Housing Support Grant (Scotland)

HC Deb 23 January 1985 vol 71 cc1038-73 7.25 pm

The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram)

I beg to move, That the draft Housing Support Grant (Scotland) Order 1985, which was laid before this House on 11th January, be approved. It may be for the convenience of the House if we debate the following order and prayer with this order: That the draft Housing Support Grant (Scotland) Variation Order 1985, which was laid before this House on 11th January, be approved. That an humble Address be presented to Her Majesty, praying that the Housing Revenue Account Rate Fund Contribution Limits (Scotland) Order 1985 (S.I. 1985, No. 3), dated 4th January 1985, a copy of which was laid before this House on 11th January, be annulled.

Mr. Speaker

If the House agrees, so be it.

Mr. Ancram

Full details of the housing support grant settlement are set out in the report which accompanies the draft Housing Support Grant Order. Therefore, I shall not burden the House with an excessive amount of detail. However, I shall explain the thinking behind the proposals and also the limits which have been set out in the Housing Revenue Account Rate Fund Contribution Limits (Scotland) Order.

We have reached full agreement with the Convention of Scottish Local Authorities on the formula for the distribution of housing support grant this year. I should like to place fully on the record our thanks to the convention for its contributions to our discussions. In the housing support grant settlement for 1985–86, the Government have again aimed at concentrating resources on those authorities which require them. We have estimated eligible expenditure at £282 million and relevant income at £234 million. Housing support grant will therefore total £48 million which will be distributed among 23 authorities which we believe will incur deficits on their housing revenue accounts in 1985–86. We have of course left out of the reckoning the expenditure and income of authorities which could in our view generate a surplus.

As I have explained, the figure of £48 million reflects our best current estimate of the difference between eligible expenditure and relevant income. Housing support grant is of course, however, highly sensitive to changes in the level of interest rates. We shall therefore keep the situation under review. If in practice interest rates prove to be significantly different from our current assumptions, we shall bring forward an appropriate variation order in due course. The fact that we are today introducing a variation order in respect of the housing support grant for the current year, 1984–85, in the sum of £10.1 million reflects a similar undertaking given last year at this time. If the most recent movements in interest rates are sustained, a further variation order for the current year may in due course be required.

Labour Members will no doubt endeavour to present our housing support grant settlement proposals, and the rate fund contribution limits set out in the other order that we are debating today, as a direct attack on council house tenants, and as usual they will be talking rubbish. The decisions that we have made in previous years, and the figures in the orders before us today, reflect our continuing concern to balance the undoubted need for expenditure on housing against our responsibility to control public expenditure as a whole. It would, for example, be a waste of valuable resources, which have always been a matter of laughter for the hon. Member for Falkirk, East (Mr. Ewing), to pay grant to an authority at a level above that needed on reasonable assumptions to balance its housing revenue account.

In our estimation of expenditure, by agreement with the convention, we are again applying an average rate of interest to authorities' individual volumes of debt; and 10.4 per cent. has been assumed in the settlement. I repeat, however, that if differences in interest rates lead to significant differences in the level of authorities' loan charges we shall consider variation orders in due course.

The other main element of expenditure which we have to consider is the amount to be allowed for management and maintenance. In the 1984–85 settlement we allowed for an average expenditure of £262 per house—£226 million in total. Authorities, however, chose to budget for £284 per house—£245 million in total. However, no sound evidence has been presented to me of any need for a real increase in our provision for management and maintenance. As a consequence we have uprated the provision in last year's order by 4 per cent. to hold it generally constant in real terms at £272 per house—£232 million overall. Indeed, our stance on this expenditure has again been endorsed this year, with more than half of Scotland's housing authorities continuing to budget for a figure below that provided in our 1984–85 settlement.

On the income side, we are assuming for the purposes of the settlement that rents will increase by £1 per week over 1984–85 order levels, bringing rents to £12.59 in order terms. This assumed increase in rent matches our estimate of the overall average impact that the Government's decisions on housing support grant and rate fund contribution limits should actually have on council house rents.

This leads me to the Housing Revenue Account Rate Fund Contribution Limits (Scotland) Order which was also laid before the House on 11 January. It is right that we should consider this order at the same time as the Housing Support Grant Orders, since they are all closely linked.

It may be helpful to the House if I restate the reasons why we felt it necessary to take power in last Session's Rating and Valuation Amendment (Scotland) Act to limit the contributions which local authorities may estimate to make from their general rate fund to their housing revenue account in this way. The rate fund contributions meet the deficit on the account between local authorities' expenditure, mainly on servicing debt and management and maintenance, and their income from rents and grant. Over the past five years—and in spite of our efforts to persuade authorities to exercise voluntary restraints through the housing expenditure limits system—the rate contribution to housing has risen inexorably from £75 million, or £84 per house, in 1979–80 to £120.5 million, or £140 per house, in 1984–85.

The Government have a responsibility to take decisions about the total amount of resources which the nation can afford to devote to housing, within the general context of our objective of reducing public expenditure. We have, as I have already explained, reduced housing support grant in recent years in line with reasonable assumptions about authorities' expenditure needs and the amount of income which they might generate from rent and rates. I make no apologies for this. Authorities' decisions, however, to increase the resulting proportion of expenditure borne by the ratepayer—thereby keeping rents unnecessarily and artificially low—have had the unfortunate effect of limiting the share of public expenditure resources which could be made available for necessary capital works.

The result has been that in the present year alone local authorities in Scotland have forgone some £20 million which would otherwise have been available for much needed construction and improvement work in order instead to fund rent subsidies for council house tenants. Over the past four years, more than £110 million has been lost in this way. In the Government's view, this situation quite simply could not be allowed to continue. It places an intolerable burden on the ratepayers and, because it has led to the delay of much needed work on the housing stock, it is against the long-term interests of tenants themselves. It is bad for tenants and bad for ratepayers. On any view that made it unacceptable.

Our decision to ask authorities to budget for rate contributions to the housing revenue account not exceeding £89.5 million in 1985–86, as set out in the order before the House, has enabled us to issue provisional capital allocations on the housing revenue account totalling £267 million in Scotland next year. This figure is £40 million more than the final allocation of £227 million issued last March and represents in anyone's view a very substantial increase in real terms—particularly significant at a time when public expenditure elsewhere is necessarily being restrained. Local authorities will be able to spend the increased sum of £40 million on construction and improvement work, including tackling the problems of condensation and dampness. It is £40 million more work than possible this year. As a general guide, every additional £1 million of housing investment means that a further 42 small general needs houses, or 26 sheltered houses, can be built. Alternatively, 320 local authority houses can be modernised, or 60 properties which the local authority has acquired can be rehabilitated. Taken as a whole, this addition to the HRA is something which no reasonable observer can sniff at, and it is, I believe, an indication of a failure to understand the housing finance situation in Scotland so to do. The hon. Member for Glasgow, Garscadden (Mr. Dewar) sits in his seat laughing at the idea of £40 million more being made available to deal with problems of condensation and dampness. I trust that that will be noted by his constituents who suffer from such problems.

An additional feature of the system is that we have been able to introduce a new arrangement this year for any authority which budgets for a rate fund contribution below the prescribed limit. Where an authority's budget falls below its limit, we will be prepared to increase its capital allocation by an equivalent amount. Authorities will, therefore, have a real opportunity next year to increase the capital expenditure they can undertake even further, provided that they hold back on their rate fund contribution and then they can use it for dealing with dampness, condensation and so on. That is good for tenants and good for ratepayers.

In setting an aggregate limit to rate fund contributions of £89.5 million next year we have asked individual authorities to budget for a rate fund contribution 10 per cent. below the guideline issued for housing expenditure limit purposes last year, or not to exceed their actual budgeted figure, if that was lower. We have consulted authorities very widely about the implications of the individual limits set, in line with the undertakings which we gave during the passage of the legislation last Session. In particular, we have held detailed discussions with the Convention of Scottish Local Authorities and we have received and carefully considered representations from over half of all individual authorities.

As a result, we are convinced that the limits proposed in the order are fair and reasonable. Authorities were—at their own request—given very early notification at the beginning of October of the provisional limits which we proposed to set. We then allowed a substantial period for consultation between October and the middle of December, when final decisions had to be reached to allow us to proceed with arrangements for making and laying the necessary order.

During the consultation period, we indicated that we would look particularly carefully at representations from authorities which believed that they were faced, as a result of the rate fund contribution limit proposed, with making a rent increase significantly in excess of the average, which we estimated to be slightly over £1 per week—provided that the excess rent increase did not result from the authority's own decisions to ignore housing expenditure limit guidelines in the past, or provided there were other special circumstances which required the authority to budget for a higher rate contribution.

Mr. James Wallace (Orkney and Shetland)

The Minister has said that there was consultation. To what extent did that consultation have an effect on the Government? He said that the Government expect an average increase of just over £1 per week. In Shetland the proposed increase could be £7. In Orkney the required increase is expected to be 30 per cent. Neither of these councils can by any stretch of the imagination be taken to be the bastions of socialism that the Minister so often castigates. What sort of figures did he have before him if rent increases in these authorities are to be so much in excess of the average that he has talked about?

Mr. Ancram

If the hon. Gentleman had been listening to what 1 have been saying he would have realised and appreciated that we were judging it against a number of assumptions which were agreed by COSLA in the consultations—assumptions as to the nominal rent level which we were seeking, as to the interest rates and as to the management and maintenance costs uprated to meet inflation in this year. As I have said, we looked at the representations made to us. In many cases we found that the authorities thought that their rent increases would be much higher than £1, because in the past they had either ignored housing expenditure limits or had found that their management and maintenance costs were much higher than the average for Scotland. Obviously, we considered the matter, because in the event we concluded that only two authorities met the criteria that we had set, and merited a higher rate fund contribution limit. It may surprise the hon. Member for Orkney and Shetland (Mr. Wallace) to know that they were Orkney, and Badenoch and Strathspey. We also accepted the argument of Edinburgh district council that, in its particular circumstances, if it was to be treated fairly with all the other authorities, its rate fund contribution limit needed to be raised. That we did in December.

In the case of all other authorities that made representations, we concluded that either the authority did not face a rent increase significantly in excess of the average, or that if it did it was due to its failure to observe housing expenditure limit guidelines in the past, or to its including in its calculations an estimate of loan charges significantly higher than we thought reasonable, or to its intending to increase expenditure on management and maintenance by significantly more than the rate of inflation. As the hon. Member for Orkney and Shetland, who is a lawyer, will I am sure accept, where those circumstances applied, we did not think that any increase in the rate fund contribution limit was justified.

No doubt we will hear during the debate exaggerated claims from Opposition Members about the impact of rate fund contribution limits on council house rents. We have made clear our view that, making reasonable assumptions about loan charges and management and maintenance costs, we believe that the average rent increase in Scotland next year need be only slightly above £1 per house. That figure was not seriously disputed by COSLA when I met it in December.

Obviously, the rent implications for individual authorities would vary considerably around the average, depending on their own estimates of loan charges next year and on their proposed expenditure on management and maintenance. But I believe that, provided authorities do not increase expenditure on management and maintenance by more than the rate of inflation, few authorities in Scotland need face a rent increase next year of as much as £2 per house per week. I reject totally some of the exaggerated claims about the likely consequences for rents which we have heard from certain authorities in recent weeks. I will return to some of those claims later.

