HL Deb 29 June 1964 vol 259 cc434-53

2.48 p.m.

Report of Amendments received (according to Order).

Clause 2 [Power of Corporation to make loans to housing societies]:

LORD HASTINGS

My Lords, during the Committee stage I promised noble Lords opposite that we would have another look at Clause 2 and at subsection (1) in order to see whether we could find a form of words to make it clear beyond doubt that the Housing Corporation could make loans to a housing society of up to 100 per cent. without prejudicing the Minister's powers to give directions under Clause 1. This Amendment and the second one have been devised for that purpose. I beg to move.

Amendment moved— Page 3, line 34, after ("make") insert ("loans")—(Lord Hastings.)

On Question, Amendment agreed to.

LORD HASTINGS

My Lords, I beg to move this Amendment formally.

Amendment moved— Page 3, line 35, leave out ("loans to meet") and insert ("for the purpose of enabling the housing society to meet the whole or any part of any").—(Lord Hastings.)

On Question, Amendment agreed to.

Clause 19 [Dwellings outside improvement areas]:

LORD SILKIN

My Lords, Clause 19 provides for the giving of notices for work to be done on premises which fall within Part II of the Bill, and that the notice to the owner shall be of twelve months. During Committee stage it was pointed out that in some cases twelve months was unnecessarily long, particularly where the full works contemplated in the Bill would not be required to bring dwellings up to the requisite standard—it might be necessary to provide only cooking facilities in a kitchen or water or something of that kind—and in that case it should be within the discretion of the local authority to give notice of a period shorter than twelve months. That is the purpose of this Amendment and I hope it will be acceptable. I beg to move.

Amendment moved—

Page 23, line 23, at end insert— ("(c) If the works are to a lower standard than full improvement, the improvement notice may. at the discretion of the local authority, specify a period shorter than twelve months.") —(Lord Silkin.)

LORD HASTINGS

My Lords, in respect of Clause 19 certainly the Government would think it right to advise local authorities to exercise care when specifying a shorter period than twelve months, and in any case not to go below six months; but subject to that, I have pleasure in accepting this Amendment.

On Question, Amendment agreed to.

LORD HASTINGS moved, after Clause 34, to insert the following new clause:

Rent limit in Rent Act 1957: increase for improvement under Part II

" .—(1) In the case of an improvement effected in compliance with an immediate improvement notice or final improvement notice or an undertaking accepted under this Part of this Act, section 5 of the Rent Act 1957 (increase for improvements) shall have effect subject to the provisions of this section.

(2) If—

  1. (a) the landlord, or a predecessor in title of the landlord, is the person who expended money on the improvement, and
  2. (b) a standard grant under section 4 of the Act of 1959 in respect of the improvement, although obtainable, has not been obtained,
the said section 5(4) (under which, as amended by section 27 of the Act of 1959, the making of a standard grant reduces the increase of rent authorised by that section) shall apply as if that standard grant had been obtained.

(3) In any proceedings relating to the increase authorised by the said section 5 in respect of the improvement it shall be assumed, until the contrary is proved, that a standard grant was obtainable in respect of the improvement.

(4) The local authority shall, at the request in writing of the landlord or the tenant, give to him an estimate in writing of what the amount of the standard grant would have been if it had been obtained, and for the purposes of any such proceedings that estimate shall be sufficient evidence of what that amount would have been.

(5) Section 25 of the Rent Act 1957 shall apply for the interpretation of this section."

The noble Lord said: My Lords, this new clause has been put down by Her Majesty's Government in order to achieve the object of the Opposition's new clause which was moved in Committee and which I accepted in principle. Your Lordships will remember that I suggested then that it would be better to achieve this object by reference to the Rent Act, 1957, and that has been followed out. The substance of the new clause is in subsection (2), which provides that the amount spent on the improvement, on which the rent increase is calculated, shall be the cost less the grant, as if the grant had been taken, whether it has been taken or not. Subsection (3) puts the onus on the landlord of proving that the grant was not obtainable, and subsection (4) obliges the local authority to supply an estimate of what the grant would have been if a grant had been asked for and given. I think that this will meet the requirements which noble Lords want to put into the Bill. I beg to move.

