HOUSING SUBSIDIES BILL (Hansard, 1 May 1967)

§ THE PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD KENNET)
My Lords, I beg to move that this Bill be now read a third time. The House will not wish me to give any further account of it than we have had at earlier stages, but there are a couple of small points on which I promised to inform the House regarding certain consultations not concluded earlier. These have now been concluded. They concern the circumstances in which two special needs subsidies available under Clause 5 will be payable, and my right honourable friend's discussions with the local authority associations on this clause have now been concluded.
The Minister intends that the subsidy under Clause 5(1) should be payable on 701 approved dwellings provided by local authorities whose housing costs are high in relation to their resources. An authority's housing expenditure will be measured by adding up its rental income and any contribution it makes from its own rateable resources to the housing account in any relevant financial year. If this expenditure is markedly above the annual average for its class of authority when expressed in terms of the gross value of all the houses in its housing revenue account, then a payment will he made under Clause 5(1) on all approved dwellings completed in the following year. The amount of payment will be based on a sliding scale related to the amount by which an authority's expenditure exceeds the average. These arrangements have been accepted by the associations subject in the case of London to further information being obtained from the London boroughs.
As for the subsidy under Clause 5(2), the Minister intends that this should be payable in the context of the kind of scheme in which a major industrial establishment transfers from one part of the country to another, bringing workers with it, or where a major new industrial growth in one area attracts workers from other areas. This subsidy will act as an incentive provision. My right honourable friend has proposed a general formula with a sliding scale and subsidy related to the effect which the new housing would have on the authority's overall housing costs and hence on rents. This has been discussed with the associations and they have agreed that while the proposed scale seems generally satisfactory, it would be better not to lay down a rigid formula at the outset but to test the proposed scale on some actual cases as they arise. This is a new form of subsidy to promote industrial mobility and we shall want to see how it works out in practice.
My Lords, a Bill of this nature inevitably involves a great deal of consultation and discussion with the bodies who are to be involved in its subsequent administration. In some aspects the Bill is complicated and in respect of both Parts of it new ground is being broken. Subsidies to local authorities under Part I are calculated on quite a different basis from those provided in earlier legislation. Part II is an entirely new scheme which has had to be worked out from 702 scratch with no past experience to guide us at all. We have had a great deal of help and co-operation from the local authority associations on Part I and from the local authorities, building societies, insurance companies and the friendly societies in connection with Part II. The Government are grateful for this co-operation. The passing of this Bill does not, of course, solve all the problems; it is only the beginning. The new framework of housing subsidies for local authorities should provide a springboard for further advances in local authority housing, and likewise the provisions in Part II should give an added impetus to the expansion of owner-occupation. To that extent the Bill is only a starting point for greater efforts by all who are concerned in the production of homes in both the private and public sectors. I beg to move.

§ LORD BROOKE OF CUMNOR
My Lords, during the Committee stage I asked the noble Lord, Lord Kennet, about the progress of the negotiations between the Ministry and the local authority associations regarding a settlement of the criteria under which the special subsidies provided for in Clause 5 should be paid. I am very glad to hear that those negotiations have reached a broadly satisfactory conclusion. I raised the question in connection with the use in the Bill of the rather undesirable word "unreasonably", but I pointed out that it the local authorities as well as the Minister were satisfied that the arrangements were reasonable, there was, in my view, no cause for Parliament to concern itself further over that word. I am quite sure that the noble Lord is fully justified in the gratitude he has expressed to the local authority associations and all the other bodies who must have had to be consulted in relation to this Bill. I trust that, for his part, the noble Lord will agree that my noble friends and I have fulfilled the undertaking which we gave on Second Reading to do everything we could to speed the Bill towards the Statute Book.

§ LORD ILFORD
My Lords, as a President of one of the associations, may I thank the noble Lord, Lord Kennet, for 703 the co-operation we have had from him, and also thank him for all that he has just said.