HOUSING SUBSIDIES BILL

HL Deb 06 March 1956 vol 196 cc81-117

2.40 p.m.

Order of the Day for the Second Reading read.

THE MINISTER WITHOUT PORTFOLIO (THE EARL OF MUNSTER)

My Lords, I beg to move that this Bill be read a second time. I think I should be correct in saying that the purpose and provisions of this Bill will now be well known to noble Lords in all parts of the House, but perhaps more especially to those Members who take an interest in legislation dealing with every aspect of the housing problem. At the outset, let me remind your Lordships that this Bill applies only to England and Wales. Its main proposals are to reduce the Exchequer subsidy on houses provided by local authorities for general needs, to introduce a special subsidy for dwellings to replace slum property and for new dwellings erected by development corporations in new towns and by the local authorities of expanding towns. In addition, it is the intention of my right honourable friend the Minister of Housing and Local Government to abolish within a year or so the basic subsidy on houses built for general needs, but naturally the Order to this effect will require an Affirmative Resolution. There are additional minor matters to which I shall refer in explaining the purport of the clauses in the Bill, but before I deal with the measure in any detail I should like to make some general observations.

Local authorities are now by far and away the largest owners of house property in the country. They built some 1¼ million houses before the war and a further 1½ million since the war. Therefore, it is not surprising to find that the cost of housing subsidies has risen from £14 million a year at the end of the war to £47 million this year. The original idea behind housing subsidies was to ensure that no one through lack of means should be prevented from having a decent home in which to live. But I believe we have moved far from that original purpose, because local authorities now provide houses for all members of the community, a great many of whom could well afford to pay higher rents without any hardship. It follows, therefore, that many tenants of council houses are now being subsidised to a greater extent than is really necessary. But, to my mind, there is something even more objectionable: we are, in fact, not asking, but insisting by legislation that the poorer members of the community should pay increased rates and taxes for the benefit of the richer people who have managed to secure local authority houses. At a time when Her Majesty's Government are engaged in reducing expenditure it is surely right that we should now introduce more realism into housing finance, while at the same time safeguarding the smaller local authorities who might be forced to charge abnormally high rents or rates.

During the passage of this Bill through another place, it was suggested that the reduction in housing subsidies would have the effect of a substantial increase in rents. That argument would be correct if it is assumed that local authorities own only those houses which are now in the course of erection. But we all know that that is not the case, for local authorities have a large number of houses built at a lower cost but upon which higher rates of subsidy are being paid; nor must it be overlooked that local authorities, as I have said, own 1¼ million houses built before the war when prices were even lower. If local authorities pool the rents of all their houses and the subsidies they receive, the increase in rents will be negligible. If this principle of pooling is accepted, then all the criticism about substantially higher rents is really groundless. Many local authorities do follow this course and pool their subsidies so that they are used to the best advantage to ensure that no hardship is inflicted upon the poorer tenants. We think that in this way, too, local authorities should still be able to continue to build new houses with less Exchequer assistance than hitherto. In order to assist local authorities to adjust their rent structure by the method I have described, Her Majesty's Government have decided to give the lower subsidy for an interim period before it is finally abolished.

Noble Lords on this side of the House will certainly recall—and I imagine noble Lords opposite will also remember it—that at the time of the General Election the Conservative Party issued a statement of policy which said that we intended, if we were returned to power, to devote a larger part of our resources to the elimination of slums and the modernisation of old houses. We intend to implement the pledge we then gave, and this Bill is designed to enable local authorities to concentrate their efforts on tackling this problem, and an incentive is provided for a higher rate of subsidy to be paid. Noble Lords will recall that last year local authorities carried out a survey of slum property, and a Command Paper was issued in November which stated that the number of unfit houses was in the region of 850,000. Since the end of the war, for I think obvious reasons, little has been done towards abolishing the slums, and for the first nine months of last year only 13,000 houses were built for this purpose. I venture to think it is high time that this problem was energetically tackled, both centrally and locally. Local authorities have set themselves an ambitious programme, for they aim at clearing 375,000 houses in the next five years. We will give them all assistance in our power, and, as I stated on a previous occasion in this House, sincerely hope that the target which they have set themselves may prove to be only a minimum. The incentive which we offer to local authorities is financial, for the subsidy for slum clearance will remain at £22 1s. a house a year at a time when other subsidies are being reduced.

Here I should like to remind noble Lords—it is perhaps a little outside the purpose of this Bill—of what has been done under the Housing Repairs and Rents Act, 1954, to renovate old houses with the help of improvement grants. I have been advised that some 1,200 housing authorities, out of a total of 1,469, are now giving these grants. They have been available since 1949, but it is only since the passing of the 1954 Act that any wide-scale use has been made of them. In all, some 59,000 improvement grants have been made, of which 50,000 have been since 1953. We believe that this Act serves a useful purpose, and it is our sincere hope that local authorities will continue to make ample use of its provisions.

This Bill, besides dealing with slum property in the way I have outlined, also makes special arrangements to encourage overspill away from congested towns. New houses erected by the receiving authority for this purpose will receive a subsidy of £24 a year. I said earlier that a reduction in the subsidy need not result in any substantial rise in rents if all the resources were pooled, but this obviously could not happen in any new or expanded town which had no pool of older houses. We consider, therefore, that it is necessary to provide a special rate of subsidy to make these overspill schemes attractive. Noble Lords on all sides of the House are, I think, of one opinion, and would not wish to see these overspill schemes abandoned and so allow once again that ugly sprawl to continue in and outside our great cities. As the House knows, this problem is being dealt with by the provision of new towns and by town development schemes. This special subsidy is also to be paid in those cases where houses arc provided for people moving into a district for special industrial needs of national importance. The subsidy granted for the erection of flats is being altered as the cost of providing a flat increases with the height of the block. Furthermore, as noble Lords will notice, the subsidy paid on expensive sites has been separated from that paid for constructing a flat.

Having given noble Lords a few words on the general purposes of the Bill, let me now turn to explain the principal clauses to the House. Clause 2 empowers the Minister to abolish or reduce subsidies, and, as the House is aware, it is the intention of my right honourable friend to abolish the subsidy altogether for general needs in the next year or so; but that will require an Affirmative Resolution in another place. Clause 3 deals with the new rates of subsidy, and a summary of them appears in the Explanatory Memorandum of the Bill. In each case, the subsidy is payable for a period of sixty years. I have already dealt with the case of houses for general needs, for overspill purposes and for flats, and I do not think I need worry the House with further details at this stage.

Clause 4 provides, as at present, for a special additional subsidy of £9 for agricultural dwellings on isolated sites. Under subsection (2) of the clause and the First Schedule to the Bill, a house in this category would attract a further grant of £2 10s. from the county council. The clause also provides subsidies for special circumstances, such as mining subsidence or the need to build houses in certain materials to fit in with their surroundings. Clause 5 gives my right honourable friend power to increase up to a maximum, which is mentioned in subsection (1) of the clause, the Exchequer subsidy payable to local authorities who may have limited financial resources. Clause 6 deals with expensive sites, and enables my right honourable friend to pay an annual subsidy towards the cost of purchasing and developing the site. The site subsidy is separate from, and is payable in addition to, the subsidy on the dwellings erected.

Clause 7 reduces the subsidy for agricultural cottages built by private persons from £15 to £10 a year for a period of forty years. Clause 8 abolishes the obligation of the local authority to pay a statutory rate fund contribution for each dwelling which receives Exchequer subsidy. Local authorities, however, still retain the power to make a contribution from the general rate fund to the housing revenue account if they think fit, but they must make such a contribution if there is a deficit on the account. Clause 9 enables the Minister to recover from the exporting authority a proportion of the contribution which may have been made to the development corporation of a new town or to the local authority of a receiving district under the Town Development Act, 1952. Clause 11, the only other clause to which I need refer the House, is the interpretation clause, and under subsection (1) is found the definition for the purposes of slum clearance. That is the Bill which I have endeavoured briefly to outline to the House. As I have said. I do not think that at this stage of the proceedings I need worry the House with any further details. Accordingly, I beg to move that this Bill be read a second time.

