HL Deb 17 April 1967 vol 282 cc9-28

2.53 p.m.

Order of the Day for the House to be put into Committee read.

Moved, That the House do now resolve itself into Committee.—(Lord Kennet.)

On Question, Motion agreed to.

House in Committee accordingly.

[The EARL OF LISTOWEL in the Chair.]

Clause 1 [New provisions for financial assistance towards provision of dwellings]:

LORD KENNET

This is essentially a drafting Amendment which is designed to relate the wording of the retro-spective paragraph (3)(c) more precisely to the qualifying tests announced by the Minister in reply to a Parliamentary Question in another place on December 20. I am not sure into how much detail the Committee would like me to go, but if the Committee is content to take it as a drafting Amendment on a matter already known and agreed, I am happy to move it shortly.

Amendment moved— Page 2, line 25, leave out "there is" and insert ("at that date, on the information which had by then been made available to the Minister, there was").—(Lord Kennet.)

LORD BROOKE OF CUMNOR

I see no objection at all to this Amendment. It seems to me to add precision to what the Minister is actually undertaking to do here. In passing, I must express some regret that the Government have not at the same time seen their way to alter the wording of another passage in this same subsection—subsection (3)(c) of Clause 1—where on Second Reading I criticised the use of the words "unreasonable" and "unreasonably", here as elsewhere in the Bill. But all these are in fact retrospective matters, as they are dealing with what is to happen about things that have occurred in the past; and as the Minister has already published a list of the local authorities that are to benefit under this wording, whatever the final wording may be, I certainly should not wish to press the matter further.

On Question, Amendment agreed to.

Clause 1, as amended, agreed to.

Clause 2 agreed to.

Clause 3:

Ascertainment of approved cost of dwelling

3.— (5) The Minister may determine that the approved cost of any dwelling shall be reduced by deducting from the cost incurred as aforesaid in respect thereof as determined in accordance with the foregoing provisions of this section an amount not exceeding the amount, if any, by which the part of that cost referred to in subsection (3) of this section exceeds what in the opinion of the Minister, having regard to all the circumstances of the case, should be the reasonable and appropriate cost (apart from any cost attributable to the acquisition of a site) of providing an adequate dwelling in those circumstances.

LORD BROOKE OF CUMNOR moved, in subsection (5), after the words, "providing an adequate dwelling", to insert, "of similar character". The noble Lord said: This is a small point arising on Clause 3, which provides for the ascertainment of the approved cost of a dwelling. It is important, under the new scheme embodied in the Bill, to arrive at the approved cost in order to calculate what the appropriate amount of subsidy should be. In subsection (5) of the clause it says that the Minister may in certain circumstances determine that the approved cost of the dwelling shall be reduced, in particular if the original tender cost exceeded the reasonable and appropriate cost … of providing an adequate dwelling in the circumstances.

I think it is common ground on all sides of the House that we want local authorities to go forward with the building of different types of dwelling. Indeed, I should have thought it was hardly possible to contemplate that the local authorities would reach the kind of target which the Government has set before them unless they were prepared to order buildings of industrialised or non-traditional type as well as the traditional type of brick house. We know, however, from past experience, that, at any rate in the first instance, the tenders they will receive for new and non-traditional types may well be higher than for the tried traditional types. So far as I am aware this has been the experience ever since the war, when various manufacturers have been seeking to get non-traditional types accepted. Until a stage is reached where very large orders can be placed and the manufacturer knows that he has a long run to go ahead with, it may be inevitable that he will have to quote a somewhat higher price for the new type of non-traditional house than for the accepted traditional type.

It seems to me that unless the Government are prepared to accept an Amendment such as I have put down there may be a deterrent to local authorities interesting themselves in non-traditional building. My Amendment suggests that the criterion should be not the "reasonable and appropriate cost of providing an adequate dwelling" but the reasonable and appropriate cost of providing an adequate dwelling of similar character. The reason why I have chosen those words is to give an assurance to the local authority that if it decides to place an order for some new type of house it need not fear that the Minister will deduct from the approved cost on which he pays subsidy any excess by which that new type of house may exceed the cost of the traditional type.

