HOUSING FINANCE BILL

HL Deb 11 July 1972 vol 333 cc117-219

3.3 p.m.

THE MINISTER WITHOUT PORT-FOLIO (LORD DRUMALBYN)

My Lords, I beg to move that this Report be now received.

Moved, That the Report be now received.—(Lord Drumalbyn.)

On Question, Motion agreed to.

Clause 1 [Introduction of Part I]:

LORD DIAMOND moved Amendment No. 1: Page 1, line 13, at end insert—

(" 2. The special needs subsidy.")

The noble Lord said: My Lords, in moving on to the important Report stage of this Bill, the first thing I ought to do is to remind your Lordships that I requested the Government to be good enough to make a statement with regard to an essential matter within this Bill relating to Birmingham and other corporations, and to express my appreciation to them for having done so. I think the House is now in a much better position to understand the Government's mind and to deal objectively with the Bill.

It might be for the convenience of your Lordships to take with Amendment No. 1, Amendment Nos. 2 and 5, No. 5 being the definition of the special needs subsidy. This is an extremely important Amendment; it goes to the heart of the Bill and, so far as I am aware, meets the objectives of the Government in all respects. The Government have made it clear many times that there is one main objective; namely, to concentrate help where help is needed. And they have made it clear many times that their purpose is to devote to that end the resources which are at present devoted to this purpose. Therefore one has to make sure that this main objective, of concentrating help where it is needed, can be achieved. No doubt the Government will say that this is the main reason why they have devised a series of methods of assistance in the Bill; that is to say, the housing subsidies which are listed in this clause. That is indeed true. But all these subsidies suffer from the same defect as every provision which mortal man makes; namely, that one cannot see the whole of the present, and certainly one cannot see the whole of the future. Therefore it is wise, prudent and cautious to make provision for man's inability so to do and to provide a certain amount of flexibility.

Previous Acts which have provided assistance in the housing field in terms of finance have made this provision: they have provided in general terms that to cover any special case, which either existed at the time and one was not aware of it, or which might crop up in the future and one could not foresee it, it is reasonable and sensible to give the Government the power to look at it and say: "Had we known about that at the time, should we have put it in the Bill?" That is the normal, sensible procedure, and, as your Lordships know, there are precedents for doing exactly this in Section 6 of the 1958 Act and in Section 5 of the 1967 Act.

One wants to give to the Government the necessary flexibility, and to enable them at the same time to do two other things. The first is to provide the finance and the resources which they say it is their intention to provide. At the moment, the Bill does not provide any specific amount, but the Government's estimate is that the cost of subsidies in the future, certainly over a period of about five years, will be the same as it is now, in current cash terms. Therefore it will be less than it is now in resource terms, in real money values, because it is only sensible to anticipate that there will be a measure of inflation over the next five years. If it were to run at the present rate, it would be a very considerable sum indeed. There is no need to define it. It is a matter of common agreement that there will be a measure of inflation, and therefore the amount must be adjusted from present cash terms to resource terms so as to maintain over the period the real purchasing power of the money. In order to do that, it is necessary to provide that, whatever the difference is as the years emerge, whatever additional money is required to maintain the same purchasing power of the previous pound should be available.

By doing this, if this Amendment is accepted, we do not land the Government with any additional expenditure. We merely give the Minister the opportunity in the terms of these Amendments of meeting special need by drawing up to, but not in excess of, the difference between cash terms and resource terms as I have explained them. That is why the words used in Amendment No. 5 are The total of all such payments"— that is the payments which may be needed in order to provide flexibility and to meet special needs— in each year shall not exceed the amount by which … and so on. That is a formula in order to achieve the purpose I have described. That is one of the things I think the Government would want to do, having regard to their frequently-expressed statements that they are maintaining the subsidies, in real terms, which are at present being incurred. The second objective is that they are desirous of concentrating help where help is needed. Additionally, I should have thought the Government would wish to meet the request that has been made for an annual review of housing need. This was a request made from the Government's own Back-Benchers, as well as being pressed by both Opposition Parties. Indeed it is difficult to see how a Government could control the economy in any meaningful way if they had no idea of housing needs or of the resources required to fill them.

With that explanation I now turn to the Amendments themselves. The first one is merely to insert in the list of Amendments provided in the Bill the special needs subsidy, and it is provided at a point where it is to be credited to the Housing Revenue Account. Amendment No. 5 describes the special needs subsidy. Subsection (2) says: It shall be the duty of the Secretary of State to consult with local authorities and new town corporations about their need for housing and the amount of special needs subsidy required, in addition to all other housing subsidies, to meet that need. This is merely a duty. Then subsection (3) says: The Secretary of State may,"— not "must": this is to give the important necessary flexibility— in the light of such consultation, and with the consent of the Treasury,"— I think it is always wise to put in those words— pay to a local authority such sum by way of special needs subsidy as he thinks fit. I have already referred to the next subsection. It describes the limitation placed on the capacity of the Secretary of State to meet special needs in such a way as not to increase the real costs, as anticipated by the Government. Finally, it says that for these purposes a new town corporation counts just the same as a local authority.

