Lords Sitting of 10 July 1972

Preamble
The House met at half past two of the clock: The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Hereford.

NORTHERN IRELAND
LORD DENHAM: My Lords, with the leave of the House my noble friend Lord Carrington will be making a Statement on Northern Ireland at a convenient moment after 3.30 p.m.
PORT TALBOT CORPORATION BILL [H.L.]
Read 3a, and passed, and sent to the Commons.
MILFORD DOCKS BILL
Read 2a, and committed to the Committee on Unopposed Bills.

CHRONICALLY SICK AND DISABLED PERSONS (SCOTLAND) BILL
LORD HOY: My Lords, I understand that Amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a
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manuscript Amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move, pursuant to Standing Order No. 45(2), that the Order of Commitment be discharged.
Moved, That the Order of Commitment be discharged.—(Lord Hoy.)
On Question, Motion agreed to.

HOUSING (FINANCIAL PROVISIONS) (SCOTLAND) BILL
2.39 p.m.
THE MINISTER OF STATE, SCOTTISH OFFICE (LORD POLWARTH): My Lords, I beg to move that the House do again resolve itself into Committee on this Bill.
Moved, That the House do again resolve itself into Committee.—(Lord Polwarth.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Lord DOUGLAS OF BARLOCH in the Chair.]
Clauses 21 to 23 agreed to.
Schedule 4 [The housing revenue account]:
LORD HUGHES LORD HUGHES moved Amendment No. 75:
Page 84, line 30, leave out paragraph (7).
The noble Lord said : This Amendment is to delete paragraph (7), which reads as follows :

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" For any year, the local authority may, with the consent of the Secretary of State, carry to the credit of the account, in addition to the amounts required by the foregoing provisions of this Schedule, such further amounts, if any, as they think fit."
Reading that, at first glance there is nothing that one needs worry about at all, but this Amendment is really a probing one, and I would wish to be considered along with it Amendments Nos. 81, 84 and 85. Amendment No. 81, relating to the same Schedule, is to leave out paragraph 9. That paragraph reads:
" The Secretary of State may direct that items of income or expenditure, either generally or of a specific category, shall be included in or excluded from the account."
That, again, is a fairly common form of words.
Then, turning to Amendments Nos. 84 and 85, these relate to Schedule 5. That is the Schedule dealing with the slum clearance revenue account, and is the one to which my Amendments Nos. 84 and 85 refer. The second of those Amendments is to leave out paragraph 6, on page 88, which reads:
" The Secretary of State may direct that items of income or expenditure either generally or of a specific category, shall be included in or excluded from the slum clearance revenue account."
Your Lordships will see that, apart from the reference to the slum clearance revenue account, that provision is identical with paragraph 9 of Schedule 4. But the subject of the other Amendment, paragraph 5, reads:
" A local authority may, with the consent of the Secretary of State, exclude from the slum clearance revenue account any of the items of income or expenditure mentioned in the foregoing provisions of this Schedule, or may with such consent include any items of income or expenditure not mentioned in those foregoing provisions."
Paragraphs 5 and 6 of Schedule 5 seem to be a perfectly acceptable way of doing things, because it places with the local authority an initiative to suggest that additional items may be either debited or credited to the account, or to suggest that items which otherwise would be debited or credited may be left out. That can be given effect to if the Secretary of State agrees. So the hands of the Secretary of State are not tied by paragraph 5 to Schedule 5. Paragraph 6 gives him a power of direction in certain respects.
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When we look at the Schedule relating to the housing revenue account, we find that in paragraph 7, the local authority are given only the initiative of asking for additional items to be carried to the credit of the account. There is no corresponding figure on the debit side.
I cannot see why there should be this difference of treatment in these two accounts. If both were treated in the second way the effect would be to leave the final decision entirely in the hands of the Secretary of State while making it clear that if the local authority think that there should be additions or exclusions either from the debit or the credit side of the slum clearance account they may make this suggestion to the Secretary of State. If he agrees he will authorise it and if not he will presumably say, "No". I cannot see the reason why exactly the same procedure is not followed in relation to the other important account, the housing revenue account. I hope that I have made it clear that the purpose of moving these Amendments is to try to find out why this different method of treatment is adopted. I hope that as a result of what the Minister may say that at the next stage of consideration of the Bill we may proceed to a common form of treatment of these items in both Schedules; and preferably the form they take in Schedule 5. I beg to move.
LORD POLWARTH: The noble Lord was good enough to give me some notice, though not so long ago, of what he was seeking to achieve by moving these Amendments. I must confess that on reading them I failed to understand their import or to spot the real point behind them. I take his point that there appears to be a difference in the two Schedules; but I am afraid that I am not in a position to-day to explain the reason for it. I am willing to have this looked into between now and the next stage if the noble Lord will withdraw his Amendment.
LORD HUGHES: I think that in the circumstances that is probably as far as the Minister will go. I would remind him I am not trying to trap him into anything. Of the two wordings, one is acceptable in both cases. In begging leave to withdraw the Amendment, I would commend that course of action to him for consideration before Report stage.
Amendment, by leave, withdrawn.
2.47 p.m.
LORD HUGHES LORD HUGHES moved Amendment No. 77 :
Page 86, line 14, after ("garage") insert ("or").
The noble Lord said : Amendments Nos. 77 and 78 stand together. Proviso (ii) in paragraph 3, at page 86, line 14, refers to the provision of
" any garage, car-port or other car-parking facilities provided by the local authority …"
These are services which may be charged for. So far as the garage and the carport are concerned, they present me with no difficulty. Many years ago when I was in local authority I took the view that the charge for services of this kind should represent an economic rent so that no burden would fall on the taxpayers. That still remains my view because these are facilities provided for the use of a particular tenant ; they may be part of his house and will be included in one rent. On the other hand, as is fairly common, a tenant may be allocated a garage in another part of a block of flats for which a separate rent would be payable. Car-ports, I should imagine, would almost invariably be attached to the occupier's house.
However, I am a little worried about the reference to "other car parking facilities". I believe that some authorities (who are certainly in a minority) provide certain car-parking facilities and earmark a particular space for the use of a particular tenant of a particular house. This sometimes can be accomplished by the use of a pillar device which most of us will have seen (usually in public buildings like universities or hospitals where parking places are earmarked for the staff) which guarantees the authorised motorist the use of a particular car parking space. That may happen in the case of some local authorities' car-parking facilities but more generally in local authority housing schemes a group space is provided in which a number of cars may be parked. They are not earmarked for any particular tenant.
My worry is that by the way this provision is worded, local authorities could lump these facilities in as services and divide the aggregate cost among all the tenants in the scheme, whether or not the tenants have cars and may use the facilities, or whether the facilities may be used by visitors. I believe that the inten-
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tion of the Bill is that a charge will he made to a tenant only for a service specifically available for his sole use—a garage, a car-port or car parking facilities—but from the wording in the Bill it seems to me that a local authority will not necessarily confine itself in that way. If it is put on the basis that anybody provided with a garage or car-port should pay a rent which takes care of the whole cost, that, I think would be is a reasonable principle because the opposite is that the person concerned is paying only part of the cost and his fellow tenants and ratepayers generally are paying part of the cost to provide these facilities.
If there are to be facilities which, in some cases, may be used by people who have nothing to do with the housing scheme at all—and that is not unknown ; people do abandon cars in such areas as an easy way of getting rid of the vehicles—to spread the charge over people who have no benefit from the facilities would be unfair. I hope the Minister will tell me exactly how this provision is intended to work and whether I am right in assuming that the Government intend that people will pay only for that which they receive. If so, how is the other aspect of this situation to be excluded.
LORD POLWARTH: I do not think there is anything between us regarding the intention here ; it is merely a question of how we achieve the objective. May I say to the noble Lord, Lord Hughes, that I am familiar with the device which he mentioned of a pillar which may be either raised or lowered ; having on one occasion inadvertently driven over one of these things which was in the prone position but which elevated itself and came through the floor of the car. I think that here the position is exactly what the noble Lord, Lord Hughes, is seeking to establish. The distinction is between what might be called allocated and unallocated car-parking facilities. We are, I think, all agreed that in the case of the allocated facilities it is right that a tenant who has the exclusive use of facilities should pay for them. This would include not only garages or car-ports but also spaces specifically reserved.
I am advised that unallocated car parking facilities may be considered to be provided within the terms of the tenancy,

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as the Bill says, and therefore local authorities are under no duty to make charges with respect to them. It is our intention to include guidance on this in the circular to be sent to local authorities subject to the enactment of the Bill. I think this is the more effective way of dealing with the matter rather than trying to be too specific in defining these other car-parking facilities. It is, I think, covered by what is within the terms of the tenancy, and the guidance to be issued. I find it almost impossible to believe that local authorities would even wish to try to make charges to individual tenants for the use of communal car parks. I hope that what I have said will give some sort of assurance to the noble Lord, Lord Hughes.
LORD HUGHES: I was all set to say that I think this perfectly reasonable, until the Minister ventured to suggest that he could not imagine any local authorities trying to charge individuals. When one thinks back to the last Conservative Administration in Glasgow and the devices to which they descended in order to try to charge school fees, I would not put any such project beyond that lot—fortunately, it is most unlikely that they will ever get the chance again.
Returning to what the Minister said, if a circular giving guidance to local authorities makes it perfectly clear that they are entitled to make a charge only for allocated facilities of this kind, that meets my point. The only thing is that when there is talk of car parking facilities of this kind one thinks of areas or lay-bys or something of that kind, and not just marks painted on what otherwise would be the carriageway. There is that bugbear in some of our housing schemes and as a result during certain times of the day people cannot move because of the number of vehicles which are parked on the highway. In the light of the Minister's explanation—
LORD HOY: I should like to say a word on this Amendment.
LORD HUGHES: I was about to ask leave to withdraw the Amendment. It is my fate to be prevented from withdrawing Amendments. On the last occasion I was frequently prevented by the noble Lord,
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Lord Drumalbyn, and I gave way to him, so I can do no less than give way to my noble friend.
LORD HOY: I do not wish to delay the proceedings of the Committee, but there are one or two problems which would arise from the Amendment. It is not always a question of a local authority being the housing authority and doing this job. Great trouble may flow from certain decisions being made. Noble Lords will know that recently in the City of Edinburgh the University allocated car parking spaces to the students, but immediately imposed such appalling charges that all the students parked their cars in the streets and thereby prevented householders from finding parking accommodation. The authorities may seek to get out of this trouble by reducing the charge.
When the noble Lord, Lord Polwarth, says that local authorities will not impose charges where facilities are not being provided, I wonder whether he is taking into consideration the most recent schemes submitted to his Office in Edinburgh in which parking fees are to be charged in certain streets. I can think of one area in North Edinburgh where there is a large printing works and any worker arriving at his work in a car and who wishes to park there will be told by the Edinburgh Corporation that the rent is to be £26 a year, or whatever the figure may be, for parking. All I would say to the noble Lord, when he asserts that local authorities will not impose charges unless facilities are provided, is that we had better define the term "facilities" very clearly. Where a street has been in existence for many years and those who go to their work are to be charged to park their cars there that seems to me to be taking the matter a little too far. I do not want to make a great deal of this ; all I want to say to the noble Lord is that when he is considering the matter I hope that he will also consider the points that I have raised.
LORD POLWARTH: I am familiar with some of the problems which have been raised by the noble Lord, Lord Hoy. The street in Edinburgh in which I live is used as a parking place by the inhabitants of the Department who serve me and so problems may arise there. I think I may give an assurance that these problems will be dealt with in the circular of instruction to be sent to all authorities.
LORD HUGHES: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
3.0 p.m.
LORD HUGHES LORD HUGHES moved Amendment No. 79 :
Page 86, line 28, leave out ("Schedule 4 to this Act") and insert (" this Schedule").
The noble Lord said : This Amendment and Amendment No. 80 are purely drafting Amendments. The wording in the Bill is a reference to Schedule 4 to this Act. This wording is in Schedule 4. Having gone through the Bill, I cannot find any other place where it is done in this way. Everywhere else where there is a reference in the Schedule to that Schedule it says "in this Schedule". The purpose of these two Amendments is merely to bring the wording into conformity with what is done elsewhere in the Bill. I should hate to be regarded as an amateur draftsman, but I do not like this sort of untidiness. I beg to move Amendment No. 79.
LORD POLWARTH: The last thing I would wish to do would be to label the noble Lord an amateur draftsman. From my experience he is very much a professional one. I think the Bill was drafted in this way with the idea that there could have been confusion with the reference, two lines earlier, to the Act of 1968. However, after looking at the matter closely and discussing it with those responsible, I am happy to accept this Amendment. I do not think it would cause any confusion.
LORD HUGHES: I am grateful to the Minister. Actually I had thought that was the explanation. When I looked it up I found that the reference was not to "this Schedule" but to "that Schedule", so there could be no possible confusion.
On Question, Amendment agreed to.
LORD HUGHES: I beg to move Amendment No. 80.
Amendment moved—
Page 86, line 31, leave out (" Schedule 4 to this Act") and insert ("this Schedule").— [Lord Hughes.]
On Question, Amendment agreed to.
On Question, Whether Schedule 4, as amended, shall stand part of the Bill?
LORD HUGHES: I am certain that the Minister would be exceedingly disappointed if I did not use this oppor-
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tunity to come back once again to a point which I have now made at least three times, so far without success. The first time was on the first day of the Committee stage. Perhaps it was reasonable then that neither the Minister nor his advisers had the figures for which I asked ; perhaps they were only available in Edinburgh. On that occasion, there-forfore, I did not press the matter unduly. But on the last occasion I again asked for the figures, and again I was denied them, for reasons which did not impress me as being sound. So once again I return to the reference to an overall figure of £70 million to £75 million as being the likely or possible cost of the six or ten subsidies, as the case may be, in 1975–76.
It is impossible for the Government to have made an estimate of £70 million to £75 million as being the overall cost of this subsidy in 1975–76 without first having ascertained the cost of the individual components which go to make it up. Now that the Minister has had a further few days to look into the matter, I ask him again whether he will furnish this information. I appreciate that any information could not possibly be regarded by any reasonable person as being binding on the Government. The overall sum of £70 million to £75 million could not be other than guesswork at this stage. It may turn out to be accurate or it may be very far from the truth; but, either way, I do not think anyone would be entitled in 1975–76 to say, "That was a horribly bad guess you made back in 1972".
At least one of the subsidies—the rent allowance—is in a completely new field. There must be a very high element of guesswork, and it follows that there must be an equally high element of guesswork in any breakdown of the figures. But on that very limited basis I think we are entitled to know how the figures add up to £70 million to £75 million. I hope that this time the Minister will not send me away, or have me sitting here, discontented. I shall not be going away, at least not for some time.
LORD POLWARTH: Whether I shall be able to send the noble Lord, Lord Hughes, away contented I would hesitate to say at this moment. I appreciate that he has pressed on more than one occasion for a breakdown of the figures in the

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estimates given in the Financial Memorandum at the beginning of the Bill. In view of his considerable pressure, and that of other noble Lords, I have discussed the matter with my right honourable friend, the Secretary of State for Scotland, and I shall be glad to give a breakdown into categories which, as the noble Lord was good enough to say, must be subject to considerable reservations so far as accuracy is concerned. We have to accept that it cannot be otherwise. I will try to do this in such a way that your Lordships will have time to absorb the figures. This is always difficult to do. As my noble friend Lord Drumalbyn said, it is unfortunate that we are not allowed to have a blackboard on these occasions.
Turning to the statement in the first paragraph of the financial estimate, I think the best estimate to be made is that current net charges of £55 million would amount to £70 million to £75 million in 1975–76. The £55 million is estimated to be composed of total old subsidies of £45 million, to be replaced, and supplementary benefit payments in respect of rent, which are referred to in that paragraph, of £10 million. The figure of £70 million to £75 million falls into three broad categories. One is the element of residual subsidy, and another is what I call the new subsidies which are taking over from the residual subsidies and are running from now onwards. One might group these as the housing expenditure subsidy, an old friend the high cost subsidy, and the slum clearance subsidy. Those are the subsidies directed to houses and housing. Then there are the rent rebate subsidy, the rent allowance subsidy and, connected with those, our friend the supplementary benefit payments, which again come into this year's figures.
To start with Group 1, the residual subsidy, the figure which we have included in the estimate—and it is only an estimate—is in the neighbourhood of £20 million out of £70 million to £75 million. We come then to the next group, housing expenditure, high cost and slum clearance subsidies. Here we estimate the total—and again it can only be an estimate—to be in the neighbourhood of another £20 million, almost the same figure. By far the largest propor-
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tion of that figure will be attributable to the housing expenditure subsidy. I think we can dismiss high cost subsidy on the grounds that it will not figure in millions and we are not being as exact as to go below millions in this estimate. It is there for a specific purpose and it is not its size which is relevant. The slum clearance subsidy is very hard to estimate. It will not of course be receivable by all authorities in the way that the housing expenditure subsidy will, and there are provisions to help with slum clearance other than under this Bill. All I would say is that I should think that out of that £20 million one might estimate it at probably in the £2 million to £3 million bracket ; but it is very much an estimate, as I have said.
Now, having dealt with the two groups of some £20 million each, we come to the least predictable or ascertainable of the subsidies, as the noble Lord has said—the rent rebate and the rent allowance subsidies. Here the figures we have included are inevitably more in the form of a bracket, as is the final figure in the Bill. The figure we estimated for it is from £20 million to £25 million. I will come back to that in a minute. Following on that there is a bracket in respect of supplementary benefit payments where again there are many incalculables. Looking ahead we have estimated £10 million to £15 million, which compares with the current year's estimate of £10 million. As to the amount out of the rent rebate and allowance subsidies that will be attributable to the two halves, I should have thought that again of all our estimates the rent rebate subsidy will be by far the largest part. This is inevitable because of the proportion of local authority houses in relation to private houses that will be involved, together with the other factors as well. Here again I should have thought that the proportion of that £20 million to £25 million attributable to rent allowance subsidy, as opposed to rent rebate subsidy, might be of the order of one-tenth—and that, as you may calculate for yourself, may be £2 million to £2,500,000. These are the figures and I hope I have made them tolerably clear : residual subsidy, £20 million ; housing high cost and slum clearance together, another £20 million ; rent rebate and allowance subsidies, in