Moved, That the Bill be now read 2^a. —(The Earl of Munster.)

2.58 p.m.

LORD SILKEN

My Lords, there is no-one in this House better able to serve up an unpalatable dish in a more attractive manner than the noble Earl, Lord Munster. He was so completely disarming that he would even have the House believe that the Government are rendering a great service to the cause of housing by withdrawing the subsidy on housing for general needs. I propose to play the part of the public analyst and to examine this attractive-looking dish in order to see whether it is not, as I rather suspect it is, dangerous or injurious to the health of the nation.

The conclusion to which I have come is that, in spite of the manner in which it was introduced, this is the most deadly attack on housing that this country has sustained since the end of the First World War when housing became recognised as a matter for national responsibility. Ever since 1920 it has been accepted by all Parties and by all Governments that it was impossible to provide housing for the bulk of the people who were in need of housing except by means of a subsidy—that is, that the gap between the economic rent and the rent which was possible for most people to pay was so wide that it could be bridged only with the assistance of public money. There was, it is true, a short period from 1933 onwards when the subsidy for general housing was abolished, but the conditions in 1933 were very different from the conditions to-day.

It is worth while to point out some of these differences. In another place, some play has been made of the fact that in 1933 the subsidy for general needs was abolished without any evil effects. But in 1933 we were in a period of deflation and falling costs. For some time prior to 1933, the cost of building had been falling and had continued to fall after 1933. There was considerable unemployment in the building industry, and for this short period the gap between the economic cost of housing and the rents which it was possible to charge had become considerably narrowed. It was not necessary to draw on the pool of housing—nor was there, in fact, in existence a pool of housing on which it was possible to draw. As I say, there was this very short period during which it was possible to build without subsidy. But how different is the position to-day!

To-day, we are in a period of rising costs and rising rates of interest. There is no unemployment in the building industry or elsewhere. It is impossible to-day to provide dwellings for the average worker without a subsidy, and the position is deteriorating every day. Even while this Bill has been under discussion, the interest rates have risen. Taking the average cost of a normal house at about £1,750, noble Lords will see that a rise of 1 per cent. involves an annual increased cost of £17 10s. 0d. a year, which is considerable. Therefore I should like to remove from the minds of noble Lords, whose memories may go back to 1933 and may seek to draw an analogy, the idea that, because in 1933 for a short time it was possible to reduce the subsidy for general needs, it is equally possible to-day. I refer to it because that argument was brought up over and over again in another place.

I have said that it is impossible to provide houses at economic rents for people who need them at the present time. I think the noble Earl rather agreed with me. I want to give one or two figures to illustrate what I have in mind. Taking again a figure of £1,750 as a normal figure for the cost of a house, including a site, and assuming an interest rate of 5 per cent.—and the rates are higher to-day; I r see that a number of local authorities are seeking to borrow money from the general public at 5½ per cent., so that 5 per cent. is not an unfair figure to take—and allowing 10s. a week for rates, then we find that an economic rent for a house costing £1,750 would be £2 11 s. 6d. a week. If one assumes, as I think one is entitled to, that one-seventh of a person's income is a reasonable amount to allocate for rent, then that assumes an income of £18 a week.

The noble Earl has pointed out that the cost of building flats is considerably higher than that of building houses, and I think £2,750 may be taken as the normal cost for building a flat in an urban area—and that includes rates. In that case, the economic rent, again including rates, would be £3 15s. 0d. a week and, on the same basis, it would be necessary for a person to earn £26 5s. 0d. a week to pay this rent. Nobody suggests that these rents are really possible apart from the exceptional cases. According to the Ministry of Labour figures which were given last October, the average weekly earnings of adult manual workers are £11 2s. 11d., as against £18 which would be necessary to pay an economic rent. For manufacturing industries the average wage was £11 11s. 0d., and that included all bonuses and overtime. So it is clear from these figures that housing cannot be provided at unsubsidised rents; and, by withdrawing the subsidy on all except the special categories, such as dwellings to replace slums, or dwellings in new towns and expanding towns, the Government are making it virtually impossible for the local authorities to build for other needs.

Yet I would remind the House that the other needs remain. The obligation of the local authorities to provide for their normal housing needs remains. They have a statutory obligation, and I do not think that the noble Earl suggested that they should not comply with their statutory obligations, although he went pretty near it by talking of a priority for slum clearance. Exactly what he meant by giving a priority I did not follow. Did he mean that one should build for rehousing slum dwellers before one built for general housing needs? Because if one is going to build pari passu, some housing for general needs and some for slum clearance, then the question of priority does not arise. Perhaps the noble and learned Viscount who is to reply will explain to us exactly what is meant by giving a priority to slum clearance.

When we last debated the question of housing in this Chamber last June, I gave some figures setting out what, in my view, were our housing needs. I do not propose to repeat those figures in detail, though I should like to say in general terms what the housing needs are. First, there is the clearance of the slums: and the noble Earl has suggested that the programme is to build something like, I think, 70,000 to 75,000 dwellings a year for the purpose of rehousing people from the slums. In addition, there is something which most of us tend to overlook—namely, an increase in population each year of something like a quarter of a million, which increase requires something like 60,000 to 70,000 houses a year. If provision is not made within a short time for the increased population it will produce grave difficulties. We find overcrowding; we see young couples unable to find acommodation and unable to get married; and we see all the difficulties and the unhappiness from which we have been suffering since the war as a result of lack of housing. Therefore, every year we should be providing 60,000 to 70,000 houses merely for the purpose of housing the increased population.

Moreover, as every noble Lord is aware there is still an immense amount of overcrowding, of large families occupying inadequate accommodation, One is constantly reading of families—of husband, wife and several children—occupying one room, and living, sleeping and carrying on all their activities in that one room, or perhaps in two rooms; or of people living in congested conditions with their mothers-in-law, in circumstances where there is no room for more than one family. An enormous number of houses originally built for one family are to-day occupied by several families, who share the cooking facilities, the kitchen sink, the kitchen, water, the W.C. If you take the housing problem and look at it in terms of human unhappiness and misery, I would suggest to your Lordships that far more unhappiness is being caused to-day by this sharing of houses in congested conditions than there is even in slums.

I do not want my remarks to be interpreted in any way as suggesting that we ought not to clear the slums as quickly as possible. They are, by definition, insanitary and unhealthy, and we want to get rid of them; but we should be making a great mistake if we gave this priority to slum clearance in such a way as to prohibit us from dealing with the other evils which, in my view, cause more misery and unhappiness even than living in a slum. After all, most people who live in a slum house at any rate have it to themselves. It may be damp; the ceilings may be low—it may have all sorts of defects; but it is their own home, and when they lock the door they are inside, and nobody can interfere with them. Whereas I think the nearest approach to hell is this sharing of a single dwelling-house by more than one family, with all the difficulties which your Lordships can imagine taking place. It is my submission that by withdrawing the subsidy, even in the attractive terms which the noble Earl put before us, the Government are doing irreparable damage to the needs of housing. They are making it more and more difficult for local authorities to carry out their task of dealing with the housing needs of the people generally. I want local authorities not only to clear the slums but to deal with these other evils which I have indicated, which are in many ways as great as those of dealing with slums.

