Lords Sitting of 27 January 1972

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Chester.

DESALINATION: BUCKLESHAM PROJECT
LORD BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what decision has been made regarding the future of the desalination project at Bucklesham.]
THE PARLIAMENTARY UNDER-SECRETARY OF STATE, DEPARTMENT OF THE ENVIRONMENT (LORD SANDFORD): My Lords, this project was being carried out by Simon Engineering Limited, in conjunction with the United Kingdom Atomic Energy Authority and the Water Resources Board. As Simon Engineering no longer consider the process envisaged at Bucklesham to be commercially viable, and as the estimated cost of the project had risen by about £1 million over the estimate made when Government participation was agreed, my right honourable friend decided, in agreement with the Secretary of State for Trade and Industry, that it would not he right to continue the project, with the whole cost falling on public funds. He is however supporting further work on this process in order to get the maximum value out of the development already done; and he is always prepared to consider assistance to the development of other desalination processes that are potentially efficient and economic. My right honourable friend is considering the possibility of working with European countries to obtain a breakthrough in desalination, and has had preliminary discussions earlier this week with the French Government.
LORD BROCKWAY: My Lords, while thanking the Minister for that very detailed reply, may I ask him this question? Was not the original development from a laboratory to a plant endorsed by the Water Resources Board and the Atomic Energy Authority, with the approval of the Department of the Environment, and is not the significance of this much more than just the commercial value to a private company? Is not its significance in the contribution which it makes towards converting sea water into plain water?
LORD SANDFORD: Yes, my Lords; the noble Lord is correct. My right honourable friend the Secretary of State announced as recently as March, 1971, that this experimental project was to go ahead. But for the reasons which I gave in my Answer he has now decided that it should be terminated in the way I described.
LORD BROCKWAY: My Lords, while appreciating that the Government are still showing interest, may I ask this question? Is not this process of freezing sea water and getting the crystals of pure water a much cheaper process than the present plant in this area; would it not give a very great advantage in the export market; and, most important of all, would it not enable an advance to be made in watering the deserts of the world in order to make them fertile land, to deal with the problem of food supplies with an increased world population?
LORD SANDFORD: My Lords, the technology is basically sound, but Simon Engineering clearly have no great hopes of the commercial prospects of the process.
LORD NUGENT OF GUILDFORD: My Lords, is my noble friend aware that, although Simon Engineering may not foresee immediate commercial benefit from this experiment, it is nevertheless essential for the future economy of this country that we should make progress in the process of desalination? Is my noble friend also aware that, possibly not in this decade but almost certainly before the end of the next decade, it will be necessary to use desalination for part of our fresh water supply? Will my noble friend therefore give an undertaking that he will ask my right honourable friend

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the Secretary of State to give further consideration to this matter, and mount a fresh experiment and a really comprehensive piece of research into the best method of desalination?
LORD SANDFORD: My Lords, if my noble friend will study the last part of my original reply, I think he will see that I have already given that assurance.
LORD BESWICK:: My Lords, is the noble Lord aware that he does not appear to be sufficiently enthusiastic, shall I say, about the enormous potential that there is in this process? Is it not at any rate possible that Simon Engineering were not looking at this in a sufficiently broad and deep way, and that the Goverment's resources ought to be behind this work? Can the noble Lord give a further assurance that there will be no lack of funds for the essential work to go ahead?
LORD SANDFORD: My Lords, I was asked a question about this particular pilot project and I have given a reason for the decision. This does not imply that we have lost all interest in desalination as a process, and I should have thought that the last part of my Answer made that abundantly clear.
LORD AVEBURY:: My Lords, to make this matter absolutely plain, will the noble Lord confirm that the Government had been giving support to three processes of desalination, the other two being reverse osmosis and multi-stage flash distillation, and that the support given by the Department of Trade and Industry and the Atomic Energy Authority to the companies which are engaged in the other two of these is continuing at its previous level? Also, will the noble Lord agree that this example indicates that the customer, in Lord Rothschild's definition, is not always right?
LORD SANDFORD: My Lords, I prefer not to answer that question, because further research into this matter is really something for my right honourable friend the Secretary of State for the Department of Trade and Industry; and also because there is a Question on the Order Paper for next Monday, dealing with this very point.
LORD INGLEWOOD:: My Lords, may I ask my noble friend whether he can assure the House that, before deciding that they would not go ahead with this project at Bucklesham, the Government made inquiries as to whether there was another engineering company in this country capable of doing work like this, which might have been willing to carry on? Simon Engineering is surely not the only one which is capable.
LORD SANDFORD: My Lords, I think I would need notice of that question.
LORD LEATHERLAND: My Lords, have the Government borne in mind that the Simon Engineering Company has recently struck a rather unhappy patch financially, and that this might be the reason why they do not want to encumber themselves with something which does not show any immediate prospects of profit? Is that not a reason why the Government themselves should take over the responsibility for research and development of what could be a really promising and big profit-earning undertaking in the long run?
LORD SANDFORD: I can only repeat, my Lords, that we remain convinced that the technology here is basically sound. The project is not economically viable, and Simon Engineering withdrew for that reason. For the reason given in my original Answer, we have not thought it right that the whole of the cost of this project should fall on public funds at this stage.
LORD IRONSIDE:: My Lords, arising out of my noble friend's Answer, may I ask him whether he could give more detail about the prospect, which he referred to, of working with the French Government?
LORD SANDFORD: No, my Lords, not at this stage.
VISCOUNT MONCK:: My Lords, would my noble friend agree that there is a large body of opinion which believes that desalination is the main answer to the esential problem—I repeat, the essential problem—of doubling the supply of water in the United Kingdom in the next thirty years? Would my noble friend also agree that, as the present cost of desalination is at least six times that of

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treating water by normal methods, this belief is erroneous, and that bulk supply by desalination can only be a very long-term project?
LORD SANDFORD: Yes, my Lords, I would absolutely agree with that without precisely endorsing the differential between the cost of supplying water by desalination and that of supplying water by conventional methods. But it is four or five time more expensive, and the prospects of bulk supply by desalination are certainly very far distant. Nevertheless, as my noble friend Lord Nugent of Guildford has said, there is scope for the conjunctive use of desalination with other forms of supply.
THE LORD PRIVY SEAL (EARL JELLICOE): My Lords, it is quite clear from the supplementary questions that your Lordships have a great thirst for this particular subject. I should have thought that the thirst was so great that the matter might well be worth a debate —possibly on an Unstarred Question. But it is now 3.16 p.m., and we are still on our first Question. I think most of your Lordships now feel that it is time we moved on to our second Question.
LORD SHACKLETON: My Lords, perhaps I may say that I entirely agree with the noble Earl: this is a very suitable subject for a mini-debate, which I hope we may have. If I may say so, the discussion this afternoon exposes the danger of a Minister trying to be as helpful as the noble Lord in giving so much information. None the less, I hope that he will not be discouraged from doing so in future.

BANKRUPTCY LAW
3.17 p.m.
LORD GARDINER: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government on what grounds they have decided not to introduce in this Parliament legislation to implement the recommendations of the Committee on Bankruptcy Law (Cmnd. 221 of 1957).]
THE MINISTER WITHOUT PORT-FOLIO (LORD DRUMALBYN): My Lords,
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Her Majesty's Government have not decided not to introduce such legislation in this Parliament, although, as my noble friend Lord Windlesham informed the noble and learned Lord on November 24, 1971, they cannot undertake that time will be available for it.
LORD GARDINER: My Lords, while thanking the Minister for that not unfavourable Answer, may I ask him, with reference to next Session, whether, if the Government are unable to find the necessary legislative time, the Secretary of State will be well disposed towards a Private Member's Bill implementing the recommendations of this 14-year-old Report?
LORD DRUMALBYN: My Lords, presumably this would be a matter for a private Member in another place who was successful in getting a place in the ballot and electing to choose this subject, or, alternatively, for a noble Lord who might decide to introduce a Bill into this House. But I cannot at this stage commit the Government to giving time for it.
LORD SHACKLETON: But, my Lords, could the noble Lord at least consider my noble friend's question, and let us know whether the Government would be prepared to co-operate in this matter? As he knows, all Governments are prone to make use of private Members, sometimes on matters which the Government ought to handle. But this, clearly, is something of concern to my noble and learned friend, who strove manfully, though not always successfully, to get through a number of Bills. This is not a Party point. Would the noble Lord give further consideration to the possibility of legislation being introduced, perhaps in this House by my noble and learned friend?
LORD DRUMALBYN: My Lords, as I have said, it is very difficult for the Government to commit themselves to giving time on a subject of this sort; and. of course, normally a Bill introduced into this House means that time has to he given at some stage by the Government. The trouble here, as always, arises from the pressure on time and the priorities of legislation.

STUDENTS' DEPUTATION AND POLICE
3.19 p.m.
LORD AVEBURY:: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government on what authority an officer of the Metropolitan Police asked the Vice-Chairman of the I.L.E.A. Further and Higher Education Sub-committee for the names of students on a deputation to County Hall, and the names on a petition presented by those students.]
THE MINISTER OF STATE, HOME OFFICE (LORD WINDLESHAM): My Lords, while I can well appreciate the noble Lord's concern in putting this Question, the only answer I can give on the specific point he raises is that a police officer does not require specific authority for making inquiries which he regards as relevant to his police duties.
LORD AVEBURY:: My Lords, could the noble Lord explain to us how the names of the students on this demonstration, asked of the Vice-Chairman of the I.L.E.A., could possibly be of any relevance whatsoever to the inquiries the police might have been undertaking? Is he also aware that this is not an isolated instance, because when I was in a demonstration at the Chinese Embassy on the occasion of the tenth anniversay of Amnesty International I personally was asked my name by the responsible police officer on the spot? Since it appears that this is becoming a general practice of the Metropolitan Police, could not instructions be issued by the Home Office to see that names are requested only when essential for the furtherance of police inquiries?
LORD WINDLESHAM: My Lords, the Home Secretary does not consider that the police on this occasion exercised their discretion wrongly. The police were concerned with taking precautions which
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might guard against the commission of an offence, in this case a possible breach of the peace. It must be remembered that a number of demonstrations were planned for the day in question and that on earlier occasions there had been disorder at County Hall during demonstrations. Happily, on this occasion nothing untoward happened; but the fact that this turned out to be so does not mean that the police were wrong to take precautions.
LORD AVEBURY:: My Lords, may I ask the noble Lord to make it clear that there is no obligation on the Vice-Chairman of I.L.E.A. or on any person concerned at demonstrations to give his name to an officer of the Metropolitan Police unless he is being charged with some offence?
LORD WINDLESHAM: My Lords, I can re-state the position. While the police will often need to ask questions while taking precautions to guard against the commission of an offence, every individual has a corresponding right to refuse to answer—which is what happened in this case.
LORD SHACKLETON: My Lords, can the noble Lord explain how taking names in advance contributes to preventing an offence? Does he really suggest that this is proper police procedure'? I realise that he is in some difficulty and is coping manfully; but this is a matter which I am sure concerns all noble Lords.
LORD WINDLESHAM: My Lords, this is a tricky area: on that we can all agree with the noble Lord the Leader of the Opposition. It is right that Parliament should be vigilant to see that police officers, or any other public servants, do not exceed their proper functions. There was nothing sinister in the request made by the police officer. The police needed to obtain as much information as possible on what was likely to happen. On this day a number of demonstrations were planned throughout London, and the names of persons taking a leading part in the demonstrations could have been useful to the police in this connection.

PROPOSED SCOTTISH CONVENTION
LORD NAPIER AND ETTRICK: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what plans they have for now implementing the pledge given to the Conservative Party Election Manifesto of 1970 that if returned to power they would set up the Scottish Convention as was proposed in Sir Alec Douglas-Home's Committee on Scotland's Government.]
THE MINISTER OF STATE, SCOTTISH OFFICE (BARONESS TWEEDSMUIR OF BELIIELVIE): My Lords, as has already been made clear, the Government intend during the life of this Parliament to put forward proposals based on the proposals in the Douglas-Home Committee Report.
LORD NAPIER AND ETTRICK: My Lords, while I am grateful to my noble friend for that revealing reply to my Question, may I ask whether Her Majesty's Government are entirely satisfied at the formation of this body is both necessary and desirable? In their opinion do the possible advantages outweigh the disadvantages?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, as I have already said, Her Majesty's Government are going to put forward proposals based on the Douglas-Home Report, including the Scottish Convention. Therefore, we think it is desirable.
LORD HUGHES: My Lords, Will the Minister with her right honourable friend take into consideration the possibility that this is a case where the Government would gain very much more credit in Scotland for abandoning a pledge than for carrying it out?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I think we had better wait and see the proposals in the lifetime of this Parliament.
LORD AVEBURY:: My Lords, will the Government send Lord Pearce to Scotland to find out whether these proposals are acceptable to the people there?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, these proposals were fully accepted by the Scottish Conservative Party in Scotland.
LORD KILMANY: My Lords, will my noble friend bear in mind that while in due course there may be much to be said for proceeding with this proposal, there are more active steps which could better be taken at the present time to help Scotland's economy than to set up this Convention?
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, the Government have firmy said that in any case they could not put forward these proposals on which action could be taken until after local government reform in Scotland.

FUTURE BUSINESS
EARL ST. ALDWYN: My Lords, it may be for the convenience of the House for me to inform your Lordships that in view of the number of speakers wishing to take part in the debate on Monday dinners will be available.
CLYDE PORT AUTHORITY ORDER CONFIRMATION BILL
Considered on Report.