In the current year the average Scottish local authority rent stands at approximately £10.46. The rents of many individual authorities are lower still. In Glasgow. the average rent this year is only £9.75. In Aberdeen it is £8.90. In Dundee it is £8.82. That compares with an average local authority rent in England and Wales of £14.71. Yet in 1984 the average earnings of manual workers in Scotland were actually higher than those of their counterparts in England and Wales, and the proportion of that being spent on rents was considerably lower.

With over half of all households in Scotland in public sector rented housing, it is difficult to justify such low rent levels. If tenants have genuine difficulty in meeting their housing needs, a full and adequate scheme of relief is available to them through the housing benefit system. I am sure that the majority of tenants would accept that their rents must make a realistic contribution to the cost of providing their houses. Indeed, I believe that many of them would be happy to pay higher rents in return for a better service. Perhaps local authorities fear that a more realistic relationship between rents and the cost of providing the service might lead more tenants to question whether their landlords are providing value for money.

I am convinced that there is room for greater efficiency—with consequent rent savings for tenants—in the way that local authorities run their management and maintenance services. For example, if Glasgow brought its management and maintenance expenditure per house down to the average for the other 55 authorities, A would save the equivalent of a reduction in rents of £1.14 per house per week. If Edinburgh, which now spends more on management and maintenance per house than any mainland authority in Scotland, were to do the same, it could cut £1.70 off every tenant's weekly rent. These figures speak for themselves, and I hope that tenants will ask whether their landlords are giving them value for money.

Mr. Robert Hughes (Aberdeen, North)

Will the Minister stop using the phrase "management and maintenance expenditure" and instead differentiate between management expenditure, and repair and maintenance expenditure? It is the figure for the latter that should be taken into account.

Mr. Ancram

If the hon. Gentleman had listened to me, he would know that we have uprated last year's figure to keep it in line with inflation. Thus the management and maintenance assumptions of last year are being maintained in real terms.

We are concerned to reverse the present rising trend in rate subsidies to housing. Such subsidies contribute nothing to the provision or modernisation of public housing. They do not encourage efficiency. They benefit only the better-off tenant who has no need for subsidy, and they are wasteful of scarce resources. We have consulted widely, and at length, on the individual limits in the order before the House, and I am satisfied that the figures are fair and reasonable. In particular, I believe that the impact on council house rents, which I calculate will be to raise rents on average by little over £1 per house per week, is not excessive and is justified in present circumstances.

In the past few weeks we have heard several claims being made. In particular, we have seen press reports that Edinburgh district council is refusing to put up rents by the Secretary of State's average of £1. That is not surprising, because the council does not need to. Calculations carried out by Shelter—hardly one of the Government's arch supporters, and a body that generally sets its figures on the high side—suggest in the briefing paper sent to Members of Parliament that Edinburgh could comply with its rate fund limit and increase its management and maintenance costs in line with inflation with a rent increase of only 18p.

I think that ratepayers and tenants have a right to ask what the greatly increased expenditure that Edinburgh claims is needed is for. I have pointed out that Edinburgh already spends more on management and maintenance per house than any mainland authority; administration takes up a staggering £122 per house—more than 50 per cent. above the Scottish average. The plain fact is that Edinburgh has been very fairly treated indeed. We have revised its rate fund limit, and we have also increased its capital allocation on the HRA block by 50 per cent. this year.

Mr. Gavin Strang (Edinburgh, East)

The Minister does not seem to realise that Edinburgh's council rents are much higher than the rents of other Scottish cities. Indeed, I hope to be able to refer to that later. Furthermore, the hon. Gentleman does not seem to realise that Edinburgh's housing stock has been massively neglected in recent years. Hon. Members on both sides of the House have witnessed that. More expenditure is drastically needed.

Mr. Ancram

The hon. Gentleman has made my point for me. I have just confirmed that we have increased Edinburgh's HRA block by 50 per cent. this year. If that is not a substantial increase, I do not know what is. That has been done to enable Edinburgh to look after its stock. The hon. Gentleman made a valid point in saying that Edinburgh rents are high. But that is precisely why the district council is talking nonsense when it says that it is being required to impose excessive rent levels.

I have heard what Edinburgh has to say. but if Edinburgh chooses to go outside the law we can conclude only that it is doing so for purely dogmatic reasons. In due course I am sure that voters will take note, and that they will act accordingly. But for the more immediate future let me make it clear that if Edinburgh or any other local authority decides not to budget for rate fund contributions to the housing revenue account within the limits set by the Secretary of State they should be in no doubt that my right hon. Friend will take all possible steps open to him to ensure compliance with the law. The principal powers open to him are his default powers under section 211 of the Local Government (Scotland) Act 1973 under which —if following an inquiry he considers that an authority is in default—he can press for an order of specific performance from the Court of Session. Failure by the authority to comply with such an order of the court would constitute contempt of court, with all the penalties that that entails; and in certain circumstances individual councillors can be required personally to make good illegal expenditure incurred.

We have, however, as do the people of Scotland, a legitimate interest in the official stance of the leadership of the Labour party on this issue—the question of the breach of the law. Parliament has a right to know where the Labour party stands on the question of breaking the obligations placed on local government by this democratic Parliament. The hon. Member for Garscadden has been asked this before, and I am offering him the opportunity tonight to make his position clear. Those of us who have tried to follow the stance of the Scottish Labour party through the media must confess to being confused. On the one hand, it apparently does not condone law breaking—how comforting, if I may say so. On the other hand—and it is beginning to sound like the Liberal party in this—it supports councils in breaching statutorily imposed limits, or so it would seem.

But I understand that our Labour leaders in Scotland have reconciled their position in some amazing stretch of legal principle founded upon the belief that only proof of illegality, whatever the prima facie nature of the act, should merit their opprobrium and condemnation. What a miracle of twisted morality. What in effect they are saying is, "Do what we think is wrong with our blessing, and we will not withdraw that blessing and replace it with condemnation until we are told it is wrong and when it is too late to stop you. We will lead you firmly from behind." That is the message of the Labour leadership in Scotland to Labour councillors. What an abdication of leadership. What a run for cover from the threat of militant disapproval. What a farce.

The hon. Member for Garscadden is an honourable and reasonable man. I hope that he will take this opportunity to tell the House that his party has been misreported in the media. I trust he will tell the House that his party respects the law, that his party accepts the democratic decisions of Parliament unless and until they are changed and that he calls on his supporters in local government to respect the law and to abide by it. If he is honest, he cannot sit on the fence, he cannot lead from behind and tonight he cannot cavil. Today he has an opportunity to set the record straight. Does he in the true principles of democracy state that the law must be obeyed and that he will give no comfort to those who seek to break it, or does he subscribe to that dangerous path that supports its breach? He can wriggle no longer, for the question is simple and the answer in honesty is unavoidable.

It is in the confidence that Her Majesty's Opposition can only back the law determined by this Parliament that I commend these orders to the House.

7.52 pm

Mr. Donald Dewar (Glasgow, Garscadden)

I do not know about my hon. Friends, but I was not terribly impressed with all that. There was a slight lack of continuity, I thought, about the hon. Gentleman's remarks. They had been very carefully prepared. I thought there was a great scarcity of argument for the Under-Secretary to remark, "I am satisfied that the figures are reasonable", and to conclude all argument and all discussion on that note does not seem to me to be entirely convincing.

I regret that the Secretary of State for Scotland did not open the debate. I say that not as a matter of protocol or etiquette—after all, some of my hon. Friends might think that he would not be missed in this or any other debate—but because this is a rather unusual event and we are not engaged in a run-of-the-mill outbreak of bickering between Government and Opposition, the kind of trivial arguments that sometimes mark debates in this place.

In these orders and in the Housing Revenue Account Rate Fund Contribution Limits (Scotland) Order we have a real and unwelcome departure from accepted practice and a real shifting in the balance of power between central and local government. I fully accept that on many occasions in the past we have had disappointing and sometimes plain bad housing support grant settlements. Very often over the last few years we have had some driech and dreary testimonies to the indifference and, if I may say so, insensitivity of Ministers who just do not seem to be able to grasp the reality of the crisis that is facing district councils and housing authorities in Scotland.

At this time there is no doubt that discontent is sharpening into dissent, and legitimate argument is reaching the point of escalating into confrontation. In that situation I do not think that it is satisfactory that some unfortunate junior Minister is put up to read a departmental brief in a thoroughly unsympathetic and, it seems to me, uncomprehending way. One of my hon. Friends was calling, "Bring back Russell Fairgrieve" — at least he wrote his own speeches. I can think of no fairer criticism of the efforts of the hon. Member for Edinburgh, South (Mr. Ancram).

Why do we protest? First, I wish to address myself to the figures and to the housing support grant settlement. We know of course that this year it is £48.2 million, a new low, and I believe—and I think I will carry a great deal of support across the range of opinion in Scotland—that is an insult when measured against the housing needs of the nation. When we remember that in 1979–80 it stood at £213 million and that it reached £228 million in the second year in which the hon. Gentleman was in St. Andrew's House, to see it now at £48.2 million marks the complete inadequacy of the Government's response to Scotland's housing needs. What we see in terms of the housing support grant is a remnant, a battered remains of the Government's contribution. As for the district councils, there are only 23 survivors. Thirty-three in some miraculous way have been given a surplus manufactured on improbable assumptions and based upon the arithmetic of make-believe.

The Under-Secretary in a sense used an interesting phrase in that regard when talking about surpluses. He referred to authorities "which could in our view generate a surplus". That may be the view of the Minister, but the artificiality of the figures that are used—the deemed amounts for maintenance and repairs, the deemed rent income — bears no reality in many cases to what is happening in local government in Scotland. It gives an air of complete unreality to these damning calculations which have resulted in the quite catastrophic slump in support to the housing revenue account. Even among the rump which have survived—those who are still receiving housing support grant — a large number of authorities are suffering greatly. Glasgow, which of course receives the biggest share of what remains, will receive £24.8 million in the coming year. Five years ago it received £52.2 million. As a Member of Parliament representing Glasgow I know nothing—and I put this as gently, as negatively, as I can— in the housing conditions of Glasgow that could justify that kind of catastrophic slide in the Government's commitment and their help and support.

Of course, it is not just the great conurbations that are suffering. Banff and Buchan authority is down about £700,000, and no doubt the hon. Member for Banff and Buchan (Mr. McQuarrie) will have views upon that The authority of the Minister's Parliamentary Private Secretary, the hon. Member for Moray (Mr. Pollock), comes down from £1.68 million to £980,000. Argyll and Bute authority, which is represented by the Under-Secretary of State, the hon. Member for Argyll and Bute (Mr. McKay), loses close on £500,000, which is a not insignificant sum, certainly for a district council of that size. Everywhere the situation is the same. One cannot take that kind of money from the maintenance of the housing stock without a substantial and worrying impact on all concerned.

