§ 2.44 p.m.
§ Order of the Day for the Second Reading read.
THE MINISTER OF STATE, SCOTTISH OFFICE (THE EARL OF HOME)
My Lords, as your Lordships are aware, this Housing (Scotland) Bill has only limited objectives, but nevertheless I hope that you will feel that they are necessary and worth while. The main purpose of the Bill is to increase the Exchequer subsidy on houses which are built by a local authority or by the Scottish Special Housing Association. A local authority (and for purposes of illustration this afternoon, and for convenience, I shall always take the case of a four-apartment house in relation to any figures I may quote) has since 1946 had a subsidy of £23 per four-apartment house per annum. In the present Bill that subsidy is raised from £23 by £19 5s. to a total of £42 5s. That subsidy is designed to achieve two things: first, to cover the rise in interest rates which has occurred since this time last year, and, secondly, to help local authorities in some degree to meet their increasing costs.
The subsidy, clearly, can only be fixed satisfactorily in so far as the capital cost of the average house can be ascertained accurately. It was hoped that after discussions with the local authorities we could have agreed a figure of cost for the average four-apartment house, and, therefore, that we could have agreed a figure for subsidy. But, in practice, after prolonged conversations, the local authority figure stuck at £1,900, and the Government survey revealed an average cost figure of £1,765. From that £1,765, £130 was deducted in respect of economies in design and construction which are now possible, leaving a figure of 917 £1,635. So there was a gap between the local authorities' own estimate and the result of the Government's survey, and no agreement was possible. In those circumstances the Government had to take a decision. That seemed rather to surprise Her Majesty's Opposition in another place. Perhaps they are out of practice in that respect. But to take a decision is a necessary thing in some circumstances for a Government to do.
We therefore fixed the figure of £1,635 as a reasonably fair figure on which to base a subsidy, and for these reasons. The survey which was carried out by the Departments was a factual survey and took into account the actual contracts over a wide area for the seven months preceding the establishment of the new subsidy. The subsidy of £42 5s., in fact, fully covers the rise in interest rates, and it contributes something towards the increased costs which local authorities now have to pay. In England the local authorities agreed on a figure of £1,525 as the capital cost of the average house, and the figure for Scotland of £1,635 is over £100 in advance of that. The burden which the taxpayer is bearing is at present 16s. 3d. per head per house per week, and the Government did not feel that the taxpayer could be asked to bear a greater burden at this time. So, for all these reasons, I hope your Lordships will sustain the Government's decision to fix the new subsidy at £42 5s. which is £19 5s. in advance of anything local authorities have had in the last six years.
I know it is everybody's desire that we should hold the agricultural population on the land. Indeed, if we are to fulfil our programme of increased food production, it is necessary not only to maintain the houses there are but also to have a great many more houses built in country districts. Therefore, the Government have taken the opportunity to include in this Bill two new measures which we hope will contribute to that end. Up till now, if a private individual wished to build a house for an agricultural worker, he could obtain a grant up to a maximum of £300, but only if he built a house in replacement of an old one. We have removed that limitation and now, although it is a modest grant when we take into account the expense of building an agricultural cottage, anybody who builds a new house 918 in the country will be able to get the maximum grant of £300. We have taken the step, which I can safely say the whole agricultural community regards as long overdue, of giving a grant for the reconditioning of cottages which are tied to farms. May I add, in passing, that the Secretary of State has taken the opportunity by regulations to raise the upward limit of the amount which can be expended from £600 to £800, and therefore the grant will go up from a maximum of £300 to a maximum of £400? In the exceptional cases which are particularly costly because of their remoteness from sources of labour or materials, the Secretary of State retains his discretion, after an examination of every application, to allow extra expenditure.