NATIONAL INSURANCE REGULATIONS (VALIDATION) BILL
3.26 p.m.
THE MINISTER OF STATE, DEPARTMENT OF HEALTH AND SOCIAL SECURITY (LORD ABERDARE): My Lords, I beg to move that this Bill be now read a second time. The purpose of the Bill is to validate a provision of some National Insurance Regulations which were made in 1966 and which have been found to be technically deficient. The provision was made by the Minister of the day, although the power to make it was actually for the National Insurance Joint Authority to exercise. The provision has been operating as though it had been valid. This Bill is needed simply to endorse this action.
Moved, That the Bill be now read 2a. —(Lord Aberdare.)
BARONESS PHILLIPS: My Lords, I should like to thank the noble Lord for that explanation. I have done a lot of research on this matter and was unable to discover what it was all about. He has now satisfactorily cleared it up.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

HARBOURS, PIERS AND FERRIES (SCOTLAND) BILL [H.L.]
3.28 p.m.
THE EARL OF CROMARTIE: My Lords, I beg to move that this Bill be now read a second time. This Bill, which is of Scottish application only, is intended to facilitate the authorisation of works at "marine works", a term which, as defined in the Harbours Act 1964, includes transport harbours in the Highlands and Islands and fishing harbours throughout Scotland. It has become clear over the past few years that for most sea services to the Scottish islands the right answer to their need for efficient transport at reasonable cost lies in the introduction of roll-on/roll-off vehicle services to replace conventional passenger and cargo ships, and the operators concerned are committed to a substantial programme of investment in suitable vessels as quickly as can be undertaken. They have, however, run into major delays in the provision by local and harbour authorities of appropriate terminals to fit the new vessels. This difficulty arises to a considerable degree from the complex private legislation and other procedures contained in a number of different Statutes which go back to 1847, governing the authorisation of pier and harbour works. The result is that in practice it can take up to two years from a decision by a public authority to build a new ferry terminal, or to modify an existing one, before work on the site can even begin. This, not surprisingly, has provoked criticism from the operators concerned, becauses it seriously delays the introduction of the new services they have planned. As these services will be more efficient than those they replace, the delay withholds the benefits of the services from the island communities to be served and also affects either the operators' financial position or, where the service is subsi-
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dised, holds up possible economies in Government support expenditure.
The legitimate outside public interest in harbour works to be undertaken by public authorities must of course be recognised, and where there are objections there must always be full opportunity for them to be heard and properly considered. This inevitably involves delay, but it is only right that this should be so; the proposals in the Bill in no way exclude such consideration. What is undesirable is that, even where there are no objections. work cannot in many cases begin because of the cumbersome procedures which have to be gone through before the local or harbour authority can obtain the powers it needs. Powers may also be obtained by Private Legislation Procedure, the continued availability of which is in no way curtailed by the Bill.
Among the other proceedures available is the relatively simple and expeditious one of conferring power contained in Section 7 of the Harbours, Piers and Ferries (Scotland) Act 1937. Under this procedure the Secretary of State is able to authorise improvements in connection with marine works after public advertisement and consultation with interested Government Departments. If there are objections they have to be considered by the Secretary of State, who may arrange for a public inquiry into them before construction is authorised. If there are no objections, authorisation can be given immediately, provided consultations have been completed. The difficulty is that this procedure can be used only when the Secretary of State is satisfied that the cost of the work to be undertaken will be below £100,000.
Because of the substantial increase in construction costs since this limit was set, and the fact that roll-on/roll-off facilities are more expensive to provide than traditional harbour facilities, many roll-on/roll-off ferry terminals cannot be provided for this amount. The figure of £100,000 dates from 1968. The original 1937 Act stipulated a limit of £5,000; this was increased to £25,000 by a Private Member's Bill, the Harbours, Piers and Ferries (Scotland) Act 1953. It was further raised by Section 152 of the Transport Act 1968, to £100,000. The Bill raises this figure to £200,000, a cost limit within which most minor vehicle ferry terminals could be constructed. For a longer term

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the Bill also provides that the financial limit could be revised by an Order made under the 1937 Act subject to Affirmative Resolution of both Houses. It would not be appropriate to attempt to extend the provisions of this Bill to cover work on harbours which are not marine works, as this would raise wide issues of policy. Indeed, in the interests of the United Kingdom Department it would add to the length and complexity of the amending Bill and might make the Bill controversial in Parliament.
The District Councils' Association of Scotland, the Convention of Royal Burghs and the Association of County Councils in Scotland were all consulted by the Scottish Development Department during the preparation of this Bill. All three organisations welcomed the proposals, though the Association of County Councils originally suggested that the new limit under which works could be approved under the 1937 Act should be raised to £500,000. It was explained to the Association that this would significantly alter the purpose of the Bill by extending Section 7 of the 1937 Act to encompass works of a scope far beyond that hitherto authorised under that Section, thus making the Bill potentially controversial in Parliament and thereby jeopardising its progress. This explanation was accepted.
As the Explanatory Memorandum makes clear, the Bill does not involve any additional expenditure of public money. Indeed, by simplifying procedures it should produce a distinct, though unquantifiable, saving in staff, time and cost, particularly legal fees, for both local and also central Government. My Lords, I beg to move.
Moved. That the Bill be now read 2a.—(The Earl of Cromartie.)
3.34 p.m.
LORD HUGHES: My Lords, I wish to congratulate the noble Earl, Lord Cromartie, on having brought forward a measure about which we may say what we so often have the opportunity of saying about Scottish Bills—that it is a useful little Bill. I would also congratulate the noble Earl on the excellence of his drafting, if I did not have a suspicion that he had the assistance of a Government Department to enable what might otherwise have been a little Government
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Bill to come forward a little earlier than otherwise it might have done. In fact, my Lords, I have a suspicion that if the noble Earl had drafted the Bill himself he would have managed it in fewer words; it would have needed a shorter speech to explain it, and it might well have accomplished exactly the same purpose. The purpose of the Bill is so very simple; namely, to restore the value of the work that may be done to something approximating to what could have been done for £100,000 a few years ago. I think that perhaps the most useful part of the Bill is Clause 1(2) which enables alterations in the amount to be made in future by Order instead of its being necessary to wait for an opportunity to bring forward a fresh Bill. I am quite certain that there is not even the slightest hint of Party controversy about this measure, and I am delighted to give it my support.
3.35 p.m.
BARONESS TWEEDSMUIR OF BELHELVIE: My Lords, I should like to congratulate my noble friend Lord Cromartie on the introduction of this Bill and to say how glad I am that it has been warmly welcomed by the noble Lord, Lord Hughes. He will, perhaps, not be surprised that I also warmly welcome the Bill, and I should like to put on record that if it reaches the Statute Book it will without doubt benefit the Highlands and Islands particularly in respect of transport. Also, it will be very useful to the fishing industry.
I think I should say that without doubt there is need for a comprehensive measure designed to codify and amend the existing body of Statutes much of which is archaic particularly in its application to piers and harbours, for which, of course, the Secretary of State for Scotland is responsible. Work on this has begun but it is complex and a considerable time will elapse before it is complete, not least because of the repercussions on legislation which it will have, probably throughout the whole of the United Kingdom. Therefore this is an interim relief to the situation and my noble friend has very clearly and comprehensively explained the provisions of the Bill. Like the noble Lord, Lord Hughes, I should like to say that we, as a Government, welcome the proposals in the Bill to allow future adjustments of the financial limit in Section 7 of the 1937 Act to be made by

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Order subject to approval by both Houses of Parliament. Therefore I commend the Bill to your Lordships because I believe that it will be likely to speed the improvement of the sea transport services on which the Scottish Islands depend and will assist the fishing industry throughout Scotland.
3.37 p.m.
LORD FERRIER: My Lords, as an occasional user of these services which will benefit by work undertaken under the provisions of this Bill I feel bound to add a few words in support of it. Only those who have to use the services to the Western Isles realise how very immediate is the need to improve the conditions for the unloading of vehicles and improving the piers and ferries. On a voyage this year it took an hour and a quarter at Coll to unload nine cars, and the arrival at later ports was accordingly late. I must tell your Lordships that on the way back I sat down to breakfast at 7 o'clock in the morning, again at Coll, and found myself sitting opposite to an old lady who had joined the boat at Barra at 3 o'clock in the morning. I had caught the boat at Tiree at 5 o'clock. The old lady found out that I was a Conservative and she said, "What you people are trying to do is to rub the Island of Barra off the map." I hope that when she reads this Bill when it becomes an Act she will realise that the noble Baroness and my noble friend Lord Cromartie are not of that intent.
THE EARL OF CROMARTIE: My Lords, I should like merely to say, "Thank you" for giving the Bill such an easy passage. I entirely agree with what was said by the noble Lord, Lord Hughes, and I thank the Minister very much for her compliments
On Question, Bill read 2a, and committed to a Committee of the Whole House.

DIFFICULTIES OF HOUSING ASSOCIATIONS
3.40 p.m.
VISCOUNT GAGE VISCOUNT GAGE rose to call attention to the difficulties now being experienced by Housing Associations and Housing Societies; and to move for Papers. The noble Viscount said: My Lords, this is an unusual Motion because many of the difficulties to which I refer
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in it derive from a Bill, the Housing (Finance) Bill, which is not yet before your Lordships and may not be here for several months. The explanation is that the prospect of this Bill is already affecting housing association policy. Despite the publicly expressed, and I am quite sure sincere, intention of Her Majesty's Government to entrust to voluntary housing a much larger responsibility for housing than hitherto, many of those engaged in operating these associations—including, incidentally, certain noble Lords in this House—feel that under the provisions of the Bill as proposed the result will be the reverse and will tend to contract building. They are convinced that unless there are major Amendments to the Bill as it stands the large majority of projects which under existing legislation would have been started will not be started. It is hardly an exaggeration to say that unless this Bill is amended there is a danger that no new building will ever again be undertaken by a charitable housing association. That we consider a serious state of affairs, and possibly it might be so considered in the country.
I will not go into detail, but the main reason for this is that housing associations, unlike local authorities, have no financial reserves. We have no general rate fund and, except for a few of the older and larger associations, we have no pool of rented accommodation. Consequently, each new scheme must be considered on its financial merits. My Lords, it is true that the Minister and the local authorities have certain discretions which might be exercised in our favour. Again, the exact meaning of "fair rents", which in future will govern our rents, may be different from that which we at present believe it to be. It is possible that interest and mortgage rates will come down. All these things might have an ameliorating effect, but we have no right to gamble on the supposition that they will; and, even if we felt disposed to do so, if we could not prove that our schemes were financially viable we could not borrow from any source whatever the money needed to finance them. We think that, in view of the new controls and conditions which we have to observe, it is unlikely that we shall find it possible to make more than a very few schemes financially viable.
My Lords, I said that this is an unusual Motion. A further unusual point about it is that all our problems are well known to Her Majesty's Government. Indeed, they have set up a joint working party which meets quite frequently to try to devise means of solving these problems. I think we should all be very grateful to the Government for doing this because so complex and technical are the points at issue that we consider it unlikely that they would ever be resolved in the normal Committee stage of a Bill, which we know is controversial and in which only two Parts out of nine are concerned with voluntary housing. This working party is operating on what is usually called the "official level". It consists of Ministers, Ministry officials, officers of the National Federation of Housing Associations and other bodies. They certainly have some very difficult problems to solve. So my major object in putting down this Motion is to indicate, as I hope it will, the real concern of Parliament in its proceedings and the strong hope that those proceedings will result in the tabling of Government Amendments to the Bill which are agreed by all those chiefly concerned, despite these difficulties.
As the Bill itself is not before us, I think your Lordships will agree that it would be improper on this occasion to anticipate its Second Reading and to discuss its general principles; or, for that matter, to anticipate its Committee stage by suggesting any detailed Amendments. But I hope that it will not be considered improper if some of my noble friends who are at present operating these housing associations tell your Lordships something of what they are experiencing now and how they see things developing in this Bill as drafted. Perhaps I might say just a word about the noble Lords who have indicated their intention of speaking, because they might feel difficulty in disclosing their qualifications. First, there is the noble Lord, Lord Fiske, who I suppose is best known to your Lordships as Leader of the G.L.C. from 1964 to 1967, but who is also President of the National Federation of Housing Associations and Chairman of the Hanover Housing Association, one of the biggest and most active of the associations. Before that he was Chairman of the Sutton Housing Trust. I am very
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glad that he is present this afternoon, after his quite serious illness.
Then there is my noble friend Lord Hylton, the honorary general secretary of the Catholic Housing Aid Society and a trustee of the Shelter Aid Centre. He is particularly concerned with redevelopment of what are now called "grey areas". There is also the noble Lord, Lord Strathcona and Mount Royal, who is actively concerned with co-ownership and cost-rent schemes. One is also glad to know that other noble Lords who have had long knowledge and experience of these associations, are also supporting this Motion. I am particularly glad to have the support of the noble Lord, Lord Greenwood of Rossendale, because when I was President of the Federation I thought, possibly wrongly, that on occasion I found certain local authorities, perhaps more imbued with Labour doctrinaire policy, hostile to the whole charitable housing association movement, on the ground that they thought it was wrong for people to be housed through charity. I hope the noble Lord will be able to assure us that that is not the official policy of the Labour Party.
My Lords, at the conclusion of what is meant to be only a very short introductory speech, I should like to make one general observation which may sound a little like a glimpse of the obvious, although it often seems to be forgotten. Voluntary housing is voluntary: these associations do not have to do anything. They are willing and anxious to play the part that Her Majesty's Government seem to wish them to play, as suggested in the White Paper. I think they can do it. I have mentioned the Hanover Association. That has, or had, a programme of 500 low-rent houses a year. It would be rather absurd to suggest that the other 2,000 members of the association do equally well, but that gives some indication of the potential of the voluntary housing movement. We want a reasonably fair deal and there seem to be some rather odd ideas about regarding what is reasonably fair.
For example, I heard it suggested the other day (I do not think it was from a very responsible quarter) that as subsidies were in any event eventually coming to an end, and it was hoped that by that time things would be much easier, and

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as we were voluntary bodies, we ought to raise all the necessary money we require from charity, without coming to the State at all. My Lords, if one analyses what that means, one sees it is that, in addition to raising capital to help new schemes get off the ground, as we do—about £160,000 was raised for last year's programme—we should raise the equivalent of all the subsidies which we at present enjoy, and which run into further hundreds of thousands of pounds, possibly millions. That is not reasonable. There is not really all that charitable money available now. I repeat, this is a voluntary movement, and if things are made too difficult those concerned in it will, most unwillingly, have to give up trying.
I am not surprised that there should be some ignorance about the work of housing associations. The public seem to be much more interested in listening to sad human stories arising from bad housing conditions than they are in hearing about what is being done to ameliorate these conditions. "Cathy" without a home is a sort of national figure; a "Cathy" with a home ceases to have any interest for anybody. It may be part of the general predilection for hearing bad news. I suppose we should be grateful to those who use their dramatic talents to arouse us from our apathy, but I confess that I have greater admiration for those who are prepared to take on the much more difficult task of building houses and solving problems. Those who do these things do not look for any reward or recognition, but work to satisfy their own consciences. But on rare occasions when there is a crisis they do hope for a measure of Parliamentary and public support. This is one such occasion. My Lords, I beg to move for Papers.
3.52 p.m.
LORD GREENWOOD OF ROSSENDALE: My Lords, this is a most timely debate, and we are all indebted to the noble Viscount for giving your Lordships' House an opportunity of what will, I hope, be a rather wide discussion upon the question of the voluntary housing movement. The noble Viscount asked for an assurance that Labour Party policy was not opposed to the voluntary housing movement. I am sure that I can still give him that assurance, and certainly
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my own views are strongly in favour of the movement of which he is so distinguished a member.
It has, in my view, a tremendous contribution to make, especially in limited geographical areas and in the case of specific groups in the population like old people, the disabled and unmarried mothers. I think a further importance that attaches to it is that housing associations and housing societies can often make use of small isolated sites which are not of great interest either to local authorities or to private developers. I myself have played a small part in the movement for a long time now, and I was able to show the importance that I attach to it in a practical form in the 1967 and 1969 Acts.
This is a matter of a rather technical nature, as the noble Viscount said, and I think of a kind on which Members of your Lordships' House are uniquely qualified to speak. So, in thanking the noble Viscount, Lord Gage, I should like to say how much I look forward to hearing the views that are expressed, and not least by my noble friend Lord Fiske. I am sure we are all greatly pleased that, in spite of great personal difficulties, he has taken the trouble to be with us this afternoon; we hope that the improvement will continue and that we shall once again in the near future see him regularly in the Chamber of your Lordships' House.
I should like to say how much I welcome the tribute that the noble Viscount, Lord Gage, paid to people who actually get on with the job of solving the housing problem instead of talking about it, which is so fashionable at the present time. As an example of the complexity of the subject, perhaps I should remind your Lordships of what I thought was the excellent book by Mr. M'Kenzie Hall, Low Cost Homes to Rent or Buy, in which he lists five different categories of housing associations and two different categories of housing societies. Broadly, I suppose one can say that until 1964 the terms were synonymous. Since then, groups which are formed through the Federation are called housing associations, while those which are formed through the Housing Corporation (whose recent progress has I am sure delighted us all) are called housing societies. The Housing Corporation now confines itself mainly to promoting new unsubsidised