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the order of £20 million to £25 million ; and supplementary payments in the order of £10 million to £15 million.
Before leaving the subject, I wonder whether we may look at these and say that these estimates, predictions or whatever you like to call them, must be taken alongside the reduction in rate fund contributions for housing. Here I would simply draw your Lordships' attention to the figures in the second paragraph of the Financial Memorandum, pointing out that on our estimates—and again they are only estimates—the figure for the current year of some £40 million should be reduced to something in the range of £15 million to £20 million. I have endeavoured to give the information in a form which I hope is useful. I frankly think this is as far as one can go in view of the uncertainties and so many other factors attending what may be the position in 1975–76. I would say that these, together, comprise our best estimate of the position.
LORD HUGHES: I am grateful to the Minister for at long last finding himself able to furnish these figures. I should not wish to quarrel with the way in which he has put them forward. Frankly, if the Minister had been able or willing—and I think the word is "able" rather than "willing"—to concede right at the beginning that nobody was going to worry too much about the expenditure and high cost subsidy, we could have had this information a long time ago. As it is, the Minister has detailed, I think very reasonably, every particular subsidy except the high cost subsidy. I want just to recapitulate to find out where we are. The residual subsidy will cost about £20 million ; the housing expenditure subsidy will cost approximately £17 million to £18 million—that is the £20 million which the Minister mentioned for the group and deducting from it the £2 million to £3 million which he estimates might be the cost of slum clearance. I think it is generally accepted that the high cost subsidy will now figure only in the petty cash book ; it is what in another part of the Bill would be described as " negligible " and therefore does not need to be registered.
Then we come to rebates. I must admit it causes me a litle surprise that rebates and rent allowances, taken together, might cost £20 million to £25 mil-
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lion and that only £2 million to £2,500,000 is to be attributable to rent allowances. I think most of us had assumed that the rent allowances represented a considerable breakthrough into a new field and that with so many houses being brought into the fair rent system at a much more rapid rate than had previously been contemplated, one would have expected that a fairly large number of those in privately rented accommodation would be in receipt of allowances. This would seem to indicate that the Government's estimate at this stage is that either a very much larger number of those in private rented accommodation are not to get an allowance or that the amount of the allowance they are going to get is to be very much less than the average figure of rent rebates for other houses. That may not in fact be the correct position.
Obviously, the best that I can do at this stage is to thank the Minister for having at long last gone on the road to Damascus, with the same result as happened to another man some time ago. I should like to study in the Record tomorrow what has been said. Meantime, I thank him for having furnished the information. Some of my colleagues feel that this shows that if one leaves out of account the subsidising of rebates and rent allowances, which is a new form of subsidy, as the Minister has pointed out, the actual expenditure on subsidies for building purposes, as it were, the residual subsidy and the housing expenditure subsidy, show a reduction of the subsidies which are going for these purposes at the present time. However, I should like to study the information in more detail, and the noble Lord will not be surprised if we find an opportunity of coming back to this subject. However, I assure him that it will not be on the grounds that we are criticising his estimates, or his departmental guess work, because I accept fully that at this stage it cannot be any better than that.
LORD NUNBURNHOLME: Before the Minister replies, may I ask a question about slum clearance? The noble Lord, Lord Hughes, referred to between £2 million and £3 million. I believe the noble Lord opposite said £3 million. Could the noble Lord, Lord Polwarth, tell us what the figures are to-day and why it should be only £3 million in 1975?
LORD POLWARTH: I referred to the same figure as was quoted by the noble Lord, Lord Hughes—between £2 million and £3 million. I said that it could only be an approximation. I am sorry but I do not have with me the current figures of the rate of expenditure on slum clearance. The subsidy in relation to slum clearance is a new subsidy and has not existed in the past. There are other provisions for help with slum clearance besides those under this Bill. Some progress has already been made in this direction, and we hope that greater progress will be made now.
LORD BERNSTEIN: Is it a subsidy, or is it a deduction from another part of the account to be used for housing?
LORD POLWARTH: This is a new subsidy, outside anything existing at present, to help with the clearance of slum areas prior to building.
Schedule 4, as amended, agreed to.
Clause 24 agreed to.
Clauses 25 and 26 agreed to.
Schedule 5 [The Slum Clearance Revenue Account]:
LORD HUGHES: I have already received assurances from the Minister in relation to Amendments Nos. 84 and 85, and therefore I do not propose to move them.
Schedule 5 agreed to.
Clause 27 agreed to.
Clause 28 [Rents to be charged so as to balance housing revenue account]:
3.22 p.m.
LORD HUGHES LORD HUGHES moved Amendment No. 86:
Page 26, line 27, leave out ("£26") and insert ("£13").
The noble Lord said: I wish to discuss with this Amendment Nos. 87, 88, 89 and 90. These Amendments are the second leg of the argument which we discussed when considering the subsidies. I was unsuccessful in moving that the subsidies should be greater or, alternatively, that the phasing-out should be slower, the purpose being not just to alter the level of subsidies but to alter the effect. The way in which the subsidies are being brought in or phased out, as the case
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may be, the new and the old, is to enable rents to be increased by an average amount of 50p per week until the housing revenue account comes into balance. If that happens while the present Government are in office, we do not know whether they will go on to the other stage of proceeding to the fair rents. A little has been said about that but not very much. That is not in the Bill, and I do not propose to venture into that field at this stage.
It has been said more than once, both here and elsewhere, that during the time of the last Labour Government rents went up more than at any other period. There is substance in that because the last Government did their best to help to bring the position of housing accounts on to a more reasonable basis, but always with the qualification that increases should be at a level which it was possible for an ordinary working class budget to absorb without having recourse to drastic changes in methods of living. The difference in approach between the two Governments can be summed up in this way: this Government are requiring a minimum increase of 50p a week. When we ventured into the field of saying what the rent increases should be, we laid down that they should not exceed (I will use the new money although of course it was not so expressed then) 37½p a week. One of the reasons why rents went up a little more than before was because local authorities were very careful not to put up their rents by the amount which the Government permitted. Under the method of the previous Government, if they wanted to increase their rents by more than 37½p a week they had to go to the Secretary of State for permission. If they did not wish to increase by more than that figure, they had discretion. The average amount of increase in any one year was not more than about 20p a week. The attitude of the local authorities was, "The Secretary of State would have allowed us to increase our rents by 37½p. Look how reasonable we are! We are putting them up only by 1op" —or 15p or 20p, or whatever it was. The Government are now going the other way they say that the rents must be increased by 50p a week.
One of the reasons why the increases which took place between 1964 and 1970, with one or two exceptions, were

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not the subject of any general outcry, and certainly not the subject of any national campaign, was because the amount of the increase could be absorbed. The 3 shillings or 4 shillings increase on the rent could be found without people having to say, "We will not go on holiday", or, "We buy less in the way of clothes", or, "We will alter our eating habits ; we will go for cheaper cuts of meat." That was not necessary, but a mandatory increase of 50p per week on every rent is, in the opinion of this side of the Committee, much beyond the capacity of many working class households. If this level of increase is persisted in it will be the height of folly, because in the situation in which we find ourselves today its effect cannot be other than grossly inflationary. One can take it for granted that, once this is done, any trade union lodging a wage claim will start off on the basis that the first 50p received will go straight into the rent increase. They can go further than that because they will need more than an increase of 50p per week to be able to pay a 50p rent increase, because in the case of anybody paying income tax the Chancellor is chopping off 30 per cent. of the increase before it reaches the employee. Income tax at 7s. 9d., or 38¾ per cent., less two-ninths earned income allowance, brings the rate down to a tax rate of approximately 30 per cent. So in fact people are going to need a good bit more than 50p a week in a wage award to enable them to pay a 50p rent increase.
If we were in a period of complete prosperity without mass unemployment, without a floating pound and without inflation of the order that we are getting, there would still be danger in this course of action, yet the Government persist. We cannot be associated in any way with increases of this order. I take a certain amount of risk in suggesting an alternative figure. If I were following the dictum of a very famous Conservative Prime Minister, the late Sir Winston Churchill, I would not be putting forward any alternative. When he was Leader of the Opposition in another place he laid it down that it was not the business of an Opposition to provide policies but that it was their business to oppose bad policies from the Government. That would be sufficient. But I am trying to be
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realistic. It is not enough to attempt to take something out without putting something else in its place. If I had been seeking to relate things entirely to the past I would not even have accepted a figure as high as £13. That is certainly as far as I can bring myself to go. I think a figure of £26 a year or 50p a week under existing circumstances is totally unreasonable and from a national point of view is the height of folly. I beg to move.
LORD POLWARTH: We must get clear straight away what we are talking about. The noble Lord spoke of a 50p minimum increase. This is not the case. Fifty per cent. is the maximum average rent increase in any 12 months.
LORD HUGHES: If the noble Lord is quoting me correctly, and I do not think he is, then there has been a slip of the tongue. I was talking about a 50p mandatory increase. I accept the fact that it is an average and that the maximum is in fact 75p per week on an individual house. But it is a mandatory average increase of 50p.
LORD POLWARTH: I apologise to the noble Lord. It was either a slip of his tongue or of my ear. As was pointed out, this 50p is a maximum average increase in regard to standard rent. Some indeed will be above that and others below it according to the nature of the accommodation. The whole point is that this takes no account of the other provisions of the Bill. As we have repeated again and again, the object is to introduce a system where those who can afford to pay a reasonable rent in relation to the cost of their accommodation should do so, whereas those who are not able to do so should be relieved from it. That is the object of the rent rebate and rent allowance schemes. So when we are talking about a 50p maximum average increase this is something that will apply to some, but by no means to all tenants. Various estimates have been made of the number who will benefit from the rent rebate and rent allowances. It is not unreasonable to say that the current thinking is that something like 35 to 40 per cent, of tenants will be eligible for rent rebate.
Turning to the question of ability to pay and as to whether the circumstances are so very different now as to ability to absorb increases in rent compared with

19
the time of which the noble Lord spoke under the previous Administration, he quoted on an earlier occasion the family expenditure survey of 1971 published by the Department of Employment. It showed that the average weekly family expenditure in the United Kingdom was £31 per week, give or take a penny. The rent return for November last year showed that the Scottish average rent was approximately £1·50 per week. Therefore local authority tenants in Scotland are paying between 4 and 5 per cent. of their household income as rent. The rent rebate scheme provides considerable protection to a wide range of tenants, and in many cases will reduce the proportion of income paid out in rent for the lower paid and those less able to afford it. May I give one example. I may have given it previously; I cannot remember. A married couple with four children whose income is equal to their needs allowance under the scheme would pay just under 4 per cent. of their income as rent. I should not have thought that that was an unreasonable figure, and I am certain that it is lower than is normally the case with rents in England, which we all know are higher.
Let us take again the trend of earnings. Over the period of 2½ years ending last October the average weekly earnings of adult male manual workers in Scotland rose at a rate equivalent to £2 a year. Even if that rate were to be halved over the next two years, something for which we would very much hope—noble Lords may laugh but we do not think it at all funny.
LORD GARNSWORTHY: If the noble Lord will excuse me, he referred to £2 a year increase. Did he really mean £2 a year increase? That is what we were smiling about.
LORD POLWARTH: An increase of £2 a year over that period to October, 1971.
LORD HUGHES: The noble Lord must mean £2 per week during the year. An increase of £2 a year is getting into high cost subsidy finance again.
LORD POLWARTH: The noble Lord quick rightly picked up my slip of the tongue. Of course I meant £2 a week, as I should have thought was clear. I
20
apologise. That is £100 a year. We sincerely hope that increases will not continue at that rate; but I should have thought that such increases would have been ample to cover increases of this amount in rent payable, particularly in view of the qualifications I have given as to the number of people who will pay the full increases that have been mentioned. For those receiving rent rebate a 50p increase in their weekly rent would normally only increase their rent payable by 20p because of the 40 per cent. minimum rent provision. We should all like to help everybody to pay as little as possible and to pay reasonably for anything ; but it is the Government's feeling that these figures with these increases, together with the considerable help given to those not able to meet the increases, is not unreasonable.
LORD HUGHES: It would be idle if I were to pretend for one moment that I found anything the least satisfactory in that answer. It would be equally idle for me to pretend for one moment that I was surprised at the answer. What the Minister said, and what I said before him, sum up the completely different approach which the Government and the Opposition have to this matter. To the Government a 50 per cent. increase—
LORD GARNSWORTHY: A 50p increase.
LORD HUGHES: I am getting to be as bad as the Minister. The Minister treats a 50p increase as if it was something that did not really matter a great deal to the average family. Yet the figures which he quoted from the Department of Employment's survey of expenditure of the average of some 8,000 or so households which were taken into account are probably much more relevant than a husband and wife and four children trying to exist on the needs allowance. I believe I mentioned at an earlier stage that, if we take the Department's figures into account, it is only a husband and wife who are nonsmoking teetotallers who can get near the figures of average expenditure and equate them with the needs allowance.
When we were voting earlier on the subject of rebates, I argued that the rebate scheme, while good in principle, was bad in detail ; and I would certainly take the view that anyone who had an

21
income only up to the figure of the needs allowance has no money available for paying rent at all, if he is going to eat, have his family clothed and live in a house which is adequately heated, leaving aside all kinds of luxuries. We therefore approach this problem from totally different points of view, and it is accord-
House resumed.

NORTHERN IRELAND
3.48 p.m.
THE SECRETARY OF STATE FOR DEFENCE (LORD CARRINGTON): My Lords, with your Lordships' permission, I should like to repeat a Statement which has been made in another place by my right honourable friend the Secretary of
ingly right that we should reflect our differences in the Lobby.
3.41 p.m.
On Question, Whether the said Amendment (No. 86) shall be agreed to?
Their Lordships divided : Contents, 44 ; Not-Contents, 70.

CONTENTS

Archibald, L.

Garnsworthy, L. [Teller.]

Rathcreedan, L.

Arwyn, L.

Gladwyn, L.

Royle, L.

Beaumont of Whitley, L.

Hale, L.

Sainsbury, L.

Bernstein, L.

Hall, V.

St. Davids, V.

Beswick, L.

Henderson, L.

Samuel, V.

Birk, Bs.

Hereford, L. Bp.

Segal, L.

Blackett, L.

Hoy, L.

Shackleton, L.

Brockway, L.

Hughes, L.

Shepherd, L.

Buckinghamshire, E.

Lee of Asheridge, Bs.

Shinwell, L.

Burntwood, L.

McLeavy, L.

Slater, L.

Byers, L.

Moyle, L.

Summerskiil, Bs.

Champion, L.

Nunburnholme, L.

Taylor of Mansfield, L.

Chorley, L.

Pargiter, L.

Wright of Ashton under Lyne, L.

Fiske, L.

Phillips, Bs. [Teller.]

Gaitskell, Bs.

Portsmouth, L. Bp.

Wynne-Jones, L.

NOT-CONTENTS

Aberdare, L.

Dundee, E.

Lauderdale, E.

Ailwyn, L.

Eccles, V.

Lothian, M.

Atholl, D.

Effingham, E.

Lucas of Chilworth, L.

Auckland, L.

Elles, Bs.

Mansfield, E.

Balfour E.

Elliot of Harwood, Bs.

Mar, E.

Balfour of Inchrye, L.

Emmet of Amberley, Bs.

Merrivale, L.

Belhaven and Stenton, L.

Ferrers, E.

Milverton, L.

Belstead, L.

Fortescue, E.

Mowbray and Stourton, L. [Teller.]

Blackford, L.

Gisborough, L.

Bridgeman, V.

Goschen, V.

Napier and Ettrick, L.

Caccia, L.

Gowrie, E.

Nugent of Guildford, L.

Carrington, L.

Greenway, L.

Onslow, E.

Clifford of Chudleigh, L.

Grenfell, L.

Polwarth, L.

Clwyd, L.

Grimston of Westbury, L.

Robbins, L.

Colgrain, L.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Ruthven of Freeland, Ly.

Colville of Culross, V.

Sackville, L.

Cottesloe, L.

Hatherton, L.

St. Helens, L.

Cowley, E.

Hood, V.

Sandford, L.

Craigavon, V.

Howard of Glossop, L.

Strathclyde, L.

Cromartie, E.

Hylton-Foster, Bs.

Sudeley, L.

Daventry, V.

Ilford, L.

Vivian, L.

de Clifford, L.

Jeilicoe, E.(L. Privy Seal.)

Wakefield of Kendal, L.

Denham, L. [Teller.]

Kilmarnock, L.

Young, Bs.

Drumalbyn, L.

Kings Norton, L.

Younger of Leckie, V.

Resolved in the negative, and Amendment disagreed to accordingly.

State for Northern Ireland. The Statement reads as follows :
" I will, with permission, make a further Statement about Northern Ireland. The House will have heard that the cessation of hostilities in Northern Ireland announced by the Provisional Wing of the I.R.A., of which I told the House on Thursday, the 22nd of June, was ended by them on Sunday evening after fire had been opened on British troops. The security forces had been subjected for some

23
time to assault short of shooting arising out of communal argument about housing, a matter that has already been the subject of anxious discussion and about which a further meeting had been arranged. It was only after the Army units had been fired on that they returned the fire. This incident has been seized on by the Provisional Wing of the I.R.A. as a reason for ending their declared truce. That truce had been discussed by me with some leaders of the Provisional Wing on the 7th July. I arranged to see them because I have, as the House will know, discussed these grievous Northern Ireland problems with representatives of many shades of opinion. Any action that I could honourably take that might save life, or avoid further damage to property, should be taken.
" The I.R.A. leaders complained that I had given nothing in return for their cessation of hostilities. They made demands that I could not accept but that I agreed to consider in case some peaceful way forward might be found.
" The House may be interested to know what these demands were.
" They called on the British Government to recognise publicly that it is the right of the whole people of Ireland, acting as a unit, to decide the future of Ireland.
" They called on the British Government immediately to declare its intention to withdraw all British Forces from Irish soil, such withdrawal to be completed on or before the first day of January, 1975. Pending such withdrawal, British Forces must be withdrawn immediately from sensitive areas.
" They called for a general amnesty for all political prisoners in Irish and British gaols; for all internees and detainees, and for all persons on the ' wanted ' list. In this they recorded their dissatisfaction that internment had not been ended in response to their initiative in declaring a suspension of offensive operations.
" Before I could even discuss these matters with my Cabinet colleagues the fragile truce was broken, as I have already set out. I deeply regret that
24
the Provisional Wing of the I.R.A. have resorted to violence on the basis of one incident, which could have been solved peacefully. I hope that it is not too late even for the Provisional I.R.A. to think again, and for the whole Northern Ireland community to see the need for progress without violence."
3.52 p.m.
LORD SHACKLETON: My Lords, I am grateful to the noble Lord for making the Statement, which I must confess I think is the most depressing of all the Statements we have had. There is little I can say, beyond that I personally think that the Secretary of State for Northern Ireland showed great courage in the face of what must have been potential criticism from some members of his Party in meeting the I.R.A. Provisionals, distasteful though that must have been. If I may express an opinion, I cannot believe that the I.R.A. Provisionals for one moment, in the light of the demands they have made, intended to keep the truce. They knew that the particular proposals they made could not possibly be accepted in that form, and it appears to me that they are intending, and did intend, to seize the earliest pretext for reopening the struggle, believing that ultimately out of civil war and disaster a united Ireland might come.
My Lords, no doubt the Government will continue to keep us informed. The awful thing is that a vast number of innocent people who want peace will not have it, and our sympathy must go out to the troops. I do not think there is any useful suggestion that any of us can make to the Secretary of State for Defence as to what the Government or the Army should do at this moment. They have a dreadful problem and they have our sympathy and admiration.
LORD BYERS: My Lords, I should like to agree with the noble Lord, Lord Shackleton. This new turn of events is a tragic disappointment to all of us who want to see peace in Northern Ireland. One can only appeal to the moderates on both sides to use the maximum influence with their miltants, to try to tone down the atmosphere and to get rid of the violence. It must surely be obvious that the presence of gunmen on any side in Ireland will do nobody any good whatsoever. I can only endorse the action that the Government have taken.
LORD CARRINGTON: My Lords, I am much obliged for the way in which both noble Lords have responded to what I agree is a very depressing Statement. I think it would be a mistake at this particular moment to come to too many conclusions. There is no doubt in my mind that there is a strong feeling among the ordinary people of Northern Ireland, whether they be Catholics or Protestants, that this violence should stop, and we must hope that the good sense of the moderates, whether they be Catholics or Protestants, will be brought to bear on the extremists.
LORD SHINWELL: My Lords, the noble Lord referred to a single incident which has given rise to the cessation of the cease-fire agreement. Was he referring to the efforts on the part of some homeless Catholics to occupy houses which were formerly occupied by Protestants but were vacant? If that is the incident to which the noble Lord was referring, was it not possible for those acting on behalf of his right honourable friend the Secretary of State to arrange something which might have solved that problem, if it was only a single incident which in the opinion of the noble Lord could have been solved?
May I ask the noble Lord this further question? While everybody in your Lordships' House, and all right-thinking people, will deplore what is happening in Northern Ireland, now that the Provisional I.R.A. have decided to suspend the cease-fire—if they ever intended to proceed with it; it is difficult to say and I think we should hesitate before drawing any conclusions about it—the question confronting us is, where do we go from here? How long are we to tolerate the situation where already more than 100 of our soldiers have been shot dead and a large number wounded, affecting the morale of the British Forces in Ireland? Is it not time that the United Kingdom Government should declare, firmly and unequivocally, that Ulster will be under direct rule and that whatever reforms can be implemented will be implemented at once? Is it not time to consider that as a line of policy which is worth the attention of the United Kingdom Government?
LORD CARRINGTON: My Lords, as the noble Lord himself said, perhaps this
26
is not the time to come to conclusions. Certainly when one looks at what might happen as a result of the breaking of the truce by the Provisional I.R.A. one can see nothing in it but misery for the Irish people.
With regard to the noble Lord's first question, the incident did relate to the housing. It was a little more complicated than the noble Lord has explained to your Lordships, because it was a question of exchanging one lot of houses for the Protestants and another lot for the Catholics. There was no reason whatever why it should not have been solved and one can only think that perhaps on the part of the Provisional I.R.A. there was no intention of letting it be solved.
LORD SHINWELL: My Lords, may I follow up my previous question, because I regard this as an extremely important matter? Is it not true, according to Press reports—I cannot vouch for the authenticity of Press reports, but we rely on them to a large extent—that members of Her Majesty's forces intervened to prevent these homeless Catholics from occupying the vacant houses which were formerly occupied by a Protestant section of the community? And is it not also the case, according to Press reports, that the U.D.A. having decided that if these houses were occupied they would intervene, the soldiers were compelled to take the kind of action that they in fact took?
LORD CARRINGTON: My Lords, the situation was this. I know that this is right, but I am not quite sure what happened afterwards. Basically, the idea was to fill the vacant houses in Horn Drive, which is within the Protestant area in this estate, with Protestant families who are at present living in Catholic areas elsewhere in Belfast. This would have released houses for the displaced Catholic families at present living on the Suffolk Estate. Agreement had been sought on this basis but it was impossible to reach agreement because of the incidents that took place.
LORD MAYBRAY-KING: My Lords, will the noble Lord convey to his right honourable friend Mr. Whitelaw, the Secretary of State, the admiration for him, and the confidence in him, of all the people of Britain? May not the time

