§ 2.42 p.m.
§ Order of the Day for the Second Reading read.
THE MINISTER OF STATE, SCOTTISH OFFICE LORD CRAIGTON)
My Lords, I beg to move that this Bill be now read a second time. Your Lordships will be familiar with the White Paper Housing in Scotland, published in November last year, which contains the background to, and the reasons for, the present Bill; so I will say only a word or two by way of introduction.
In the sixteen years since the war, over 450,000 houses have been built in Scotland. In human terms this means that over one-and-a-half million people in Scotland, something like a third of the population, have moved into a brand new house since the war. This is a very considerable achievement, and I am glad to pay tribute to all those who have played a part in it—principally, of course, the local authorities. But we cannot rest content with this: though much has been accomplished, much remains to be done. Many families have 5 moved into modern homes, but others are still living in conditions of wretched squalor which really should not exist in the second part of the twentieth century. The Government are, therefore, determined to continue to stimulate house-building programmes until every family in Scotland has a decent home, with all the facilities necessary for civilised living.
We recognise that local authorities must continue to be the principal providers of subsidised housing for those who are not able to provide a modern home for themselves. The main object of the Bill is to recast the present pattern of housing subsidies, so as to provide the maximum possible help and encouragement for those local authorities who most need Exchequer assistance. At present, as the House knows, subsidies are, in general, paid at the same flat rate per house for all local authorities. The difficulty about this is that the circumstances of local authorities differ widely: some are better off than others, and some have greater housing needs than others.
This Bill, therefore, replaces the present flat-rate subsidies by a new system giving higher subsidies to those local authorities who are still faced with substantial housing programmes and are badly placed financially to tackle them. The object is to redistribute the present amount of Exchequer assistance for new houses, so that the money is used to better advantage. We estimate that over the first few years of operation of the subsidy the cost to the Exchequer will be about the same as if the present subsidies were to continue; thereafter, expenditure may be expected to rise.
The provisions giving effect to this new conception of subsidies are contained in Clause 3, with certain associated machinery provisions in Clause 1 and the First and Second Schedules. From the new pattern will be excepted only houses provided for special purposes, such as overspill and incoming industrial workers—and also, of course, houses built by new towns, housing associations and the Scottish Special Housing Association. I will refer to these in a minute. For the general run of local authority houses there will in future be two basic rates of annual subsidy: the lower rate of £12 per house 6 and a higher rate of £32, compared with the present flat overall rate of £24. In addition, there is provision for supplementary subsidies for local authorities whose needs are particularly great, up to a total possible subsidy payment of £56 per house.
Which of these rates is paid to a particular local authority will depend on the result of a "resources test" applied to their housing revenue account, on the basis of a notional income related to the gross valuation—that is, the valuation as assessed under the Valuation and Rating (Scotland) Act, 1956—of all the houses in the account. The actual income from existing Exchequer subsidies and any other sources will be included unaffected in the resources, with, in addition, a notional income from rent and rate in place of the existing one. This notional income will be obtained by taking the gross valuation of all the local authority's houses and adding to it a sum per house equivalent to half the amount by which the average gross value falls short of £60. The new gross values of the local authority's houses represent an assessment, within the conditions laid down by the 1956 Act, of the letting value of the houses. But the traditionally low Scottish rent levels have to some extent depressed market values; and we have therefore allowed for this by providing for the adjustment of actual area average gross values by bringing them halfway towards the notional figure of £60.
If the total income on the housing revenue account, adjusted in this way, is greater than the local authority's annual housing expenditure, then the authority will be regarded as having adequate potential resources and will qualify only for the lower rate of subsidy—that is, £12. If, however, the adjusted income is less than the actual expenditure, or if the surplus is merely marginal, then the authority will qualify for the higher basic rate of £32. In addition to the £32, supplementary subsidies of £8, £16 or £24 will be paid to local authorities who have both a general rate burden above the Scottish average and an unduly high housing deficit, as provided in the Second Schedule. The resources test will be applied from year to year so as to take 7 account of each local authority's building programme. This means that if an authority which in the early years of the new subsidy has a surplus—and thus qualifies only for the £12 subsidy—goes into deficit because of continued building, it will then be able to qualify for a higher rate of subsidy.
My Lords, the Bill contains a further provision associated with this subsidy structure. All these subsidies will normally run for 60 years, as subsidies do under present legislation. Experience has shown that over a period as long as 60 years great economic changes can occur; so the Bill gives the Secretary of State power by order, under Clause 8, to reduce, terminate or curtail the duration of subsidies payable on houses approved under the Bill. What is new about the provision in Clause 8 is that, unlike the existing powers—which provide for the review of subsidy only on houses approved in future—it will now be possible for the Secretary of State, after ten years from the passing of this Bill, to review subsidies already in payment on houses approved under the Bill. The power will not be exercised without full consultation with the local authorities, and cannot be exercised unless approved by the other place.
These then are the main subsidy proposals. But the Bill also makes a number of adjustments in other subsidies, partly in the light of experience and partly to fit in with the new basic pattern of subsidies. We have, for example, in Clause 5, put the subsidy for multi-storey flats on to a new basis, replacing the present variable subsidy by a flat rate addition of £40 per house. We hope that this will simplify the procedure and enable us to reduce the present detailed scrutiny of local authorities' proposals. We are also proposing to help local authorities faced with expensive schemes of urban renewal and redevelopment by introducing a brand new subsidy for houses built on expensive sites. This is contained in Clause 7 and the Third Schedule.
Clause 4 retains the existing subsidy for houses provided by local authorities for the agricultural population, in the form of a differential of £12 on top of the appropriate basic subsidy. I should mention here a further provision connected 8 with privately-owned agricultural housing: that is, the provision in Clause 32 enabling the occupancy condition attached to an agricultural house built with the aid of grant to be relaxed by the local authority where the house is not required for occupation by a member of the agricultural population.
Two other special subsidy provisions are to be found: one in Clause 6, which re-enacts the existing additional subsidies to meet the cost of providing rights of support or of measures such as building in stone required to preserve the character of a particular area; and the other in Clause 10, which extends the existing definition of a house to enable the normal subsidy to be paid for small flatlets provided for old people. This will cover, for example, the type of accommodation which includes shared bathroom facilities. We hope that this will enable local authorities to make better provision for meeting the special needs of the growing number of our old people.
To complete the picture I should mention that under Clause 2 we are retaining, and in certain cases increasing, the fixed-rate subsidies payable for the following types of houses. The overspill subsidy remains at £42 as at present; the subsidy for houses built by the Scottish Special Housing Association, which is now concentrating on overspill, will be at the same rate; the subsidy for houses built by local authorities to meet the needs of incoming industrial workers is increased from £30 to £32; and the subsidy for houses built by housing associations is increased from the present £24 to £32.
So much, my Lords for the subsidy provisions of the Bill. There are, however, many people who do not need a subsidised house but who are not able or willing to go to the other end of the scale and incur the full responsibilities of buying and owning their own houses. Here we think that the housing associations can help, and we are proposing in this Bill a scheme of Exchequer advances to housing associations which build houses for letting at economic rents or for occupation on a joint-ownership basis. This is, quite frankly, an experiment, and the amount of the Exchequer advances is relatively limited. We want to find out what sort of a 9 market exists for this type of house. If the experiment is successful, we hope to persuade and encourage private capital to re-enter the field of housebuilding for letting. The Bill reinforces the efforts of housing associations by enabling the S.S.H.A. to take part in the scheme. The necessary provisions are in Clause 11, which refers to the housing associations, and Clause 18, which refers to the S.S.H.A.
The Bill also takes account of the fact that building new houses is not enough. Anyone who looks at a typical Scottish town will see that, as new houses have been built on the outskirts and people have moved out from the centre, the old stone tenements and other houses in the centre are being deserted and are falling into decay. Many of them are fast becoming slums—if, indeed, they are not slums already. In so far as they are slums, the subsidy and other proposals in the Bill should help local authorities to tackle effectively their demolition and replacement. But many of the houses, though sub-standard in many ways, are quite capable of being modernised. They can still be made into good homes, which will have the additional advantage of being nearer to the town centre than some of the post-war housing estates are.
The Bill, therefore, contains a number of provisions designed to help on the work of improvement. Clause 15 seeks to encourage the improvement of privately-owned, rented properties by enabling an owner to add to the rent an allowance of 12½ per cent. (instead of the present 8 per cent.) of his share of [...] 10 cedure relationg to unfit houses. An informal working party of officials was set up last year with the co-operation of the local authority associations. The working party considered what procedural changes would help local authorities in dealing with unfit houses. The proposals in Part III result from these consultations. Essentially, the purpose of this Part of the Bill is to streamline the procedure. The effect should be to speed up the clearance of the slums. There is no interference with the existing rights of those concerned, and I am not aware that any of the proposals are controversial, in a political sense.
Clauses 25 to 28, in Part IV of the Bill, regulate the repairing obligations of the parties to short leases. They ensure that in any lease which is granted for a period of less than seven years the landlord shall be obliged to keep in repair the structure and the exterior of the house, and certain main installations. The provisions constitute a useful protection for the tenant; though they do no more than set out obligations which, under Scots law, are what a good landlord already accepts as his responsibility. There has been no evidence in Scotland—as there has been in England—of any abuse in this respect, but we think it right to provide in the Bill against the possibility.
The only provision in Part V of the Bill to which I should draw your Lordships' attention in Clause 29. This strengthens the default powers available to the Secretary of State against a local authority which has failed to carry out its statutory duties in fixing the rents of its houses. Clause 29 does no more than make the existing default powers effective. This is all we are doing, and all we think it necessary to do. We are not making it any easier to put a local authority into default. The existing statutory powers and duties of a local authority in relation to the charging of reasonable rents for its houses will, therefore, remain untouched. What this clause does is to make sure that, where these powers and duties have not been observed by a local authority, and after the local authority has been found in default—following a public inquiry under the existing procedure—there is an effective means of ensuring that the default is set right.
11 The clause operates by enabling my right honourable friend to lay down a rents scheme which will be binding on the defaulting authority until it has itself put the default right and the default order is withdrawn. I emphasise that the Secretary of State's power to lay down a rents scheme also extends to laying down a scheme of rebates. And surely no-one can object to a rent pattern which ensures that those who are able to pay a reasonable rent do so, while the wind is tempered to the less fortunate by a properly conceived rebates scheme. I believe, and I hope, that the existence of these strengthened default powers will achieve their end without the Secretary of State's being obliged to use them. He certainly will not use them unless he has to.
Finally, I conclude my account of the Bill by noting that the Schedules contain, in addition to the machinery provisions I have already mentioned, the usual variety of consequential and other minor, unexceptionable amendments. My Lords, when we were discussing the Local Government (Financial Provisions, etc.) (Scotland) Bill a few weeks ago, the noble Lord, Lord Hughes, teased me for describing that Bill as "limited and urgent", and a previous measure as "small but useful". I now beg to move that this important and constructive Bill be read a second time.