The Under-Secretary, perhaps understandably, given that he had such a thin and miserable case on the current expenditure side, tried to make a good deal of the capital expenditure plans for the coming year. I am not sure that his figures compare like with like. I would think that £244 million to £270 million was a fairer comparison on the HRA side. Of course, these are figures in cash. Perhaps the hon. Gentleman would like to look at his Down White Paper on public expenditure which was published yesterday. After all, we are not looking at the capital side, and presumably he dragged it in as some sort of camouflage exercise for the purposes of the debate. The hon. Gentleman will observe that between 1984 and the next financial year the revenue expenditure of local authorities on housing is budgeted to drop from £111 million to £98 million. On the capital side, there will be a drop from £295 million to £260 million. The Minister will say that much of that is due to the private sector, the non-RHA, decline. I accept that, but he cannot get away from the fact that his White Paper shows that on both revenue and capital there will be a cut of about 15 per cent. between this year and next year. That seems to give the lie to and to undermine the spurious and specious claims that the Government have shown concern for the housing problems of Scotland.

Mr. Ancram

The hon. Gentleman seems to have great difficulty in understanding the figures on the HRA. Will he accept that housing authorities in Scotland have been given consent to spend £227 million this year? On the figures that I have announced today, they will be able to spend £267 million next year. That is a cash increase of £40 million, which will be spent on precisely the problems that the hon. Gentleman is talking about.

Mr. Dewar

I suspect that the Minister is omitting some factors. There was almost certainly an addition and the hon. Gentleman usually boasts about such additions during the financial year. The figures that I gave come from the Government's White Paper. I am not manufacturing anything. The Minister is doing the manufacturing and, in his desperation, he is reduced to arrogant sneering about the mental powers of others. He is in a poor position to make such comments.

Knowing some of the problems involved—I talk to the people involved and look at what is happening—I find it offensive for the Minister to suggest that the scourge of dampness in public sector housing in Scotland could be dealt with by a minor adjustment in the spending priorities of local authorities. That sort of statement trips too easily off the Minister's tongue. If he thought about it, he would recognise that he is being, at best, misleading and is, at worst, putting up a dishonest smokescreen to hide the reality.

The impact of the housing support grant settlement and the cuts that I have referred to will be frightening. We shall see the housing stock deteriorating and standards falling. The struggle in many areas is to maintain property in a wind and watertight condition. The Under-Secretary said that there is no sound evidence that we need more money for repairs of council houses in Scotland. He should visit almost any large housing scheme, certainly in west central Scotland and, on the evidence of my briefer acquaintance with other areas, almost any other part of the country.

I often feel sorry for the staff of housing departments who can see the problems and are often under siege from tenants who are suffering from the problems. Those staff know that they do not have the resources to provide the solutions that they would like to provide. I am even sorrier for the tenants who have to live with faults and defects that affect the quality of their lives. I have anger and contempt for a Government who, in the face of all the evidence—hon. Members should just read the Select Committee report on dampness — pretend that the problem is nothing to do with them and is not of their making.

Leaving for a moment the size of this year's settlement and moving on to the rate fund contribution limits order, our second objection is that the Under-Secretary failed to address himself to the points of principle behind that order.

I agree with the Minister that the housing expenditure limits system was unsatisfactory and involved a complicated and unjust series of penalties related to rent levels. We are glad to see the back of that system, but it is a perverse ingenuity for the Government to come up with a solution that is even worse. Housing expenditure limits should have been scrapped and not replaced.

I believe that the Government's intention is to try to control rent levels in Scotland. That is an important departure, because I presume that the Minister intends to keep the machinery in place and that, year after year, we shall see rents forced up in an unacceptable manner.

District councils have many important functions, but I do not think that anyone would disagree that, basically, they are housing authorities. It is an essential power of a housing authority, and one of the reasons why its councillors are elected, that it can set its own rent levels. Soon, rents, rates and the pattern of housing expenditure, particularly now that guidelines are virtually mandatory—because of the way in which the general abatement works and the apportionment of the general abatement—will be dictated by men from St. Andrew's house.

The power of the Secretary of State is increasing. In the interests of local democracy, it ought to be diminishing. That is not merely a partisan party point, though it could be presented as such. I believe that my view is shared by COSLA, whatever the colour of the politics of various councils. My impression at yesterday's lobby organised by COSLA's district councils policy committee—I concede that many people were talking about the rate support grant as well as housing matters—was that Liberal councils, independent councils and even Tory councils —councillors of Eastwood and of Bearsden and Milngavie specifically asked to be associated with the lobby—did not like the fact that their powers are being undermined and that the balance of power is being tipped in favour of the Scottish Office.

I do not want to read a constitutional lecture, and I would probably not be competent to do so, but I make the simple point that one of the strengths of our country is that we have competing and balancing centres of power. That has been true of our government structure in Scotland. If we weaken the power of local government against central Government, we shall remove an important safeguard.

When we protest about the rate fund contribution limitation system, which is being used for the first time, it is not just because of the effect on rents. It is also because we believe that it is wrong and objectionable. I hope that the Minister will reply to those important matters.

The new scheme will force up rents. That is what the Government want to do and, to be fair to the Under-Secretary, he made no bones about that. The Government claim that the system will increase rents by just over £1. We all deal in averages, but I suspect that that average may turn out to be too low. The Minister conceded that in many areas rent increases will be considerably higher than that. For example, the rate fund contribution limitation will add about £1 to rents in Glasgow. On top of that come the cut in housing support grant and the effects of inflation. Glasgow tells me that it is looking at an increase of £2.20 or perhaps more. The hon. Member for Orkney and Shetland (Mr. Wallace) has referred to Shetland's startling figure of £7. There may be special circumstances there—the council has a big modernisation programme under way—but that is still a very large sum.

Even the Government's own figure is twice the going rate of inflation. I do not believe that we ought to hijack the traditional and central power of district councils to allow Ministers, who represent a rump of opinion in Scotland, to do a bit of unjustified social engineering. There is no doubt that it is a matter of social policy—we heard about the English comparisons and about wage rates in Scotland. I am unimpressed by those arguments and I believe that tenants will also be unimpressed. If rents are far too low in Scotland, why is the housing benefits scheme, constructed by this Government, extended to over 60 per cent. of council house tenants in Scotland? In the light of that one startling fact, how can it be claimed that rents are too low? By how much will that 60 per cent. figure increase if we allow the Government to push up rents as they suggest? The whole system is arbitrary and unreasonable, as is shown by the concept of a 10 per cent. cut across the board.

Edinburgh's rate fund contribution is £47 per house. The city has a legacy of neglect and inadequate services. Its rate fund contribution is half the average in Scotland and less than a third of the contribution of many of the larger councils in Scotland. What is the point of holding them down at that level, which is out of line with practically every other council in Scotland, and certainly every other comparable council? It makes no sense and the Minister must know that it is nonsensical.

The nominal rate fund contribution for Glasgow was £29 million and it is to be reduced to £26.5 million. Everyone knows that it was in fact £35 million in the current year. Therefore, £8.5 million is to be found from rents. A measure of the pass to which things have come is that Glasgow has raised in the Court of Session an action against the Secretary of State claiming that the order is ultra vires. That does not affect the debate because the proceedings have not reached the stage where they impinge upon the sub judice rule. The summons has only just been served.

The Minister preaches to me sanctimoniously about the rule of law. I think that there might have been a case for staying the Government's hand until the Court of Session had decided the outcome of the case. It seems that it is a stateable case, and I say that as modestly as I can.

The Minister spoke about consultation, but we know that one of the factors that brought the Glasgow case to the courts was the way in which Glasgow's representations about the considerable blow that the settlement would have on the rate fund contribution limit were met. They were answered by a stereotyped letter in which "Glasgow" had been written hurriedly in ink. That showed that the answer was being sent to all authorities irrespective of their cases.

I hope that the House will recognise that we feel strongly about this matter. I believe genuinely that the monstrous business is unnecessary. The housing revenue account between 1978–79 and 1985–86 shows that the Government's contribution to housing support grant in Scotland — that is the conglomerate housing revenue account—has decreased from 39 per cent. to 7 per cent. In other words, the Minister has cut his contribution to almost nothing.

The percentage of the housing revenue account that is met from rents, which are apparently such a worry to Conservative Members, has increased in the same period from 47 to 80 per cent. The Government's contribution has decreased massively while rents have increased massively. That is the trend and it is one that makes nonsense of the Minister's more excitable claims and those of his colleagues. I accept that the rate fund contribution has increased, but only from 14 per cent. to 18 per cent. It has been held steady over the past three years, and if the Minister has his way it will come down to 13 per cent.

The rate fund contribution has been largely static. There has been very little movement in that area while rents have been increased to meet a larger and larger share of the general burden on the revenue side. Total housing resources in cash terms this year as against last year will decrease by £71 million. There will be a decrease of £30 million in the rate fund contribution, of £14 million in the housing support grant and of £27 million in the capital account overall.

Mr. Barry Henderson (Fife, North-East)

I do not follow the hon. Gentleman's figures. He has talked about the rate fund contribution having been decreased. The extent to which there is to be a rate fund contribution to the housing revenue account has been reduced. If we encourage local authorities to pay a substantial rate fund contribution, one of the effects will be to diminish the amount to be paid in housing benefit by the general body of taxpayers but not ratepayers.

Mr. Dewar

The hon. Gentleman has misunderstood at least some of the figures that I have recited. I was saying that the rate fund contribution has increased only marginally while rents have been increased massively. At the same time, the Government's contribution has been reduced massively. The overall resources available for housing have decreased by about £71 million. I accept that the rate fund contribution can be a controversial issue.

I understand that the local authority within the constituency of the hon. Member for Fife, North-East (Mr. Henderson) is facing a 37 per cent. increase in its rates in the coming year, although it is within the Government's guidelines. The hon. Gentleman is interested in helping the ratepayer by cutting the rate fund contribution, but if we really want to help the ratepayer we should do so by concentrating properly on the effects of revaluation. We should do so by stopping the savage reductions in the rate support grant which are facing so many councils at the same time as large rates increases. We should not do so at the expense of council house tenants by means of an artificial and unnecessary reduction in the rate fund contribution.

Mr. Michael Forsyth (Stirling)

Will the hon. Gentleman deal with the central point? By raising rents rather than increasing the burden on the ratepayer we shall move away from a system which is regressive, which makes those who cannot afford to do so pay towards a system that puts the burden on those who can pay. It is wrong for the hon. Gentleman to attack the Government because they are moving away from a system that subsidises council house tenants who may have large incomes to one that protects ratepayers who do not.

Mr. Dewar

I accept that the hon. Gentleman is obsessed with the tax burden generally and would like to see it cut. I am not sure about the equity of his proposition that the entire burden should fall on the comparative minority of tenants who do not receive housing benefit. I am not greatly attracted by that proposition. That shows the difference of approach between us, which we shall have to argue about on a wider stage.

This collection of orders illustrates a mean-minded approach which is likely and, I fear, intended to make council housing a less attractive option than it was. I fear that there are those in the Conservative party—I need look no further than those on the Conservative Benches—who feel that council housing should be a fall-back option or a safety net for those who are not fortunate enough or confident enough to be able to scramble successfully in the private sector. That is not a concept of public sector housing which commends itself to my right hon. and hon. Friends or to the majority of those in Scotland.

