§ 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 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 POLWARTHI 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 HUGHESI 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 POLWARTHI 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 HUGHESDo 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 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—
§ 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 BALFOUROne 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 POLWARTHMy 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 HUGHESI 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 POLWARTHThe 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 HUGHESI 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 POLWARTHBefore 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 HUGHESI 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 POLWARTHI 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 ATHOLLMay 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 POLWARTHWith 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 HUGHESThe noble Lord, Lord Polwarth, is not being very helpful
§ Resolved in the negative, and Amend ment disagreed to accordingly.
40§ 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.
39| 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 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 POLWARTHAs 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 HUGHESIf 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 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 POLWARTHI 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 HUGHESBefore 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 POLWARTHThis 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 HUGHESI 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 POLWARTHThis 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 HUGHESAs 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 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 POLWARTHInevitably, 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, 50 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 BALFOUROne 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 HOYI 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.
51 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 ATHOLLI 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 52 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 HUGHESIf 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.
§ BARONESS ELLIOT OF HARWOODThere 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 53 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 BALFOURI 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 54 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 HUGHESTwo 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 BALFOURI am sorry to interrupt the noble Lord, Lord Hughes, but I must point out that the only way 55 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 HUGHESNot 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.
56 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 HARWOODThe 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 HUGHESIs the noble Baroness seriously telling me that in her county 57 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 HARWOODI 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 HUGHESThe 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 POLWARTHI 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 58 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 HUGHESI did not say that.
§ LORD POLWARTHI 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 HUGHESI 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 59 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 moved Amendment No. 101:
Page 37, line 19, leave out from (" registered") to ("the") in line 24.
§ LORD POLWARTHIf 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.
59| 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—
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 POLWARTHAs 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- 62 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 63 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 HOYThe 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 64 £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 POLWARTHPerhaps 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 HOYI 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 POLWARTHIf 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 HOYI 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 HUGHESI 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.
67| 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 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 POLWARTHThe 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 HUGHESI 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 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 POLWARTHBefore 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 HUGHESI 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 LOTHIANAs 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 HUGHESI 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 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 BALFOURDoes 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 HUGHESI 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".
§ THE MARQUESS OF LOTHIANI 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 CHORLEYCould the noble Marquess do better this time?
§ THE MARQUESS OF LOTHIANI 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 HUGHESThe 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 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 LOTHIANI 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 HUGHESContrary 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.
75| 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.