Amendment moved— After Clause 34, insert the said new clause. —(Lord Hastings.)

LORD SILKIN

My Lords, this is certainly an improvement on what was in the Bill before. It gives us some of the things we asked for, and I am very glad indeed to support it.

On Question, Amendment agreed to.

THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF HEALTH (THE MARQUESS OF LOTHIAN)

My Lords, this Amendment is the Scottish counterpart of the Amendment to which your Lordships have just agreed. I beg to move.

Amendment moved—

After Clause 34, insert the following new clause:

Increase in controlled rent in respect of improvement under Part II

".—(1) In the case of an improvement effected in compliance with an immediate improvement notice or a final improvement notice or an undertaking accepted under this Part of this Act, section 2(1)(a) of the Increase of Rent and Mortgage Interest (Restrictions) Act 1920 (increase for improvements) shall have effect subject to the provisions of this section.

(2) If a standard grant under section 19 of the Act of 1959 in respect of the improvement, although obtainable, has not been obtained, the said section 2(1)(a) (under which the amount of the permitted increase in rent in respect of expenditure incurred by the landlord on the improvement of a dwellinghouse to which the said Act of 1920 applies is limited to an amount calculated at a rate per annum not exceeding twelve and one half per cent of the amount so expended) shall apply as if for the reference therein to the amount expended on the improvement there were substituted a reference to that amount diminished by a sum equal to what the amount of the said standard grant would have been if it had been obtained.

(3) In any proceedings relating to the increase permitted by the said section 2(1)(a) in respect of the improvement it shall be assumed, until the contrary is proved, that a standard grant was obtainable in respect of the improvement.

(4) The local authority shall, at the request in writing of the landlord or the tenant, give to him an estimate in writing of what the amount of the standard grant would have been if it had been obtained, and for the purposes of any such proceedings that estimate shall be sufficient evidence of what that amount would have been.

(5) In this section 'landlord' and 'tenant' have the same meanings respectively as in the said Act of 1920."—(The Marquess of Lothian.)

On Question, Amendment agreed to.

Clause 39 [Exclusion of dwellings controlled by Crown or a public authority]:

LORD TAYLOR moved, in subsection (2), to add to paragraph (c): Provided that the housing association is recognised by the Corporation as a bona fide association, formed for the benefit of the tenants,". The noble Lord said: My Lords, this Amendment tries to make sure that premises controlled by housing associations formed for something other than a bona fide purpose do not escape being dealt with by control orders. When we were dealing with this matter in Committee, the noble Lord, Lord Hastings, promised to look into it. He said that, in a sense, it was a possible gap in housing association law, rather than something which ought to be dealt with here, but his final words were that he would look into the question and report to us again, to see whether anything could or should be done. May I say that we are grateful for the kindness which the noble Lord has shown to our proposals so far? Long may it continue! I beg to move.

Amendment moved— Page 45, line 21, at end insert the said proviso.—(Lord Taylor.)

LORD HASTINGS

My Lords, I did look into this matter carefully and, as the noble Lord, Lord Taylor, is no doubt aware, I wrote to his noble friend Lord Silkin, to say I regretted that we should not be able to accept his suggestion. My reason for saying that was that this would really be taking a large mallet in order to crush a very small gnat. This Amendment would exclude many hundreds of provident and non-profit-making housing societies from the exemption made in this clause, and we should hardly be justified in doing that. We feel, moreover, that housing associations, like local authorities and development corporations, can be relied upon to act responsibly in regard to the improvement of their dwellings—and in this Part of the Act we are dealing with improvements and not with other matters. I think that it would be derogatory to the housing associations not to treat them in a responsible manner, particularly at a moment when we hope to get many more housing associations started.

As regards the Amendment itself, there are other objections, apart from that of principle. First, there is the question of recognition. This cannot be a function or purpose of the Housing Corporation, whose primary function is to lend money to housing societies. Before it does so, the Corporation will go thoroughly into the background of a society, its formation, its stability and reputability. It is not likely that it would lend money to a housing society which has not been formed with the view to helping people who want to build houses for themselves at cost-rents or who want to share in cost-rent schemes. Apart from that, by the Industrial and Provident Societies Act, 1893, recognition is really vested in the Chief Registrar of Friendly Societies. That is where the test comes. The societies must not be trading for a profit, and it is difficult to see where these other societies would creep in or be any sort of danger.