In Scotland, where so many of our cottages are substantially constructed, I can say with certainty that the reconditioning of many of our cottages—and in Scotland we took great advantage of the Housing (Rural Workers) Act of 1926, which was later allowed to expire by the Socialist Government—will make more durable and comfortable homes than many of the houses that are being built at the present time at present costs. The principle of the tied cottage, of course, has been objected to, but few people who live in the country can understand the validity of that objection, and certainly they can never follow it when it comes from those who have advocated nationalisation, having regard to the practice of the nationalised industries, which have taken power to tie to themselves many cottages and houses for employees. It is essential, particularly in a country like Scotland where distances are great, that farm workers should be able to live on the farm.
Housing finance, the difficulties of the local authorities and the amounts which have to be expended by the taxpayer and ratepayer, are causing great anxiety. The secret of relief and success must be looked for in reducing building costs. From now on the Government and the local authorities, the industry and the unions should make that their chief preoccupation. There will be other occasions on which we can develop this wider question. Meanwhile I would ask your Lordships' approval for this modest Bill, which is a new instrument to help in the rehousing of the people.
§ Moved, That the Bill be now read 2a.—(The Earl of Home.)
§ 2.56 p.m.
§ LORD MORRISON
My Lords, as was to be expected, the noble Earl, Lord Home, has given a clear and brief exposition of the provisions of what he has just described as a modest Bill. He correctly described it as a Bill dealing mainly with the problems of housing finance. I would put the main object of this Bill as the redistribution of the increased cost of housing subsidies between the taxpayers and the ratepayers. These increases are largely necessitated by the rise in the bank rate—I think the noble Earl in fact said that. The rise in the bank rate was immediately followed by a rise in the rate of interest charged by the Public Works Loan Board. But even before this happened, there was considerable anxiety. I would endorse what the noble Earl said in regard to Scotland—although it applies not only in Scotland but all over England as well. There was considerable anxiety among local authorities about housing finance, in view of the fact that—in spite of the pious wishes the noble Earl uttered a few moments ago—there are few indications of any appreciable decrease in housing costs.
I confess that I have not sufficient knowledge of the finer points of banking and finance to venture an opinion as to whether, or to what extent, it was necessary for the Public Works Loan Board to increase their rate of interest because the bank rate had gone up. I am not sure whether it was what we regard in this House as consequential, but at any rate it was done. However, I do know this: that the result has been alarming, to local authorities, to tenants and prospective tenants of council houses, and to those looking forward to owning their own houses. Everybody with any knowledge of local government knows this. Therefore, I make no apology this afternoon for asking your Lordships to permit me to skip the minor provisions of the Bill and concentrate upon the much more important question of where we are going in housing finance.
This problem is not peculiar to Scotland, although it is generally agreed that it is more acute in Scotland. Your Lordships will recall that last July we debated in this House an English Bill with 920 similar objects. The Second Reading of that Bill was moved by the noble Lord. Lord Woolton, whose present illness we all greatly deplore. The main object of that Bill was the same as the main object of this one—namely, to restore the balance of housing subsidies between the Government and local authorities which had been upset by the rise in the rate of interest. If your Lordships will forgive me for mentioning his name, you may recall that in our discussions on that Bill my noble friend Lord Silkin made an impressive speech upon the ever-increasing burden of housing subsidies, a speech which the noble Lord, Lord Woolton, cordially welcomed. This afternoon I am harping on the same point, because ever since last July the situation has become rapidly worse. Unless a halt can be called, I fear that we are heading for a complete breakdown in our housing finance. This Bill, like the English Bill, will do little, if anything, to avert it. Every day evidence accumulates of the anxiety to which the noble Earl himself referred. Last Saturday there was a headline in The Times, "Housing Burden on London Rates: Three Times 1939 Sum"; and it went on to give the gist of the Report of the Finance Committee of the London County Council, which I summarise by saying that that Report for 1951–52 shows a total deficiency of £4,066,636, and that the additional rate contribution now necessary is nearly eight and a half times the amount required before the war. The Report in The Times adds:… the standard costs on which subsidies and statutory rate contributions are based, have left large deficiencies which are far from covered by the rents charged.The