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building through cost rent and co-ownership housing societies. The former, the cost rent ones, have not, I am afraid made any very dramatic progress, and I think it is true to say that most of them are now concentrating their efforts on forming subsidiary co-ownership societies.
I think we must all admit that progress in this field has been a little disappointing. Some groups have been outstandingly successful in meeting specific needs, and some groups have produced houses and homes of a quite remarkably high quality. But, on the whole, progress has been less than I certainly should have wished. The reasons for this, I think, are numerous. They have had to contend with high interest rates. They have had to contend with occasional shortages of finance, both through the Housing Corporation and also at times through the building societies.
I should like to draw the attention of your Lordships to the Report on Housing Associations which was published by the Department of the Environment last year and is largely based on the work that was done by the Working Party chaired by Sir Karl Cohen, and of which Sir Herbert Ashworth was also a member. I draw your Lordships' attention to chapter 6, paragraph 11, on pages 92 and 93 of the Report, because it mentions there the problems that some building societies have had to face. Like many of your Lordships, I am a director of a building society, and I can understand the doubts that they have from time to time.
The reasons which the Building Societies Association gave to the Cohen Committee were:
"lack of viability of many schemes, especially cost-rent schemes, in the face of rising interest rates; lack of confidence in the continued good management of co-ownership schemes; the unusual nature of the security offered by an estate of housing society houses; the more cautious, lower valuation placed upon those houses by the building societies' valuers."
I mention those because I think we ought to keep well in mind that these are difficulties facing the voluntary housing movement, and difficulties which have to be overcome. When, from time to time, we may be disappointed in the progress of the movement, or perhaps disappointed if there appears to be a lack of enthusiasm on the part of some building societies, the
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reasons are there for us to judge and make up our minds about. It may be that some of your Lordships will recall an interesting article which Mr. Martin Bond wrote in the Housing Review for November and December, 1970, in which he used the phrase,
"housing associations are becoming the dependants of local authorities".
I think there is a measure of truth in that. Certainly local authorities have done an enormous amount to help housing associations and housing societies. But, inevitably, a body like a local authority, which is publicly accountable, often has to impose conditions and restrictions upon the work, which may from time to time be resented. If, however, one is going to need public money, this is one of the obligations that one has to accept.
But Mr. Bond went on to draw attention to what he regarded as some of the main difficulties. He spoke of the dependence of the housing groups on local authorities and on the Exchequer. He spoke of the tightrope which they have to tread between the Parker Morris standards, on the one hand, and the cost yardstick, on the other. He mentioned the duplication of effort between local authorities and housing groups which often, I am afraid, is the case. And he stressed that quite often housing associations or societies are expected to be a substitute for what the council should be doing rather than a supplement to the council's housing programme. When the noble Viscount referred to what he regarded as "Labour-indoctrinated local councils" as being less than enthusiastic about the voluntary housing movement, my mind went back to the only controversy in this field in which I was involved as a Minister. This was when I had to take some local authorities to task because they appeared to be trying to shuffle off their own responsibilities and put them firmly on the shoulders of the voluntary housing movement.
Perhaps I may sum up the work of the groups as I see it. I believe they have provided a great deal of excellent accommodation, and have played an extremely important part in improving old property. I want to see them making greater and faster progress but—and this is where I go back to the noble Viscount's argument—in addition to the difficulties that I have mentioned, the Housing Finance

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Bill, unless radical changes are made in it, will make the development of the voluntary housing movement even more difficult. I am very grateful to the noble Viscount, as President of the National Association of Housing Societies, for making this so clear.
I think your Lordships will appreciate that I dislike the Housing Finance Bill intensely. I was responsible for initiating the first radical review in depth of housing finance, and the officials of the Department, as one would expect, produced a thorough, painstaking and well-documented report. The tentative conclusions that it led me to, however, were very different from those reached by the present Administration. I believe the present Bill is a bad Bill; I believe that it breaks faith with local authorities, and that it could cause grave hardship to many tenants. I am quite certain that unless it is amended as the noble Viscount has suggested, it will hinder the work of housing associations and societies. We shall have many opportunities to discuss the Bill when it is before your Lordships' House and I do not propose to anticipate the discussions which lie ahead, but I hope that to-day the noble Lord, Lord Sandford, will be able to tell us that, on Clauses 76 and 87 at least, the Government are going to be reasonable. I hope that he will please us all by giving to the noble Viscount the assurances for which he rightly asked.
4.3 p.m.
LORD AMULREE: My Lords, I too should like to thank the noble Viscount, Lord Gage, for putting down this Motion even though, as he pointed out, it is perhaps a little premature because the Housing Finance Bill is not before us at the present time. I share some of his fears of what may be the effect of this Bill upon voluntary housing and I should like briefly to put a few thoughts before your Lordships at this time.
I think it is important for voluntary housing to continue on as big a scale as possible because it makes a third choice for people in addition to the owner-occupier and the council tenancy. The problem which can arise with the owner-occupier and the council tenancy is that it is difficult to get people moving about quickly, if they need to change their place of residence. For some people mobility is quite an important factor in
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their lives, and the need can best be filled by the provision made by these voluntary housing associations and societies in doing their work for them.
Another important part which the housing association can play is dealing with what may be called rather peculiar or difficult kinds of families. I am not talking about the "problem family" in the true sense of the word, but over the last ten years, to quote from my own experience for a moment, I have been connected with a housing association in South-West London which was really beginning to achieve success in finding temporary accommodation for large families which, though not problem families in the ordinary sense, were being evicted from their present accommodation or whose present accommodation was unsatisfactory, being perhaps too small or unsuitable for them, and who were too big to be easily accommodated in council housing. Thus there was a very grave danger of the families being split up, with the children being taken into custody and the parents perhaps not being able to live together. This society has now 140 houses and has done a great deal of work of that kind for people who do not fit into any particular category of the unfortunate but who yet pose quite a big problem. We have found that the G.L.C. is relatively good about providing money under mortgage, but the point I should like to put to the noble Lord who is to reply refers to the fact that we are having trouble in buying new houses because the price of properties in that part of London has gone up quite a lot and the situation shows no sign of coming to an end. The top figure that we had on which mortgages were easily available was £5,500. It is now very difficult to buy a suitable house in the part of London I am talking about —West Kensington or the Wandsworth area—for that sum, so one rather fears that the conversion of similar houses into suitable accommodation may be—I will not say coming to an end but that the rate of conversions will not continue at the rate we should like or at the rate at which we have expanded in the past.
One advantage concerning housing associations in the London area is that from time to time they can draw upon rate support to bridge the gap between the fair rent and the subsidised cost rent.

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There again, the housing association can be rather at the mercy of the local authority whose policy might change if the political complexion of the council were to change; so although it is reasonably satisfactory at the present time one feels that this situation may not be on a very permanent basis.
There is another kind of accommodation with which the voluntary bodies can give important assistance; that is, the type called "hostel accommodation". This is useful for elderly persons, single persons, discharged prisoners and similar people. The subsidy is not very big—I think it is £15 per bedroom—but I am told that that subsidy may be withdrawn. That would be a very sad occurrence because hostels are a very good way of taking care of people, and if they are not available people have to go into institutional accommodation, which is far more expensive. That is why I am extremely pleased to support the noble Viscount's Motion, and I hope that the Government will be able, may be not now but certainly when the Bill comes before us, to give us some encouragement and accept a certain amount of amendments to the Bill.
4.10 p.m.
LORD SANDFORD: My Lords, I, too, am grateful to my noble friend Lord Gage for giving us an opportunity to discuss this matter now, so that Her Majesty's Government may have the benefit of the views of the noble Lords who are taking part in this debate as we come to consider what further needs to be done to implement our policy in respect particularly of housing associations. I thought it might be convenient if I were to speak briefly at this moment in the debate to set out and confirm Her Majesty's Government's attitude towards housing associations within the context of the policy as outlined in Fair Deal for Housing and the Bill based on that document which is now in Committee in another place. With the leave of the House, I should like to speak again at the end of the debate to comment immediately, where it is possible to do so, on the views that your Lordships will by then have set forth.
Housing associations, as we said in our White Paper, hold a special place in the Government's new housing policies. I
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confirm that the associations can rely on our continued encouragement and support. Their value waxes as the stock of private houses to rent wanes. They provide a choice for would-be tenants. No doubt they have, and will have, their difficulties, but the fact of the matter is that in successive past years they have built 4,000, 4,500, 5,500, 7,000, 8,000, and in 1971 10,000 new dwellings. In addition to that they have converted or improved in past years 1,700, 2,000, 3,000, 4,000, and 6.000 dwellings, and they are still expanding their activities. So if there are difficulties they are being overcome to no small extent. We want them to continue to overcome these difficulties because we want to see this growth maintained.
Our Fair Deal for Housing provides new subsidies for people—tenants who need them—and gradually withdraws subsidies on buildings. Housing association property will come—like nearly all other rented property—to be let at fair rents, and housing association tenants who cannot afford that fair rent will receive rent allowances to help them do so. That basic principle is simple enough. There will be ample opportunity to expound it in more detail and to elaborate on it when the Bill comes to us. The problem has been, and the difficulty is. to find a rent which is fair as between landlord and tenant, and to find a formula for the transition from the present system of subsidy to the new one which is also fair as between housing associations on the one hand, and local authorities and private landlords on the other. That formula must also be fair in its application across a range of 2,000 to 3,000 separate housing associations with stocks of housing varying enormously in age and quantity, catering for a wide variety of tenants spread all over the country, and commanding a wide variety of experience, expertise and resources for their management.
Peabody, with a large stock of old houses, now able to charge rents below the fair rent, will undoubtedly benefit from the increase to fair rents and be enabled to expand and grow. Other, newer associations, already charging fair rents or higher, will not benefit to the same extent—though many of their tenants will—and for them a transitional subsidy needs to be devised. Any such

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subsidy which entirely, filled the gap between the cost of providing housing and the income from fair rents would—and my noble friend Lord Gage acknowledged this himself, in an earlier debate in 1965 —encourage a whole stream of well-intentioned amateurs to move into this field and start operations as new housing associations, confident that any mistakes and losses they made would be fully underwritten by the Exchequer. Furthermore, such a wholesale subsidy would lead straight to this fine, independent, voluntary movement becoming little more than an agent of central Government—or, as the noble Lord, Lord Greenwood, reminded us, an agent of local government. Bearing all those facts in mind, these, therefore are the three proposals to cover the introduction of Fair Deal for Housing to the housing association movement.
First of all, there is the new building subsidy. The Bill proposes that this subsidy shall be a declining percentage of the gap between costs and fair rents; that is, 90 per cent. for the first three years, including the year of completion; 60 per cent. for the fourth, fifth and sixth years; 30 per cent. for the seventh, eighth and ninth years, and 10 per cent. for the tenth and final year. The timing of these reductions is related to the provisions in the Rent Act for fair rents to be reviewed at three-yearly intervals. An association may in the event, and for good reasons, be unable to match the subsidy reduction by rent increases, or from other sources of income; for example, contributions from a local authority, charitable funds, reserves, surpluses from rents of older dwellings. Therefore the Bill includes power for the Secretary of State to defer the reductions of subsidy, or make smaller ones, if he is satisfied that, having regard to the association's normal sources of income, they would be unable to meet such expenditure as he considers it would be reasonable for them to incur in the exercise of their proper functions.
The second proposal concerns the withdrawal of existing subsidies. As I have said, subsidies payable for new building under earlier Acts will be withdrawn from housing associations on a basis similar to that under which they will be withdrawn from local authorities: to be replaced by temporary subsidies (called
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the basic residual subsidy and the special residual subsidy) which will be withdrawn over a period by deducting a net amount for each subsidised house each year. This "withdrawal factor" is so calculated as to take account of the rate at which associations are expected to be able to increase their rents to the fair rent level. As with the new building subsidy, there is provision in the Bill for the Secretary of State to slow down the rate of withdrawal of subsidy; that is, to pay a larger amount of subsidy than would otherwise be payable in the legislation by substituting a small withdrawal factor in particular cases. The association applying for this power to be exercised will first have to furnish the Secretary of State with information about their financial position to satisfy him that their income for the year will be insufficient to enable them to meet such expenditure as in his opinion it would be reasonable for them to incur in the exercise of their functions. That outlines the second subsidy and the discretion for adjusting it.
The third one might describe as "mark-time rents". Formerly it was the established tradition for housing trusts to provide accommodation for the poor at low concessionary rents, meeting the cost from charitable funds. Many still do that; but such is the diversity of voluntary housing that some have provided only for those who need no charity, and they let their housing at cost rents. This applies especially to associations, loosely distinguished as "societies", set up following the Housing Acts of 1961 and 1964. Others, again, have provided houses at rents which are concessionary only to the extent of the subsidies they receive from local authorities, or by way of improvement or conversion contributions. The rent for homes so provided in recent years may well in some cases be higher than is the fair rent initially. The Bill therefore empowers the Secretary of State to direct that the rent limit may be above the fair rent determined by the rent officer or rent assessment committee, but not higher than the previous rent: that is, he may permit the association to continue to charge rents already above fair rents, on a mark-time basis, until the fair rent as reviewed every three years eventually catches up. But because such action breaches the whole fair rent principle, my right

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honourable friend would want to be satisfied that it was necessary to exercise his powers because of the particular financial position of one association.
At this point I have done no more than remind your Lordships of the broad outlines of the process by which we intend to introduce Fair Deal for Housing to housing associations. I have done that because the Bill is not strictly speaking before us, but these I think are the relevant parts of it. I now look forward to hearing in more detail from other noble Lords who have their names down to speak precisely what the difficulties are that this transition presents to the housing associations. These views, coming from noble Lords who are so closely connected with such a wide range of housing associations, will of course be very valuable to us as we deal with the remaining features of our policy that will have to be considered, in order to make it effective and to secure a future for the housing associations which we want as much as they do. My Lords, with the leave of the House I will leave it at that now and, if I may, intervene at a later stage to give any comments that it is possible for me to give immediately to noble Lords who take part in this debate.
4.22 p.m.
LORD FISKE: My Lords, we must be extremely grateful to the noble Viscount, Lord Gage, for bringing this Motion here this afternoon. It was not an easy situation for him to bring before us to discuss what is really the contents of a Bill that is now in Committee in another place, but in view of the shadow that the Bill is casting over both the present and the future of the housing associations there was full justification for doing so. We can start, or at any rate I can start, on the assumption that the Government desperately—perhaps "desperately" is too strong a word, but certainly badly—need the help of the housing associations in the present housing crisis. The Secretary of State himself said in a television programme only last week that he did not see private enterprise coming back into the building field for housing to rent. That means that all those millions of people who look for rented housing and who have no entitlement through a local authority can turn only to the voluntary
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housing movement. This, I think, is the great central strength of our position.
That is what I was proposing to say to your Lordships in any event. Now, having reached that point, I ought to stop and consider whether I take any comfort from what the noble Lord, Lord Sandford, has told us this afternoon. I know he is going to speak later and I hope that later he will be more forthcoming. He has given us a first-rate explanation of how these various subsidies are going to work, but we must try to take the voluntary housing movement rather further than that if we are to keep it going through the next three years. There are inherent in the Bill many uncertainties, but I think the two which afflict the voluntary housing movement most are, first, the fact that nobody really has much of a clue about fair rents. If one is going to build a scheme of, say, twenty, thirty, forty or fifty houses, bungalows or flats to rent, and one has no real clue as to what will be the rent at which they ought to be let at the end of the process, one is in a real difficulty.
The first difficulty leads automatically to the second difficulty, which is this. If the fair rents eventually emerge as being lower than the rents which would be thrown up by the costs—and the general anticipation is that that will be so—has one a right to go to a local authority, a housing corporation, a building society or any other public authority to borrow money on mortgage when one knows that the income from the property one is mortgaging is not sufficient to meet the loan charges? Would any public authority or building society or local authority be right in committing itself to such a mortgage three years in advance of knowing how this was going to work out? These are the great uncertainties of the Bill which very much afflict the present policy of housing associations.
If your Lordships will bear with me for a minue or two, I should like to show the kind of problem that I shall have to deal with in the Hanover Housing Association over the coming months. We know that any schemes which are in the pipeline will be dealt with by special procedures that will, so to speak, guarantee them. But I understand—and perhaps the Minister could confirm this—that the pipeline will be finally stopped