I do not know whether the Government are going to accept this Amendment or whether they see some other way of meeting the difficulty, but I think it must be common ground between us that nothing should be done to deter local authorities from experimenting with new types of building if by this means they are going to increase their chance of reaching their housing targets, which in certain circumstances they might not be able to do if they had to rely entirely on types of building to which they have been accustomed hitherto. I think my Amendment would overcome the difficulty. I do not intend to press it if the noble Lord, Lord Kennet, can explain whether there is any other way in which this genuine difficulty can be met.

Amendment moved— Page 5, line 33, after ("dwelling") insert ("of similar character")—(Lord Brooke of Cumnor.)

LORD LEATHERLAND

On this day above all I hardly think that the noble Lord will expect me to be much in harmony with the views he has expressed. Nevertheless, I realise the great importance of the contribution which industrialised building can make to municipal housing schemes. A few weeks ago, it was my pleasure to unlock the first door on a housing estate that had been erected by industrialised methods by a company with whom I happen to enjoy friendly personal relations, and I sincerely hope that every possible encouragement will be given to local authorities to switch over from traditional methods to industrialised building, particularly those who have orders for only 100 or 200 houses to place. If arrangements can be made for them to organise consortia, all the better. But they will not take that step so long as they find that the cost of industrialised building exceeds the cost of building traditional houses, as it must inevitably do in the early stages of industrialised building.

That is not the main reason why I rose to my feet. It is to draw attention to the phraseology of this clause. Those of us who operate in local government circles—I suppose I should almost say those who still operate in local government circles—sometimes find difficulty in interpreting these measures. May I read the subsection? It says: The Minister may determine that the approved cost of any dwelling shall be reduced by deducting from the cost incurred as aforesaid in respect thereof as determined in accordance with the foregoing provisions of this section an amount not exceeding the amount, if any, by which the part of that cost referred to in subsection (3) of this section exceeds what in the opinion of the Minister, having regard to all the circumstances of the case, should be the reasonable and appropriate cost (apart from any cost attributable to the acquisition of a site) of providing an adequate dwelling in those circumstances. I think that it would be simpler if we could think of a number, double it, and take away the first one! I am not criticising the Parliamentary draftsmen or my noble friend, but I would add my appeal to many that have been made in this House in recent months, that when legislation is brought before us we should have it in a form in which simple people can understand it.

LORD KENNET

If I may address myself to my noble friend's plea, I sympathise with him—I am sure we all do—in his difficulty in understanding these clauses as they have to be drafted. If he wishes—and perhaps he would inform me afterwards privately—I will try my hand at interpreting the clause and give the result to the House at the next stage of our discussions.

The purpose of the clause, in simple language, is to enable the Minister to reduce the amount on which subsidy will be payable, other than land costs, of any dwelling by any sum by which the total cost of that dwelling in his opinion exceeds what is a reasonable and appropriate cost for providing an adequate dwelling in all circumstances. It is very permissive. If I may address myself to the noble Lord's Amendment, it is true that some industrialised systems may cost more than traditional methods, particularly if used on a short run, which does not permit the economies of scale possible on a long run, but for some types of building, particularly for high and medium rise flats, industrialised building tends to be cheaper than traditional.

In general, industrialised building is well established, and it is reasonable that it should compete on level terms with traditional construction. The new cost limits to which local authorities will have to work as a result of this Bill are based on recent tenders and include a proportion of industrialised schemes. Good systems, efficiently used and in the right place, should come within the cost limits in the same way as economically designed and well-organised traditional schemes. In all forms of construction, the inherent cost of the materials and methods used is only one of the factors which determine cost. Another is the ability of the contractor to organise the work economically. Therefore, we think that in general it would be wrong to discriminate against traditional construction by permitting higher subsidies to be paid for non-traditional construction. By helping to weed out the less efficient industrialised systems, we can ensure that the better ones get a bigger share of the market, which is public policy, and so realise the economies of scale which are potentially inherent in system building.