I hope this Amendment will find approval and perhaps even acceptance in its present form so far as the Government are concerned. There is nothing in it which is partisan or which is not embodied in the views expressed either by the Government or their supporters. I beg to move.

LORD DAVIES OF LEEK

My Lords, I wholeheartedly support the Amendment of my noble friend. I will try to do so without repeating the arguments that have been used. I should like to point out what I consider to be an important feature of our modern life: the movement of population to South-East England. I happened to look in on the exhibition on Milton Keynes New Town Corporation, which is an excellent exhibition at the Design Centre in the Haymarket. I know that intensive work is being done to attract industry and people to this area, but I will not go into this in depth here. There are many problems involved in the movement of people and in attracting them to the area; and there are also many new problems about the layout of the M.1. I do not wish to be dogmatic, but I feel that there will be a problem over housing new tenants in that new town either in rented accommodation which they can afford or in houses bought at reasonable prices; in other words, if we want to keep the mobility of labour and employment, the matter of housing and the price of housing is greatly involved with trade unionism, wage demands and inflation. Land prices and housing prices are two of the fundamental factors which are causing inflation. There may come a time when the Government—it could well be a Labour Government, or any other Government—might have to reverse their policy about not giving subsidies to meet the economic exigencies of the period in which we are living. I hope that point is fairly clear: in other words, I do not want to make a cheap political point. But the Government have been forced to reconsider their position over giving aid to places of development and to industries, since they have been in power in these last two years. Consequently, to have this Amendment in the Bill, because we cannot foresee the future, would, as my noble friend pointed out, be a "social shock-absorber" to enable the Government to apply a policy of intelligent subsidy if the need arose, without coming again to the House.

3.19 p.m.

LORD SANDFORD

My Lords, I am glad that the noble Lord, Lord Diamond, has opened our debate on the Report stage by concentrating on the main feature of our policy in this Bill. We entirely agree with him that the right thing to do is to concentrate the resources that are being used for housing subsidies at the moment to the areas and the people which most need them. To the extent that the Amendment is an attempt to do that, it is very much more welcome to us than the opening speech the noble Lord made at the Committee stage, which was an argument that the existing system should more or less continue as at present, with adjustments to the ceiling and to the floor; so to that extent these Amendments are welcome, as is the spirit behind them. But special needs, whether they are foreseeable now or unforeseen, are all met (in our view adequately) by the rising cost subsidy; because whatever the need is it will cost money to provide it, and if it costs more money in the succeeding year than the year before, the rising cost subsidy is automatically attracted in whatever amount is required. Any scheme that a housing authority devises and decides to adopt, whether they consult with the Secretary of State about it or not, will attract a rising cost subsidy in the circumstances described in the relevant clause. There is no limit to the amount that this will attract. It will be a varying percentage of the total amount of the rising costs, the greater part being borne by the Exchequer.

The noble Lord, Lord Diamond, made the point that subsidies as a whole will remain at roughly the same level at current prices. Broadly speaking, that is true; but for the authorities who need to continue to build and meet special needs, and to do so to a greater extent, and to whom the rising costs subsidy applies, the situation is very different. That subsidy increases fivefold over the next three years from an estimated £10 million in the current year 1972–73, up to £55 million in the year 1975–76. Those figures are contained in the table of subsidies which we furnished to noble Lords during the Committee stage. There is very clear recognition that there are important needs to be met and that is why such a buoyant subsidy is provided. It is designed to meet special needs and we are satisfied that it will do so.

There remains the question of whether the 10 per cent., 15 per cent. and 25 per cent. share to be borne by the rate fund is tolerable, fair and reasonable in all the circumstances. We had considerable discussion at the Committee stage in which the Urban District Council of Crawley strongly featured. The noble Lord has not introduced that again so I will not introduce it now. We have looked to see whether there will be any authorities which will have a particularly unfair or unreasonable burden to bear on their rate fund and we are satisfied that this is not so. There is provision in the Bill to vary this rate at a later stage (1981) upwards or downwards to a certain extent if that is thought to be necessary.

We fully accept the points that noble Lords opposite are making that there may well be special needs which need to be met in the future. But we are equally satisfied that whatever they may be the rising costs subsidy will meet them. We expect a rise of 500 per cent. over the next three years for the authorities that have special needs and who have to increase their building programme to meet them. I hope that with that explanation, and with that general welcome for the intention behind this Amendment, the noble Lord will not feel it necessary to press it.

3.33 p.m.

LORD DIAMOND

My Lords, I am glad that we are at one as to what the intentions of the Government are. The only question therefore is, "Which is the best way of giving effect to the Government's intentions?" I am likely to recognise the difference between my approach at this moment and my approach at Committee stage. This is why one has two different stages. The stage we are now on is a stage where a wise Opposition, such as is represented by my noble friends and those behind me, will seek to move and, if possible, get accepted Amendments of a kind which the Government, if it were fully wise, would accept. But a Conservative Government will not, of course, accept Socialist policies and therefore one does not attempt that kind of exercise. One has covered the ground in the Committee stage and knows what is possible and what is impossible. We are engaged in the political act of trying to persuade the Government to do what is wise within the broad policy of the Government.