Councillors are bitter and disillusioned, as are many tenants and ratepayers generally. After all, tenants are ratepayers and that should not be forgotten. Council house tenants do not live in ghettos. They pay their rates and taxes and deserve fair consideration. The Minister should not underestimate the pressure on councillors from public opinion in Scotland, which they much more fairly represent than Ministers. No one on the Opposition Benches seeks confrontation. None of my colleagues wants to see local authorities and the Government at loggerheads and facing a complete impasse, which will necessitate the creaking and oppressive machinery of coercion coming into play. I do not want to share the Minister's vision of section 211 inquiries, Court of Session actions, surcharges and all the other procedures.

Mr. Ancram

I do not want that either.

Mr. Dewar

At least we have that in common. We should be considering how we can best avoid that happening. I will not encourage or support those who find themselves in defiance of court orders. That would not be proper and could not be done. Councils are entitled at this stage and are right to stand their ground and to put their point of view to Ministers, but if there is no response from the Government we could end up with confrontation. That will be a tragedy which no one wants.

Who can make the greatest contribution to avoiding that confrontation? That can come from Ministers, who are presently insisting on an unreasonable set of propositions which bear no reality to the situation that is faced by district councils. I say to the Secretary of State, his satraps and his mouthpiece for the day that if he wants to show a little common sense he will best do so by withdrawing from the brink, by recognising the housing needs of Scotland and by not forcing councillors into a position where choice becomes impossible. They should not be asked at his behest to betray the interests of those who elected them and to whom they are answerable.

Misery and more misery are offered by this clutch of orders. The orders offer poorer services and higher rents—people will pay more and get less. I believe that the housing support grant settlement as outlined is hopeless and inadequate. The rate fund contribution limitation is misconceived and oppressive. The Opposition want none of it, and we shall vote accordingly.

Mr. John Home Robertson (East Lothian)

On a point of order, Mr. Deputy Speaker. In the light of what has been said, it would be intolerable if the Under-Secretary of State, the hon. Member for Edinburgh, South (Mr. Ancram), were to reply to the debate. Have you any way of ensuring that the right hon. Member for Ayr (Mr. Younger), who calls himself the Secretary of State for Scotland, faces the music?

Mr. Deputy Speaker (Sir Paul Dean)

The hon. Member makes a political point. It is not a point for me.

8.20 pm

Mr. Barry Henderson (Fife, North-East)

I listened with great interest to the hon. Member for Glasgow, Garscadden (Mr. Dewar).

Mr. Willie W. Hamilton (Fife, Central)

On a point of order, Mr. Deputy Speaker. I should like to clarify a point for future reference. If the Minister who opened the debate, the hon. Member for Edinburgh, South (Mr. Ancram), seeks to speak at the end of the debate, must he receive the permission of the House?

Mr. Deputy Speaker

Because the hon. Member for Edinburgh, South (Mr. Ancram) moved the motion, he does not need the leave of the House to wind up.

Mr. Henderson

It is astonishing how some people who feel bested in an argument have to find other ways of venting their frustrations.

The capital allocations, particularly for the HRA block, made available to local authorities are probably as much as most local authorities could reasonably have hoped for at present. I believe that the non-HRA block is not as generous as the HRA block and is more important in certain areas than in others. I should like my hon. Friend the Under-Secretary of State to examine more carefully the determination of non-HRA block for individual local authorities and to consider whether better criteria would lead to an improved allocation of non-HRA block funds which are more scarce.

I quarrelled with the hon. Member for Garscadden about rate fund contributions. It is appropriate to move from rate fund contributions to housing revenue accounts as rents generally begin to reflect costs and housing benefit is a more effective way of helping those who need help. Housing benefit is a cost ultimately met by the general body of taxpayers, not by the specific ratepayers of a local authority.

Mr. Jim Craigen (Glasgow, Maryhill)

The fact is that local authorities, other than new towns and the Scottish Special Housing Association, must meet 10 per cent. of the cost.

Mr. Henderson

When there is a substantial rate fund contribution to the housing revenue account to depress rents and to save having to pay housing benefit, the local authority is responsible for 100 per cent. of that cost. It is sensible to move to a position in which one can get away from rate fund contributions to the housing revenue account.

The purpose of helping with housing costs is to meet the needs of people rather than to satisfy ideas about particular types of houses deserving subsidies. People, not houses, should receive help.

I have some sympathy with the point raised by the hon. Member for Aberdeen, North (Mr. Hughes) in an intervention when he distinguished between management costs and maintenance costs. I should like my hon. Friend the Under-Secretary of State to reflect more on the answer he gave off the cuff to the hon. Member for Aberdeen, North. There is no doubt that some of the costs which come under the heading of maintenance and management are grossly excessive. There are fantastic and inexplicable differences between local authorities. An analysis of the reasonableness or otherwise of management and maintenance costs would be helped if we could start by distinguishing between the costs of management and administration and the costs of maintenance.

Mr. Robert Hughes

The housing revenue account for the Aberdeen district council shows that management costs and repair and maintenance costs are identified separately.

Mr. Henderson

The more these matters are broken down, the more helpful it is to analyse what is sensible.

I should like my hon. Friend the Under-Secretary of State to consider the possibility of giving an element of support in our housing policies to recognise that local authorities have responsibilities for housing not related specifically to their council estates. I have in mind the monitoring of all housing conditions, advising about housing generally—not necessarily related to tenants—and examining some aspects of coping with homeless persons and community provision for non-council sheltered housing. I appreciate that those are not major expenditure items compared with the main items that must be considered in running council housing estates, but they show up when budgeting is tight, especially when a local authority is at the margin of eligibility for housing support grant. I take at random the case of the North East Fife district council which last year did not expect to receive housing support grant. To the council's pleasant surprise, during the year it received the small sum of £17,000 in housing support grant. That proves that the district council was at the margin. It would be helpful if we recognised the non-council housing costs of local authorities in determining the support available from the Exchequer.

I hope that some of my points will be borne in mind when the Government are seeking to determine the future appropriate levels of housing support grant and housing allocations generally.

8.27 pm

Mr. Hugh Brown (Glasgow, Provan)

I shall not follow the remarks of the hon. Member for Fife, North-East (Mr. Henderson). His contribution about non-housing support grant seemed a little jumbled. To use the parliamentary jargon, I believe that the speech by the Under-Secretary of State should have been entitled, "Line 1, 'delete Lothian regional council and insert Edinburgh district council'". His speech had no substance and gave no indication that he understood some of its points. When the Under-Secretary of State was questioned by my hon. Friend the Member for Aberdeen, North (Mr. Hughes), the hon. Gentleman seemed confused about the two elements in the housing support grant. I give the Under-Secretary of State credit for one thing: attack is the best form of defence, and the hon. Gentleman did his best. I hope to demonstrate that the hon. Gentleman was wrong on both counts.

I do not wish to be too personal, but I have always thought that the Under-Secretary of State was slightly guilty of using slick language. That came through in his speech when, for example, he said that COSLA was in full agreement on the formula. We all know what that means, but the Under-Secretary of State wished to convey to those outside the Chamber that COSLA agreed with the settlement. That is entirely different. I know that the hon. Gentleman can wriggle out of that accusation. When the Under-Secretary of State was accused of attacking council tenants, he said that that was rubbish. We shall demonstrate that this measure is an attack on council tenants.

I object to the Under-Secretary of State saying, "We shall hear exaggerated claims from the Opposition". That might be all right for a press note. I have never been guilty of exaggeration in this place — [Interruption.] The Under-Secretary of State uses an omnibus approach which sounds good in debate. I personally resent that if only because on this occasion there is absolutely no need for us to exaggerate.

We have been inundated with representations. I shall claim a few moments' injury time to save others having to give the information again. Detailed representations backed up by facts and figures and well documented cases have come from the city of Glasgow council, the Strathclyde housing liaison group, the Scottish local government information unit, the Scottish Federation of Housing Associations, Shelter, and the Convention of Scottish Local Authorities. The largest delegation of local authority representatives that I have ever seen has come here to lobby Parliament. I hope that no one will be cynical enough to ask why so many people need to come to London at the ratepayers' expense. I see the Minister nodding already.

I have the greatest admiration for the Secretary of State — [HON. MEMBERS: "Why?"] I will put the boot in then. Representing an east end constituency in Glasgow I felt a certain obligation to attend a luncheon in Glasgow, on Friday held on behalf of his former company. I put it to any Conservative Member thinking of trying to make capital out of the large number of local authority representatives here this week that the cost of that was nothing compared with the lunch in Glasgow on Friday. I did not spend a lot of time there as I had to go on a housing meeting, but I am not trying to be virtuous about that. I do not complain about that lunch, but I hope that no one will make cheap, unworthy points about the cost of lobbying Parliament. We should appreciate the frustration of so many councillors and their need to feel that they can make representations in that way. I welcome the large number of representatives who have come to the House and the representations that they have made.

I know that it is a sign of age to be constantly looking backwards, but from time to time I feel obliged to draw attention to the needs of the so-called deprived areas. The argument about local democracy has been very strong in the representations made in the past couple of days. The Government are interfering with the rights of locally elected representatives to carry out policies and provide services as the people who elected them wish.

Some of those who criticise the Government for interfering may be unaware that that is traditional Conservative Government policy. The 1972 legislation not only interfered with local authorities and rent levels but specified annual amounts. That legislation, which was taken through the House by the Secretary of State for Scotland, included the ultimate phasing out of all subsidies. So there is nothing new about the policy, if such it may be called, now being pursued by the Government. They are trying to do the things that they were unable to do in 1972 because they had no basis for assessing the real housing needs of the people of Scotland. The result then was that the Clay Cross martyrs had to be rescued in England and their Scottish counterparts had to be rescued by my right hon. Friend the Member for Glasgow, Govan (Mr. Milian) from the penalties that the Conservatives sought to impose.

Previous housing legislation from Conservative Governments required Glasgow and Clydebank—

Mr. David Lambie (Cunninghame, South)

And Saltcoats.

Mr. Brown

Saltcoats is always worth mentioning in a housing debate, but Glasgow and Clydebank were actually taken to court for refusing to revise rents upwards. There is nothing new about Government interference of this kind. The sad fact is that all the examples are in periods of Conservative Government. The Conservatives are incapable of treating local authorities with respect or showing any confidence in them. There are faults on both sides, of course, and there is not time to analyse this in depth, but Conservative Governments seem incapable of reaching understanding with local authorities in Scotland.

Having received so many submissions, I intended to make a speech without citing any figures. So far, I have succeeded. I wish, however, to draw attention to another slick presentation by the Government. I give credit to the Conservative Government of 1970–74 for bringing forward the concept of housing associations as a genuine attempt to provide some means of replacing the dwindling private rented sector. Since then, there has been all-party recognition of the work done by housing associations and the need to support them. We have now been told in a very slick presentation that next year the housing associations' percentage of total housing resources is going up. How dishonest can Ministers be? How can they present the situation to the public in that way when the actual resources available to housing associations will be cut? It is no use the Minister shaking his head. We all know that figures and percentages can be juggled. I do not even remember the figures, but the presentation was blatantly dishonest.