The noble Earl has suggested that there are a large number of people for whom housing has been provided by local authorities and who are not, in fact, in need of a subsidy. I do not think anybody on this side of the House wants to act as the champion of people who are being given public money and are not in need of it; but in view of the figures that I have given, can it really be suggested to any considerable extent, that there is an occupation of these dwellings by people who can afford to find their own accommodation and pay an economic rent? I just do not believe it. When one has listened to people speaking—I have read the speeches made in another place—one gathers that there is no real knowledge of what people are earning on an average. There seems to be a judgment based upon the number of motor cars that happen to be parked on a housing estate. Your Lordships may not move in those circles, but on any day I can take any of your Lordships along to buy a motor car for £25. While I do not know what is the price that the tenants on these housing estates pay for their motor cars, I should be surprised if you would find many Rolls Royces outside a house, or even a brand new Morris. I think you would find that these people have found ways and means of buying something cheap and adapting it, thereby getting some little fun out of life. I think it is quite a false test to assume that, because there are these cars, therefore people have high incomes. And to assume that, because there are these cars, the bulk of the tenants are able to pay an economic rate is utterly wrong.

The noble Earl, Lord Munster, also suggested, as the Government have done in another place, that it is possible to pool all the subsidies, to use the subsidies that are being paid in respect of low-rented dwellings and increase the number of lower-rented dwellings, thereby providing a fund out of which further houses can be built without subsidy. In another place, the Minister suggested that if this were done it would involve no more than an average increase of 7d. a week.

THE EARL OF MUNSTER

Eightpence.

LORD SILKIN

No; he said 7d. on Second Reading. By the time the Third Reading came along he had gone up to 8d. But what he forgot, until he was reminded of it, was that even on his own figures, which are of course utterly fallacious, as I shall show in a moment, that applies only for the first year. In the second year, when a further number of unsubsidised houses have been built, it will again be necessary to increase rents and to draw on the pool of older houses; and each year, by arithmetical progression, as the local authority go on building unsubsidised houses they will have to go on increasing the rents. It is just not true that 7d. or 8d. a week will cover the loss of subsidy.

The Minister has forgotten that a great many of the rents of houses previously built and now in the pool have already been increased very substantially, and that, by and large, the rents are as high as people can afford to pay. And while I do not pretend that it is not possible to increase the rents (for of course it is), that would inflict great hardship on the bulk of the tenants who already are paying as much as they can pay; so that this increase is really not feasible. The Minister's statement, too, was based on the assumption that every local authority have a considerable pool of houses whose rents can be increased. That, again, is not true everywhere. It is true of some of the larger cities, like Birmingham and London; it may be true of Liverpool and Manchester. When one gets away from the large towns, however, there is no large pool of housing which can be used to meet the loss of subsidy.

It was suggested (though the noble Earl has not stressed the point to-day) that it would be possible to introduce a scheme of differential rents, or alternatively, a scheme of rent rebates. These are alternatives and nobody is against them in principle. The object of either scheme is to ensure that the subsidy is not given to those who can afford to live without it. There is, however, a corollary to the differential rents scheme: assuming one is concerned with housing people purely on the basis of means, where people cannot afford to pay even the existing rents, those rents should be adjusted to meet their needs. If there were differential rent schemes in a great many of the London boroughs with which I am familiar (I will quote the case of Camberwell), and rents were adjusted according to the means of the tenants, it would be found that there would have to be an all-round reduction of rents. The income derived from rents would be smaller than it is to-day, even taking into account the limited number of people who can afford to pay a higher rent.

Again, it was suggested, although the noble Earl did not take the point very strongly, that by removing the subsidy private enterprise would be given a chance to meet the need. Is that really true?

THE EARL OF MUNSTER

I did not say so.

LORD SILKIN

I expected the noble Earl to say that because it had been said in another place, and therefore I fortified myself with the argument. It is such a good one that I feel I should give the House the benefit of it. In my view, we shall have fewer and fewer private enterprise houses built in the next few years. With increasing costs and rising rates of interest, and the credit squeeze which will prevent people from obtaining mortgages on their houses, it will be more and more difficult for private enterprise to meet the needs. The relevance of that fact is that, if the needs are to be met at all, they will have to be met by local authorities. Hitherto, private enterprise has to a certain extent been able to make a contribution even in respect of lower-priced dwellings; but I believe that that contribution will gradually decrease. We are already beginning to see in unemployment the effects of the credit squeeeze, and I do not see how private enterprise can provide houses at prices which people can afford to pay and make a profit in doing so. That sort of housing, therefore, will diminish and will be increasingly left to local authorities.

The noble Earl referred to the repair of houses under the 1954 Act. At the time that Bill was introduced I took the view that it was not a bad one but was merely ineffective; that it was not going to do the job which it was introduced to do. I believe noble Lords, on all sides of the House will agree that the 1954 Act has been a complete failure—perhaps "complete" is slightly overstating the case, but certainly it has failed, in its purpose in relation to what it was expected to do. It has not made good the repairs to large numbers of houses which were rapidly getting into a state of decay. The Act sought to do that by the method of incentive, to which the noble Earl referred from time to time in his speech—the incentive of offering the landlord a little more rent if he would do the repairs. The incentive was not big enough. It did not attract the landlords, as I expected would be the case, and as a result very little repair work has been done. That has added to the task of local authorities. The houses are rapidly getting into a state of decay and are adding to the 850,000 slum dwellings which the noble Earl mentioned as the number found, under the new survey, to be unfit.

I regard this Bill, coming on top of that failure to deal with the urgent problem of repairs, as a national disaster of the first magnitude. In recent months Her Majesty's Government have driven quite a number of nails in their own coffin in domestic affairs. This is one more; and, in my view, it is one of the most serious of them all, condemning millions of people to continue to live for an idefinite period in their existing miserable conditions. In this House we do not move to reject a Bill, and I do not propose to do so. There is nothing very much that we can do by way of amending the Bill, for it is so bad that nothing that we in this House, within the limitations that we have, can do can help to repair it or lo make it a better Bill; but I say in the strongest terms that this is one of the worst measures with which I have had to deal in one of the most serious problems we have encountered in housing; and I very much deplore the fact that Her Majesty's Government have found it necessary to introduce it.

3.29 p.m.

VISCOUNT GAGE

My Lords, a few days ago, on a Motion which I ventured to submit to this House, I produced statistics which seemed to suggest that the demand for building, particularly for housing, was not evenly distributed all over the country but was very much more acute in certain areas than in others. I do not seem to have had the good fortune to have impressed those arguments on the noble Lord, Lord Silkin, because in the course of his gay and cheerful speech to which we have just listened, he referred all the time to national demands and national averages. I do not seem to have had much luck in any direction because the noble Earl, Lord Munster, also told me that the principal deductions which I made were wrong. But until some figures are produced to disprove my contention, I may perhaps be forgiven for believing that there are areas which are comparatively static and a few areas into which there has been, and still is, a good deal of immigration. In fact, from my own local experience, I know this to be true, because, as the town clerk of a neighbouring county borough put it: We had 5,000 people on our housing list, so we built 5,000 houses and we accommodated 5,000 families—and, at the end of it all, we were left with a housing list of 6,000. It therefore seems to me evident that this Bill will be looked on very differently in different places. My own belief is that over large parts of the country, except for slum clearance and improvements to existing houses, the housing needs have been met, but in areas where immigration is still proceeding it will be at least alleged —as the noble Lord, Lord Silkin, has just suggested—that great hardship is likely to be caused. Whether that hardship will be caused or not seems to me to depend on how far the Government are successful, both through this Bill and through other measures, in slowing down the drift of population from the North and East towards the South and particularly into London. Much of this movement I believe to be unnecessary and inflationary in character. I do not wish to repeat figures which I gave the House the other day, but I would recall that I quoted the figure of 45,000 as being the number of people who had come into the Greater London region—places all around London—of which total 15,000 came from inner London and 30,000 from outside. That figure was given to me on the highest authority.

