Lords Sitting of 23 March 1959

Preamble
The House met at half past two of the clock, The CHAIRMAN OF COMMITTEES On the Woolsack.
Prayers—Read by the Chairman of Committees.

FOREIGN TRAVEL ALLOWANCE
2.35 p.m.
LORD REA: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what, if any, would be the approximate annual financial loss to the Exchequer if the existing limit of £100 per annum foreign travel allowance were increased (exclusive of application to the dollar area) to £200 per annum.]
THE MINISTER WITHOUT PORTFOLIO (THE EARL OF DUNDEE): My Lords, there would be some additional charge on the united Kingdom balance of payments, but no one can predict with any certainty what it might amount to.
LORD REA: My Lords, while thanking the noble Earl for that Answer, will he agree that in the view of the Government it is necessary that British nationals should travel abroad as easily as possible, and will he bear this matter well in mind and deal with it, if possible, before the holiday season gets into full swing?
THE EARL OF DUNDEE: Certainly, my Lords. I think the Chancellor of the Exchequer has already stated that he hopes that in due course it will not be necessary to maintain these restrictions on foreign travel.
LORD CONESFORD: My Lords, is it not a fact that the limit in the case of Scandinavia is now £250? Has this caused any appreciable flight of capital? If it has not, why should the raising of the limit elsewhere have that effect?
THE EARL OF DUNDEE: My Lords, I do not think the raising of the limit to £200, as the noble Lord, Lord Rea, suggests in his Question, Would have much effect on the flight of capital.
LORD GIFFORD: My Lords, would the noble Earl consider making a request to those connected with the travel world to give some kind of estimate? I think he would find that the amount involved would be quite negligible.

SOUTHERN RHODESIA'S UNLAWFUL ORGANISATION BILL
LORD STONHAM: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they were consulted by the Government of Southern Rhodesia with reference to the "Unlawful Organisation Bill", and, if so, what advice was given.]
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (THE EARL OF HOME): My Lords, it is not the practice to state whether consultations have taken place with any Commonwealth country, or to disclose the nature of any consultations. I am afraid, therefore, that I cannot give the noble Lord the information which he seeks.
LORD STONHAM: My Lords, is the noble Earl aware that this Bill in its provisions violates every fundamental principle of the British Government as set out by the Prime Minister recently: free speech, free elections and the separation of the Executive and the Judiciary? Would he confirm that we still have the right of veto against legislation which discriminates against Africans? And in order to prevent what is likely to be a great tragedy, will Her Majesty's Government veto this Bill and all similar repressive legislation?
THE EARL OF HOME: My Lords, the Bill, so far as I know, is not yet law. Under Article 28 of the Southern Rhodesia Constitution Letters Patent of 1923 it is provided that the Governor shall reserve certain categories of law unless he has previously obtained instructions through the Secretary of State. The two main categories of legislation, under Article 28, are, as the noble Lord indicated, legislation which discriminates against Africans or which amends the

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Land Apportionment Act. Unless the Governor asks for prior Royal instructions, which he has not done in this case, my constitutional responsibility under Article 28 does not come into play until the law has been passed by the Southern Rhodesian Parliament; and, as I say, the law has not yet been passed.
VISCOUNT STANSGATE: My Lords, would the noble Earl consider, in view of the debate to-morrow, making available to all Members of the House a précis or particulars of two or three Bills presently before the Southern Rhodesia Parliament, as they will affect the course of the debate? This is one, but there are others. Or, if he cannot make them available, could we get them at his office or get the information accurately in some form?
THE EARL OF HOME: My Lords, as the noble Viscount knows, laws are often brought into Parliament and altered greatly during their passage through Parliament. Laws do not necessarily go through the Southern Rhodesian Parliament in the form in which they are introduced. I do not think I could produce the Bills to your Lordships' House between now and to-morrow, but I will consider what information I can make available.
VISCOUNT STANSGATE: My Lords, when it comes to considering this Unlawful Organisation Bill, would the noble Earl consider that a Bill which makes illegal the African Congress is not a Bill which affects African interests? That is the issue.
LORD STONHAM: My Lords, is the noble Earl also aware that this Bill has had a Second Reading, without a Division, and therefore it has advanced considerably? Would he bear in mind in any representations that may be made by Her Majesty's Government, private as they may be, that hundreds of people are being detained without trial and without being charged? How can we ever again protest against Communist repression if we permit this kind of tyranny, without protest, in the British Commonwealth?
THE EARL OF HOME: My Lords, most Commonwealth countries have Preventive Detention Acts, which the noble
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Lord will no doubt study with care. But, as I say, these Bills have not yet become law. Although I cannot reveal the consultations that we have, or the nature of them, I will bear the noble Lord's remarks in mind.
VISCOUNT STANSGATE: My Lords, will the noble Earl answer the question: Does he consider that a Bill which outlaws the African National Congress is not a Bill specially affecting the interests of Africans?
THE EARL OF HOME: My Lords, it depends whether or not the membership of the African National Congress is purely African, and I think it is not.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, may I take it that the noble Earl the Leader of the House and we all sympathise with him in his anxious time just now will not be prevented from making good will representations to such places as Southern Rhodesia, and pointing out what would be likely to be the best all round, in the interests of the Commonwealth?
THE EARL OF HOME: My Lords, I certainly respond to the noble Viscount's suggestion.

THE MALDIVE ISLANDS
3.42 p.m.
LORD OGMORE: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether the reports that 80 people have died from starvation in Addu Atoll, Maldive Islands, are true; what the food situation in Addu Atoll is; whether Her Majesty's Government are sending food supplies there; and what is the present position in the negotiations between Her Majesty's Government and the Maldivian Government on the question of the establishment and maintenance of an R.A.F. base and staging post on Gan Island.]
THE EARL OF HOME: My Lords, in Addu Atoll, in which Gan Island is situated, no reports have come to my notice of any difficulty over food. There have, however, been reports of people dying from starvation in Huvadu Atoll, some

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eighty miles north of Addu. In one of these reports the number of deaths has been given as eighty. In others it has been lower. Arrangements are being made to enable Major Phillips, the Adviser on Maldivian Affairs to the Royal Air Force in Gan, and a doctor to visit Huvadu, but their report will not be available for some days. Meanwhile, in view of continuing reports of a very serious situation over a month or more, food has been sent to Huvaclu.
The negotiations with the Maldivian Government which have been proceeding in Colombo about the R.A.F. staging post at Gan have been suspended on the initiative of the Maldivian Delegation. The negotiations were on the basis of documents on which there had already been a substantial degree of agreement between us and the Maldivians. In the course of the negotiations the Maldivian representatives raised new matters of substance quite unrelated to the agreement concerning Gan. Although the United Kingdom side went as far as possible to meet them, this resulted only in the Maldivians producing further and unacceptable demands. We have informed the Maldivian Government that we remain prepared to discuss all outstanding matters and have expressed our willingness to resume negotiations at any time in Male or in Colombo or in London, if they so desire.
LORD OGMORE: My Lords, the House, I am sure, will be pleased to know that the Secretary of State is calling for a report on the situation in the place that he mentioned, and also that (he is causing food to be sent there to relieve the alleged starvation. Has the Secretary of State's attention been drawn to the accusation of the Maldivian Government that the British Government have incited and encouraged discontent in the Gan Atoll and the two adjoining Atolls, and the allegation that Major Phillips, the British Advisory Officer, was responsible for this discontent?
THE EARL OF HOME: My Lords, I think the noble Lord will understand that communications are extremely difficult. There are 2,000 of these islands and they are very small. Some 200 are occupied and the people are apt to be living on the very margin of starvation. Where starvation is threatened in any particular island, the obligation really rests upon the Central Government of
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Male to supplement the food supplies. That the Male Government would not do; therefore, as the noble Lord has said, we have sent a food ship, and I hope it will arrive in time with adequate supplies. I am aware that the Maldivian Delegation accused Major Phillips of trying to foment discontent in Gan Island and the Island of Huvadu. I would say at once that there is no connection between the island of Huvadu where the starvation is, and Gan Island, so Major Phillips could have had nothing whatever to do with that. In any case, I would repudiate absolutely the accusations made against him and say that the only thing that has happened as so often happens when British troops are around—is that the Royal Air Force have made friends with the local people on the islands and are getting on extremely well with them. That, I believe, will be a matter of satisfaction. I think we require patience in discussing this matter with the Maldivian Government, and that we shall arrive at a conclusion of our differences in time.
LORD SHEPHERD: My Lords, may I ask the noble Earl a question? He said that talks have broken clown between the Maldivian Government and Her Majesty's Government. Are we to understand that work has ceased at the airfield, or is it progressing?
THE EARL OF HOME: My Lords, everything is going on and progressing as planned, with perfect good will on the part of the local islanders.