§ Moved, That the Bill be now read 2a.—(Lord Craigton.)
§ 3.0 p.m.
§ LORD HUGHES
My Lords, the noble Lord, Lord Craigton, must be more of a mind-reader than I had previously given him credit for being, because I had thought of another adjective to apply to this Bill, though it was neither of the ones which he used. On this occasion I will not be jocular. Previously it would have been quite correct to say that I had been teasing the Minister, rather than anything else, but I am perfectly serious about what I propose to say on this occasion. My feeling about the Bill is that, in relation to the economic state of Scotland and the things the Government ought to be legislating for Scotland, this Bill is a piece of complete irrelevancy so far as the problems of Scotland are concerned.
12 The Minister gave an excellent résumé of the purposes of the Bill, and explained it almost completely clause by clause. I wish to congratulate him on the clarity of that exposition. When, however, he left the facts of the Bill and proceeded to draw his conclusions as to what would arise in the Scottish housing problem from the application of this Bill, then I completely disagreed with him. I should like to remind your Lordships of some of the things which the noble Lord said. After speaking of the number of houses Which had been built since 1945, he went on to say that much remained to be done. No one with any knowledge of the housing position in Scotland could say anything other than that. If we go to any of the larger centres of population, we must immediately become aware of the fact that there remains a considerable number of slum houses still in occupation. I think we must have a larger proportion of houses, both single-roomed and two-roomed houses, still occupied by families than almost any country in Europe has.
The noble Lord then went on to say that the purpose the Government have in mind is to stimulate house building until every family has a civilised dwelling—or words to that effect. I cannot see how the Government expect this Bill to accomplish that purpose. It was said by the Minister that the present amount of subsidy was to be redistributed among the local authorities; that what would be spent in the beginning would be much the same as is spent at the present time, and then in later years the sum would rise and be transferred from those who had less need to those who had greater need, [...] 13 of the authorities which are to receive a subsidy of £12 for houses provided under this Bill.
I know that in my own home town of Dundee that is the provisional calculation which has bean made. I notice that in speaking I am immediately to be followed by the noble Baroness, Lady Horsbrugh, who is as familiar with conditions in Dundee as I am, in view of the long period during which she was one of our Parliamentary representatives. It will not surprise her, and I am sure it will not Surprise other noble Lords who are familiar with Scottish problems, if I say that Dundee has just about as bad a problem as Glasgow has. Is it not surprising that, with that position, the two authorities with most to do are to be expected to do it on a subsidy of £12 for each additional house they build?
I have tried to work out some general basis of how this; subsidy arrangement is going to work, and, very broadly, it appears to work in this way. Until a local authority has built twice as many houses since 1945 as it did in the years between 1919 and 1939, it cannot possibly create the notional deficiency which would entitle it to the £32 subsidy under the more generous part of Clause 3. In terms of actual houses—I apologise once again for quoting the town I know best, but I use it merely as an example and because I can be quite factual about it—before the war some 8,000 houses were built in the city. Between 1945 and the present time, some 14,000 houses have been built. Yet, so far as can be ascertained, for the next two years at least, even with a building rate of 1,000 a year, the subsidy to be paid in Dundee will be £12 a house. And that at a time when the economic rent for a house to be built is of the order of £130.
No one outside St. Andrew's House knows where the figure of £60, which is mentioned in the Bill, came from. But we were given a kind of clue by the noble Lord, Lord Craigton, when he said that the gross annual values fixed in terms of the 1956 Valuation Act had been depressed to some extent because of the existing pattern of low rents in Scotland. Whether or not that is the case, I do not know; that is a matter of opinion, and in this context Lord Craigton's 14 opinion is as good as anybody else's, so I will not proceed to disagree with it. But if that is the case, then it would appear that at the present time something of the order of £60 would be considered by the Government to be a not unreasonable rent in Scotland. If the economic rent is in fact £130, and £60 is accepted as a reasonable rent to be taken from the tenant, that leaves £70. The Government are to find £12 of that; the other £50-odd as to come from the ratepayers. That does not strike me as being a way of encouraging Scottish local authorities to provide in greater numbers the quantity of houses required, and required so very speedily, if Lord Crargton's objective is to be reached.
In fact, we know from the returns which have been placed before Parliament by the Secretary of State for Scotland that the pattern of house production by local authorities in Scotland has been falling year by year. It fell because the reduction of the subsidy to £24—the result of the last Government measure to "stimulate" house building in Scotland—had the effect of discouraging many local authorities from re-embarking upon even the sort of programme that they had been carrying out hitherto. The effect on at least half of the local authorities in Scotland of reducing the subsidy to £12 must be to discourage them still further.
I think that the Secretary of State for Scotland would have been very much better occupied if, instead of producing this Bill, he had brought in some measure to help improve the general economic position of Scotland and thereby make it possible for more people to pay reasonable rents for houses. I do not stand here seeking to justify the level of rents which are charged by many local authorities in Scotland, but the difference between what is charged and the annual cost of a three-apartment house—£130—is not something which can be bridged in terms of this Bill. The Bill becomes, therefore, another of those measures which have been criticised on both sides of this House and in another place, in that its primary purpose is to transfer financial responsibility from the taxpayer to the ratepayer. If it is passed in its present form, this Bill will once again accomplish just that.
It is not my intention to follow Lord Craigton's example, excellent though it 15 was, in going through the Bill clause by clause. Some of the clauses, I consider, effect improvements on the present position, and I have confined my remarks to those aspects of the Bill which I dislike. When it comes to the next stage, I shall be putting forward specific proposals which I think will improve the measure. I should like to conclude by referring to one or two aspects which I think are particularly objectionable. In the first instance, I object to the provision in the first clause of the Bill which makes these proposals retrospective to November 1 of last year. The most that the Government are entitled to impose on local authorities in Scotland is that this measure should not take effect, from the reduction of subsidy point of view, until it has been approved by Parliament.
Secondly, I consider that the subsidies generally are completely inadequate in the present financial circumstances. After all, it was the present Government who increased the subsidies to as much as £42 15s. 0d. a few years ago, when they took account of the changed pattern of interest rates—that is, when interest had gone up from 3 to 6 per cent. The noble Lord will remember that, when we were discussing the Bill to which he referred, I was sufficiently unkind to quote his forecast of the interest rate pattern, which is still completely falsified by events, because local authorities are still paying 6½ per cent., and more, notwithstanding the present level of the bank rate. So far as the formula is concerned, I think it is unnecessary to elaborate. In its effect, it is grossly unfair to local authorities, and certainly in due course I wish to move Amendments to that clause.
In Clause 8, the Secretary of State seeks the power, Which so far as I can gather has never been given to a Secretary of State before, to abolish subsidies altogether. That, I think, is going much too far, even accepting the Minister's statement that over a period of sixty years great economic changes can take place. We do not need to look over a period so great as sixty years to recognise that that is a completely true statement; but what I think is quite wrong is that the Bill should assume, notwithstanding the pattern of the last sixty years—or of the last 600 years, for that matter—that in the next sixty years any 16 changes that are going to take place are those Which will make it reasonable only to reduce or abolish subsidies. If the Minister were really asking power to adjust subsidies to circumstances as they change from time to time, one would have expected that the wording would have been, "to take power to abolish or to alter subsidies". There at least ought to be some recognition of the fact that things might continue in the years ahead as they have been in the years past and move against local authorities.
An even more objectionable part of this provision is that which gives the Secretary of State, after a lapse of ten years, power to reduce or abolish subsidies with retrospective effect. While he cannot do that during the ten years after the passing of the Bill, if the then Secretary of State were so minded, 10½ years after the passing of the Bill he could introduce an Order restricting or abolishing subsidies and apply it for 5 or 6 years previously. He could put it back to the beginning of the Bill. This is one of the conceptions in the Bill which has had an extremely unfriendly welcome from local authorities in Scotland, and this is not confined to local authorities with Labour majorities or substantial numbers of Labour members on them. Authorities which are completely Progressive or Independent or Moderate, according to the local descriptions, have objected. They submit that the ordinary basis of a bargain between two parties is not going to exist.
Local authorities proceed on the basis that they will receive a subsidy of a given amount, even of the small amount of £12, and in 12 or 15 years, when they are committed to repaying money borrowed for a period of 60 years—your Lordships will remember that they have to borrow money for the whole of the period which they have laid down, which is 60 years—they may find that one element of their calculation has been withdrawn from them, after consultation, admittedly, but local authorities in Scotland have a bitter experience of what Ministers regard as consultation. They certainly say to local authorities, "We are going to do so and so: what do you think?" But unless the local authorities say that they think the same as the Minister, they are not both happy at the end of the day. Generally speaking, the Government go 17 a head and do what they said in the first instance. And that may well take place in this case.
The noble Lord, Lord Craigton, gave rebates his blessing. That was not surprising, because it is the policy of the present Government. It is also the opinion of many people outside the Government that the correct way of dealing with rents is to fix a reasonable rent, having regard to the general circumstances, and those who cannot afford to pay that rent should rely on a rent rebate to put the position right. That is the position to which I personally subscribe. But in this Bill, if there is to be a measure of rebate given, whether it is a modest rebate or whether in times of unemployment it becomes a substantial factor in the calculation, the whole responsibility for the rebate rests on the local authorities, because the rebate is not to be taken into account in determining the amount of subsidy that is payable. Also, if we ever had an approach to the conditions of unemployment that have existed in Scotland on so many occasions in the past and which have cropped up from time to time in the last ten years, we could have the finances of local authorities seriously disturbed, because the rebate is a matter entirely for the ratepayer and not one to Which the taxpayer is to contribute at all.
For these reasons, I cannot give any recommendation to a large part of this measure. I think that, bad as the existing provisions are, more houses are likely to be provided under the existing legislation than will possibly be provided under the housing legislation as this Bill amends it. In view of the fact that so much remains to be done, I think that in its subsidy provisions this Bill is a retrograde step and one which the majority of Scottish local authorities regret. I hope that your Lordships will make it possible to improve it in the next stage of our procedure.
§ 3.20 p.m.
§ BARONESS HORSBRUGH
My Lords, as I think the noble Lord, Lord Hughes, said, and as was quite clear from the speech of my noble friend Lord Craigton, this is a very complicated Bill. As I listened to the noble Lord, Lord Hughes, I came to the conclusion that I had read some parts rather differently from the 18 way in which he had read them. I agree that the noble Lord will probably be right and I shall be wrong, and I will not venture to put forward some of the ideas that I thought were contrary to his, because no doubt the Minister, in winding up, will be able to explain.