As I understand the Bill, the general intention is to make housing policy and planning policy conform. Subsidies are to be given under it for slum clearance and for planned movement, and planned movement only. I think that is an admirable object, if it can be achieved, but I confess I have some doubts whether it will be achieved at once. I doubt whether anyone who is contemplating moving his present place of residence in pursuit of work will immediately find himself neatly fitted into one or more of the categories for which a subsidy is now available. He will not perhaps find himself classed as a person going to a new or expanded town under subsection (3) (c) of Clause 3, or to an industry where the needs are urgent and where special circumstances prevail, as provided for in subsection (3) (d) of the clause.

I imagine that some circular will be issued relating to this latter subsection. The wording is so general that it seems to be capable of all kinds of interpretation, and presumably it will be interpreted in different ways by different Ministers. Unless some circular is put out explaining its purport in greater detail, I anticipate that the Minister will be overwhelmed with applications for this particular subsidy. I understand that the Bill still leaves with the local authority —notwithstanding the reduction of the subsidy—the general duty of providing for general housing needs. We have been reminded by my noble friend that by the facilities for the pooling of rents and charging differentials money ought to be available which will enable local authorities to build houses and still let them at suitable rents. Generally speaking, I believe that may be possible; but it stands to reason that if we are going to be swamped with immigrants our pooling arrangements will also be swamped, and we shall have then to say that we can provide houses only at rents considerably in excess of what has hitherto been thought proper.

I had hoped that my noble friend would have said a word about the possibility of help from other agencies to meet housing needs. As an agricultural landowner, I have never quite understood why we should be the only class of employer expected to house not only our own employees but a number of other people's employees as well, and I have never quite seen why large firms should not be encouraged to help with housing—for example, to grant facilities and to con- tribute money towards the formation of industrial housing associations. I have here a list of about 80 different industrial housing associations most of which have been set up since the war. It can be done in certain cases; I do not see why it should not be done in others. I do not see why local authorities should have to house the employees of any industry that happens to arrive in their area. I feel that the industries should certainly be encouraged to help in the housing of their own people. I know that attempts are now being made to formulate schemes for co-operative and industrial housing societies, in which employers and building societies from the financial angle, together with the Federation of Housing Associations, are planning to participate. I do not wish to repeat the arguments which I used the other day, except to say that I still believe that if building is encouraged—either planned building or unplanned building—in areas where there is already excessive demand on the building industry, it is likely that all subsidy money will disappear in higher building costs.

Finally, I should like to say, perhaps with great temerity, that in spite of all the conflicting prophecies made about the fate of this Bill, I do not believe that the Government or the Opposition or anyone else are really in a position to foretell with accuracy what its results will be. So much seems to depend on the effect of other measures. I do not share the gloomy apprehensions of the noble Lord, Lord Silkin. I think that this Bill is a courageous step—possibly only an experimental step—towards putting a little more logic and sanity into housing legislation which, for so long, has been merely a succession of expedients to meet strains and stresses largely produced by the war. As such I welcome it.

3.40 p.m.

LORD WISE

My Lords, I find myself in rather a difficult position because I have just heard one speech in which the Bill was condemned—my noble friend Lord Silkin, like so many more of us, is full of pessimism as to what will happen under the Bill—and a second speech, that of the noble Viscount, Lord Gage, which dealt with the Bill from the other point of view and was full of optimism. Perhaps I can steer a middle course. I must say at once, however, that I feel worried about the Bill. It is clear that the Government at the present moment arc in rather a fix with regard to the economics of the nation. I think that at this moment this Bill is somewhat ill-conceived and savours of panic. The way to a permanent, or even temporary, solution of our present difficulties does not appear to me to lie in cutting subsidies in this and that direction, and increasing prices of other commodities which we need day by day. In my view, the sort of action which the Government are taking at the moment is likely to create a good deal of irritation and unrest throughout the country.

This Bill had a lengthy passage through another place and there was keen discussion; but, so far as I could see, it did not find much favour in the Government ranks. The speeches made by Members of the opposite side in another place were few and far between, and showed no great optimism or satisfaction about the Bill. The Minister, of course, did his part, with his Parliamentary Secretaries, in steering the Bill through, and eventually it found its way here through what I regard as the usual "steamroller" operation of the final Division. I was hoping, perhaps against hope, that the Bill would die a natural death in another place and would not see daylight here. In view of the tremendous opposition which appears to exist in the country to this Bill, I should not make any objection if, even now, the Government decided to withdraw it. I am certain that many people who will come under the whip of this Bill would agree with that view.

The test of any Bill is its effect upon the wellbeing of the nation as a whole. Whom does this Bill benefit? From the Explanatory Memorandum, which I commend to your Lordships, I fail to see who are the beneficiaries under this Bill, except some few who are forced, through housing and financial difficulties, to live in slums. The Government tell us that this Bill will make its contribution towards helping us out of our financial and economic difficulties. But the amount of money saved under the Bill is very small in relation to the general finance of the country. The Bill may produce more houses and bungalows for sale, but against that it should be borne in mind that private building in this country may well suffer a setback within the next few months because of the increased interest rates and the actions of financial houses, building societies and others, who at the moment are not so keen on lending large sums of money for the erection of small houses.

It seems to me that, by spreading or pooling subsidies the Bill will inflict upon thousands of decent, hard-working British citizens a financial strain which will make it more difficult for them to make ends meet, and will do something which no noble Lord desires: it will tend to reduce the standard of living. My noble friend Lord Silkin referred to the housing difficulties of young married couples. It is obvious that if the local authorities embark upon slum clearance schemes, they will automatically transfer their resources from the building of houses far general need to the erection of houses for slum clearance, with the result that many young married couples, who are certainly not able to buy houses, will have to wait for several more years before they are able to otbain council houses.

Another point which I hope has occurred to noble Lords opposite is that the Bill, with the aid of national resources, will clear slums which were created in the past by private owners and private builders. That may be all well and good, but I should have been happier if the Bill had provided that private builders should help in some way in the building of houses for slum clearance. It is true that in the course of time the Bill will provide better homes for those living under bad conditions, but I seriously doubt whether, when these people are moved into new houses, they will be able to pay the rent required by the local authorities. If they have to pay a higher rent than they are paying at the present time for their bad dwellings, something else will have to go in order that the rent may be kept reasonably free from arrears. It is well known to many of us that the fear of being behind with the rent is a real fear to those who live in council houses. Week after week the rent is put on one side ready for the rent-collector when he calls. Any increase in rent which will fall upon council tenants will cause their spending power in other directions to fall. There is this point which was mentioned by my noble friend Lord Silkin and which I should like to endorse: that, in spite of what was said by the Minister in another place about low increases of rent. it is a fact that this Bill provides for a cumulative increase in rent year by year. What happens in the first year will certainly not happen in the second year if these houses are built—the rents will increase year by year.

Not much has been said, either this afternoon or in the previous debates elsewhere, about the position in the rural areas. I have noticed the reduction of subsidies and the increase in the amount of subsidies in certain respects; but I believe it is impossible for most of our people in council houses in the countryside to bear any increase in rent whatever. Wages in agriculture are still comparatively low. If the houses which arc required suffer reduction in regard to subsidy, thus calling for the payment of a higher rent by the householders in country villages and elsewhere, then it will be impossible for them to meet those rents.

Then there is the point of the reduction of the subsidy in regard to private building of houses in the countryside. Noble Lords will know, as I do, how difficult it sometimes is for landlords and owners of property to build houses in rural districts or villages. If those houses are tied, then the rents are stipulated and the return to private owners by way of rent is really negligible. But the Bill shows that it will be more difficult, to the extent of £5 a year, for maybe sixty years, for private owners to build agricultural cottages. I am wondering what is likely to be the position of rural district councils who are building according to the five-year plan for slum clearance. It is obvious that if a district council or an urban district council in a rural area are carrying out their obligations under the slum-clearance scheme, they will not be able to concentrate at all upon building houses for private needs. I have knowledge of one council who are contemplating clearing away their slums and leaving over the building for private needs.