It is pathetic for the Minister to try to deny that housing authorities face major problems. He shakes his head again, but if he does not deny that there are massive problems — dampness, multi-storey blocks, system-built houses and other problems that scream out for large amounts of money — the resources being made available are certainly utterly inadequate to meet the situation. The Government should come clean and admit that this is yet one more example of authorities being required to fit into the Government's public expenditure programme and do the best that they can.

Finally, I hope that the Minister will look sympathetically at the par value co-operative idea in Glasgow. If his answer is no, clearly I do not wish to hear that today, so I merely ask him to go away and consider this. It is a complicated matter and I do not wish to spend time on it now, but I hope that I offend no one when I say that in this context, as with housing co-operatives, the much maligned Glasgow district council is in the vanguard, albeit having been virtually forced into it due to lack of resources. Nevertheless, it is an imaginative idea and deserves support. It is not cheap. I accept that the Minister will have difficulties with it. However, I hope that he will consider the idea sympathetically. It is not a trick designed to get around the provision in the Tenants' Rights, Etc. (Scotland) Act 1980 giving every tenant the right to buy. At least in my eyes, that is not the main purpose of it. It is a genuine attempt, where there are limited resources, to give people hope.

I can give the Minister details. Calvay crescent in my constituency is a disaster area where there is no likelihood of resources being made available in the conventional way. I beg the Minister to consider the idea sympathetically and perhaps in due course help Glasgow by pushing forward the idea of a housing management concept that will give more people pride in their own area.

Lastly, there is the question of the peripheral estates. There is a leak in The Guardian today. The Government are subject to leaks at present, but this one seems well informed. It is about the future of improvement and repair grants. I imagine that the idea of par value co-operatives has been promoted in Glasgow as a means of getting into the private sector account. There is no deviousness. That might have been one way of escaping from the capital restrictions in the housing revenue account side and using some private sector money for improvements in private sector. I hope that we shall not hear bad news about cuts in even that area of housing expenditure. I give the Government credit for allowing reasonable resources for that in the past couple of years.

The Government do not have a housing policy. Although I do not intend to make any public announcement, I intend to make a decision about my future in due course and so I do not need to worry unduly about pressures from any quarter inside or outside the House. There is not enough fundamental thought about the whole of society at present. People are having to apologise for an economic system that cannot find useful work for almost 4 million people. It may be said that Socialism is not the answer.

Mr. Michael Forsyth

Socialism was not the answer.

Mr. Brown

I have no time for the small minds of people such as the hon. Member for Stirling (Mr. Forsyth). Under this crazy, outdated economic system, even the best educated people from Eton and Ampleforth—

Dr. Norman A. Godman (Greenock and Port Glasgow)

What about Fettes?

Mr. Brown

Even the best educated people cannot produce an economic system that uses the wealth of talent and skills available to the benefit of all our people.

Within the confines placed on us we are trying to argue for more public expenditure on housing. I would not claim that we can solve every problem by flinging money at it. However, we have to look at the conditions in which people are living in the deprived areas. It is obscene to argue that tax cuts should be a priority in the Budget. I feel humble at times when I see the conditions in which we ask people to live and then listen in the House to academic arguments from accountants to the effect that tax concessions lead to social justice and will improve the economic system. We all know that the biggest tax concessions will go to the wealthiest.

I beg Ministers to consider the problems. I have visited Pilton, Craigmillar and Western Hailles. The Secretary of State for Scotland has visited Provan once in his lifetime. Perhaps he should visit us again and see the deep social problems of drug-taking and so on that arise in deprived areas. Housing expenditure not only creates jobs but helps people. I wish that more resources were available for it.

8.45 pm

Sir Hector Monro (Dumfries)

It is always a pleasure to follow the hon. Member for Glasgow, Provan (Mr. Brown). I am glad that he did not go over the brink and say that he is to leave the House. I very much hope that he will not do so. I should be as sorry to lose him as I should be to lose my pair. The hon. Gentleman's experience is most valuable and we have listened to him with interest.

The debate follows the publication yesterday of the White Paper on spending, which emphasises the importance of containing inflation. Local authority expenditure is public expenditure, and therefore we must consider it in terms of inflation. However, I welcome in the White Paper the increased expenditure in real terms on the National Health Service and on social security. That aspect of the White Paper nails for good the constant criticism from Opposition Members to the effect that we are cutting those two valuable services.

Increases in the number of doctors, nurses, dentists and other specialists have been dramatic. We should highlight that increased expenditure when debating subjects such as housing. Today we are debating housing and housing support. We are not debating rate support grant. We shall deal with that tomorrow.

The three orders mark out the pattern of local authority revenue spending on housing. I am glad that there is agreement within COSLA on the formula, although there is not yet agreement on the settlement. However, if a group of Ministers and local councillors understand the formula, that is certainly a step in the right direction. I have been totally at a loss to understand the rate support grant and housing support formula for several years. I am glad that someone is beginning to see the light.

The two grant orders set the proportion of subsidy to be provided by the Government, and the rate fund contribution order limits the amount of money to he transferred to the housing revenue account from the rate fund by certain authorities. The Minister explained his point of view. It is obvious that the district councils are far from happy. The figures — we shall deal with them much more thoroughly tomorrow in terms of the rate support grant and the rates that will be payable by residents in local authority areas — are very critical. From the figures that the Minister has given, on a stand-still budget —and we must accept that it could be possible to have a stand-still budget—the rate increases bandied about in the press and elsewhere are very much exaggerated. We must allow a percentage for revaluation, but the figures of 30 per cent. or 40 per cent., when balances and other resources have been taken into account, will turn out to be far in excess of what will in fact be levied.

I appreciate only too readily the difficulty that faces councillors in Scotland, but it is not new. During all of the years when I was a councillor we had to accept extreme constraints from the finance committee and the finance convenor. We always had to pare down many of the projects that we would have liked to carry forward and show ratepayers that we were developing the quality of life in the area. Housekeeping and budgeting tightly is not new.

Perhaps my hon. Friend the Minister could say a little more about the assumptions upon which he calculates the housing support grant. The grant is nearly £48 million and I think that I heard him say, amid the hubbub from the Opposition, that, in the light of changes in interest rates, he will probably have to introduce a variation order, as he is empowered to do under the Housing (Financial Provisions) (Scotland) Act 1978. Will the order be introduced in the early days of the financial year or will local authorities learn about it in the autumn?

I was interested in what my hon. Friend the Minister said about supervision and management. I strongly welcome his decision to increase the housing capital allocation to Nithsdale to £3.25 million, following representations from the council, me and my hon. Friend the Member for Galloway and Upper Nithsdale (Mr. Lang), as it will enable a start to be made with the complete renovation of a substantial number of flats in the Lochside area of Dumfries. They are of post-war construction but, sadly, have fallen far below acceptable modern standards. It is right that the district council should renovate them as soon as possible.

In regard to what my hon. Friend the Minister said about management, the additional funds, which I hope will be available, are important as it no use rebuilding that area of Lochside if we do not institute a much improved standard of management so that the flats do not fall into such disrepair again. I hope that the terms of the order will allow that.

As for the rate fund contribution for housing expenditure limits, we know that the housing revenue account is balanced by income from rents, contributions from the rate fund and the housing support grant. While the housing support grant has been diminishing, the rate fund contribution in many authority areas has been rising—hence the limits order stemming from the 1984 rating and valuation legislation. My hon. Friend the Minister can now set an overall limit, but has he done that arbitrarily on an assumption or is there a formula that has been agreed by COSLA?

Housing capital allocations are vital as they cover the improvement, construction and repair of council housing. I am glad that it is up by £43 million, or 19 per cent. That includes the apportionment that has been made to cover condensation and dampness. I was not a member of the Select Committee that made the inquiry, although I was a member of it when it concluded the report and published it, so I listened to the arguments of members of the Committee on the contentious issue of whether a house is damp or suffering from condensation. It is right for my right hon. Friend the Secretary of State to have made a start in this important matter because we have a much longer way to go than £16 million will make an impression on in the first year. There should be a rolling programme for 10 or 20 years to eliminate this detrimental aspect of local authority housing. As the Select Committee made clear, we must emphasise education because condensation is not understood by as many tenants as I should like. They frequently blame dampness when the problem arises from their reluctance to open a window or two during the day.

Overall, we have made a substantial advance in housing improvement. I am glad that my hon. Friend the Minister was able at the end of last year to give a substantial additional sum of £110,000 to Annandale and Eskdale district council, as improvements are crucially important. The Government are granting almost the entire bid of Annandale and Eskdale on the housing revenue account block of £2.82 million. That is welcome news. The non-housing revenue account allocation falls substantially below the council's bid, which was an increase of 90 per cent. on last year. Nevertheless, I note from my hon. Friend's letter, dated 21 January which I received yesterday, that the council can transfer resources from the housing revenue account to its non-housing revenue account if it wishes to do so. That is helpful.

The improvement of houses is perhaps the most important issue that we should consider today. I hope that my hon. Friend the Minister will say a little more about where we stand in regard to the percentage grant and the amount of resources that are available. We could improve our housing stock even more rapidly. That would help the construction industry and help reduce unemployment as well. I know that my hon. Friend was able to give a little additional money at the end of last year but more would be valuable.

We should consider the sale of council houses, as it is an important issue in regard to resources. We have a long way to go to make as much impact on the sale of council houses as I should like. There are two district councils in which I am interested. The first, Annandale and Eskdale, has 4,958 houses of which, according to a recent parliamentary question, it has sold only 319 or 6.4 per cent. The second, Nithsdale, has 8,589 houses of which it has sold only 683, or 8 per cent. Both figures are much below those of equivalent districts in Scotland. Although both councils have fulfilled their statutory duties, they could go out on a real selling drive to encourage tenants to purchase their houses. Mortgages are available. They would then have more resources to put into housing.

I have been much impressed by the excellent work of housing associations, especially in sheltered housing. Anything that my hon. Friend the Minister can do to help them keep up their rate of construction would be most valuable in the longer run. Housing associations have a cash limit of £90.7 million, but think that the number of completed houses will begin to fall after this year. If we can reverse that trend, so much the better.

The Minster has a difficult job to produce these orders within the financial targets. We must have an overriding view that winning the battle against inflation is of prime importance. The Minister has done a fine job in balancing a most complicated financial issue. When district councils appreciate what he has done on housing—I emphasis housing because we have a different debate tomorrow on the rate support grant — and that he has made a substantial amount of assistance available to housing authorities this year, they will strongly support these orders.

8.59 pm

Mr Robert Hughes (Aberdeen, North)

During Scottish questions a week ago my hon. Friend the Member for Dunfermline, West (Mr. Douglas), in an ironic exchange, said that the Secretary of State for Scotland was pretending to be Generous George. In reality the proper description of him is Gauleiter George. In truth he is an arrogant, overbearing, subordinate wielder of authority on behalf of the Prime Minister.

Never since the inception of the office of Secretary for Scotland in 1885, nearly 100 years ago, has anyone arrogated to himself such dictatorial powers. He is interfering in the rights and duties of elected local authorities in a manner which goes well beyond any reasonable attempt to influence policy matters of elected councillors. I accept, and always have, that central Government have a locus to seek to influence the policy of a local authority. However, on national policy, whether the establishment of comprehensive education, which I like, or tenants' right to buy, which I dislike, statute is the proper way to express that influence. But influence on local issues should be achieved, if it is to be achieved, by consultation, discussion and agreement. If agreement cannot be reached, providing the authority is not in breach of statutory responsibilities, the issue under discussion must be left to local judgment. At the end of the day the local electorate is the final arbiter.