I suspect that an unintended consequence of the Amendment would be to limit the Minister's power to reduce costs by requiring him to have regard to the design and standards of the dwellings submitted for subsidy. This would mean that the Minister would not be able to reduce the cost of a dwelling approved for subsidy to take account of what in his opinion was uneconomic design or excessively high standards. In other words, he could operate control over costs but not over standards, which is a different matter. The new subsidy has the characteristics of a percentage grant and therefore increases as the cost of a house increases. Consequently, it is only reasonable and prudent that the Minister should have discretion to reduce costs which he considers to be excessive in order to safeguard the taxpayer. For this reason I cannot advise the House to accept this Amendment.

There is a general point of which it is important not to lose sight. The cost of housing generally throughout the country has to be sensibly limited because, unless this is done, some authorities may consume a larger share of the available resources at the expense of others, with the result that there will be fewer houses built. The characteristic of this new grant is that if a local authority were to do this, it would automatically decrease the amount of money available to others. Let me remind the Committee of what my noble friend Lord Sorensen said on Second Reading, that the new cost yardstick tables will be based on the high modern standards which were recommended in the Parker Morris Committee's Report. I appreciate the constructive frame of mind in which the noble Lord advanced this Amendment, and if he would agree to withdraw it, I think that another method may be found to achieve the purpose he has in mind.

LORD BROOKE OF CUMNOR

I am grateful to the noble Lord, Lord Kennet, for what he has said, although he has not gone so far as I should have liked. I know he appreciates that I put this Amendment down in order to draw attention to the point, and that I never believed for one moment that the wording was sufficiently exact to avoid having some unintended consequences in other directions, as he suggested. I certainly was not desiring to provide loopholes for local authorities to obtain subsidies on houses of extravagant design.

I wonder whether the noble Lord would consider this suggestion, among other courses: that when the Minister sends out a circular expounding the provisions of the Bill after it has become an Act of Parliament, as is the normal course when Housing Bills reach the Statute Book, he would make the point I was seeking to make, that local authorities should not be deterred from considering the placing of orders for industrialised buildings by the feeling that on that account alone they might bring themselves within the mischief of subsection (5). It may be that the noble Lord has in mind some other means of doing this. I appreciate his kindness in recognising that there is a point of substance here, and if he will continue to think about the matter I shall be happy to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 3 shall stand part of the Bill?

LORD ROYLE

I cannot refrain from saying a few words in support of my noble friend Lord Leatherland in his renewed protest against the phraseology of subsection (5). A fortnight ago I took the opportunity to make a similar protest with regard to the Road Safety Bill when it was in Committee. Since I first entered another place, 22 years ago, I have heard this protest made time and time again, calling for the simplification of Acts of Parliament and Orders of various kinds. We live in a time when there is some criticism about your Lordships' House as to the contribution we make to Parliamentary life in general, and it seems to me that the time has now come when one of the contributions we might make is consistently and constantly to point out the necessity for simplification in the drafting of our Bills and Orders. I want to support my noble friend in this, and I think that perhaps the more often we say it the greater is the chance that there will be simpler language in our legislation.

LORD LEATHERLAND

I shall be brief in dealing with one small point. In our discussions on this clause we have referred to the qualities of houses and whether a house that is built in substitution for another shall be necessarily of the same quality. In dealing with that point my noble friend touched on the Parker Morris standards, and said that houses to be built in the future would be built to those standards. A few days ago I saw in one of the less reliable of our newspapers a suggestion that the Minister was going to abandon the Parker Morris standards, and was going to tell local authorities that in future they could build below those standards, with his blessing. I rather gathered from my noble friend that in fact the Parker Morris standards are to be upheld, and I should be delighted if he could give me an assurance to that effect.

LORD KENNET

Willingly, my Lords. The yardstick at present under preparation and discussion with the local authority associations is based on the Parker Morris standards.

Clause 3 agreed to.