27
come when the Prime Minister of Eire and the Members of Stormont all want peace, and may come together with Mr. Whitelaw to bring to Northern Ireland what everybody in this country, and what the vast majority of the people of Ireland, want?
LORD CARRINGTON: My Lords, I most devoutly hope so, and I will certainly convey what the noble Lord has said to my right honourable friend, who will value it greatly as having come from the noble Lord.
LORD ROBBINS: My Lords, as a solitary Cross-Bencher, may I comment that in my judgment the noble Lord, the Leader of the Opposition, and the noble Lord, Lord Byers, spoke with the voice of all men of humanity and compassion at this juncture?
LORD BROCKWAY: My Lords, is the noble Lord, Lord Carrington, aware of the depth of regret which all of us must feel at this development? Will he bear in mind the fact that there has been recent evidence in the Catholic areas, both of Londonderry and Belfast, that a very large proportion of the people are against any continuation of violence and want peace? Is he aware that if one could appeal to them the result would be to demonstrate and determine overwhelmingly the view that this truce shall not be broken by the Provisional I.R.A.? Could there possibly have been a worse occasion for the breaking of the truce, when at last there was an opportunity to move forward to the ending of internment, of the Special Powers Act and of the Bill of Rights, as was indicated by the Minister in another place last week?
LORD CARRINGTON: My Lords, I am sure that all your Lordships will share the views which have been expressed by the noble Lord, Lord Brockway. Indeed, when I said earlier that I hoped that there would be second thoughts, my hope certainly was that the vast majority of the Roman Catholics who live in these estates do not want violence and may bring pressure to bear on the Provisional I.R.A.—and that they, too, may think again and we may have a resumption of the truce.
LORD BESWICK: My Lords, can the noble Lord say whether the Advisory Council established by his right honourable friend has met and, if so, what advice they have tendered? Is there any reason to believe that the co-operation of elements which hitherto had refused to cooperate in community activities but had undertaken to co-operate will not still be forthcoming in their co-operation?
LORD CARRINGTON: My Lords, I do not think I can answer either of those two questions, though I see no reason why it should not be so regarding the second. I cannot answer the first point because, as the noble Lord will appreciate, it is not for my Department. The Secretary of State arrived back from Northern Ireland only about three quarters of an hour ago and I have not had an opportunity to have a conversation with him. I must therefore apologise to the noble Lord for not being able to answer him.

HOUSING (FINANCIAL PROVISIONS) (SCOTLAND) BILL
4.4 p.m.
House again in Committee.
Clause 28 agreed to.
Clause 29 agreed to.
Clause 30 [Increases in rent of individual houses of housing authorities]:
LORD HUGHES LORD HUGHES moved Amendment No. 91:
Page 27, line 28, leave out from ("apply") to (" where") in line 29.
The noble Lord said: The subsection to which this Amendment applies reads:
" The restrictions on any increase imposed by subsection (1) above shall not apply where a lease is granted to a new tenant of the house or where an improvement has been made in the house."
The subsection (1) above to which that provision refers permits an increase in the rent of an individual house to be as high as £39 a year, apart from the transitional arrangements made for the first year. Although I disagree with the extent of this permitted maximum increase of £39, there are good grounds for permitting

29
any maximum to be greater where improvements have been carried out. The ordinary procedure over the years has been for rent increases to take account of such improvements. However, I do not see any need for the words:
" … where a lease is granted to a new tenant of the house …"
We must remember that these are local authority houses. The Government are requiring, first, that an average rent increase shall be of 50p a week and, second, that in individual cases there shall be a permitted increase of up to 75p. This must mean that some increases will be of less than 50p, and the Minister confirmed this when we debated the last Amendment. If an increase of £26 a year is too much, then obviously a maximum permitted increase of £39 is even less to be commended.
The Government propose in this subsection that where a vacancy occurs in the tenancy of a council house, there shall be no limit on the extent to which the local authority may increase the rent for a new tenant. I see no justification for this. An authority which is out of touch with working-class family budgeting, as members of the Government appear to be, could seize this opportunity to increase rents to new tenants not by £26 a year, not even by £39 but by any figure, though presumably any such figure would have to come within the overall average of £26 a year. Having accepted a figure as high as that, why have the Government felt it necessary to impose such a high upper limit? We must ensure that local authorities take into account the circumstances of the tenant and do not just soak a new tenant because of the existence of this provision. The vast majority of local authorities will not do anything of the kind, but I have known authorities and individual members of them to whom I would not have entrusted a power of this kind. I therefore feel it my duty to attempt to delete these offending words. I beg to move.
LORD POLWARTH: I think I can immediately assure your Lordships that by the inclusion of these words there is certainly no intention to give free licence to local authorities to make increases in rent in excess of what are stipulated in the Bill. I am informed that the reason for these words is basically to give help
30
to the local authorities in exercising their management function for housing ; there is no other purpose. Two specific cases have been drawn to my attention where an element of flexibility is needed. The noble Lord said that the local authority is not to take into account the personal circumstances of a tenant, but I understand that there are cases where the previous tenant's rent may in fact have been restricted for reasons such as that he was a council employee. I cannot give details, but I understand that this kind of case will still be met, and where that restriction had existed it would be wrong that the rent to a new tenant who is not in the same position should be held down. That is one case, I understand, that these words are intended to cover.
There is another situation, namely, where a new tenant is taking over a house after a general rent increase had been decided and announced and was about to come into effect, say in a week or two weeks' time. It would really be sensible that the new rent should be applied at once rather than that immediately he had taken occupation he should receive notice that his rent was to rise in another week, or whatever the period was. I can assure your Lordships that the intention of these words is solely to assist local authorities in making sensible management arrangements for their houses. If, however, the noble Lord feels that it is opening the door too widely, I shall be happy to look at any alternative for dealing with the situation.
LORD HUGHES: I must first of all say that I find it a little amusing that the first justification for this provision should be to give local authorities—I do not remember the exact words which the Minister used, but they implied—a certain measure of freedom in these matters. When we are discussing this subject in the context that local authorities must impose a rent increase which averages £26 a year and that they are allowed to increase it up to but not to exceed, £39 a year for an individual house, to talk about freedom in relation to this very limited number of cases is just verging on the comical. Houses where local authority employees are allowed to live at a rent which differs from the rent of other houses must be few and far between. In my own former authority I was not aware of any of this kind,

31
although I am not saying categorically that they did not exist. I am certainly not aware of it and it is anything but a general practice. It was generally sufficient that a local authority employee was given a preference in getting into a house, without adding to it a preferential rent. There will be exceptions, of course—houses like school houses, which almost come into the category of being "tied" houses—but I am not referring to that sort of thing. On the second case, about the man who is moving in a week or a fortnight before the general rent increase takes effect, obviously there would be more of them, but few in relation to the total.
However, I ought not to be too difficult on this matter because I think the Minister, by implication, feels that the wording is much wider than is necessary to take care of the sort of conditions that he has in mind. As it stands, there is nothing to prevent a local authority which felt it could get away with it from increasing the rents of some of its houses well beyond the £39 maximum in circumstances which have nothing to do with the kind of case which the Minister or his advisers have in mind. I should be prepared to withdraw the Amendment if the Minister's assurance is along the lines that he will have another look at it to find a form of wording which conforms more to the object the Government have in view. From that object I would not dissent. Both of those are reasonable cases but they are likely to form a very small minority of the total stock. A more acceptable form of words to deal with them ought to be devised. I hope, therefore, that the Minister will assure me that he will try to find such an alternative form of words for the next stage. If that is the case, I shall proceed to ask leave to withdraw the Amendment, but not quite yet.
LORD POLWARTH: I am happy to give that assurance, subject to making quite certain there is no other safeguard already within the Bill which will prevent an abuse of this kind. Subject to that, I am happy to give an assurance that I will look at the form of words again.
LORD HUGHES: Do not lean too heavily on the expectation that there is something elsewhere, because if there is
32
one thing that makes this Bill complicated it is that one can never find the answer where one looks for it. There are always references to another clause or another Schedule, usually 40 pages away. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 30 agreed to.
Clauses 31 to 33 agreed to.
Clause 34 [Conversion of controlled tenancies : general decontrol].
4.17 p.m.
LORD HUGHES LORD HUGHES moved Amendment No. 94:
Page 29, line 15, leave out ("1973") and insert ("1974").
The noble Lord said: With the permission of the Committee, I will speak to Amendments 94, 95 and 96 together. The first Amendment is to page 29, line 15, and is to leave out "1973" and insert "1974" ; the next Amendment is to leave out "1974" and insert "1976" ; and the third Amendment is to leave out from "£50" to the end of line 21. This clause deals with the conversion of controlled tenancies and general decontrol, and the subsection which I wish to amend reads as follows:
" Subject to the provisions of this section—

(a) 1st January 1973 is the date applicable to a dwelling-house of a value of £50 or more,

(b) 1st January 1974 is the date applicable to a dwelling-house of a value of less than £50 but not less than £25, and

(c) 1st January 1975 is the date applicable to a dwelling-house of a value of less than £25."

The effect of these three Amendments is to substitute the year 1974 for the year 1973 in relation to houses of a value of £50 or more, and to substitute the year 1976 for the years 1974 and 1975, respectively, for houses with a rent of between £50 and £25 and houses with a less rent than £25. Under the Amendment, the conversion would move in two stages only-1974 and 1976—instead of in three stages, 1973, 1974 and 1975. The clause is part of the pattern which the Government are following in the Bill in building on the fair rent provisions of the previous Government. In each case where they make an amendment it is to

33
step up the speed at which this process takes place and the extent to which rents may be increased. We do not think, particularly in the present economic climate, that this is either necessary or desirable, and we consider that a slower process such as I suggest in this Amendment has much to commend it. I beg to move.
4.20 p.m.
THE EARL OF BALFOUR: One of the points your Lordships should realise is that these valuation figures refer in many cases to cottages which have altered in value out of all recognition in the last six years. The operative date is really March 23, 1965. Many a good quality farm cottage—for example, a good quality three-apartment farm cottage—five years ago may have had a rateable value of no more than £30. To-day its rateable value may be twice or almost three times what it was in 1965. I feel that landlords surely have some encouragement to maintain these houses in good order.
If this Amendment—and if for a moment I may speak also to Amendment No. 99—were to be carried, it is really a dreadful disincentive to landlords to try to improve their houses and to bring them into good order. I think your Lordships will agree that wherever possible we must give every encouragement to landlords to do away with houses in slum conditions. Some are dreadful, but at least the landlord should be given some prospect of improvement in rent if he is prepared to spend the money on improving the property. Therefore, I ask that these Amendments should not be carried and that landlords should be given every encouragement to improve the facilities and conditions. The tenant has security of tenure; nothing like that is being altered. I feel that this should be borne in mind, particularly as in many cases the rateable values are now almost obsolete as regards age as there have been two revaluations in Scotland, something which, I must admit, has not taken place in England.
LORD POLWARTH: My Lords, in considering this Amendment, I think we must come back to the purpose of this Part of the Bill. The object here is to see that the landlords of these houses, previously subject to rent control, are enabled to obtain, over a period, a rent
34
which will enable them to put these houses into order and remedy the conditions under which so many private tenants have been living for so long owing to the ludicrously low rents to which most landlords have been kept. The situation of improvement of conditions will not be brought about until the money is available for repairs to be carried out. The only reason for introducing a phasing of this is to enable those concerned to cope with the work-load of dealing with the conversion from control. The phasing has been done with the lower rateable value being deferred until the last so that they will have the longest grace for any increase; the highest will be the first to feel the impact. Surely, we must bear in mind that the first purpose is to get these houses into better order so that tenants will enjoy decent conditions. That will not be done without increased rents being available. The date for the conversion to start, January 1, 1973, was chosen specifically with the interests of the tenant in mind, in that that is when the rent allowance scheme for private tenants will come into operation, so that those whose means are insufficient to meet increases will be able to obtain assistance from that date; and, indeed, those whose conversion will not come into effect until a later stage will none the less still be able to enjoy the benefits of rent allowances from the beginning of 1973.
There is an argument that prolonging the period of decontrol, during which decontrol can be obtained only by getting qualification certificates as to the state of repair, is reasonable, but in fact what has happened in the past is that this has just not come about; the funds have not been available and since August, 1969, only 55 applications have come forward in respect of houses where landlords have carried out these works of bringing houses up to qualifying standard. The reason obviously is because they have been unable in advance to obtain any increased rent in order that they can carry out improvements. I would also point out that the conversion of these controlled tenancies to regulated tenancies in the case of lower-rated houses in poor repair will not automatically mean an increase in rents because a fair rent formula, under the Rents (Scotland) Act 1971 specifically requires the state of repair to be taken into account. Where a house is in a poor

35
state of repair or has inadequate facilities the fair rent can be lower than the controlled rent. I do not want to weary your Lordships but I have examples of a considerable number of cases in towns and cities throughout Scotland where the fair rents fixed for regulated tenancies are below the previous rents. I am confident that the procedures laid down in 1965 for fixing fair rents, together with the phasing we have suggested in the Bill and the introduction of rent allowances at the earliest date of conversion, make all these fears groundless. I do not believe that delaying the operation of the conversion of these tenancies would do anything for the benefit of those who occupy the properties.
LORD HUGHES: I must confess that the Minister rather lost me in the course of his argument. He seemed to be arguing two things at the same time. First of all he took up the point made by his noble friend Lord Balfour, that unless low rents were increased very necessary repairs would not be carried out; but a little later he pointed out that where the house was in a poor state of repair the fair rent procedure could in fact result in a rent being fixed which was even less than the controlled rent at present. On that basis if one accepts his first argument, that house will not have anything done to it and it is going to degenerate into a slum. I cannot believe that the Government are deliberately legislating that houses should be converted from being in bad repair to slum conditions. Either one or the other argument is invalid.
I was confused by the noble Earl when he talked about people not carrying out improvements unless they were allowed an adequate rent. Improvements do not enter into this, because when a house is improved (I am talking about improvements, I hope, in the sense that he used the word: improvements for which rents may be increased) adequate opportunities are available for fixing a fair rent. If when the noble Earl talked about improvements he was referring merely to carrying out the necessary repairs, he was talking about something quite different. I agree that there ought to be reasonable provision for converting controlled tenancies to regulated tenancies:
36
that was the purpose of the legislation when it was passed in 1965. But it was an essential part of the way the job was to be done that it should be phased over a number of years, so that rent officers and rent assessment committees would have adequate opportunity for doing the job properly. They will not be able to do the job properly if they are so flooded with applications that some will inevitably receive less consideration than they otherwise might do. This was the sole reason for having a fairly slow phasing in of the operation.
Even when the previous Government thought that they had made adequate arrangements for the phasing in on a reasonable basis, there was in some areas a fair measure of dissatisfaction with the results of the fair rent procedure. In some cases, at any rate, I think it was because the rent officers were inundated with work ; they had far more to do than time in which to do it, and some bad decisions slipped through, not because the rent officers were deliberately making a mess of the job but that they were not given enough time in which to do the job. I know that the Explanatory and Financial Memorandum contemplates that there are going to be more rent officers employed, but it may turn out that the difficulty of getting properly qualified rent officers slows the thing up.
I am quite certain that the present Government are getting complaints, in exactly the same way as the previous Government did, about how difficult it is to get a value put on things because of the shortage of valuers ; the district valuer is working on a time-lag of two years or more because he cannot find people qualified to augment his staff. People suitably qualified to be rent officers and do the job in the way we want it done are not to be found on every street corner. Let us not pretend that because there are still enormously unsatisfactory unemployment figures every labour exchange can produce at the drop of a hat a list of people to take on this work. That is not so. If this timetable is to be carried out, I think the Government will succeed in doing something which I am certain it is not their intention to do ; that is to bring the whole machinery of the fair rents procedure into disrepute. For that reason, I think that the timetable I have

37
suggested is much more reasonable, and hope against hope that perhaps the Minister might agree to see the error of his ways.
4.32 p.m.
LORD POLWARTH: The first point made by the noble Lord was that I had almost, as it were, contradicted myself in my opening argument because I said in some cases the regulated rents would turn out to be lower than the controlled rents. That is indeed the case for a number, but what proportion it is hard to say. I think there is undoubtedly a problem. The rent has to be adjusted to what is considered reasonable for the house in the condition in which it is. I think that in the vast majority of cases the rent increases will help towards putting these houses into good order.
On the question of dates and the phasing, it is always possible to make the case that there will be an administrative problem because of inability to get the appropriate people, and that there will be delays and so on. I think this is taking a pessimistic view of the situation. The proposal of the noble Lord would in fact bunch the dates for the conversion into two specific dates rather than leaving them spread over three different dates. I would have thought there was quite a danger in bunching at those particular dates instead of having them spread over three. Surely it is not too much to expect the valuers to tackle forthwith those houses of the higher rateable values, £50 or more, which are substantial houses. I do not know what proportion will fall into this category; I would not have thought an exceptionally large proportion. They would be brought on to the new system next year, leaving two years for the further increase. The lowest values would be left to the end, and those occupants would have the maximum benefit meanwhile.
LORD HUGHES: I must say again that I find the Minister's reasoning odd. If allowing four years to do the job instead of three is going to aggravate the problem, I cannot understand that; he talks about bunching if we arrange the matter in two lots of two instead of in three lots of one. I think also he might find himself a little out of date on values and that his noble friend Lord Balfour is rather nearer the target. I would be very
38
much surprised if a majority of the houses coming into consideration fall below a rateable value of £50. After all, the noble Earl was talking about farm cottages up in that region. Therefore, it may well be that the biggest "dollop" to be valued will be in the first phase, and I am allowing two years for that to be done instead of one. I think that the differences between us here have not been narrowed in the slightest from the time when we discussed this matter on Second Reading, and I do not feel inclined to let the matter rest there.
LORD POLWARTH: Before the noble Lord withdraws or presses his Amendment, whichever course he is going to adopt, perhaps I am in order in making two further comments. First, I thought the noble Lord was being a little derogatory about farm cottages. I suspect from my own experience that the noble Lord's rateable values over £50 are pretty good modern bungalows, a great deal better in condition than many of the urban properties we are considering here. The noble Lord shakes his head. I have some experience of this personally.
LORD HUGHES: I would remind the noble Lord that what the noble Earl was talking about was houses in need of improvement and repair ; they are not modern farm bungalows, or, if they are, they are the product of a rotten builder.
LORD POLWARTH: I may have misunderstood what the noble Earl was referring to, but I felt bound to stand up for the condition of a great many decent farm properties in Scotland. On the question of the availability of rent officers and the workload, one can argue either way. I admit that the noble Lord's phasing would spread this over a longer period, but there would be more bunching of dates. I am informed that the process of selection of additional rent officers is going ahead well, and there has already been a good response in candidates for these positions, candidates with valuation experience. We are not unduly concerned that there will not be an adequacy of rent officers with expertise to deal with the situation.
THE DUKE OF ATHOLL: May I ask my noble friend whether he has any idea how the number of houses coming out of

39
control in the year, say, 1973 will compare with what came out of control in the last year, 1971? Secondly, with trepidation I enter into this argument about rateable value of farm houses, to say that my experience in Perthshire is that good quality farm cottages, fully modernised with three bedrooms, are rated at between £50 and £60, and the ones which are rated at below £50 are usually not in a good position or are lacking some amenity.
LORD POLWARTH: With regard to the noble Duke's first question, I think I should require notice of that. I will certainly endeavour to obtain the information for him.
LORD HUGHES: The noble Lord, Lord Polwarth, is not being very helpful
Resolved in the negative, and Amend ment disagreed to accordingly.
on the farm cottages for his noble friends. We are not in this clause legislating for farm cottages; we are legislating for houses that will change from controlled to regulated tenancies, and for every one that is a farm cottage I suggest that there will be at least a hundred, if not a thousand, that are not farm cottages. If one can make the case for the Bill as it stands only by dealing with the way in which the exceptional or rare case would be influenced, then there is ample justification for my not withdrawing the Amendment but pressing it to a Division, as indeed I now do.
4.42 p.m.
On Question, Whether the said Amendment (No. 94) shall be agreed to?
Their Lordships divided: Contents, 48; Not-Contents, 74.