Secondly, the Amendment is rather vague, because it does not make provision for machinery of recognition, if the bona fide of the association has to be decided by the Housing Corporation. Therefore, I do not think that the Amendment would stand in its present form. But our main objection is to the principle that, in order to catch one or two potentially unsatisfactory housing associations, we should put into Part II of the Bill a proviso which would limit the exemption of housing societies from the liability to compulsory improvement orders. Therefore, I hope that the noble Lord will not wish to press his Amendment.

LORD TAYLOR

My Lords, I see the objections which the noble Lord has raised, that we are introducing a new function for the Housing Corporation, in making it, as it were, the registrar of bona fide housing societies. Our concern is with people who would form a housing society in order to avoid the effects of the application of a control order, as a sort of crooked operation—and that could be done. But let us hope it will be seldom done; and if it is done, we must try to expose it in due course and deal with it in some other way. I realise that to try to do it in the way we have suggested may be impracticable, and we do not wish to press the Amendment.

On Question, Amendment negatived.

Clause 46 [Standard grants excluded for certain houses and other buildings in multiple occupation]:

LORD HASTINGS

My Lords, this Amendment is also put down to meet an objection raised by noble Lords opposite on the Committee stage. They wished to enable a standard grant to be paid for the improvement of a house in multiple occupation to the level of the full range of standard amenities. This Amendment restores the availability of grant for improvements to that full standard in the sort of case noble Lords opposite had in mind. I beg to move.

Amendment moved— Page 54, line 28, after ("1959") insert ("so far as it relates to applications made by virtue of section 43 of this Act").—(Lord Hastings.)

LORD LATHAM

My Lords, this Amendment and the next one substantially redeem the assurance the Minister was good enough to give on the Committee stage. It strengthens the clause substantially and meets the point the local authorities had in mind. We are grateful.

On Question, Amendment agreed to.

LORD HASTINGS

My Lords, this is a consequential Amendment. I beg to move.

Amendment moved— Page 54, line 29, leave out from ("made") to ("in").—(Lord Hastings.)

On Question, Amendment agreed to.

Clause 54 [Conditions attaching to improvement grants and standard grants in England and Wales: rent limit]:

LORD HASTINGS

My Lords, this is a minor Amendment repairing an omission. I beg to move.

Amendment moved— Page 61, line 23, after ("Sections") insert ("2,").—(Lord Hastings.)

On Question, Amendment agreed to.

Clause 58:

Amount of improvement grant for dwellings provided by conversion of houses of three or more storeys in England and Wales

58.—(1) Section 32(1)(b) of the Act of 1958 (which limits the amount of an improvement grant under Part II of that Act for each dwelling provided by the improvement works to four hundred pounds or such other amount as may be prescribed) shall have effect in relation to a dwelling provided by a conversion of a house which consists of three or more storeys as if for the words "four hundred pounds" there were substituted the words "five hundred pounds".

(2) The reference in the foregoing subsection to the number of storeys shall, if any of the dwellings provided by the improvement works is a dwelling all or part of which is in the basement, include the basement as one of the number of storeys of the house.

(3) The Minister's power under the said section 32(1)(b) to vary the amount specified in that paragraph shall be exercisable separately as respects the amount of four hundred pounds mentioned in that section and as respects the amount of five hundred pounds substituted by this section in the cases specified in this section.

3.8 p.m.

VISCOUNT STONEHAVEN moved, in subsection (1), to leave out all words after "effect", and to leave out subsections (2) and (3), and insert: as if for the words 'four hundred pounds' there were substituted the words 'six hundred pounds'.

The noble Viscount said: My noble friend Lord Colville of Culross is unable to be here to-day and has asked me to move this Amendment for him. I must apologise for a mere Scotsman moving an English Amendment, but if it is for the convenience of your Lordships I will speak to this Amendment and the next one, which is a Scottish Amendment, at the same time, and then I will move them separately.