Clause 4 agreed to.

Clause 5 [Subsidies for dwellings provided to meet special needs]:

On Question, Whether Clause 5 shall stand part of the Bill?

LORD BROOKE OF CUMNOR

There is one question I should like to raise on Clause 5. Here again we have the ambiguous word "unreasonably" which occurs in subsection (1)(b), and again in subsection (2)(b). I regret that we have to use words of this kind in housing legislation, although I am quite sure that I was frequently guilty of it myself and was no doubt criticised by the other side at the time. I believe I am right in saying that the Minister has circulated to the local authority associations his draft proposals for determining the criteria for these discretionary additional subsidies. The question of "unreasonable" or "reasonable" is in effect a question between the Minister and the local authorities. Those are the parties concerned, and if in fact the Minister and the local authorities have reached agreement as to what is reasonable or what is unreasonable, it certainly would not seem to me necessary for Parliament to seek to substitute a different word.

If I am right in thinking that conversations have been initiated by the Minister with the local authorities as to the principles on which the criteria in Clause 5 are to apply, could the noble Lord, Lord Kennet, tell us whether those discussions have been concluded amicably or otherwise, and whether there is agreement between the Minister and the local authority associations as to the application of this clause? I think that is the information which your Lordships would most like to have.

LORD KENNET

It is true that there are discussions in progress (I am not informed that they have yet been concluded) between the Department and the local authority associations, and I understand that the word "unreasonably" as compared with another word such as, for instance, "unduly" does not give rise to difficulty.

LORD BROOKE OF CUMNOR

I am grateful to the noble Lord. As this will not be the final stage of the Bill, perhaps he could take steps to keep your Lordships' House informed at later stages of the Bill here as to whether these conversations have been concluded, because it is quite an important matter so far as this clause is concerned.

Clause 5 agreed to.

Clauses 6 to 8 agreed to.

Clause 9 [Contributions between authorities]:

LORD KENNET

This is the first of four related drafting Amendments which I propose to move formally, if the Committee are willing. I beg to move.

Amendment moved— Page 8, line 24, leave out ("1964") and insert ("1965").—(Lord Kennet.)

On Question, Amendment agreed to.

LORD KENNET

I beg to move Amendment No. 4.

Amendment moved— Page 8, line 35, leave out ("1964") and insert ("1965").—(Lord Kennet.)

On Question, Amendment agreed to.

Clause 9, as amended, agreed to.

Clause 10 [Expensive site subsidies]:

Lord KENNET moved, in subsection (1), to leave out from "on the ground that otherwise the", to the end of the subsection, and to insert: cost to the recipient authority of providing dwellings on the site would, in the opinion of the Minister, be unduly high in the circumstances of the case.

The noble Lord said: I can perhaps best explain the reason for this Amendment by explaining what is the general provision which we want to secure. The last few lines of subsection (1) of Clause 10 provide that the expensive site subsidy payable shall not exceed a certain limit unless the Minister determines that it should be higher. The limit is set out in subsection (2): it is the point at which the expensive site subsidy plus the basic land-cost subsidy would exceed 75 per cent of the loan charges.

The need for the Amendment has arisen because when we came to working out the detailed rules for administering the Minister's discretion under subsection (1) we found that it really was not practical and sensible to relate the cost of providing dwellings on a particular site which might be quite small, although expensive, to the total rate fund or the general level of rents charged by the recipient authority. Any other case would have bound the Minister to have evidence before him of how the high cost of a site, which might have been quite small—only a few acres, with ten or even fewer houses—would show up on the total rate burden of what might be a very large housing authority. In practical terms, this was an impossible proposition and therefore we came to the conclusion that the wording in the Bill ought to be changed. The new wording gives the Minister freedom to help on an expensive site, however small it is, even when the cost would not show up in the total rate burden of the housing authority concerned. I beg to move.

Amendment moved— Page 9, line 42, leave out from first ("the") to the end of line 2 on page 10, and insert the said words.—(Lord Kennet.)