APPEALS IN HABEAS CORPUS CASES
LORD SILKIN: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they are aware of the considerable dissatisfaction which exists owing to there being no appeal against a decision of a Judge of the High Court refusing a writ of habeas corpus, and whether they will take urgent action in the matter.]
LORD CHESHAM: My Lords, as the noble Lord is aware, there is a right of appeal to the Court of Appeal against the

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refusal of a writ of habeas corpus in a civil matter. My right honourable friend the Home Secretary is already actively considering, in consultation with my noble and learned friend the Lord Chancellor, the question of conferring a right of appeal to the House of Lords against the refusal of a writ of habeas corpus in a criminal matter. This involves difficult and important problems which require thorough examination.

BUSINESS OF THE HOUSE
THE EARL OF HOME: My Lords, I beg to move the Motion which stands in my name on the Order Paper.
Moved, That Standing Order No. 35 be suspended until the House adjourns for the Recess at Easter for the purpose of giving Government Business (except with the consent of the Government) precedence over other Notices and Orders of the Day, and that Standing Order No. 41 (No two stages of a Bill to be taken on one day) be suspended for the aforesaid period.—(The Earl of Home.)
On Question, Motion agreed to, and ordered accordingly.
VISCOUNT ALEXANDER OF HILLS BOROUGH: My Lords, with regard to the Business for to-morrow, we understand from the Press that there may be some delay in issuing the White Paper which is to be produced. Can the noble Earl the Leader of the House tell us whether the White Paper will be available to-day?
THE EARL OF HOME: My Lords, in order to avoid any possible mistake or slip-up, I would say that either I or my noble friend will make a statement on that matter at about half-past three. I have no reason to anticipate that anything will go wrong.

NATIONAL INSURANCE (EARNINGS) REGULATIONS, 1959
2.51 p.m.
THE EARL OF DUNDEE THE EARL OF DUNDEE rose to move, That the Draft National Insurance (Earnings) Regulations, 1959, be approved. The noble Earl said: My Lords. I beg to move that these draft Regulations be approved. As your Lordships are aware,
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these Regulations are presented to Parliament on the advice of the National Insurance Advisory Committee. They have already been discussed and unanimously approved in the other place and they require the approval of this House also. These Regulations, which are made under the authority of the Act, do not raise the question of whether an earnings rule is or is not necessary. If that were raised we might perhaps have quite an interesting debate. All they do is to raise the limit of earnings which may be earned by a retirement pensioner or a widow in receipt of the retirement pension, or a widowed mother who comes under a different category in the Act, by substantial amounts in order to bring the permitted earnings into line with the increase in wages.
In the case of retirement pensions that is for men between the ages of 65 and 70 and women between the ages of 60 and 65 the present limit is 50s. a week on which no deduction is made, and for the first 20s. after that only 6d. in every ls. is deducted; therefore at present a pensioner can earn up to 50s. with no deduction, 70s. with 6d. in the ls. deduction on the additional pound and after 70s. it is not worth his while earning any more. Those amounts are being raised by these Regulations to 60s. and 80s. respectively; that is to say, he can earn up to 60s. without any deduction at all and up to 80s. with only a 50 per cent. deduction on the additional pound.
In regard to a widowed mother, the present position is that she may earn up to 60s. with no deduction and 80s. with only a half deduction on the additional pound. Under these new Regulations the amounts are again raised by 20s., so that a widowed mother will now be able to earn up to 80s. with no deduction and up to 100s. with only a 50 per cent. deduction on the last 20s. As I think your Lordships know, the case of the widowed mother has always been considered separately from that of the retired pensioner, because the widowed mother with children who are of dependent age, under 18, is nearly always herself under 60; more often she may be under 50 or even 40, and the idea of the National Insurance Act is that the majority of widowed mothers would have to spend too much time looking after their children to be able to take full-time employment.
The allowances for part-time employment have always been higher than those which applied to old age pensioners, and of course the children's allowances are also higher than the ordinary children's allowances. The widowed mother, as I think your Lordships know, receives 20s. a week for the first child compared with nothing under the ordinary children's allowances. She receives 12s. for the second child, which brings it up to 20s. with the 8s. allowance, and 12s. for all other children, which would bring it up to 22s. So that a widowed mother with three dependent children would receive £3 2s. a week in children's allowances, and 50s. in her own right, making a total of £5 12s. Under the existing earnings regulations she could earn another £3, making £8 12s., without any deduction from the pension. Under these new regulations she will be able to receive up to £9 12s. without any deduction, the limit having gone up to 80s. If she earned an additional £1 over and above that. that would raise the family income to £10 2s., above which it would not be worth her while to go.
I do not wish to say anything which might raise a general discussion on the Insurance Act, and I thought your Lordships would prefer that I should state, as I have tried to do objectively, the changes which are proposed by these Regulations which are now submitted for your Lordships' approval. I beg to move.
Moved, That the Draft National Insurance (Earnings) Regulations, 1959, be approved.—(The Earl of Dundee.)
LORD PETHICK-LAWRENCE: My Lords, the noble Earl has given us a very clear and precise account of the changes provided for in these Regulations, which we very much welcome. I do not think anyone would wish in any way to detract from the propositions which he has laid down. The change in the whole standing of money and everything since these earlier Regulations were enacted has made the alterations in this new form desirable and acceptable. I think, in all directions. I well remember the special point about the widowed mother, because I think I was the first person, with my wife, to bring over from the United States a man who had brought these Regulations into being in the United States somewhere about fifty-five years or so ago. From that event the idea was
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translated into this country, and subsequently came into the effect which the noble Earl has described.
There is just one point about which I am not quite clear, though perhaps I should be. Do these Regulations come into being immediately they have been approved by both Houses? I understand that they have already gone through the other House. Or is there a time when they are brought into effect? Perhaps the noble Earl will say a final word in answer to that point.
THE EARL OF DUNDEE: My Lords, if your Lordships approve the Regulations they will come into effect on April 20, which is the earliest date at which the necessary arrangements can be made.
On Question, Motion agreed to.

HOUSE PURCHASE AND HOUSING BILL
3.0 p.m.
Order of the Day for the Second Reading read.
THE EARL OF DUNDEE: My Lords, I beg to move that this Bill be now read a second time. The Bill is in four Parts, the first Part being concerned with lending money for house purchase; the second Part with improvement grants in England; the third Part with improvement grants in Scotland, and the fourth Part miscellaneous and general. The purpose of Part I of the Bill is to help people who want to buy their own homes but who have to borrow money in order to be able to do so. The two lending agencies which are affected by the Bill are the local authorities and the building societies. The local authorities already have power to lend money for house purchase, with a limit of 90 per cent. on the value of the house and also a limit of £5,000 on any advance which they may make in respect of any one house. Those two restrictions are not imposed on any other lending agency in the country. The Government feel that they are now an unnecessary restriction on the freedom of local authorities, and in Clause 3 of this Bill those restrictions are accordingly removed. If the Bill goes through, local authorities will be free to lend as much as they wish, and on what terms they wish, to finance house purchase without being limited either in the total amount of their advance or by any percentage of the value of the property.