The noble Lord, Lord Sandford, asks me, in effect, whether I am satisfied that what the Government are proposing to do is wise within its own policy objectives. The answer is, "No". It is conceited in the sense that it is saying that it can foresee the future in a way which previous Conservative and Labour Governments did not arrogate to themselves. They did not say that they could foresee the future; they said, "We think it would be wiser to give the Minister power to look at the future when he arrives there in the light of the facts as they have emerged." If any Government ought to know by now that facts are not what you think they are going to be when you come into government, this Government ought to be well aware of that. This is a healthy experience which all Governments go through so I am not making any Party point. I am suggesting that the first point has not been met; namely, that a previous Conservative Government and a previous Labour Government, legislating for similar objectives, decided to give a Minister flexibility. Nobody is saying, "must"; all we are saying is, "may". I would think therefore that on those grounds the Government are not being as wise as they should be.

LORD SANDFORD

My Lords, the noble Lord is quite right, we have legislated for special needs. But we were legislating then for individual dwellings to meet special needs. I must apologise to the House if I did not make the point clear, but the rising costs subsidy embraces all these special needs and the costs involved in meeting them.

LORD DIAMOND

My Lords, I thought that the noble Lord was going to come to the rising costs subsidy and that is why I would have really preferred him not to interrupt me until I had dealt with that. However, I am always anxious to give myself the pleasure of listening to the noble Lord. On the first basis I do not think the Government are being as wise or prudent as their predecessors, from both Parties, were.

The next point the noble Lord makes in resisting the Amendment is that the Bill already provides sufficiently for this purpose. I do not think that it does. I have a simple idea of what sufficient is. Sufficient is 100 per cent, of what I want. Sufficient is not 90 per cent., or 85 per cent., 80 per cent., or 75 per cent. ; nor is it such other sum, possibly lower than 75 per cent., as may be provided. I am, of course, reading from the table in the Bill in which the Government gives rising costs subsidy. The one figure which is absent from that table is 100 per cent. When the noble Lord says that this unexpected cost which may arise will be met by the rising costs subsidy, the answer is that (a) it may not fall in that form at all, (b) even if it were to do so it would only be partly met. For the majority of the years the anticipation is that it would be met as to three-quarters, and one quarter would fall on the rates. I do not think the noble Lord has satisfied me that the Government are wise in resisting the Amendment on those grounds.

I do not think that one need deal with the argument that the rising costs subsidy is going up in total. Of course it is, because other subsidies are going down. As one is talking about the total figure that is not an argument with which I need delay your Lordships. It should not be thought that the view I am expressing is a personal view, or a view only of my Party or this side of the House as a whole. It is the view which was expressed by the Urban District Councils Association as recently as July 7 after—and I hope I may disclose this—they had the great pleasure and privilege of listening to the noble Lord, Lord Sandford.

LORD SANDFORD

Before.

LORD DIAMOND

Before? I am sorry; but the letter has not been withdrawn. This is a resolution passed as notified to me by the Secretary of the Urban District Councils Association at their Annual Meeting. I gather from the noble Lord that they had wisely invited him to address them and explain this Bill to them. There were six items which they resolved. I will read from the beginning: This Annual Meeting of the Urban District Councils Association records its strong support for the representations which have been made to Her Majesty's Government by the Executive Council and regrets that Amendments have so far only been made to the Housing Finance Bill on minor points … I think we can go beyond that now— and calls upon the Government to amend the Bill with a view to securing that … and the item I am concentrating on is this: additional financial assistance is provided for those authorities with an exceptionally high rate burden as a result of this Bill. That is the kernel of the matter. That is the example which I gave your Lordships on the previous occasion in full detail from Crawley.

Crawley is typical of all those cases where there is a small existing stock of houses and a big building programme and where the building programme should continue but will not be able to continue under this Bill unless an enormous burden is put on the rates in the view of Crawley and in the view of the Urban District

Councils Association which, I should add, is not a card-carrying member of the Labour Party. It represents the views of all the authorities gathered together at its annual conference. It takes the objective view that additional financial assistance would be required where there is an exceptionally high rate burden. That is the point I have tried to meet. I am sorry that the Government are not prepared to accept the Amendment. I have tried to explain why the answer given by the noble Lord, Lord Sandford, does not touch the heart of the problem. It is a most important issue and one on which I ought to divide your Lordships' House.

LORD DAVIES OF LEEK

My Lords—

SEVERAL NOBLE LORDS

Report!

LORD DIAMOND

The noble Lord could ask me a question.

LORD DAVIES OF LEEK

My Lords, that is the best way to do it. Could I ask the noble Lord, Lord Sandford, whether he is going to say a word about the possibility of new towns being treated as local authorities? He hinted at it at the end of his speech.

LORD DIAMOND

My Lords, it is very kind of my noble friend to ask that question but he cannot have the answer because the noble Lord, Lord Sandford, has exhausted his right to speak.

3.32 p.m.

On Question, Whether the said Amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 63; Not-Contents, 81.

