§ 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 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 :
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.
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.5
§ 2.47 p.m.
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- 6 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, 7 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 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, 8 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.
§ Amendment, by leave, withdrawn.
§ 3.0 p.m.
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.
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- 10 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 11 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- 12 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 13 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- 14 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.
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 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 16 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 17 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 18 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 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 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.