CONTENTS

Archibald, L.

Gaitskell, Bs.

Rathcreedan, L.

Ardwick, L.

Garnsworthy, L. [Teller.]

Royle, L.

Beaumont of Whitley, L.

Gladwyn, L.

Sainsbury, L.

Beswick, L.

Hale, L.

St. Davids, V.

Birk, Bs.

Henderson, L.

Samuel, V.

Blyton, L.

Hoy, L.

Segal, L.

Brockway, L.

Hughes, L.

Shackleton, L.

Buckinghamshire, E.

Kennet, L.

Shepherd, L.

Burntwood, L.

McLeavy, L.

Shinwell, L.

Champion, L.

Maelor, L.

Slater, L.

Chorley, L.

Meston, L.

Snow, L.

Davies of Leek, L.

Moyle, L.

Summerskill, Bs.

Delacourt-Smith, L.

Nunburnholme, L.

Taylor of Mansfield, L.

Diamond, L.

Ogmore, L.

White, Bs.

Donaldson of Kingsbridge, L.

Phillips, Bs. [Teller.]

Wright of Ashton under Lyne, L.

Douglas of Barloch, L.

Popplewell, L.

Faringdon, L.

NOT-CONTENTS

Aberdare, L.

Dundee, E.

Lothian, M.

Ailwyn, L.

Eccles, V.

Loudoun, C.

Atholl, D.

Effingham, E.

Lucas of Chilworth, L.

Auckland, L.

Elles, Bs.

Macleod of Borve, Bs.

Balfour, E.

Elliot of Harwood, Bs.

Mansfield, E.

Balfour of Inchrye, L.

Emmet of Amberley, Bs.

Mersey, V.

Belhaven and Stenton, L.

Ferrers, E.

Milverton, L.

Belstead, L.

Fortescue, E.

Mowbray and Stourton, L.[Teller.]

Berkeley, Bs.

Gisborough, L.

Blackford, L.

Goschen, V.

Napier and Ettrick, L.

Bridgeman, V.

Gowrie, E.

Netherthorpe, L.

Brooke of Cumnor, L.

Greenway, L.

Nugent of Guildford, L.

Camoys, L.

Grenfell, L.

Orr-Ewing, L.

Cawley, L.

Grimston of Westbury, L.

Polwarth, L.

Clwyd, L.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Reay, L.

Colgrain, L.

Ruthven of Freeland, Ly.

Colville of Culross, V.

Harvey of Prestbury, L.

St. Helens, L.

Cottesloe, L.

Howard of Glossop, L.

Sandford, L.

Cowley, E.

Hylton-Foster, Bs.

Stamp, L.

Craigavon, V.

Ilford, L.

Strathclyde, L.

Cromartie, E.

Ironside, L.

Sudeley, L.

Daventry, V.

Jellicoe E. (L. Privy Seal)

Tweedsmuir, L.

de Clifford, L.

Kilmarnock, L.

Vivian, L.

Denham, L. [Teller.]

Latymer, L.

Wakefield of Kendal, L.

Derwent, L.

Lauderdale, E.

Young, Bs.

Drumalbyn, L.

4.48 p.m.
LORD HUGHES LORD HUGHES moved Amendment No. 97:
Page 29, line 24, leave out ("earlier or").
The noble Lord said: I beg to move Amendment No. 97. The subsection in which these words appear reads as follows:
" The Secretary of State may by order substitute as the date applicable to a dwelling-house of such value as may be specified in the order a date earlier or later than that which would be applicable to it under subsection (2) above."
One of the justifications for the phasing which is in the Bill, and which the Government preferred to my own phasing, was that to do it the way I suggested might have resulted in undesirable "bunching" if we had two lots each going through in two years. But what the Government are contemplating is that they may have such "bunching" even within their own provisions, because they are making it possible for dates earlier than those specified to be substituted. I think that would be wholly unreasonable. It is most unlikely that these dates will be accomplished comfortably ; and while I think the Secretary of State would be wise to take power to specify a later date—which, after all, is what I have already given him the opportunity to do—he would be very foolish if he thought for one moment that it would be possible to have earlier dates, even although I know of the following subsection, subsection (4), which contemplates different positions in different registration areas. I think that subsection (2) as it stands is bad enough, but if we add subsection (3), giving the opportunity for the dates to be brought even closer together, this would be a retrograde step. I beg to move.
LORD POLWARTH: As we agreed before, the whole object of this entire clause is to spread the workload so that the work can be done efficiently and the new system brought into operation as soon as is reasonably possible: it is not for the purpose of deferring, for any particular person, the conversion from control to regulation, for reasons which we have discussed already and which I do not think we need go over again. This provision was inserted to give a degree of flexibility, and both to reduce the effects of congestion if it was found
42
that the load was too heavy for those carrying out the work and, conversely, if at any time in the phasing it was found that the numbers were less than expected and the officials had the time and effort available to push on further, to enable them to do so. We felt that this was a not unreasonable provision. The intention of this phasing in three stages and of the fixing of the levels of rateable values was designed to bring about 30,000 conversions into each stage. This can be done only as a matter of guesswork, because there is no reliable information about the numbers in each category ; but it is the best we can do. It is the Government's feeling that, in the interests of efficiency and economy, having recruited additional rent officers to handle this, such officers should neither be tied by having an excessive workload to meeting the deadlines if they were unable to do so, nor, conversely, if in fact they find they can get ahead faster, be impeded from doing so and be kept idle—an eventuality which, I agree with the noble Lord, one would consider was probably unlikely. This wording is as it is purely in the interests of flexibility and the maximum efficiency of operation.
I would certainly be prepared to have another look at this provision to see whether it would be reasonable to leave it out. It may be that at this stage of the Bill there is more information available as to the numbers falling into these different bands, but I should not like to give a commitment to your Lordships at this stage. The power to bring the dates of decontrol forward is, I understand, exactly parallel to a provision in the 1969 Act, which I think the noble Lord himself may well have proposed in your Lordships' House. I am told that it is Section 51(3), which has been used in the year 1971, since the passing of the 1969 Act. I would have preferred to see the maximum flexibility here. I am quite prepared to look at it again, but I am bound to say that I would not do so with a great deal of optimism about being ready to accept a change in it.
LORD HUGHES: If the Minister had only sat down before the last bit of paper arrived the answer would have been more satisfactory. These cautionary notes should not be sent across to a Minister so that, no sooner are the words out of

43
his mouth, he has to qualify them. I think there is not the slightest doubt that he is not giving any hostages to fortune when he says that it is most unlikely that there will be any need for the provision to speed up the process, because I think the workload will be such that those concerned are going to be very hard pushed to do the job in the time laid down. However, as I say, if the Minister had sat down two or three minutes earlier I should have been very much happier at his offer to have a look at the matter again. However, in the hope, not of creating dissension on the other side but of having the Minister rely on his own, better judgment instead of these cautionary notes, I accept his assurance that he will have another look at the matter on this basis. Perhaps he will be good enough to let me know in ample time whether he is going to do anything about it, because if he does not I will. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
4.58 p.m.
LORD HUGHES LORD HUGHES moved Amendment No. 98:
Page 29, line 40, leave out from ("determined") to end of line 41, and insert (" by the local authority and agreed in writing by the landlord and tenant.").
The noble Lord said: The latter part of subsection (5) reads:
" Provided that any question arising under the said section 6 as applied by this subsection as to the proper apportionment of any value may be determined by the landlord and the tenant by agreement in writing."
The word "value" is defined a little further up the page as meaning rateable value. As the Minister knows, I tried to find out exactly what were the sort of circumstances in which this provision would apply, and we seemed to reach agreement that those circumstances might be where two people were tenanting what would be regarded by a city or county assessor as "one subject". There might be two floors of a house with one family living on one floor and another family, and perhaps the landlord, living on the other. As this provision is worded, the landlord and tenant can decide by agreement in writing how the values are to be divided up between those two parts of the property, and that will determine the proportion of rates to be paid by each.
I must confess that I approached this matter from the point of view of a tenant's being led by a landlord who was more knowledgeable into an agreement which was not fair ; but the more I looked at it the more I came to the conclusion that in the vast majority of cases neither the landlord nor the tenant would be in a very good position to allocate values. Very often the kind of property which could be divided in this way is not valued by an assessor in the same way throughout. If a total of 1,000 square feet is divided into 600 square feet for one man and 400 square feet for the other, it becomes fairly simply for the assessor who measures it and says that a particular square foot is allocated to one portion and another square foot to another portion. But different valuations are placed on different floors of the house. A ground floor with an 11-foot ceiling may have a higher or lower valuation placed on it than the floor above. It depends on the extent to which the assessor reduces the value because of the high cost of heating a room with a high ceiling or diminishes it on another floor with lower ceilings, perhaps because there is not the same outlook and the windows look to the back rather than to the front. How a landlord or tenant is qualified to make that sort of judgment, I do not know; but the local authority has an official who is very interested in this sort of thing and whose job it is to do it. This official is independent of the local authority. The local authority does not say to its assessor: "Do this!" In fact, the number of cases where an authority has appealed against a decision of its own assessor is fairly high.
It seems to me that the obvious course is for this to be done by the local authority; and when I say "local authority" I mean the appropriate official of the local authority, the assessor. I should have been quite happy to leave out the last part of the words of my own Amendment, which is the wording that appears in the Bill, because to have this unbiased and well-qualified person, the assessor, to decide how the value should be divided is very much better than to rely on an agreement between two people, neither of whom may be knowledgeable in this respect. In fact, there must be even fewer cases where both people are knowledgeable. It is more than likely that one man knows what he is about

45
and takes advantage of the other. I started off to obviate the latter case ; but the more one examines it the more it becomes obvious that the whole matter is one for the assessor to examine and decide how the value should be divided and the rates apportioned.
LORD POLWARTH: I appreciate that the noble Lord's motive in moving this Amendment is to secure maximum fairness in arriving at a decision in these cases ; but can we consider first the reason why this is to be done, and, secondly, the scale of the problem? It is not for the purpose of payment of rates. Let us be clear that this is purely to decide into which of these categories (and therefore phases) the dwelling-house falls for the conversion of the tenancy. It has nothing to do with the actual payment of the rates. Secondly, let us consider the scale of the problem. The noble Lord has surmised correctly that this applies to cases of what in Scotland we call "one subject", sub-divided for the purposes of letting, but not sub-divided in the valuation. We do not know the number of houses which fall in this category and which will be subject to this clause. I should not have thought it a very substantial number; for most houses of this category are now treated as separate subjects. But certainly the problem exists or we should not have made this provision against it.
We feel that the present safeguard in the event of failure of agreement—that of the parties going to the sheriff—is the right solution. If we start bringing in the local authorities or their agents, the assessors, we are then prima facie asking them to rule on the apportionment of the rateable value between two parts of the house which, if fixed for this purpose, would inevitably have to apply for the purposes of valuation as a whole, including the payment of rates. I do not think we could have a situation where a house was apportioned in one way to apply to a particular circumstance—for instance, when it becomes liable to decontrol—and apportioned in a different way for the purpose of ascertaining the actual rates payable. I should have thought that if there were to be any interference in this matter by the valuation authorities or the local authorities, it would need to be in connection with statutory valuation, where the house might be split into
46
two subjects and the valuations could be negotiated beforehand.
We take the view that for the cases that may arise where agreement cannot be reached—and this will be a small category for the number of disagreements are likely to be extremely few—there must be some sort of voluntary agreement regarding the payment of rates on the respective dwellings within one subject. I am aware of a case where such a voluntarily agreement has continued happily year after year. It would cause considerable complication to bring in the local authority; and in any case there is the safeguard in the event of failure to agree of going to the sheriff.
LORD HUGHES: Before taking it further, would the Minister care to give me an indication of what considerable complication would arise if the valuation authority were brought in? I cannot contemplate one.
LORD POLWARTH: This surely would be infringing on an entirely different field. What the exact complications will be, I am not qualified to say. It would mean being involved in revaluing the subjects effectively. I do not see how the local authority or its agent, the valuation officer, can be asked to pronounce on the relative rateable values without doing so in a statutory way, presumably under a rating act. We have adequate provision for dealing with this very special case relating to a once-and-for-all occurrence. If there is a dispute the parties can go to the sheriff to resolve it, which is a well known channel for resolving differences of this kind.
LORD HUGHES: I have a feeling that the Minister is right when he says that there will not be many of these cases in Scotland. My noble friend Lord Garnsworthy has checked that there is a provision similar to this one in the Bill which in deference to the noble Lord, Lord Brecon, I will call the English and Welsh Bill. I have a feeling that it is only in the Scottish Bill because it is in the English and Welsh Bill and not because it is needed in Scotland. We know that in many places on this side of the Border there is a considerable problem in relation to houses which are in multi-occupation, the sort of houses

47
which are not divided into what we would call in Scotland "separate subjects" where this problem is probably acute. It will not be an acute problem in Scotland. Therefore when we are asking to have some unbiased person to apportion the valuations, we are not throwing a great burden on to any one official. If the Minister is worried about the official who is to do the job, then, notwithstanding what I have said about the rent officer, I should be inclined to give it to him. This is not going to increase his task to any great extent in any particular authority area in Scotland. If, therefore, the numbers are small, the argument against the apportionment being done by an official disappears.
I was glad when the noble Lord reminded us that one of the matters it has to do with is determining into which phases a particular house comes. If it is between the landlord and the tenant, the landlord is certainly not an unbiased individual. He has a decided incentive to ensure that one part from which he is receiving rent gets in at the earliest opportunity. For instance, if each was valued at £45 he could say that one part was valued at £52 and the other at £38, and he would be in the position of benefiting from this. If the phasing were done by the valuation officer, he has no interest one way or the other.
To take the point made by the Minister, this could not be done through the assessor because it is not part of his job. But if we put it in the Bill and it is enacted, it becomes part of his job. He cannot opt out of it by saying, "I am not going to pay any attention to the 1972 Housing (Financial Provisions) (Scotland) Act; it is not part of the job that I originally contracted to do." From time to time there have been a number of variations in what officials have to do, resulting from legislation, and I am certain that none of the officials would be unduly worried about it. The whole attitude of the Government regarding this Bill is that they want to be fair to people. I suggest that in this case if one person has a vested interest in going one way, and another person has a vested interest in going another way, and if one is likely to be more knowledgeable than the other, it would be much more satisfactory to bring in an unbiased person. I still think
48
that the Minister has not produced reasons for not accepting the Amendment.
LORD POLWARTH: This is a matter about which one could argue in both directions almost indefinitely. The landlord is not unbiased in the matter. I think it a little tortuous to suggest that he would try to push up the rateable value in respect of a property occupied by one of his tenants and put down the rateable value of another in order to get a marginal advantage over the conversion of one property more quickly than the other, or something of that kind ; but obviously it could happen. Surely the right person to deal with disputes between landord and tenant is the sheriff. It is acknowledged in the 1969 Act to which we have referred. I should have thought it far better to let agreement take place where possible, rather than automatically involve outside intervention, whether the agreement may be viable or not. Under the Rent Acts the sheriff is the person to resolve disputes. There is here a small area of dispute and I should have thought that was the right solution in respect of such few cases as would be likely to arise.
LORD HUGHES: As the Minister says, we could go on long enough. We might be able to make the discussions go on long enough to justify having dinner tonight and thus gladden the hearts of those in the Refreshment Department. But I doubt whether we shall persuade each other. I do not propose to withdraw the Amendment; on the other hand, I do not propose to force it to a Division.
On Question, Amendment negatived.
5.15 p.m.
LORD HUGHES LORD HUGHES moved Amendment No. 99:
Page 30, line 6, at end insert—
(" (7) No tenancy of a dwellinghouse to which this section refers shall cease to be a controlled tenancy if the said dwellinghouse has an external toilet or has no bath.")
The noble Lord said: The case for inserting these words seems so obvious that my first feeling is one of astonishment that they are not in the Bill already and that it should be necessary to move an Amendment to the effect that a tenancy will not be changed from a controlled tenancy to a regulated tenancy if it falls into this category. Is it below the tolerable standard if it has an external toilet

49
or is without a bath? That is the sort of question upon which we could talk for hours, but everything that needs to be said in justification of the Amendment could be said as effectively in minutes. I think I have already said all that needs to be said.
LORD POLWARTH: Inevitably, one has considerable sympathy with the emotional appeal in what the noble Lord, Lord Hughes, has said. Of course we all want to see every house with these amenities, but I submit that the matter is not quite as simple as that. In the first place, if this requirement were introduced it would be more stringent than the provisions under existing Acts regarding houses meeting the tolerable standard. There is then the question of what is most urgent. Do we want to see houses provided with these facilities, and if so, where is the money coming from to provide the facilities? The object of bringing about decontrol is to ensure that rents are made available to enable landlords to put their properties into good repair. The provision of such facilities as these, particularly a bath, is frequently a matter of some considerable expense. Where is the money to come from to provide these facilities unless and until rents can be adjusted?
It is also fair to say that there may well be houses which are more urgently in need of other forms of repair than the provision of these amenities. Grates and other things in such premises may be out of date and their replacement more urgent than the provision of a separate bath and toilet. Finally, there is a practical consideration in that there is, I should have thought, a great number of these houses where the conversion which would be necessary to provide space for these facilities would be prohibitive, in that it would impinge so much on the existing space.
This is not to defend a continuance of the present situation. Longer-term problems are involved. Possibly many of these houses should be thrown together and converted. This is encouraged by means of improvement grants. I have had personal experience of this, admittedly not in cities or towns but in the country. I know the problem involved in modernising cottages on farms where,
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in their present condition, there is not the space for these facilities. Obviously we all want to see better facilities provided, but keeping tenancies under control is not the way to bring it about. The noble Lord moved his Amendment briefly, and I, answering briefly, have tried to show that it is simply not practical in achieving the objects of the Bill.
THE EARL OF BALFOUR: One matter which should be taken into consideration is that the landlord of a house with very poor standards has great difficulty in getting any sort of grant for putting a bathroom in because it leads, say, from the kitchen, or in some other way contravenes the Building Standards Regulations 1971. I understand what Lord Hughes is getting at, but I have a horrible feeling that his Amendment would merely act as a disincentive for the local authority to close the house because it was not fit for human habitation, or would discourage any action at all. I am dreadfully afraid that this Amendment would have the opposite of the desired effect, which is either to have houses very much improved or closed altogether.
LORD HOY: I do not mind the noble Lord being very short in his reply provided it is logical. I admired his brevity, but in the concluding sentences of his speech the noble Earl, Lord Balfour, said that in some cases a bathroom might lead off the kitchen. Apparently, that seems a very good reason for not having one. On the other hand, the noble Lord in replying said that the cost would be prohibitive. In either case, the effect is that no bathroom would be provided. The noble Lord knows as well as I do that improvement grants are available for those who want to improve their property. Indeed, he is bound to know that advantage has been taken of grants in hundreds of cases. He himself struck on one which was made possible by the previous Government. In large cities, where there are still some very good buildings, but lacking these amenities, we encouraged landlords to convert groups of three flats into two, so that the middle flat could be used to provide bathrooms and kitchenettes for the tenants on either side. In this way property was not allowed to deteriorate, and the landlord, in addition to the grants, got increased rents which tenants did not object to paying.