I should like to address a question on this subject to the noble and learned Viscount on the Woolsack, and in addressing this and other questions to him I must apologise for not having given him notice of them, as I drew them up only a short time before I came into the House. If a council decide to build simply for the clearance of slums and do not build for the private needs of the people, what action, if any, will be taken by the Government, either to control the council so as to ensure that they provide these houses, or to provide them themselves? There must be some obligation on the part of these councils to do some building for the communal interest; but if they fail to do it, will the Government step in and take action?

Another question upon which the noble and learned Viscount may be able to give me information is this. Clause 2 of the Bill refers to the abolition or reduction at any time of subsidies granted under this Bill, the abolition or reduction to be by direction of the Minister, under an Order to be approved by another place. Is there any intention of the Government at the present time to make any reduction or cessation of the subsidies which are at present in existence under a previous Bill? In the ordinary way subsidies go on for sixty years, and I presume that under this Bill they will go on for the same period of time. Is it the view of the Government that in, say, five or ten years' time, or even in two years' time, when the subsidies may cease under this Bill, any alteration should be made in the subsidies which now exist?

There is a further point. We speak of the raising of rents. Will any rents of council houses be reduced under this Bill? If the rents paid under an earlier Act of Parliament, when money was possibly even dearer than it is at present, are high, will those rents be increased, or is it possible for them to be reduced? In conclusion, I hope that before this Bill reaches the Statute Book any alterations that may be found desirable after the discussions which have taken place will be made. It has been suggested that the Bill will find favour in the course of time, but my hope is that, if it becomes an Act of Parliament, it will not adversely affect anyone at all.

4.0 p.m.

LORD WOLVERTON

My Lords, in rising this afternoon to support the Second Reading of this Bill, I thank the noble Earl, Lord Munster, for his lucid explanation. I for one, welcome this Bill. Having listened to the debate this afternoon and to the pessimism expressed by the noble Lords, Lord Silkin and Lord Wise, I think we must examine the Bill further for a few moments. When all is said and done, it was put in front of the electorate at the last Election that if our Party were returned we would have a great drive and try to solve the problem of the slums. We have the advantage now of Command Paper 9593 on slum clearance, which took twelve months to prepare. As has been quoted by my noble friend, out of a total number of 12,900,000 houses, there are 847,000 houses which cannot be repaired and should be pulled down. The task which Her Majesty's Government have set themselves is to try to clear 60,000 houses a year and, in the five-year period, tackle about half the number of those houses which should be pulled down. It is a gigantic job which must be undertaken with all vigour.

Listening to the debate, one would think that in the last ten years little had been done in housing. An enormous amount has been done. We probably lead the world in our record in housing, with 1 million houses built under the Government of noble Lords opposite and 1¼ million houses built in four years under this Government. By the end of this year the number will be nearly 1½ million. That will make a total of 2½ million houses, built in this country for general needs. We have to consider art important aspect which I do not think has been touched upon so far, except by my noble friend—if I am wrong, no doubt the noble Earl, Lord Listowel, will correct me. Many of these great cities are running out of land. Birmingham, for instance, think that they will run out of land in about two years' time; Liverpool will practically run out of land by the end of 1958, and London, within its area of London County, will do so by the end of this year. So these great cities must depend more and more on the new town corporations and expanded towns. The new town corporations are building houses at the rate of about 15,000 a year, and they hope to step that up to something like 20,000 a year. They will have an extra £2 a year subsidy, raising it to £24, and the same subsidy of £24 is also given for expanded towns, We shall have to depend more and more on the speeding up of the development of these new towns and expanded towns, because the great cities still have great problems. They have little or no land left within their areas. I do not think that that can be denied.

Slum clearance has to be made attractive. The Conservative Government, between 1937 and 1939, had a good record in starting a great slum clearance programme. If it had not been for the war, we should largely have conquered the slum position to-day. But we have not been able to do a great deal since the war. We have had to concentrate on new houses for the families, and I think a gigantic job has been done. But it is not fair to leave people in slum conditions indefinitely, and the problem must be tackled. At any rate, we put it in front of the electorate at the last Election. I spoke on it several times myself, up and down the country, and I believe people feel that it has to be tackled. There are also very bad slum properties in the rural areas.

We all want to see houses built for general needs. I really do not think it is correct to say that local authorities will not build houses for general needs. I have been at pains to make inquiries about what is happening in the Eastern Counties where I live, and I found that only 12 per cent. of local authorities are working either a rent rebate scheme or a differential scheme. There is nothing new in such schemes, because they were brought in many years ago, so far back as 1934–35. Many more local authorities are now going to put those schemes into operation. I personally prefer the rent rebate scheme rather than the differential scheme, because it is much easier to work. Only those people who want relief are put through a means test, because you settle what the standard or economic rent will be and announce that any people who want relief have to go through some means test.

Many local authorities in the Eastern Counties are putting that scheme into operation and are finding that they have money in their pool with which to go on building houses for general needs. Of course, they will not build so many houses; but in many of those areas the demand for general needs is not so great as it was. However, there is great demand, in my submission, for slum clearance. We have a big problem, not only in big cities but in rural areas. The noble Lord, Lord Wise, was worried about what was going to happen if there was no pool. Many rural authorities did not build many houses before the war, particularly in Wales. There is a discretionary clause, Clause 5, which gives the Minister power in certain circumstances, with the permission of the Treasury, to give a subsidy. No doubt in some cases where there is hardship that power may have to be used.

If a rent rebate scheme is put into operation, especially in the areas that I have been able to study a little, there should not be much hardship. There are many people who can afford to pay a standard rent. The full standard rent which has been adopted in the Eastern Counties is about 30s. to 31s., where before it was probably 21s. or 22s. If wages are £7 10s. 0d. or less a week, the tenant does not pay any extra at all, but if wages are £11 or over, he has to pay the full standard or economic rent: he has to pay the whole of the subsidy value of 11s. 4d. There has been a certain amount of protest, but things settle down, and, from what I have heard, after a few months there are few complaints. It is fair in that it does not put any further obligation on the people who cannot afford it, but it does make those people who can afford it—and there are many to-day who can—pay a standard or economic rent. It provides sufficient money in the pool to allow a certain number of houses to be built for general needs, and we hope that on April 1 it is also going to relieve an unbearable burden on local ratepayers, who, in many cases, are less well off than people living in council houses who have to be subsidised by them. They have had to bear a big burden to get the subsidy of two-thirds from the Government.

With those few words, I welcome the Bill and hope it will be a success. I agree with the noble Lord, Lord Silkin, that unfortunately the Housing Repairs and Rents Act has not worked as well as we hoped. Some of us were rather critical at the time. Although we welcomed it, we thought it did not go far enough, and it has been used in only about 12 per cent. of cases. The modernisation provisions of the Act, as the noble Earl has said, have had a great effect, because, when we altered that Bill only about 10,000 houses had been modernised from 1949 to 1952. From 1952 until now another 50,000 have been modernised; therefore, from that point of view, the Act has worked well. But from the point of view of repairs, I agree with the noble Earl that in many cases it has not worked because the terms were not sufficiently generous. I hope that in the next few months we shall hear of some Amendment to that Act. It is needed because, as the noble Lord, Lord Silkin, said, we shall find many more of these old houses falling into disrepair.

4.11 p.m.