Scottish Bill, like the English Bill, is only doing a little juggling on the fringe of this problem: it is not even an effective stopgap. Take the example, which the noble Earl gave, of four-apartment houses, which are very common in large Scottish centres. The Government's subsidy under this new proposal will be 16s. 3d. a week, as the noble Earl said. This is paid for by the taxpayer. Beyond that there is the ratepayers' subsidy, which will amount under this measure to 5s. 6d. a week. The ratepayers' subsidy is paid for by the rates levied by the local authorities. But that is not the end of this sad story. After these subsidies are known the duty of fixing rents to 921 be charged falls upon the local authorities. It is not easy, as one can well understand. Every local authority in Scotland, and in England, too, has a long waiting list, compiled after meticulous examination of the circumstances of the applicants. There is a points system applied in most local authorities for various kinds of hardship. It is not difficult to realise that if the rent fixed by the local authority is fixed too high some most deserving and urgent cases, of families living under horrible conditions, will be forced, because they cannot afford the rent, to refuse the offer of a house when it is made to them. What happens, therefore, in most cases is that local authorities, knowing far better than the Government do the economic circumstances of the families on their housing lists, fix a rent at a figure which they think the tenant can afford without falling into arrears. They do this, although in many cases they know that this will create a deficit over and above the contributions already required from them, which they will have to meet by a further rate increase. So the figures under this Bill are really 16s. 3d. for a four-apartment house, payable by the taxpayers—by the Government, if you like—5s. 6d. payable by the ratepayers, at the demand of the local authority, plus the deficit which may arise, with the rent added to it.
This is not only what will happen; it is actually happening now to an alarming extent, and this Bill merely continues the medicine as before. Nobody with knowledge of local authorities will deny that in housing matters they are rapidly reaching a point of financial difficulty which may have far-reaching consequences. It was stated in another place that in the past five years Scottish local authorities have had to find an additional £5,500,000 to meet the deficits in their housing revenue accounts. Almost every week one can read in the Scottish Press of finance officers or treasurers presenting reports calling attention to the increasing burdens which have resulted since the increase in the interest rates. One of the Under-Secretaries for Scotland confirmed this. He said that he did not think it possible for the taxpayer to make a larger contribution; and he added:The local authorities are hard pressed.922 I think the noble Earl would probably accept that as not being an exaggeration.
THE EARL OF HOME
I think I must interrupt the noble Lord. The calculation of the subsidy does cover the interest rate since last April. That was the object of this Bill. It has a comparatively limited objective.
§ LORD MORRISON
Therefore, the argument I am putting before your Lordships is that, whereas the condition of the local authorities was extremely difficult before the rise in the bank rate, followed by the rise in the interest rates, now it is much more difficult still.
I have a little more evidence which the noble Earl might like to consider. It is quite evident, to me, at any rate, that the full effects of the increase in the rate of interest are only now beginning to be felt. May I give your Lordships an example from another angle? I confess at once that this is not a Scottish example, but, as I say, this difficulty arises in England, and is almost as acute there as it is in Scotland. I am sure what I am now going to say will come as a surprise to many of your Lordships. In one local authority of which I have some knowledge a long list has been compiled of persons asking for licences to build their own houses—an ideal which the Government have very much at heart, judging by the public speeches of its members. To get on the approved list applicants have to convince the council that their housing need is urgent. That, I think, is in accordance with the request of the Minister of Housing, Mr. Macmillan, who, said that in these cases housing need would be taken into consideration. In the authority to which I am referring, we have a long list of people who have applied for licences to build their own houses, because their housing need is urgent. Within the past month seventy taken from the top priorities of the list were offered a licence to build their own houses. What was the response? I have been informed this morning that, after being given a month to consider this offer, only eight out of the seventy have accepted. These people have not been cross-examined by the council (it is not the council's business) as to why they took all this trouble to get their names put on the list, and now, having been offered a licence to build a house, they 923 do not wish to avail themselves of it. But I venture to say that probably the main reason is that the rise in the interest rates has made it impossible for them to continue.