I have been supplied with a lot of figures relating to England, and I am sure that Her Majesty's Government have these figures. Therefore I will only summarise them, because I do not wish to bore your Lordships with too many statistics. The Country Landowners' Association in England approached 46 rural district councils, who replied. Of those 40 rural district councils, 6 said that, as a matter of policy, they did not pay the maximum grant in any case. Eleven sent in detailed figures for 1961, 1962 and 1963 which show that, out of 973 approved cases, the approved cost of 453 of the houses was over £800; and out of 941 cases, the approved cost of 245 was over £1,000. The discrepancy in the total numbers arises through Malton, which I understand is in Yorkshire, who give their figures as averages, and their average cost over those three years was £1,273 per house, £942 per house, £1,081 per house, and for a part period, £1,249.

Her Majesty's Government on the Committee stage rested their case, I thought, on average figures of grant paid. I should like to nail the fallacy and danger of this argument, I hope once and for all, by three quite simple examples. Ten houses costing £800 each, which is a total of £8,000, rank for an average grant of £400. Five houses at £1,000, and five houses at £600, total average cost £800, would rank for an average grant of £350—the same cost for the same number of houses, but a totally different figure, because you are playing with averages. I will give one last example. Five houses at £900, five houses at £700, a total of £8,000, would rank for an average grant each of £375. The total cost is exactly the same, the total number of houses is the same, but, on the average figure for grant, you have three completely different answers. I think tint proves the fallacy of trying to get at this through averages. That is the general theme for England and Scotland, although the figures vary.

Converted houses, of course, mean better living conditions for workers and—an important point—for retired folk and people who find it difficult to be housed other than by local authorities. In other words, conversion will relieve the pressure on local authorities, and it is a cheap way of getting this done. Nevertheless, the conversion or improvement of a house results in an increased rateable value, and often in the particular district an increased poundage on the rates. Therefore, quite a "cut" comes back to the local authority.

Conversion also, theoretically, results in increased allowable rent. But this is, in country districts, largely a theoretical exercise, because the rent you may charge is governed, certainly for agricultural workers, by the Agricultural Wages Act, which limits the rent at the present moment to 11s. a week. You can appeal to the Board and possibly get it put up, but if you did that, you would not get a farm worker, and I think that is why nobody ever does it. On the other hand, the bigger the grant you receive, the less increase in rent you are allowed to pass on, which is very just and proper. Private enterprise housing in the country seldom passes on the rent or rate increase to the agricultural worker, because the rent and rates is payable by the farmer and owner. Local authorities, on the other hand, have to pass on the whole.

There are some factors in cost of construction which to some degree affect England and parts of Scotland. Cost of materials in remoter places includes cost of transport. As an example of that, I will quote the cost of cement in the London area, which is of the order of £5 to £6 a ton, as compared with a not very remote part of the world, Stonehaven, near where I live, where it is over £9 a ton. And all other materials include a fairly heavy delivery charge. Also, workers' travelling time has to be allowed for. When the workers have to go into the country you have to pay both for the travelling time and the transport to get them there. There is more bad weather in some parts of the country than in others, which again has to be paid for; and, in particular, in the country districts, there is the cost of drainage, electricity and water (this is not so in every case, but in a large number of cases) which is bound to put up the cost.

Another factor which does not seem to be accounted for is the size of accommodation which is often necessary in country districts to prevent overcrowding, no other accommodation being available. Costs of new houses vary largely from house to house and district to district. The cost of land is not always shown in the cost of the scheme; very often it is shown differently. Also the costs of roadworks, drainage and sewerage are often in a separate scheme, and, therefore, these figures are very difficult to compare. By the time all the loans have been paid off on a house originally costing about £2,000 the cost of that house is probably much nearer £5,000. The cost of converting a house, which the Government and the ratepayers would find between them, even if the cost of building or converting the house is in the order of £1,800, would be a figure of not much more than that, so it is a very good bargain however you look at it.