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up on May 1, 1972. The Hanover Housing Association, of which I am Chairman, has some 2,000 homes in its possession, all let, and has a programme of building 500 units a year, usually in groups of twenty or thirty bungalows or flats scattered over the country—England, Wales and Scotland—at large. If it is to build 500 a year, and the schemes are in twenties or thirties, it means that it must approve between 15 and 20 or 25 schemes a year, which on the basis of monthly meetings is about two schemes a month.
When we come to June of this year we have two schemes for approval. What do we do? Do we approve them and take the chances, or fold our arms and say that we must wait until the position under the Bill is clarified? We have equated this in figures, just to show the kind of risks we should be taking, and they are these. If we stopped now, or stopped when the pipeline stops, we should at the end of the next ten years, with the operation of fair rents, as we see it, have accumulated a deficit of some £22,000. Over ten years that is something one can perhaps bear. But if we went on building at 500 units a year for the next ten years, at the end of the 10-year period our deficit would be not £22,000, but £408,000, which is more than we should be prudent to incur. It is in view of these difficulties that I think we need an underwriting hand, if I may call it that, from the Minister. I am quite prepared to believe with him that in the long run this Bill may work. There are, however, imponderables which we cannot foresee. We do not know, for example, what will happen to bank rate. A 1 per cent. fall in bank rate would make a profound difference to the calculations I have just given to your Lordships, but we cannot count on it, and unless it actually happens we have to take the present rate into consideration.
So really we want the Minister's discretion to be able to support an association which in good faith goes ahead with its work as planned, but finds itself in difficulties at the end of the day. I fully agree that it is a great deal to ask; nevertheless, this is a Bill in which so much Ministerial discretion is taken that I should like to see the Minister take this little extra discretion to help the housing associations. We make this plea as
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strongly as we can, and I think we must do so, in public if possible, for this reason: the noble Lord, Lord Sandford, was good enough to quote some figures which I will confess I did not know and which came as a pleasant surprise to me in their quantity; nevertheless those figures, taken over the whole field of housing, form a very small item indeed.
I have a feeling at the back of my mind that the voluntary housing movement is in danger of being trodden out of existence because it is such a very small fish in a very big pond. I know the Government do not want that to happen and I know that the voluntary housing movement wishes to carry on, but unless some special precautions are taken I can foresee that there will be a great slowing down of activity in the summer, autumn and winter of this year, and onwards, until we see the pattern that emerges from the new Act. This could easily be three years, or it could be longer, and who knows, if a housing association stays in abeyance for three years, whether in the end it will be revivified? Therefore I beseech the Minister to do his best to secure the future of the voluntary housing movement. It is in his power to do so.
4.32 p.m.
LORD HYLTON: My Lords, I think I should commence with an apology, because it has taken me some three and a half years to begin to attend your Lordships' House and four years to venture to take part in a debate. Perhaps I should also declare my interest in this subject and amplify what my noble friend Lord Gage has already said in introducing his team. For two years I was very much involved in the expansion of the work of the Abbeyfield Society, which houses elderly and lonely people. For the last seven years I have been involved in the Catholic Housing Aid Society, which has sponsored some 30 housing associations which now have over 2,500 tenants. I have also taken part in the distribution machinery which allocates monies raised by Shelter and other charitable trusts to the voluntary housing movement.
I wonder whether the present Government and past Governments have ever really understood how housing associations work in practice? If we look back to the Housing Acts of 1961 and

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1964 which introduced a cost rent and a co-ownership scheme, it was expected that cost rent would meet a large public demand. In practice, through certain changes of legislation it turned out that co-ownership was the one of the two to survive and make the greatest current progress. Then again one might ask why housing associations have been notably more successful and more active in London than in other provincial cities. I believe that the reason is due to the greater understanding shown by the Greater London Council, which in my view has produced far and away the best scheme of assistance and mortgage finance of any local authority in the country.
It is sometimes thought that because housing associations are engaged in the business of providing houses they will therefore have the same sort of strengths as local authorities. I fear that this is not so: neither the financial strength nor similar institutional strength. It is important to remember that they are non-profit-making bodies. Therefore, they cannot accumulate reserves in the same way as a private enterprise organisation. Their finances are usually on a knife-edge—I think a noble Lord who spoke previously described it as a "tight-rope". They are likely to be blown off course by the smallest change in interest rates or the smallest change in such things as taxation law. I recall a severe threat to their continued existence when corporation tax was first introduced—a threat which was fortunately avoided by Government action—and one can foresee in the future that similar difficulties will arise when the value added tax is introduced.
The associations normally suffer from a serious shortage of working capital, and if I may quote from the "yellow book" which one might describe briefly as the "Cohen Committee evidence", they say, on page 23:
"A new, vigorous housing association wishing to carry out works of any impact on the area must not be hampered by the anxiety of shortage of working capital. Even the fullest co-operation of a local authority cannot overcome interim problems which beset a trust in the establishment of working relationships with the officials involved in the day to day work. The financial delays resulting from this can be an embarrassment to a trust of low financial standing and it would appear that an
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establishment grant in the region of £30,000 would be necessary."
One presumes that such an establishment grant would have to come from the funds of either central or local government, but that is something which we have not yet seen.
I would suggest to the Government that they really should listen to the representations that have been and are being made to them by such bodies as the National Federation of Housing Societies and by Shelter, which now has some five years' experience in developing and making associations grow, particularly in the inner cities and in the housing stress areas. Other bodies which have submitted evidence and are very much prepared to enter into dialogue with the administration include the British Churches Housing Trust, which also has a proved record of success ill bringing church land into use for public housing.
I should like to concentrate on the problems that arise for associations working in twilight zones and housing stress areas, but before turning to them perhaps I may spend a little while in describing what might be termed the "usual difficulties". The first of these difficulties is that of delays in local authority procedure. Again the Cohen evidence, at page 90, reports that out of the 232 associations which were questioned, 54 reported that delays in local authority procedures constituted a major problem for them. In a sellers' market for houses such as we have at present, the result of delays is that properties are missed and cannot be bought when they come on the market. Greater costs are imposed on associations and a longer time is taken to develop a scheme to the point of letting. Delays have been particularly serious in the city of Birmingham.
On what points do delays occur? They occur in the obtaining of valuations, whether from district valuers or from local authority valuers. They occur in the obtaining of loan consent, and also in the getting of approval for improvement grants and Exchequer improvement contributions. Delays occur in the approval of permitted rent level. I very much hope that it will be possible under the new system for fair rents to be estimated in advance, by means of a formula, so that delay in obtaining loan sanction for a scheme will be kept to a minimum.

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Such work by formula has already been shown to be practicable by the Greater London Council.
Another major source of difficulty is over financial arrangements. A number of local authorities are unwilling to grant 100 per cent. loans. Of those that do grant such loans, some will not include in the loan the amount of the professional fees on a housing scheme; others will not allow interest that accrues during the construction or conversion period to be capitalised. In other cases, valuations for 100 per cent. loans are in themselves too low, with the result that there is a shortfall between the amount of the loan and the total cost of the scheme. One can appreciate how easily this occurs during a time of inflation, of rising house prices, when it is quite possible for house prices to rise by 15 per cent, in a single year. Another weakness in financial arrangements is that some local authorities will not allow the cost, particularly the cost of abortive work and the cost of administrative work, to be capitalised when an association is buying a substantial number of properties each year. If I may turn again to the Greater London Council, this authority allows £80 worth of loan to be taken up for each single house bought. Again under the heading of financial arrangements there is the question of welfare grants for old people's schemes with wardens—and I am sure the noble Lord, Lord Fiske, will be alive to this problem. Some local authorities exercise their powers to the full; others exercise them only in part, and yet others do not exercise them at all.
Planning conditions give rise to further difficulties. In schemes catering either for old people or for low-income families it has sometimes happened that rather unreasonable conditions have been imposed, governing the number of garages or parking spaces to be provided. There is also the question of nominations to tenancies in new schemes: the Cohen Committee had something to say about this. "Refusals of loans have occurred where the housing association was unwilling to accept the conditions imposed by the local authority regarding nominations of tenants". On this point the Kensington Housing Trust and the London Housing Trust had this to say:
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"We believe that freedom of action in deciding who should have priority for a tenancy is fundamental to the success of the charitable housing association movement."
Now, my Lords, I turn to the particular problems of associations working within the housing stress areas, and even more particularly to the problems which those associations face as a result of the Housing Finance Bill. Housing stress areas were first identified for London by the report of the Milner Holland Committee in 1965. Attention was focused on them in the Greater London Development Plan, and more recently in Professor Grieve's Report, Homelessness in London. So it is known, at least in London, precisely where these areas are. They are found also, of course, in other cities, such as Birmingham, Liverpool, Glasgow and a number of other towns, which have their own particular combinations of problems.
I am delighted that the existing grants for the improvement, modernisation and conversion of properties will continue unchanged under the new system, because these are so badly needed in the twilight zones. What is less satisfactory, however, is what has been termed the "deficit gap". This is the gap that will arise in future between the cost rent of a given scheme after improvement grants have been taken and the level of the future fair rent. It has been estimated that this gap may amount, on average, to £1 per week per dwelling for those dwellings produced during 1972. After 1972, the gap is likely to widen, because the costs of land, of houses and building will rise at a rate greater than any increase in fair rents. The gap will be particularly large where the environment of the town is poor or run down or unsatisfactory, since in such areas the level of fair rents will be considerably below that in say the leafy suburbs. The gap will be particularly large where the pressure of demand and the shortage of housing forces up the general level of prices. The gap will be particularly large where associations are providing large units; that is to say, three or more bedrooms, the reason being that the amenities of a kitchen and cooker and central heating are more highly valued in assessing a fair rent than the number of square feet provided in a dwelling.
Certain methods of dealing with this gap have been suggested by Her

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Majesty's Government. It has been said that some associations will have reserves of their own, or surpluses of their own, created by the introduction of fair rents. But I suggest to your Lordships that those fortunate associations will be very few in number, and that where such surpluses and reserves do arise they are likely to be absorbed by the associations' own expanding programme. It has also been suggested that charitable funds might provide a way out of the dilemma. But if we look again at the Cohen evidence we see that in 1970 £56 million was borrowed by housing associations but only £1 million was provided by charitable sources, or a contribution of the order of 2 per cent. To my mind, whatever charitable funds can be raised should be reserved for providing extra amenities, or meeting additional costs over and above the normal yardstick for loan sanction. It should also be reserved for paying for casework with deprived families, crippled, handicapped persons, and similar cases. It has been suggested also that local authorities will be, willing to provide contributions from their rate funds to meet the gap between cost rents and fair rents for housing associations. I know that this does happen at the present time within Greater London, but I think it is most improbable that it will happen on any scale at all outside London in the near future.
Solutions must somehow be found for the problem of filling this gap. Section 21 of the Housing Act 1969 may perhaps help in this respect. because it gives the Secretary of State discretion to raise the ceiling for Exchequer improvement contributions, and this he has in fact already done, both in the case of London and of Birmingham where, I think I am right in saying, the ceiling was raised from £2,500 per dwelling to £5,000. We hope that, when necessary, this discretion will be exercised in other areas and for other amounts. But perhaps more important than the ceiling is the amount of the Exchequer contribution. At the present time this is three-eighths of the loan charges on a given scheme. The 1971 Housing Act provides a precedent for varying and increasing the amount of the contribution. Your Lordships will recall that in development areas the amount of the contribution was doubled for a period of two years ending in 1973. A suggestion
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along these lines was put to the Under-Secretary of State as long ago as October, and I gather that this month the view was being maintained that it would not be possible to incorporate an Amendment of this nature in the Housing Finance Bill. I beg members of Her Majesty's Government to think again on this particular point, and if they cannot accept the suggestion that has been made by the National Federation of Housing Societies would they at least devise some alternative method of avoiding future deficits on future housing schemes?
In conclusion, it is possible to make certain criticisms of the housing associations; in particular, that those associations that do not have charitable status may be open to exploitation once their loans and mortgages have been paid off, because there is no effective system of controlling the equity in an association. Again, it has been said that not all associations house the most urgent cases that come to their knowledge. But here I think one has to bear in mind that the younger and newer associations, because they are on a knife-edge, simply cannot afford to have bad debts and rent arrears. The possibility of a conflict of interest arising where professional men are members of management committees has been raised. It could be that one or two of them may be doing the work only because of their interest in the fees arising from it. These are all points where housing associations have been, or could be, criticised. Nevertheless, both the past and the present Government have declared their intention of encouraging associations, of helping them to develop their work and of seeing that they will play an important role in the future of housing. Yet this Bill, as it is now drafted, gives us a great fear that there will be stagnation rather than development. The noble Lord, Lord Sandford, when he spoke earlier, did not go very much beyond the terms of the White Paper and the Bill, and I hope that when he finally replies to the debate he will he able to be much more forthcoming, particularly on this question of associations working in housing stress areas.
4.56 p.m.
LORD SILKIN: My Lords, I am not quite certain whether I ought to congratulate the noble Lord on a maiden