I hope that the Government, and not only the Scottish Department, will give early and urgent consideration as to where all this is leading us. In my long experience of local government no one has ever accused me of being an alarmist; but now I confess, quite frankly, that I am alarmed. We appear to be heading for a complete breakdown in our housing finance, and I am afraid that this Bill is not going to stop it. It is obvious that local authorities cannot continue to carry the burden of these huge deficiencies any more than the Government can. What of the tenants, and the many thousands urgently in need of houses? Any large increase in rent for lower-paid wage earners will make it almost impossible for them to accept a house. For these reasons and many more, which I will not take up your Lordships' time in developing, I cannot honestly say that this Bill makes an important contribution to Scotland's housing problem. I suppose in that I agree with the Minister, who said that it was a modest Bill. This Bill will go through, but the problem will still be there.
Finally, I should like your Lordships to consider a suggestion. I have serious doubts—and I believe many of your Lordships in all parts of this House have similar doubts—as to whether Britain's housing problem will ever begin to look like being solved until it is lifted out of the arena of Party politics. That is a task which will not be easy; but if there is one problem or, should I say, one series of problems, crying out to be tackled on non-Party lines, this is it. Whichever Government are in power they do their best, but half the population have no confidence in them, whether it be a Conservative or a Labour Government. I believe that the overwhelming majority of the population—politicians and non-politicians alike—would welcome any step in the direction I suggest. The question is: Who will be bold enough to take the initiative? We can hardly expect it to come from either Party in another place, or from their organisations throughout the country—they are too busy fighting each other. 924 Would it be considered presumptuous by your Lordships if I suggested that members of this House might give the suggestion consideration? I do not wish to encourage an exaggerated sense of our importance but I have no doubt that, given an opportunity, in that non-Party spirit in which this House often excels we could rise to the occasion and that many useful suggestions would be forthcoming. I will not develop this point further to-day, as the House has other business.
I hope the noble Lord opposite will forgive me for not dealing clause by clause with this Bill. After his lucid exposition, it is unnecessary. Moreover, the Bill has already been discussed at great length in another place—at too great a length I might suggest, considering that it is merely (I do not think the Minister will disagree) a stopgap. We on this side do not intend to vote against the Second Reading, and, therefore, I have taken the opportunity of expressing my personal opinion that the problem of adequately housing our population might make more rapid progress if it were dealt with on non-Party lines. If your Lordships' House could see its way to give a lead in that direction. I am sure that we should deserve well of our country.
§ 3.4 p.m.
My Lords, the Scottish farm servant and Scottish country dwellers generally have had their interests so long postponed for those of the town dwellers that I greatly welcome this Bill. I am very grateful to the Government for it, and in particular for the help they are going to give to the owners of tied houses. I will come back to that in a moment, but at this point I should like to thank the noble Lord, Lord Morrison, for what he has said about taking housing out of Party politics. I thoroughly endorse his remarks. If he will allow me, I will just touch for a moment on the subject mentioned by the noble Earl who produced this Bill, and on which a clear understanding might help us to take this business out of Party politics. I refer to the tied house.
Up to a short time ago, every farm servant in Scotland who was married and had a family was engaged on May 28 for one year. At the end of that year he either continued his service in his 925 place or he sought another. However bad a master he had, he could not be disturbed in his house for a year. However bad a man he was, he could not be disturbed in his house for a year. If he was a bad workman he might have to seek another place, but he had to seek it on May 28, when every other married man was seeking a place. Therefore, under that system there was no chance of a man with a family being left without a shelter over his head. Recently, that system has, I am afraid, been rather broken into, partly through the opposition of the trade unions, and partly through the opposition of the farmers themselves. The farmers did not like having to give a man three months' notice, knowing that they would have to keep him for three months.
I submit that originally that system was a very humane one. In fact, I can recall a Minister of Agriculture in your Lordships' House, on the opposite side to myself, turning to me across the Chamber in a debate and saying: "I know you are perfectly right, but you know what political feeling there is on the subject." I suggest to my noble friends opposite—and they are my noble friends, most of them—that it is worth while, in taking this matter out of politics, to turn a new eye, a non-political eye, on the tied house, to see what use it would or would not serve, remembering always that in Scotland, by age-long tradition and by practical experience of the extraordinarily difficult communications in deep snow, the farm servant must live on, or very nearly on, his work.