LORD BROOKE OF CUMNOR

This Amendment concerns another of the passages in the Bill which I criticised on Second Reading for the use of the word "unreasonably". I do not know how much satisfaction I can draw from the fact that "unreasonably" is now replaced by "unduly", but at any rate I feel that I have achieved something, some return to myself, and I hope some return to the Government, because, as I understand what the noble Lord has just said, further examination of that passage as it stood revealed that the wording was not wholly satisfactory and would have been difficult to apply. So in that respect, too, I claim some small credit for having directed attention to this passage, and I am happy that the Government have devised this new form of words.

On Question, Amendment agreed to.

Clause 10, as amended, agreed to.

Clause 11 [Advances on account of expensive site subsidies]:

LORD KENNET

I beg formally to move Amendment No. 6.

Amendment moved— Page 10, line 4, leave out ("1964") and insert ("1965").—(Lord Kennet.)

On Question, Amendment agreed to.

Clause 11, as amended, agreed to.

Clauses 12 and 13 agreed to.

LORD BROOKE OF CUMNOR moved, after Clause 13, to insert the following new clause:

Subsidies under Part I not payable in certain circumstances

" . In respect of any year during which a local authority fails to satisfy the Minister that it grants rent relief only to those of its tenants who need it and to the extent that they need it, no subsidies shall be payable under this Part of this Act to that local authority."

The noble Lord said: I beg to move the Amendment standing in my name, to insert the new clause. This is a more important point. The whole reasoning that underlies housing subsidies is that the Exchequer should provide cash grants to those local authorities which would not otherwise be able to proceed with their housing programmes without either seeking to charge the tenants rents higher than they could pay, or having to add to a rate burden, which in all the circumstances would be unreasonable. It certainly seems to me, and I think it is widely accepted, that the subsidy from the Exchequer—that is, from the taxpayer—should be a kind of topping-up operation, after it has been ascertained that without an Exchequer subsidy it would be unavoidable for a local authority to impose unreasonable burdens either on its tenants or on its ratepayers.

Its tenants must be considered, because if would be wrong for a local authority to hop about up and down its waiting list and refuse to rehouse those whose needs were greatest, simply on the ground that they could not afford to pay the rents which the local authority felt it necessary to charge. With respect to the ratepayers, again there might be strong pressure from them on a local authority to slow down its housing programme, if the rates were being so excessively raised that it was going to drain the ratepayers of their resources or alternatively cause great difficulty to the other essential services which the local authority has to provide.

I think that over the years some of us have tended to forget the original reasoning underlying the housing subsidies. Housing subsidies are a good thing if they relieve need. But they should not be paid if it is not necessary for them to be paid, in the sense that there is no need waiting to be relieved. The purpose of the new clause which I am moving is that the new and substantial subsidies payable under this Bill should be payable to a local authority only if, in effect, it proves need; that is to say, it should be required to satisfy the Minister that it grants relief only to those of its tenants who need that relief and to the extent that they need it. If a local authority fails to satisfy the Minister about this, then it is clear proof that the need is not there to the extent originally envisaged, and therefore there is less necessity for the Exchequer—that is to say, the taxpayer—to provide subsidies.

Under my new clause, bearing in mind that these subsidies are payable on an annual basis, I am proposing that in respect of any year during which a local authority fails to satisfy the Minister of this, no subsidies under this Bill should be payable. Of course, all existing subsidies would go on—there is no question about that; there is no interference with what has been arranged in the past. My new clause concerns only the new subsidies which are payable under this Bill. And they are very large indeed.

The Joint Parliamentary Secretary, Mr. Mellish, in another place, winding-up the debate on the Third Reading of the Bill, said: To-day, subsidies are running at £86 million a year. Under the Bill, they go up this year to £100 million, and by 1970 they will rise to £140 million. We are determined to give aid to those in genuine need."— [OFFICIAL REPORT, Commons, 8/3/67, col. 1711.] Everybody is determined to give aid to those in genuine need; but the rate of increase which I have mentioned is so high that it is incumbent on the Government to examine whether this vastly increased subsidy bill is in full required for the purpose of relieving need. There is no merit in paying subsidies out of the Exchequer. There is no social merit in that, though it almost seemed as if Mr. Mellish was laying a claim to that. There is social merit in relieving need, and subsidies from the Exchequer are required, as everybody agrees, for the purpose of helping local authorities to relieve need.