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The average amount of money advanced by local authorities for house purchase over the last three or four years has been about £60 million a year, and the annual number of houses purchased with the help of local authority advances has averaged about 50,000. Of course, that is not evenly spread over the whole country. Some local authorities go in a good deal for lending to help house purchase; others go in for it only a little, and some do not go in for it at all. That is a matter for the local authorities to decide. What the Bill does is to remove any restriction in the way of their doing so, and we hope that all local authorities will consider with favour the possibility of helping house purchase.
As for the building societies, whose main business is to lend money for house purchase, the average amount which they have been lending for that purpose over the last three years or so has been a little under £400 million a year; and the average number of houses the purchase of which they have financed by these loans have been a little under 300,000 a year. Four hundred million pounds sounds a lot of money, but it is not sufficient to satisfy the demands for these loans; and in spite of the fact that the present rate of interest charged by the building societies is a good deal higher than it usually is, the number of applications for loans to finance house purchase is much greater than the amount of cash which the building societies have at their disposal for that purpose. What the Government and the Bill propose is to make more cash available.
They will do this in two ways. The first is by conferring trustee status on those building societies which fulfil certain conditions, which are set forth in the White Paper on House Purchase issued last November (Comnd. 571), in Appendix II, "Proposed conditions on which the Chief Registrar shall have power to approve Building Societies for purposes of Trustee Status." It is expected by the building societies that those of them who get this trustee status will thereby be enabled substantially to increase their deposits, because a number of people who are responsible for trust funds will be able to invest those funds in building societies. The other way in
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which we propose to make more cash available is to make direct Treasury advances to the building societies which they, in their turn. will lend on certain conditions to finance house purchase.
Of course, building societies make advances on all kinds of houses, both new and old; and, generally speaking, new houses are better security from the building society's point of view than old ones, although, as many of your Lordships know, especially in Scotland, a good many of the older houses built before 1919 were built of much more durable materials than are now generally used, and if they can be satisfactorily modernised they will probably outlive by a very long time most of the houses which are now being built. Nevertheless, other things being equal, the newer the house, the better the security; and the Government are proposing to give direct assistance in respect of the oldest class of house, those built before January 1, 1919.
At the present moment, it is estimated that on these oldest classes of houses the building societies are advancing between £40 and £50 million a year. Of course, that does not mean that the Treasury advances are necessarily limited to that sum, because, as I have explained to your Lordships, the demand at present is greater than the amount of money available. Therefore, it may be found that the amount of money which the Government advance on these old houses is a great deal more than the building societies are able to provide, since they are compelled to ration all their clients quite severely because they have not enough money to do everything that is wanted. On these old houses the building societies have undertaken to advance to their clients who are credit-worthy loans to the amount of 95 per cent. That is substantially higher than the maximum percentage which they have hitherto been accustomed to loan.
We intend that these loans should be used indirectly to help the financing of the purchase of houses which are not so old as this—houses built between the two wars. As your Lordships will see from the White Paper, in the agreement which was arrived at between the Government and the building societies (although there is nothing in the Bill about this), the building societies have undertaken to make similar advances on similar terms—that is, 95 per cent. of the purchase

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price—to people who want to buy houses which have been built between the two wars. They think that they will be enabled to do this, first, because they will be relieved by the Government of the £40 million or £50 million which they are now spending on the older houses; and next, because their trustee status will enable them to get more money together.
LORD PETHICK-LAWRENCE: My Lords, if the noble Earl would allow me to interrupt him, he says "95 per cent. of the purchase price". I suppose the building society make an independent valuation which justifies the purchase price—they make certain that the purchase price is not in excess of the real value of the house?
THE EARL OF DUNDEE: Yes. It is, I think, an ordinary matter in the business of building societies; they have to do that. They have, of course, to satisfy themselves, too, that the client is creditworthy.
The advances of money made by the Government under this Bill will be made only to those societies which fulfil the conditions entitling them to trustee status which are set down in Appendix II to the White Paper. Your Lordships have probably read it, and I do not suppose you will wish me to go through those conditions. The only one which I think has given rise to any criticism is the assets limit of half a million pounds: a society cannot qualify unless its assets exceed £500,000. Since there are a large number of small building societies, a great many of them very efficiently run, with good local reputations, whose assets are not so much as £500,000, it has naturally been suggested that there ought not to be this limit. Although we do not suggest that size is the same thing as reliability, the size of the assets of a concern is one element in its capacity of fulfilling without undue risk its position as a trustee stock.
The limit of £500,000 is lower than that which has sometimes been suggested on previous occasions. I feel it necessary that there should be some limit somewhere, and the right honourable gentleman the Minister of Housing and Local Government is satisfied that there are enough building societies with assets of more than £500,000, and that their distribution over the country is sufficiently
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wide, to make it certain that a would-be purchaser wishing to acquire a house, in whatever locality, will not have any difficulty in finding either the head office or a local branch of some building society which qualifies under this White Paper from whom he can raise the necessary loan.
The interest which the Treasury will charge will ½ be per cent, below the current rate of interest charged by the building societies—whatever that may be at the time. That, of course, always depends on two things. The first is the rate at which the public are willing to invest in the building societies. If the societies try to put the rate too low the public will not invest, and the societies have to compete with National Savings Certificates and other forms of investment. Secondly, on the other hand, if the building societies put the rate too high, people who want to borrow money to buy a house will not do so. They will wait until interest rates come down. It is therefore one of the most constant preoccupations of building societies to consider the optimum rate of interest which will produce the greatest amount of business.
I do not want to take up your Lordships' time by going through every clause in Part II of the Bill, which makes certain alterations in the existing procedure for making improvement grants under previous Housing Acts, and perhaps your Lordships would prefer that I should try to give a short summary of the changes in the existing law which are made by Part II of the Bill. At the present time, as your Lordships will know, certain conditions apply to improvement grants. The maximum amount of grant which can be paid is either £400 or 50 per cent. of the actual expenditure on an approved scheme for reconditioning—whichever is the less. The dwelling, to qualify, must be used as a private house unless the local authority consent otherwise. The house must be lived in by the applicant or by members of his family, or by someone to whom it has passed on the applicant's death, or by an agricultural worker on a contract of service; or it must be let.
The rent chargeable shall not be more than the rent which could be charged if the house were a rent-controlled house—and if it is rent-controlled the rent is limited by the control—plus 8 per cent.

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on the amount of expenditure on improvements which expenditure is not reimbursed by the reconditioning grant. The house must be fit for human habitation. No premium may be charged for assigning a tenancy. All these conditions apply for twenty years from the time when the improvement works are completed. Until 1949 the only kind of house which could attract an improvement grant was an agricultural house. Although improvement grants were extended to urban houses by the Housing Act of 1949, in practice that Act was almost a "dead letter" until 1954, when my right honourable friend the Prime Minister, who was then Minister of Housing and Local Government, started a campaign in favour of more urban reconditioning. That campaign got off to quite a good start, but for the last three or four years it has remained more or less static, and Her Majesty's Government feel that things would move a great deal faster if the conditions were a little less restrictive and frustrating.
What Part II of this Bill does, therefore, is to make certain changes, the most important being to introduce a new grant which does not supersede, but which may be part of, the old maintenance grant, in respect of what are called "standard improvements". Such improvements are: the installation of a bath, wash-basin, hot water supply, water closet and satisfactory food store. A great many of the older type of houses are perfectly habitable but lack these things which are now considered essential to modern comfort and proper family life. Under Part II, therefore, provision is made that if only these five standard improvements are effected, not as part of a comprehensive reconditioning scheme but by themselves, a grant may be claimed from the local authority of either 50 per cent. of the cost or a maximum of £155, whichever is the less. This grant has to be paid provided that the local authority are satisfied that the house is fit for human habitation and is likely to have a life of at least fifteen years. There is then a statutory obligation on the local authority to pay the grant.
This provision also links up with the arrangements in Part I of the Bill for assisting the purchase, through the building societies, of pre-1919 houses, where 95 per cent. of the loan is derived from
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Government funds. If the purchaser wishes to put in these five standard improvements and gets from the local authority a grant of £155, and if his own costs, over and above that, have been £150 or £200, then the building society can lend him, as part of his building society loan, the amount of the expenditure he has incurred over and above the amount of the grant. We hope that this will facilitate the more rapid improvement of a large number of these older houses which are still perfectly fit and capable of having a long and useful life.
The other change which Part II makes in the conditions for an improvement grant is in respect of rent. If the house is controlled there is, of course, no change. The limit is the controlled rent plus 8 per cent. of the owner's share of the cost of the improvement. If the house is decontrolled, it is not at present possible to obtain a grant unless the rent is brought down to what would have been the controlled rent (had it been controlled) plus 8 per cent. Under Part II of the Bill it will be possible to appeal to the local authority to decide what they consider to be a fair rent, having regard to the rents of other free houses in the locality. These are the two principal changes.
A third change is that the conditions will apply for only ten years, instead of twenty. Also, at present the house must be lived in by the applicant or a member of his family, or someone to whom it has passed on the death of the applicant. A further change made by Part II of the Bill is that after three years from the date of the completion of the improvement works the house may be sold without any breach of the conditions and without the grant having to be repaid. It is hoped that these changes will speed up the process of reconditioning and encourage owners of houses to do a great deal more than is being done now under the previous Housing Acts.
With regard to part III, I think your Lordships will probably be relieved to hear that Part III does not create differences between Scotland and England which I should have to explain. On the contrary, it removes differences which previously existed and assimilates Scottish conditions to English conditions; and since I have just explained to your Lordships the English conditions it is unnecessary for me to say much about the