There is one point in this Bill about which I feel critical, and I hope the noble Earl will forgive me if I mention it. It is the point about repairing of houses. Apparently if you have a scheme to repair a house, and that scheme costs £800, you obtain a grant of £400. If it costs £801 you get no grant at all, except by the grace of the Secretary of State. In these days it is quite impossible to forecast what building costs are going to be. Not long ago I had laid on me the task of repairing a house which happened to be a national monument. The local authority were anxious to help. I had the promise of a licence by a certain date: I had the contractor and I got the team all "on their toes," ready to commence the work by the assigned date. But no licence appeared. The whole business 926 relaxed, and it was ten days before I got the licence. The cost of course, was very much greater, partly because of the delay and partly because, naturally, I had my team up to the point and they were relaxed and it was very difficult to get the same enthusiasm again. I have no grievance. It happens that for the most part Her Majesty's Government will have to defray the extra cost entailed. But the point is that you cannot forecast in advance what the particular costs of any building operation will be.
I am told that the reason for this provision is the shortage of materials, and that control must be retained over materials. I do not quite understand how this particular provision is going to conserve materials, but I am quite sure that if you get people wholeheartedly interested in this matter there are to be found materials the existence of which the Government have not the smallest notion. There is hardly a place in the country where somebody has not got his eye on some buiding material which can be made available to him when he gets permission to use it—because everybody in the country has building that he needs to do. It is extraordinary the amount of quite serviceable substitutes which you can get. I could give many examples, but I will refrain.
I will, however, mention one fact. At any time, certainly for the past year, and I think for longer, it has been possible in London to buy unlicensed wood—at a price. I think it has been perfectly legally bought and sold, but if that wood is used, as it is, for building, it will mean very heavy costs. The heavy cost is due to the fact that there is licensed and unlicensed wood. I am sure that if the Government could find it possible—if not in this Bill in some later Bill—to show more confidence in the people who are doing the building, and to give them a freer hand in matters of this kind, it would be all to the good. In fact, if all the controls in this business could be taken off altogether I am sure there would be such a burst of well-directed energy as would go far to help the most pressing needs in housing. This is not the kind of legislation that one desires. At the moment there is a temptation to suppress items of cost.
Perhaps I may give one other instance. A little time ago, when to spend more than £10 on the maintenance of a house 927 in London was not permitted, how many thousands of people must have contravened that regulation! If you have a sudden hole in your roof, and rain comes pouring in, and there is a danger of the ceiling coming down, you are not going to think about the £10 limit you are going to save your house. Indeed, your duty is to save your house, not to worry about regulations. I think that legislation on these lines is practically forcing a great many people to break the law and, ipso facto, to bring the law into disregard, if not into contempt. I hope, therefore that on a later occasion the Government will be able to do away with this particular form of grant, which I am bound to say I do not like very much, and put the matter on a proper basis. With that criticism, which I regard as important, even if it is not vital, I warmly welcome this Bill and the effects which I hope it will have.
§ 3.23 p.m.
§ LORD GREENHILL
My Lords, may I at the outset apologise to the noble Earl opposite for misleading him to some extent by indicating that I did not intend to speak on this Bill to-day? The fact is that, having been persuaded to speak on another Bill which is to be dealt with to-day, I had become so absorbed in that measure that it seemed almost impossible to bring my mind on to this measure. But when one considers that I am not only a member of a Scottish town council but am also a representative of the council on the Counties and Cities Association I felt that I could not allow this Bill to be discussed to-day without my saying a word on it.
I associate myself wholly with what my noble friend Lord Morrison has said, and with the emphasis that has been placed on the desire that this should not be treated as a Party political matter. What we are discussing to-day is not a Party political issue at all. What may be Party politics is any reference to the standards of housing, the numbers of houses that will be built for sale or to let, and so forth. But we are not dealing to-day, I suggest, with that Party political aspect; it is unimportant. What is important is the financial aspect of this Bill; and certainly the four city authorities—and they are not wholly of one political colour—are almost in despair at 928 the position in which they find themselves because of this housing problem. The noble Earl will know perfectly well that discussions on the increase of subsidy began before the raising of the bank rate; and there was at that time an admission that the amount of subsidy paid to local authorities in these cases was badly in need of review.