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speech or not. In fact, I do not know whether he is a "maiden". I know that he has been in the House for a number of years, and he certainly has not spoken often. Recently we have heard a number of maiden speakers and I have been impressed by them all, because every one of them has explained that he has not spoken for some years after becoming a Member of this House because he was waiting for an opportunity of speaking on a subject with which he was familiar. Well, the noble Lord, Lord Hylton, is certainly familiar with this particular subject and I should like to congratulate him on his speech, whether it is a maiden speech or not. He showed an extraordinary grasp of the subject of housing associations, with full details, and I am sure that the House must have been very much enlightened by what he said. I hope that we shall hear him on other subjects as well, and hear him with equal interest.
I should also like to thank the noble Viscount, Lord Gage, for having introduced this Motion. It is opportune that we should be discussing it at this moment because there is still time to influence the Government on the Housing Finance Bill which is at present in Committee in another place. I know that the housing associations have made representations to the Government on a number of points in the Bill, and I understand that the Minister for the Environment is discussing those representations. Other representations have been made by every Member who has spoken. I am content largely to leave it at that. I hope that we shall have an opportunity of going through the Bill very carefully. It is being gone through in another place with equal care, and it is my hope that the Bill will not emerge in its present form when it eventually comes before us, and still less when we finish with it.
There are a number of difficulties from which housing associations are suffering to-day. If I may say so, I was a little misled by the terms of the noble Viscount's Motion when he used the word "now". It refers to the difficulties that they are now experiencing, which I took to be as opposed to the difficulties which they are likely to suffer from if the Housing Finance Bill is passed. Therefore I shall concentrate mainly on the difficulties that they are now suffering from. The first one was touched on by
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the noble Lord, Lord Greenwood of Rossendale; the difficulty of obtaining land, especially land held by local authorities. There are a number of local authorities which, let us be quite frank about it, are somewhat prejudiced against housing associations. They take the view that the housing association is merely repeating what they themselves can do, and they are not going to dispose of any land to a housing association when they themselves can build the houses.
I need hardly explain at length to this House how the housing association's functions differ from those of the local authority. A local authority building houses has a housing waiting list, and they choose their tenants from among those at the top of it. Of course the housing association is not bound by that list. There are many proposed tenants who, possibly for other reasons, need housing just as badly as those at the top of the waiting list, and it is those for whom the housing associations are mainly catering. It is true that they sometimes have to accept nominations from a local authority, but that is done to only a slight extent and, as has been said, a number of housing associations are not prepared to accept as a condition of a loan that the local authority should nominate tenants. So there is a distinction between the work of local authorities and the work of housing associations. and that makes it exceptionally difficult for the associations to carry on their functions. I am sorry to say that this is largely the case in Labour-controlled areas. Very largely, it is Labour-controlled councils who are somewhat prejudiced against housing associations. Generally speaking, I understand that no such prejudice exists in other local authorities.
Speaking as one who has been associated with housing associations for many years—I have been chairman of several, and I am still a member of the management committees of some—I can state that the problem of obtaining land is only one of the difficulties. Another great difficulty from which they are suffering is the increasing cost of land and of building. Although in theory one can recoup the higher costs by charging higher rents, that is largely defeating its own purpose because rents can become so high as to be impossible for the very people who it is intended should benefit

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from the erection of those houses. There is the further difficulty that, generally speaking, there is a limit on the amount of loan that a housing association can obtain. The time is rapidly approaching—indeed, in a number of cases it has arrived—when housing associations will not be able, because of the high cost of land and the increasing cost of building, to get advances of the amount of money they require. These are some of the difficulties from which housing associations are suffering at the moment.
There is considerable apprehension as to what is going to happen under the Housing Finance Bill and, as has been said by a number of other speakers, if the Bill remained as it stands to-day it would without doubt mean the end of the majority of housing associations. In the last 18 months, the housing association with which I am immediately concerned has converted a considerable number of houses to provide 160 flats for people who would not otherwise have been provided for by the local authority. But, as has been said, we are working on a knife-edge and I doubt very much whether, even under existing conditions, we could go on unless the loans were increased. The noble Lord, Lord Hylton, has explained some of the difficulties about loans. Some local authorities are not prepared to advance money in respect of professional charges or accrued interest, or other expenses which have been incurred outside of the pure cost of building and of land. It is virtually impossible to find the sort of money that is required to meet those extra costs if they are not included in the loan. I shall not pursue this point, because the Federation of Housing Associations have already put forward their case and I have no doubt that they included these points in it.
I want to conclude by issuing a plea to the Government to carry out what they have professed to believe in. It is all very well for every Government speaker, talking about housing associations, to start off by saying how much he believes in them, what a good job they are doing, what a fine body of people they are, and so on. The Government must make it possible for the associations to carry out this work; and if by their legislation they cause them not only apprehension
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and doubt about the future but also difficulty as to their finances, then those fine words cut no ice—I think "butter no parsnips" is the usual expression. I hope that the Government will take very seriously what has been said to-day. If they mean, as I think they do, that they want these housing associations to carry on in the future and to grow as they are growing, I hope that they will provide them with the means of so doing and will ease as quickly as possible the anxieties from which so many of the associations are suffering to-day.
5.8 p.m.
THE LORD BISHOP OF SOUTHWARK: My Lords, it has now been confirmed that the noble Lord, Lord Hylton, who succeeded to this House in 1967, has made his maiden speech this afternoon. Therefore it is with the very greatest pleasure that from the Bishops' Bench I rise to congratulate him. He spoke with considerable authority in what may technically be called a maiden speech, and a masterly speech it certainly was. He is well qualified to make that speech, because he is an Associate of the Chartered Land Agents' Society, he is Secretary of the Catholic Housing Society and he is a trustee of the Shelter Housing Aid Centre. I am sure your Lordships will agree that we are fortunate to have such a knowledgeable man in this House, able to address us on occasions such as this. We hope very much that this will be by no means the last occasion on which he will speak, but that he will speak frequently in the future. We can assure him of a most appreciative audience.
The speech of the noble Lord, Lord Hylton, has really rendered most of my speech unnecessary. Therefore, we are all indebted to him for the possible brevity of the speeches which will follow, but I am very glad to speak from the Bishops' Bench because this is a matter of great concern to the Churches, especially in London. It was about nine years ago that the Bishop of London and I led a march from St. Paul's Cathedral to Southwark Cathedral; and, like the noble Viscount, Lord Gage, we were not content with criticisms and with dramatic presentations of the fate of the homeless. We thought that something should be done; and in many parts of London now, as well as, of course, in many of the other dioceses, there are housing associations.

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What concerns us about the Bill is the effect which it will have upon these housing associations, because it would seem that unless alterations are made our work will in some instances be made impossible and in most instances made difficult: the reason being, of course, the gap between the fair rent of a dwelling and its economic rent. That gap is too wide except for those associations which are heavily subsidised or which have substantial surpluses. I recognise that the Peabody, the Rowntree and the Cadbury ventures may very well get by in spite of the proposed legislation; and I know that in defence it can be said that the G.L.C. and the boroughs give subsidies from the rates to bridge this gap. But these subsidies are permissive and not mandatory, and when you are trying to do your homework, deciding what you can do within the next three years, you just cannot do that homework adequately when there is no guarantee. If it is only permissive, how do you know that you are going to get the subsidy? Is it a reasonable risk to take in the hope that you will get that subsidy? I think that any one of your Lordships, being responsible for such a charitable venture, would say that in most instances such a risk is not reasonable.
I know it will also be said in defence that the Minister is given discretionary powers to enable this gap to be bridged from statutory sources. That is true enough: but he will not state in advance whether he will exercise this right. Just let me give your Lordships an example of the problem. The British Churches Housing Trust, to which reference has already been made, is seeking to develop redundant church sites especially for homes for old people. At the moment at least 80 of these sites are under consideration. The Bill as it stands will make this work financially impossible unless vast sums of charitable money can be raised—and, speaking in any case so far as the Church of England is concerned, that money simply cannot be forthcoming; it is not there. So what is to happen to these sites? If we cannot develop them, it is most improbable that the local authorities would want to handle them, so those sites will remain idle. It is only a few weeks ago that I dedicated a number of homes on a site which had previously had on it an old
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church. Now a smaller church has been put up, and we used half the site for housing. I think it has 11 or 12 units for old people. That sort of assistance to the old in London, where housing is such a problem to them, is a real benefit, and it would be sad beyond words if work of that sort had to come to an end and the ground remained idle. The same applies to a good many of the older properties. Both the Government and the local authorities have said that the reconditioning of these properties is done much better by the housing society—much better in the sense that it is easier for the society to handle than for the Government or the local authority.
May I give your Lordships some more specific illustrations, perhaps some interesting ones, from the society for which my diocese is responsible, the South Bank Housing Society? Those of your Lordships who happen to live South of the River will know how, for the past seven or eight years, I have asked you to go without a meal on Fridays in Lent and to let me have the cost of that meal. As a result of that appeal, we have raised nearly £100,000, one-third of which has gone towards our housing society. I would remind any of your Lordships in the House this afternoon who live South of the River that Lent is shortly beginning, and that all contributions will be gratefully received! During these years we have converted 63 houses and let them at a rent of approximately £7. We have let 24 new houses at an approximate rent of £8, and 12 large houses, for large families, at a rent of about £9.
Now let me tell your Lordships how the loan charges work out. The loan charges and management and maintenance costs for a particular block that we are dealing with come to £6,600, and by way of subsidy we get £3,800. Those figures are interesting. On this particular block the loan charges and management and maintenance costs are £6,600, and the subsidies are £2,600 from the Exchequer and £1,200 from the rate fund, making £3,800 altogether. That leaves us with a balance of £2,800. Because of that, we are able to charge a rent of £210 per annum. Your Lordships can see what an enormous assistance the subsidies are, and how it would be almost impossible for us to do this work without them. We worked it out yesterday—I

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hope these figures are right—that in the case of a new building scheme in Hatcham, upon which we have embarked, we hope to let the housing at £8 a week, roughly £420 per annum. This is the important point. If all subsidies are withdrawn, the rent would not be £8 a week but £21 a week, and the cost per annum would not be £420 but £1,050; that is if the rent was to be an economic rent. Of course, this rent is quite beyond the means of those for whom we seek to provide accommodation: hence our work would be brought to an end.
What, then, do we ask the Government? I put forward three suggestions, some of which have already been made this afternoon. First, that discretionary powers vested in the Secretary of State should be used to preserve the new building subsidy at the 90 per cent. level, instead of its being reduced to 60 per cent. Then, second, where a deficit arises in the case of a housing association, that should be treated either as a charge on that part of the local authority housing revenue which, if in surplus, is payable under the Bill to the Department, or, where the housing revenue account itself is in deficit, the sum of the housing association deficit should be added thereto and the sum payable by the Department to the housing revenue account increased accordingly. Thirdly, the Secretary of State should have discretionary powers to raise the level of Exchequer contribution, and provision should be made for both the level and the ceiling of Exchequer contributions to be reviewed at least annually for all parts of the country.
My Lords, before I sit down I must say that I believe we have to decide what is the wish of the Government with regard to housing societies. Private enterprise seems less and less to be providing houses for rent, except luxury houses for people who can afford to pay large rents. If that is so, are we going to leave it just to the councils? Obviously, the local authorities (in London, the G.L.C. as well) are going to supply the greater number. But is there not also a place for the housing societies and for the charitable and private organisations?—for they can do things which are difficult for the State or the boroughs to do. They can deal with people who do not fit easily into any category. Moreover, I have always held the belief that while it is our duty to
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accomplish much of our welfare work through our elected representatives there is always a place for us, ourselves, to participate in such a way as to enable us to achieve some of our objectives through our own efforts and not leave the matter just to the State. That is why I look upon the housing associations as a third arm. We have private enterprise, we have the local authorities and the State—and we have the charitable societies and housing associations as the third arm. I hope that as a result of this debate this afternoon and of the expressions of opinion from all sides of the House, the Government will have another look at the Bill and see what they can do to strengthen that third arm.
5.22 p.m.
VISCOUNT INGLEBY: My Lords, I apologise to the House, and particularly to the noble Viscount, Lord Gage, that I did not hear his speech nor the earlier speeches in the debate. I was on my own in our flat and, to be honest, the debate started earlier than I had been warned. I was quite unable to get a taxi as a sudden change in the weather resulted in all my efforts failing. I humbly apologise. I should like to congratulate the noble Lord, Lord Hylton, a personal friend of mine, on his masterly maiden speech. I was amazed at the grasp that he seemed to have of the subject.
I speak as the president of a small housing society, the St. Giles Housing Society, which exists to provide suitable accommodation for severely disabled people who can go out to work and earn their own living. The society particularly tries to help young disabled people who would like to get married if only they had suitable accommodation. The society first carries out a job survey in a particular area to find out whether suitable jobs for disabled people are available there before it starts to build. The society has recently completed the building of a block of flats in Ealing. These are 16 flats with wide doors, wide passages, a lift, good central heating and, if not room to swing a cat, room to swing a kitten. The society has helped people like Joan Driver—of whom your Lordships may have read in an article in The Times on January 5—to go out and earn their own living and do their own housework. Mrs. Driver is a high cervical which, when translated, means that she

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has broken her neck, is completely paralysed from the shoulders downwards and has only 60 per cent. power in her arms. In spite of this she goes out to work every day, earns her own living and comes back and cooks her own meal in the evening. This she has been able to do with the help of the St. Giles Housing Society.
The difficulty is that to provide this sort of specialised accommodation costs more than to provide ordinary accommodation. There are some severely disabled people whom this society has to turn away because the rent that the society has to charge, the cost rent, is more than they can afford. The earnings of the severely disabled are likely to be lower than normal and the rent for a flat suitable for a married couple may be about £5 a week. This is more than some disabled people can afford.
What is the alternative? these people are not provided with ommodation of this kind it mea that they have to be accommodated in an institution such as a rehabilitation centre, a hostel or a hospital where the cost to the taxpayer will be anything upwards of £30 a week. I would ask the noble Lord who is going to reply—and I am sure that he is sympathetic—whether it would not make good sense to provide a little financial assistance towards the rents of the flats for these severely disabled people which would be only a fraction of the amount needed to keep them in an institution. But economics are only a small part of the answer. A much greater benefit would be conferred on these people by enabling them to go out, to earn their own living and to lead a much fuller and more satisfying life.
5.25 p.m.
LORD STRATHCONA AND MOUNT ROYAL: My Lords, I should like first to join other noble Lords in thanking the noble Viscount, Lord Gage, for introducing this debate to-day. All of us who work in the movement must be very grateful to him, and this applies particularly to those of us who are concerned with the work of the National Federation which tries to speak for all the individual societies. I should also like to congratulate my noble friend Lord Hylton on his excellent, extremely well-informed and authoritative maiden speech. I think that
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he must be unusual among Members of your Lordships' House in that he nearly succeeded in losing his virginity in this Chamber without anybody noticing it. I am sure that we look forward to hearing from him in the future, and particularly on subjects about which lie is as knowledgeable as that on which he spoke this afternoon.
On the question of this debate in general, first let me say that I welcome wholeheartedly the Government's declared objective which is set out in the White Paper, A Fair Deal for Housing. We shall never have a rational housing policy in this country until we accept the principle that we must, somehow or other, relate the payments for housing to the kind of resources they represent. It seems to me that the fair rent policy is at least a step in the right direction. The economic principle must ultimately become accepted and this must ultimately be combined with subsidies for those who, for one reason or another, have to call upon the community to support them in their housing needs. The noble Lord, Lord Sandford, confirmed what the White Paper said:
"The voluntary housing movement holds a special place in the Government's housing policies. It makes a distinctive contribution to meeting people's housing needs. It can rely"—
that was the word used—
"on the Government's continued encouragement and support.'
I am sure that we were all delighted to hear the noble Lord, Lord Sandford, underline that point again this afternoon. We accept that this is still the Government's intention; but, as so many noble Lords have said earlier, we firmly believe that very many of the provisions in this Bill are going to have quite the opposite effect. If I may say so, one has the impression that perhaps the Minister is not aware of the "housing facts of life". Many of us know that ignorance of the facts of life can sometimes lead to rather unexpected and unfortunate results. I suggest that this is quickly going to happen to us here.
I should like therefore to try to underline some of the points made. Nearly all the relevant points have been made this afternoon, and I do not want to repeat too many of them. I should like to underline the potential contribution