I have given the noble Lord the totals of the costs of actual housing in Kincardineshire, my own county—I will not quote them all to your Lordships—which I took from the housing factor's files from 1950 to 1963–64. The total is for 835 houses. At the beginning the average cost of a house—and I am again using averages—was £479. In 1963–64 the average figure was £1,186, which shows the rate at which the costs have been going up. The first nine houses in 1964–65 cost an average of £1,254, and they all received the maximum grant. With regard to local authority conversions, my own local authority converted some houses. In 1960–61 they converted eight houses at an average cost of £1,240. In 1963, they converted three others at a place called Auchinblae, two of them at a cost of £1,460, and one at £1,336. So their costs are comparable to private enterprise costs.

I should like to draw attention to the houses in Cove Bay because the local authority applied to the Secretary of State, and because they said that they had architecturally to fit them into the rest of the village they got an increased grant. Last year a private individual improved another house in the same village and had to comply with exactly the same conditions. His costs for doing that were £1,031, as against the local authority's costs of £1,240, and he did not get an increased grant. The Inverness-shire totals, which I have also with me, are really rather shattering. Inverness, of course, is very remote, as one knows; and again I will try to keep the figures to the absolute minimum. In 1961, they converted 21 houses, 15 of which were above the cost of £800. The average price was £1,028. In 1962, they converted 29 houses, 24 of which were above £800, and the average cost was £1,214. In 1963, they converted 37 houses, 26 of which were above the £800 mark. The average grants they received on these houses were, in 1963 £381; in 1962 £387, and in 1961 £376, which again brings out the point of the danger of averaging these things. It just does not fit the bill at all.

I have a rough knowledge of the Scottish conditions because I have myself converted and re-conditioned about 2 per cent. of the total number of houses which have been converted in that county, which amounts, I think, to 18 to date. I have done the surveying, I have made up the bills of quantities, the specifications and the drawing myself, and obtained prices. The fact that there are two yet to do is one of the reasons why I am keen on this subject. Nevertheless, I claim that the fact that costs of building have gone up—this is nothing to do with averages at all—proves that what I am saying is true; and, so far as I know, it applies to England and Scotland. It appears to me that the Secretary of State has inadequate figures on this question, because when I sent these figures to him after a little bit of shuffling, St. Andrew's House rang up the housing factor in Stonehaven and asked him what it was all about. Therefore, I think the liaison is not quite what it might have been.

So far as individual application to the Secretary of State for an increase in grant is concerned, by and large it takes somewhere between nine months and a year to get through the paraphernalia before you can carry out a renovation. If after that you have to go to the Secretary of State before you can do a job, it is going to take another five or six weeks, at the very least, and my experience is that any approach to the Scottish Office takes considerably longer than that. Therefore, I do not think that that answers any of these problems.

The Association of County Councils were approached, and I believe they recommended this Scottish figure of £500, which at this month of this year I do not quarrel with. I am looking to what will be happening in the general rise of building costs in the future. The Association of County Councils are an interested party, and therefore it would be a good thing to discuss it with the other parties interested in this bargain. I would suggest that a way out might be that in the quarterly housing returns (which go into minute detail of the appliances fitted to each house, and where and why, and all the rest of it) could be added the number of houses ranking for grant above the 50 per cent. figure. That would give us a clear indication, without any averages at all, of just how many people were having to pay a large sum above the 50 per cent. grant. I do not think this would cause any real difficulty, because all the machinery appears to exist. I think it would give us a feeling of confidence that if the Secretary of State and the Minister of Housing did not review these grants, and if evidence was laid that it was necessary to put them up, we could then have the normal opportunity of asking questions or, at any rate, of putting on a little pressure. I beg to move.

Amendment moved— Page 67, line 18, leave out from ("effect") to the end of line 32, and insert the said new words.—(Viscount Stonehaven.)

LORD HAWKE

My Lords, I should like to support my noble friend in this exercise, because presumably these limits were right when they were set, and during the several years that have passed since then there has been an almost unprecedented rise in the cost of building, particularly of the smaller items such as repairs. If the Minister values this form of providing proper up-to-date housing —and I believe he does—I should have thought it was a good thing to keep this grant figure constantly moving to keep in touch with the rising cost of building. We all know that this increase has been going on. I know, particularly from a church point of view, that repairs are very much more expensive to-day than they were a few years ago. Indeed, the Minister has said himself that the industry is heavily overloaded, and we believe that there is very strong bidding between the contractors for labour, so that a great deal of building labour is costing far more than the trade union rates for any particular job. I do not know sufficiently about the background of the Bill to know precisely when these particular limits were set, but certainly I would suggest that the grants should be kept in line with the cost of building.