CONTENTS
Addison, V.	Chorley, L.	Hughes, L.
Airedale, L.	Clancarty, E.	Jacques, L.
Amulree, L.	Davies of Leek, L.	Janner, L.
Archibald, L.	Delacourt-Smith, L.	Kennet, L.
Ardwick, L.	Diamond, L.	McLeavy, L.
Arwyn, L.	Donaldson of Kingsbridge, L.	Maelor, L.
Avebury, L.	Douglass of Cleveland, L.	Milford, L.
Bacon, Bs.	Evans of Hungershall, L.	Moyle, L.
Beaumont of Whitley, L.	Gaitskell, Bs.	Ogmore, L.
Blyton, L.	Gardiner, L.	Pargiter, L.
Brockway, L.	Garnsworthy, L. [Teller.]	Phillips. Bs. [Teller.]
Buckinghamshire, E.	Geddes of Epsom, L.	Royle, L.
Burntwood, L.	Hale, L.	Rusholme, L.
Burton of Coventry, Bs.	Hall, V.	Sainsbury, L.
Champion, L.	Hanworth, V.	Seear, Bs.
Chichester, L.Bp.	Henderson, L.	Serota, Bs.
Shackleton, L.	Southwark, Bp.	Swaythling, L.
Shepherd, L.	Stocks, Bs.	Taylor of Mansfield, L.
Shinwell, L.	Stow Hill, L.	Walston, L.
Slater, L.	Strang, L.	Watkins, L.
Soper, L.	Summerskill, Bs.	Williamson, L.
NOT-CONTENTS
Aberdare, L.	Effingham, E.	Lothian, M.
Ailwyn, L.	Elles, Bs.	MacAndrew, L.
Albemarle, E.	Elliot of Harwood, Bs.	Mansfield, E.
Allerton, L.	Emmet of Amberley, Bs.	Merrivale, L.
Ashbourne, L.	Essex, E.	Milverton, L.
Atholl, D.	Ferrers, E.	Mowbray and Stourton, L. [Teller.]
Balfour, E.	Fortescue, E.
Beauchamp, E.	Gage, V.	Orr-Ewing, L.
Berkeley, Bs.	Gowrie, E.	Redcliffe-Maud, L.
Blackford, L.	Gridley, L.	Redesdale, L.
Bourne, L.	Grimston of Westbury, L.	Reigate, L.
Brentford, V.	Hailes, L.	Sackville, L.
Carrington, L.	Hailsham of Saint Marylebone, L. (L. Chancellor.)	St. Helens, L.
Clifford of Chudleigh, L.		Sandford, L.
Clwyd, L.	Harris, L.	Selkirk, E.
Colville of Culross, V.	Harvey of Prestbury, L.	Shannon, E.
Colyton, L.	Hatherton, L.	Stonehaven, V.
Cork and Orrery, E.	Hawke, L.	Strange of Knokin, Bs.
Cottesloe, L.	Hood, V.	Strathclyde, L.
Cowley, E.	Howard of Glossop, L.	Thorneycroft, L.
Crathorne, L.	Ilford, L.	Tweedsmuir, L.
Cromartie, E.	Jellicoe, E. (L. Privy Seal.)	Vernon, L.
Daventry, V.	Kemsley, V.	Vivian, L.
de Clifford, L.	Kilmarnock, L.	Wakefield of Kendal, L.
Denham, L. [Teller.]	Kindersley, L.	Willingdon, M.
Draumalbyn, L.	Kinloss, Ly.	Wrottesley, L.
Dundee, E.	Lauderdale, E.	Young, Bs.
Eccles, V.	Long, V.

Resolved in the negative, and Amendment disagreed to accordingly.

Clause 2 [The residual subsidy]:

3.40 p.m.

LORD DIAMOND moved Amendment No. 3: Page 3, line 4, leave out ("£20") and insert ("£10")

The noble Lord said: My Lords, this short and simple Amendment again goes to the heart not only of the Bill but of the Government's policy with regard to the Bill. I have already thanked the Government for being good enough to provide the information which every one of your Lordships would naturally want, namely, the information as to how the Government propose to respond to local authorities like Birmingham who have suggested that they should take steps which were outside the contemplation of the Bill. The Government have responded to three authorities: to Birmingham, Newcastle and Hammersmith; and have made it clear that they contemplate, if this Bill should ever become an Act, authorising these authorities to make increases in the rents of their local autho rity houses different from the provisions in the Bill. The Bill provides, of course, that where an authority has not made an increase so far—and of course there will be many authorities which have not because there is no statutory power to require them to do so until the Bill becomes law—there shall be an increase this year, starting in October, of £1 a week so as to provide a total of £26 over the remaining six months of the current fiscal year. One pound a week is what is provided for in the Bill. What is provided for in these various letters, as your Lordships will have seen, is, in the case of Birmingham, 65p; in the case of Newcastle, 35p, and in the case of Hammersmith, 75p. So what the Government are intending to do is to depart not only from the contemplated £1 but from what I think the noble Lord, Lord Drumalbyn, called the carefully integrated arithmetic of the Bill—or words to that effect. Therefore, I must explain this matter to your Lordships and relate what I have been saying to the Amendment which I have moved.