The early part of those discussions began with the assumption that, partly as the result of the increase in cost, there might be a substantial increase in the subsidy. In the course of the negotiations the bank rate went up, and this added a large burden to the Central Government and to local authorities. When we came to discuss the amount of the increase in the subsidy the question was, what would be a reasonable amount to compensate local authorities for this double increase—the increase in cost and the increase in bank rate. After considerable discussion a figure was, if I may say so, insisted upon by the Scottish Office, a figure which amounted to less than the cost of the increased burden in rates alone. If the noble Earl says that on the figures he has submitted there is a portion in the subsidy to cover the extra cost, I answer that this is only on the assumption that the figure which he gave of the cost to the local authority is the correct figure, rather than that given by the four cities. On the basis of cost at which the finance officers of the four cities have arrived, the additional subsidy does not cover the cost by a fairly long way.
There is a further difficulty in which the local authorities in Scotland find themselves. The noble Earl is well aware that the mere ownership of houses imposes a burden on the owner, because every time the rates go up he is faced with additional costs. Since in Glasgow alone the number of houses owned is, I think, in the nature of 80,000, it means a very substantial increase in the burden every time the rates go up. They went up in Glasgow by something like 2s. or so this last year, which means a substantial increase in the burdens of the local authorities, who are finding it difficult to know how to raise this money. They find they cannot possibly cope with this added burden. For this reason I am inclined to support my noble friend when he asks what principles we are following when we say that the rate 929 of interest to be charged by local authorities for the building of houses must be parallel with the increase in the bank rate.
Is it not possible to draw a distinction between rates of interest charged on ordinary normal transactions and the rates of interest which the Public Works Loan Board will charge for money borrowed specifically for house building purposes? That would be one solution. We are aware that this would add to the already heavy burden on the taxpayer, but that is inevitable. This is a heavy burden and it has to be met somehow. The ratepayers have almost reached the limit of the burden they can carry, while the taxpayer also feels that he has reached the stage at which the burden is becoming almost unbearable. But we have to meet this expenditure. How are we to do it? I would strongly impress upon the noble Earl, Lord Home, that he should have another look at the figures and say to his colleagues: "All we are doing here is to recoup the local authorities for the increased burden in the rate of interest they have to bear; can we not also give them a little towards the additional cost of building, and so to some extent ease their burden?"
The noble Earl is well aware that, when we came to review the subsidies under the 1946 Act, a difficulty arose because in that Act there had been no room for a review of the subsidies in an upward direction, and the Government hid behind that fact and said: "Sorry, we cannot help you. The law does not allow it"—I think I am right in saying that: if not, I shall gladly be corrected. The belief when that Bill was being considered was that prices would inevitably come down, as they had done in a similar period following the First World War. As we all know, that did not happen. Prices went up and continued to go up, and, while we hope that they will come down, they are not coming down at anything like the rate they did after the First World War. Why did not the Government take that into Consideration and say: "Since prices are still remaining at this high level, we will do something about it, and when prices come down and the subsidy has to be reviewed again, then we can, if necessary, lower it"? I think I have made that particular aspect clear.
930 There is one other point I should like to raise in regard to Clause 7, which increases from £4 to £8 the minimum amount which a local authority must contribute each year to their housing repairs account for each of the houses in their housing revenue account. We feel that to impose this 100 per cent. burden on local authorities, after the burden they are already carrying, is unfair. I think I am not committing any breach of confidence if I tell the noble Earl that when we in Glasgow were considering our annual estimates and tried to arrive at a figure to cover this increase, we not only hesitated to put in £8 as the figure for the increased cost of repairs, but we queried whether it was wise to put in the £7 which we ultimately did, because we thought we were thereby almost admitting that £7 was what we were prepared to pay. Could not the Government review that figure and say: "In view of the burden our local authorities are bearing, £8 is too much, and we might reduce it to £2 or £3 or some such figure as would make the burden less onerous than it is at the moment"? I apologise for taking up your Lordships' time on this matter. I think that is all I would ask the noble Earl to consider at this moment.