BARONESS HORSBRUGH

My Lords, I rise to support this Amendment, because I believe that one of the most important things we have to do, if we are to have really good housing in this country, is to go further and more speedily with conversions. We have talked for a great many years of the benefits of conversion. I remember being on two Housing Committees, one to deal with English housing and the other with Scottish housing, before the war, and in both Reports which were issued it was recommended that more effort should be made to convert houses for the use for which they were then, and are now, really wanted. We have done a certain amount, but I am perfectly certain that we have not gone sufficiently far and with sufficient speed in this matter. I feel that if we do not do something further now, those who come after us, in ten, twenty, thirty or forty years' time will be making the same type of speeches and will still be imploring the authorities for more houses; and we shall have had an enormous waste of housing in this country.

We can build new houses, but there is a great deal more which can be done by further conversion. I quite agree with my noble friend about the difficulties of averages; but, after all, he himself had to fall back on averages. We all know that the average cost is one which applies to no specific house at all. I would ask Her Majesty's Government whether there has been a detailed examination of the costs. As my noble friend has pointed out, he has gone into the question of improvements in his own area and has given us some of the details, and it is quite extraordinary what the variations are. I suggest that we should be able to have a clearer statement of costs as they are to-day. As the noble Lord, Lord Hawke, has said, they are going up. I believe that the greatest effort should be made to get on with this job of conversion. Yet I think I am right in saying that in some areas less has been done in the last few years than was done, say, about five years ago. I would ask Her Majesty's Government to consider this question of conversion very seriously, as one of the ways, as we have known for many years, that can make an enormous difference to the housing problem—in other words, make available good and comfortable housing for the people of this country.

THE DUKE OF ATHOLL

My Lords, I, too, should like to support this Amendment and, more especially, the next one —for I gather that we are discussing the two together. In Scotland this particular clause applies only to houses of three or four storeys, and this often means, when improvements are undertaken, that it is necessary to add a room to the house in order to create a bathroom; otherwise, the house becomes so small that economically it is not worth improving. The trouble is that in these days of high building costs it is quite impossible to do so for as little as £1,000. The cost is nearly always between £1,200 and £1,400, as I know only too well from experience. I feel that if the limit were raised from £400 to £600, instead of £500, as provided in the Bill, it would encourage more landlords to undertake these improvements. After all, they are so[...]ly needed, and the longer they are delayed, the greater the cost will be, both to the landlord and to the country. I hope, therefore, that the Government will be able to see their way to accepting both Amendments No. 11 and No. 12.

3.25 p.m.

THE MINISTER OF DEFENCE FOR THE ROYAL NAVY (EARL JELLICOE)

My Lords, having been exposed to something of a barrage, I rise, very diffidently, to reply to these two Amendments, which, as my noble friend suggested, I think it would be useful to take together. First of all, I should like to repeat one main point which I made at Committee stage: that I am at one with my noble friend who has moved this Amendment and those of my noble friends who have supported him; and, more important, the Government are at one with them in agreeing on the importance of doing what we can to encourage house improvements either by standard grants or by discretionary grants. And that, of course, is why we are taking steps, in both Part II and Part III of this Bill, in various ways to encourage more rapid and more comprehensive improvements of houses.

Having said that, I should like to try to clear away what I think is a common misconception here, and one which, to a certain extent, I have heard reflected in some of the things which have been said this afternoon. The discretionary grant—the one we are dealing with here —is not intended to cover half the cost of the works of improvement, whatever that figure may be. Strictly speaking, a discretionary grant is a contribution based on a percentage of up to 50 per cent. towards the first £800 of the cost of improvements. For this reason, it is not enough simply to point to the substantial rise in building costs since 1954. I would agree entirely with my noble friend that building costs have risen substantially since then. I cannot quite recall the precise figure which my noble friend quoted, but I think they have risen by anything from 45 to 50 per cent. in the period with which we are dealing—that is, since 1954, when the £800 limit was fixed.