We all agree that much remains to be done. Of that we are perfectly certain. But the point is: what is the best way of doing it? The noble Lord, Lord Hughes, stated that the best way is to have no change; to go on with the subsidy scheme as it is at present. I feel exactly the opposite. In my view, the White Paper is one of the best analyses of the housing problem I have ever read. It seems to me that the housing problem is complicated, and that we have to deal with it in different ways. The speech of my noble friend Lord Craigton, like the White Paper, dealt with such matters as slum clearance, overspill, houses for the old, houses for incoming industrial workers, high flats, expensive sites, agricultural workers, housing associations, and in various ways, in the later part of the Bill, with houses built by private enterprise. It seems to me perfectly clear that we have to take each of those categories and find out what is the best way of dealing with each. I believe that we have come to a stage where a flat rate will be the best scheme. I congratulate the Minister on bringing forward a very complicated but, I believe, much more efficient way of dealing with these difficulties.
The noble Lord, Lord Hughes, said that he did not like a great part of the Bill. I should like to say that I like a great part of the Bill, though I am slightly doubtful of certain minor parts, which no doubt we shall deal with at the Committee stage. I think I am right (no doubt I shall be corrected if I am not) in saying that already in the English Housing Act there is the power to abolish subsidies, or to reduce them, after ten years. I do not think I quite agree with the noble Lord, Lord Hughes, on the subject of the appalling slums both in Glasgow and Dundee. My knowledge of slums and the difficulties of slum dwellers is pretty profound, as I was for a good many years a Member for the City of Dundee, and I was then a Member for a certain number of years 19 for the City of Manchester. I think probably that in those two cities you could find the worst and most disgraceful slums in the whole of this country. Are we going to improve matters by this Bill? Personally, I think we are.
Without going into detail which will remain for the Committee stage, I would say that this Bill surely deals with three main schemes. The first is the subsidy: how much should be taken from the taxpayers to be shared by the ratepayers in order to reduce the rent that otherwise would have to be charged for every house that is built? I think that really comes down to the basic point on which we all agree. The cost of a house is too expensive for a great many people to pay the economic rent; therefore the rent charged must be reduced by payments from ratepayers and, in certain cases, from taxpayers. The first Part of this Bill deals with that.
Then there is the Part which provides, or attempts to provide, for houses built by private enterprise and deals with houses built by housing associations for letting. I am personally convinced that we shall not solve the housing problem of Scotland until we get some form of private enterprise going again, whether it be housing associations or whatever it may be. The third Part of the Bill to which I should like to allude is that which deals with the improvement of houses that are structurally sound yet without the modern requirements. Dealing first with this question of subsidy-how much should be taken from the taxpayers, how much from the ratepayers, and who could pay an economic rent—I am in favour of this flexibility, because there is the variety. The noble Lord, Lord Hughes, told us about Glasgow and Dundee, which, he said, would get only £12 for each house. I gathered from what he said (I may be wrong) that the annual cost of the house would be over £100. If the notional figure is taken at £60, and that was the rent, there would still be £70 a year to be paid for that house by the ratepayers, and from that all they would get would be £12 of subsidy.
I thought I was right in reading this Bill in a different way. It seemed to me that what was in this Bill was that each year the housing account of the local 20 authority should be looked at. The local authority would be able to show if it was in deficit or in credit. In exactly the same way, it seems to me that every council makes, every year, an estimate on its expenses. It then decides the poundage rate that it must take, and in this way obtains revenue to match its expenses. I gathered from this Bill (as I say, I may be entirely wrong, and I know that if I am I shall be corrected later) that the idea was that if the local authority had a credit balance in its housing account it would get the £12. I do not know whether we shall be told the secret of why the figure of £12 was chosen: I have not the slightest idea, and I do not know whether anybody else has. If, on the other hand, the authority had a deficit, then it would get the £32. It seemed to me that it must be worked out on that basis, and that therefore some particular authorities, not having a deficit, would get the £12.
As we know, before the war local authorities built a good many houses at a great deal lower cost, and it may be that now that the cost all goes into one account some local authorities who built more at the start will find that their housing account is not so much in deficit as others Who have had to do a great deal of building of the more expensive type, I know that this idea has been objected to, but I cannot see why there should be objection, so long as it is made perfectly clear that the difference between the £32 and the £12 is regarded in connection with the state of finance of the local authority. The formula seems to be to take the rent that is being -received, plus the amount borne by the rates and the subsidy, to find out the exact amount the house is bringing in.
I was glad to hear from the noble Lord, Lord Hughes, that he is not in favour of some of these extraordinary low rents that we have in Scotland. It is often said that Scotland has about the worst housing situation in the whole of the West of Europe. A little time ago I tried to obtain more facts about the housing situation in various European countries, and to ascertain the level of rents taken as a proportion of the average wages. I can only say that, while I am not certain, it seemed to me from that examination that rents in 21 Scotland were about the lowest, in proportion to wages, in the whole of Western Europe. I believe it is perfectly clear that we shall not get a better housing situation in Scotland if we allow that state of affairs to continue. In all cases it means low rents and high rates.
A little time ago I asked the noble Lord, Lord Craigton, for certain figures which I wished to compare. I want to say at once that I do not say that rents in Scotland should be exactly the same as rents in England; there are various reasons for the difference. But What is quite astonishing is to compare the rents and then to compare the nigh rates and to see how nearly those high rates bring rents to the high level of English rents. I should, like to give one or two examples. I asked for the figures for Birmingham and Glasgow. The weekly rent for a four-apartment post-war house is in Birmingham 29s. l0d.; in Glasgow, 10s. 1d. I should perhaps state that those were the figures in England for March, 1961, and in Scotland for November, 1961. But with the addition of rates, the respective amounts payable are: in Birmingham 42s. 6d. a week; in Glasgow 29s. 6d. So the difference between them has been greatly reduced, though there is still a difference. Then I took two fairly similar towns, I thought, Plymouth and Aberdeen. In Plymouth the weekly rent for a four-apartment house was 31s. 5d.; in Aberdeen, 10s. 1d. Again, with rates, the figures were: Plymouth 42s. 2d.; Aberdeen, 29s. 3d. The only places that are practically similar are Manchester and Edinburgh; Manchester being 15s. 9d.; Edinburgh, 15s. 11d. And of the figures for which I particularly asked, 15s. was certainly the largest rent.
I should like to point out these facts, because I believe that we have to get a far more realistic rent scheme in Scotland, and we must realise that many people who have a new house, and others who are living in slums—which I hope will soon be demolished—are finding that they have to face this high rate in order to help the reduction of the rents of those living in very much better houses. It is affecting all districts to a great extent and it is not what we should call just. Is it the case that too many people occupy a subsidised house, though they could pay a full rent if they 22 were able to find a house at the full economic rent, and are therefore keeping others out of those subsidised houses? I think that this is a problem that must be looked at. I am not blaming those people, because after the war their only chance of getting a house was to obtain a local authority subsidised house.
The noble Lord has spoken about rebate. Again I did not quite understand when he said that rebate would be entirely a matter for the local authority. Probably I did not notice that part, because I should have thought that the rent charged, with the rebate, would be the rent that went into the local authority housing account. The noble Lord shakes his head and probably he noticed that point. There are people perfectly able and willing—perhaps, in some cases, more able than willing, which is only natural—to pay a full economic rent. I think people should know the economic rents of these houses. I should like to see the economic rent on every single rent book, so that people would know what it is; and there are a great many people who could quite well pay or get other houses which are now being built by private enterprise. Of course there are cases where the rent must be particularly high—for example, where houses are built on expensive sites. But, after all, if we face the fact, these subsidies are really National Assistance. People go to the National Assistance Board and get help, and get their rents paid because they deserve it and are in need. But at present many people are having National Assistance in the subsidy for their house, though they are not in need and would not pretend that they were. I think that this situation has to stop, and once that happens we shall be able to deal with those who are really in need.
The noble Lord, Lord Hughes and I agree on the subject of Dundee, and about the appalling conditions in which a great many people who cannot afford the full economic rent are living. Those are the ones who ought to be at the top of the queue; and these schemes, of course, make it more difficult. The fact that people do get these subsidised rents makes it more difficult for public enterprise to compete. Because, after all, theirs is an economic rent; and, as I say, many people do not even know what 23 the economic rent of their local authority house is. If we are to get private enterprise working again we must more and more have regard to what is the economic rent of the local authority houses. And if we did that, we should see that the rents of the private enterprise houses would probably be no more, if as large.
We have not yet succeeded—though efforts have been made—in regard to housing associations. We have in this Bill the new scheme, which again I welcome, but I would say to the noble Lord, Lord Craigton, that I feel that there must be much more propaganda, much more advertising and much more campaigning if we are to get housing associations really going in Scotland. We have not had them to any extent. Few people even know that it is a new venture. If only we could get that point over to the people of Scotland, with an explanation of the difficulties of (he housing problems, I think we might succeed; but without that propaganda and without a really 20-ahead campaign I do not think we shall.
Lastly, improvements. Is the grant big enough? We are not getting on as we ought to with the grants. I cannot answer the question whether the grant is big enough, but I presume the actual factors, the actual expense of modernising a house or a flat, have been taken into account. I am glad that the increase allowed is now to go up from 8 to 12½ per cent., with, of course, the tenant's agreement, because that may help; but I believe that we ought to try to see whether we can do more on this improvements scheme. I would ask the noble Minister whether we really get the best architects on to this subject. Would there be the possibility of some competition? We know the difficulties of some tenants who are in appalling conditions, and of saying that you must turn out some people and take their flats to make them into bathrooms and W.C.s for the others. Have we really got the best people on to this work? Have we tried to make any experiments? Have we thought of a scheme to give each flat a separate W.C. while the bathroom of one flat is shared between possibly two or three? Each tenant could 24 have a key and each could heat the water, having a meter to put a shilling in. It seems to me that we have looked at this problem and said how difficult it is and have then let it lapse.
My Lords, perhaps I have spoken for too long on a subject which I am tremendously keen about. I think it was more than 25, perhaps nearer 30, years ago when I first served on Departmental committees dealing with the housing problem—I know my name has been attached to various Reports—and still to-day we come to the same subject, although it is new in some ways. We did not then think of overspill to the great extent we do now; we did not speak of high flats. But still there are overcrowding, insufficient numbers, slum clearance. I now know that it is a problem—I do not approach this problem now with the same confidence as I did in those days—that is bound to be with us always.
There has always to he an overseeing of this problem of housing; there has always to be change. Unlike the noble Lord, Lord Hughes, I cannot say "Let it be as it is now". I do not think it is good enough. He thinks we are going to make that worse. I think we are going to make it better because it is going to be flexible. We are going to deal with the individual problems. I would ask the Minister to make sure that slum clearance is right in the forefront of the problem. I believe that is absolutely essential. It is the most difficult thing to do. Naturally, no local authority particularly wants to do slum clearance; anything else is easier. But I believe it is absolutely necessary.
Having got away from the need for the large houses for the families, we are getting to the smaller houses for the old people. Can it be arranged that those houses are not in a housing estate far away from the centre of the city but are nearer to where the old people have friends and shops and where they know people? It is far more difficult for the old to get into buses and into the centre of the city. If we can get on with the slum clearance and get private enterprise going and make improvements, we shall no longer be ashamed of the housing situation in Scotland.