The Bill contemplates an increase in local authorities' income compensated for by a decrease in local authorities' income. The increase in local authorities' income will come from rents. The amount of that increase is the amount the Government require the local authority to add to the rents of their tenants. The decrease in the income of the local authority arises from the decrease in the subsidy. That decrease is the decrease in this particular subsidy which we are now considering under Clause 2—the residual subsidy. Clause 2 provides that this subsidy shall, broadly, if I may use shorthand language, be reduced by £20 per local authority house in each of the first two years and then £10 a year thereafter until it is wiped out. That is the correspondence. If your Lordships say to me, quite properly, that £20 does not correspond precisely with £26, that is of course right; but the contemplation was that £26 put on to a local authority house would not be paid by every local authority house. There would be some loss of rent, some empty houses, and so on. So to round the figure off, it would be reasonable to contemplate an additional income of £20 coming to a local authority as a result of increasing the rent by £1 a week.

It follows from that—does it not?—that if the rent is not increased by £1 a week you do not get your £20. In fact, if the rent is increased by much less than £1 a week—for example, by the 35p proposed in the case of Newcastle—you get much less than that. That is approximately a third; 65p, as in the case of Birmingham, is two-thirds; 75p (Hammersmith) is three-quarters. So in everyone of these cases where a local authority has applied to the Government, and the Government have given their view, the increase will be somewhat, or substantially, less than the £1 contemplated. Now your Lordships understand why I say that this upsets the closely integrated arithmetic of this Bill.

Therefore, I have two duties. The first is to try to make the Government's Bill work, so far as I can, and the second is to ask the Government what are their intentions. In order to try to make the Government's Bill work, if the income is not increasing by as much as was contemplated, in order to keep the balance one should try to ensure that the decrease in income is not as great as was originally contemplated. What was originally con templated was a £20 per annum reduction in the residual subsidy. Your Lordships will immediately understand why I am suggesting in this Amendment that, instead of £20, we should have £10. That is the reason for the Amendment. We have been through part of this argument before, but of course when we went through it last time we had no idea what the Government were going to say with regard to Birmingham and the other areas. The Government's reply in our earlier Committee stage discussion was that there is no need to reduce the £20 to £10, because this falling away is automatically picked up in a transitional subsidy. There is, indeed, a further subsidy, called the transition subsidy, which your Lordships will find provided in Clause 3. But, again, with a rather simple, down-to-earth approach I observe that the transition subsidy provides for 90 per cent., 85 per cent., 80 per cent., 75 per cent. or less than 75 per cent. of the amount at issue. One figure which one does not find in the table on page 4 is 100 per cent. So the first thing one is bound to say is that this difference is not picked up in whole by the transition subsidy.

Of course, it is right to say that it is picked up to the extent of three-quarters or more by the transition subsidy, and therefore from that point of view no great cost would fall upon the Government if the Government were to accept this Amendment: the difference is not all that great. Therefore, I am suggesting to the Government that they ought to accept this Amendment so as to keep their arithmetic more or less integrated as it was originally. I am bound to remind your Lordships that the whole of the Bill is predicated on that basis: that there is a compulsory increase in local authority rents matched, as near as may be, by a subsidy. So if the increase in rents has to be varied, so has the subsidy; and the way to make this subsidy compensate for the variation in the rents is to vary the subsidy broadly in the way I have indicated. I can only speak broadly because I do not know what is in the Government's mind in regard to other cases. One only knows of these three replies.

It may well be that there has been a flood of local authorities writing to the Government and saying, "Would you please indicate what direction you would give us in our particular case?". If there has not been a flood, one can safely forecast—as a Biblical figure also forecast—that there certainly will be a flood. There will be a flood of applications from local authorities who will say, "What is good enough for Birmingham is good enough for us". Indeed, there will be a flood of local authorities saying, "Nobody can understand the basis on which you have said for Birmingham one figure, for Hammersmith another figure, and so on." Nobody can understand that, for the simple reason that the Government have not given it. Therefore, every local authority will write in and say, "We interpret your remarks to Hammersmith"—or whatever the case may be—"in the following way, and in our case instead of £1 increase we are suggesting 35p"—or 50p or whatever the case may be.

In short there will be—as one suspected when one started on this Bill—chaos so far as local authority rent arrangements are concerned: chaos and, to make it worse, immediate chaos, because this Bill provides that the new rent demands shall go out on October 1. Before the rent demands go out the local authority, the council, has to approve it. Before the council has to approve it the local authority officers have to make their examinations. This will take time. There are 5 million local authority tenants. Before the Government can require any local authority to take one step they must have their Act—and we are still in your Lordships' House discussing a stage in the Bill. If this Bill becomes an Act before August, I shall be very surprised. The council will need to have their meeting in September in order to authorise the rent demands to be paid by October 1.