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To say that this Amendment would be more stringent than the present procedures is no reason for objecting to it. There is nothing emotional about our appeal. Surely, at this time of day it is not too much to say, without emotion, that people have a right to have a bathroom. The very least that they have a right to expect is not to have to go outside in order to use the lavatory. The noble Lord said that the landlord might not be able to afford this. First, he cannot get a grant ; and if the facilities are provided, this is taken into account in fixing the rent. But the noble Lord, Lord Polwarth, said that the tenants should pay increased rents now and that they might eventually get these facilities. Surely, that is asking people to wait too long.
I should have thought that in such a simple case the appeal would have been to your Lordships' House. I am sure there is not one noble Lord who would deny that one is making a request for an elementary right, rather than an emotional appeal, when one calls for a lavatory and, if possible, a bathroom for each house. We are saying that unless these facilities are provided, properties should not be taken out of control; if they can be provided, out of control the premises would go. These appalling conditions are an old sore in Scotland; they have been with us for much too long. I am certain that people in Scotland would take very strong objection if we did not show our displeasure even to the extent of going into the Division Lobby.
5.26 p.m.
THE DUKE OF ATHOLL: I do not like this Amendment, for one reason. I sympathise with everything that the noble Lord, Lord Hoy, has said: it was all perfectly true. But I dislike the Amendment because it says:
" No tenancy of a dwelling-house to which this section refers shall cease to be a controlled tenancy if the said dwelling-house has an external toilet or has no bath."
The tenants of many rural houses find it extremely convenient to have an external toilet as well as an internal one. I cannot see any reason for not having an external toilet simply in order to fall within the provisions of this Amendment. Farm workers are often fairly dirty, and, rather
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than take off their boots to go into the house, they will use an external toilet which has been there for umpteen years. I therefore find this Amendment unacceptable.
LORD HUGHES: If the noble Duke wished to move a manuscript Amendment to my Amendment, before "external" to insert the word "only", that would meet his point completely.
THE DUKE OF ATHOLL: Would the noble Lord accept it?
BARONESS ELLIOT OF HARWOOD: There is no dispute as to whether houses should have bathrooms and lavatories. These are most simple and agreed amenities. My local authority does not allow anyone to put up or alter a house without making provision for a bathroom and lavatory. People who do not provide these facilities have their houses condemned. Such facilities are absolutely vital. They are expensive, but one can get grants. Hundreds of thousands of premises have been improved on this basis. But of course the landlord has to put up quite a bit of money. No doubt this is difficult for some people. There is the question of being able to charge rents which bear any relation to costs. In some cases this can be done, but in others it cannot. But under this Act a landlord will be able to get an economic rent, with all the safeguards that we have been discussing.
It seems to me that if this Amendment is accepted it will make it much more difficult to get exactly what is wanted; that is, proper sanitation and a bathroom for every person. I think it is absolutely vital that everybody should have this. We should urge all local authorities to say to landlords, "Your house is not habitable unless you put in a bath and a lavatory". I well remember that in Glasgow in the old days, when there were those red sandstone tenements, which were very solid and where there was never a proper bathroom or lavatory, exactly what the noble Lord, Lord Hoy, said took place. The "single end", as it was called in those days was knocked out, and this enabled flats to have a bathroom. Sometimes it was not done and the houses got so bad that the only thing to do with them was to blow them up and rebuild on the site. This has been done

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of course, and quite rightly, in a great many industrial areas.
There is no difference between us over what is desired. The only point is that it is easier to do it if the houses are all controlled tenancies. If we can get a local authority to say that no house in their area shall be let unless it has a bath and lavatory—in other words, make it so stringent that an owner cannot get a permit to do what he wants to do unless he installs a bath and a lavatory—that is the way to get people to move. But to say that they must be kept controlled is to give the lazy landlord, or whatever you like to call him, an opportunity of declaring, "Oh, my tenant has lived like this for many years. He doesn't mind". It is true that many of them do not mind, and I think it is all wrong that they take that attitude. The first thing I would do with old houses or houses that are being converted, is to make the owners put in a lavatory and bath, and then allow them to charge a proper rent. I think the noble Lord will be putting the clock back if he puts down this Amendment. He will be making it more difficult to achieve what we all want to see done.
5.33 p.m.
THE EARL OF BALFOUR: I should like to intervene for a moment, because I think that the noble Lord, Lord Hughes—and possibly also the Committee—has misunderstood what I said. What I meant to say was that to have a connection or door between a kitchen and a bathroom is in direct contradiction of the Building Standards Regulations. It could mean that a house might have a very good bathroom and toilet next door to the kitchen but the two could not be connected because the connecting door would lead from the bathroom into the kitchen, and vice versa. This is the sort of thing that I had in mind. This can happen, and I know of a number of occasions where, for convenience of plumbing, the kitchen has been placed on one side of a wall and the bathroom on the other. To make a connection between the two by anything but an underground pipe would obviously be a great mistake. It is not always possible or easy to make a passage between the two. I should like the Committee to be clear on this point. But certainly it is up to a local authority
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under its existing powers, to condemn any house which does not have these facilities. They have full powers as it is to be able to condemn for human habitation any house which has so low a standard as to have neither bath nor toilet.
LORD HUGHES: Two things, at least, have emerged from this debate. It has been claimed that there is no difference between us on the desirability of having a bathroom and an internal water closet or lavatory in each house, even though it may he additional to one outside. I have no objection to there being two, even if one of them is outside. We then come on to the question of what is the best way of accomplishing this. The Minister asked where the money would come from for these improvements if my Amendment were carried. It will come from the same source as it would have come from if my Amendment is not accepted—by the owner submitting plans and applying for an improvement grant. If he does it under the terms of the Government's present proposals, he will get a grant of 75 per cent. and if he does not have the other 25 per cent. at his command, most local authorities will lend it to him. Then the improved house comes under the new rent procedure and he gets a rent fixed, not merely by taking account of the value of the improvement. It is not the old business of just adding on 12½, per cent. of the expenditure, but of bringing the whole house into the new rent procedure. So the owner gets a rent fixed, and that is where the money would come from if he elects to do it in that way. If he decides that he will not go ahead and apply for an improvement grant, the Government say, ' That is too bad, but nevertheless we will allow you to increase the rent: we will make it a regulated tenancy "—which means that he will get a higher rent for the house. If he is not going to make the improvement out of a grant, he is certainly not going to make it out of his regulated tenancy, because what he would get for his regulated tenancy for the unimproved part of the house is exactly what he would get for that part of the house if he had taken advantage of the improvement procedures and added a bathroom and toilet to it.
THE EARL OF BALFOUR: I am sorry to interrupt the noble Lord, Lord Hughes, but I must point out that the only way

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in which a person could get the full 75 per cent. grant would be if the house was brought up to the full Building Standards Regulations in Scotland. He does not get it for the installation of a bathroom or toilet alone. It is a very small grant, and he would not get the 75 per cent. grant. If I may, I will give typical examples of where people have failed to get it: for argument's sake, where the bedroom ceiling height is not 7 ft. 6 ins. or where there is not 2 per cent. daylight lighting in the kitchen—a single item like that, and you have lost the grant.
LORD HUGHES: Not necessarily: it depends on how the local authority choose to interpret this, and if the local authority do not want to give a grant there are many ways in which they can find it is not possible to do so. The noble Earl, Lord Dundee, has spoken of this matter before. He has mentioned houses which in the past have been rejected for grant because of lack of daylight and which subsequently have qualified for a grant because of changed attitudes and positions.
If I may continue with my argument, the noble Baroness, Lady Elliot of Harwood, said that if my Amendment were carried it would be putting off the position. That is not so, because if the landlord is not going to get an increased rent so long as the house remains in this condition, he obviously has a decided incentive to look at the question of improving the house. If he improves the house he gets a very much enhanced rent because, as I say, not only does he get rent for the value of what he has added, but also rent for what exists at the present time. Therefore, there is considerable incentive for him to go ahead. Let us assume that there are extraordinary people who do not want to carry out improvements—those who have been called "lazy landlords". A man does not want to be bothered, and he gets the benefit of this increased rent. If he is not going to bother to apply for grants to do the job, he is certainly not going to do it out of the rent he will get from the existing house. So the best way of ensuring that that house will never have a bathroom or a toilet added is to give him the increase without having any guarantee that he will do anything about it.
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Now I come to the alternative suggestion of the Minister. The Minister believes that having this increase will facilitate the improvement of some of these houses—I will not put it any higher than that. Would the Minister agree that if a house changes from a controlled tenancy to a regulated tenancy and within some reasonable period thereafter nothing has been done, is it not then reasonable to suggest that the man has not carried out his part of the bargain and that we should go back to square one? The argument of the Minister and the noble Baroness, Lady Elliot—which she is so anxious to reinforce—is that if you allow this at the present time the house will be improved. For the sake of argument I am prepared to accept that this is a possibility. You allow the man to get his rent increase and at the end of two or three years, or some reasonable period like that, if nothing has been done why should he get the increased rent if he has not done anything? Would either the Minister or the noble Baroness agree that in these circumstances he is getting money in a way which the Government did not intend and using it in a way which the Government did not intend? Therefore I think this should be withdrawn.
BARONESS ELLIOT OF HARWOOD: The noble Lord is not allowing for the regulations which govern most of the housing work of housing committees—certainly in Scotland—that people are simply not allowed to accommodate people in houses lacking these facilities. They can do so up to a point, but there comes a point when the local authority will say—certainly my authority will: "This house is condemned. You either move the people out or carry out reconstruction work". The people are not allowed to stay there. The noble Lord says that the house will be in another category and that the landlords will be allowed to raise the rent. But they will not be allowed to do so in my area. There the authority will say that the house is not fit for habitation because it does not have the amenities which are considered to be absolutely necessary, the chief of which so far as my area is concerned is proper sanitation, water and a bath. Therefore the premises would be caught in that way by the local authority.
LORD HUGHES: Is the noble Baroness seriously telling me that in her county

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every house which lacks an internal toilet, and every house which has no bathroom, has been condemned as unfit for human habitation?
BARONESS ELLIOT OF HARWOOD: I cannot say that of every one, but for every single town there is a housing meeting, and people who know of houses which have no baths or sanitation say, "They are condemned". Whether they are all condemned now I do not know. But I can tell you that we are a very good local authority; we have very few houses in the rural areas—I cannot tell you so much about the towns—that do not have these amenities. We condemn the houses that do not have these amenities.
LORD HUGHES: The next time that I am in the area of the noble Baroness I must make some inquiries because I have a feeling that her authority is not quite so good as she is pretending for the moment it is. Her native caution came in because first of all she was implying that every house without these amenities is condemned as unfit for human habitation. But now she says a house is only condemned if the local authority happen to hear about it and the matter is raised at a council meeting.
LORD POLWARTH: I maintain, and I think that we are all agreed, that our objective is the same—we differ only on the means by which it will be brought about. I come back to the basic differences in method. The method proposed by noble Lords opposite is that of the stick; in the Bill we believe in the method of the carrot, giving encouragement rather than by saying, "Unless you do it …". I cannot go into all the detail of the arguments against requiring the improvement of the dwelling to certain standards before any decontrol is allowed. This matter was gone into thoroughly by the Francis Committee which was appointed by the previous Government. That Committee recommended that all controlled tenancies should be converted into regulated tenancies without preconditions, and gave a long list of reasons for this, a number of which I have already recited.
There are improvement grants, and I hope that more and more use will be made of them. They will meet part of the cost of improvements. You can borrow, but you still have to pay interest
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on the loan. I thought that the noble Lord adopted two different lines at different times in his remarks. At one stage he referred to allowing this increase (presumably in rents), and in another he said that if the tenancies were decontrolled and did not have the amenities the landlords would not get much, if any, of an increase. I do not think that he can have it both ways.
LORD HUGHES: I did not say that.
LORD POLWARTH: I am sorry if I misunderstood the noble Lord; I understood that that was what he said. In that case, I withdraw my remarks. While we desperately want all houses to have baths and internal toilets, there is the sheer physical problem that in a number of cases it just cannot be done. Of course we want to sec conversion and adaption to make this possible. If we are to maintain control then this will frustrate the possibility of other more urgent repairs in cases where plumbing improvements cannot be brought about. While we could argue this matter ad infinitum, I am afraid that I must ask your Lordships to resist this Amendment.
LORD HUGHES: I was interested to hear the noble Lord say that what we were asking for in this Amendment was the application of the stick and that the Government preferred the application of the carrot. This is an old saying of the noble Lord's. When he was at the Scottish Council for Development and Industry and was engaged in trying to bring industry into Scotland he used that phrase for the first time—at any rate publicly. The advantage, when dealing with the donkey, of having both the carrot and the stick was that the carrot was the grant and the stick the Industrial Development Certificate. The object was that you wanted to get the donkey to work and you did both of those things. But what happens if, having given the donkey the carrot, it eats it but still does no work? What do you do then? Do you look for another carrot? I suggest that these are the circumstances in which You use the stick. The stick is to say, "Unless you do this you are not going to get the reward". The carrot is in the Bill already because the reward for bringing the house up to a reasonable standard is getting a higher rent. What is not provided for in the Bill is the

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stick; that is saying, "If you do nothing you are going to remain in the same financial position".
I will rest on the basis that I think I can fairly say I have hoisted the noble Lord, if not with his own petard, at least with his own carrot, and I wish to proceed to a Division on this Amendment.
Clause 34 agreed to.
Clauses 35 to 43 agreed to.
Clause 44 [Rent agreements: special provisions where grant-aided improvements are carried out].
5.57 p.m.
LORD HUGHES LORD HUGHES moved Amendment No. 101:
Page 37, line 19, leave out from (" registered") to ("the") in line 24.
LORD POLWARTH: If the donkey eats the carrot and does nothing in return he will not get any more carrots, but he will get some stick.
5.48 p.m.
On Question, Whether the said Amendment (No. 99) shall be agreed to?
Their Lordships divided: Contents, 40; Not-Contents, 70.

CONTENTS

Archibald, L.

Evans of Hungershall, L.

Rathcreedan, L.

Ardwick, L.

Gaitskell, Bs.

Royle, L.

Beaumont of Whitley, L.

Garnsworthy, L. [Teller.]

Segal, L.

Beswick, L.

Gladwyn, L.

Shackleton, L.

Blyton, L.

Hale, L.

Shepherd, L.

Brockway, L.

Henderson, L.

Shinwell, L.

Buckinghamshire, E.

Hoy, L.

Snow, L.

Burntwood, L.

Hughes, L.

Stow Hill, L.

Champion, L.

Janner, L.

Strabolgi, L.

Chorley, L.

Kennet, L.

Summerskill, Bs.

Davies of Leek, L.

Maelor, L.

Taylor of Mansfield, L.

Delacourt-Smith, L.

Nunburnholme, L.

Wright of Ashton under Lyne, L.

Diamond, L.

Phillips, Bs. [Teller.]

Donaldson of Kingsbridge, L.

Popplewell, L.

NOT-CONTENTS

Aberdare, L.

Elles, Bs.

Macleod of Borve, B.

Amory, V.

El iot of Harwood, Bs.

Mancroft, L.

Atholl, D.

Emmet of Amberley, Bs.

Mansfield, E.

Auckland, L.

Exeter, M.

Milverton, L.

Balfour, E.

Fortescue, E.

Mowbray and Stourton, L. [Teller.]

Balfour of Inchrye, L.

Gainford, L.

Belstead, L.

Gisborough, L.

Nugent of Guildford, L.

Berkeley, Bs.

Goschen, V.

Onslow, E.

Bledisloe, V.

Gowrie, E.

Orr-Ewing, L.

Brooke of Cumnor, L.

Greenway, L.

Polwarth, L.

Brougham and Vaux, L.

Grenfell, L.

Reay, L.

Clifford of Chudleigh, L.

Grimston of Westbury, L.

Reigate, L.

Colville of Culross, V.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Rhyl, L.

Cork and Orrery, E.

Rowallan, L.

Cottesloe, L.

Hawke, L.

Ruthven of Freeland, Ly.

Cowley, E.

Howard of Glossop, L.

Sandford, L.

Craigavon, V.

Hylton-Foster, Bs.

Stamp, L.

Cromartie, E.

Jellicoe, E. (L. Privy Seal.)

Strange, L.

Daventry, V.

Killearn, L.

Strathclyde, L.

de Clifford, L.

Latymer, L.

Sudeley, L.

Denham, L. [Teller.]

Lauderdale, E.

Tweedsmuir, L.

Drumalbyn, L.

Lothian, M.

Vivian, L.

Dundee, E.

Loudoun, C.

Wakefield of Kendal, L.

Eccles, V.

Lucas of Chilworth, L.

Young, Bs.

Resolved in the negative, and Amendment disagreed to accordingly.

The noble Lord said: With this Amendment I wish also to speak to Amendment No. 102, to Schedule 6, and Amendment No. 103, to Schedule 7, because these all form part of the same story. If noble Lords will look at the Bill they will see that subsection (4) says that the requirements mentioned earlier are that the agreement:
"(b) explains that, if the grant became payable, and a rent was registered, the rent increase up to the registered rent would be phased as follows, that is—

(i) if the increase exceeded £1·50 per week, the rent would be increased by three

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annual increments, each of one-third of the total increase,

(ii) if it were less than £1·50 per week, the rent would be increased by annual increments of up to £0·50 per week up to the registered rent."