§ LORD HUGHES
My Lords, the noble Baroness misunderstood one point and 25 I should not like it to go toy default. She returned to she same point in her closing remarks. I did not say that Che existing subsidy arrangements were the best. I said that they were merely better than the change. If 1 had chosen my words more carefully I should not have created the erroneous impression in her mind. I said I regarded the existing ones as the lesser of two evils.
§ BARONESS HORSBRUGH
I thank the noble Lord for that explanation, but in listening to him I came to that conclusion because he never told us what would be better.
§ 3.42 p.m.
§ LORD MOLSON
My Lords, it is with trepidation that, as an Englishman, I venture to intervene in this debate. I do so, however, for two reasons. The first is that, having recently settled in Scotland and having some cottages which I have in some cases modernised and improved, I naturally take a very great interest in the Scottish housing problem. I am fortunate in living in the county of Roxburgh, which is, I think, one of the most enlightened of the counties of Scotland. Their rents are about £38 a year, making an average rent of about 15s., which, as anyone who looks at the table on page 7 of Rents of Houses Owned by Local Authorities in Scotland, 1961, will see, is very much higher than in the case of most of the counties. It is, I think, largely for that reason that the housing conditions in Roxburghshire are among the better in Scotland.
The second reason why I venture to speak is that on February 7 I put forward general considerations about housing policy and by implication I criticised the Act that was recently passed dealing with housing in England. I am very glad that in one or two respects it appears to me that this Bill for Scotland is a considerable improvement on the Bill that was introduced for England. I shall nevertheless urge upon my noble friend, Lord Craigton, that in some respects it might be possible to go rather further than has been done in this Bill.
On February 7 I suggested that the time had come when subsidies for the building of houses as such should be 26 brought to an end. I suggested that subsidies should be directed to giving assistance to those individual tenants who were without the means to pay a full economic rent. It is because I think that this Bill goes rather further in this direction than the English Bill, if I understand them both aright, that I feel my noble friend and the Secretary of State have introduced a better Bill.
The subsidies remain unchanged in many cases and they are directed to particular purposes; overspill at £42 remains unchanged, development corporation at £42 remains unchanged; the Scottish Special Housing Association is going to be paid the same subsidy as a corresponding local authority. In the case of the basic subsidy, which I understand has again been directed specially to the needs of different parts of Scotland and different classes of the community, by administrative action of the Secretary of State, a wise distinction is made, similar to that in the case of the English Act: the distinction between the more impoverished local authorities who require a higher subsidy and the smaller subsidy in the case of the wealthier authorities. I would say that I myself feel that the time has come in the case of those wealthier authorities to bring the subsidy completely to an end. That does not mean that assistance cannot be given in the case of special individuals or classes in the community who are unable to pay an economic rent.
Command Paper 1520 sets out extraordinarily plainly the evils of the low rents normally charged in Scotland. I agree with my noble friend Lady Horsbrugh that this is one of the best pieces of writing upon this subject that the Government have produced. They give a number of the evil effects that result from these low rents. First, they say it is a direct cause of bad housing, and so it obviously is. They say that it discourages adequate expenditure in building new houses, in providing amenities, and in the lay-out. If people become accustomed to a very low level of rent, it is difficult to persuade them to pay a higher rent in order to get the better amenities that can thereby be provided. It discourages mobility of labour, it inflates waiting lists and, above all, it is unfair to many of the ratepayers who are obliged to subsidise these rents. At page 6 of the 27 White Paper this is put so extraordinarily plainly that I venture to read it to your Lordships:The result is that there are many old age pensioners and others with low incomes, who are living in privately rented or owner-occupied property and contributing in their rates to the housing of people who are better-off than themselves. This clearly runs counter to the local authority's duty to hold a balance between the interests of their tenants and the interests of the general body of ratepayers.I do not think that that has ever been more clearly or forcibly put.
The diagnosis in the White Paper is all right, but does this Bill go far enough to rectify the evils pointed out? Why is nothing done in Clause 3 and in the Second Schedule to bring financial influence to bear by making the subsidy in some degree conditional upon reasonable economic rents being charged to those able to pay them? As I understand Clause 3 and the Schedule, it means that in the case of two different authorities with different rent policies the subsidy is the same. There may be one local authority which charges a full economic rent, no doubt having a wise and generous rebate scheme in order to give assistance to those who stand in need of it, and putting no general burden upon the rates other than that special burden which is justified in individual cases. In the other, you may have one of many local authorities in Scotland (as can be seen by looking at page 7 of Cmnd. 1609) which are now charging only 7s. a week, or something like that, and putting the whole of the additional cost upon the rates. What can be the justification for having rents in Scotland at an average, at the time this White Paper was produced, of only 9s. as compared with £1 a week in the case of England? In the case of new houses being built—this is contained in paragraph 17 of the White Paper—" the average Scottish local authority tenant meets rather less than one-fifth of the current cost of providing a house".
I feel that in doing nothing about that in Clause 3 the Secretary of State is missing a great opportunity. But he has a good record in this matter in the past, and he has done a great deal to persuade, and indeed sometimes to coerce, Scottish local authorities into raising their rents. That, again, can be seen from Table 1 on page 6. But how much further there is still to go is shown by 28 Table 2. In the case of Aberdeen, after adjustment to 1961 money values, the rents charged in 1961 were 8s. 7d. a week as compared with 18s. 1d. in 1938. Despite all that has happened, and in spite of the great increase in rent-paying capacity, the actual contribution made by tenants, if you revalue the money in order to enable a fair comparison to be made, is much less than it was before the war.
Clause 29 contains default powers. I think it goes a long way when it enables the Secretary of State to prepare, and to impose upon a local authority, a rents scheme which fixes rents and which may include a rent rebate scheme. To the best of my knowledge, the Minister of Housing and Local Government in England has not yet had the courage to do that. In several speeches, notably that in the debate in another place on February 2, the present Minister has said how strongly he wishes local authorities to charge the full economic rent to those people who can afford to pay it, and to introduce a rebate scheme. My right honourable friend the Secretary of State for Scotland is certainly setting him a good example when he is taking power in this Bill to prepare a scheme of that kind if a local authority is in default. I only wish that instead of confining his activities to this rather drastic action in really scandalous cases, of which there have been some in Scotland, the Secretary of State had drafted this Bill in order to give also a general financial encouragement to all the local authorities in Scotland to pursue a wiser policy with regard to rents.
I do not feel that in these respects this Bill goes as far as I should wish it to go, but I regard it as being most definitely a step forward in many respects. I associate myself with almost everything that my noble friend Baroness Horsbrugh has said, and I hope that we can have an assurance from the Minister of State that it is the intention of the Secretary of State boldly to go ahead in the direction of ensuring that in Scotland rents are raised, because without that I cannot believe that there will be a revival of the building of houses by private enterprise in Scotland. I do not believe that, without that, there can be a satisfactory solution to the housing problems in that kingdom.
§ 3.55 p.m.
VISCOUNT COLVILLE OF CULROSS
My Lords, I have not the knowledge or the experience of housing subsidies or their application to enter the skirmish to which your Lordships have been listening this afternoon on that subject. There are, however a few small points in this Bill on which I should like to comment, and then perhaps I might venture to draw your Lordships' attention to one matter of, as I think, considerable significance which does not, I am sorry to say, appear in the Bill.
Of the smaller points, the first that I should like to mention is that which appears in Clause 21 of the Bill, which, as I understand my noble friend Lord Craigton, provides the new speeded-up machinery which the informal Committee suggested for demolition and closing orders. The point I should like to make to my noble friend is that he has done away with the machinery by which, in the past, notice has been given to the owner of a house in regard to which such an order was proposed to be made so that he could, if he was able, then give an undertaking to the local authority that he would repair the house and put it in proper condition and thereby avoid having any such order made at all. Now the order can be made in the first place and a certain length of time is given to the owner during Which he may, if he is able, give just such an undertaking as he did before.
But the time limit is the trouble in this particular case. After the service of the order the owner is given only 21 days during which he can give this undertaking. If the undertaking requires a structural survey and professional advice, which it surely must do, 21 days does not seem to me to be a particularly long time for a proper examination to take place. Nevertheless, if a house can be put right by virtue of the work which the owner is prepared to undertake, it seems to me much better that it should be put right and thereby saved for the occupation of the family, rather than that it should be torn down simply for lack of time for a proper examination to be made under professional advice. I hope that I am wrong in that, but it seems to me that three weeks is not long in the circumstances.
Then I turn to Part IV of the Bill, which seems to me to 30 be a good measure, in that it brings the law in Scotland into line with that which came into force in England I think the year before last, when the English Act to this effect was passed. I hope that the provisions in Clause 27 (1), by which, in proper cases, the two parties may apply to the sheriff for some rearrangement of the liabilities which this Part of the Bill lays down, will be used so that where there are proper cases the landlord will not necessarily have to stand the full rigour of the repairing clauses which are implied.
Then there is a small point in Clause 32. Where a house has been allowed a grant for occupation by an agricultural tenant there is a provision already in the law by which the local authority can, if they wish, waive the condition that the occupancy of that house must be that of an agricultural tenant. What is laid down in this particular clause is that the power of the local authority to waive that condition can be used only if the Secretary of State gives his consent. For the most part, these will not be very large houses. The local authority have the power simply to insist on this condition and not to allow a waiver. Apparently Her Majesty's Government think that where the local authority consider the case may be a suitable one for waiver of the condition they should not be allowed, on their own responsibility, to do so, but that the Secretary of State—that great man in Edinburgh—should first be consulted. I wonder whether my right honourable friend in another place does not feel he is using a sledgehammer to crack a rather small nut.
The fourth point I should like to make is to welcome the provisions of the Fourth Schedule, which will provide that where there is a preservation order in respect of an historic building, and a demolition order is proposed to be made, the building shall not be demolished but instead shall be closed. There are no doubt historic buildings which should not be lived in but which are still suitable to be preserved and to enjoy, providing a family does not have to put up with their insanitary arrangements.
The point that this Bill does not contain is one of which my noble friend already has notice, because it was raised in another place. It refers to the structure of rent for controlled houses in 31 Scotland. I do not want to take up an inordinate amount of time upon this subject, but it is one that is so complicated that, unless I explain it at a little length, I do not think anybody could be expected to see the point of what I am saying. Rent control in Scotland, as South of the Border, arose during the First World War, and rents were fixed at a certain level and security of tenure was given. In 1920 a certain increase in the rents for these controlled houses was allowed to be charged and as a matter of broad principle an increase of about 40 per cent. was permitted. In England this produced a system which to a large degree stood the test of time and proved to be tolerably fair; but in Scotland there was a peculiar circumstance which prevented this fairness coming to fruition as it did South of the Border.