I am not here proposing that any local authority should be obliged to adopt a rent rebate scheme, or a differential rent scheme, or a lodger charge, or an extra earner charge, or anything like that. The local authority can decide what policy it will pursue. But may I remind your Lordships of a most important circular which was issued to local authorities in the time of a former Labour Government in 1930, when, if I remember rightly, the late Mr. Arthur Greenwood was the Minister in charge of Housing? It was Circular No. 1138 of 1930, and it referred to: the clear intention of Parliament that the new grant shall not inure to persons for whom it is not needed. The grant, together with the prescribed rate charge, should be regarded as a pool out of which such abatements or other special arrangements in regard to rent as the local authority propose may be financed. Rent relief should be given only to those who need it, and only for so long as they need it. Your Lordships will see from where I have taken the phrase "rent relief" in this new clause.

I am, of course, aware that other attempts to provide similarly have broken down on the ambiguity of the words used or the difficulty of defining what the criterion shall be, but there can surely be no ambiguity about the phrase "rent relief", because it has been used by a previous Minister in a circular to local authorities on this very subject, and by a Minister of the same Party as the present Administration. From my ministerial experience, I know that Ministers do not use words in important circulars which may be liable to different interpretation by local authorities. Circulars tend to be very exact in their drafting and their wording.

So this is the proposition which I seek to commend to the Committee. I believe the underlying purpose is now widely accepted—accepted by all Parties in Parliament and in local government. The purpose is that housing subsidies should be used to give help to those tenants who need help and to the extent they need it, and not otherwise; because if they are extended to tenants who do not need rent relief, or are extended more generously to such tenants than they really need, then clearly public money is being wasted. I hope noble Lords will consider that this will be an improvement in the Bill, and I commend the new clause to the Committee.

Amendment moved—

After Clause 13 insert the said new clause.—(Lord Brook of Cumnor.)

LORD LEATHERLAND

When the noble Lord, Lord Brooke of Cumnor, began to move his Amendment, I had a fear that if any council failed to conform with the provision which he wants to insert it would lose all its subsidies under all subsidy Bills and not merely the new subsidies which are provided by this measure, but he made it clear as he went on that that was not to be the case and that it was only the subsidies under this Bill which were to be interfered with. In other words, he is introducing a sliding scale of virtue: any subsidies which might have been paid under a Tory Act of Parliament are wise and should continue; any subsidies which are now introduced by a Labour Government are unwise, extravagant and wasteful and should not be allowed to continue. It is a great pity if we are to interfere with the freedom of mind of local authorities and try to bulldoze them into accepting policies in matters of housing which they do not consider to be in the interests of their own local inhabitants, whose needs they are much more capable of interpreting than we are sitting here at Westminster.

Superficially, the idea that one should try to encourage rent rebate schemes is very good indeed. It is part of the Labour Party's official national policy. I do not like to see big motor cars parked outside houses on council estates when I am driving by in my modest Ford, nor, I suppose, does anybody else. It is undoubtedly a matter of much discussion in neighbourhoods where there is a council housing estate. But we must be fair. Every one of the arguments used by the noble Lord against council house tenants could be used equally against that portion of the Bill which proposes subsidies for would-be house purchasers who are buying their premises on mortgages. So if the noble Lord is to pick out the house tenants and to deny subsidies to them, he ought in fairness to pick out the people buying their houses on mortgage—and that is something which none of us would like to see. We are all warmly in favour of house ownership and would like to see it encouraged. One of the blessings of the Bill is that it will make it much easier than it has been in the past for the small man to buy his own house. This is a very good thing indeed.