What I have said is particularly apposite to the rate fund contributions to the housing revenue account, which the Secretary of State seeks to limit. In that case, he is directly intervening in the management of a local authority's affairs. He seeks directly to impose rent increases on all local authority tenants, irrespective of the judgment of elected councillors and of local conditions. Provided a local authority is not in breach of its statutory obligations, the local decision must prevail.

The Secretary of State must adopt that criterion. He has, and always has had, reserve powers under statute to bring to judgment a local authority that is behaving unreasonably and disregarding its legal responsibilities. The idea of a public inquiry is obnoxious to all, but if it is done purely on the basis of judging a local decision and in an objective manner, at least it allows the local authority publicly to explain itself. What is especially obnoxious is that the Secretary of State is compelling authorities to arrive at a certain figure. If it is not reached, he argues, there is a prima facie case that the authority is in breach of statute. That is not necessarily so.

Open public scrutiny of the housing revenue accounts of local authorities shows clearly that the Secretary of State has not taken proper regard to the financial problems to be faced. Unlike my hon. Friend the Member for Glasgow, Provan (Mr. Brown), I shall quote some extensive figures. I wish to quote the figures for Aberdeen, not because Aberdeen is in a unique position, but because its accounts are fairly typical. The 1984–85 expenditure figures in the housing revenue account show loan charges which are split into two different elements: instalments of debt at just more than £3 million, and interest payments at more than £15 million. That gives a total of more than £18 million. Interest payments are virtually five times the amount of debt repayments, and amount to more than 50 per cent. of the total expenditure on housing in Aberdeen. Total loan charges amount to almost 60 per cent. of total expenditure. The next highest sum on the expenditure side is the cost of repairs and maintenance, not management and maintenance, which is just more than £6,600,000. That is about one third of total expenditure. The figure for the following year is roughly similar.

Instalment payments must increase by £500,000, interest charge payments must increase by about £1.25 million, and payments for repairs and maintenance are estimated to increase by about £1.33 million. The increase in costs next year as compared with this year will be just over £3 million, of which £1.75 million is completely outwith the control of the local authority. The sum that is within the authority's control for repairs and maintenance represents what a prudent authority believes to be necessary to maintain the standards of an ever-ageing housing stock. If there were no repairs and maintenance in 1984–85, debt repayment would be 14 per cent. of the housing budget and interest charges would be 68 per cent. Therefore, 82 per cent. of housing costs would go simply to service debts incurred from building houses in years gone by. For 1985–86, the figure is estimated to be 83 per cent.

Even if there were no repairs and maintenance payments next year, the authority cannot escape from the fact that it must meet 80 per cent. of its housing revenue costs. There can be no default on those payments. The idea that the local authority has been profligate in respect of its housing budget is nonsense.

The Secretary of State's response to the financial problem is twofold: first, to reduce the housing support grant; and, secondly, to limit the rate fund contributions. He has set a limit for Aberdeen of £6,015,000, which is almost £3 million less than the previous year and far short of the budget forecast for next year. If that shortfall is met only by rent increases, rents in Aberdeen will have to increase by £3.86 a week. If not, there will be a savage cut in repairs and maintenance, which I know from my experience and from the experience of my constituents are extremely necessary in large parts of Aberdeen.

The Secretary of State seems to believe that tenants in Aberdeen can afford such increases, but he is completely wrong. He is one of those who believe that Aberdeen is an oil E1 Dorado. Let me disabuse him of that idea. Already 44 per cent. of tenants in Aberdeen receive housing benefits, and the figure is rising. Unemployment in the city is far from rosy, despite the favourable comparisons with other parts of Scotland. I concede immediately that many other areas in Scotland have far more serious unemployment. However, in the centre of the city — in the constituency of the hon. Member for Aberdeen, South (Mr. Malone)—in the Ferryhill area, which I know extremely well as I represented it on the council at one time—

Dr. Godman

A fine councillor, too.

Mr. Hughes

As they say in the courts, I am obliged to my hon. Friend. Unemployment in the Ferryhill area is 15.9 per cent. It is the worst pocket of unemployment in the Grampian region. Three other areas in the city are among Grampian region's six top blackspots for unemployment. In a decade of so-called oil boom in Aberdeen. 35 per cent. of manufacturing jobs have been lost. With such a background, we would expect the Secretary of State to have a sympathetic approach and to make available more finance for housing. The reverse has been the case, because he is making a much smaller financial contribution.

The most recent figures—I shall not return to those balmy days when a Labour Government gave full support to the local authorities—show that in 1982–83, housing support grant in Aberdeen was 27 per cent. of the income of the housing revenue account. In 1983–84, that figure was reduced to 13 per cent. In 1984–85, there has been a further reduction to 6 per cent., and in 1985–86, the figure will be 2 per cent. My understanding is that the following year there will be no housing support grant.

Hon. Members can say that it is all very well to quote clever statistics and percentages, but that we should say what they mean in money terms. In money terms, this means a reduction from the 1982–83 housing support grant of £8,670,000 to £802,000 in 1985–86. One does not have to be a mathematician to see that this is a fantastic cut in income to local authorities.

The picture that I have set out for Aberdeen is indicative of Scotland as a whole. Since 1979–80, housing support grant has reduced from £213 million to £48.2 million in 1985–86. Some 33 housing authorities will get housing support grant. The interesting thing about that is that these non-qualifying authorities account for 63.4 per cent. of the Scottish housing stock. Where is the great support for local authority housing about which the Secretary of State boasted?

In 1979–80, the housing support grant represented 39 per cent. of the income of the housing revenue accounts. By 1985–86, that figure will be down to 7 per cent. By contrast, rents as a proportion have increased from 47 per cent. to 74 per cent., and the proportion is likely to go even higher the year after that. The Secretary of State is making a despicable attack on those least able to afford it. All this is designed for one purpose alone—to provide money for the Treasury. Council tenants in Scotland will not be the beneficiaries of the tax-cutting bonanza.

I remind the House that I was a member of the city of Aberdeen council from 1962 to 1971. I make no bones about saying that those were happy days. We had furious arguments, among ourselves in the Labour group, often, in the spirit of vigorous party political debate, in the council chamber, and fairly frequently with the Scottish Office, even with a Labour Secretary of State. There is one major difference between those recent years and the present. The issues that we were discussing and debating then were on the pace of developments—how best we could go, how best to deal with the problems facing the people of the city of Aberdeen. I give credit to our Tory opponents in the council chamber in those days, because they also wished to see the city thriving and prosperous. It was common ground that we should provide the best education, health, welfare, housing and leisure facilities. We did all those things, although we should have liked to do more.

In these days, the pressures and problems are worse. Discussions are about how councillors can meet the Government's guidelines laid down by edict, about how the councils can meet the statutory housing obligations, given the dictatorial cash limits of the Secretary of State for Scotland. I do not know how they can maintain their sanity when trying to deal with this problem.

In many respects, the growth of the standard of living of our people, the improvement of the environment, the eradication of disease, and the widening of educational prospects were the result of the full flowering of local government and democracy. The Secretary of State is destroying local government, and if he does not understand what this is doing to our people, he is even more ignorant than I thought he was.

9.13 pm

Mr. Gerald Malone (Aberdeen, South)

I am pleased to follow the hon. Member for Aberdeen, North (Mr. Hughes). I shall deal with one or two of his points later. I am grateful for his basic honesty in pointing out that hon. Members on both sides of the House have different objectives in public housing. There is no secret about that. I share the view of many of my colleagues that the provision of public housing in Scotland represents too high a percentage of the total housing stock.

I welcome the move to greater private ownership. In a sense, it is a difference in philosophy in this respect that divides the House. There can be no doubt that the direction of the Government's policy is a matter of balance. We have got out of balance in the way in which we finance our public housing. We have reached the stage when the burden on the taxpayer in general is too great. The contribution of those who benefit from public housing has become proportionately too small. This imbalance has developed over a substantial number of years, and, in my view, the Government are correctly taking steps to correct it.

My hon. Friend the Parliamentary Under-Secretary of State for Scotland says that in order to meet overall the targets for Scotland which he has set in these orders council house rents will, on average, have to go up by £1. The alternative way of dealing with the matter that was proposed by the hon. Member for Aberdeen, North would mean that in Aberdeen rents would have to be increased by more than £3. One is still referring, in the specific case of Aberdeen, even if it chooses simply to increase rents to meet these targets, to a rent that is lower than that which is to be found in many other parts of the United Kingdom. It is worth putting some of the figures on record.

In Scotland, council house rents take approximately 10 per cent. of a family's income, whereas in the remainder of the United Kingdom the average figure taken by council house rents is 16 per cent. I do not believe that we should attempt to reach parity, but when the Opposition speak in such emotional and excited terms I believe that it is worth trying to gain a sense of proportion and to bear these figures in mind.

Mr. Wallace

To apply an objective test to the argument of the hon. Member, can he tell us what will be the public subsidy to council house tenants after the orders are passed compared with the subsidy that is given in the form of tax relief on mortgages to the owner-occupier?

Mr. Malone

The answer is that it varies from authority to authority. It is important to bear that in mind. It is also important to bear in mind that when we encourage the sale of the stock of council houses there are many council house tenants who put themselves in the position of owner-occupiers. When one espouses the policy of encouraging private ownership, as do this Government, it is important to give some form of encouragement. I remind the hon. Member for Orkney and Shetland (Mr. Wallace) that, even within the context of those remarks, the assistance that is given by tax incentives of that kind has been reduced dramatically in real terms during the term of office of this Government. It has been brought into balance in line with the view of the Chancellor of the Exchequer that we should have a fairly neutral tax system. It cannot be done at once, but it is moving in that direction.

Mr. Craigen

rose—

Mr. Malone

Perhaps I may be allowed to continue.

I should like to put one or two points about this matter to my hon. Friend the Minister in the hope that he will deal with them in his reply. I want to concentrate upon one or two matters. One relates to eligible expenditure, in particular interest charges. When assumptions are made in his calculations about the interest charges that should be met by local authorities, the Chancellor of the Exchequer fixes a rate that takes into account the potential of capital receipts from volume sales of council houses. I understand that he does this for the straightforward reason that it is within the power of local authorities to reduce their borrowing by adopting an enthusiastic policy of selling council houses. Is it, in my hon. Friend's view, fair that many local authorities enthusiastically adopt this policy and reduce their debt while many other local authorities do not do so? When these overall interest assumptions are made, are these matters taken into account?

Mr. Robert Hughes

rose—

Mr. Malone

I shall give way to the hon. Member when I have finished making this point.

The hon. Gentleman mentioned the overall borrowing figure of Aberdeen district council and the substantial amount of money that has to go to service that. Aberdeen district council has chosen to sell 4.7 per cent. of its housing stock, well below the percentage of a large number of local authorities in Scotland. If it wants to reduce that item of relevant expenditure — interest charges — it has the solution in its hands. It could continue to sell council houses more enthusiastically than it does and so reduce that item of expenditure.