That peculiar circumstance was the system in Scotland of owners' rates, by which a part of the rate burden was paid by the tenant and a part by the owner. The 1920 Act provided that no part of the owner's rates could be recouped by the owner in the form of extra rent from the tenant. This provision was, I believe, put in on second thoughts on Report stage of the Bill, whereas it had been rejected in Committee. I think it would have been better, as it turned out, if it had been rejected the second time also, because what happened was that, as the rate poundages rose-as they did between the wars and afterwards—so the owner's return became less and less, although, of course, the tenant continued to pay the same.
In Scotland in 1956 a concept of a "true rent" was produced by the Rating and Valuation Act of that year for the purposes of that Act. It is interesting to see, by using this concept, what were the results of the controlled-rent policy over the period 1920 to 1956, and in order to make a worth-while comparison it is as well to take into the account the 25 per cent. increase which was allowed under the Rent Act, 1957. I have some interesting figures here showing the effect of these various provisions upon rents in Scotland.
Take, as an example, a house with a rent of £20. The true rent—that is to say, the rent less the owner's rates—that would be received by a landlord in 32 Glasgow in 1920 would have been £15 15s. In 1962, taking into account the 25 per cent. increase granted in 1957, the rent received by the landlord would be £15 11s. 8d., which is less than it was in 1920. Similarly, in Dunbartonshire, if the true rent in 1920 was £17 3s. 6d., in 1962 it was £10 7s. 6d. That, of course, meant that the tenant was paying £20 throughout. That, in itself, seems to me to be a strange situation, because, after all, £20 in 1920 is a very different matter from what it is to-day. But the inevitable consequence of this has been that the landlord has simply not had enough money coming in from his property to put it in good order and to keep it up to date. In England and Wales this was put right in 1957, because in that year the rents of controlled houses were changed and a new formula was introdued on the basis of the gross value of the houses; but it was not apparently possible to do so in Scotland because no up-to-date valuation for the purposes of rating had taken place. Therefore, the Secretary of State confessed, quite openly, that the Scottish provisions of the 1957 Act were of a purely interim nature.
May I just quote one small passage from what he said on this matter? [OFFICIAL REPORT, Commons, Vol. 567, col. 1421]:These rent provisions are, as I have said. of an interim nature and the Government do not look on them as representing a new rent structure for houses remaining in control. It will be necessary, once the new valuations become available in 1961, to make a fresh and comprehensive review of the position as a whole.I wonder whether the time has not now come for that review. But apparently Hex Majesty's Government do not think so, because nothing appears in this Bill to put it into effect.
The extent of the problem is a very considerable one. There are at the moment under control in Scotland about 450,000 houses. This number, it is true, has decreased by about 150,000 since 1957—that is, within a period of five years—hy means of creeping decontrol. But 450,000 is still a very large number indeed, and I believe it to be the case about one-third of the population of Scotland is involved. Of these houses it is estimated that something less than a third are of very good quality indeed; 33 rather more than a third are of middle quality and could well do with modernisation and bringing up to date; and again something less than a third are of bad quality, probably slums, which should in any case be done away with and demolished. The result however, of the rents structure that has up to now existed has been that the middle third, in particular, of these houses have not been modernised because nobody has been able to afford to do it.
This is borne cut by the use which has been made of various measures which have been introduced since the last war to encourage people to modernise existing sub-standard housing. I believe that since 1950 only 30,000 grants for modernisation have been made in Scotland, and only about 3 per cent. of the controlled houses were actually improved under the Housing (Repairs and Rent) (Scotland) Act, 1954. I do not believe—my noble friend Lady Hors-brugh bore this out—that the matter has improved very much since that date, although the 1957 Act purported to do something to help landowners to improve their houses. The result is that this property has: run down, in many cases prematurely, and what could be good accommodation is in a bad state of repair and is rapidly getting worse.
In the situation about which we have heard in Scotland, this must be a very serious matter. Unfortunately, it appears that Her Majesty's Government have set their face against doing anything about it. An Amendment was introduced in another place to try to bring some arrangement into operation in this Bill in order to effect a remedy, but some sort of undertaking seems to have been given during the 1959 Election campaign which has been interpreted by Her Majesty's Government as being a promise not to deal with this matter. My Lords, it is presumably for Her Majesty's Government to interpret as they see fit their own undertakings. I think it is certainly possible to read the words that were then said by the Secretary of State and by my right honourable friend the Chief Secretary of the Treasury, in such a way that they mean that measures could be introduced in this Bill to put the matter right. But my honourable friend the Under-Secretary of State for Scotland said in another place that the Government have already made it clear 34 that they do not intend in the present Parliament to alter the rent levels laid down in the Rent Act, and according to Her Majesty's Government, that seems to preclude anything to deal with this matter.
No doubt the proper way to deal with it would be to do the same thing as has been done in England; that is, to relate the rent structure for controlled houses in Scotland to the gross annual value, in the same way as in England it is related to the gross value. Since a revaluation took place and came into force last year, all the material must be available for this to be done, so the 1957 excuse that there were not up-to-date valuations is no longer at all relevant or valid. Indeed, that particular way of dealing with it would not mean any further decontrol. It would not mean that Her Majesty's Government would have to employ the powers that they have, to alter the levels at which houses come within control under the Rent Acts; nor would it mean that anybody's security of tenure would be destroyed. However, Her Majesty's Government seem determined not to do it.
I hope, however, that my noble friend can tell me one or two things about Her Majesty's Government's intentions on this matter. First of all, are they satisfied that the houses which are still controlled are being improved and brought up to date under the existing legislation in a proper way and as fast as is desired? I cannot believe that they are satisfied with that. If they are not satisfied, how do they propose to cope with the situation, how long do they intend to stick to the measures that are already in force, how long are these interim measures to stay on the Statute Book? And what about the fresh and comprehensive review that was promised in 1957? Are they going to undertake that, or are they already doing so? When do they think that something is going to be done about it? I believe that, unless all those things are done and done quickly, there will be a grave waste of potentially good housing in Scotland which is just simply not going to be used, and which is going to get into worse and worse disrepair until finally it will have to be demolished and replaced altogether. I hope, therefore, that Her Majesty's Government, and my noble friend, will be able to say something 35 about this matter and indicate that, at any rate, Her Majesty's Government think it is a matter of urgency.
§ 4.13 p.m.
§ BARONESS ELLIOT OF HARWOOD
My Lords, I have listened with very great interest to this debate, and I am delighted that in your Lordships' House we should devote a day to discussing Scottish affairs. Last week we had a day devoted to Wales and Welsh affairs, and to-day we are discussing Scottish affairs. I am particularly delighted that we should have chosen for this debate the most important subject of housing. I do not believe there is a more important subject than the question of housing to the community throughout the country. As Lady Horsbrugh has said, it has been a subject in which all of us have been deeply interested for a great many years, so to-day we have embarked on what I believe to be a most important discussion. There seems to be a considerable amount of agreement among all of us. I listened to the noble Lord, Lord Hughes. While I could not follow him completely in some of the things he said, it was obvious that it was a matter of method rather than of principle which was involved. He on his side, we on our side, are very anxious to do all we can to improve the housing situation in Scotland.
For some sixteen years I have been a member of a housing committee in a rural county in Scotland. In fact, I was gratified to hear the noble Lord, Lord Molson, pay tribute to the work of that committee, since the county in which he lives is the county in which for all those years I have been a member of the housing committee. I am glad that we have managed in that county—it is true that it is a rural county and the problems are not comparable to those of the cities—to build a sufficient amount of houses since the war; that we have managed to keep the rents in step with the rising costs; and that we are not now faced with either a very large deficit on the housing revenue account, or a large number of houses still to build.
The other part of Scotland which I know very well indeed is, of course, the city of Glasgow, and for 25 years I have been intimately associated with that city and its problems. We have in the noble Lord, Lord Greenhill, someone who 36 knows that city better than anyone else does, since he was treasurer of the city council for so many years. I may say how delighted we are to see him here, and we are so glad that he is able to take part in the debate. There was a moment when I feared that something had prevented him from getting here, but now I see him and I know that his contribution will be a very valuable one indeed. The problems of Glasgow are greater than those of any other city in Scotland. There is the enormous number of people who flock into that city all the time, and the great difficulty of getting people to leave it, although I have seen people living there in appalling slum conditions. You may say to them, "Why do you not go somewhere else? You would get much better conditions and, probably, in this era of full employment you would get equally good employment"; but they are Glasgow born and Glasgow bred and in Glasgow they are going to stay, whatever the conditions. But many a time I have wondered at such tremendous local patriotism.
In the past I have been critical of the city council and of the way in which it has handled some of its housing problems; because of its reluctance, during those many long years when I was closely associated with one of the constituencies, to explore the possibility of building high, building up. It was forever building and spreading the city wider and wider, with the result that every acre, every inch of ground, has been built over. It is only in the last three, four or five years that the policy has changed and they are now building high. In some of the worst areas such as the Gorbals they are knocking down the slums and building these tall houses. I am sure that that is a wise thing to do in a city the size of Glasgow and, indeed, in many of our great cities in this country. I am glad that in this new Housing Bill we have provision for that type of building.
I am glad, too, that in other parts of the country, particularly in the rural areas, the local authorities have caught up with some of the housing needs. It is now only in the big cities and in certain of the larger boroughs that the shortages still remain. I am also glad that the special needs, mentioned by one or two of your Lordships in the debate 37 this afternoon, are being concentrated upon. I am sure that those special needs and the special types of [houses to which reference has been made are of the greatest importance and in that regard this Bill makes a very valuable contribution.
I also believe that the question is not only one of house building. There are other ancillary services that we should consider in dealing with the question of housing: water being one, electricity another. I should like to pay tribute to the way in which the Electricity Boards, the North of Scotland Hydro-Electric Board and the South of Scotland Electricity Board, have enabled us to raise the standard of housing by putting electricity at our disposal, but I think that we might well examine and increase the water supplies, in order to help overcome some of the shortages in which the supply of water is of vital importance. I should also like to congratulate the Government on the standard grants scheme, which has come just at the right time. It enables us to use houses of which the structure is quite good and to bring the amenities up to modern standards. I welcome that scheme very much. I know that in our county we have employed these standard grants, and they will obviously be taken up in many areas because they will be of very great value in solving this particular problem.
I also welcome Clause 32, which allows for a change of use of houses built originally for agricultural workers. If a need for agricultural workers' houses is not in evidence, then one can change their use to that of general needs houses. I think that is very valuable because, as a result of the increase in the use of machinery, the number of people engaged in agriculture to-day is going down. I agree with the noble Viscount, Lord Colville of Culross, that it might well be left to the local authorities to decide about the change of use of these houses. The problem is not a very great one, and these houses and their conditions are well known to the housing committees of the local authorities. So I hope that during the Committee stage we may be able to insert an Amendment to that effect.