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application of these improvement grants for Scotland. Perhaps your Lordships will forgive me for just mentioning that an Amendment which. I, as a private Member, moved to the Scottish Housing and Town Development Bill in 1957, and which I withdrew on a promise of reconsideration by the Government, has, I find, been incorporated in this Bill. The Amendment was to abolish the necessity of having to repay an improvement grant if the owner of a house died and it was inherited by his son, which always seemed a little unnecessary.
Part III merely applies Part II of the Bill, concerning the provisions relating to improvement grants, to Scotland. Part I, relating to house purchase loans, applies to Scotland, anyhow; and I hope it will be made good use of in Scotland, because I am sorry to say that the proportion of owner-occupied houses in, Scotland is considerably less than it is in England. In England, out of 14 million houses, about 3¾ million are owner-occupied—that is, about 27 per cent; whereas in Scotland. out of 1,600,000 houses, only 300,000 are owner-occupied. That is under one fifth, compared with over one quarter in England. I, at least, and, I am sure, many other people, would like to see far more people in Scotland owning their own homes. One reason, I think, why Scotrish householders are less apt than English householders to be owner-occupiers is that rents in Scotland are so much lower; and if rents are lower the inducement to become the owner of one's house is not so strong. On the other hand, one should always remember that the lower the rent the more difficult it is for the owner to keep the house in good repair, and if the occupier is also the owner he can do what he likes about repairs. He can spend as much as he wants to on them. and probably do the work a great deal more economically. He can do work which he might be reluctant to do if the house belonged to someone else.
I hope very much that house occupiers, local authorities, building societies and everybody else in Scotland will make the best use they can of this Bill. Probably all your Lordships, whatever you may think about the Bill itself, are agreed in principle that it is a good thing for more people to own their own houses. That
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view is probably held by all political Parties, or by nearly everybody. There was a clergyman (I think it was Mr. Sidney Dark) who used to edit the Church Times between the wars; he was a very thoroughgoing Socialist who used to say that the only thing upon which he really insisted on being individualistic was his toothbrush, and he could not bear the idea of that being nationalised. I think that in many ways a house and a home is a much more personal and intimate thing than a toothbrush, and the advantages of owner-occupiership to a nation are very great indeed.
Those of your Lordships who have been to Canada and seen the industrial expansion there must, I think, envy the Canadians, because it is very uncommon in Canada for a married worker to live in a rented house. Nearly all married workers there own their own homes, and the advantages both to social happiness and to political stability are very great. Here in Great Britain, unfortunately, we have not quite so much room as the people in Canada have and it is possible that universal home ownership may never become practical, but the present proportion, I think we should all agree, is too low. To consider England and Scotland together, only about 4 million houses are owned by their occupiers out of a total of between 15 million and 16 million. That we would all agree is too low a proportion, and although it may be a very long way ahead, I hope that this Bill will do something to bring us a little nearer to the time when the ownership of houses by those who live in them may be the rule and not the exception.
Moved, That the Bill be now read 2a.—(The Earl of Dundee.)
3.27 p.m.
LORD LATHAM: My Lords, I am sure that the House is much indebted to the noble Earl for the clear and brief way in which he has explained the salient features of this Bill. He has done it with his most acceptable and accustomed urbanity. At the start, I should perhaps declare an interest; I am an honorary Vice-President, among other of your Lordships and others, of the Building Societies' Association. This is a modest Bill and I cannot myself understand the kind of bravura with which it was introduced into another place by the Minister

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of Housing and Local Government, for the Bill makes no impact at all upon the housing problem, which is perhaps, after the question of full employment, the most grave social problem of our times. The Bill will not in operation add a single dwelling to the existing stock of dwellings. All it does is to facilitate by way of the provision of national funds, based on national credit, a change of ownership. That is all that it does.
Indeed, there are cases where the operation of the Bill, if it becomes an Act, could reduce the number of housing units in this wise; that a person might under the scheme get an advance from a building society to purchase a pre-1919 house which at the time of purchase was occupied by more than one family. Having bought the house, the purchaser may wish to live in it himself. If the house is decontrolled, as it might well be, the purchaser could evict the tenants, perhaps two families, and replace the two families by his own family; that is to say, he could thus reduce the total available housing units by one—and, in some circumstances, it might be, by more than one. It might well be argued that it is desirable that a house built for single family occupation should not be occupied by a number of families, as this would lead to overcrowding, and from overcrowding to slum conditions. That may be so: but if a local authority reduces the number of persons in any given housing accommodation, then the local authority is responsible for providing re-housing accommodation.
As the noble Earl said, and as the White Paper shows, the reasons for this Bill are, first, to increase the money available for house purchase, especially for the purchase of older houses; and secondly, to encourage home ownership. I will take the first reason first—namely, the alleged shortage of money. Would it be unfair to say that, very largely, this shortage of money arises from the Government's financial policy over the last two or three years, one result of that policy having been that local authorities had to cease making loans to intending purchasers of houses because the funds were not available, and, inasmuch as they were largely thrown upon the money market, they found it very difficult to raise funds for their normal activities?
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In support of that submission I should like to read an extract from a statement made by the Deputy-Chairman of the Building Societies Association. It is a statement which was printed in the Building Societies' Gazette, and was referred to in another place on December 15 last year [OFFICIAL REPORT (Commons), Vol.597 (No. 35), col. 865]. It said:
"After pointing out that the investments in building societies had fallen off during the years 1956 to 1958, he"—
that is the Deputy-Chairman of the Building Societies Association—
"went on to say: 'During this same period a number of local authorities ceased lending altogether, because they could only do so at what they regarded as a penal rate of interest. Insurance companies cut down their lending in many cases in favour of other forms of investment. At the same time the banks were directed to cut down their lending, and trust funds could be better employed in the purchase of gilt-edged, with the prospect of substantial capital appreciation in due course. You will see that there has been a reduction in the flow of funds from every source available to the would-be house purchaser, because of the prevailing monetary conditions. In practice, therefore, during the past three years, the climate has been very discouraging….' "
As the noble Earl said, the building societies are already advancing between £40 million and £50 million a year for the purchase of older houses, including those built pre-1919, and this sum is out of a total annual lending of something in the order of £400 million. Now in the Bill there is a limit of £100 million to the sum which can be advanced within the scheme as provided by the Bill. That is only about two years' lending at the rate at which the building societies are advancing loans at the present. It is contended that building societies' funds available for newer houses have been reduced by the loans which they have made for the purchase of older houses. That may be the case; but it seems to me that no great or substantial additional facility will be available under the provisions of this Bill.
The next reason was home ownership, and the Minister of Housing and Local Government went into what I thought was almost a panegyric of home ownership. No one would wish to decry home ownership. My own first house I bought through a building society. But buying a house through a building society, or buying it otherwise on mortgage, is not always an unmixed blessing. It is nice, of course, to have the home, and that is