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which can be made by the non-profit-making housing movement; to point out once again some of the pitfalls and to make the usual suggestions as to how perhaps we can get over some of them. The potential of the movement is really quite considerable. Listening to the debate this afternoon, and listening particularly to the noble Lords, Lord Hylton and Lord Silkin, I sometimes thought that some noble Lords might wonder how the housing associations ever get any houses built at all. Perhaps it is a measure of the underlying strength of the movement that they do manage to get houses built, despite all the problems which lie in their way. We have estimated that, given a good run, the movement could probably build up to an output as high as 40,000 units a year, which would represent something like 10 per cent. of the house-building in the country as a whole. The effect of that on the overall rent policy would be something which I should have thought would be a desirable aspect from the Government's point of view. Furthermore, my Lords, it has the other useful effect of removing the profit motive from this highly emotive question of exploiting people's housing needs.
We can only estimate but there are thought to be something like 16,000 individuals working in this movement, most of them on an unpaid basis. At this point, I think I should like again to mention something which has already been mentioned more than once. In their wish to see larger, more professionally run and perhaps more effective housing associations the Government are in real danger of making a mistake. In their understandable wish to achieve this end they run a real danger of stifling the thoroughly desirable development of some of the smaller associations which exist to do special jobs in special places. They made great play with the danger of proliferation and fragmentation of the organisation, but I believe that there is a place for these small organisations. The very fact that they have enthusiastic amateur managements who can employ the professionals puts them at a slight advantage vis-à-vis the professionals through the fact that they have considerable personal contact with the people who will occupy the houses in areas of special need or in groups requiring special attention. It
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seems to me that it would be a great pity if these people became discouraged. They are the lifeblood which built up this movement and if, in the search for efficiency, they were stilled out of existence, I believe that it would be a case of throwing the baby out with the bath water.
We have talked about the universal difficulty of what has been called the 10 per cent. gap which would apply to schemes started after what the noble Lord, Lord Fiske, called the final closure of the pipeline; that is to say, schemes that are currently in development. Nobody knows the exact size of this gap. Again, as Lord Fiske said, we have not a clue how wide it would be. The noble Lord, Lord Hylton, was brave enough to stick out his neck and hazard a quantitative guess at what the gap between fair rent and cost rent might be, at least in one instance. The fact remains that most of us believe that there will be a gap, and the proposed legislation does not cover the whole of it. I think it was the noble Viscount, Lord Gage, who right at the beginning of the debate made the point that housing associations are not in as strong a position as local authorities to bridge this gap. In the first place, local authorities have organisations in being which they could use to spread the overheads necessarily associated with the running of an association. Secondly, they have a rate fund to fall back on, which is something that housing associtations, in the main, do not have.
Nor is salvation going to lie in the notion that housing associations can bridge the gap from their past surpluses. This will apply to a few of the larger associations and a number of names have been mentioned; but it certainly is not going to apply in the case of associations which have mostly been formed during the period of rapid growth of the movement in the last few years. At the very best, the forward march of these associations will be arrested for a period; until what we think will be the inevitable inflation has raised fair rents up to the cost rent level, those associations will continue to be financially unsound. Reference has been made to the fact that in itself this makes local authorities nervous about producing the money; and, of course, it is proper that they should be so when dealing with public funds.

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My Lords, the Government have said they think that local authorities will make contributions towards bridging this gap. One can only reiterate what has been said: that there is absolutely no evidence to indicate that this is likely to happen anywhere, except possibly in London. It seems to me that the solution lies in one of the discretionary powers which the Minister has; and I very much hope that, if he cannot produce a suitable Amendment to the Bill in due time, he will feel able to give the firmest of assurances upon which we may rely that he intends to exercise his discretionary power and use a mark-time arrangement to bridge the gap for a short period—it might be as long as six years—until such time as fair rents catch up with cost rents. I do not think this would be open to the objection of principle put forward by the noble Lord, Lord Sandford—namely, that the Government resist the idea of producing a 100 per cent. subsidy—because there is a very definite term to it.
There is a further and rather technical reason why associations are unlikely to be able to accumulate funds. Unfortunately, as was pointed out by the noble Lord, Lord Greenwood of Rossendale, in recent years the activities certainly of those associations known as Societies have been diverted into what is called co-ownership. At the risk of mixing my metaphors I must say that I think that, for our movement, that is the red herring which is leading us up the garden, and possibly down a slippery slope as well. One of the facts of co-ownership is that any surplus generated is channelled back to the tenants, and therefore the association is unable to derive any strength to develop itself in the future. The second objection is the absolutely fundamental one, regarding the funds required for the payment of compensation to outgoing tenants. If you got an actuary to gross them up, you would be horrified to find that public money had ever been put into such development at all. A figure of £125 million has been mentioned by someone who understands these things a great deal better than I do as a possible liability on an investment of £50 million. We are already seeing these associations running into this kind of difficulty.
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Furthermore, my Lords, there is an objection in principle to co-ownership, in that housing associations basically exist to produce houses to let; and co-owner-ship if it works properly as it is intended to do, does not produce houses to let. It produces houses which people could be said to be buying on a co-operative mortgage system, but the point is that they are what in Scotland we call "hefted to the house": they have a real reason for staying there. On the other hand, there is, what I think is more common, the co-ownership organisation which is not running a co-ownership at all but is merely an excuse to keep down the rent. In such a case a highly complicated arrangement exists simply to exploit a particular legal framework, the option mortgage system. I am therefore highly delighted to think that in this Bill we shall see, I hope with suitable assurances from the Minister, a resurgence in the cost-rent concept which will mean that the emphasis on co-ownership will once again fall away and that the complicated system devised to exploit the possibilities of option mortgages will no longer be necessary.
The noble Lord, Lord Sandford, referred to the question of timing. This operates on two or three different time-scales, but the plain fact is that for the present time, and for the next six months, local authorities will not be interested in listening to any schemes at all. Whether this situation will continue, as I think the noble Lord, Lord Silkin, suggested it would, for the next three years, should not care to hazard a guess, but there is a serious threat of total stagnation which I think requires immediate action from the Minister. So I hope that the Minister will give an assurance that no housing association will receive less under the new arrangements than it has received under the past arrangements. Similarly, I hope that the Minister will spell out perfectly clearly Government support for the concept of capitalising any deficits which it is necessary for a housing association to run up during the early part of the operation of a scheme and then spreading that deficit over subsequent payments as the fair rents begin to climb up and ultimately to produce a surplus over the original cost rent of the scheme.

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My Lords, I hope that I have made it plain that in my view the non-profit-housing movement has a worthwhile contribution to make. I hope that the search for efficiency by the amalgamation and encouragement of large professionally organised societies and associations will not lead the Government to crush the small and highly socially desirable associations which have always existed. I suggest that comparatively small adjustments to the Government's proposed legislation would make all the difference. Instead of the housing association movement gradually atrophying, it will, if the Government will make those few adjustments which a number of noble Lords have suggested this afternoon, continue to expand in the way that all of us want to see. Most of those adjustments consist in asking the Minister to commit himself to the way in which he intends to use his discretionary powers. If he will do this, he will make at least 16,000 people very happy, and I feel perfectly certain that this will yield a good return in the long run.
5.42 p.m.
LORD NUNBURNHOLME: My Lords, I do not wish to keep your Lordships any longer than is necessary, but there is one matter which I should like to bring out. My wife is a member of a mutual housing association which buys historic houses throughout the country and converts them into flats. The residents pay for most of the conversion and they eat communally; but the association is unable to obtain grants for such conversions unless it makes a separate kitchen for each flat. I wish to draw the attention of your Lordships to this because it seems to be unnecessary. That is all I have to say.
5.43 p.m.
LORD BROOKE OF CUMNOR: My Lords, I wish to apologise to your Lordships for having failed to put my name down on the list of speakers and now intervening when your Lordships are anxious to hear the Government reply, but I promise that my speech will be very short. This gives me the opportunity to congratulate my noble friend Lord Gage on initiating this debate. I think he must feel highly rewarded by the quality of speeches which his Motion has elicited.
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I want also to congratulate my noble friend Lord Hylton who had the courage to make his maiden speech in a debate in which his fellow-contributors have included a very well-informed Bishop, a former Leader of the Greater London Council, a former Minister of Town and Country Planning and two former Minister; of Housing and Local Government. I hope that I shall not give offence in any way when I say that I do not think any other speech surpassed that of the noble Lord, Lord Hylton. I think the noble Lord, Lord Greenwood of Rossendale, will feel with me the same sort of pleasure at hearing a man of a younger generation than ours who not only feels enthusiastic about solving the housing problem but is prepared to gain the knowledge which is the essential foundation if one is to do anything effective.
My Lords, I am not going into any detail because that has all been set out in the debate. I want to put just one thought into the mind of my noble friend Lord Sandford. He, I think, will be familiar with the technical word "blight". Blight is something which normally we link in our minds with planning. On this occasion it seems to me that certain provisions of a Bill introduced in another place have extended blight to housing associations. In dealing with planning blight we have by now learned that two steps are necessary. The first is to try to narrow the field of blight as much as possible, even though that sometimes makes planning proposals and planning inquiries more difficult than they otherwise would be. That is the only fair way to proceed.
Secondly, in dealing with blight we have known that we must be prepared to compensate adequately all the people who are genuinely afflicted with blight. I hope that my noble friend will approach the problems put before him to-day in the same spirit. This is a difficult problem which he and his colleagues in the Ministry have in front of them, but it is not an insoluble one. It is not insoluble if, first, they can see how definite and firm to Parliament they can be in their indications of the way in which the Minister intends to use his powers when he has got them. I have no doubt about the amount of good will that exists in the Ministry towards housing associations and housing societies, but, as many of

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your Lordships have said, they have not large resources behind them. They are necessarily more filled with anxiety on that account, and the assurances that they need to be given must therefore be in very precise terms. Secondly, I think that when the field has been narrowed then the financial offers made by the Government must be generous ones.
I did not disagree very much with my noble friend's speech earlier in the debate, except that he used one argument which I cannot accept. It struck me as a Treasury argument, which I as a former Treasury Minister know so well. It was the argument that if the Government were too generous hundreds of housing associations would spring up all over the country to exploit Exchequer money. All of us who have had any experience of housing associations know that to set up a housing association involves, among other things, a great deal of unremunerative hard work. I appreciate, of course, that there is a faint risk that if the Government were over-generous some incompetent people might start up rather inefficient housing associations and waste a little of Government money, but I do not think this element is a substantial part of the argument that the Government are entitled to use.
I feel quite sure, there being so much good will in all quarters towards housing associations, that these problems are soluble, and I wish my noble friend all good fortune in these coming months in working out with his officials and with the representatives of the National Federation a scheme which, at the time when the Bill is considered in this House, will allay all the fears expressed this afternoon. I would just mention that, unless it is put right in another place, it may be difficult for us to do it here because some of the amendments which need to be made to this Bill in respect of housing associations will involve finance, and amendments to the Bill in this House might run the risk of being an infringement of Commons' Privilege. So the sooner the Government can announce what their final plans are, the better from every point of view.
5.52 p.m.
LORD ROYLE: My Lords, I hope the noble Lord, Lord Sandford, and the House will forgive me if I intervene for a couple of minutes. I do so only because
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I was rather inspired by what my noble friend Lord Greenwood said in referring to building societies and their relationship with housing societies and housing associations. I agree with him that many directors of building societies are hesitant about agreeing to loans to housing societies and housing associations because they are concerned about the security of their investors and members: they want to be certain that the security is there before they make any such loans. It occurs to me that, along with the consideration of subsidy, the Government might think about guarantees to building societies for housing associations and housing societies. If this were done, it would amount to the Government's coming along with their subsidies and so helping the housing associations, but the money used would be money provided by the building societies, which at present, owing to the amount of investment that is going on, have the money available. I am not sure about this suggestion but I think it is worth considering, and I just put it to the noble Lord to see what the Government may feel about it.
5.54 p.m.
LORD SANDFORD: My Lords, this has been a debate in which considerable fears and doubts have been expressed about the future of this movement. But what I find particularly gratifying is that, despite that, there has been nothing but support for the Government's broad policy towards housing associations; namely, that we want to see them grow, develop and get stronger. That has been extremely helpful. I am grateful for the point made by my noble friend Lord Strathcona—but not made by many other noble Lords—that we are moving broadly in the right direction in seeking to subsidise people and not buildings. But it is natural enough that a change as radical as this—and, as many will say, so much overdue—is bound to produce difficulties, uncertainties, doubts and fears. It is my objective and hope that I shall be able to alleviate some of them tonight, and it is certainly the wish and intention of my right honourable friend that we alleviate all of them in due course. Before saying any more, I should like to add my congratulations to those of other noble Lords to my noble

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friend Lord Hylton on his maiden speech. I look forward very much to his advice and guidance when we come on to the Housing Finance Bill later in the Session.
It seems to me that the main thread here is fear and doubt concerning what might be called "blight"—and I am grateful to my noble friend for having used this particular metaphor, which is so apt. If the future of the housing associations is indeed blighted, it is not so much because of what is in the Housing Finance Bill, but because of the uncertainty as to the way in which the Secretary of State will exercise the discretion which he has thought it necessary for him to have in order to operate the clauses in the Bill relating to housing associations. I fully recognise that we must do our best to remove these doubts. I believe that we can do so by following Lord Fiske's suggestion and setting out as clearly as we can (not perhaps tonight, although I will endeavour to do so to some extent) the criteria by which the Secretary of State will exercise his discretion, and doing that as precisely as possible, while still leaving him some discretion—because I think all noble Lords will agree that in this particular sphere he must have some discretion. I should like to take up the point made by the right reverend Prelate the Bishop of Southwark, that if we will state these criteria in advance it will remove a great deal of doubt. I am sure it will, and I am sure that we can do this. We cannot set out precisely what discretion will be applied in respect of each particular association, because we do not know precisely how the advent of fair rents and the withdrawal of the subsidies as laid down will affect the associations. But we can certainly set out in advance what the criteria might be, and that is what I will endeavour to do to some extent. Before doing so, may I say that this is only a preliminary statement, and that what I am doing now it will certainly be possible to carry a stage further as our discussions, which are already going on, proceed.
The first test that the Secretary of State will apply in exercising his powers of discretion on the matter of deferring the phasing out of existing subsidies is this: Is the additional income from gradually putting up rents of the scheme
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to fair rents not matching the regular phasing out described in the Bill? For example, the existing rents may have been so close to the fair rent as not to give much additional rent, or maintenance costs may have jumped to take up much of the increase. If the answer to that is, Yes—that is to say, the extra income is not corresponding to the regular phasing out—then there is a prima facie case for deferring the phasing out in that particular case.
The second test in applying the discretionary powers in regard to this particular subsidy is this. Cannot the gap in the finances of this scheme be met from surplus income from other schemes of the same association? If the money is not forthcoming from other schemes, it will still be asked whether the rents of those other schemes are being raised to fair rent levels. It would not entitle an association to extra subsidy on a scheme if they had wilfully refrained from raising rents of other schemes. Also, the association's normal sources of income will be looked at. If the association's normal supporters decided to withdraw their support in the hope of the association getting an extra subsidy, this would not work for the extra subsidy—and it must be remembered that this is an extra subsidy and not a regular subsidy on top of what is already described in the Bill—it is meant only for associations who are in an unavoidable jam. But the test as to whether the deficit on a scheme cannot be met from other schemes will not be applied to the extent of insisting that no further schemes are started and every penny that might be used for such schemes is devoted to the deficit. In other words, it is only money that is reasonably surplus that will be taken into account.
Now I turn to the other subsidy (in Clause 76 of the Bill) for deferring and easing the standard reduction in the new building subsidy. The same sort of tests will be applied. The first one is: is not the triennial increase in fair rents in the scheme producing extra income to match the standard reduction in the subsidy? If not, there is a prima facie case for deferring reduction. The second test is: cannot the gap in the finances of this scheme be met from surplus income from other schemes? Again,. the possibility of raising rents on the other schemes and

