HL Deb 13 July 1971 vol 322 cc209-15

3.55 p.m.


My Lords, with the permission of the House I should like now to repeat a Statement, which is being made in another place by my right honourable friend the Secretary of State for the Environment, on the reform of housing finance in England and Wales. The Statement is as follows: "In my Statement of November 3 I informed the House of the broad principles of our reform of housing finance. We have discussed the details of our plans with the local authority associations and the voluntary housing movement. The proposals which we have formulated in the light of these discussions are set out in a White Paper (Command No. 4728) which my right honourable and learned friend the Secretary of State for Wales and I are presenting to the House. Copies are now available in the Vote Office."

And they are also in the Printed Paper Office of your Lordships' House. The Statement continues: "For the first time in our history there will be a national rent rebate scheme for all unfurnished tenants under which a rent rebate or allowance will be available to those tenants who need help to pay a fair rent for the house that they occupy. This will mean that 2½ million tenants in the private sector will for the first time have a rebate scheme available. It will mean also that council house tenants in authorities which do not at present have rent rebate schemes—that is, almost 40 per cent. of all authorities—will now be covered by a scheme.

"Let me give an example. Take a council house tenant with a wife and two children who lives in a house with a fair rent of £4 a week. If his gross income is £25 a week, he will then get a rebate that will reduce his rent from £4 to about £2.70 a week. For those on very low incomes in relation to their family responsibilities, the scheme will provide a full rebate of rent, so that they will pay no rent at all. When the scheme is introduced, many council and private tenants will meet less of the rent of their dwelling than before.

"The White Paper proposes the replacement of the existing subsidy system by a new system to give a fresh stimulus to housing authorities and associations who need to go on building and to clear slums. If an authority incurs a deficit on its housing revenue account because it builds new houses for people now living in slums, Exchequer subsidies will meet about 75 per cent. of the deficit. In addition, if the authority makes a loss on the slum clearance operations itself, an entirely new slum clearance subsidy will meet 75 per cent. of that loss. In order to give an immediate momentum to slum clearance, we have decided that this new subsidy should be retrospective to the beginning of the present financial year.

"I have already announced in my statement of November 3 that the fair rent principle will be applied to local authority dwellings and extended more rapidly to private controlled tenancies. The White Paper now makes it clear that the rent increase for council dwellings which are now below the fair rent will be phased in annual steps. The average annual increase will be 50p a week, subject to transitional arrangements for the period up to March 31, 1973, which are explained in the White Paper. When a private tenancy passes out of rent control and the registered fair rent is substantially higher, the increases in the rent of the tenancy will be phased in three equal annual instalments.

"The Government intend to introduce a Bill early in the next Session of Parliament to give effect to the proposals in the White Paper. These proposals will create a system of housing finance which is fair to all concerned and which concentrates help on people and areas in need.

"My right honourable friend the Secretary of State for Scotland will be presenting a White Paper to-morrow which will contain his proposals for the reform of housing finance in Scotland."

My Lords, that is the end of the Statement.


My Lords, we are all grateful to the noble Lord for repeating the Statement for your Lordships' consideration. I have no doubt that the Under-Secretary will agree with me that this is a highly complicated subject. It was because of the complexity of the problem that I asked for a study of housing finance to be made, but I must confess that I am rather shocked at some of the uses to which the Government are putting the work which has been done. I have no doubt that all your Lordships would agree that subsidies should be directed to those in greatest need. That, of course, was why we increased the subsidy and embarked upon a programme of priority housing areas. Although some tenants will benefit from what the noble Lord has suggested, a large number, in both the public and the private sector, will not, and the burden which falls upon them will be a good deal heavier than the Labour Government would have found tolerable. But at the moment, until we have studied the White Paper, it is difficult to quantify the effects.

I should like to ask the noble Lord three questions. First, is not this Statement rather a breach of faith with those local authorities that have embarked upon considerable housing programmes on the basis of the housing subsidies which existed at the time when they decided upon those programmes? Secondly, is not the imposition of a national rent rebate scheme a further erosion of the discretion of local authorities?—which I believe to be a clear breach of the pledges that the Conservative Party gave to the country and to local authorities at the last Election. It does, of course, mean a great extension of means testing. Lastly, is the noble Lord able to give us any indication of the effect these proposals will have on the size of the local authority house-building programme? Those are the questions that I put to the noble Lord, but perhaps I may conclude by expressing the hope that we shall have an early opportunity of debating this subject, in the hope that we may influence the Government's thinking on these matters before they embark on legislation.