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one thing: but there is also the obligation of paying for it over a period of some twenty to twenty-five years; and, normally speaking, the terms are such, especially now, with the high rate of interest, that the resources of most people with an average income are greatly stretched, especially if there should he any alteration in the domestic circumstances of the borrower for instance, if a family should come along, or if sickness involving a loss of earnings should supervene. In those circumstances it frequently happens that the owner, the mortgagor, is compelled to take in lodgers, or, indeed, to take in a family, and that normally has a serious effect upon the condition of the house, which becomes overcrowded with two families having to use one set of offices: and it is not a long road between conditions of that kind and something approaching slumdom.
The Minister of Housing and Local Government, when introducing the Bill in another place on December 15, took as an example a pre-1919 house costing £1,800, to be bought on mortgage by a person with average earnings of £13 a week. He indicated that over a period of twenty years the monthly payment would be £12 15s. That means that one week in every month the whole earnings would have to go to make the mortgage payments. In addition, there are rates to be paid and repairs and decorations to be met, and on present rates of interest the transaction can become a very burdensome one. in 1951, for instance, when the rate of interest was 4 per cent., the monthly repayments over a period of 25 years would have been £10 15s. At 6 per cent., the prevailing rate of interest, they would be £13 Is. 8d., a difference of £2 6s. 8d.
Moreover, we cannot take the average earnings at £13 a week. According to figures given by the Minister of Pensions in another place on October 29 last, there are 3 million men in this country earning under £9 a week and 6¼ million earning between £9 and £15. While it may work out that the heavy earnings in certain special industries make the average spread over the whole of the working population £13 a week, it would be wrong to take that as the average income available from which a person could undertake heavy responsibilities for purchasing a house, whether it be old or new, with the interest rate running at
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some 6 per cent. Moreover, there is always the circumstance that there will be less overtime avilable and that bonus earnings will also diminish.
There is also the point to be made in connection with home ownership, which cannot be disregarded, that with the development of industry and new techniques and with the increased application of automation, it becomes increasingly necessary that labour should be mobile. Indeed, a few weeks ago, there was a discussion in your Lordships' House at the instance of the noble Lord, Lord Beveridge, in which the noble Lord, with the support of a number of noble Lords, advanced the notion that it should be a compulsory element in all pension schemes that pension rights should be transferable from factory to factory, in order that there might be mobility of labour. There is a good deal to be said for that without, of course, accepting the doctrine in any absolute sense. Surely one of the things which would discourage a person from moving to another job in another place would be the fact that he was buying his own house on mortgage and was unable to face up to what might be the difficulties resulting from his transfer to another place of work.
As the noble Earl, Lord Dundee, said, the limit of the amount to be advanced by building societies on any one property, not only pre-1919 property but also houses built between 1919 and 1940, is £2,500, except in the Metropolitan Police District and in the City of London, where the limit is £3,000. The interest rate is to be the normal rate of the building societies, less ½ per cent.— that is to say, the building societies are to get the money from the Government at 5½ per cent. No one would wish to object to that. In what I say, I hope I shall not be regarded as criticising the building societies. But if this rate, which is to provide ½ per cent. for management, is to be available to building societies, it is difficult to understand why it cannot also he available to local authorities. Local authorities have not a free access, not even at the present time, to the Public Works Loan Board. They are forced into the money market. They are borrowing, most of them, in small sums with almost repetitive commissions. Yet if they do borrow from the Public Works Loan Board, they have to pay 5⅞ per cent. for loans from one to fifteen years and 5¾ per cent. for thirty

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years. If they lend at 6 per cent., they have a margin of one eighth per cent., or at the most one quarter per cent., whereas the building societies are to get a margin of a half per cent. As regards loans by local authorities under the Small Dwellings Act, the margin is limited to one quarter per cent., which would bring the rate up to 6⅛ per cent.
Under the Housing Act financial provisions the margin is settled by the Minister, and the Minister has settled margins which go up to 1¼ per cent. Having regard to the fact that local authorities are to bear 25 per cent. of the standard improvement grants, which is a new obligation, a new financial burden, cast upon the local authorities—it is the case that they have to provide a similar percentage in respect of improvements under the 1954 Act, but this is a new financial obligation—if ratepayers are to be saddled with this further obligation, which operates for the benefit of selected persons (namely, those who have taken advantage of the grant provisions to carry out improvements), it is difficult to understand why local authorities should also be penalised by having to pay more for money which is applied for precisely the same purposes than the building societies have to pay. Why is there this discrimination? I am sure that we should all like to hear the noble Earl in explanation and. if possible, in justification of this unfair treatment of local authorities and, through them, of the ratepayers. After all, the local authorities have done a good job of work in making loans to house purchasers. It is true that the total of their advances is nothing like so much as the total advances of building societies, but they have advanced between one-sixth and one-seventh of the total advances made overall by the building societies and other institutions, including local authorities themselves.
There is another inequity, I think, towards the local authorities. As I understand it, under Clause 2 the building societies can repay any advances made by the Government, at the Minister's discretion, with the consent of the Treasury. The White Paper, however, says quite definitely, in Appendix I, that the building societies may repay whenever they wish; and the Minister made a similar statement on December 15 last
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when he said: [OFFICIAL REPORT, Commons, Vol. 597 (No. 35), col. 796]:
"Flexibility will be afforded by the right, which we intend to allow the building society, to repay the whole or any part of the loan at any earlier time it chooses."
The local authorities are not in that position. Up to October, 1953, a local authority could not repay in advance of the due period monies borrowed from the Public Works Loan Board, except under penalty. By a Treasury Minute of October, 1953, special repayments of monies advanced for house purchase could be made without penalty if the borrower himself or herself was repaying earlier than the due date. That is a limited easing of the situation, I agree. But the building societies can, without let or hindrance, repay all that they have borrowed, and can re-finance elsewhere, maybe on better terms than they are getting from the Government, whereas a local authority is in a position only to repay particular loans of which they have themselves agreed to accept earlier repayment. This seems to be another unfair discrimination against the local authorities.
The local authorities are to be permitted to grant loans up to 100 per cent., as against the former limit of 90 per cent. The argument, of course, has always been that it would be unwise to advance up to 100 per cent., because it is desirable that the borrower should have a stake in the property. Apparently that argument is not thought to apply when it is local government money, but it is when it is somebody's else's. However, the borrower has a stake in the property from the moment that he signs, as well as a personal liability; and his stake increases, although his liability diminishes, with every payment that he makes.
There is one matter that I should like the noble Earl to clear up, and that is whether loans under the scheme through a building society are limited to owner-occupier. There is a conflict of statement, I think, by the Minister of Housing and Local Government. On December 15 last he said [OFFICIAL REPORT. Commons, Vol. 597 (No. 35), col. 791]:
"Exchequer money will be available for financing all mortgages granted on houses falling within the age and value limits set out in Clause 2 …"
In Clause 2, so far as I can see, there is no reference to owner-occupation. There are a number of occasions when those

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words are used in the White Paper and in the brochure which was sent out by the Building Societies' Association; and it is the case that at column 788 of the OFFICIAL REPORT the Minister further said:
"Never before has it been possible for any credit-worthy person wishing to buy an old, sound house to be sure of getting a 95 per cent. mortgage on it. That is what this Bill achieves."
There is no mention there of the advance being limited to owner-occupiers. Yet I am bound to say that in column 795 the Minister said:
"This is a scheme for enabling people to buy houses to live in themselves."
There seems to be a confusion of statement by the Minister which in some respects is contrary to some of the statements made in the White Paper, and we should appreciate it if the noble Earl could clear that up.
Then we come to the question of grants, dealt with in Part II, which I believe was dubbed towards the end of the proceedings in another place as "the washbasin part", resulting from the fact that it was due to efforts made during the Committee stages of the Bill to include wash-hand basins in the standard amenities. These proposals, with the grant which accompanies them, seem to me to be an effort to rescue "Operation Rescue" of 1954, which has really been a lamentable failure; and even the noble Earl was forced to admit that within the last two or three years the measure of improvements which have been carried out under those provisions has been quite unimportant. It is now proposed, as it were, to increase the bribe to landlords to carry out and provide rudimentary, elementary amenities. They are to have additional facilities, and they are to be relieved of a number of the conditions. As the Manchester Guardian said:
"This appears to be the last chance for private landlords."
As I have said, the Government propose to pay 50 per cent. and the local authorities have to carry the burden of 25 per cent.
This question of amenities is one of the most serious aspects of the housing problem, and these proposals do not touch the fringe of that problem, when we remember, as is the case, to our shame, that nearly half the families in this country are living in accommodation which is
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sub-standard and which lacks the most elementary conveniences and amenities. There are nearly 7 million dwellings in this country with no fixed bath of their own. There are 3 million who share or are entirely without a water closet; nearly 2 million who share or are without a kitchen sink, and over 1 million who share or are without a cooking stove. Those figures are taken from the Census of 1951, and the position has not very much improved, if it has improved at all, since then.
As the noble Earl said, Part III of the Bill concerns Scotland, and will follow his wise guidance and not go into the details of the provisions dealing with Scotland. There are a number of other miscellaneous provisions, including the grant to building societies of the status of trustee in respect of funds deposited with them. I think everyone will agree that this is a wise thing to have done, subject, of course, to the building societies being approved in accordance with the terms of the scheme set out in the White Paper. The building societies have for many years sought this objective, and I think we can all be reasonably pleased that they have now achieved their object, although it is perhaps a little unfortunate that it should be mixed up with the many other considerations involved in this Bill.
As I said at the start, this is not an important Bill in the context of the housing problem. It is part, as it were, of the patchwork of housing legislation in which the Government and their predecessors have indulged, but which has left the housing problem still one of the most acute social problems of our time. It is the case, though not, perhaps, in the sense that was indicated by the patron saint of the Tory Party, Disraeli, that there are in this country two nations—one nation enjoying decent housing accommodation, and the other living in conditions which are an affront to any sense of decency in any civilised country. It is that problem which needs to be tackled, and it cannot be dealt with on the basis of the proposals of a patchwork order such as are included within this Bill. We shall not oppose the Second Reading, because, although the Bill may enable a number of persons to acquire pre-1919 houses, and may result in a few