I hope your Lordships do not think that I am using extravagant language when I talk about "immediate chaos". One anticipated chaos and now it is upon us. This arises partly from the structure of the Bill and partly from the complications which the Government have got into for political reasons, upon which one need not expand at length. All I am doing is trying to make sense of the Bill, so far as one reasonably can; trying to keep the arithmetic somewhat integrated, which the noble Lord, Lord Drumalbyn, said was the key purpose of the Bill, and in particular trying to find out, if the Government will be good enough to let us know, what they now intend to do about the Bill. I beg to move.

3.54 p.m.

LORD AVEBURY

My Lords, I have tried, time and time again, without success, to impress on the Government the difficulties which local authorities will face as a result of the delays in announcing what is to be done with regard to the authorities which can prove to the satisfaction of the Government that 2 per cent. of their tenants would be above the fair rents limit and that therefore they should be entitled to increase their rents by some lesser amount than that provided for in the Bill. The Government have ignored this argument, and here we are, in the middle of July, with only three authorities having been informed what they are going to be allowed to do, but with many others in the queue. Some of them will have heard the speech of the Secretary of State over the weekend (I know that my own local authority, Bromley, is one of them, and there are some dozen others which are still waiting to hear from the Government) and as the noble Lord, Lord Diamond, has just said, it is obvious that as soon as anybody in the local authority world reads these figures in the papers they will ask their treasurer and the director of housing of the local authority to do the necessary calculations so far as their borough is concerned, in order that they may put in a similar application.

But local authorities do not normally meet in August, so by the time their applications are in and the Government have considered them one is speaking about September. Then local authorities must have a housing committee meeting, and as I have already said to the noble Lord, Lord Sandford, I do not know how he expects local authorities, within two weeks of the date on which these notices have to be sent out to all their tenants, to ensure that all the paper work and all the chief officer's work is done and the clerical procedures are gone through. I would beg the noble Lord to be good enough to deal with this point now, because we are getting to a very late stage in the proceedings. It is physically impossible, my Lords, and many people in local authorities have told me that they just do not know how they will cope with it. If the Government will only get that point into their heads I think we shall have done a good day's work.

With regard to this Amendment, the noble Lord said that broadly speaking it would help to meet the new situation which has arisen in cases where there was formerly an income from the rents which was balanced by a decrease in the residual subsidy, and the two cancelled one another out. Now there is a situation where, at least so far as three authorities are concerned, some lesser amount will be received in the form of rent increases but the subsidy structure on which those rent increases are supposed to be based remains the same. I think the noble Lord is right in saying that this only broadly does justice to the situation, because here we have three authorities with increases permitted of 35p in one case, 65p in the second and 75p in the third, and if one took an average of those figures perhaps his figure of £10 would be about right.

What the Government ought to do is to take this clause away and produce a re-draft so that the figure of £20 is replaced by a percentage of £20 which would vary according to the level of the agreed rent increases for the year 1972–73. In the case of Newcastle, for example, the amount would not be £10 but 35 per cent. of £20; that is, £7. I think the noble Lord, Lord Diamond, who is an accountant, will agree that my arithmetic is correct. So while his figure of £10 goes part of the way towards meeting the difficulties that the local authorities will face, it does not entirely cover the situation of Newcastle.

LORD DIAMOND

My Lords, will the noble Lord allow me? I might just explain that the information about these three councils has only just arrived and the Amendment had to be tabled in anticipation.

LORD AVEBURY

My Lords, I was not blaming the noble Lord for not having anticipated what the Government would do. I do not think anyone could have guessed, because there was certainly no indication when we tried to discuss the matter earlier, during the Committee stage. The Government would not let us into their thinking at that stage, and it might have been any figure, so I hope the noble Lord will not think that I was criticising him for not having a crystal ball into which he could look and guess what the Government were going to do. If the figures are so variable in the case of the first three authorities, is it not possible to contemplate an even wider spread in the case of the remaining councils which are still in the queue? May it not be, for example, as low as 20p in the case of an authority which is in the more extreme situation than Newcastle? I do not know whether the noble Lord can give us any further information about the authorities in the queue, but I think he should deal with that point in order to enable us to see whether the figure of £10 is going to do the trick or whether, alternatively, we should insist that the Government should take away this clause and come back with something that meets the immense variability that is involved here.

4.0 p.m.

THE EARL OF BALFOUR

My Lords, in regard to this Amendment I think it is important to realise, from what the noble Lord, Lord Diamond, has said, that if these three authorities do not need to increase their rents by £26 in the year 1972–73 they surely do not need the residual subsidy as much as some of the other authorities. These three authorities obviously do not have deficits on their housing accounts. The difference is that we on this side of your Lordships' House have always believed that it is much more important to subsidise people in need than to subsidise houses in principle. If these authorities have reached the stage of almost fair rents—in other words, they need to put up their rents by between 35p and 70p during the rest of this year—then they are not in the same position as other authorities with big building programmes who need to rely on the subsidies laid down in Clause 1. I do not think there will be any hardship. I am interested in the people, and if the accounts balance, that should be all that matters.

4.2 p.m.