THE EARL OF LISTOWEL

My Lords, like the noble Lord, Lord Wolverton, with whom I usually agree when he speaks about housing, I have serious misgivings about this Bill. These misgivings were, I think, shared by several of the speakers in the debate this afternoon and have been expressed by many of the local authorities who are engaged in housing. Let me say quite frankly, at the outset, that I regard this Bill, because it will inevitably cut down the building operations of local authorities for real need—operations which will not be undertaken by private enterprise—as the worst setback to housing for public need since the war. I quickly add that, in saying that, I am taking this Bill in conjunction with something else which also has an effect on housing; it is the combination of the two that will handicap the housing operations of local authorities. The other thing is, of course, the Government's financial policy and the increase, which the Government feel is essential, in the bank rate and interest charges. It is the combination of this higher rate of interest which has to be paid on borrowed capital and the ending of the general needs subsidy by this Bill that will, in due course, reduce the amount of new housing undertaken by the local authorities.

I know that the Government—the noble Earl, Lord Munster, said so in his introductory speech—think that the two essential forms of housing as a social service, slum clearance and overspill, will not suffer, but I venture to think (and I shall give my reasons for so thinking) that the Government are mistaken in supposing that this Bill will encourage slum clearance and redevelopment and make it easier for small towns to take the overspill from their congested neighbours. I shall try to show your Lordships by taking the example of London, which is of course typical of our large cities, that the policy of the Bill and the financial policy of the Government, taken together, will prejudice all the housing operations of the large urban authorities, not merely those connected with housing for general needs.

Let me deal, first of all, with slum clearance. The subsidy proposed in the Bill for this purpose is too narrow and limited in scope. Under Clause 3 it will be available only for dwellings provided for slum clearance or redevelopment and for families in unsatisfactory temporary accommodation. The narrow range of dwellings covered by the subsidy will hamper local authorities in planning the satisfactory redevelopment of their slum areas, and also in preventing old, dwellings from deteriorating to the point at which they will become new slums.

THE EARL OF MUNSTER

May I interrupt the noble Earl? He will not have forgotten Clause 11 of the Bill, which defines exactly what a slum is.

THE EARL OF LISTOWEL

I accept, of course, what the noble Earl says, but the definition is too narrow from the point of view of the redevelopment of these areas in what is regarded as a satisfactory way by the local authorities. What I should like to suggest to the Government is that the subsidy should have been made available for the rehousing of families on land purchased by local authorities under Part V of the 1936 Housing Act. This Part of the Act, as your Lordships will remember, makes it possible for local authorities to enlarge a clearance area so that it can be redeveloped as a whole. It also enables them to acquire obsolescent property which would otherwise, within quite a short time, turn into new slum property. To give just one example, from London, the Brandon Estate is quite an interesting case in which a rapidly decaying neighbourhood has been taken over by the London County Council and is to be restored, repaired and prevented from falling into complete decay. All our great cities have large areas of shoddy, ageing houses which will ultimately have to be condemned unless they are repaired and modernised in time. Here again, the essential work will be stopped because the local authorities will be unable to afford to do it.

The subsidy should also be available for families moving out of comprehensive development areas if, in those areas, they do not occupy slum dwellings or qualify for service grants. All these housing operations to which I have referred are, in the view of many local authorities, essential for satisfactory clearance and redevelopment, or, of course, for preventing existing property from deteriorating into slums. But these operations are all outside the scope of the slum clearance subsidy proposed in the Bill. If the local authorities have to stop these activities because they cannot afford to go on without a grant, then the slum conditions that many of us hoped—and the Minister was sincere in expressing this hope—might be ended by the Government's slum clearance drive, will continue to be with us indefinitely. I. agree entirely with the rather pessimistic but, I feel, accurate view about the continuation of these conditions expressed by the noble Lord, Lord Silkin, at the end of his speech.

I should now like to say something about the effect of the Bill on the other main aspect of housing as a social service —that is, the dispersal of population from our great cities, again taking London as a typical example. There will be a welcome increase in the Treasury contribution to receiving authorities—it was mentioned by the noble Lord, Lord Wolverton, in his remarks; but I think that he perhaps overlooked a fact to which I shall now allude: the increase In the subsidy and grant for houses built by the local authorities in new or expanded towns will not, unfortunately, offset the higher rates of interest that those authorities will have to pay on their loans.

It has been estimated that the increase in rent of a three-bedroomed house, with interest charges at 5 per cent., will be about 8s. per week. Only 1s. of this increase will be covered by the larger Exchequer grant. It would obviously be unreasonable to expect the local council tenants, or indeed the local ratepayers as a whole, to foot a bill of this magnitude for re-housing Londoners—apart from anything else, it would create an intense ill-feeling on the part of the local people towards the people coming in from outside. It is obviously the case that the individual rent burden for each family would be much greater in a small town than in London, as there is no stock of old houses over which to spread this increase in rent.

The financial provisions in the Bill, taken together with the higher interest which local authorities will have to pay on borrowed money, and the financial disincentive which the receiving authorities now have, have already brought to a complete standstill agreements between them and the London County Council under the Town Development Act. Your Lordships will remember the eloquent plea made by the noble Lord, Lord Balfour of Burleigh, only last June, in the debate to which my noble friend Lord Silkin referred, for the implementation of that Act. At that time most of us were hopeful, and it seemed that the Minister was most anxious to go ahead: I am sure that that was his intention. But the inadequacy of the Exchequer contribution under this Bill will make it almost impossible for receiving authorities in the countryside to undertake fresh commitments.

Since the Bill was introduced in another place, the London County Council have failed completely to induce any more of these authorities to accept overspill from London. May I remind your Lordships, as most noble Lords live in London, that there are still about 150,000 families of our fellow-Londoners on the waiting list of the London County Council, quite apart from the waiting lists of the borough councils. Many of these are, of course, cases of extreme hardship and of long delay, and almost all of them will have to be accommodated in new or expanded towns. The failure of the Government to make it financially possible for the country towns to go on taking urban overspill will perpetuate overcrowding and bad housing conditions in our congested cities. It seems particularly inequitable that this curtailment of building for housing need is not accompanied by any control of expensive private buildings. I do not suppose that there would be much scope for saving in capital investment from the control of private building, because it represents such a small part of the total of the building industry: the advantage would be social and not economic. But the sacrifices that are now being called for from people far down on the income scale would at any rate be easier to bear if it was felt that these sacrifices were being shared by the whole community.

My Lords, I only hope that, as soon as economic conditions improve, the Government will regard it as their first duty not to remit taxation but to give local authorities the financial support they must have to finish the job of slum clearance and the relief of overcrowding. They must have more financial help to get on with the homes that are required to give new hope to thousands of families living in our great cities, and to bring new life and prosperity to small places in the countryside.

4.23 p.m.

THE LORD CHANCELLOR (VISCOUNT KILMUIR)

My Lords, I am sure that all of your Lordships who have listened to this debate must have been impressed by the care and preparation which has gone into the speeches which have been made to your Lordships' House, and although they disclose grave and considerable differences of opinion, they certainly merit close attention and the best possible reply that I can give. The noble Lord, Lord Silkin used serious language with regard to his views on the Bill, and he was re-echoed by the noble Earl, Lord Listowel. In my view, however, they did not face up, as everyone in this country must face up at the present time, to the objectives of the Bill, and say whether they really felt either that those objectives were wrong or that they could be ignored.

The objectives of the Bill are perfectly clear. They are, first of all, to concentrate housing subsidies on two social problems—the elimination of slums and the relief of congested towns—and, secondly, to introduce more realism into housing finance and to put some reasonable brake on the growth of the subsidy burden. It is true that the noble Lord, Lord Silkin, asked me for my view on the statement of my noble friend Lord Munster about giving slum clearance priority; and Lord Silkin implied that in his view (although I do not think I am doing him an injustice in saying that he did not come right out on the point) overcrowding was an even graver problem than slum clearance. I put it to your Lordships that the objectives which I have mentioned cannot be ignored at the present time, and I respectfully question the view of the noble Lord, Lord Silkin, that slum clearance can be moved down on the list of priorities at the present time.