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houses, relatively speaking, being improved by the provision of the standard of amenities set out in the Bill, the real problem will, for the most part, remain untouched.

WHITE PAPER ON NYASALAND
THE EARL OF HOME: My Lords, as promised at Question Time, I wish to tell your Lordships that a White Paper on the series of events in Nyasaland leading to the disturbances, will be available in the Printed Paper Office within a few minutes.

HOUSE PURCHASE AND HOUSING BILL
4.7 p.m.
Debate resumed.
LORD HYLTON: My Lords, I hope your Lordships will agree to give a Second Reading to what has been described as "this small Bill". It is a small Bill, but I would suggest that if a small Bill does good it should not be condemned for its smallness. The noble Lord who has just sat down poured cold water in all directions on practically all the provisions of this Bill. No doubt he had views as to how the matter should be dealt with. He ventured to say that he did not decry the principle of home ownership or house ownership. I am sure we were all grateful to hear that fall from his lips. It seems to us on this side of the House that any provisions which facilitate the purchase of houses by private people are for the good of the country. We on this side of the House believe in a property-owning democracy. We should not willingly see the municipalisation of all the rented houses in this country. But that is by the way.
This Bill, which is quite simple. does two things. It extends two principles which have long been acknowledged as good ones from Benches on this side of the House: the principle of facilitating house purchase, and the principle of simplifying and extending the provisions of the existing improvement grants. The noble Lord. Lord Latham, described the 40,000 improvement grants in any one year as almost puerile. I
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believe that the improvement of the homes of 40,000 families in any one year is not to be laughed at in that way. They are 40,000 families of English people. If this Bill, by introducing a new standard grant, increases the number of improvement grants made during any one year, then I believe that the majority of people in this country will say that it is a good thing brought about by this Bill. I shall not follow the noble Lord in his argument about the discrimination between the building societies and local government authorities, because I feel convinced that the noble Earl who moved this Bill will deal with it in his reply.
I should like to say something about Part II of the Bill, which is a subject of which, as an owner of houses, I have had some experience and in which I must, of course, declare an interest. The Minister, who has been frequently quoted this afternoon, gave in another place some interesting figures on improvement grants. He said that in the first five years after 1949 only 10,000 improvement grants were made. Since the machinery of improvement grants was greatly improved by the 1956 Housing Act those grants have been running at the rate of 35,000 a year, which is an enormous increase. I myself should like to see the number of annual grants doubled. There are in this country a very large number of houses that are over 100 years old. The number is estimated to be more than one million. If even 50,000 can be dealt with in one year, either by improvement grants or by standard grants, then a very great improvement will have been made. I do not want to suggest reasons why improvement grants were not made in earlier years owing to the policy of another Government, but very little could be done in improving old houses between the years 1939 and 1956.
I ventured, I think in 1954, in a debate on the Housing Repairs and Rents Bill, to say that the success of improvement grants depended absolutely on the cooperation of the local housing authorities; that that had not been forthcoming under the 1949 Act. and that, unless it was forthcoming under the new Bill, these clauses on improvement grants would be non-effective and improvements would not be made. That, my Lords, remains true to-day. Unless the

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local housing authorities make grants, then these improvements are unlikely to take place; and it is not the case that all local authorities are making grants, or are making them at the 50 per cent. rate laid down in the Act. Many of them make grants of 33 per cent., some of 25 per cent., and others make no grants whatsoever. That is, to my mind. a distressing feature of the attitude of some local authorities to the intention of Parliament when these Acts authorising improvement grants were made.
I could quote one case to your Lordships. Quite recently, a body well known in this House, the Church of England Commissioners, carried out all the work necessary to qualify for an improvement grant, and the value of that grant was assessed at £400. After the matter had been debated by the local authority concerned they came to the conclusion that they would pay half the grant of £400, and therefore a grant of £200 was made. One of the reasons given was that the Commissioners were the owners of a considerable amount of old house property within the town, and that if a full grant were paid on this application, which had passed all the officials and had passed the housing committee, a full grant might have to he paid on the other property owned by the Commissioners. So it would appear that there was no burning desire to improve or to see that these unmodernised properties were improved. There was rather a desire to make the grant as small as possible because there might have been a financial demand in future years on this particular authority. I believe that that attitude by housing authorities, who, after all, are responsible for establishing and maintaining a proper standard of housing throughout the district for which they are responsible, is rather deplorable.
I should like to refer just for one moment to the qualifying conditions for the standard grants. Very properly, the standard grants can be given by a local authority only if the house is fit for human habitation. No one would wish to see a grant made for a house not fit for human habitation, but the definition of fitness for human habitation, which appears in Clause 29 (2) of the Bill, is governed by Section 4 of the Housing Act, 1957; and that gives a list of matters which must be taken into account in
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determining whether the house is fit. The house must be, very properly, in good repair and of good stability and free from damp and so on. Two of the conditions to be taken into account are the state of the natural lighting and the state of ventilation. I would ask the Minister, when he is advising local authorities or issuing circulars on this matters, to urge that where houses are in rural areas, not in urban areas, there should be some flexibility in the interpretation of lighting and ventilation. Your Lordships well know that many of these houses in the country are surrounded by unlimited air and light, so that there is not the same necessity for the urban Standard in either of these two matters.
The matter affects these rural houses in this way: that in order, perhaps, to comply with the requirements of the local authority on a question of lighting, all the window frames and sashes have to be taken off and the whole elevation of the house has to be altered so as to gain the additional light which might be necessary in an urban setting. With the unlimited light in the country, I question whether the same necessity arises there, and what happens is that, in providing new windows and so on, the elevation and attractive appearance of many old houses in the country are irretrievably lost. One sees constantly in the Press appeals from various public bodies, such as that concerned with the preservation of rural England, who are crying out against the destruction of the appearance of well-known village streets in the country. Much of this could be avoided if the housing authorities used a little more flexibility in their approach to these two questions.
There is only one other question that arises on standard grants—namely, what will be the position where no main sewers are available. That is often the case in the country when one is dealing with isolated houses and many small hamlets. The local authority have not provided a sewerage system, and perhaps will not do so for many years; and in some cases never. How can a standard grant be given unless there is some provision for the inclusion of the expenditure arising from the provision of separate tanks? It seems to me that it is most important that this additional provision should be made in this connection. It is