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the association's normal sources of income will come into the reckoning with, on the other side, the reasonable starting of further schemes. It might be asked why, if the intention is to make the reductions in existing or new building subsidy correspond with increases in fair rents, the reduction cannot be made in law to hinge on these increases. The answer is that where the association's resources outside the scheme are to be taken into account these resources ought to be taken into account only so far as reasonable; and what is reasonable is, after all, a matter for discretion. So there is a limit to the detail in which these criteria can be spelled out.
Mark-time rents is a third form of subsidy. The rents of existing association houses—not of new ones—can be held at a level above the fair rent if the Secretary of State so directs upon the association's applying to him. The test here is: cannot the association make do with income from all their dwellings, plus all other normal income and sources of income (except income earmarked for non-housing purposes, such as welfare) including income from capital reserves, though not the reserves themselves? But the association will not be expected just to drop all further schemes and use for the deficit every penny that might have gone into new schemes. Nevertheless, associations will have to show that expenditure on all their housing activities is on accepted levels, and to divulge whether the scheme in question is carrying costs of abortive schemes.
My Lords, so much for criteria. I would stress that this is a preliminary statement on the way in which we consider this scheme might be carried out. It may be carried several stages further as our discussions with the National Federation and the housing associations proceed. This is the sort of thing that can certainly be done in advance, and I take the point made by the noble Lord, Lord Fiske, and others that the more we can do this, the more we shall be able to remove the blight which has caused uncertainty in this field.
The noble Lord, Lord Hylton, said a number of things about conversion and improvement as well as about new building, and I would stress first of all that we indeed listen to the bodies that he mentioned and we are in close discussions
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with them at the moment. We value those as much as we value this particular debate. Some of the newer associations have asserted that even with the generous Exchequer contribution available, which amounts to three-eighths of the overall subsidy on acquisition and improvement, the limitation to fair rents will leave them with revenue deficiencies which they have not the reserves to meet. If a fair rent does not allow an association to cover even five-eighths of its cost it looks as though something has gone wrong: either the fair rent is too low or the association has struck a bad bargain. No reasonable level of subsidy from the Exchequer can replace a prudent balancing of the likely cost of a scheme against the likely revenue, and we must avoid the situation where it does.
Just as an association cannot be expected to acquire a property in the most expensive area, so there may be poor areas where the likely fair rent, which is bound to be affected by the tone of the street, would plainly be insufficient. On the other hand, if a local authority wish an association to help raise the tone of the street—a general improvement which will involve improving several houses in the street—then they ought in logic to support the association from the rates, as indeed they have the power to do. The Government's contribution for conversions is normally three-eighths of the loan charges, on acquisition as well as conversion, within a limit of total cost which is twice the statutory allowance, but in development and intermediate areas, as your Lordships will know, the "allowable cost" is 100 per cent. of the total cost, and the proportion of Government contribution is in effect doubled.
Whilst on this point perhaps I could also deal with a very recent development on conversion work. In Fair Deal for Housing we promised to keep under review the adequacy of the existing Exchequer contribution for acquisition, conversion and improvement. Any selective increase in the rate of Government contribution to improvement and conversion work undertaken by housing associations would need legislation. But the Act also specifies a ceiling per dwelling to the "allowable cost" on which the Government contributions are calculated. This can be altered by the Secretary of

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State at his discretion without legislation, where he is satisfied that there is good reason to do so. This power has already been used more than once to raise the ceilings to allowable cost for housing associations in particular parts of the country. In London, where the maximum allowable cost had previously been doubled generally under this power, I am pleased to say—and this will also please the noble Lord, Lord Amulree—that the limits have again been raised.
The new figure of allowable cost promulgated for London will vary according to the type and size of dwelling, but I can give some details here: £3,250 for a house for six or more persons; £2,750 for a smaller house; £2,750 per flat in a house converted into only two flats £2,500 per flat in a house that has been turned into more than two flats. This means that the amount of expenditure on which an association can get the full three-eighths subsidy will vary according to the type and size of dwelling provided—from £5,000 for a small flat in a multiple conversion to £6,500 for a large family house provided by acquisition and improvement. This will meet the particular problem of increased cost for housing associations, and of course local authorities, for acquiring and improving houses for large families and acquiring and converting houses into two dwellings. Higher limits have also been fixed in Birmingham and other areas of housing stress for acquiring houses for larger families, and the case for increasing the ceiling in other parts of the country is now being looked at.
Another point raised by my noble friend Lord Hylton concerned local authorities and delays in administrative procedures, and so on. Circular 47/71 published on July 6, 1971, referred to complaints about delay by local authorities in dealing with improvement grant applications. If the authority took more than four to six weeks to approve straightforward applications they were asked to review their procedures to see whether they could reduce that time. Although local authorities need to have certain information in support of applications for loans and improvement grants, the requirements are not onerous and have been reduced to the absolute minimum necessary. If a local authority have
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the will to help local associations they can do so speedily, provided they organise their administrative procedure to that end. As to the Secretary of State's approval to contribution, there should be no delay if the authority submit a properly completed application. It is worth mentioning that on August 31 last year we sent all authorities a copy of the model scheme of assistance to associations for conversion and improvement schemes, with the idea that it would help associations to have a standard scheme of assistance adopted as widely as possible. The model scheme expressly mentions that to streamline procedures the council should obtain block approvals from the Department of the Environment to make loans to associations. As for getting fair rents in future, it needs to be emphasised that there is nothing in Fair Deal for Housing that expects authorities to require a certificate of fair rent before they will grant a loan for acquisition for improvement. I hope that deals with some of the points which my noble friend raised in that connection.
I should like now to turn to a point that he and my noble friend Lord Strathcona raised about finance, particularly finance from local authorities. As noble Lords know, these local authorities are independent bodies making up their own minds, and not all authorities will make 100 per cent. loans—some will not make any loans at all. Similarly with allowing capitalisation of interest and administrative cost during construction. On new building, the proposal in the White Paper, and now in the Bill, is for the Housing Corporation to be able to lend to all sorts of associations, and the Corporation have in the past allowed reasonable costs of this sort. This is another point to bear in mind in weighing up all the uncertainties.
It is also relevant to point out that the Bill gives the Housing Corporation power to lend to housing associations of all sorts, instead of being confined, as they were hitherto, to the particular kind called "housing societies". So when the Bill is through, the Corporation, at least, with their experience and acumen and their close contact with both the Minister and the voluntary housing movement, are not likely to be deterred from lending by any mere uncertainty which they, of course, are in a good position to remove. Just at

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present, however, the National Federation of Housing Societies believe that some local authorities are uneasy or unsure about the way in which the discretionary powers of the Secretary of State are to be exercised, and very naturally so. The form of statement which their members can show to lenders is being discussed with them. The National Federation of Housing Societies have asked for assurances about the exercise of the powers of the Secretary of State, and the form of statement which their members can show to mortgagees is being discussed with them. What I have said at the beginning of my remarks is a foretaste of the kind of statement which can be developed as our discussions go on.
My Lords, I am conscious that I have not dealt by any means with all the points; but it was not the main object of the debate that I should do so. The main object of the debate, if I have judged my noble friend Lord Gage's intention correctly, is to use this occasion to lay before my right honourable friend the Secretary of State precisely the nature of the doubts, fears and uncertainties, so that we may have the benefit of the views of noble Lords who are so close to the movement. We can then take these into account as we formulate our policies in more detail, and, in particular, as we lay down the criteria which we are quite sure can go a long way to remove the blight which, as my noble friend says, at the present moment hangs over the movement.
6.15 p.m.
VISCOUNT GAGE: My Lords, I am grateful to all those who have spoken to-day. I am hoping that what they have said will make an impact on official thinking on this matter. I was glad to hear on the great authority of my noble friend Lord Brooke of Cumnor that he thinks that it will make such an impact. The noble Lord, Lord Hylton, has earned congratulations from many quarters. Knowing as I do that he has spent a very great deal of his life in voluntary housing service. I am not in the least surprised that he should have earned those tributes.
I am not going to attempt to deal with the points which have been made by my noble friend Lord Sandford. I opened by saying that I thought it was a very
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complicated problem which would give his Committee a great deal to do, and at the end of this debate I have no reason to think otherwise. What cheered me more than anything he said was that he gave us hope that the points we have been making would be considered honestly and, so far as he was able to guarantee, dealt with. My noble friend Lord Sandford has an enormous number of multifarious duties under his gigantic Ministry, and knowing, as we do, the dedicated way in which he deals with them I feel sure that in this matter he will be as good as his word.
This is a Motion for Papers, and the Papers that I should like are the new amendments which will solve these problems. But perhaps to press for them this evening would be unreasonable. I therefore be, leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

CARE OF EPILEPTICS: THE REID REPORT
6.17 p.m.
LORD HASTINGS LORD HASTINGS rose to ask Her Majesty's Government whether they have come to any decisions as a result of the report of the Joint Sub-Committee of the Standing Medical Advisory Committee and the Advisory Committee on the Health and Welfare of Handicapped Persons entitled, People With Epilepsy. better known as the Reid Report; and when such recommendations as may have been accepted by Her Majesty's Government will be implemented. The noble Lord said: My Lords, I rise to ask Her Majesty's Government the question on the Order Paper in my name. To put it very briefly—because it is a rather long Question—it asks: what decisions have they come to about the Reid Report, and when are they going to implement those decisions?
The last opportunity we had in your Lordships' House to discuss this subject in any detail was nearly six years ago, on April 6, 1965, when I asked the Government of the day, which was a Labour Government, whether they would consider the findings of the Cohen Report on the Medical Care of Epileptics which had been published nine years previously.

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Unfortunately, in the intervening time very little progress had been made, and it was therefore very necessary to raise the subject. I am glad to say that, after that, although six years have elapsed—and it seems rather a long time—quite a lot has happened. The Cohen Committee was reconvened and as a result, I think, a joint sub-committee was set up. This sub-committee, chaired by Dr. Reid, has published the report to which I am drawing your Lordships' attention to-day entitled, People with Epilepsy. One of the first things the sub-committee say in that report, in paragraph 14, is:
"It should be added that, in our opinion, had the major recommendations of the Cohen Report been implemented, the services for people with epilepsy would by now be much more satisfactory than they in fact are, and our committee might not have proved necessary."
This report was printed at the extreme end of 1969. I do not think it came into the hands of the British Epilepsy Association until January of 1970. That was the General Election year, so that it was difficult, either for the Government which in the event proved to be outgoing or for an incoming Government, until it had settled down, to do anything about it. In 1971 a great deal of work was done on this report. I know that my noble friend the Minister of State, who is to reply to this debate, has studied it very carefully, at great length and on many occasions. His Department have been in very close touch with the British Epilepsy Association. I should remind your Lordships that this is my particular interest; I am President of that Association and, at the moment, also its acting chairman. The Department has been in very close touch with us. They have appointed an official observer to our association, which is very helpful, and I know that they are in a position to tell us this evening what they are going to do about this report.
I do not intend to make a long speech because it is a long report. I want to refer to only one or two of the principal recommendations which I feel should be having the Government's attention. One has only to turn to page 1, where the recommendations are set out, to see that there are in fact 56 of them. I want to mention numbers 2 to 5, which cover the question of "diagnosis and continuing care". The recommendations say:
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"Family doctors should be able to refer patients with epilepsy for full investigation and assessment by a multi-disciplinary team, which should include consultants, a social worker, a clinical psychologist and, in certain cases, local authority staff and a Disablement Resettlement Officer.
"Such teams should operate at most general hospitals and at all hospitals which have neurological and neurosurgical units.
"Epilepsy clinics should be established at district general hospitals as parts of relevant departments.
"Following diagnosis and initial assessment, a person with epilepsy should remain under the continuing surveillance of his family doctor and community team. Hospital medical staff should also frequently be involved in this process of aftercare."
Recommendation No. 11 states:
"People with epilepsy who require welfare services "—
and of course they do, very much so—
"should receive them within the general framework of facilities for the handicapped. Nevertheless, in order that progress can be assessed, people whose primary disability is epilepsy should be separately identified for statistical and research purposes within the registers of the general classes of the handicapped kept by local authorities."
I mention that last recommendation because it has a very close bearing, of course, on the Chronically Sick and Disabled Persons Act, which I hope is being put into force gradually and which is causing continuous scrutiny in both Houses of Parliament to ensure that that work which we did, I think so admirably, not so long ago is going ahead.
The only other recommendations that I want the attention of my noble friend Lord Aberdare directed to deal with special centres: recommendations 26 to 29. The report says:
"Special centres should he provided for those people with epilepsy whose management presents particular problems, and such centres should have two components, the first being a hospital neurological and neurosurgical unit, and the second a residential unit with facilities for carrying out assessments under everyday living and working conditions. Such centres could be provided by the grouping of appropriate existing facilities.
"As an initial step, some five or six such units should be established in England and Wales on a supra-regional basis.
"The special units should form focal points for research and for professional and general teaching about epilepsy.
"Regional Hospital Boards, acting in consultation with Boards of Governors and relevant local authorities, voluntary bodies and government departments, should review the facilities within their regions in order to decide