The Amendments would change this so that it read:
" (b) explains that, if the grant became payable, and a rent was registered, the rent would be increased by annual increments of up to 50p per week."
The effect of the change would be to rule out the possibility of an increase of more than 50p per week if the total increase in the rent was more than £1·50 per week. If anything, 50p is going too far. I have proposed 50p in earlier parts of the Bill, and I see no justification for going beyond it here. The Amendment to Schedule 6 would make the increase not more than 50p. The purpose of the Amendment to Schedule 7 is again to accomplish the same upper limit of 50p per week. I do not think that the way in which all of these matters in relation to rent and rent increases are being considered is such as to justify my making a long speech. A long speech would be justified only if I felt there was any possibility that I could influence the attitude of the Government. But I am quite certain that, whether I speak for 20 minutes or whether I close my remarks now, the result will be the same: the Government will not accept the Amendment. That does not make these Amendments any the less desirable from my point of view. It is right that we should express from these Benches the way in which we think the Bill should be improved. I do not think that what I am saying will be regarded as an improvement in the completely positive sense of the word. It is merely an improvement on what is in the Bill, and it makes the Bill not quite so bad as it is at the present time.
6.1 p.m.
LORD POLWARTH: As the noble Lord has said, this matter again is related to the basic philosophy of this Part of the Bill and the intention to proceed from the system of control to the system of regulation, and his Amendment would slow down that process in the cases to which it relates. I come back again to the Report of the Francis Committee. They made it clear that the whole object here was to get these ten-
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ancies away from controlled rents—some of the rents are quite ludicrously low—to a system of fair rents for these houses and to get the houses into order. We have disagreed, I know, as to which way round this will work. It is a question of the chicken and the egg, and vice versa, and that difference exists between us.
We have quite a way to go from some of the controlled rents, certainly in the case of better properties under control—I do not say all of them—to what will be the regulated rents. This was recognised by the programme of phasing proposed in the 1969 Act. But we must look at the facts that exist now, as opposed to those which existed then. There is now the system of rent allowances which was not available previously, and this is intended to take account of the difficulties of those tenants who cannot afford the rent increases proposed. This matter can be argued in any way, but it seems that, with the rent allowances, nobody is going to be in a position of serious hardship in this connection. I have taken examples of what will happen in cases dealt with under the 1969 Act in the matter of movement from control. It is interesting to look at the average effect where rents were registered in 1971 under the 1969 Act. Although the fair rent rose from the controlled rent of £29 a year to a figure of £123, it is worth looking at the effect on a variety of occupants in different circumstances as a result of the working of rent allowances. In fact, the increases they would actually have to pay are very slight, depending, of course, on the circumstances.
I know that one can produce circumstances to prove almost any case, but I would take these examples. First, I take the case of a single pensioner with a total income at present of £8 a week who is faced with the situation of a rent increase on decontrol. I take the average of cases coming forward in 1971. With the operation of rent allowances, this tenant would have his rent reduced by 18p a week for the first year and then the rent would remain static. The noble Lord might think I am trying to prove a special case but these cases were chosen at random. The next case is that of a couple with an income of £16 a week. They would face an increase in the first year of 60p, and one in the second year

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of 5p, and in the third year of nothing: a total of 65p. Only that increase would be paid, thanks to the operation of rent allowances. The Amendment would defer the process of transfer of control to regulation and the bringing in of rents that will enable landlords to put properties into good repair. I know we differ fundamentally as to whether this is the right way to deal with the situation. I can only say that this is the reason for the provision as it stands in the Bill at present.
LORD HOY: The case my noble friend Lord Hughes was making is that the proposed increases are too high. I should have thought that the Government themselves might have given second thoughts to this matter because it is only within the last few days that the Government have had to take action to say to certain very substantial local authorities, "What we proposed to impose upon you in our legislation is something we now propose to amend." The Government have said to them that their proposals should be imposed to a lesser extent; in other words, the Government have said that what was proposed in the Bill went too far. My noble friend Lord Hughes is saying that this is what ought to be done at this point of the Bill. These increases are too high. One must not misunderstand the position of the worker. To take the last example which the noble Lord, Lord Polwarth, used, if a man receiving £16 a week has his rent increased by 60p the first year, and by another 5p the second year, that increase is to him substantial. That man is obviously going to have to approach his employer and say," I have this increased charge imposed upon me by the Government. It represents a cut in my standard of living and I want more wages." He might be a generous man and say to his employer that he will share the cost 50/50, but in any event he has to ask for an increase in wages. This he is compelled to do by the action of the Government.
The noble Lord, Lord Polwarth, says, Under our proposal rent allowances will be paid." I do not want to dispute the noble Lord's figures, but at the beginning of this debate he gave us an estimate that the total allowances over the whole of Scotland would be somewhere between
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£2 million and £2½ million a year. That, I repeat, is the total for the whole of Scotland. So people are not going to have substantial rent allowances throughout the length and breadth of Scotland because all the allowances are going to be contained within this particular sum. I do not want to take advantage of the noble Lord's having given us a figure, but we now know that the allowances cannot be more than a figure of that order.
LORD POLWARTH: Perhaps I might just point this out. I am not suggesting that the noble Lord would take advantage of the figure I gave earlier on. The fact is that rent allowances payable to individuals are determined by the provisions in this Bill. Those who are eligible for allowances will receive them on the scales that are laid down in this Bill. As I emphasised at the beginning, those figures do not form a ceiling and there is no question of there being any restriction.
LORD HOY: I am not disputing what the noble Lord said. I said that they were in the Bill. I am not saying that there is a ceiling, but the best estimate that the Government can make is that in total the amount will be £2½ million. That is what the noble Lord has said. My argument is that if one accepts that then the allowances are not going to be all that generous.
LORD POLWARTH: If the noble Lord will allow me, I cannot understand what he means when he says that the allowances will not be all that generous. They are the figures shown in the Bill. There is no question of variation in relation to the figures that I gave of the total of the allowances.
LORD HOY: I am not saying that they are anything different from what is in the Bill. Of course they are in the Bill. The noble Lord does not understand the position. I am not arguing that they are generous: if they were generous they would have my support. It is because they are not generous that I am complaining, and I wish he would understand that point. Nor am I convinced when he takes the case of some old age pensioner or a widow, because I know of no Government which have ever run short of widows and old age pensioners when they wanted to make a

65
case for themselves. Even then, the widows and the old age pensioners are all included in the figure of £2½ million. I should have thought that from the noble Lord's own point of view he would have accepted the Amendment moved by my noble friend. That would have been fair, reasonable and just. It would also have given an increased rent, and if that had to be paid it would have been paid. But I think the figure has been pitched too high; it will be inflationary in its reaction, and certainly it will call for wage increases on the part of all the workers affected.
If the noble Lord doubts that let him consider what has been happening throughout the length and breadth of Scotland during these past weeks ; let him think of that conference which took place in Glasgow only a week ago. These are the reactions of the people of Scotland and the reactions of every local authority in Scotland except—is it Roxburgh?—that the noble Baroness, Lady Elliot of Harwood, represents. All the local authorities that I can think of are protesting against it with the exception of Roxburgh. It is like the high cost value; if it were not for Lauder the Government would not have a case at all. So all I am saying is that in my view my noble friend has moved a very reasonable Amendment and I am most disappointed that the noble Lord has not accepted it.
LORD HUGHES: I do not want to add much to what has been said. My noble friend Lord Hoy has made an excellent case for this Amendment. All I want to
do is to remind your Lordships of one of the reasons why we are against these proposals. We think that a 50p increase is not capable of being easily absorbed by the average family. Secondly, it is inflationary in its effect. If anyone is paying income tax to-day he is paying at a standard rate of 38¾ per cent. with two-ninths earned income allowance which, give or take a fraction of a percentage, is 30 per cent. If a man is faced with this increase of 50p a week we can take it for granted that he is going to expect his trade union to get his wages increased to pay for it, and he is going to need 70p a week gross to enable him to pay 50p a week rent. I am quite certain that when people are negotiating wage increases there will be no differentiation made between those who pay income tax and those who do not, so that everybody will ask for 70p in order to pay his 50p increase. After all, the Chancellor has already taken away the difference. The Chancellor and the local authority between them will get 50p and the Chancellor will get the other 20p. On that basis it would be quite wrong if we were to allow the case to go by default. Here again we must force those on the Government side who believe in this idea, and those who are willing to follow them through the Lobby, to do so. We intend to go into the Lobby against it.
6.16 p.m.
On Question, Whether the said Amendment (No. 101) shall to agreed to?
Their Lordship divided: Contents, 41; Not-Contents, 65.

CONTENTS

Archibald, L.

Gaitskell, Bs.

Popplewell, L.

Ardwick, L.

Garnsworthy, L. [Teller.]

Rathcreedan, L.

Beaumont of Whitley, L.

Gladwyn, L.

Shackleton, L.

Beswick, L.

Hale, L.

Shepherd, L.

Blyton, L.

Henderson, L.

Shinwell, L.

Boothby, L.

Hoy, L.

Slater, L.

Brockway, L.

Hughes, L.

Snow, L.

Buckinghamshire, E.

Janner, L.

Stow Hill, L.

Champion, L.

Kennet, L.

Strabolgi, L. [Teller.]

Chorley, L.

Lloyd of Hampstead, L.

Summerskill, Bs.

Davies of Leek, L.

Maelor, L.

Taylor of Mansfield, L.

Delacourt-Smith, L.

Nunbumholme, L.

Wright of Ashton under Lyne, L.

Diamond, L.

Phillips, Bs.

Evans of Hungershall, L.

Platt, L.

Wynne-Jones, L.

NOT-CONTENTS

Aberdare, L.

Balfour, E.

Bledisloe, V.

Amory, V.

Balfour of Inchrye, L.

Brooke of Cumnor, L.

Atholl, D.

Belstead, L.

Brougham and Vaux, L.

Auckland, L.

Berkeley, Bs.

Clifford of Chudleigh, L.

Cork and Orrery, E.

Goschen, V.

Milverton, L.

Cowley, E.

Gowrie, E.

Mowbray and Stourton, L. [Teller.]

Craigavon, V.

Greenway, L.

Cromartie, E.

Grenfell, L.

Nugent of Guildford, L.

Cullen of Ashbourne, L.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Onslow, E.

Daventry, V.

Orr-Ewing, L.

de Clifford, L.

Hanworth, V.

Polwarth, L.

Denham, L. [Teller.]

Hawke, L.

Reay, L.

Drumalbyn, L.

Howard of Glossop, L.

Reigate, L.

Dundee, E.

Hylton-Foster, Bs.

Rhyl, L.

Eccles, V.

Jellicoe, E. (L. Privy Seal.)

Ruthven of Freeland, Ly.

Elles, Bs.

Killearn, L.

Sandford, L.

Elliot of Harwood, Bs.

Latymer, L.

Stamp, L.

Emmet of Amberley, Bs.

Lauderdale, E.

Strange, L.

Exeter, M.

Lothian, M.

Strathclyde, L.

Ferrers, E.

Macleod of Borve, Bs.

Tweedsmuir, L.

Fortescue, E.

Mancroft, L.

Vivian, L.

Gainford, L.

Mansfield, E.

Young, Bs.

Gisborough, L.

Resolved in the negative, and Amendment disagreed to accordingly.

Clause 44 agreed to.
Clauses 45 to 50 agreed to.
Schedule 6 agreed to.
Schedule 7 [Modifications of Part VI of the Rent (Scotland) Act 1971]:
6.24 p.m.
LORD HUGHES LORD HUGHES moved Amendment No. 106:
Page 96, line 7, leave out paragraph 12.
The noble Lord said: This paragraph alters the period of delay and the proportions of the payments that are to be made in rents imposed by Schedule 13 to the 1971 Act. It goes on to say:
" … where the second year of a period of delay of four years under the Schedule begins on or after 1st January 1973 the period of delay shall instead be two years, and the fraction in the third column of the Table in paragraph 2(2) for the second year shall be three fifths, and not two fifths."
This Amendment is closely related to the others we have been discussing on this issue. In our view, the Government want to move too fast towards high rent levels. We think the pace should be slower and that the speed of existing legislation is fast enough. Our aim would be accomplished by deleting paragraph 12. I beg to move.
LORD POLWARTH: The noble Lord, Lord Hughes, moved the Amendment with brevity and pointed out that it was related to the others we have discussed about the period of delay. In the circumstances, it is difficult for me to adduce new arguments why the Amendment should not be accepted. We return here
68
to the essence of the rent registration scheme in which we have officials, rent officers and rent assessment committees with their statutory procedures, independence and impartiality. The essence of this system is that a fair rent should be fair to the landlord as well as to the tenant. Perhaps this is giving an academic interpretation of it, but any period during which a fair rent has not to be paid in full—and this applies to the period of phasing—is in a sense continuing an unfairness to one party to the agreement.
The phasing is deliberately introduced and the difference between what exists and the new system is that there are to be rent allowances. Under the fair rent system introduced and operated previously there was no financial assistance by way of allowances to those who were unable to pay fair rents or even the phased increases up to fair rents. This assistance is now being made available, and while it can be argued that any particular rate of introducing higher rents is fair or unfair, it is the Government's view, in accordance with their view of the earlier provisions in this Part of the Bill, that the rate of phasing and the availability of rent allowances will avoid hardship.
LORD HUGHES: I do not intend to withdraw the Amendment, though I do not propose to press it to a Division. In the preamble to his remarks the noble Lord made a statement which I could accept provided he amended it by changing one word. He said that he could not adduce new arguments against the Amendment. If he were to substitute the word "any" for the word "new" I could agree with him, because he has

69
been unable to adduce any arguments against it.
On Question, Amendment negatived.
Schedule 7 agreed to.
Clause 51 [Introduction of new subsidies for housing associations]:
6.30 p.m.
LORD HUGHES LORD HUGHES moved Amendment No. 107:
Page 41, line 30, leave out ("£5") and insert ("£2·50").
The noble Lord said: This and Amendment No. 108 are on the same topic. We are here dealing with subsidies for housing associations and the Amendment is designed to accomplish exactly what we have been trying to secure in other directions. It is to halve the rate of withdrawal or to double the time of phasing out to enable rents to be increased at a more acceptable pace. I do not think that it would be in the interests of anybody (other than possibly the Refreshment Department) to prolong the discussion on this subject because we have covered the point time and time again. But it does not alter the fact that, particularly in this area of housing associations where we want to give the maximum encouragement to people to take advantage of facilities that may be provided, there is a very special reason for not wishing the rent increases to go on at too rapid a rate.
Obviously, in the case of a housing association the rate at which their rents go up has to be governed more strongly than in the case of any other bodies by the extent to which they have income. If the present subsidies are phased out rapidly, then obviously the rents must go up faster. There will be, therefore, some degree of discouragement for the activities of associations who, up to the present, have found it rather difficult to operate in Scotland. Housing associations have not met with quite the same measure of success there as they have on this side of the Border—they have not been all that successful down here either. On both sides of the Border we should be happy to see a much bigger proportion of the housing load taken up by these associations. I suggest that what is in this clause in the form in which it presently stands will not give these associations the maximum amount of encouragement while my
70
Amendments would help them to that end. I beg to move.
LORD POLWARTH: Before the discussion develops on the noble Lord's Amendment, may I draw the attention of the Committee to what appears to be a misprint in the Marshalled List, in that the Amendments the noble Lord is now moving relate not to Clause 51 as printed but to Clause 52. In the circumstances we probably have to make Clause 51 stand part of the Bill before we take the noble Lord's Amendments.
Clause 51 agreed to.
Clause 52 [The basic residual subsidy.]
LORD HUGHES: I hope that your Lordships will accept that what I have just said can be taken as being to the Amendments to Clause 52.
THE MARQUESS OF LOTHIAN: As the noble Lord, Lord Hughes, has said we are now in the Part of the Bill dealing with housing associations, and as he rightly pointed out these two Amendments are similar to other Amendments he has moved on other Paris of the Bill. In other words, he wishes to halve the amount and thereby also the speed of withdrawal. I do not think that he will expect to get very much satisfaction on these Amendments, although I recognise the sincerity with which he moved them. We believe that they are not really necessary for several reasons. For one thing we feel that they are not necessary in preventing financial difficulties for housing associations, which was a very important point that the noble Lord raised, because, as has already been said, by making reasonable increases towards the fair rent an association will normally be able to offset the loss of income from the phasing out of the existing subsidies. In the same way—and I do not think this point really needs to be mentioned any more—so far as the tenants are concerned the rent increase is limited to the 75p per week in any year which we have been talking about, and, as my noble friend has been saying frequently this afternoon, any tenant will be able to apply for a rent allowance. Therefore I cannot add very much to what my answer has been; indeed it is very much the same as we have been hearing this afternoon.
LORD HUGHES: I am very disappointed. I thought that because of the special case which I made for housing associations there was a chance that the Government might do something about it, and when a new Minister came in I thought that obviously something was going to happen ; the noble Marquess will not be thrown right into the fray with a brief marked "Reject" ; the worst that can be at the top of his note is "Agree to consider". But, lo! and behold! he was not handed any carrot ; he was handed another stick. We could have hoped for better things, but it is obvious that it does not matter very much who is to get up and speak from the Front Bench opposite, the answer at best is going to be "Maybe" but most of the time it is going to be "No". I should be wasting your Lordships' time if I spoke any longer on this point. I do not think I need to take it any further. We have already demonstrated our views, both in speech and by vote on a number of occasions. I do not think it is necessary to vote again on this one and I therefore beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 52 agreed to.
Clause 53 [The special residual subsidy]:
6.37 p.m.
LORD HUGHES LORD HUGHES moved Amendment No. 109:
Page 41, line 39, leave out subsections (2) and (3).
The noble Lord said: If we leave out subsection (3) it will at least be an economy, because it will take a page out of the Bill and, having regard to the general nature of the Bill, taking out any given page anywhere is a decided advantage as well as an economy. Subsection (2) reads:
" A housing association shall be entitled to special residual subsidy for … works approved … before the coming into force of this Act and completed during the year 1972–73, 1973–74 or 1974–75."
And then it goes on in subsection (3)—I am wrong ; I have not taken out as much as I thought. I am disappointed. I am taking out only subsections (2) and (3) and amending the other sections.
To put it briefly, what the Bill does at the present time is to relate these
72
payments to what is done in the years 1972–73, 1973–74 and 1974–75 and I propose to make it applicable for the years 1972–1980. Considering the somewhat parlous position that most of these housing associations are in at the present time, having great difficulty in making ends meet, it seems to me reasonable that we should give them the assurance of these payments for something longer than three years. I think they are in need of greater consideration than the local authorities, the Development Corporations, or the Scottish Special Housing Association, and the period from 1972 to 1980 which would be achieved if the said Amendments, Nos. 109, 110, 111 and 112 were agreed to, would give them that feeling of security and that degree of help which would provide the necessary encouragement for them to get on with the job. And if the Government are not serious about wanting the housing associations to get on with their job, then I suggest that the Bill in its present form is as good a deterrent as the Government are likely to find. I beg to move.
THE EARL OF BALFOUR: Does not Clause 54(1) to a very great extent cover the point raised by the noble Lord, Lord Hughes? I feel that the Secretary of State has powers, if a housing association get into difficulty, to give them extra subsidies if they need them. It seems to me that they are given about as great a safeguard as they need to be given.
LORD HUGHES: I must admit that to a certain extent the noble Earl has a point. The only difference is that I wanted it to be, "Yes", instead of, "If".
A NOBLE LORD: And the noble Earl would not object.
THE MARQUESS OF LOTHIAN: I am sorry if I disappointed the noble Lord last time, but a new face does not necessarily always mean a new answer, as he has come to realise.
LORD CHORLEY: Could the noble Marquess do better this time?
THE MARQUESS OF LOTHIAN: I doubt it. I should like briefly to explain the Government's attitude on these four Amendments, which, as the noble Lord said, are intended to make the subsidy payable in respect of houses completed from 1972 to 1980. I entirely agree that

73
it is our aim to encourage housing associations in the very good work they are doing. But we do not think that to extend to 1980 the period during which houses may be completed to qualify for subsidy is necessary, because the subsidy is especially intended to be a transitional measure designed to encourage and provide financial assistance for those associations who have commenced expenditure on the building of houses and obtained approval for subsidy under the 1968 Act before the Bill comes into force but who will have been unable to complete them before the end of 1971·72 and thus have them included in the calculation on the basic residual subsidy. It is necessary to make this special provision ; otherwise the houses would fail to qualify for either the 1968 subsidy, which will not be available as from 1972·73, or the new building subsidy under Clause 55, which will be available in respect of schemes approved after the Bill comes into force.
As at present drafted, Clause 53 enables houses approved before the Bill comes into force and completed in almost three years before the end of 1974–75 to qualify for special residential subsidy. We feel that this is reasonable and allows a generous period of time for the completion of current schemes, which I understand involve something in the region of 400 houses. One of the chief beneficiaries of this special subsidy is likely to be the "Homes for the Aged" Association in Scotland with whom I understand that the noble Lord, Lord Hughes, has been having discussions recently, and he will I understand know that they hope to get this subsidy on about 200 houses. I do not think this is an unfair clause; I think that the subsidy is generous, and I think the time limit is generous. I am sorry that I cannot accept the Amendment.
LORD HUGHES: The noble Marquess mentioned the "Homes for the Aged" Association of Scotland, and if he is trying to "buy me off" it will not work, even though I am Vice Chairman of the Association. I am rather operating on the basis that I am satisfied with what we are getting. I am not moving the Amendment just in order that the Association, in particular, may get more. If they happened to be beneficiaries under this Amendment, if it were carried, then perhaps I should have declared an interest
74
in the matter ; but I can assure noble Lords that none of the benefit will land in my pocket. I do not have a beneficial interest in the matter. The noble Marquess says, "No" in such a pleasantly hesitant manner that I cannot brace myself to the ordeal of forcing a Division against him on this Amendment. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 53 agreed to.
Clause 54 agreed to.
Clause 55 [The new building subsidy]:
6.47 p.m.
LORD HUGHES LORD HUGHES moved Amendment No. 113:
Page 44, line 11, leave out from ("for") to end of line 16 and insert ("so long as the housing association have a deficit and the amount of the subsidy for a year shall be the amount of the deficit").
The noble Lord said: Unlike most Amendments, this one is self-explanatory. It does not need a long story in support, but I would remind your Lordships that housing associations are not wealthy bodies; they are non-profit-making concerns, and have to balance their budgets year by year. If the obligation is placed on them to balance their budget by having rent increases to too great a level obviously this diminishes their chances of getting tenants into their houses. There is experience of housing associations having in the past had houses standing empty because people could not face up to the high rents involved. I think this is one way in which we can improve the situation. In the hope that the noble Marquess will not want to blot his copybook by having three "No's" in a row, I beg to move.
THE MARQUESS OF LOTHIAN: I feel that this Amendment is too open-ended in that, in our view, it would not be right in principle to provide for the meeting of any housing association possible deficits almost indefinitely. This is the fault in the Amendment. If we were to do that, there would be no real incentive for an association to exercise care or foresight. Under subsection (6) the progressive reduction in the percentage of the initial deficit to be met by subsidy should be matched by increases in rent income arising from increases in fair rents

75
of houses in a scheme. But, of course, where unforeseen circumstances arise, and an association is perhaps unable to match the subsidy by rent income or by other available finance, the Secretary of State is empowered under subsection (12) to defer the reduction if he is satisfied, having regard to the normal sources of income of the association, that they would not be able to meet any reasonable expenditure incurred on their housing functions. I should have thought that this was a sufficient safeguard against the dangers the noble Lord has in mind.
LORD HUGHES: Contrary to my expectation, the noble Marquess has made it a hat-trick of "No's". I am very sorry, but I am not prepared to give him a hat-trick of free runs ; I am going to divide on this one, because I think his answers grow progressively more stereotyped and progressively more unsatisfactory.
6.50 p.m.
On Question, Whether the said Amendment (No. 113) shall be agreed to?
Their Lordships divided : Contents, 36 ; Not-Contents, 57.