But the acid test is whether the works of improvement required to bring the house up to the 12-point standard, as it is known, can reasonably be carried out within a maximum figure of £800. That is the point. During Committee stage I promised my noble friend Lord Colville of Culross, Who then moved the Amendment that my right honourable friend and his Ministry would continue with their examination of the evidence that was being collected on the cost of grantaided schemes of improvement, and that I would say anything more I could at Report stage in the light of that reexamination. We have looked at this matter, and the Ministry have reexamined the evidence, and I come back now to give the results of it.

We have taken a random sample of the schemes approved in rural areas in the United Kingdom during the first quarter of 1964, and we have given very detailed examination (for which I think my noble friend Baroness Horsbrugh was asking) to it. I have called it a random sample, but it was not quite a random sample, because the schemes we were looking at were those selected by the Rural District Councils' Association—and I should like to pay tribute to the co-operation which they have given over this—and related to the cases that had been brought to my right honourable friend's attention by the mover of a smilar Amendment, Mr. Ridley, in another place. They were the specific cases which the proponents of this scheme had brought to the Minister's attention.

We looked at 170 cases. In 54 of these the cost of the improvements came to over £800, which is the crucial figure here. However, after applying the necessary three tests which are laid down in the practice notes (and I will remind your Lordships in a moment of what those three tests are), there were only 7, or 4 per cent. of the 170, where the works need have cost more than £800. What are these three tests? They are, first, that the cost should not be above or near the cost of providing comparable new accommodation; secondly, that the grant-attracting element of the cost should exclude all items not necessary to bring a house up to the 12-point standard; and thirdly, that the local authority should calculate the cost-attracting element of the grant by reference to the standards used for the improvement of their own houses. So far as I know, my noble friends have not queried those tests. When those tests were applied, only 7 of the 170 cases—4 per cent. of the cases —need have cost more than £800.

LORD HAWKE

Could my noble friend say why he has chosen 170 cases for rural areas? I should have thought that the greater need for modernisation was in the towns.

EARL JELLICOE

I do not think that is the case. I think it is precisely in the rural areas where this is most likely to hit. But we have looked carefully with the Association of Municipal Corporations at the town cases. There was no pressure for any increase from them. I think the pressure for this increase, both in this House and another place, has been mainly in respect of rural areas, save in Scotland for the tenements. But because of that—and I would ask your Lordships to believe that the Ministry have looked at this very carefully—we still take the view that there is, as yet, insufficient evidence to warrant a general increase in the maximum amount of the discretionary grants. Nevertheless, as I also endeavoured to point out at Committee, the Government do not wish to be inflexible on this matter, if for no other reason than that they, like my noble friends, wish to get this improvement going forward and going forward more rapidly.

I should like to apprise your Lordships of two developments that we have in mind. First, it has seemed significant to us that in each of the 7 cases where the reasonable cost of improvement would have exceeded £800 a substantial item of the cost was that for providing a new floor to replace the existing brick, earth floor or stone flag floor. Your Lordships know (I mentioned this point, also, at Committee stage) that in particular cases, provided that my right honourable friend agrees, local authorities may pay grant above the normal maximum. My right honourable friend therefore proposes to advise local authorities that they may seek his concurrence to pay more than the normal maximum of discretionary grant where they consider that the need for this arises from the provision of new floors in the circumstances I have mentioned. That is the first assurance.

The second is perhaps more substantial. My right honourable friend the Minister of Housing and Local Government feels that it would be right from now on to conduct a continuous running review of the cost of grant-aided schemes. I think this is the sort of thing my noble friend Lady Horsbrugh had in mind. This will be carried out by a small special technical staff who are being recruited over the next few months specifically to supervise this work of improvement. This will, we believe, provide my right honourable friend with the eyes and ears he needs, the information he needs on which he can act, if necessary, to alter the present statutory maximum of grants. As your Lordships know, the Minister already has power to vary by order, at any time, the amount of grant, and it would certainly be his intention to do so should he find it necessary in the light of this continuous running review he proposes to institute. I would only add that in Scotland my right honourable friend the Secretary of State for Scotland proposes to do precisely the same thing: to institute a continuous running review. If that review shows that the cost of improvement is rising substantially above £1,000 (it is £1,000 in the case of Scotland), he will take precisely the same action as the Minister of Housing and Local Government proposes to take in England and Wales. I hope that, with those two assurances, my noble friends will not press these two Amendments this afternoon.