Undoubtedly by far the most controversial matter in connection with housing is the question of rents. The British 38 public, and perhaps especially the Scots, want two items, in particular (there may be others, but certainly there are two items, in particular), on the cheap: they want cheap houses, and they want cheap politicians. It is very difficult indeed to get anyone to pay politicians, particularly those in another place, an adequate remuneration for their services. They are lower paid, I think, than in any other country in the world. Similarly, it is very difficult to persuade anybody that he should pay an economic rent. I know that these two things are not, perhaps, otherwise comparable, but they are comparable in that the public have a great dislike of paying for either of these particular services at a remunerative rate. "Rent" is a word which has a kind of sinister ring about it. There are such words in the English language which instantly bring reactions. "Mother-in-law", for instance; "beer"; "Wigan" —all these are well-known words which bring instant reactions, on a music-hall stage or anywhere else. I remember someone once saying (I cannot remember if it was my husband, or who it was), when talking about housing: "They are talking about building in refrigerators; they are talking about building in amenities of the most modern kind, but take great care you do not build in your mother-in-law!"
Undoubtedly "rent" is one of the words from which people really cry off. I vividly remember fighting a by-election in the Kelvingrove Division in 1958, during the passage of the Rent Act. The appalling consequences that were predicted by my opponent during the course of that campaign—perfectly legitimately, because we were fighting an Election; and in an Election all is fair—were quite fantastic. Rents, it was said, would go up 100 per cent. or 200 per cent.; people would be evicted; furniture would be put out on the streets, and all the rest of it. There was going to be the most appalling disaster descending upon the great city of Glasgow, and upon other cities in the country. Nothing I could say could convince the Tories—I was not particularly concerned about the Labour vote, because I knew that I should not get that anyway—that this would not happen. In fact, they abstained, and I did not win the seat. But about nine months afterwards I went 39 back, and I had a talk with the Sheriff. I said to him, "How many cases did you have of evictions, or of excessive rent rises? How many cases came before you as a tribunal?" He said, "Two"—and this was out of a possible total of thousands of cases that might have arisen. So that, really and truly, the fear of the word "rent" is greatly exaggerated; and if only the matter can be discussed in a calm and straightforward manner, I am quite sure that we can get over the difficulty and can get a fair rent policy throughout Scotland.
The noble Baroness, Lady Horsbrugh—and I agree entirely with everything that she said about this—has asked why people who live in modern council houses, with all the amenities we want everybody to have, should pay such low rents that the general rate, which is paid by everybody in the city or in the town, has to make a very considerable contribution to their housing conditions? I remember well going around the city of Glasgow and seeing people who were themselves living in desperate conditions paying the full rates, a considerable proportion of which was required to equalise the housing revenue account. I do not believe that that is at all fair, and I think it is a fact which all local authorities must face.
The difficulty, of course, is that in a number of areas the local authority owns so many houses that it requires a great deal of self-sacrifice on the part of the appropriate committee to agree to put up rents, because the members themselves—or a great many of them, anyway—are involved in this process. I think that in the White Paper there is a paragraph which refers to the question of the local authority's becoming a monopoly landlord. That is inevitable, where the local authority has gone ahead, and rightly so, and built so many houses. But it is also very difficult, I appreciate, for the members of that authority to vote themselves very much higher rents. Yet it is a very short-sighted point of view that prevents them from seeing the wisdom of a fair rent—I am not saying an excessive rent, but one that is fair both to those people who do not live in comfortable, modernised houses and to those people who do. It is accepted, I think, that in Scotland rents of local 40 authority houses are about 50 per cent. lower than in England. The Government subsidy in Scotland is 10 per cent. more, and the general rate payment is almost five times what it is in England. That, I think, is something which the Secretary of State, by this Bill, is going to take powers to alter, or cause to be altered, and I am sure that that is a very good thing.
The question of building by private enterprise, which has been referred to, and which I am sure is a very good thing is, of course, very much influenced by the question of the rent that may be charged. It is one thing for a private individual to put a great deal of capital into house building and not to get a full return: it is another for a local authority, which has the general rate to fall back on. So unless this question of rents is dealt with fairly and squarely, you will not get either any big private housing association or private enterprise builders to risk their capital. The admirable scheme whereby, in modernising cottages, one could get a grant of £400 for a full modernisation scheme has been used tremendously in Scotland. But the £400 was, I think, originally supposed to meet something like 50 per cent. of the cost, and if you are really putting a house in good order you cannot do it under between £800 and £1,000, which means that £400, although a great help, is certainly nowhere near 50 per cent. of the cost.
My Lords, these matters are all very difficult. The discussion which has gone on this afternoon on the subject of rents has been of very great interest indeed. It is a complicated subject. I think that in this Bill the Secretary of State for Scotland has taken powers which will enable him to help solve this problem. It is one out of which we want to try to take the dynamite, if we possibly can, because it is in the interests of everyone—it is in the interests of those who live in poorer houses, it is in the interests of house building, and it is in the interests of general fairness all round—that there should be a better rent policy throughout the country. Therefore I hope that that will be one of the products of this Bill.
I commend very strongly the policy of slum clearance which is being concentrated upon by the Secretary of State for 41 Scotland, the increase in house building for old people, and the reconstruction of the old but fit houses—that is to say, fit structurally, but not containing the amenities which we want in modern houses. I hope that by this Bill, and by the support which I believe it will have from all sections of the public, the Government will be able to tackle these problems faster and more effectively, and that will be of enormous benefit to everybody in Scotland.
§ 4.33 p.m.
My Lords, although I support the matter contained in this Bill, I will not occupy your Lordships' time in praising it, because I remember the advice about long speeches given to us all in Tam o'Shanter. Although I am a proud burgess of the City of Glasgow, I will not deal with the great cities; I will let my noble friend Lord Greenhill have a clear field there. But I should like to say a word or two to your Lordships about the smaller Scottish burghs, which are really the places where the history of the country has been made, and where the social system has really been framed.
In the smaller Scottish burghs there has been, all through time so far as I can remember, a great sales resistance on the part of the public to paying for housing, although the climate demands that they should be well housed. Yet a very large proportion of that population think that a man has not properly succeeded in life unless he has built or bought a house of his own in his native burgh. For that reason, I was a little sorry that the noble Lord, Lord Craigton, in introducing this Bill, while paying a well-deserved tribute to the local authorities, seemed to be more hesitant about the building done by private enterprise. My knowledge, especially of the smaller Scottish burghs, is that a great deal of building has been done by private enterprise, largely by citizens who have built their own houses, but there has also been some amount of building speculation by firms. This has presented more difficulties, and these firms run far more risk of loss, because, after all, only a limited proportion of the public is willing to follow the old traditional line.
The noble Baroness, Lady Horsbrugh, said that it is prefectly true, that the 42 whole of society in these burghs is very largely housed in council houses—so far as I can make out, there is no difference in rank or occupation between people housed in their own houses, or in houses built by private enterprise, and people housed in council houses. It is true that a certain distinction is drawn by banks, insurance companies, and businesses of that kind, who think it incumbent upon them, and very properly so, to house their principal employees—their managers, and so on. However, the Postmaster General does not feel the same necessity, and he triumphantly comes in and gets council houses for his postmasters; and some burghs have the honour of housing quite a large number of old retired postmasters in council houses. When there is a lead like that from the Postmaster General himself, it appears to me that nobody can cast stones at anyone who prefers to have a council house and has been able to get it. What Lady Horsbrugh said was abundantly true: there will always be housing difficulties in Scotland until some distinction is drawn between those who are entitled to assistance in housing and those who are not in need of it, and therefore must fail.
That brings me to another point. I had not altogether understood Clause 11, I am afraid, but it seems to me that the Government's experiment in renting houses shows that, unless housing associations have very much wider powers than private proprietors have in getting an economic rent, or resuming possession if the conditions of a lease are not carried out and the rent goes into default, it will not be easy for them to get houses; and I am rather afraid the experiment will fail.
The other point which drew my attention was Clause 32, and I should be very glad of some sort of clarification there. Clause 32 provides that a local authority may waive a restriction on a house built for an agricultural tenant if that house is no longer required for agricultural purposes. My own experience in that line happened some time ago, and I think this question will need rather careful consideration. Take the case of a farmer who has some houses for his workers, either houses nearby, such as council houses, or as part of the equipment of the farm. The farmer 43 then changes one of his employees. Instead of employing another married man in place of one who is leaving and going somewhere else, he employs what we call a half-lin, a son or relative of a neighbour. The farmer carries on, and he has his full equipment on the farm. When that half-lin gets married, he may have to go away and take a house somewhere else—because he must go where he can find a house.
In my experience, the Farmers' Union and the Farm Servants' Union combine to do a great injury, I think, to the farm services of Scotland by insisting on short-term engagements. If a man is offered employment and the chance of a house, he must take it. He dare not leave the opportunity untaken, because it might be long enough before he finds another. For that reason, it seems to me that if a local authority waives the requirement that a house must be used for an agricultural tenant, later they may find themselves faced with a demand for a house for an agricultural tenant when they have already let it. I am afraid that I am putting the point badly, but it seems to me that difficulty will arise here unless the local authority has power to re-establish the house as an agricultural house. In that case, they will have to give notice to the tenant whom they have allowed in. I do not suppose that the noble Lord, Lord Craigton, will be able to answer this point off-hand, but I wanted to bring it before him because it is one that requires a little study. Subject to that, I give the Bill my warm and wholehearted support.
§ LORD FORBES
My Lords, I apologise for intervening in the debate, but there is one question that I should like to ask the noble Lord who is to reply for Her Majesty's Government. At present, there is a £400 maximum grant for modernising houses. What I want to know is: can that grant be increased under Part II of this Bill? Although a great many houses have been improved with the aid of this grant, there still remains a hard core; and I, for one, do not believe that this hard core will be dealt with under the present grant. The amount of the grant was thought suitable in 1954, and it is hardly surprising 44 that many people do not think it adequate now, because £400 will not buy today what it did in 1954.
§ 4.43 p.m.
§ LORD GREENHILL
My Lords, I begin with an apology to the noble Lord, Lord Craigton, for not being here earlier to-day. On the other hand, my purpose in coming down to-day was not so much to go over the whole Bill that is before your Lordships as to concentrate on the position of Glasgow, which needs special consideration. The noble Lord will be aware that last Tuesday there were municipal elections in Scotland, and in Glasgow one Party received not only a substantial majority but an increase in the number of adherents to its political views, doubtless after they had read about the Second Reading of this Bill in another place. Whether that was a case of cause and effect, I do not know, but I am sure that it is something over which the noble Lord will ponder.
I was disarmed by the kind remarks of the noble Baroness, Lady Elliot of Harwood. It is true that I have come down because I am concerned about the position of housing in Glasgow. I am not going to deal with any of the clauses in the Bill, because an opportunity will be given to us in Committee stage of submitting such Amendments as we think necessary, and we can argue the details then. I prefer to take instead the picture as drawn in the White Paper that has been issued. There we find, in spite of the polite and kindly language which the compilers of White Papers usually adopt, one or two sinister points, which I think warrant serious consideration.