Mr. Hughes

The hon. Gentleman must address himself to the contradiction in what he and his hon. Friend the Under-Secretary of State are saying. His hon. Friend is saying that if the council sells council houses, money will be available to spend on repairs and maintenance and the eradication of damp. If it uses the money to try to reduce some of its capital indebtedness, it obviously cannot do what his hon. Friend suggests. If he imagines that the sale of council houses can extinguish the debt which he has mentioned, he must be aware that the only way to do that is to sell the lot.

Mr. Malone

There is nothing wrong with increasing substantially the number of council houses to be sold in Aberdeen. The hon. Gentleman has not managed to contradict the fact that it would give Aberdeen district council the chance to reduce what is an enormous on-cost from the eligible expenditure which it undertakes. There is no sense in which that can be reasonably denied.

There is another area in which many councils can reduce their expenditure. When we talk about management and maintenance and repair and maintenance—I concede that Aberdeen district council is extremely careful to differentiate between those two elements—a lot can be said for many Scottish local authorities reducing repair costs.

Before the hon. Member for Aberdeen, North tries to intervene again, let me put one point on the record. By and large, Aberdeen district council operates a relatively efficient repair and maintenance service. It is relatively cost-effective compared with many local authorities in Scotland. But I trust that my hon. Friend the Under-Secretary of State will be taking whatever steps he can to encourage local authorities to reduce even further the costs of repair and maintenance which vary so much throughout local authorities in Scotland and which in some areas are completely unreasonable and inefficient.

It is important to point out to local authorities, when they justifiably look at such matters with a great deal of anxiety, that part of the solution to the problems that they face in making their budget balance lies well within their own hands.

Some mention has been made during the debate of increases in capital expenditure on housing. I endorse what was said by my hon. Friend the Member for Dumfries (Sir H. Monro) in welcoming that. It is important that we devote as much as we possibly can in straitened circumstances to the improvement of the housing stock. However, it is also important that local authorities should take up many of the new initiatives that are available. It is important that if the private sector offers solutions to such problems they should be welcomed with open arms rather than rejected on a point of political dogma.

I hope that many Scottish local authorities will look to the scheme that is presently being operated by the South of Scotland Electricity Board, which is offering an integrated service for multi-storey buildings whereby they can be rendered free from damp. It also encourages the cost of the provision of electricity to be added to the rent. There is a system that can usefully go towards the eradication of what I concede, as is clear from the Select Committee report, is a problem of peculiar difficulty in Scotland.

We have already heard many words from the Opposition tonight about our policy being offensive. What I find to an extent offensive is some attempt to justify the recreation of a policy whereby public expenditure goes up on council and local authority housing when it is that policy of high expenditure with lack of proper control that has resulted in the housing stock with which we are having extreme difficulty today. It cannot be claimed that high public expenditure has been a success, otherwise we would not be faced with great difficulties with multi-storey buildings, dampness and all the rest of it which arose during a period of extremely high public expenditure. I do not pretend to accept the suggestion of the Opposition that what we are saying—that there should be an ordered balance away from central funding of local authority housing towards tenant funding—is offensive or wrong.

This is nothing more than a way of attempting to move marginally the balance of expenditure. I believe that it underlines the essential difference between the two sides of the House, but it does not undermine what I see genuinely as a common concern that we have a good housing stock and that a large number of houses paid for by public funds are not left derelict and empty because people do not want to occupy them. The fundamental difference between us is that we see the provision coming from a different source. I believe that it can best be provided by choice in the private sector and the increase in influence that the tenant will have. That, unfortunately, does not seem to be the motive of the Opposition. Their motive is to increase again the stranglehold that they and their followers had over the public housing stock. That is what they seek to achieve in opposing the order.

I have great pleasure in supporting the order. My hon. Friend has undertaken a difficult balancing task and he has done it exceptionally well.

9.26 pm

Mr. Gordon Wilson (Dundee, East)

I follow the hon. Member for Aberdeen, South (Mr. Malone) with considerable regret because I do not think he has done justice to his constituents with regard to housing. Of the two views that have emanated from Aberdeen in the debate I prefer that of the hon. Member for Aberdeen, North (Mr. Hughes). I have disagreed with the hon. Member for Aberdeen, North on many occasions, particularly on constitutional matters, but this evening our views coincide. He referred to the Secretary of State as a gauleiter. My German is limited, but I think that is the equivalent of a regional administrator. That is exactly the role that the Secretary of State occupies.

Earlier today when I met the delegations that had come down it was difficult to try to explain to them that, although I appreciated their position, the debate did not offer much to them, because the decisions that we are discussing were taken several years ago under the public expenditure White Paper. Those decisions were taken not by the Secretary of State for Scotland, whether he be a gauleiter, a colonial administrator or even a Cabinet Minister, but by the Cabinet as a whole under the aegis of the Treasury and the Prime Minister. Effectively, the decisions taken several years ago in regard to public expenditure on housing that we are implementing under the orders will be enforced upon the people of Scotland by an English majority, which will come pouring in to vote when the Division bells ring. That is what we must realise.

Furthermore, when we look at the White Paper that was published only yesterday we find that there is even greater room for worry about what might happen in the public housing sector in years to come. We find that the decline in public expenditure on the housing account is of the order of 10 to 15 per cent. spread over the three years to 1988. I suspect that in the next two or three years we shall have a considerable number of these debates when we see the amount of money being reduced steadily and when in our constituencies week by week or fortnight by fortnight we see the problems mounting as people demand repairs and cannot get them. That is where the Scottish Office is out of touch with what is happening. It was significant that the Under-Secretary of State referred to the English situation. The Scottish Office's policy seemed to be to bring Scotland into line with England, regardless of the methods used and the hardship caused. Indeed, great hardship will be occasioned.

I confess that the issues involved in the rate support grant and the housing support grant are so complex that I do not fully understand them. The Convention of Scottish Local Authorities has stated: The factors used to determine each Authority's eligibility or otherwise for HSG continue to ignore the actual position of housing authorities. In other words, the Secretary of State's decision can be entirely arbitrary and it is difficult for those in the know to work out the reasons for it. However, it has been suggested to me that political motivation is involved. That possibility should not be ignored. After all, if the system cannot be explained clearly to people, the motivations of those who operate it, particularly when they provide insufficient funds, will be questioned. If they are providing more expenditure than people had expected, there is not the same criticism.

The whole system involved in local government reminds me of the comment that was made about the Schleswig-Holstein affair, to the effect that it was so complex that those who understood it were either dead, in a mental hospital — or perhaps in this case, in the Scottish Office. The system is certainly beyond my understanding. Year after year district councils have faced reductions in the resources available for the services that affect many of their citizens. In 1980–81, the rents in Scotland provided about 50 per cent. of housing costs. The figure for 1985–86 is likely to be about 80 per cent. if the Government's intentions are carried out.

This year, the rent increases on average will be at least twice the prevailing rate of inflation. But that is only an average, as in many other areas the £1 suggested as the average will be considerably exceeded. I understand that if Dundee follows the lines laid down by the Minister, the rent increase could be double what he suggests as being the average.

It must be borne in mind that if the money has to be found from tenants, rate bills will rise, and so they will be hit twice. The Government do not seem to care that public sector housing in Scotland is in urgent need of repair and modernisation. Yet that is what happens when we do not spend money on property. It is bad business not to spend money on maintenance, because eventually the bills will become bigger. I should have thought that Ministers who sponsor, in particular, the private sector would be aware of the facts of domestic life.

We know that about 350,000 of our people still live in damp houses. However, capital expenditure on housing has been reduced by about 40 per cent. in real terms since 1980. In 1983, the number of housing starts and completions in the public sector was the lowest for decades. It is all very well for the Minister to say that that work can be taken up by the private sector. That may often be true with regard to general family housing, although there are shortages in certain types of family housing. But the private sector will not meet the demand, for example, for sheltered housing. Moreover, the increased expectations of elderly tenants cannot be met. A report was recently handed to me from the Scottish Council for Single Homeless, suggesting that the situation in Dundee is critical with regard to the provision of houses for single persons.

I shall show how the orders will affect Dundee. In the coming year the city will receive no housing support grant. Indeed, it has not received any for the past two years. To cushion the effects, the rate fund contribution to housing revenue in the city, which was £6.9 million in 1983–84, will now, as a result of the Secretary of State's powers, be reduced to £4.9 million. That will have a traumatic effect on the administration of the housing stock in the city. It will result in rents going up steeply on the one hand and in a drop in service on the other. If one takes the rate of modernisation, it would be a long period before the work could be done.

The housing authority has brought to my attention the problems that it has. Deterioration of the fabric of the housing stock is widespread, as are harling defects to flat roofs. Structural defects are apparent in non-traditional house types, types which the Scottish Office in previous generations wished upon local authorities at the time. Window replacement is needed on a large scale. I receive many complaints about this from my constituents. We talk about cold climate allowances and suchlike, but it would help if we had windows that kept out the draughts and mitigated the heat loss. Some 16,000 tenants in Dundee suffer to a lesser or greater degree from dampness. Over 3,000 houses have not been modernised since they were built 50 years ago. Houses built after the war are in need of modernisation.

Rewiring to a modern standard is required in 17,000 houses. One can make all sorts of adjustments in relation to repairs from time to time by doing spot repairs and deferring the problem to later years when one hopes that more cash will be available. I wish to impress upon the Government that deficient wiring is a safety risk and should have some priority. These are the problems that are affecting individual tenants in the city of Dundee. From the other delegations that I have met, I understand that their position is the same if not worse. A general problem is building up.

I have been impressed that the Government during the last year have managed to gel together a coalition of people of all parties in the district councils and the regional councils against their policies. Given the nature of the party loyalties and the differences of opinion that exist—the vigorous debate to which the hon. Member for Aberdeen, North referred — it is a remarkable achievement on the part of the Secretary of State and his Parliamentary Under-Secretary.

I have one suggestion for the attention of the Minister to which I hope he will give consideration. It has been put to me that under the present system, whereby allowances are announced at the last moment, housing authorities are not permitted to conduct a rolling programme where they are assured of a certain fairly high proportion of the money they require. Cost savings would be made if housing authorities were able to plan in advance, do things on longer contract or undertake larger jobs than they are at present able to carry out. I suggest that some kind of rolling three-year programme might be worthwhile considering from the point of view of the accountants in the Minister's Department if not those who work in the Treasury.

We are dealing with a fundamental political problem. The Government are not administering Scottish housing from a Scottish viewpoint; they do not need to take account of public opinion in Scotland; they do not need the majority support of Scottish Members of Parliament. From these constitutional facts of numbers stems our whole problem, in my view. The Minister said that he was giving as much as the nation could afford. I for one do not accept that distinction. Nor do I accept that the £12 billion that is going into the Treasury this year from our oil resources should not be deployed towards Scotland to meet our problems.

Mr. Albert McQuarrie (Banff and Buchan)

United Kingdom oil.

Mr. Wilson

If the hon. Gentleman disagrees, it draws a correct distinction between his attitude and mine and my willingness to see that Scottish money is put to the betterment of the Scottish people.