THE DUKE OF ATHOLL

My Lords, would my noble friend not agree that the very fact that these 170 cases were taken in the first quarter of this year—when it was well known that this Bill was coming forward; in fact I think it had already been published, raising the maximum grant receivable from £400 to £500—would mean that nobody would be likely to come forward with cases costing more than £800? This, I feel, may have biased the figures in some way towards the cheaper schemes during this particular period, and I feel he might have got a completely different result if he had taken schemes coming forward before there was any wind of what was in this Bill.

EARL JELLICOE

My Lords, I am not quite certain that I follow the argument. In fact the schemes are in respect of England and Wales, where the increase does not apply. This information was furnished by proponents of an increase themselves, and presumably they would not have furnished evidence, as it were, against themselves.

3.36 p.m.

LORD MORRISON OF LAMBETH

My Lords, this is a worrying debate, and I do not find it easy to come down flat one way or the other on the merits of the case. What does worry me a little is that the Minister of Defence for the Royal Navy—who is just as good at defending the Ministry of Housing and Local Government as the Navy—has intimated that, if this additional work on floors and indeed the whole business has to take place, then this great Ministry of Housing and Local Government, which is a pretty extraordinarily big show, must have some additional specialist staff in order to handle it. The Government have lost control over their establishment altogether. They expand the Civil Service staff on the slightest provocation, and this is a slight provocation; and every expansion of staff means an expansion of accommodation and so on, and this Bill in itself is somewhat inflationary in character. But the other interesting thing about the discussion is that the whole debate has been in favour of inflation. Every speaker on the other side, every noble Lord and the noble Lady, has been making an inflationary case to put up public expenditure and put up grants. They may have a case. They say that wages have gone up; indeed one noble Lord has said that in the competition for labour employers are in some cases paying well above trade union rates, so that the whole thing is inflationary.

What we come back to every time is that everybody has a case for something or another, and they make it, and all of them have their spokesmen in Parliament; it may be wages, salaries, technicians, professionals, the higher Civil Service and so on, and they all make a case. And what is the case based on? That the cost of living has gone up. That prices have gone up. And this is, of course, the fundamental point to which the Government ought to give their minds with greater energy and determination than they have done so far. It is this steady increase in prices for one reason or another, some of them understandable and some of them not understandable, that leads to these claims for increased wages, salaries and public expenditure of one sort and another. But if this were not a debate about grants to aid property owners to improve their property—which in itself is a desirable thing in principle, as long as it is not unduly taken advantage of; if this were a debate about the claims of work people or even lower ranks of the Public Service to increased money, we should have heard from the Minister and from the spokesmen opposite warnings about inflationary influences. But as this is a debate about grants to enable property owners to improve their property nobody on the other side has mentioned inflation and it has been left to this common or garden Socialist to mention the possibilities of inflation. It is funny, but it is also serious. So noble Lords opposite are in favour of inflation where their own friends' money is concerned; they are against it when the pockets of humble people are concerned. However, the lesson for all of us is that the sooner the Government can somehow keep prices level, keep them down, the better it will be, and the less we shall have of these inflationary arguments which have entirely monopolised noble Lords opposite this afternoon.

BARONESS HORSBRUGH

My Lords, before the noble Lord sits down, I should like to ask him: Does he not agree that it is better to convert and repair houses, if it can be done well, than to have to build all new houses?

LORD MORRISON OF LAMBETH

I concede that that may well be true; but it does not invalidate my argument in the least.

On Question, Amendment negatived.

VISCOUNT STONEHAVEN

My Lords, I think I should have replied before. I am so sorry: I was asleep.

THE LORD CHANCELLOR

My Lords, I am afraid that I have now put the Question and collected the voices; the noble Viscount is too late.

VISCOUNT STONEHAVEN

I can make my speech on the next Amendment.