CONTENTS

Archibald, L.

Henderson, L.

Shackleton, L.

Ardwick, L.

Hoy, L.

Shepherd, L.

Beaumont of Whitley, L.

Hughes, L.

Shinwell, L.

Blyton, L.

Kennet, L.

Slater, L.

Boothby, L.

Lloyd of Hampstead, L.

Snow, L.

Brockway, L.

Longford, E.

Strabolgi, L.

Buckinghamshire, E.

Maelor, L.

Summerskill, Bs.

Champion, L.

Peddie, L.

Taylor of Mansfield, L.

Diamond, L.

Phillips, Bs. [Teller.]

Watkins, L.

Evans of Hungershall, L.

Platt, L.

Wright of Ashton under Lyne, L.

Gaitskell, Bs.

Popplewell, L.

Garnsworthy, L. [Teller.]

Rathcreedan, L.

Wynne-Jones, L.

Hale, L.

NOT-CONTENTS

Aberdare, L.

Ell ot of Harwood, Bs.

Lucas of Chilworth, L.

Atholl, D.

Emmet of Amberley, Bs.

Macleod of Borve, Bs.

Auckland, L.

Exeter, M.

Mansfield, E.

Balfour, E.

Ferrers, E.

Milverton, L.

Balfour of Inchrye, L.

Fortescue, E.

Mowbray and Stourton, L. [Teller.]

Belstead, L.

Gainford, L.

Berkeley, Bs.

Gisborough, L.

Nugent of Guildford, L.

Brooke of Cumnor, L.

Goschen, V.

Onslow, E.

Brougham and Vaux, L.

Gowrie, E.

Polwarth, L.

Clifford of Chudleigh, L.

Grenfell, L.

Reay, L.

Cork and Orrery, E.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Reigate, L.

Cowley, E.

Rhyl, L.

Craigmyle, L.

Hanworth, V.

Rowallan, L.

Cromartie, E.

Hawke, L.

Ruthven of Freeland, Ly.

Daventry, V.

Hylton-Foster, Bs.

Sandford, L.

de Clifford, L.

Jellicoe, E. (L. Privy Seal.)

Strathclyde, L.

Denham, L. [Teller.]

Killearn, L.

Tweedsmuir, L.

Drumalbyn, L.

Latymer, L.

Vivian, L.

Dundee, E.

Lauderdale, E.

Young, Bs.

Eccles, V.

Lothian, M.

Resolved in the negative, and Amendment disagreed to accordingly.

House resumed.

PARLIAMENTARY AND OTHER PENSIONS BILL
6.58 p.m.
THE LORD PRIVY SEAL (EARL JELLICOE): My Lords, I understand that there may be some questions put to me, and therefore I do not propose to move the Motion standing in my name on the Order Paper. I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Earl Jellicoe.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD GRENFELL in the Chair.]
Clauses 1 to 4 agreed to.
Clause 5 [Exchequer contributions]:
On Question, Whether Clause 5 shall stand part of the Bill?
7.0 p.m.
LORD SHACKLETON: If I may make this general remark, I thought it might be more convenient and effective that I should merely raise a number of points on particular clauses, and all the more so because the Government have, throughout this Bill, with the general support of the Opposition, taken the view that it was the "whole of Boyle or nothing". I accept the logic of this approach when we are dealing with pensions and such matters affecting Parliament. This is a sensible way to act. On the other hand, it has become apparent that there are certain anxieties here and there, and that in due course there may be an opportunity for the Boyle Committee to meet again (possibly sooner than might otherwise be anticipated). A number of Members of another place, recognising this, have taken the opportunity, as I hope to do, to put certain matters on the record so that they can be taken into account in the future.
I speak on Clause 5 once again in order to raise the position of the pre-1964 Members of Parliament. I accept from my own experience in the public service that it is very difficult to provide pensions for those who were not in a pension scheme. None the less, it is very
78
striking, and is still a subject of some soreness, that people who enter now, or who were in the House of Commons since 1964, are able to draw a pension, whereas those who were there before that date are not able to draw a pension. Furthermore, the requirement in the Members' Pension Fund—which does not arise directly on this Bill—is still one of 10 years' qualification, whereas for future pensioners under this Bill four years is all the qualification that they need. It is a fact that in 1964 it was not open for many Members of Parliament to belong to other pension schemes, nor were they rich enough to make contributions through insurance arrangements or anything of that kind.
Nobody has tried harder than the noble Earl himself to meet and to give consideration to the anxieties of the pre-1964 pensioners. I only rise on this clause once again to register the very strong feeling on this matter—bearing in mind particularly that many of these pre-1964 Members of Parliament are no longer in Parliament unless they happen to be in the House of Lords, and therefore we alone are conscious of their problem. I would ask the noble Earl to bear this in mind. I would hope that it would be possible for him, when the Boyle Committee meets again, to take into account these remarks. This is one way of giving evidence to it. I gave my evidence. I would repeat yet again that I think that in many ways the Boyle Committee did a very good job and that we have greatly improved the position of Members of Parliament, as we should do ; but we have totally failed to do anything for the older people who left Parliament too early.
I raise these remarks on Clause 5 because here the payment of monies is provided for by Parliament as an annual Exchequer contribution. I am not clear whether there is any Exchequer contribution towards the Members' own Fund. Not having given notice to the noble Earl, he may or may not have the answer. I would hope that, if necessary, there can be contributions, so as to ensure that the position of those who are receiving these inevitably means-tested pensions—and I would not for one moment suggest that they are derisory, as some people have—is sustained. If there are annual or biennial reviews (indeed there

79
will be) for the up-rating of pensions under the new scheme, I hope that there will be similar reviews under the scheme run by the trustees.
LORD BOOTHBY: I am grateful to the noble Lord, Lord Shackleton, for raising this particular question. I naturally speak with a personal interest. but the fact remains that the pre-1964 Members of Parliament are being disgracefully treated. I was a Member of Parliament for 34 years without a break, and my pension is nil. I think that that is not fair. I do not think that any other country in the Western world, or even in the Communist world, would treat its ex-Members of Parliament in that particular way. I speak on behalf of a considerable number of people who were Members of Parliament with me and who are living in terms of considerable hardship, who have got nothing at all, but who would rather die than go through the humiliation of a means test to get a pension from the Fund. We in our day were grossly underpaid all the way through. I started at £400 a year in 1924, and our pay went up very slowly to about £1,000 a year ; but we had no allowances, no grants for secretaries, nothing comparable to what they have in the House of Commons to-day. So we really paid our meed, our tribute, and we were there for many years. I know of a number of ex-Members of Parliament from pre-1964 who were there for many years, who gave more than 10 years' service, and who got no pension of any kind at all. I simply say that I believe this to be wrong. They will not go to the Fund because they will not submit to a means test. I sympathise with them wholly on that. I would rather die in penury than do it myself.
I feel that, somehow or other, the ethics of this business have got out of line, have gone wrong, and that the country as a whole would not object at all if a modest pension as of right, without requiring a means test, were given to those Members of Parliament who served for over 10 years before 1964. If I had delayed accepting elevation—I think that is the right word—to this House for another three or four years, which I could easily have done, and had held my constituency, I should be entitled to a pension. It just seems to me that the position
80
now is unfair and ethically wrong. I realise that the noble Earl the Leader of the House recognises this. I think that he feels in his heart that it is wrong, but that there are the difficulties over retrospective legislation. I do not believe that the country would resent that retrospective legislation at all ; I think that they would think it absolutely fair, especially in view of the very considerable and substantial increases in salaries and pensions which have recently been granted to the House of Commons and to the heads of the nationalised industries. I feel that this is something that is just not right, and I have expressed my opinion on it on more than one occasion, as I have my personal interest. It is negligible by comparison, but I have a slight personal interest and I must confess it. But I feel that this is just not right, and that is all I have to say.
7.10 p.m.
LORD JANNER: My Lords, may I add one word? I have not as yet intervened in the course of this debate, but having heard my noble friend Lord Shackleton and the noble Lord, Lord Boothby, I should like to say that I, too, started in Parliament when the salary was £400 a year. Some of us were fortunate enough to have a profession or some kind of interest which enabled us to live. I cannot imagine how on earth many of those who came into the House at that time—certainly those who had no other kind of occupation or other kind of income—were able to get along. But they did ; and they strove through a very hard time. I do not think the country as a whole realises what happened to people who were in the House in those days, or the dedicated and devoted service which was given by Members of Parliament, as indeed is being given to-day, without anything like sufficient remuneration to compensate them for what they were doing. It is a disgrace. I think we ought to face this fact. It is a disgrace that any Member who served his country before 1964 should be placed in the miserable and undignified position of having to carry on as best he can, in many cases on a very slight income. We ought to be ashamed of ourselves for not having rectified this position before.
I know that the noble Earl the Leader of the House is with us in this kind of sentiment but I appeal to him. Many of

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those who would benefit if something were done at the present time may not have much longer to live and we ought not to delay. We ought to take the earliest opportunity to rectify a position of this sort. I know a number of Members with whom I served in the House who are placed in a really difficult position, and my experience, too, is that they feel very miserable about any suggestion of undergoing a means test. They prefer not to do it and even to put up with the consequences of it. I honestly believe that the country as a whole, irrespective of Party—and I do not think the kind of argument would be raised which one hears so frequently when there is an increase of payments to Members—would be with the people who served, and served very well, in many instances for many years. I appeal to the House to take the earliest opportunity to try to get this very serious position remedied.
LORD WALSTON: My Lords, I want to add a very few words on this subject. It used to be said in Victorian times that people practised a double morality. There was the morality which they put on with their best clothes when they went out, for the public to see—the morality they were proud of—and there was the morality of which they would be ashamed in public but which they exercised at home and in private. To-day I believe we have a double morality, but, curiously enough, in exactly the opposite way. We frequently behave in public or when we are representing a public body in a way which, as individuals, we should consider completely immoral. We treat our public servants to-day in a way which no individual would treat a personal servant who had given loyal service. We treat public figures in a way we should never treat friends. This is a new form and a curious form of double morality which we must get away from. I believe we must use every opportunity which presents itself to us, when we are in positions representing the Government, as the noble Earl is at present, or representing a public body, to ensure that that Government or public body acts in exactly the same way as we, as individuals, would in an analogous situation. For those reasons I support what noble Lords have already said on this matter.
7.16 p.m.
EARL JELLICOE: My Lords, we discussed this matter at some length on Second Reading, but having regard to the strongly held views of Members of your Lordships' House on this subject I do not for one second quarrel with the fact that we have rehearsed it now at Committee stage. I should like to explain once again, if I may, but as briefly as I can, why the Government have taken the line they have on this particular aspect of the Bill. There are two basic reasons. The first is that we should, in our view, be very careful about overriding the careful conclusions which now two distinguished, impartial and expert Committees who have been looking at the whole question of Parliamentary and Ministerial salaries and pensions have come to ; and secondly, we should also be careful about laying ourselves open to the accusation—and I do not wish to rest too much on this point but it certainly would be a possible accusation if we were to take the course recommended to this Committee by a number of noble Lords—that we legislators were prepared to treat ourselves better than the generality of good employers, because this would be a considerable breach in normal pensions practice. This we should recognise.
LORD BOOTHBY: My Lords, may I interrupt the noble Earl for a moment to say that I had correspondence with Lord Boyle on this subject and he definitely said to me that he did not regard this particular question as within the remit of his Committee.
EARL JELLICOE: I must of course accept what the noble Lord has said, but I would remind him that this matter is specifically dealt with in paragraph 69 of the Boyle Committee's Report and again in paragraph 70, and since they have specifically looked at it, it is rather surprising to hear from the noble Lord that they felt themselves debarred from so doing. On Second Reading I in fact read out, I think, the relevant paragraphs. But I should like to say that the Lawrence Committee in 1963–64 and then the Boyle Committee have in fact considered with some considerable degree of care what should be done about the pre-1964 Members whom we are all probably very worried

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about. The Lawrence Committee's arguments are to be found in paragraph 76 of their Report, and without wishing to a make a Party point of this I must remind your Lordships that they were accepted by the then Government and were built into the existing 1965 Act. Normally this is the kind of issue which would be settled, once and for all, when a new scheme is set up.
However, the creation of the top salaries review body under Lord Boyle—and there were two other Members of your Lordships' House on it—and the referring of Parliamentary remuneration to that body, gave an opportunity, in these cases a very exceptional opportunity, for second thoughts. Despite what the noble Lord, Lord Boothby, said it is my understanding (and this is borne out by the specific reference in their Report, in Paragraphs 69 and 70) that the Committee, quite deliberately, took this opportunity and, equally deliberately, concluded that they could not vary the conclusion of the Lawrence Committee. I suggest that at least at this stage we must rest on that. We must rest on it for the reasons I have given in the past: that otherwise we shall be back to the whole problem of singling out bits and pieces of impartial Committees' Reports for adoption or rejection ; and in that case it would be far better not to have a Committee. If we do that we shall then be putting Parliament in the invidious position of having to decide for itself the scale of remuneration and pension to which Parliamentarians should be entitled. That was a position which Parliament got itself out of ; and I would ask noble Lords to reflect very carefully before wittingly and deliberately putting back Parliament into that position.
I think that the noble Lord, Lord Shackleton, has offered your Lordships, and perhaps Parliament as a whole, a way out. I am speaking from memory but I think it is the suggestion, implicit or explicit, in the Top Salaries Review Body Report that a body of this kind is expected to report once in a Parliament. Certainly the Government agreed with that. But there is no reason at all why, if there is a case for it, and if the Review Body feels that an interim report is called for, the Review Body should not make an interim report. While it would be foolish
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of me, speaking as it were without the book, to commit the Government to an interim review, speaking personally, I can see no reason why the Government should not assent to such a review if the Review Body, in its judgment, thought this desirable. I am certain that Lord Boyle's Committee would wish to pay very careful attention to the views expressed on this point, should they decide to make an interim review. One can take it, given the quality of the membership of the Review Body, that this will be the case. But purely to reinforce what does not need reinforcing I will undertake here and now to your Lordships that I will direct personally the attention of the noble Lord, Lord Boyle, to the strongly expressed feelings of this House on this point.
May I say that I entirely agree that it is right and proper that noble Lords who may be less directly interested in this matter—and it is easier to follow these sentiments in this House than in another place—given the strong feelings on this matter should raise it once again in this House. This, I believe, is possibly the best way forward at this time ; because I would counsel noble Lords strongly against trying to make piecemeal amendments to the Boyle Committee Report at this stage.
As to the particular point raised by the noble Lord, Lord Shackleton, I would add that there is an Exchequer contribution to the Members' fund: it is a matter of £22,000 a year. The actual contribution found necessary has been slightly under that in recent years ; but if the trustees receive the extra discretion for which they asked, and to which I referred on Second Reading, it is possible that the full amount, or something close to it, will be needed.
I hope that I have not sounded unsympathetic in my reply to noble Lords, because I am far from unsympathetic ; but I am certain that we are right to rest where we are at the present time. I note the strong, expressions of views of your Lordships—and not only the sentiments expressed but the feeling that if something is going to be done in this area it should be done without too long a delay.
Clause 5 agreed to.
Clause 6 agreed to.
Clause 7 [Pensions of Members]:
On Question, Whether Clause 7 shall stand part of the Bill?
LORD SHACKLETON: This is a small point. I must apologise to the Committee for raising that last matter in relation to Clause 5 when, clearly, I should have done so in relation to Clause 6. None the less, it gave rise to a useful debate. The point on Clause 7 is the rate of accrual of one-sixtieth. This point has been made on the grounds that no Member of Parliament is likely, or only exceptionally so, to have the length of service of an employee in a firm or a civil servant. The reply given by the Parliamentary Secretary in another place is that in future everybody will be in a pension scheme. The fact is that not everybody is in a pension scheme now. Here again I would ask that the Boyle Committee consider some arrangement whereby there can be a higher rate of accrual for those who are not in existing pension schemes. It is not easy very often to combine either pension schemes or "top hat" schemes, particularly when somebody becomes a Minister: then he is in a very peculiar position indeed. I had to abandon a "top hat" when I became a Minister ; but that matter arises on another clause.
What I am saying is that I think one-sixtieth is not very good. I am not complaining about this but judges can accumulate a full judicial pension (of 50 per cent., I think) after eighteen or twenty years' service. It would take considerably longer for a Member of Parliament to do that. So far as the argument that everybody is supposed to be in a pension scheme is concerned, we have not had an opportunity to discuss the Government pension scheme ; but in any case a lot of people are not in these schemes now. We are in this area building up more injustices for the future. The new entries will all be all right. Some of the post-1964 people have got something, but for the future it ought to accrue at a very much faster rate.
EARL JELLICOE: Here again I should like to say that if there is an interim report by the Review Body I think this is a point they might wish to look at in the light of what has been said in this
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House and in another place. Specifically, as I mentioned during the Second Reading, I myself feel they will almost certainly wish to look at the possibility of buying in extra pension rights. This is something which is now introduced into the Civil Service scheme. It was introduced at a time when it would not have been possible for the Boyle Committee to give full consideration to the possibility. Had the timing been different I think they might have wished to have done so. This is a matter which I think they may wish to look at if they decide to make an interim report.
Clause 7 agreed to.
Clauses 8 to 13 agreed to.
Clause 14 [Pensions for certain widowers]:
On Question, Whether Clause 14 shall stand part of the Bill?
7.30 p.m.
LORD SHACKLETON: This objectionable little clause provides benefits to the spouses of women Members of the House of Commons only if they are incapacitated. I do not want to make anything more of this now, but being an anti-discriminator I think this is a bad clause. It has been criticised, and here again I should like Lord Boyle to note my opinion.
EARL JELLICOE: I am grateful to the noble Lord, Lord Shackleton, for putting his point so moderately. I also happen to be an anti-discriminator, whether the discrimination is against the ladies or against the minority sex. But I would point out that what is written into this clause follows the normal practice of Public Service schemes. I am not necessarily defending what is the normal practice ; all I would suggest is that the assumptions underlying that practice are those which are derived from our whole socio-economic structure. It may be that that structure is wrong in this respect ; but if it is, I am not certain that the right way to start putting it right is through the medium of a Parliamentary pensions scheme. Whether there should be discrimination in this area is something which again I think should be looked at. I suspect that it might be better to look at it in a wider setting