Nor am I going to trouble the House by going into the long string of figures which were given in the course of the Second Reading debate in another place. These figures indicated that Glasgow's problem, as the White Paper says, is a special one. To-day I want not so much to criticise the policy of the Government in this measure as to plead with the Government to treat Glasgow as a special case, and not as one of the 300-odd local authorities in this country. In Glasgow, we have what is called an overspill problem. It is true that Glasgow has succeeded in persuading a number of burghs to take some of our overspill population by agreeing to pay 45 a certain amount over a number of years. One would imagine that other burghs would be very willing to take advantage of this and help with the overspill to the fullest extent of their powers. The point of view that I want to submit is that these burghs receiving overspill are benefiting from the intake of the overspill, while Glasgow is becoming impoverished to an irreparable extent. The people who are leaving Glasgow to go and live elsewhere are not the old folk or the people who are unable to fend for themselves. They are the young, active heads of young families, who take with them their skills, leaving Glasgow, by the loss of such highly desirable citizens, still more impoverished than she already is.
The noble Baroness, Lady Elliot of Harwood, has pointed out that, with the exception of a couple of areas, there is now no space at all available in Glasgow for housing. Only yesterday, when I had occasion to pass through the district called Knightswood, I was led to compare the housing there with the horrible structures that are going up now in Gorbals and other parts of Glasgow. They may house a great many people, but they are horrible to look at. The amenities are not what one associates with desirable residences. Although admittedly there has been an extravagant use of land in the Knightswood area, reckoned in terms of to-day, we see there what might be called gracious living in beautiful surroundings, and presumably at a cost which Knightswood people can pay and are willing to pay.
It has been said in the White Paper, and also by the noble Baroness, that there is a long tradition in Scotland of low rents. I will not contend that a town council is acting legally in refusing to obey a law which lays down that there must be a revision of rents. I am not suggesting that the tribunal before which they appeared, and which inquired into these problems, was wrong in its findings. But what I think it is equally important to remember is that the action—and we may as well mention names—of Dumbarton and the County of Glasgow, in not fully obeying the terms of the law, was not due to any rebellious spirit by these people, on the ground that they thought the prices charged were adequate for the accommodation 46 the tenants were receiving, but was the natural and understandable reaction of people who felt frustrated and displayed their attitude by their refusal to obey.
As the White Paper itself admits, rents have been increased slightly. But let us not forget that this so-called tradition of low rents is a tradition in the real sense of the word, in that it goes back for many years. Indeed, it would not be exaggerating to say that it goes back to the early days of the Industrial Revolution, when the industrialists of those days paid wages on which the people could not manage to live, so that when anything was taken from their wages it left them too little to pay rents of any magnitude. One side effect of that was that the conditions under which they were asked to live, the houses which were built for them, were ramshackle, dirty, filthy, and unsafe. And it is no wonder that, until the medical profession found means of remedying the incidence of tuberculosis, Glasgow had the unenviable reputation of being the city with the highest incidence of that kind of disease.
When I speak in these terms, it is not that I am saying that Dunbarton County did right in their action, or that even Glasgow did right, when it came to these inquiries. I say that in the circumstances their reaction was understandable: that to pay a high rent, as they considered it, seemed to them to be unfair for what they were getting in return. I need not remind noble Lords—at any rate, those who have gone round some of the slummier parts of Glasgow—that no human being could possibly tolerate the conditions under which, even to-day, people are living there. Let us remember this fact, too: this tradition is a tradition in which the ordinary working man and woman in Scotland was made to tolerate conditions which to-day would not be tolerated by their children. That is due to the normal development of taste; to the higher level of education; to the demand for a higher standard of living which nobody in your Lordships' House would say they do not deserve. Therefore, without going into the merits of the finances and subsidies (and, incidentally, I do not think these improved subsidies will bring about the remedies which the Secretary of State 47 himself rather suggested they would), I say that until Glasgow is taken out of the context of all the other local authorities, and is treated in a way commensurate with its importance, we can never expect her to become once again the great city she was.
Let us remember, also, that changes are taking place, not merely in the demands of the people, not merely in their attitude to what they consider the minimum requirements of life, but also in the very means of communication, of transport and so on. Whereas ships were once the great industry for Glasgow, and whereas railway engines were once the product of Glasgow, with heavy industry generally, to-day we see that all that is changing. My fear is that unless Glasgow is treated as a special problem it will become a derelict city, because of the very matters now being adumbrated in this White Paper.
What it says here is that in a time of changing industry, with new towns being built and so on, there is opportunity for different attitudes to housing. That may be so. But it does not apply to Glasgow. It is interesting that in the current number of Town and Country Planning, a copy of which was sent in January, 1962, to the Secretary of State for Scotland, we find this rather important point of view expressed: that, whereas the Clyde Valley Scheme was one which took into consideration a very large area for the purposes of developing in the way that is well known to-day, that is no longer adequate. To-day, what one needs by way of development is something which covers not merely the Clyde Valley but the Forth Valley as well. Until we get a wider Council, as is demanded by present-day conditions, we cannot hope to get the improvements we wish and which we think we ought to have. So, my Lords, I come back to my point. The Government admit that Glasgow is a special problem; therefore, they should treat Glasgow as a special case. Whatever may be done under the general heading of subsidies for all the other places, consideration should be given to the setting up of some special body, for the particular purpose of trying to save Glasgow from becoming, as I fear it might, a derelict city.
§ 4.57 p.m.
§ LORD CRAIGTON
My Lords, I should like to join in the congratulations of all Scottish noble Lords on this side of the House to the noble Lord, Lord Greenhill. We are glad that he is now better and able to take part in our deliberations. I should like to thank him for the great experience which he has brought to bear in a thoughtful and well-balanced speech. I am glad, too, that my noble friend Lord Molson—I am sorry he is not here now—thinks that the Bill is better than the English Act. We think that about all our Scottish Bills. I am grateful for his appreciation, and for the appreciation of the noble Baroness, Lady Horsbrugh, of Command 1520, Housing in Scotland. As both have said, the position is clearly put, and that is because we really understand the problem.
Correct diagnosis is, I think, the first step to a final cure, and there have been many such steps over the years. I feel that this is just another step in the right direction. I agree with my noble friend Lady Elliot of Harwood that there has been considerable agreement among all speakers, and I thank her for her welcome to the Bill. It is difficult enough to handle a Bill like this which touches on rents, and I am glad that it has nothing to do with mothers-in-law. One would expect a little opposition from the noble Lord, Lord Hughes, but I could not think of a worse description to give a skilfully detailed Bill than that it was completely irrelevant. I think he seemed to prefer the status quo. I must tell him that one day he may be standing where I am now, and he will not get far by preferring the status quo.
What is the purpose of the Bill? To stimulate house building until everyone has a proper home; and for that we have to make a change. The noble Lords, Lord Hughes and Lord Greenhill, mentioned Glasgow. I must confess that I do not know whether Glasgow gets £12 or £32, though I would remind the noble Lord that whether the result of the election depended on £12 or £32—I know he was only joking—one of his honourable friends in another place calculated that Glasgow would get £32. But we ourselves do not know. I think I must join issue with the noble Lord on his suggestion that we should treat Glasgow as a separate case, because going back over 49 the last number of years I think that is what we have done, and we are simply adding to it in this Bill. For example, there is the expensive sites subsidy—a brand new subsidy. What is that in essence but treating Glasgow as a separate case in that particular field? By its operation that is a provision that will specially benefit Glasgow. Glasgow considerations were borne in mind in preparing the expensive sites subsidy, as were, of course, all Glasgow's problems. The same, too, with the high fiats subsidy and the help given by the S.S.H.A.
Will the noble Lord cast his mind back to the Housing and Town Development Act, the overspill Act? Surely that is treating Glasgow as a separate case. I feel that we are doing in this Bill all that we should to help Glasgow within the ambit of the Bill. If there is something else we should do about Glasgow, something else perhaps to improve the overspill operation, let us by all means keep open minds and see whether we cannot do something to help improve what is being dons already. The noble Lord said that he appreciated the problems that overspill causes; but the Glasgow Corporation, I think, do a wonderful job with overspill. He also, says, and I agree with him, that the intolerable conditions must go. There can be no alternative but for the people of Glasgow to leave Glasgow if the [...] conditions are to go and the peopel of Glasgow are to have a city and housing conditions that they really deserve while I agree with him in posing these problems, the problems will remain [...] the overs pill Problem is solved, which can be by people leaving Glasgow.
The noble Lord's friend mentioned the difficulties of Dundee, which he said would get £12 over the next two years. Of course, as he knows, the object of this Bill is to get the worst-off at the head of the queue, and if Dundee are not at the head of the queue then they will not be one of the very worst-off authorities. He believed that £60 was not an unreasonable rent to charge Is that what the noble Lord said?
§ LORD HUGHES
I said it was not an unreasonable inference to take from his remarks that the noble Minister considered it a reasonable rent.
§ LORD CRAIGTON
That makes it olear in my own mind that the noble Lord does not have the position quite clear. I do not blame him, but I will try to explain. In the first place, £60 is not the target figure for all authorities. In fact the figure for an individual authority will be half-way between the average gross value of the local authority's houses and £60. In Scotland as a whole the average figure will be something like £53. In the second place, even this average figure of £53 is not a figure for rent alone. It is an assumed income from both rents and rates and it is left to the local authority, as at present, to decide in what proportion the expenditure will actually be met from rents and from the rate fund. In fact, it would not be necessary for most authorities at present to charge as much as £53 rent to balance their accounts provided there is a reasonable contribution from the rates.
The noble Lord asked: why £60? Where did we get this figure of £60? I will try to answer. The answer is that £60 is admittedly an empirical figure which appeared, after a process "trial and error, to be the figure to produce the right results. It produced a fair balance between local authorities with relatively inadequate and those with relatively adequate resources, so that we could give a substantial increase to those authorities who need it while maintaining overall Exchequer assistance to housing at about the present rate of increase.
Starting from the assumption that the rate of increase in this Exahequer com-mitment should remain about the same over the next few years, we had to determine two things—the form of the resources test and what the new rates of subsidy should be—in such a way as to achieve the result we wanted; and each of these two things clearly conditions the other. The object is to give a higher subsidy to a local authority Which, even if it takes credit for the full notional income from rates and rent, can reasonably expect to be still seriously in deficit. Authorities in deficit should have really increased subsidies, but the total paid out in this way should not be more than we can afford. We had, therefore, to find a formula that had the greatest possible regard for local conditions and for sound housing account finance.