LORD SANDFORD

My Lords, I am glad that the noble Lord, Lord Diamond, raised this question early in our discussions on Report because it is as well for us to consider this subject at this stage and I hope that the House will think it appropriate if the debate ranges rather wider than the Amendment. I think the noble Lord will agree that his speech went considerably wider than the clause in question, and this is probably the best way to deal with the matter.

The noble Lord, Lord Diamond, asked me what we intend to do about the Bill. The short answer is that we intend to enact and implement it after all the due Parliamentary processes have been completed. I would not want there to be any doubt about that. Because we believe that the system of housing finance which we have devised and incorporated in the Bill is a big advance on the existing incoherent and unfair system, we are anxious to make the transition with all due despatch. That is why, apart from the other points which the noble Lord raised, we have introduced a withdrawal factor which will have the effect of completing the transition twice as fast as the withdrawal factor which he is asking us to put in the Bill. Any reduction of that figure would have the overall effect of spreading the period of transition from what we believe to be a bad and unfair system of housing finance to one which we believe is fair. We want to get on with it and to make the transition quite briskly.

The noble Lord, Lord Diamond, spoke rather as though the increase of rents by £1 in October of this year was the standard and only way of proceeding towards fair rents. In fact, 2 million council houses have had their rents increased by 50p this April as part of the progress to fair rents, so those are already finished and dealt with as far as the first stage of progression to fair rents is concerned.

LORD DIAMOND

My Lords, is the noble Lord saying that it is not open to these councils to apply to the Government under Clause 62(4) for a direction which would enable them to pay less than that during the remainder of the year?

LORD SANDFORD

My Lords, they are already paying it. If they thought it necessary to have a direction to pay less, then that is something they could go into; but I would suppose that they would not be in the exceptional circumstances of the authorities about which we have been talking—

LORD DIAMOND

Will the noble Lord answer my question?

LORD SANDFORD

—and to which I will come later. They have already made their increases.

LORD DIAMOND

My Lords, I am sorry if I did not make my question clear. I asked whether the local authorities in question would not be entitled, in the light of new information which they may have, to come to the Government under the Bill and seek a direction under Clause 62(4) during the remainder of the year.

LORD SANDFORD

The clause is there and it entitles any authority to make such an application. On the other hand, if they have already increased their rents by 50p in April, presumably they think that that is appropriate in the circumstances as set out in the Bill and envisaged in the White Paper. What we are concerned with now are the remaining authorities for which an increase of £1 in October is required under the Bill because they have not made any other increases in the preceding period. The direction that the increase can be less than £1 in October for those authorities which have not made an increase in the preceding period is within the scope of the Bill. It is provided for in a clause to which we have not yet come but to which the noble Lord, Lord Diamond, rightly referred. Clause 62(4) provides for authorities which find themselves in the exceptional circumstances where a progression of £1 would take more than a certain proportion of their tenants' houses over the fair rent—and because the purpose of the Bill is that rents should be at the fair rent level, it is obviously undesirable that we should do anything which would push fair rents above that level.

The authorities in question are exceptional, and I will expand on that later. I wish, first, to deal with the question of the shortfall that is occasioned by a rise of less than £1 in October for those authorities which have not made any increase towards fair rents up to now. This again is provided for in the Bill, as the noble Lord said, by the transition subsidy, and I am glad of this opportunity to explain the position more fully. Under Clause 3, which allows for the transition subsidy, if there is a shortfall between the increases of rents on the one hand and the reduction of subsidies on the other by the application of the withdrawal factor to the residual subsidy, then that shortfall is precisely what the transition subsidy is designed to meet. If the shortfall occurs in this first year, the transition subsidy is available at the rate of 90 per cent. The fact that the shortfall or part of it may be occasioned by a direction to increase rents by less than £1 in October does not alter the situation in the least. Whatever causes the shortfall, it is made good by the transition subsidy at the rate of 90 per cent. That therefore takes care of the shortfall, in the same way as it will take care of any shortfall, however caused.

The question envisaged in the noble Lord's remarks concerned the exceptional nature of the cases that have been put before us. It may well be that other authorities will apply, but they will have to make a case to show that they are exceptional. It may help if I indicate the position that these particular authorities are in: Birmingham were able to show that their average current rents were 60 per cent. higher than the rest of the West Midland region; Newcastle council rents are 80 per cent. higher than the average for the whole of the Northern region; and the average current rent in Hammersmith was 90 per cent. higher than the average London Boroughs. It is certainly true that there may well be other exceptional authorities and they will be entitled to apply for an indication in the first place, and when the Bill is law for a direction, that their increase should be less than £1. But they will not get the direction unless they are in a situation of that kind. Noble Lords will see at once that the exceptional situation of Birmingham, Newcastle, Hammersmith, and others like them, will certainly rule out any question of a great avalanche of applications for directions of this kind.

LORD AVEBURY

My Lords, I am most grateful to the noble Lord but there must be something more to this than the figures he has given, because if Birmingham was 60 per cent. higher than its region, Newcastle 80 per cent. and Hammersmith 90 per cent., one would have expected the increases agreed by the Government to have gone in that order—Birmingham being the highest and Hammersmith the lowest, whereas in fact Newcastle is the lowest and it comes in the middle of the three authorities he has given. What other factors, therefore, were taken into account apart from the relation of the rents charged by those authorities to others in the region?