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than a possible interim review of a Top Salaries Review Body.
LORD SHACKLETON: I accept that. The noble Earl has been doing well in the public service in this field, and I am encouraging this in perhaps a wider context.
EARL JELLICOE: The noble Earl also is doing well in other areas, and he will never tire of doing well.
LORD SHACKLETON: The noble Earl is following the path which his predecessors set for him.
Clause 14 agreed to.
Clauses 15 to 17 agreed to.
Clause 18 [Refund of contributions to contributor]:
On Question, Whether Clause 18 shall stand part of the Bill?
LORD SHACKLETON: Here again I should like to raise a small point. I confess that I cannot remember what Boyle said on this, and we are not sure whether we are bound by the pure dogma doctrine of the Boyle Committee. Clause 18 provides that the contributions of a Member of Parliament or an ex-Member of Parliament, can at his request be refunded, with interest, if he has not completed the appropriate service. I will not go into the details ; but why only his own contributions? If I am right on this, the Member of Parliament gets back his own contributions but not the Government's contributions—those of the notional employer.
Good pension schemes—admittedly, it may not always have happened in the early days—provide that a man can get back the employer's contributions as well as his own. I know many such schemes. In many private schemes there is a restriction on the amount a man can get back for short service, the idea being that if somebody leaves voluntarily, or is sacked for incompetence or something of that kind, he has his own money but not the firm's. But a Member of Parliament is surely in a rather different position. He does not usually give up his job voluntarily ; the job gives him up. I should be interested to know whether this provision ought not to include also the
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Government's contributions. There may be an answer. If not, here again it is something that Boyle could look at. I should not wish to try to amend the Bill.
EARL JELLICOE: I hope that up to now I have defended my pensions wicket with reasonable adequacy, but I must confess that on this occasion the noble Lord thas bowled me a googly. I am not absolutely certain of the ground here. I was surprised to hear the noble Lord say that in a number of good pension schemes there is provision, in analogous circumstances, for a refund of the employer's contributions. It is certainly my understanding that in the circumstances closest to those provided for in Clause 18 this would be contrary to normal pension practice. Again I think this is a point which might well be looked at. I notice that the noble Lord, Lord Shackleton, is not proposing to amend Clause 18 at this stage. Not only do I suggest that this could be looked at, but also, in view of the noble Lord's interest in this matter, I should like to write to him about the point ; and if there are other noble Lords who are interested I will see that my fuller explanation is copied to them as well.
VISCOUNT AMORY: There is one point which arises from what was suggested by the noble Lord, Lord Shackle-ton. My recollection of one or two schemes about which I know is that where it is provided that the employer's contribution shall also be repayable to the employee that has to be taken into consideration by the actuary and tends to put up the rate of contribution, because the scheme does not keep that money: it is not ploughed back into the scheme. In the case of people with relatively short service I think that actuaries are loth to adopt the practice. Where service is long I think there is a much stronger case for providing that the employer's contribution also is paid to the employee, but I doubt whether it would be desirable in a case where the average period of service was short.
LORD SHACKLETON: I think there is a good deal of force in what the noble Viscount, Lord Amory, has said. I have avoided speaking from my own experience—as one of the 9¾-year Members of Parliament I lose in all directions. It so

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happens that the one bit of pension I ever had in my life was from the B.B.C. before the war. I spent most of my time at the B.B.C. actually serving in the Air Force, and my pension accumulated. My recollection is that there were different periods in the joint contributory pension scheme. If a man had been there for two years he got all his own contributions and 25 per cent. of the employer's contributions ; and the same applied in proportion for a period of three years, and so on. I do not want to press this matter further, but I think that Members of Parliament are a rather special case. This is a matter which we shall probably need to look at in a wider context when we see the Government's Bill on the whole field of pensions. I do not want to press the noble Lord further on this matter. I am very grateful for the answers he has given.
EARL JELLICOE: I am grateful to the noble Lord, Lord Shackleton, and to my noble friend Lord Amory for coming to my rescue.
VISCOUNT AMORY: Can my noble friend tell me whether I have inadvertently overlooked something? As a former Member of another place I had never thought of recovering my contributions in this connection. But since that is not a matter of public interest, perhaps my noble friend will tell me privately.
EARL JELLICOE: I shall be glad to have private communication with my noble friend on that matter.
Clause 18 agreed to.
Remaining clauses and Schedules agreed to.
House resumed: Bill reported without Amendments ; Report received.
EARL JELLICOE: My Lords, I think we have reached a point when I should move that this House do adjourn during pleasure until 8 o'clock.
Moved accordingly, and, on Question, Motion agreed to.
[The Silting was suspended at 7.40 p.m. and resumed at 8 p.m.

HOUSING (FINANCIAL PROVISIONS) (SCOTLAND) BILL
8.0 p.m.
House again in Committee.
LORD HUGHES LORD HUGHES moved Amendment No. 120:
Page 45, line 14, leave out subsection (8).
The noble Lord said: I should like to speak to Amendment No. 121 with Amendment No. 120. These Amendments are probing Amendments, with the possibility that redrafting may take place in due course if I elicit the information that I expect. If I may refer to Amendment No. 120, the effect of subsection (8) which I am querying is to remove the assumption that every house is let for the whole year at a rent equal to the fair rent and to give the Secretary of State power to substitute some other assumption. In the light of enquiries which I have made I do not believe that it is possible to have a higher assumption, because the provisions of subsection (5)(b) represent the maximum that can be charged. But nearly always in legislation of this sort, if you use the word "other" it means the possibility of varying either up or down, whereas it is obvious that the only assumption which can be made and which would differ from that given in subsection (5)(b) would be a lower one—in which case I suggest that the next move would be to substitute at the next stage the word "lower" for the word "other". In other words:
" such lower assumption as may be specified in the direction."
The purpose of the Amendment is to find out if this is a correct reading of the situation. If it is, then I suggest that at the next stage a drafting Amendment might be made. In fact, it makes no difference, because if it can move only one way it does not matter a great deal if it says "other". The only point is that it keeps it as a consistent practice that when you use the word "other" you mean the possibility of going either way ; if you are intending only to move down, you say "lower", and if you are intending to move up, you say "higher". I beg to move.
THE EARL OF BALFOUR: In this case, in reference to the word "other" to which the noble Lord, Lord Hughes, is referring,

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I wonder whether it would be in order to allow the Secretary of State to take into consideration any house which may have been built under subsection (5)(b) and which the building association have failed to let. I feel that this is an important point, because sometimes houses are built and, for a short period of time, may be reserved for some key workers coming into the area. I think it would be most unfair if, to give an example, the Scottish Special Housing Association, who do so much of this work of keeping houses specially for key workers, were to be penalised if the houses were not let within that financial year, when at the same time they might be desperately needed.
LORD HUGHES: I do not think there is any doubt that that is a possibility, but this reinforces the point that there would be a lower assumption than would otherwise be the case, because they would not assume that they were getting rent for a whole year when in fact they could not get rent in the circumstances. So I do not think there is much doubt (though one can never be sure with this kind of complicated legislation) that subsection (8) can mean only a move in one direction.
8.7 p.m.
LORD POLWARTH: I think the noble Lord has really answered his own point. The whole purpose is to enable account to be taken of the possibility that all houses are not let for the whole time and therefore not all are producing rent incomes. So subsection (8) is for the benefit of the housing association in that it will increase the amount of this new building subsidy. As to the drafting I think that here again the noble Lord has pretty well answered his own question. If the assumption in the other subsection is that every house so comprised were let for the whole of the year, I do not see how another assumption can be other than that they were not all let for the whole of that year. I fail to see how it could be otherwise.
I appreciate the noble Lord's anxiety about the advantage of expressing the term "lower", but I submit that this is not necessary here. While I would not contest his skill s a draftsman, I would humbly suggest that an assumption could
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be "a lower assumption". I am not sure that this would accord with the form of language that we use in the Bill, but this is a matter of drafting and I have a feeling that if he were to have the word "lower" put in, this would require a rather lengthier form of words than is now in the paragraph. I feel that what is expressed there leaves absolutely no doubt, and accordingly, while I would certainly not try to discourage the noble Lord too much from putting down another Amendment later, I am not sure I should be prepared to sider accepting something that might have to be longer and more complicated in its expression.
LORD HUGHES: I think I can get it without being very much longer than that. For instance, one can say in the paragraph:
" … in that paragraph of such assumption of lower amount …"
or something of that kind. It is not beyond the wit of the ordinary layman to get something of this kind. I do not think I am letting any very disreputable cats out of the bag when I say that when he looked at this wording for the first time. and when I looked at it for the first time, and when the noble Earl, Lord Balfour, looks at it for the first time, none of us realised that the taking together of subsection 5(b) and subsection (8) meant that the assumption could move only in one direction. It was only when the experts told us that was the only possible meaning we could take from it, that we realised this.
If not one of the three, each reading it separately, can arrive at this obvious conclusion as to the only thing the wording can mean, it seems to me there is an obvious case for putting it in clear wording so that any of the three of us, dim though we may be, should be able to recognise it the first time we see it. After all, it would be quite possible, after a year had gone by and we had forgotten about this debate, that we would still not understand it. That is quite a possibility. So may I suggest to the noble Lord that he should have a look at this with his experts, and I will do it on my own in an amateur way, so that one or other of us may put something down for the next stage? I do not really want to leave out the whole paragraph: it was only a way

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of getting the point discussed, and of course I did not understand the provision at first. Now that I do understand it, I should like it to say what it means. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 55 agreed to.
Clauses 56 to 62 agreed to.
Clause 63 [Phasing of progression to registered rent]:
8.13 p.m.
LORD HUGHES LORD HUGHES moved Amendment No. 122:
Page 52, line 26, leave out ("£0·75") and insert ("£0·25").
The noble Lord said: Amendments Nos. 122 and 123 go together. At line 26 this Clause says:
" for any rental period beginning in the second or any subsequent stage, the rent limit shall be the rent payable for the first rental period of the last previous stage plus £0·75 per week, or the registered rent, whichever is the less."
I propose that that should be 25p per week instead of 75p which is in line with what we have been arguing throughout the passage of this Bill. I need say no more. I beg to move.
LORD POLWARTH: As the noble Lord has said, we are back to one of the principles which we have been discussing throughout the Committee stage. I should find it difficult to accept an Amendment in these terms after the Committee's decision on the previous Amendment. As we know, housing associations are not obliged to apply for registration of fair rents for their houses. Where such a rent is registered for a house and it exceeds the previous rent limit they are not required to increase the rent to the new limit. Where they do so the amount of the increase in any year, which is specified as 52 weeks, is limited to 75p per week. That is the same figure as we have agreed to in the Bill for houses in other categories as the maximum amount of increase. All I can say is that the same protections apply as to other tenants in the form of the rent rebates and allowances. This is the first time that housing association tenants like others will be eligible for these. It is difficult again to adduce—all right, I know what the noble Lord will say—
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fresh or different arguments in relation to this category of tenant from the others we have already discussed.
LORD HUGHES: This has had a fair run. All I would say before begging leave to withdraw the Amendment is that the blithe way in which Ministers talk about its being only 75p—
LORD POLWARTH: No.
LORD HUGHES: Well, the unblithe way in which they talk about 75p or 50p per week leads one to think that they have forgotten that we have gone on to decimals. When this was being drafted the thought at the back of their minds must have been that 75p was 6s. 3d. They do not realise that 75p is a great deal of money. However, having said that, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 63 agreed to.
Clause 64 [Previous rent limit exceeding registered rent: special rent limit]:
LORD HUGHES LORD HUGHES moved Amendment No. 123:
Page 52, line 31, leave out ("£0·75") and insert ("£0·25").
The noble Lord said: The effect of this Amendment would be to make the clause read:
" Where the rent limit for a dwelling-house immediately before the date of registration of a rent for that dwelling-house exceeded the rent so registered, the excess rent shall not be recoverable from the tenant."
The rubric of this clause is "Previous rent limit exceeding registered rent: special rent limit". So far as I can see, if the rent limit for a dwelling-house immediately before registration was higher than the rent so registered the registration would be provisional only until it took effect in accordance with this clause. I am not certain exactly what the effect of that is, except that it gives me the impression, perhaps erroneously, of enabling a higher rent to be charged than might otherwise be the case. I should be obliged if the Minister would explain exactly what it will do. If that is the effect, then I do not like it. If not, I shall be glad to hear what it actually does. I beg to move.
LORD POLWARTH: I will do my best to explain this slightly complicated provision. What the noble Lord seeks to delete is the power of the Secretary of State under subsection (4) to direct that where the rent limit before the date of registration was higher than the fair rent registered then the rent limit may be still in excess of the registered rent, provided that it is no more than previously. At the moment the rents of some housing association houses—for instance, costrent associations or modernised flats—are likely to exceed the fair rent at the time the association or its tenants apply for the registration of the fair rent. In those circumstances a housing association would under Clause 62, which we have passed, be unable to charge a rent in excess of the registered rent. It would therefore be in quite serious financial difficulty because of the resultant loss of rent incomes. In other words, the association's finances are based on the basis of the rents at present being charged to their tenants. Therefore the provision in this clause is inserted to allow the Secretary of State, if he is satisfied that a direction is necessary in the light of the housing association's finances, to direct that the rent may remain at any figure above the new registered rent provided it is not in excess of the previously current rent. The period from which the direction can have effect is not to exceed three and a half years.
That is the sole purpose of the provision in the Bill. It may in some cases, where the Secretary of State directs mean a higher rent than the registered rent, but in no case will the rent be higher than the rents at present being paid by the tenants of the housing association concerned. The power will be exercised by the Secretary of State only if he is satisfied that it will jeopardise the financial basis on which the housing association is established. We feel that this flexibility is necessary and that without it some housing associations could be put at risk financially. We are told that is the view of the Scottish Committee of the National Federation of Housing Societies and the Government would not wish to accept such a risk. The Secretary of State will wish to consider the circumstances of each individual case. There is the provision about the maximum time
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for a direction having effect not exceeding three and a half years.
LORD HUGHES: At the beginning of the noble Lord's remarks I missed part of what he said. He referred to cost rent associations. I missed the words after that ; he referred to some other association.
LORD POLWARTH: Cost rent associations or those comprising modernised flats.
LORD HUGHES: Do I take it that it is only in that case, or anything which would be comparable, that this provision would bite ; that this is not something which is generally intended to be applied to the ordinary run of housing association houses?
LORD POLWARTH: That is my understanding.
LORD HUGHES: In those circumstances, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 64 agreed to.
Clauses 65 to 81 agreed to.
Schedules 8 and 9 agreed to.
Schedule 10 [Transitional provisions]:
8.25 p.m.
LORD HUGHES LORD HUGHES moved Amendment No. 127:
Page 111, line 4, leave out ("deficit or").
The noble Lord said: I have no doubt that members of the Committee will be pleased to hear that Amendments Nos. 127 to 135 are a series and I need to speak only to the first of them. If we turn to page 111, all the Amendments fall in sub-paragraphs (2) and (3) on that page. Paragraph 2(2) says:
" Any deficit or surplus in a housing repairs account as at the end of the year 1971·72 where such deficit or surplus exceeds an amount per house which is £1 for the year 1971–72 shall be treated for the year 1972–73 as a capital sum:"
Paragraph 2(3) says that anything which is £1 or less shall be debited or credited to the local authority's housing revenue account and any deficit shall be treated as if it represented expenditure on repairs for that year in addition to any

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repairs actually carried out. The effect of my Amendments is to leave the application of these sub-paragraphs only to surpluses, and not to deficits or surpluses.
It is perfectly reasonable, as you are doing away with the housing repairs account as from the end of the financial year just past, that any surplus on the funds should be treated as capital and will therefore diminish the costs for the future. It would be wrong to treat any deficit as a capital item and to borrow that amount, thereby needlessly increasing the liabilities. The sums involved for any local authority are not likely to be very great one way or the other. While it is an advantage to use the money in such a way as to get the maximum future advantage by diminishing interest charges, by the same consideration it is a mistake to multiply the burdens for the successors of local authorities, or their ratepayers, by borrowing money when the sums are likely to be comparatively small. It is much better that that should be treated as it has been hitherto, as a revenue item disposed of there and then in the last year of the accounts. I do not think that it is desirable to treat revenue expenditure as capital merely in order to put off to future years something which can probably be carried in the present year. This is a case in point and I hope that the Minister will at least consider the point. If it does not appeal to him as a Minister, it ought to appeal to him as an accountant. This is what would be called (without any capital letters) good conservative finance. I beg to move.
LORD POLWARTH: I am not quite clear in what sense the noble Lord was describing this as "good conservative finance". But we do not need to pursue that particular aspect. This is a perfectly fair point that the noble Lord has raised. I am glad that he accepts that the method of dealing with any surplus is the right one. But when we come to the matter of a deficit I am not sure that it is quite so simple. Owing to the operation of the system, whereby most authorities have dealt with the deficit on their housing repairs account in the subsequent year, the position is that if we were simply to charge this to housing revenue account it would, together with the new provisions in the Bill, mean we were virtually having a doubled repairs expenditure in the one
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year, 1972–73. We should be dealing with the deficit for the previous year in the same year that we were dealing with repairs expenditure for the first time in the housing revenue account on the new system. There would be a double burden on the rates in that one year. It might be said that it is good "conservative" accounting to get rid of that and write it off in one year. The question is, what sort of sums might be involved.
I have been given one example which shows that the amount might not be quite so trivial as one might think. Taking the case of Dumbarton Burgh, at the end of 1971 they had a deficit on their housing repairs account of rather over £105,000, which is equivalent to about £27 per house. It seems to me that that is a not insubstantial amount to be added on to whatever is going to be incurred in the following year. It would in fact more than offset the reduction in the rateborne deficit resulting from the other provisions in the Bill. That is the basic reason why this suggestion has been put forward: that it should be funded and dealt with over a period and that the latter achieves a greater equity as between tenants and ratepayers. That is all I feel inclined to say. I would be perfectly prepared to have another look at this, again without holding out strong hopes. I am perfectly prepared to look into what it might involve in burden on ratepayers of different authorities, but I should not like to hold out too much hope of being prepared to accept alteration of the principle.
8.31 p.m.
LORD HUGHES: I am quite certain that in quoting Dumbarton Burgh the Minister has quoted an extreme case. I can think of perhaps one or two others that might, because of rental policies, have found themselves in a somewhat similar position. I must admit that I should not be happy about throwing so large a burden as £27 per house into the following year's accounts. I think the trouble arises from having the threshold set at so very low a figure as £1 a house. I should like to withdraw these Amendments and come back with some other proposition, perhaps on the basis of giving a discretion to local authorities to apply to the Secretary of State as to the way in which it might be treated, giving the Secretary of State. of course, the final decision on the matter. One would expect this to be dealt

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with so that the sum would not be an undue burden to take during a year. It would be a mistake to fund a deficit in this way. I am not quarrelling about the surplus. I think that the way proposed is the best way of dealing with it. But giving a discretion in connection with borrowing to meet a surplus I think should only be clone where the alternative of dealing with it on a revenue basis would place an unduly high burden on the year in question.
What I would endeavour to do is to produce a proposal fairly early and, instead of tabling it straight away, pass it to the Minister for his comments as to whether he was likely to accept it or, alternatively, if he thought the idea was workable, to produce something along lines which would accomplish an objective of that kind. When I said it was "good conservative finance" I was using the words in the totally respectable, nonpolitical sense and on the basis that one should never borrow to meet to-day's commitments if one can possibly meet them out of income. If you start on the other road you reach a situation where there is no money to meet to-day's commitments because you are up to the hilt in paying previous debts. I should have thought that the last thing that a Minister and accountant would wish to do would be to uphold a heresy of that kind. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Schedule 10 agreed to.
Schedule 11 agreed to.
House resumed: Bill reported, with the Amendments.