With regard to the second point, the noble Earl, Lord Listowel, mentioned the Government's financial policy. But he, and every one of your Lordships, knows that inflation exists at the present time. The noble Earl did not traverse the point that when inflation exists in a national economy it is not usually regarded as a wise measure, in dealing with that economy, to give the maximum amount of subsidies, which must increase the inflationary pressure. In such an economy it is surely for every Government of good sense to find the methods of relieving inflationary pressure, by deciding what is the true place where it can be relieved, what is artificial in the economy and, where that artificiality consists of subsidies, in dealing with them. I should have thought that that is a generally acceptable financial approach. Where one finds that a great deal of the inflationary pressure —this I should have thought was incontestable—is coming from those who are earning high wages, and more so (this is a point that I do not think was mentioned by either noble Lord) where two or three adults are bringing their wage packets into the same house, then I think it is only common sense finance that subsidies must he examined and, in my words, a brake put upon the growth of the subsidy burden.

The noble Lord, Lord Silkin, did not leave the matter there. So far as I can, I want to answer with my views the point that he made about the cost of a house. I followed, took down and checked his figures. With his figures and his arithmetic I have little to quarrel. I do not quarrel with the figure of £1,750. What I do quarrel with, however, with great respect to the noble Lord, is the fallacy of treating the £1,750 house as the only house that the local authority possessed. Viewed in that way, his figures have significance; but viewed against the actual position, the number of houses that most local authorities, in fact, have, the figures have a totally different significance. I thought that the theory of pooling by local authorities was common ground and that nobody objected to that system.

May I adopt as my own the words which I now quote: I say at once that I do not think that local authorities should object to pooling their rents. It is perfectly reasonable that tenants of a local authority living in houses built in pre-war days should have their rents readjusted so as to try to obtain some help from postwar houses. It is therefore reasonable, in my view, that rents of local authority tenants should be related to the amenities of the houses themselves and not necessarily to the individual cost of construction. I think nobody in the country disagrees. I adopt those words, but they were originally stated by Mr. Aneurin Bevan, so that at any rate they now have two proclaimed adherents. I agree with Mr. Aneurin Bevan and I do not think anybody else in the country disagrees.

LORD SILKIN

May I proclaim my own agreement with them also?

THE LORD CHANCELLOR

This part of my argument, at any rate, is gaining strength by geometrical progression. The noble Lord, Lord Silkin, knows me very well. I am going to answer his points, but he will agree that general acceptance of the pooling position is a fair starting point. If that is, done, one gets the advantage that it is spread over the pooled houses and the rents of all houses with similar amenities can be kept down to a reasonable level; and the increases in rent needed to meet the cost of later houses is small when spread over all the houses.

The noble Lord, Lord Silkin, referred to the figure of 8d. a house quoted by my right honourable friend the Minister of Housing and Local Government, which, your Lordships will remember, was 2d. for reduction in the subsidy and 6d. for the increase in interest rates. Neither my right honourable friend nor myself seek to make a bad point. That is an average figure which must vary for different local authorities according to the numbers of pre-war and post-war houses they have and generally according to the total number of houses. The figure will be a varying one. The noble Lord, Lord Silkin, is always a fair debater and I put to him that to take the cost of one house at £1,750 (as he did) and work from that is even more misleading than to take a national average, as my right honourable friend did, and work from that average. The national average is, at any rate, spreading the basis of the facts fairly wide, and when an average is taken there is always a certain number of examples which come about the centre line. To take one house in isolation does not really help at all on this point.

My second point is that we have accepted the principle of pooling (and I would assure the noble Lord that I speak with all reserve as to differences which will occur between different localities), and the application of pooling generally produces a result which means that people are not going to pay, on average, a great deal more for the house. But the noble Lord then went on to question whether there were enough houses for this to operate effectively. We have had the number of houses mentioned once or twice in this debate. Speaking from memory, I would say that it is 1,200,000 pre-war houses which belong to local authorities and 1½ million houses built by them since the war. I submit to the noble Lord, Lord Silkin, that that is a considerable number of houses over which pooling can operate. I admit that the noble Lord has the point at the other end of the scale, and that there are some authorities which will have fewer old houses to pull down than other authorities; but we have tried to deal with that point in the Bill. In addition to the general provision, the amount for slum clearance subsidy will be £22 1 s. 0d. as opposed to £10.

The Bill also makes special arrangements to encourage overspill from congested cities to new and expanded towns, and, as your Lordships will see, such houses will receive a subsidy of £24. The reason for that fits in with my general argument: that in the new towns there is no pool of older houses and in the expanded towns the pool is small in relation to the number of houses which will have to be built, and built, moreover, for strangers to the towns. That, surely, is consistent with the general approach that where pooling can take place, where there are houses over which it can operate, the Government have taken the step of reducing the subsidy, but where the old houses which are necessary for pooling are not likely to exist, we have given the larger subsidy of £24. That is the position, and I feel it is a fair answer to the point made by the noble Lord, Lord Silkin, that this was a serious attack on housing. On this basis I see no reason why housing authorities should not be able to continue with their policy of building the houses which they need and letting them at rents which tenants can afford to pay.

The noble Lord, Lord Silkin, made a point as to the relative severity of slums and overcrowding. It is a difficult point to deal with—for this reason. I should be the last person in the world to minimise the difficulties arising from overcrowding. If the noble Lord will allow me one personal experience, I should like to give it to the House, because of all those who have spoken in the debate today, I think I am, perhaps, the freshest from a constituency—although I see other Members of your Lordships' House present who are even fresher, in that sense, than myself. However, this was my experience. In eighteen months, I interviewed 3,000 of my constituents in the West Derby Division of Liverpool. Of that 3,000, some 2,700—that is, nine out of every ten—brought me housing problems. I think that noble Lords who know Liverpool, and know the division which I had the honour to represent, will realise from that that I have no spirit or desire for a moment to minimise the difficulties of overcrowding. I saw far too much of it at those times to which I have just referred. But I think one must, in deciding a question of this sort, look at the general picture which the country presents.

My noble friend Lord Munster mentioned the figure of 850,000 in relation to the requirements of slum clearance to-day, and it is useful, I think, to compare that figure with the figures for overcrowding which we have. As I said, and as my noble friend has said, there are some 850,000 slum houses to-day. That is the extent of the problem. There were 470,000 in the 'thirties, and to have the problem fairly in one's mind one must also remember what has been done since the war. Again I am not criticising, but this is a sad fact which we have to meet. The position since the war is that the proportion of local authority building used to replace slums has been very small. It has consisted in something between 100,000 and 150,000 houses, out of some 2,500,000 local authority houses that have been built. And even in the first nine months of 1955, when local authorities built 122,000 houses, only some 13,000-odd were used to replace slums. That is the position with regard to slum clearance. It is a position which no one can face with equanimity, and everyone must, of course, be inspired to deal with it.

I now come to the other side of the shield—and the noble Lord is perfectly entitled to ask for it. The overcrowding survey showed that there were some 340,000 overcrowded dwellings in 1936, and the figures obtained from the Census in 1951 suggest that the number of overcrowded families in April, 1951, on a comparable standard, had fallen to 218,000. That was the position in April, 1951. The position which I was describing from my own experience existed in 1950–51. But in the five years which have passed since the Census, undoubtedly the number of overcrowded families has fallen much further, though no precise figures are available; nor can a precise estimate be made. But (and again I am sure that my noble friends who are in a similar position would bear me out) the proportion of people who came to see me about housing cases—and after all, that is a good test for a Member of Parliament—fell enormously in the period between 1951 and 1954. when I had the honour to come to your Lordships' House.