When we talk about subsidies, ought we not to look at them through neutral-coloured spectacles and not through red or green ones, as we are in the habit of doing? Whenever we talk about a subsidy for a tenant, who may be a poor working man, or may even be unemployed, we regard subsidies as something evil. But when we talk about subsidies for landowners for the squires and the noble lairds with their great estates, they can have subsidies. They can have sub sidies which render their agricultural land free of rates, subsidies which enable them to get away with paying only half the normal scale of death duties. We can have subsidies, too, for shipowners, for exporters, and for manufacturers generally. It is only when we come down to the little man and his family who are trying to struggle along on a weekly wage that subsidies seem to become sinful.

I hope that the Committee will reject the noble Lord's Amendment, because it will have one very undesirable effect. If there is a council which has not introduced a rent rebate scheme, and if under the noble Lord's proposal that council has its subsidies cut off, then the tenants in that particular district would suffer twice: first, through not having a rebate scheme, and secondly through having the subsidies cut off, and then the rents of the whole area would have to be increased. I see no virtue in the proposal put forward by the noble Lord and I hope the Committee will reject it.

3.37 p.m.

LORD WADE

The noble Lord, Lord Leatherland, has made a comparison between Parts I and II of this Bill. As I understand it, the intention in Part II of the Bill is to provide assistance for house purchase in certain circumstances. The intention is to benefit those in the lower income class who would not get the full tax relief.

LORD LEATHERLAND

Would the noble Lord permit me? If you had any of the higher income class living on council estates, I should not be too keen on benefiting such people.

LORD WADE

I wonder whether I might pursue my point for a few moments. In the second Part, as I understand it, the intention is to provide assistance for house ownership in the case of those persons with lower incomes who do not get the full benefit of tax relief. That seems to be perfectly reasonable and fair. I think it is a little complicated, but we will deal with that when we come to it.

In regard to Part I and this particular Amendment, surely the intention is to encourage local authorities to make a distinction between those who can afford to pay an economic rent and those who cannot. I should have thought that it would be quite consistent with Part II if we adopted this Amendment in Part I and discouraged local authorities from granting this rent rebate to those who can quite well afford to pay an economic rent. Like the noble Lord, Lord Leatherland, if I drive my small and modest car past a council house and see a large-substantial and expensive car outside, I do not feel too pleased if I feel I am having to contribute in the form of income tax or rates. But surely the right way to deal with this is to discourage local authorities from granting the full rebate to those who can afford to pay an economic rent. That is the gist of the whole problem.

LORD MITCHISON

Since Arthur Greenwood sent out his circular a good many years have passed, and during a number of those years the Tory Party was in power and introduced housing Bills and housing subsidy Bills. I do not recollect a clause of this kind in any of them. At any rate, it was not mentioned by the noble Lord, Lord Brooke of Cumnor, who had a considerable share in these matters. What is "need" in this connection? Once upon a time in the North of England—much about the time when Arthur Greenwood was Minister of Housing—a local authority found that the inhabitants of part of the town were very badly housed. They thereupon built for them a new housing area and moved them into it. A very curious thing happened. The medical officer of health was very interested in the result on the health of the people who were moved and found that instead of their health improving with better housing it became worse. The reason was that the inhabitants had been able to get enough to eat on the low rents in the poor area which they had left, but they were not able to get enough to eat in the new area to which they were moved, because the rents were higher. Yet they paid them and, in a sense, of course, they might be said to be able to afford them or not to be in need. I wonder whether that kind of thing is what the noble Lords opposite intend. I cannot think that that sort of definition of need is what is required, and the real trouble is that you cannot say what "need" is in many—I was going to say in most—of these cases. If you spend less on one thing you spend more on another and vice versa.

