oppose the then Secretary of State for Scotland and his application to reduce grants, but we led a rent strike against the very council on which we served. Unfortunately it did not succeed but that is not surprising when we consider the pressures that were applied to the ordinary council tenants. But it was a magnificent gesture at that time and I urge any council tenants throughout the length and breadth of Scotland who are contemplating or perpetrating rent strikes against the rent increases that are being imposed upon them by the Secretary of State for Scotland first of all to recognise the source of their misery and thus apply the strike in a proper fashion.

Mr. Lambie

My hon. Friend, being a new Member of this House, will not know the record of the Secretary of State for Scotland when he was not on the Government Benches but on these Benches in Opposition. The Secretary of State for Scotland and I took part in rate strikes when the people in Ayr, Prestwick and Troon were fighting against the valuations. The right hon. Gentleman and myself gave them full support. It is strange what a person will do when he is in opposition and how he will change his mind when he is in office. But the Secretary of State has given a good lead in this.

Mr. McKelvey

We learn all the time in this House and I am certainly astonished by that. None the less, that only underlines the Secretary of State's unmitigated gall in going to the Dispatch Box to ask for this order to be processed through this House.

There is more than a suspicion on the part of all local authorities that the Government are determined to phase out completely the housing support grant. For the first time since 1919, since we said that we were going to build homes for heroes to live in, six councils do not qualify at all for the housing support grant. And the Secretary of State boasts of that situation because he says here that we have six councils that are apparently managing their affairs so well that they do not need the housing support grant.

As other hon. Members have said, local and public housing obviously plays a very large part in the redistribution of wealth. We cannot ignore the situation that exists at present, when rents are being forced up by the Secretary of State, increases are being forced upon councils which were democratically elected, sometimes on a manifesto saying that there would be no rent increases. Those councils have to accept the bludgeon from the Secretary of State or, if they refuse to put their rents up, they are met with a cutlass and have their grants taken away from them. It is not just a question of an iron fist, but of the right hon. Gentleman having a bludgeon in one hand and a cutlass in the other. He is giving those authorities the sort of freedom of choice that pirates used to give lads who walked the plank when they said "You need not jump off the end; you can stay where you are and we will cut you in half'. That is the magnificent freedom that is being offered to councils throughout Scotland.

Those councils have made representation to us. Representations have been made today in this House, and they were very illuminating. We asked those authorities why in the name of heaven they did not make their protests known publicly long before these orders were laid before the House, so that we might be able to apply some pressure on the Secretary of State for Scotland in the same way as pressure is applied by English Members on the Secretary of State for the Environment, who on two occasions had had to change his mind on his applications regarding cuts upon local authorities in England.

Either Tory-controlled local authorities are not making their views known to Conservative Members or, even worse, hon. Gentlemen know of these protestations from those local authorities but ignore them or have not got the guts to stand up and fight for rudimentary justice.

The injustices of the withdrawal of central Government subsidy are manifest when compared with the subsidy paid to people with mortgages. Conservative Members need not shake their heads, because the figures defy explanation. One cannot deny that those who enjoy tax relief on mortgages are in a far better position, because over the years their subsidy has increased while that for council house tenants has rapidly decreased. As a matter of fact, in the last two years rents in Scotland have doubled. That cannot be denied. Indeed, figures from all sources will bear that out.

That is not exactly the situation in Kilmarnock and Loudoun. Last year, having considered the somewhat veiled threats by the Secretary of State, the council decided in its wisdom to apply a massive rent increase of 39 per cent. That was imposed on council tenants in Kilmarnock shortly after the massive redundancies announced by Massey Ferguson and at Glenfield Kennedy. In its wisdom, the council decided to act in a responsible fashion. It did so and put the rents up by 39 per cent. Now, the Secretary of State has said that rents will have to be increased by a further £2.40 if the council is to get the maximum capital grant.

On this occasion, the Kilmarnock and Loudoun district council has said "Enough is enough. We are not prepared to overburden the people of Kilmarnock who are already suffering from an unemployment rate of 19.6 per cent.". That is an appalling figure by any stretch of the imagination. In view of the human misery that such unemployment brings, the Kilmarnock and Loudoun district council has bravely said that, on this occasion, it will limit rent increases to 50p. That decision will mean that no cash will be available to undertake the necessary repairs and modernisation to the large but ageing housing stock.

The Minister has said that he is a humane and compassionate man. The district council imposed a 39 per cent. rent increase last year and has decided on a 50p increase this year. The grant for which it will qualify will amount only to a drop in the bucket. The Kilmarnock people will be aware of this, because we shall tell them who the real culprits are when they start complaining that repairs are not being carried out expeditiously.

Mr. Foulkes

Is my hon. Friend aware that those views are not merely held by the elected Members and electors of Kilmarnock and Loudoun? They are also held by Cumnock and Doon Valley district council and by Kyle and Carrick district council, part of which has the unfortunate distinction of having the Secretary of State as its current representative in Parliament. I am assured that that will not last too long.