9.38 pm

Mr. Gavin Strang (Edinburgh, East)

Listening to the Under-Secretary of State when he opened the debate, one was aware of a huge chasm between what he was saying and the views of the vast majority of the elected councils in Scotland. What he said bore no relation to the resentment that exists in these councils. This resentment exists in Labour-controlled councils but to a significant extent also in councils where the Labour party is not in control. One wonders whether the Government appreciate the depth of resentment at their policies. I understand that the Secretary of State has refused to meet COSLA to discuss its important grievances.

We are witnessing a systematic attack on local authority housing. The Government are pursuing that attack viciously and decisively year after year. The figures in the Government's public expenditure plans for the next financial year show what has been happening in recent years. The Government are making massive cuts in housing expenditure in Scotland. In 1985–86, the Secretary of State intends to spend £598 million on housing in Scotland, compared with £734 million in 1979–80—a cut of 49 per cent. in real terms. In other words, the Government have halved public expenditure on housing in Scotland. No wonder so much damage is being done; no wonder the housing stock has deteriorated so much; no wonder there is massive unemployment among workers in the construction industry.

The Government are obsessed with encouraging the sale of council houses. It is reasonable to suggest that they are deliberately pushing up council house rents to try to force as many tenants as possible to buy their houses.

Opposition to the Government's policies comes not only from Labour-controlled councils. There is also opposition from Conservative councils which deeply resent the fact that they are ceasing to be autonomous councils and are becoming mere agents of the Government. The Government fix their expenditure, they have taken powers to fix their rates and they are even taking powers to fix the amount that councils can contribute to the housing revenue account from the rates. That means, in practice, that the Government are even fixing council house rents.

The Government are pre-determining all those decisions and are removing from elected councillors, whether Conservative, Labour or any other party, the opportunity to make a judgment on the extent to which housing should be supported from the rates or from rents.

Mrs. Anna McCurley (Renfrew, West and Inverclyde)

Does the hon. Gentleman believe that everything spent in local government should be rate borne? Is that his alternative?

Mr. Strang

No. I think that the hon. Lady understands what I am saying. If she is in any doubt, she should speak to some of the councillors, including Conservative councillors, who have come to Westminster to speak to us.

Edinburgh is experiencing the effects of a massive neglect of our housing stock. Anyone who knows anything about housing in the city — and the Under-Secretary must surely know something about that—knows of the enormous deterioration that has taken place because of the below average spending on repairs, maintenance and improvements by the city council when it was under Conservative control.

When the Select Committee on Scottish Affairs visited Edinburgh, hon. Members from west central Scotland were appalled and amazed at the situation that the Conservative council had allowed to develop on some of the city's housing estates. Only recently a tenant succeeded in taking the council to court and proving it guilty on the ground of not providing a house which was wind and water tight. The elected council had failed under landlord legislation to provide the basic necessities in the council house concerned and was not prepared to provide alternative housing. I could continue at length to bring out the enormity of the deterioration in Edinburgh's housing.

It is from that base that the newly elected Labour council in Edinburgh has taken control. I have not the slightest doubt that one of the reasons why the Labour party took control of Edinburgh for the first time—it was a remarkable and historic result — was the resentment among council house tenants and others throughout the city at the neglect and callous indifferences of successive Conservative administrations to public services, especially council housing.

To its credit, the new Labour Edinburgh city council has put forward a bold programme to tackle the years of housing neglect. In the time that is left to me I shall concentrate on the expenditure which it hopes to make through the housing revenue account. Its programme will be implemented over a period of years. It has been submitted to the Scottish Office and no doubt it is considering it. The expenditure which is budgeted in the housing revenue account for 1985–86 is £47.5 million. Where is the money to come from? A part of it will come from the rate fund contribution.

As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) has said, the Government intend to limit Edinburgh's rate fund contribution for the housing revenue account to £2.8 million, which is roughly £49 per council house. That must be compared with £158 for Aberdeen, £159 for Glasgow and £125 for Dundee, an average of £105. How can the Government justify limiting Edinburgh's rate fund contribution to such a derisory figure?

The Minister has told us in the past and again this evening that he wants to see council house rents forced up to pay for the maintenance of council housing. Council house rents in Edinburgh are massively higher than rents in other Scottish cities. They are about £5 a week higher than rents in Aberdeen and Glasgow. They average about £14 compared with £10 in Glasgow and about £9 in Aberdeen and Dundee. There is no case for increasing rents any further. It would be unfair and unreasonable to expect council house tenants to pay higher rents to meet the programme which Edinburgh district council has put forward.

Edinburgh is in an impossible position. It has inherited huge neglect and it has submitted a programme to tackle it and the Government are specifically and explicitly denying the council the powers and opportunity to implement it. I hope that the Minister will reconsider Edinburgh's position. I hope that he will judge fairly the monstrous unfairness that faces Edinburgh. The council has a historical legacy of deterioration in its housing stock and yet it is faced with limitations and the imposition of a straitjacket.

I hope that the Government will think again. The Labour-controlled Edinburgh district council wants to tackle the housing problems and it has a mandate to do so. I hope that it will be allowed to go ahead and resolve the problems. Surely the sensible and statesmanlike approach would be for the Government to say that the Scottish Office and the city council should consider the council's proposed housing budget and programme and calculate how it can be implemented to improve the quality of Edinburgh's housing.

9.49 pm

Lord James Douglas-Hamilton (Edinburgh, West)

I listened with great interest to the hon. Member for Edinburgh, East (Mr. Strang) who criticised the sale of council houses. By last year about 3,500 council houses had been sold in Edinburgh, about 1,000 of them in my constituency. That is an example of the demand. The hon. Member for Edinburgh, East and I were present when the Select Committee on Scottish Affairs went to Edinburgh to examine the problems of dampness in council houses in west Pilton and Craigmillar, in our constituencies.

I should like to address myself to the problem of Orlit housing. This problem occurs in not only my constituency but many other parts of Scotland. Types of houses which are generally accepted to be defective in Scotland include Lindsay — in the Ayrshire council area — Blackburn Orlit, Boot, Dorran, Myton-Clyde, Orlit, Tarran, Tarran-Clyde, Tee beam, Unitroy, Whitson-Fairhurst and Winget. Those are examples of the widespread problem.

Now that the Housing Defects Act 1984 is on the statute book, it is obvious that, if funds are to be provided to do up a tenement in which some people own houses while the public owns others, they should be provided for the whole tenement. It is essential to have a co-ordinated and coherent approach combining the public and the private sectors so that the job is done efficiently and promptly.

Mr. Craigen

Does the hon. Gentleman regard the housing defects legislation as defective because it does not extend to public sector tenants?

Lord James Douglas-Hamilton

I followed up this matter vigorously. I can answer the hon. Gentleman by saying that on 20 December 1984 I tabled a question to the Secretary of State for Scotland asking him what allocation is being made to local authorities in respect of defective housing including Orlit housing and Blackburn Orlit housing. The answer stated: in reaching decisions on individual authorities' provisional capital allocations on HRA block, the fullest consideration has been given to their statements of need in this regard, as contained in the forward capital programme which authorities have submitted. The increase of £43 million in next year's capital allocations on this block should allow scope for authorities to undertake realistically phased programmes of remedial work according to the priority they attach to this particular aspect of housing need. The last paragraph was significant. It stated: The provisional allocations announced this week are not intended to cover authorities' financial liabilities under the Housing Defects Act 1984. The intention is to consult authorities during the course of 1985–86 with a view to issuing appropriate supplementary allocations." — [Official Report, 20 December 1984; Vol. 70, c. 329–30.] I refer especially to the words "appropriate supplementary allocations". It would be helpful if the Minister said more about that supplementary allocation. It is essential for this matter to be dealt with effectively and to be seen through to a successful conclusion as soon as practicable. We know what will qualify in the private sector— any building designed before 1960 in the categories mentioned which have prefabricated, reinforced concrete load-bearing components. The Act came into effect on 1 December 1984 and remains operational for a 10-year period. The maximum grant will be £14,000. It is essential to ensure that the measures in this connection are undertaken as vigorously in the public sector as in the private sector. I should be grateful to the Minister for making a statement about that.

Housing authority waiting lists can be lessened by the housing associations. I know that my right hon. Friend the Secretary of State has made available £100 million this year. I hope that we will work towards a target of building houses. About 18 housing associations operate in my constituency, and all of them differ from each other. I believe that it would be invidious to mention them all, but I single out one that has made an especially outstanding contribution—the Margaret Blackwood Home for the Disabled. I believe that the hon. Member for Orkney and Shetland (Mr. Wallace) visited that home some time ago. Although the housing associations represent only 1 per cent. of the total housing stock in the public sector, they could make a substantial contribution to that sector. It is also fair to add that many of the housing associations in my constituency put up the houses concerned very recently.

I should be grateful if the Minister would check the figures given by the hon. Member for Edinburgh, East as my information is slightly different. According to the public expenditure White Paper, average rents in 1982–83 were £13.58 in England and Wales and £8.94 in Scotland. I understand that the effect of the orders before us would be an average increase of £1— about 10 per cent. —bringing rents in Scotland to about £11.50 compared with an average of £14 south of the border. Bearing in mind that the average weekly wage is slightly higher in Scotland than in England, that seems fair and reasonable in the circumstances. I hope, however, that the Government will take strong, decisive action in relation to Orlit houses.

9.56 pm

Mr. Allen Adams (Paisley, North)

I hope that the Minister will take a good look at me, because he sees before him an unrepentant dogmatist. I believe in dogma. Someone once said that truths become dogmas when they are disputed, although I appreciate that that may be above the Minister's head. It was dogma, philosophy and the belief in a better world that created a better world by knocking down the slums of the Gorbals, Macalpenn, Castlehead and Paisley. The belief and the vision must be there first. Only then can one carry things through.

The history of Scotland is very different from that of England. In the middle of the 19th century we had substantial immigration from Ireland. Central Scotland also had significant immigration from the highlands as well as minor immigration from Latvia and Lithuania. At the beginning of the 20th century there was also substantial immigration from Italy. Scotland was also one of the first industrialised nations. Like Lancashire, we were heavily involved with the textile industry. This resulted towards the end of the 19th century and the beginning of the 20th century in some of the worst housing in Europe. It was reckoned that in 1910 the slums of Glasgow were second only to those of Vienna. At the beginning of the first world war, as a direct result of extremely bad housing, my area had the highest death rate in Europe from tuberculosis.

That is why in the early 1920s, when the Labour party gained control of the Scottish local authorities, it embarked on a massive council housing programme. In 20 years my authority built 20,000 council houses. Even in the mid-1950s, when I was 13, I remember going along Canal street to Campbell high school and seeing the warrens, the turret staircases, the outside toilets and the single ends that still existed even then. Things had been even worse 20 or 30 years previously. One reads of people in the Gorbals and in the east end of Glasgow living three or four to a room and two to a bed.

Therefore, there was very good reason for council housing in Scotland, and it improved immeasurably the lot of many people. We should thank the men of vision who went before us who built those houses and made life so much better for so many people.

Unlike England, Scotland has, over the past 30 or 40 years, become used to the principle of council housing. It is probably not well known in England that Scotland has more council houses per head of population than the Soviet Union. To attack council housing, to blame council tenants and to suggest constantly that they are not paying enough rent is to attack not just a minor part of the population but 70 or 75 per cent. of it.

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