There is another aspect of it, too. The standard of housing is improving, and I hope that better houses are going to be built under the arrangements in this Bill—Parker Morris standard, perhaps. If that is so, the economic rent—if that is what we are to consider for those houses—will be higher than for bad houses. I think we must rely on Governments and local authorities gradually to improve the standard of housing in this country and to set a good example in the council houses which they build. What my noble friend said just now about subsidies is perfectly true. I remember Mr. Tom Fraser getting up in the House of Commons and saying that he could not understand the principle upon which subsidies were given on a discriminatory basis to men, whereas a noble Duke—whose name he gave, but I shall not—was able to get subsidies for his pigs, irrespective of the needs of the pigs. There is truth in this.

At the bottom of it all, what are we trying to do? We are not trying to dish out coal and blankets on the old-fashioned system only to those who could not afford them. We are recognising, I think, that people's houses are as important as people's jobs and people's schools, and that private enterprise in the past has been unable to meet the need for houses of large sections of the population. We are also recognising that one of the reasons why it has been unable to meet it is because a great many people have not been able to afford houses without depriving themselves of other things. I wonder what is the intention here. Is it that the economic rent should be decided in every case, and that if the council fail to satisfy the Minister—and there is no indication as to the extent by which they have to satisfy the Minister; it may be half a dozen cases, it may be one, so far as I can see—they are then going to be penalised by being deprived of the subsidies? This is not really an attempt to help anybody; it is trying to get local councils to adopt a policy which, while it has had some rather half-hearted support from time to time in the Tory Party, has not in general commended itself to local authorities all over the country, who have recognised that a housing authority is much more like an education authority and is, in fact, filling a gap which private enterprise has been unable to fill.

If an Amendment of this kind is made, and you succeed in increasing on a large scale the extent to which house occupiers have to pay the economic rent, the next stage is going to be that you will deprive a great many people of the help which they have been getting, or which they have been expecting, in the past, and you will be putting up the general level of wages. If you do this kind of thing with housing, then I think you must expect wage claims and, I should have thought, wage claims with a pretty strong case behind them; and I doubt whether in the present circumstances of the country it is wise to do that sort of thing. We pay a very large sum, of course, but, given our situation, our industrial status as a country and the fact that we have been pretty forward-looking in housing matters on the whole, I do not think we pay too much money one way or another for these purposes.

Then it is said that it will relieve the taxpayer if you take the money from the occupant of a council house. It is not only the taxpayer who is concerned; there is somebody else, and that is the ratepayer. One important change which affects housing finance has happened since the days of Arthur Greenwood, and that is that nowadays industry is made to pay its fair share of rates. No doubt you will be relieving industry by this new clause, but there may be the result which I mentioned at the beginning of what I had to say; that some people having to pay the full economic rent because the council thinks they can afford it, and because the council is afraid of losing its subsidies from the Minister, will fall ill or starve in consequence, as happened in the town which I mentioned. To approve this Amendment will be putting an inhuman and rather unfair burden on the local authorities. They have regard to these matters in their allotment of houses, and, if they do not, then the Minister is fully entitled, and I should have thought bound, to call their attention to what he may regard as a misconception of their duties. But to penalise them for failing to charge economic rents in every case where it is thought economic rents ought to be payable is putting a wholly impossible burden on their housing administration.

Before I sit down, may I point out to your Lordships one aspect of the burden? So-and-so gets a council house, and the council, having discovered in pursuance of this Amendment that at the time he cannot afford to pay anything more, allows him a reduced rent. What is going to happen when his circumstances improve? We were told by the noble Lord who moved the Amendment that it was not intended to vary these subsidies from year to year; therefore the subsidy would continue on the state of affairs as it was when So-and-so first got his house. But, of course, the council will all the time be concerned to examine changes, and if it does not do so then the purpose of this Amendment—though no doubt its technical language may he carried out—will not, in fact, be fulfilled. It is on questions of change of circumstance that this kind of machinery breaks down, and they are matters which are very much easier to deal with by way of a rent rebate scheme as between the local authority and the person concerned than by trying to deal with them as between the Government and the local authority by an Amendment of this kind. When one really looks at it, I think that this Amendment is wrong in principle, unworkable in practice and uncertain in effect. I hope that we are not going to pass it.

House resumed.