The figures, therefore, show that an impression is being made on overcrowding, although we arc still left with a vast and intractable problem in the case of the slums. I hope that the noble Lord, Lord Silkin, will not think for a moment that I shall ever be content or complacent so long as any overcrowding remains: it is one of the most serious factors (in this I agree with the noble Lord) in determining whether or not a family will have a decent, comfortable and happy life. But when it comes to deciding priorities, then, on the figures I have given, I do not think that any Government could come to any other conclusion than to take slum clearance, and with it the overspill problem, as being the priority in this matter.

LORD SILKIN

I wonder whether the noble and learned Viscount would mind my just crystallising the issue between us, because I am sure he really wants to direct his mind to the question. I am not concerned with the exact number of overcrowded families as against the exact number of slum dwellings. He may be right in hs figures, though I think he ought to take into account the increase in population. I am not suggesting that the Government should devote themselves to one task, to the exclusion of the other; yet that is what they are doing. The Government are saying: "Deal with the slums; we will give you a subsidy for slums, but we will give you nothing for overcrowding." I suggest that local authorities have got to deal with both problems.

THE LORD CHANCELLOR

I am grateful to the noble Lord for crystallising the issue. My first general point was that slums, on the figures I have given, have priority. The noble Lord says that both tasks should be done together. There are two answers to that. One answer, with regard to overcrowding, is that, as he knows, in allocating houses during the last few years most local authorities have proceeded on a points system; and one of the bases of the points system was overcrowding. And I may say that I have constantly had to bring really gross cases of overcrowding—especially when there was tuberculosis in the family, or something of that kind—direct and at once, sometimes by telephone or telegram, to the notice of the housing authorities for them to deal with. One did that because one was confronted with a special position. But, apart from these special positions, overcrowding has been one of the matters on which new council houses have been allocated. Therefore, the position with regard to overcrowding has been attacked, as the reduction in the figures which I have quoted shows.

The other point is that at a time not only of financial stringency but of difficulty with capital investment generally, the Government have to make a decision on this matter. I think they should follow the decision that was taken between the wars—that is, to make the first effort with slums. Your Lordships will remember that from 1930 to 1935 subsidies were given for slum clearance, and it was only after five years of dealing with slums that a subsidy was given for overcrowding. I suggest that that is a sane and sensible way of approaching the problem that exists to-day. I think it is a fair point to make, that the method used by local authorities in allocating houses has done a considerable amount to deal with the overcrowding problem, but the figures I have mentioned—something between 100,000 and 150,000 out of 2 million houses built in nearly eleven years—show that very little has been done to deal with slums. The noble Lord, Lord Silkin, will have other opportunities of developing special points. If there are any that I have not dealt with, he knows that he has only to ask me and I will give such answer or information as I can. I wanted to deal with the broad points he made.

I am grateful to my noble friend Lord Gage for his welcome of the Bill and for his mention of some of the fascinating points which he put to us in the last debate we had. I think that everyone who heard him on that occasion (I recall that the noble Lord, Lord Silkin, said so at the time) was most interested in the problems which he raised, and I should like to assure my noble friend that we have them in mind. I should also like to assure him, and I hope he will pass it on, that Her Majesty's Government recognise the debt which they owe to the housing associations and the work they have done.

In order to economise your Lordships' time, may I deal straight away with the three questions put to me by the noble Lord. Lord Wise—I think that would be the most helpful method. The noble Lord's first point was on the statutory duties of local authorities to provide housing for general needs. Local authorities are under a statutory duty, under Section 71 of the Housing Act, 1936, to review the housing needs of their districts and to submit proposals for meeting them. Of course, it does not follow that a local authority must continue to build houses for general needs, because such needs might already have been met in their district, either by private building or by the use of houses which they had already built which fall vacant. But their duty to review the housing needs of their district and submit proposals is a statutory duty which falls upon them and there are the usual background consequences if they do not carry out that duty. I should not think it is something about which we need to worry. Every local authority I have known has been very "housing minded." But I wanted to reassure the noble Lord, Lord Wise, on that point.

The second point the noble Lord raised was: do the Government intend to reduce subsidies payable either under previous legislation or, by Order, under the Bill at present before your Lordships? Let me say at once that the Government have no power under Clause 2 to reduce subsidies payable under previous legislation —that is, on existing dwellings. Such an Order can apply only to the subsidies in the Bill. I think that clears the first part of his question with complete certainty. The reduction of subsidies on existing dwellings would require another Act of Parliament. I can assure the noble Lord that there is no intention of introducing such a Bill at the moment. I think that answers the second part of the question.

With regard to the noble Lord's third point, I may say that the Bill itself does not affect rents paid for houses already owned by local authorities. Councils have full powers to charge whatever rents they wish for their houses. They can reduce them if they wish. When councils introduce rent rebate schemes, it often happens that some rents are reduced. I do not want to go into great detail, but I should like to give a short picture of the position in regard to differential rents, which was mentioned by the noble Lord, Lord Silkin. I think it would be helpful to the noble Lord, Lord Wise, whose mind was moving in that way. Between fifty and sixty local authorities operate full differential rent schemes, most of them working by the rent rebate method. The local authority fix a maximum rent for every dwelling, based on the value of the amenities, size and location, disregarding the subsidy. If the tenant cannot afford that maximum rent, he is given a rebate, which is generally calculated on the basis that he can afford a certain proportion of his income for rent.

One of the features of the differential rent scheme, which many people forget and which is just what the noble Lord, Lord Wise, had in mind, is that poorer tenants can get greater relief by rebates than they could do if they received merely the full housing subsidy; and the richer tenants have to pay more. So not only is it possible to reduce rents, but it is being done by this method. Having answered those three questions. I hope the noble Lord, Lord Wise, will acquit me of any discourtesy if I do not follow him in his general argument. I have tried to give the general answer upon the Bill in answering the noble Lord, Lord Silkin. I would only say that the noble Lord, Lord Wise, began and ended his speech by saying that he had tried to drive a middle course between the Scylla of Lord Munster's praise and the Charybdis of Lord Silkin's blame. If that is the noble Lord's idea of a middle course, Heaven help those whom he really goes out to attack!

I am grateful to my noble friend Lord Wolverton for his welcome of the Bill and for the points he made, which have relieved me of answering some of the criticisms that have been made. I now come to the last speech, which was made by the noble Earl, Lord Listowel. He, again, made a general criticism of the Bill and the financial policy of the Government. I hope that he, too, with that well-known courtesy and kindness which he always shows to Members of your Lordships' House wherever they sit, will take what I have already said as an attempted answer, for which I ask only his consideration on the general point of the Bill. I hope the noble Earl will give us a chance of dealing at a later stage with the difficulties he mentioned with regard to dispersal. I had hoped that the provision of the £24 subsidy, and also the provision of the recovery of half the Treasury assistance from the exporting area, would have helped on that point. I hope the noble Earl will agree that it is a matter which one might perhaps examine when we are considering more detailed points, rather than that I should seek to give a full reply at the moment.

I hope your Lordships will excuse me for having taken so much of your time in replying to this debate. My only excuse is that it is a subject in which I have been intensely interested all my political life; I have been brought up against it constantly by my own experience in Liverpool, and it is a subject which merits the greatest possible attention from your Lordships' House at every opportunity that is given to you. I hope I have, at any rate, put the other point of view to those who disagree with the Bill, and I am sure that they in turn hope this, at least: that their more gloomy forebodings with regard to the results of the Bill will be fasified by events, and that we shall find that in the respects which I have mentioned, in dealing with slum clearance and overspill, and in making the contribution which this sector of our national life must make with every other to our financial position, the Bill will be a success.

On Question, Bill read 2^a and committed to a Committee of the Whole House.