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where and how special units should be established."
Recommendation 29 which I have just read out about Regional Hospital Boards brings me to a remark in our previous debate in 1965, made by the late noble Lord, Lord Brain, who was a great friend of the British Epilepsy Association and is greatly missed. He asked why nothing substantial had been done in the nine years following the Cohen Report. He then said:
"It is one of the principles of the Health Service to delegate as much responsibility as possible to the Regional Hospital Boards, boards of governors and hospital management committees. This has its advantages, but it also has its drawbacks, and I believe that when a national need like this has been recognised, the Ministers concerned should take much more responsibility for seeing that something is done about it. And he who wills the end must will the means."—[OFFICIAL REPORT, 6/4/65; col. 36 and 37.]
I thought I would reproduce that quotation because I am very hopeful that my noble friend Lord Aberdare and his right honourable friend the Secretary of State will take the personal responsibility involved and will not just leave it to the reorganised National Health Service. Of course, Regional Hospital Boards are going to disappear and there is going to be a new two-tier system, with Regional Health Authorities, who will be responsible for the general planning of the National Health Service, including the special services and also university medical teaching and research; and then the second tier, which is really the operational one—the area health authorities—who will be responsible for organising and administering comprehensive health services and integrating the health services in the districts served by separate district general hospitals.
What I want to ask the noble Lord is whether at the lower end the special epilepsy clinics which the Reid Report recommends should be established at district general hospitals, will in fact be established in these hospitals; and whether at the other end, at the higher level, the special centres, including the residential unit, will eventually be established on a supra-regional basis—presumably about one to each two Regional Health Authorities. I understand there will be 14 of them. It seems to me that, with the reorganisation of the National Health Service, these recommendations are really basic—there are many others
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but these are basic—to the whole report if there is going to be real progress made in the problem of epilepsy, its prevention, diagnosis, treatment, cure and rehabilitation. Are these matters going to be dealt with within the new reorganisation of the Health Service, and, if so, how? My Question did not in fact ask how, but when, the recommendations will be implemented. When they will be implemented of course depends very much on the method that is going to be used, and this means "How?" as well as "When?"
The last comment I have on this aspect of the matter is in reference to another extremely interesting little book—it is a red one in this case, not blue—called Better Services for the Mentally Handicapped, published by the noble Lord's Department last June. It is Cmnd. 4683. This also refers to the multi-disciplinary approach in regard to comprehensive assessment. Whereas the Reid Report, in paragraph 52, says in detail:
"We consider that the problems of epilepsy call for careful initial assessment and that this should be done by a multi-disciplinary team consisting of one or more consultants who may be drawn from the ranks of general physicians, paediatricians, psychiatrists, neurologists, neurophysiologists or neurosurgeons, according to individual circumstances; a social worker; and a clinical psychologist. In most cases the local authority could make a useful contribution to the team through appropriate members of its social work, health visiting. medical and educational staff. In some cases the Disablement Resettlement Officer will have a vital role to play",
the pamphlet on services for the mentally handicapped says:
"… a comprehensive assessment of the nature of the handicap or handicaps, and of the needs and problems of the handicapped person and his family, is required. Medical. educational, psychological and social aspects should be considered together, as appropriate to the age of the child."
Then, over the page, in a rather significant paragraph, No. 136, it is stated:
"Effective co-ordination is essential. Methods of achieving it need further study. The Department of Health and Social Security hopes to issue guidance on this in relation to the comprehensive assessment of persons with any form of handicap or disability."
I underline those last words—"with any form of handicap or disability". So it occurred to me that the noble Lord and my right honourable friend may be considering these multi-disciplinary teams in connection with not only epilepsy but also mental handicap and other forms

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of disability. I would not be so presumptuous as to claim special facilities limited exclusively to people who suffer from epilepsy, because there are so many other deserving disabilities, but it does seem reasonable that the Government and the National Health Service should be asked to organise and run thoroughly efficient multi-disciplinary teams suitable for dealing with any handicap, some members of the teams dealing with mental handicaps, others with epilepsy and others with other forms of disability. It seems to me that these two reports, taken together with the National Health Service reorganisation, could tie up if the Government have the will and find the means to do it.
I want only to add that of course there are many other recommendations dealing with public attitudes and with employment and accommodation. These are very much the problems with which the British Epilepsy Association is doing its best to deal. There is a recommendation in the Reid Report that the Government should help the British Epilepsy Association with central funds. I do not think I need say any more about that. We were most grateful for that form of assistance last year, at the last moment, and I hope it will be forthcoming again. We have been in close touch with the Department about this matter. I might add that it was not my main purpose to-night to come here and ask for money —that is a subsidiary purpose. The main purpose is to make sure that this is a much more hopeful and happy occasion than it was when I raised the subject some six years ago, and to congratulate in advance (if that be a safe thing to do) my noble friend Lord Aberdare who is going to give us the hope we are looking for to carry forward the work which affects 250,000 sufferers and over a million people among their families. These numbers are not decreasing. Therefore I hope that my noble friend will have some useful announcements to make. Before I sit clown I should like to thank the noble Baroness, Lady Serota, who is going to support me, for speaking in this little debate. I am most grateful to her.
6.33 p.m.
BARONESS SEROTA: My Lords, I am quite sure that all those who are concerned
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with the present medical and social and educational services and their progressive development will be most grateful to the noble Lord, Lord Hastings, for putting down this Question to-night, and also for his clear presentation of the issues involved in implementing the principal recommendations of the report of the distinguished joint sub-committee under the chairmanship of Dr. Reid. The noble Lord also set it in its current and future context with admirable skill and pointed out that these matters will need to be considered against the reorganisation of the National Health Service in 1974 and also in the light of current Government policy in regard to improving services for the handicapped.
I think there is now clearly—and some of us would say, at last—a widely recognised and accepted need to improve all aspects of the care and treatment of people with epilepsy through a range of multi-disciplinary measures and services including not least the much greater activity to increase the level of public understanding and acceptance of the nature of their problems. Therefore I will not detain the House at this somewhat late hour except to express my strong support and also, I am sure, the support of all noble Lords present in the Chamber to-night. for the plea made by the noble Lord, Lord Hastings, for Government action and leadership in implementing the report if it is not to suffer the same sad fate of the Report of the Committee on the Medical Care of Epileptics which our noble colleague Lord Cohen of Birkenhead presented in 1956.
Like the noble Lord, Lord Hastings, I too believe that there is good reason to hope that his plea will be falling on more sympathetic ears to-night. Those noble Lords who follow health and social matters closely will no doubt recall that towards the end of a Statement made by the Secretary of State in another place on November 22, and repeated here with his usual courtesy by the noble Lord, Lord Aberdare, it was stated that some of the additional £180 million that the Government were able to find to improve the health and social services within the next four years would in fact be used to provide more services for people with epilepsy. This I welcomed specifically at that time. Therefore I will simply

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confine myself to-night to asking the noble Lord, Lord Aberdare, how large is the sum, and also which specific recommendations of the Reid Report the Government now intend to implement.
Finally, my Lords, perhaps I can say a little more forcefully than the noble Lord, Lord Hastings, speaking in his dual role as President and acting Chairman of the British Epilepsy Association, that I very much hope that the Government will continue to recognise and to assist the pioneering work of that Association by giving it increased financial support (if that is possible) in the coming year from central Government funds, as recommended by the Reid Committee, so that it may not only sustain but also develop and extend the work it is now doing.
6.37 p.m.
LORD SEGAL: My Lords, I also endorse the comment of the noble Lord, Lord Hastings, that this debate is long overdue. It is particularly valuable in that it draws attention to the importance of this excellent report by the sub-committee under the chairmanship of Dr. Reid. The report is of great value in stressing the importance of team work: not only team work in the medical field but also in social welfare and in employment and integration into the life of the community. Epileptics need further provision of sheltered employment and rather greater facilities for training. Equally important is the very great change that has occurred since the last debate took place in the public attitude towards this problem, especially in the removal of any suspicion of stigma attaching to epilepsy, and the need for acceptance, partly through the active encouragement of the family doctor, of the position of the epileptic among his family, his friends and his immediate environment. It is also important to recognise the position of epileptics as fully handicapped persons entitled in every sense to the benefits of the provisions of the Disabled Persons Act. In fact, to some extent the provisions for epileptics can provide a real test of the efficient working of this Act.
It is recognised, as I have said, that the public attitude to this problem has been changing enormously. We are able to record the selection of a British runner to compete in the Olympic Games in 1968; and how valuable this was in drawing
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public attention to the potentialities of a certain group of epileptic patients! The question of issuing provisional driving licences is one to which I think the Minister might direct the attention of his colleagues in another Department. With due safeguards, epileptics granted provisional driving licences could be less of a hazard on the roads than many learner drivers; and the grant of licences could have an important therapeutic influence in steadying an epileptic patient and helping him to gain some degree of self-confidence.
My Lords, after all the years of work and the important advances in the medical field, it would be unthinkable if this valuable report were now to be lightly set aside. We look hopefully to the Government to implement its recommedations. And especially, if I may say so, I would put in a plea for support of the British Epilepsy Association by the provision of additional Government funds. I make this plea all the more readily as a result of my association with a society which has never made any claims upon Government assistance in the matter of funds, a parents' association which has always taken a pride in being entirely self-supporting. That is why I believe that the claims of the British Epilepsy Association, which is in no way similarly placed, ought to have a special call on the Government's generosity. We hope that when the Government's statement is made it will mark a really notable step forward in its provision for the welfare of the victims of this tragic social scourge. In many ways this is, in my view, a far more hopeful field than the field of mental retardation, which involves to some extent an acceptance of mental handicap. In the field of epilepsy, this condition could, with proper treatment and care, steadily improve, and that is why so many of us are particularly anxious that the Government should implement the recommendations of this excellent report.
6.43 p.m.
LORD ABERDARE: My Lords, I am most grateful to my noble friend Lord Hastings for having asked this Question this afternoon and for giving us the opportunity for a short debate on a specialised but nevertheless very important sector of the Health Services, trying to help people with epilepsy. I know

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that my noble friend spoke with a heavy cold, which may have affected his clarity of diction, but it certainly did not affect his clarity of thought. His great interest in the subject and the valuable work he does with the British Epilepsy Association, of which he is now president and, as he told us, acting chairman, is very well known to all your Lordships and to my Department, and I was glad to know that in his opinion my Department was giving him such valuable support. I am also very grateful for what was said by the noble Baroness, Lady Serota, in support of my noble friend's Question and for the remarks that fell from the noble Lord, Lord Segal.
May I take this opportunity to congratulate Dr. Reid and his colleagues on the joint sub-committee of the Standing Medical Advisory Committee, and the Advisory Committee on the Health and Welfare of Handicapped Persons on this most comprehensive and very useful report. It followed in the wake of two previous reports, one relating to the welfare of people with epilepsy and the other to their medical care; and it frankly acknowledges the debt to the work of those two committees. The medical report published in 1956 was the work of a committee under the chairmanship of Professor Sir Henry Cohen, now Lord Cohen of Birkenhead. I know that the noble Lord intended to take part in this debate, as he did on the last occasion, but unfortunately he is ill and unable to be here. If he reads Hansard, he will see that he has our best wishes for a very speedy recovery.
My Lords, the Government accept the validity of the main theme of the report, that many of the problems encountered with epilepsy are not inherent in the illness but are caused by prejudice, and that with modern treatment and care provided from the onset of symptoms nearly all those who develop epilepsy can live ordinary lives in the community. We accept also the scale of the problem outlined in the report, that there may be up to 300,000 sufferers from epilepsy in England and Wales, with 33,000 new cases every year, and we would agree that the health and social services available for them stand in need of improvement and co-ordination. The Government have initiated certain actions to
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this end, as I hope to explain in due course.
Altogether the report contains 56 recommendations. Many of them mainly concern local authorities, professional bodies and voluntary organisations, and they are not, therefore, the direct responsibility of the central Departments. There are also a number of recommendations which concern the medical treatment of patients and their management in hospital, but these are matters for individual clinicians responsible for treating epilepsy. My Department has already invited the views of local authorities, professional and voluntary organisations and hospital authorities on the report, and we intend to hold a national conference next July to provide a forum for these bodies to exchange views on the medical treatment and social care of people with epilepsy. I hope that this conference, which will use the report as a basis for its discussions, will encourage considerable improvement in the services for people with epilepsy.
As my noble friend emphasised, many of the joint sub-committee's recommendations underline the need for better coordination of available services. In the long term this will be greatly improved by the reorganisation of local authority personal social services which has already taken place, and by the reorganisation of the National Health Service, planned for 1974. But better local co-ordination of services must not await reorganisation. We have asked Regional Hospital Boards to organise regional meetings which will include representatives of hospital doctors. social workers, general practitioners, local authority health, education and social services departments, disablement resettlement officers, industrial medical officers and others interested in epilepsy. These meetings are to discuss the report and to consider how its recommendations can best be implemented locally, and we hope that by bringing together representatives of the professions concerned we shall achieve improved collaboration in the future. I hope that my noble friend will think that these regional conferences will go some way to answer the complaints that were brought up on the last occasion by the noble Lord, Lord Brain, in achieving regional action on these matters.

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I now come to the recommendations in the report on which the Government have themselves been able to take action. The report recommended that the British Epilepsy Association should receive a contribution from central funds in order to expand its educational activities and, as my noble friend has said, in 1970–71 we made a grant to the Association of £10,000. I am glad to be able to tell him that a similar grant will be made in the current financial year. This grant is given for activities other than health education, which is the responsibility of the Health Education Council, but we recognise the Association's good work in furthering understanding of the problems posed by epilepsy, and I hope that the financial stability thereby provided will enable it to continue to do this.
The report recommended that epilepsy should no longer be a ground for annulment of marriage. Under the Nullity of Marriage Act 1971 epilepsy ceased to be a ground for nullity in the case of future marriages. The report also recommended that disablement resettlement officers should receive more specific instructions about the functions of social workers and the contribution they can make towards solving employment problems. This recommendation, too, has been implemented, as has the recommendation that full reports should go back from industrial rehabilitation units to the referring medical agencies.
Most of your Lordships who have spoken referred to the recommendation about special centres: that these should be provided for those people whose management presents particular problems, and who need not only the specialised services of a hospital neurological and neurosurgical unit but also medium or long-term residential care under special conditions. Although the recommendation suggested that five or six such units should be established in England and Wales, the main text of the report stated that it would be difficult to tell how many would be required, and that in view of the importance of early experiment they should be established on a basis of existing facilities. We have decided to establish as a pilot scheme, which will be evaluated over a five-year period, two experimental centres for adults and one for children. The adult centres are to be
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at the Chalfont Centre for Epilepsy, in association with the National Hospital for Nervous Diseases, and at the Naburn and Bootham Park Hospital, York; and the centre for children will be at the Park Hospital, Oxford. Only a comparatively small number of patients can be treated at these centres—the initial capacity will be 65 adults and 12 children, although the adult capacity may be increased during the five-year period—but we intend that these centres shall also become focal points for teaching and research. We hope too that they will, in the words of the report,
"act as catalysts in raising the standard, care and interests throughout the area where they serve ".
The noble Baroness asked me about money. I can tell her that the project will cost over half a million pounds over the five years, and at the end of this period we hope to be able to determine the value of such centres, both for treatment and for teaching and research, and then decide how many centres are needed altogether and where they should be located. I hope that this last sentence will satisfy my noble friend, who asked me how these special centres would fare when we come to the reorganisation of the Health Service. They will remain in being for the next five years at these three centres, and we shall then be able to evaluate their work and decide how many are required in the long run.
My noble friend also asked me especially about the provision of separate epilepsy clinics. I fully accept the need for a multi-disciplinary approach, of which the noble Lord, Lord Segal, spoke, but professional opinion is by no means unanimous that separate epilepsy clinics are appropriate. This is one of the topics that is likely to be discussed at the national conference.
My Lords, I have outlined the action which the Government are taking to effect improvements in the light of the report and the financial support we are giving. But we see this improvement as a continuing process, and in considering what further measures might be taken the Government will take account of the views and suggestions that have been made by noble Lords in the course of this debate, the comments of the bodies

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that have been consulted and the views that emerge from the conference I have mentioned. We also have in mind the conclusions of the Office of Health Economics paper, Epilepsy in Society.
One of the greatest barriers to people with epilepsy living happy and normal lives is the public attitude to epilepsy. I endorse the recommendations of the report that both public and private bodies and employers should review restrictions on people with epilepsy, and ensure that any that are necessary in the light of modern knowledge are abandoned. I hope, too, that those whose views help to mould public opinion will use their influence to counter prejudice against people with epilepsy. In this task the British Epilepsy Association, under the presidency and acting chairmanship of my noble friend Lord Hastings well deserves our support.

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