§ 3.33 p.m.
THE EARL OF HOME
My Lords, I should like at once to thank the noble Lord, Lord Morrison, for a most thoughtful and helpful contribution to this debate, and also for widening the debate a little beyond the scope of the actual Bill which, as I said at the opening of the debate, has limited objectives. I am sure it has been to the advantage of all of us. I should be inclined to agree with the noble Lord that if we are to solve this urgent and pressing problem of housing finance, which is both national and local, if we are to solve the problem of rent control and of the repair of old buildings, particularly in the cities, there must be a great degree of Party co-operation. I hope, indeed I am sure, that his advances in this respect will be met with every sympathy from our side of the House.
He dealt with the rather more general question of the housing difficulties of local authorities. My noble friend Lord Saltoun raised the particular point of the grant for the reconditioning of rural houses. The amount of money which 931 can be spent in this way and can rank for grant is a matter for regulation and can be varied by the Secretary of State at any time, so that this £800 is not a fixed figure. The reason why we took £800 as being a reasonable figure at this time was that, having had access to the costs which are encountered in reconditioning houses, we found that £1,000 was about the average cost for a local authority. But that, of course, included the cost of acquisition, which has to be cut out in the case of grants to private persons. Therefore, for the time being at any rate, we think that £800 is a reasonable maximum, but it is subject to variation by regulation.
The noble Lord, Lord Saltoun, was afraid that if he wanted to repair a house and only £800 was allowed, and if, in fact, the bill at the end of the day turned out to be £801, the grant would be disallowed. In cases of peculiar difficulty the Secretary of State has discretion to allow a greater expenditure, and I do not think that the noble Lord or any other landlord in Scotland will find the Department of Health ungenerous in this matter. But I would add, because I think perhaps it will help landlords and farmers, that in any case where the expenditure is under £3,000 and where the job will take under six months, we have an understanding with the industry that people can ask for a firm contract which is not subject to variation. Therefore, the effect will be that when the noble Lord makes an estimate, he should be able to base it on a firm contract, and so be able to get the grant. I think that will help in the ordinary cases of reconditioning.
Before I close, may I say a word on what the noble Lord, Lord Greenhill, has said? There has, of course, on this matter been a difference of opinion between the local authorities and the Government. It is no use denying that. The reasons why the local authorities have found themselves in difficulties are two: first, because of increased costs, and secondly, because of increased interest 932 rates. This Bill is, as I said, primarily designed to meet the increased interest rates; and, on our calculations, there is something over to help local authorities to meet increased costs. If the noble Lord had been a little more aggressive, I should have been tempted to say something about increased costs, because over the last six years before the present Government took office the cost of building a house rose by 33⅓ per cent. I might have reminded the noble Lord that in the opinion of a good many people that rise was due more than anything else to one of the most obstinate exercises in inflation that was ever conducted, even by a Socialist Chancellor of the Exchequer. The question of costs is an old one. In fact, for the last six years the noble Lord's own Government reviewed this question of subsidy every year, and every year, including the year 1951—only a year ago—they sent the local authorities away, saying that the national economy could not stand any increase. So at least we have been more considerate to the noble Lord and the Glasgow Town Council than his own Party were. But let us leave the Party scene on that point.
THE EARL OF HOME
We have made the point, but let us leave it at that. I again thank the noble Lord, Lord Morrison, and the Opposition, too, for the way in which they have received this Bill. It does certain things, although it does not satisfy all of us so far as the general housing situation is concerned. I repeat what the noble Lord, Lord Morrison, said, that if we are to deal satisfactorily with this problem, we shall need a high degree of co-operation. I hope that we shall have more debates on the wider theme and that something fruitful for the housing of the nation will come out of it.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.