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perfectly clear—indeed, it is obvious to a child—that one cannot have a water closet without proper water disposal; and if there is no sewer there is only one way of disposing of the effluent, and that is by means of a separate tank, to which there is no reference in the Bill. Finally, I would say that I believe that all owners of houses are only too anxious to increase the comfort of those living in them. If this Bill does anything to facilitate that process then it is well worth passing.
4.24 p.m.
LORD GRANVILLE-WEST: My Lords, my noble friend Lord Latham described this Bill as a modest one; the noble Lord, Lord Hylton, who has just resumed his seat, described it as small. I must say that, listening to the most agreeable speech of the noble Earl, Lord Dundee, I found nothing there which dissented from the descriptions given by the two noble Lords who followed him. At any rate, one thing is quite clear: that nobody who has taken part in the debate so far has found it necessary to indulge in the extravagant language which the Minister of Housing and Local Government indulged in when he moved the Second Reading in another place. He described this Bill as [OFFICIAL REPORT, Commons, Vol. 597 (No. 35), col. 787]:
"… the greatest measure for assisting home ownership that has ever been introduced by any Government."
That is a description which has not been applied in your Lordships House, probably for good reason.
The right honourable gentleman the Minister of Housing and Local Government will undoubtedly soon have to face a General Election. The statement that he made reminded me very much of other pre-Election declarations, such as. "No cutting of the food subsidies" and "No removal of the Rent Restrictions Act". At any rate, it is clear, as has already been said, that there are large numbers of people in this country who desire to own their own homes—many because it is a desirable thing in itself, many others because they are under the great anxiety and sense of insecurity created by the decontrol of rent-restricted property and by the ever-increasing rents which are being imposed upon them. Therefore, it is right that people should desire to acquire their
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own homes, to give them that socially desirable sense of security which home ownership gives.
But what does this Bill do towards the attainment of that necessary and desirable object? In my submission, it does nothing more than make available to building societies a fund not to exceed £100 million and the Minister hopes that they will not draw upon it. That is what the Minister said when moving the Second Reading in another place. Building societies have in the past provided funds for the purchase of pre-1919 houses—houses which comply with the conditions which are laid down in this Bill. There has never been any difficulty in past years, except during the past three years when building societies and others in this country found exceeding difficulty because of the credit squeeze and the high interest rates which were imposed upon them. It has been only during the past three years that building societies have found any difficulty in advancing money for the acquisition of pre-1919 houses. But during that period they invested £50 million, most of it upon these houses for people who desired to purchase them for their own occupation. Prior to that, building societies were always willing to lend money on pre-1919 houses which reached the standards of good quality, and providing the borrower was creditworthy. Indeed, there were often times when building societies were prepared to advance more than the basic allowance of 75 per cent. which is provided by this Bill, provided the borrower could offer additional security which was acceptable to the building society.
That is all that this Bill does. Building societies will lend the basic advance of 75 per cent. upon the purchase price or the valuation of a pre-1919 house, whichever is the lower, and if the borrower desires to have an advance in excess of 75 per cent., then, under this Bill, the building society will make that advance, providing adequate security is forthcoming. There is no great magic in that. In my submission to the House, all that this Bill is doing is giving the opportunity to building societies to draw upon the £100 million fund which it is hoped by the Government they will not utilise at all. As I have mentioned, there was no difficulty in obtaining advances on pre-1919 houses—at any rate pre-1919 houses which were on freehold tenure. There

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never was an opportunity for a leaseholder of a pre-1919 house to obtain a mortgage on the acquisition of that property; nor will anybody who wishes to buy a leasehold pre-1919 house be able to obtain an advance from a building society even under the provisions of this Bill, for the obvious reason that the term of years that will remain will not give the building society adequate security for the money they advance.
It is clear, therefore, that one of the great problems that we are facing in this country to-day is the large number of leasehold houses which cannot be affected by the provisions of this Bill; and another disadvantage of leasehold houses of that age is that they deteriorate, and have deteriorated, at a more rapid rate than do freehold houses, because a leaseholder has not the same interest as a freeholder in maintaining the property. In fact, the Royal Commission appointed to Inquire into the Housing of the Working Classes at the end of the last century reported with regard to the leasehold system that the prevailing system of building leases is conducive to bad building, to deterioration of the property towards the end of the lease, and to want of interest on the part of the occupier in the house he inhabits, and that legislation to provide for the acquisition on equitable terms of the freehold interest on the part of the leaseholder would conduce greatly to the improvement of the dwellings of the people of this country. This Bill will do nothing to improve the situation of pre-1919 dwelling-houses held under the leasehold system.
My submission to your Lordships' House is that the Bill is but a pale reflection of the proposals which the Labour Party have set out in their policy document Homes for the Future. When the Labour Party are returned to power their policy will much more effectively promote extensive home ownership than anything which this Bill can do. It will be possible for people desirous of acquiring their own homes to obtain 100 per cent. advances at a cheap rate of interest, not at the 6 per cent. rate now being charged by the majority of building societies following direction and action for which Her Majesty's Government are responsible; and it will further improve the standard of hundreds of thousands of the houses of which I have been speaking—leasehold houses—by making provision
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for the enfranchising and modernising of them. In this scheme local authorities as well as the building societies will have an important part to play in rescuing Britain's housing resources.
I believe that everybody agrees that the improvement grants effect an improvement in the present position, and I think they are welcomed by all concerned. I am glad to see that recognition is at last being given to the building societies by conferring trustee status upon them. Building societies have in the past rendered a great social service to the people of this country and have enabled thousands of people to acquire homes which otherwise it would have been impossible for them to obtain. I must confess to a great affection for building societies. After all, they were originally social and political revolutionary movements inspired by men of courage and vision determined to ameliorate the conditions of the working classes which at that time under the factory system of the Industrial Revolution, were harsh and degrading. Men joined together in trade unions, co-operative associations and political organisations as a means of self-protection; but it was the combining of men one with another to try to build houses for one another which started the great scheme of the building societies which has proved of great value to the people of this country.
It was not only in the field of social endeavour, however, that the building societies rendered great service. They made a great contribution towards the spread of democracy, too, for it was through the medium of the building societies that large numbers of men were able to obtain the vote. Some of the slogans used in the early days, when building societies were in process of formation, were, "Qualify and win counties", and "Votes for the people". It was the means by which the franchise was spread among large numbers of the people of our country, and I must confess that I have a warm affection for the building societies movement. I believe the country owes them a great debt of gratitude. They have enriched the pages of British social history, and I am glad that at this stage trustee status is being conferred upon many of them who qualify under the terms of this Bill.
I am a little intrigued, however, to find that the conferring of trustee status is

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linked with the mortgage provisions which are contained in the Bill. I wonder if the noble Earl could tell us whether the conferring of trustee status was a condition of their accepting the mortgage provisions under the Bill, or whether they required trustee status as a condition of their co-operating with the Government under the provisions of this Bill. There is the provision of the £100 million on which the building societies can call if it is necessary for them to do so, although Her Majesty's Government hope they never will—and if they do so the Government reserve to themselves the right to serve six months' notice to terminate the operation of the scheme. But, apart from that, I see no greater obligations placed upon the building societies, and I should like to know—and I hope the noble Earl will be able to tell us—whether trustee status was given as an inducement to the building societies to take part in what was in fact, quite unknown to them, a little piece of pre-Election "window-dressing."
4.38 p.m.
THE DUKE OF ATHOLL: My Lords, before the noble Earl replies, I should like to say a few words about Part III of the Bill. I am sure that it is particularly welcome in Scotland, as it brings the provisions with regard to voluntary alienation in line with the position in England. I must here declare an interest. I know that many people in Scotland have found these voluntary alienation provisions to be much less favourable in our part of the world than they are South of the Border; and I am delighted to see that Her Majesty's Government are to rectify that. I would endorse the plea made by the noble Lord, Lord Hylton, that local authorities should have to make standard grants and should not be allowed to refuse them for reasons which, as far as I can make out—as Clause 9 does not apply to Scotland—they need not specify in writing. In England, where the clause applies, a local authority who refuse a grant can, at the request of the person applying for the grant, be made to give their reasons for refusal in writing. I believe that this does not apply in Scotland, and, as the noble Earl has said that this Bill brings Scotland into line with England, perhaps he can tell us why it is that Clause 9 has not been inserted in the Scottish section.
4.40 p.m.
THE EARL OF DUNDEE: My Lords, I should like to thank your Lordships for the general support which has been given to this Bill. Whether it has been warm, cool or lukewarm, it is, anyhow, support. We are not accustomed in this House to using exaggerated language; at least not always. The most general criticism. I thought, which seemed to be directed against the Bill was that the Minister in another place had described the probable effects of this Bill in terms which, in the opinion of some noble Lords, were slightly exaggerated. I should be very glad to think that no Bills of which I am in charge will ever have to meet more serious criticism than that.
I had intended, in my opening remarks, to answer one question asked by the noble Lord, Lord Latham. Indeed, it was a question which he asked me before the debate began, and which I should have answered if I had not been obliged to hurry into the House in order to answer a Question. It was whether these loans authorised by the Bill would be limited to owner-occupiers, because, as the noble Lord rightly pointed out, there is nothing in Clause 2 of the Bill to suggest they should be so limited. But they are, in fact, to be limited to owner-occupiers under the agreement made between the Government and the building societies, which is described in the White Paper, to which I think the noble Lord, Lord Latham, has already referred. I think he mentioned that in the middle of page 6 of the White Paper it is stated that a grant will be made to any borrower who in the opinion of the Society is creditworthy for a mortgage "for the purchase. for owner-occupation, of a private house". That phrase "for owner-occupation" is intended to exclude loans for other purposes under this agreement made with the building societies.
I am also very grateful to the noble Lord, Lord Latham, for raising the question of the £100 million limit which is in Clause 2 of the Bill. On page 3, in subsection (4). it is stated that:
"Advances made to building societies under this Act shall not together exceed the sum of one hundred million pounds."
That provision is simply put in for the salutary purpose of maintaining Parliamentary control, a principle which I think is always observed in our legislation. But