51 Every local authority, as the noble Lord knows, has a fixed income from existing subsidies, and the balance is now made up from rent and rates as each local authority decides. With the new valuations we have a more realistic valuation of the houses on the basis of which we can fix notional income from rent and rates in the Bill—not from rent alone. But we had in some way to limit the notional deficit authorities so that we paid no more in the high subsidy bracket than we could afford, and we had, at the same time, to cushion the impact of the new valuations on the new arrangements. This was better -achieved by the "half-way to £60" formula, which brings closer together the areas of high valuation and the areas of low valuation, than would have been the case if we had taken actual valuation as a yardstick. If, for example, we based notional income from rent and rates on gross value as it stands, without any reference to £60 or any other figure, we should then have more local authorities in deficit, and we could not have afforded to pay such a high rate as we have done. The effect will be to increase the average Scottish valuation from its present figure of £46 to something, as I said, of the order of £53: that is, £46 plus halfway to £60, which equals £7, making £53.
§ LORD GREENHILL
My Lords, may I interrupt the noble Lord just to say that no one would pretend that these figures are arrived at arbitrarily. They are arrived at on the basis of such information as is available at the time of making these figures. But experience has shown repeatedly that although you have come to certain definite figures, after a very short time—and equalisation grant is an obvious example—you have to change the very figures upon which you arrived previously, and there is, therefore, no finality, in my view, about that kind of figure. It will be alterable according to circumstances as they change, and they are rapidly changing just about now.
§ LORD CRAIGTON
That is right; but to answer the noble Lord, Lord Green-hill, of course the subsidy is regulated every year so that the authority can go in and out of deficit. It does not seem to me unreasonable to pay the lower rate of subsidy, £12, to a local authority who can reasonably be expected to obtain an income of the order of £53 from rents and rate fund contributions, and who, if they did, would have no housing deficit. The average income from rent alone in England, as the noble Lord may know, is already more than this—about one guinea a week.
The noble Baroness, Lady Horsbrugh, asked how the figure of £12 was arrived at. It was arrived at in the same way as the £32 and the £60; it is the best answer we could work out to give the results we wanted. The noble Lord, Lord Hughes, then raised another point. He said this Bill transferred liability from the taxpayer to the ratepayer. But it does not, of course. It re-distributes the taxpayer's contribution so that it is used to better advantage. For the next few years we expect the rate of increase of Exchequer costs to be about the same; then it will rise. But if the ratepayer's present burden is high in any area, this is the result of unduly low rents, and if the Secretary of State's efforts to get rents on to a more realistic basis can succeed, that will help the hardly-done-in by ratepayer. I agree with the noble Lord, Lord Hughes, and I am glad he said that he is not seeking to justify the unusually low rents in certain areas, this is a matter of concern to us on; both sides of the House. I think this Bill will be a great help. My right honourable friend will continue to do all he can.
My noble friend Lord Molson asked me to say something as to what exactly my right honourable friend proposes to do. First of all before I come to that point, the noble Lord felt that there should be greater powers in Clause 3 so as in some way to say, "Unless you are good boys you are not going to get the subsidy". But Clause 3, in effect, says to the local authority who is getting the £12, "You may feel you ought to have a higher subsidy, but the facts show that if you are in financial difficulty there is a substantial remedy in your own hands in revising your rent policy." To that extent I think Clause 3 does What the noble Lord wants.
53 My right honourable friend's powers really lie in Clause 29, which does not give my right honourable friend any new power to put a local authority into default. The existing procedure which my right honourable friend may put into motion, either on receipt of a complaint or on his own initiative, remains as it is at present. What Clause 29 does is to put "teeth" into these provisions so that when a default has been established the Secretary of State can do something effective to ensure that it is put right. These new powers are a last resort, to be used only where a local authority is found in default and has not been ready to put the default right by itself. My right honourable friend will not hesitate to use his powers, if necessary, but he will be much happier if it is not necessary at all. The fixing of rents has been entrusted by Statute to local authorities, and I am sure we ought to be able to rely on them to carry out this duty in a reasonable way.
My right honourable friend is doing everything possible to urge on local authorities the importance of getting rents on a reasonable basis, both by the issue of information and guidance and by action against local authorities who do not appear to be exercising their functions reasonably. There has been a remarkable movement in rents over the past few months, the average in Scotland going up very quickly, helped on, no doubt, by the exercise of the default procedure in a recent case. My right honourable friend has every confidence that this movement will continue, and that the anomalies of the present position can be got rid of by the reasonable exercise by local authorities of their statutory duties.
The noble Lord, Lord Hughes, was worried about my right honourable friend's powers in Clause 8 after ten years to reduce or abolish subsidies retrospectively. (The answer to my noble friend, Lady Horsbrugh, by the way, is, that there are similar provisions in the English Bill.) I would ask the noble Lord, Lord Hughes, to bear in mind that, before my right honourable friend takes this action, he goes through two motions. First of all, he has full discussions with the local authorities, and although the noble Lord, Lord Hughes, may think that "full discussions" means telling the local authorities what 54 they are to do, I have considerable experience of this and I can assure him that it is not the case at all; these discussions are very frank and very helpful, and often the local authorities have it their way rather than the Government having it their way.
§ LORD HUGHES
My Lords, will the noble Lord permit me to intervene? He is well aware of the fact that I have frequently been in these negotiations with him, but I have been on the local authority side, and I know how very seldom we have made any change at all in what has come to us from St. Andrew's House.
§ LORD CRAIGTON
I can think of more than one occasion when the noble Lord's silver-tongued oratory prevailed over us, and, as he knows, on many occasions these things have been worked out by officials before they get as far as our deliberations. The second step which my right honourable friend takes is to get his action approved in another place, and that gives full democratic right to ventilate the pros and cons.
The noble Lord was also worried about rent rebates not being included in the calculation for notional deficit. I think he overlooks the fact that it is only a calculation; it is a calculation of qualification for subsidy. The question of whether rent rebate is to be paid by the ratepayer or the taxpayer does not arise at all in this calculation. It would have been a far more complicated calculation and probably we should have arrived at exactly the same answer in the end.
I am grateful to my noble friend, Lady Horsbrugh, for her constructive speech, and especially for the welcome she and my noble friend Lady Elliot of Har-wood gave to our efforts to stimulate private house building. I agree with the noble Baroness about the need for propaganda: Governments must put things over like any business firm if they are to succeed. She referred to the advisability of trying to secure an economic rent for the new houses as they are built. I am not sure whether she had one point quite clear. She will bear in mind that most local authorities own considerable numbers of houses built when prices were low, and that for housing account purposes the benefits 55 and burdens should be fairly shared among all local authority householders.
My noble friend Lord Saltoun talked about the position of private building in small burghs. He said I was hesitant about raising the question of building houses for sale by private enterprise. The Bill does not affect private enterprise, but I did attempt to explain the new steps we are taking to stimulate capital, government and private, to build houses for letting at economic rents; and in that I hope the Bill will be a considerable help.
The noble Viscount, Lord Colville of Culross, made a typical speech in which he made a very clear statement, I thought, on the question of controlled rents. As I think my noble friend will agree, any alteration of controlled rents would be more appropriate to the Rent Acts than the Housing Acts; but, apart from this, we have repeatedly made it clear that we do not intend in the present Parliament to alter the rent levels laid down in the 1957 Act; and in particular we are bound by a pledge—and Parties must stick by election pledges—given by Mr. Henry Brooke, in September, 1959, at a pre-election Press conference, that the Government did not intend in the next Parliament to alter the rent levels laid down by the Rent Act of 1957. On this occasion Mr. Brooke was quite clearly speaking, not as an English Minister of Housing, but as one of a number of spokesmen on the Conservative Party's general policies. The Government cannot therefore hold out any possibility of making provision in the present Bill to deal with the rents of houses still remaining in control.
My noble friend made reference to what the Secretary of State said and I am advised that he quoted my right honourable friend correctly. What my right honourable friend promised was a comprehensive review of the provisions of the Rent Acts; he certainly did not imply that any legislation to amend those Acts would be introduced immediately the new valuations were available. The collection of information about current rents and new gross values of houses as well as about the working of the existing Acts so as to enable a review of the whole position to take place will obviously take time. But I 56 can give an assurance that the promised review will be put in hand just as soon as the necessary data can be obtained from the assessors, who are still, as my noble friend knows, hard pressed with work over the recent revaluation. So preliminary inquiries have been put in hand and a proper inquiry will be held as soon as possible.
I agree with my noble friends Lord Colville of Culross and Lady Horsbrugh about the importance of improvements. The noble Baroness asked whether we had experts to help us with improvements, and whether we had done our best. I can assure her that I myself have made the most exhaustive attempts to keep up the momentum in this question of improvements, but I should be being less than fair if I did not say that I am most disappointed. We are still trying. We need more improvement work. What I can tell her is that I expect that the increase in the permitted rent allowance from 8 to 12½ per cent. will help. We want the local authorities to do more, and we hope that they will be ready, in conjunction with private owners, to undertake large-scale schemes for improvements in areas of sub-standard houses which, though they may be sub-standard, are not bad enough to be demolished.
I am glad to know that some authorities are considering this. I think of Glasgow and Paisley and Port Glasgow. The large scheme recently carried out in Port Glasgow by Messrs. Lithgow shows what can be done by proper organisation and good planning. We can only do everything we can to push on every front to try to get more improvements in Glasgow. I am not sure that the noble Baroness is not right in saying that the Glasgow type of house makes improvement more difficult than the type of houses in England and Wales.
My noble friend Lord Colville of Culross asked about Clause 21. He was worried about the giving of an undertaking in 21 days, and thought that this might not be long enough. I think that I should draw his attention to an Amendment put down in another place to line 19, at page 19, whereby the local authority has power to extend the period of 21 days. But, quite apart from the Amendment, the local authorities have, 57 by tradition, always been most helpful and reasonable about the strict conditions of the Acts. I am quite sure that they will know just as well as the proprietor whether the job will take more than 21 days, and that they will "play along" with him in a fair manner.
My noble friend Lord Forbes asked whether the £400 maximum for improvement grant was increased under this Bill. The answer is: No; it is not.
§ LORD CRAIGTON
The answer is; No; it cannot be. But I will say that we still think that £400 is a reasonable maximum, as it seems to hold the right balance between the house-owner and the taxpayer. We base our belief on the fact that the average grant paid is about £300. That does not suggest that many applications are being turned down because they are over the limit.
§ LORD FORBES
My Lords, I do not quite see how that applies. If £400 was thought to be the right amount in 1954, why is it still the right amount to-day?
§ LORD CRAIGTON
My Lords, it still appears to be the right amount. But there are other Bills—I am quite serious about this—and if this point arises, and it is felt that there is substance in it, then, if a suitable instrument comes along, we can amend it.
My noble friends Lord Colville of Culross and Lady Elliot of Harwood referred to Clause 32, to the small point about the Secretary of State having to approve the change in occupation in regard to agricultural workers' houses. T will look at what the noble Lord, Lord Saltoun, has said. The answer is that this is taxpayers' money and we thought it right that my right honourable friend should be brought in when the local authority waived one of the conditions of grant. It is a small point, and I am quite willing to look at it. On that happy note, I hope that your Lordships will now agree to give this Bill a Second Reading.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.