Mr. McKelvey

Obviously, my hon. Friend's source of information is even better than mine. Frankly, I thought that the Secretary of State would have resigned long ago on his past record, never mind what has happened today.

In 1979–80, average rents in Scotland were £4.92. In 1982–83, they will rise to £9.87. These figures are correct and there is no question but that rents have doubled since 1979–80 in Scotland. The increases far outstrip any index of inflation, so the figures that the Secretary of State for Scotland has offered to the district councils in respect of his formulae are a mystery. Despite the Minister's assurances that we would learn what the formulae were, we have still not received a copy of any formulae or a book of instructions on how to understand them. When we have read that, perhaps we can understand how some of the figures are arrived at.

The Secretary of State says that in arriving at these figures he has made an allowance for wages, as part of district council expenses, of 4 per cent. Kilmarnock and Loudoun district council, having heard what the Minister had to say, set its rent increase at roughly the same figure.

That is fair and humane and if there is any sense of justice the Secretary of State will look again at the Kilmarnock figures, and, perhaps as he did in the case of Moray and Nairn, make an advance on them.

Irrespective of how one looks at the problem, it is developing in an extremely serious and sinister fashion. The continuing process by which the Secretary of State for Scotland seeks to encroach and occupy the domain and the responsibility of what hitherto belonged to the district and regional authorities is never-ending. It can only end, I assume, when the next piece of legislation—the Local Government and Planning (Scotland) Bill—passes through the House and becomes law.

When that happens, the Secretary of State will have succeeded in taking over virtually complete responsibility for local government both at district and regional levels. By that time, he will be, as an individual, setting the rates as a sort of Deutscher Kommissar. He will be doing that in an undemocratic and unheard of way in terms of central Government interference with local government affairs.

When the Secretary of State does that, and when local authorities, of both Conservative and Labour hues, realise the extent of the power that he has obtained, either there will be a complete revolution by local authorities or, more likley, all those who work in local authorities, the vast majority of whom do an extremely good job under trying terms, will throw in the towel. They will no longer tolerate a situation where the Secretary of State for Scotland will set the rates but leave them to collect them. The Government will have to put the military in to do the job of the local authorities, who will completely refuse to handle the new rates. The troops will have to go in to run Scottish local affairs because of the tyrannical and despotic aims of the Secretary of State for Scotland in these matters.

9.54 pm

Mr. R. McTaggart (Glasgow, Central)

I have sat through both today's debates. I have nothing but admiration for the excellent arithmetical exercise in which my right hon. and hon. Friends have indulged in highlighting the flaws in the Government's orders. The deficiencies in the proposals have been exposed. Amid the deluge of bureaucratic figures and formulae the only issue before the House has been shown to be another round of Tory cuts affecting those who are least able to defend themselves. The proposals will have a devastating effect on Scottish local authorities in general and Scottish housing in particular.

The order provides for about £134.5 million in housing support grant to local authorities in 1982–83. This compares with £140.7 million under the original order in 1981–82 which, revalued at present day prices, with a 12 per cent. inflation factor, is equal to £157.6 million. Those figures in real terms represent a cut of £23.1 million. That is, however, only the tip of the iceburg. The cut is the latest in a series of cuts. The figure of £1576 million for 1981–82 had already been cut by 33 per cent. from the 1980–81 figure which, at present day prices, would have been £233.9 million.

Six local authorities are to receive no subsidy from the central Government. This is a major break from a basic principle. Since the start of council housing in 1919, councils have been entitled to help from the central Government to meet housing costs. It is no wonder that so many hon. Members and also people outside the House accuse the Government and the Secretary of State in particular, of opening the way towards the abolition of housing support grant. Hon. Members have also learnt that council tenants of those authorities that make no rate fund contribution to the housing revenue account are soon likely to have to meet 100 per cent. of the authority's housing costs. The transfer of funds from the housing revenue account to the general rate fund means that they might even find themselves subsidising ratepayers, as already happens in various authorities in England.

We are witnessing another round of Scottish Tories pursuing their usual Thatcher dogma. Tories do not see council housing as the right of people to have a decent house for their families and themselves. Tories see council housing as a form of welfare housing for the poor, infirm and disabled. They do not see council housing as a basic right. They do not even see the right to work as a basic right.

The deluge of statistics and figures heard in this debate cannot begin to tell of the hardship that lies behind them. Bad housing causes frustration and anger. I have seen dampness in the homes of families on low wages in my constituency where people continually have to throw out old clothes that have been ruined. Many constituents come to my surgery to complain about bad housing. Although we, as Members of Parliament, can pursue these problems, we have often to advise our electors that those best equipped to deal with the complaint are the local district councils. By referring an increasing number of cases to local councillors we are making their jobs so much harder. The Government have already pushed through legislation on the sale of council houses. They have forced it on authorities such as Glasgow, which in 1980 was a "hung" council because no party had a clear majority. The Glasgow Labour Party in its manifesto pledged to resist the sale of council houses, and the result of the election was that the Labour Party was returned with a magnificant majority. Today we are seeing the Government pushing forward further legislation which will take away more power from local authorities.

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