My Lords, I am grateful for those comments from the noble Lord, and I should particularly like to pay a tribute to the work done by him and his Administration on which we are now building: because it was the noble Lord's Administration that introduced fair rents; and fair rents lie at the base of the whole of this reform. The noble Lord said that heavier burdens will be laid on tenants, but I would point out to the House that, if this is so, those burdens are going to be removed from the shoulders of those least able to bear them by the introduction of rent rebates and rent allowances, which were not available to those weaker shoulders when, under the previous Administration, increases were permitted to fair rent levels.

As to the statement about a breach of faith, the total scale of subsidy will remain at about the level that it is now, but it was not possible to introduce changes as radical as this without altering its application. What has happened now is that, as a result of this reform, it will be possible for local authorities to concentrate the help on the people who need it and in the areas which need it. To that extent, I would not agree that this is an erosion of the responsibilities of local authorities. It is quite true that we have here a nationally designed scheme. But it will be administered locally and, as a result of the changes, those authorities that particularly need to accelerate the clearance of slums and to relieve overcrowding will be provided with greater resources with which to do it. I can certainly confirm that their house-building programmes will now be able to go forward at an accelerated pace. As to a future debate on this subject, this would certainly be welcome, but the arrangements will have to be made through the usual channels.


My Lords, may we take it, from what the noble Lord has said, that he is saying that this is a breach of faith, and that the Government had no alternative but to embark on a course of action which did mean breaking faith on the promise that had been given? Is he admitting, too, that this does in fact limit the discretion of local authorities? That is the only interpretation that I think can be put upon it. If the noble Lord believes that this is going to mean an increase in the council house-building programme, can he say what figure the Government are aiming at in that field?


My Lords, I think the noble Lord will see when he reads the White Paper that the overall level of subsidies now available to local authorities will remain available but it will be possible to concentrate them on the people and the areas that need them, instead of spreading them in an indiscriminate manner.


My Lords, I welcome my noble friend's Statement, and also Lord Greenwood's suggestion that we should debate this matter, because until we have read the White Paper it is a puzzling and complex Statement to take in. But can my noble friend think of any reason why anybody should be shocked at the extention of a right to rent subsidies or of rebates to all tenants, whether council tenants or private tenants, to be given in accordance with their needs, but not beyond their needs?


My Lords, the fact that 2½ million people in the private sector are for the first time to be given a debate is extremely welcome, and it is such an important matter that I should like to ask my noble friend in what way this will be made known to them, so that they can take advantage of the reform, and also to those who are in council houses among the 40 per cent. of local authorities that do not as yet practise a rent rebate scheme. I think publicity is of immense importance.


My Lords, I am grateful for that question from my noble friend. There will be a statutory obligation on local authorities and private landlords to inform their tenants of their rights under these arrangements. Broadly speaking, local authorities will have to notify their tenants in writing of the circumstances in which they will be eligible for rebates. This has to be repeated once a year and in any case on a first tenancy, and on any change of rent. In the case of private landlords, the relevant information has to be inserted, within four weeks, in any rent book issued on or after January 1, 1973. I am referring to extracts from the White Paper. It is all set out more fully in the White Paper.


My Lords, the last few words of the Statement which the noble Lord repeated made a reference to a further White Paper to-morrow from the Secretary of State for Scotland. I take it that that will be accompanied by a Statement made in another place by the Secretary of State, and that that Statement will be repeated in your Lordships' House to-morrow.


My Lords, that would certainly be my assumption. My precise words were that: My right honourable friend the Secretary of State for Scotland will be presenting a White Paper tomorrow.


My Lords, can the noble Lord say whether any estimate of the net additional cost to the Treasury has been made of these proposals; and, if so, what it is?


My Lords, I think I said in answer to a question from the noble Lord, Lord Greenwood of Rossen dale, that the overall scale of subsidy remains roughly where it is. The alarming increase which was in prospect will be curbed, and, through this whole new system, the subsidies available will be concentrated on the areas where they are needed—in slum clearance, and increased house-building—and on the people who need help.


My Lords, does that mean that there will be no additional net cost to the Government? Is it a case of robbing Peter to pay Paul?


No, my Lords; it is a question of concentrating the subsidy where it is most needed.