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that does not imply by any means that we contemplate that we are going to advance only £100 million under this Bill. We cannot anticipate the rate at which money will be asked for. The noble Lord thought it possible that we might spend £100 million in two years. I do not know whether that will be the approximate rate of expenditure or not—it may be faster than that. But when the limit of £100 million is exhausted, or is approaching exhaustion, the Government will certainly ask Parliament to authorise more. We by no means intend that the increased funds made available for house purchase under this Bill should, in the long run, be limited to so small a sum.
LORD LATHAM: My Lords, may I ask the noble Earl whether it is the case that this is not a calculated figure but just a spot figure?
THE EARL OF DUNDEE: My Lords, that is quite right. We have not tried, because we do not think it would be practicable, to make any estimate, either of the sum of money that should be spent or of the period of time in which any hypothetical sum of money might be used up, because we do not know how fast the process is going to be. The £100 million is simply, as the noble Lord suggests, a convenient round sum which has been inserted in the Bill for the purpose of maintaining the principle of Parliamentary control over our public expenditure.
The noble Lord, Lord Latham, also asked whether the general financial policy of the Government, which has been aimed for some time at restraining inflation, had had the effect of causing the shortage of money which has prevented applicants for building society loans from getting the loans which they want. I think that in the case of local authorities that may quite possibly be true to some extent. If we look at the figures we see that in the year ended March, 1956, local authority loans for house purchase amounted to £69 million; in the next year, 1956–57, to £64 million; and in the following year, 1957–58, it had been reduced to £50 million. We do not get the same impression from the building society figures, which were £394 million in 1955 and in 1956, £334 million; and in 1957 they went up again to £370 million. In fact,
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I think your Lordships are aware that, because of the measures which had been taken to prevent too much borrowing and too much thoughtless expenditure which might lead to inflation, the amount of savings in the last two years has increased to a very satisfactory extent; and, of course, one of the ways in which small savers of money are often most inclined to invest their savings is by putting them into building societies. There has been for some time a shortage of funds in the possession of building societies because the demand for loans for house ownership has been increasing; not, I think, because the building societies have been getting less money from their depositors than they did before.
The noble Lord, Lord Hylton (who has apologised for not being able to stay until the conclusion of the debate), made two points which we shall certainly bear in mind. One was the general point about lack of uniformity in practice of local authorities. As we all know, some local authorities give only part of the improvement grant; some do not give any at all. There are no fewer than 1,500 local authorities in the country, of many different types, and I do not think we cart expect uniformity of practice among all of them, and I do not think it would he desirable for the Government to interfere too much with local authorities' freedom of action. But I would point out to the noble Lord that under this Bill we do at least make the improvement grants in respect of these new standard improvements payable as of right by Statute, and in that respect we have introduced a measure of uniformity which did not exist before. Beyond that, I think that for more extensive improvement work the existing arrangements observed by local authorities must continue to apply for the time being. The local authorities must be left with the discretion to decide in what circumstances they will take advantage of the improvement grant under the Housing Acts. Personally I should like more of them to do so, and I believe it is usually in their own interests that that should be done. I am sorry that my noble friend Lord Hylton was unavoidably unable to remain, but the other points which he mentioned I will pass on to my right honourable friend, and they will be considered by the Government.

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The noble Lord, Lord Granville-West, asked why trustee status had been conferred on, or was going to be conferred on, certain building societies; whether it was a result of some bargain, and what the motive was. The reason why we propose that trustee status should be conferred on some building societies is in order to enable them to raise more money. They need more money because more people want to raise loans for house purchase; and giving them trustee status will clearly enable them to do more business than they are doing now. As to the conditions, about which the noble Lord asked, they are all contained in Appendix II to the White Paper, to which I referred in my opening remarks. I think your Lordships all have copies of the Paper and you can easily see the conditions which will have to be fulfilled by a building society in order that the Chief Registrar may approve of its being given trustee status.
LORD HAWKE: My Lords, may I interrupt the noble Earl to make one small point? When he is reporting this debate to his right honourable friend the Chancellor of the Exchequer, would he remind him that some years ago the Exchequer dealt rather a severe blow to the profits of these building societies by altering the basis of the computation of sur-tax? If he is giving these building societies trustee status, he obviously wants to increase the profits, and a rescinding of that particular requirement will go a long way to doing that.
THE EARL OF DUNDEE: I will certainly look into the point which my noble friend has raised.
I am very glad that my noble friend the Duke of Atholl intervened to say a word on the subject of improvement grants in Scotland; and I will also carefully examine the question which he asked about Clause 9. My impression was that the conditions governing payment of improvement grants in Scotland had been entirely assimilated to those in England, and certainly voluntary alienation has been excised from the conditions: but I would rather not answer "off the cuff" his question about Clause 9. I am glad that he raised it, and I
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will certainly send him a reply at the earliest opportunity.
My Lords, I certainly do not want to exaggerate the merits of this Bill, but I cannot agree with some noble Lords in deprecating it. I cannot agree that it is an almost inconsiderable piece of legislation. Nor do I think it fair to say that our present housing policy is not dealing with these problems. In regard to the first Part of the Bill, I have already told your Lordships that we cannot give any estimate either of the amount which we are likely to be called upon to advance, or of the celerity with which it will be spent; but we have reason to expect that it will, in the near future, make a very appreciable difference in the number of people who are able to buy their own homes. As for the second Part, I do not think that 40,000 or 50,000 houses reconditioned every year is an in considerable quantity. I think it is a very valuable contribution towards the solution of the housing problem in this country; and under this Bill we hope and expect to increase very greatly the number of houses which are annually reconditioned.
As for our general policy of housing, with which this Bill is concerned only in certain respects, I do not think that it is a discreditable one. We expect to build in England this year 250,000 houses, of which 50,000 or 60,000 will be for the purpose of slum clearance. For some years since 1952 we have reached the figure of 300,000 houses a year for Great Britain. In Scotland, we achieved a record figure of 38,000 houses in one or two years—and I remind your Lordships that the previous pre-war record in Scotland was only 26.000. Although I certainly hope that I shall never be—and I am sure none of your Lordships will ever want to be—complacent about the housing problem in this country, I do suggest to your Lordships that the record of this present Government is better than the record of any other, and that it is one of which we need not be ashamed.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

SUPREME COURT OF JUDICATURE (AMENDMENT) BILL
Brought from the Commons; read la, and to be printed.

COUNTY COURTS BILL [H.L.]
OVERSEAS RESOURCES DEVELOPMENT BILL [H.L.]
Returned from the Commons, agreed to.

CONSOLIDATED FUND BILL
Brought from the Commons, endorsed with the certificate of the Speaker that the Bill is a Money Bill, within the meaning of the Parliament Act, 1911, and read 1a. Then, Standing Order No.41 having been suspended (pursuant to Resolution), Bill read 2a; committee negatived. Bill read 3a, and passed.
House adjourned at three minutes before five o'clock.