LORD SANDFORD

My Lords, a large number of factors were taken into account, but the broad point in answer to the noble Lord is that the argument he is putting forward now would apply only if the average rents for the whole region were at fair rent level; it is because they are not that you get this kind of variation.

The only other point I want to make in dealing with this question of the authorities who are in an exceptional position, with rents of 60p, 80p and 90p higher than the average in their area, is the fact that at the moment we are doing no more than giving an indication of what kind of direction can be expected when the Bill is law. That, of course, is not a direct indication of what fair rents will be determined in these authorities when that particular stage is reached. That is not something with which the Secretary of State is concerned. All we are concerned to do in applying this direction in these exceptional circumstances is to try to ensure that the first stage of progression towards fair rents does not take the rent above fair rents.

I do not know whether there is any other point I have overlooked which I could deal with. What I was seeking to do was to make it clear that the transition subsidy fully provides for any shortfall that is created for the authorities who receive this direction, they being in this exceptional position. There may well be others (but not perhaps as many more as people think) who can show that they are out of line in this way compared with other authorities in the same area. But just to go back to the main point of the Amendment itself, I confirm that we would not be ready to accept this Amendment because it would have the effect of slowing down the whole transition from the existing system of housing subsidies to a new system which we believe is far fairer.

BARONESS GAITSKELL

My Lords, is it not extraordinary that the Government have not got a clue as to which authorities and how many authorities will be in the queue asking for special treatment? It really is the most extraordinary thing. Here is a Bill which we are told will become an Act in a month or so and the Government have no idea how many authorities are going to ask for special treatment. I should like to make one other point in connection with a remark made by the noble Earl, Lord Balfour. He said that the Bill was for people and not for houses. I believe, my Lords, this is the most phoney distinction that any Government could have thought up.

LORD GARNSWORTHY

My Lords, the Bill is designed to produce profit-making rents. But I should like to take up the noble Lord, Lord Sandford, on his closing sentence when he dealt with the Amendment and said that it would have the effect of slowing down the transition from the present system to the one envisaged in the Bill. That is the best of all reasons why the Government should accept this Amendment. I am quite certain that the noble Lord has no idea of the trouble that the Government are creating for themselves making quite clear, as he did in his opening remarks, that nothing will hinder them in their intention to enact and to implement this Bill. I should have thought that they had had ample warning recently from the T.U.C., as well as from other people, that they really ought to consider delaying this Bill: that they ought to recognise, particularly at this time when the Government are clearly anxious to secure agreement to measures to meet the appalling situation in regard to inflation, that to call upon local authorities to impose a £1 a week increase next October is to create an atmosphere where trade unions are going to find it impossible to persuade their membership to do other than to demand wage increases to meet an imposition that is bound to lower their standards of living. That has to be faced and I do not think it has been faced on the other side of this House or by the Government.

It will be said that people can afford an increase of £1 a week in rent. Indeed, it was said in the Scottish debate only yesterday that they can afford it as they have had these wage increases. To talk like this is to have no regard at all to the other commitments into which they have entered or to the standard of living that they are accustomed to enjoy—none at all. Let us place this squarely on the Record: if this Government proceed in the spirit indicated by the noble Lord, Lord Sandford, in his opening remarks, then they are heading for trouble so far as the rank and file of the trade union movement is concerned, regardless of what the leadership might have to say. Do not think that anybody who rubs shoulders with the ordinary wage-earner is in any doubt at all about this. Let us not be too bemused by the rebates and the allowances, because as soon as any worker gets an increase in wages he is going to be re-assessed and his entitlement to an allowance or rebate thereby reduced.

LORD DRUMALBYN

My Lords, I wonder whether the noble Lord will give way on that point? It is important to realise that it will be reduced by only a proportion of his increase; that is, 17 per cent.

LORD GARNSWORTHY

My Lords, I do not think the noble Lord, Lord Drumalbyn, has taken the point which the noble Lord, Lord Hughes, was trying to make yesterday, that a man is also going to pay more income tax. Neither is the point taken that his entitlement to the benefits will also be affected. It is too easily assumed that this is not going to hurt; but it is going to hurt a growing number of people as they approach a reasonable wage level. The noble Lord, Lord Sandford, said that already 2 million tenants were paying the 50p a week increase. That leaves 3 million to deal with. But I gathered that he was referring to those 2 million when he said that presumably the housing authorities concerned were satisfied that the 50p increase was justified. I attended a housing conference over the week-end; it was a Labour Party conference, with a very considerable number of representatives from all local authorities, many of them under Labour control. Many of them were biting their fingers that their predecessors had imposed this 50p increase. If anybody is under any illusion that the number of authorities who are going to ask what Birmingham, Newcastle and Hammersmith have asked will be relatively small, then he is in for a shock—and it is not the only shock that he will get on this front.

Let us take the time factor to which my noble friend Lord Diamond referred. The Government are asking authorities who did not impose the 50p increase in April to impose a 100p increase in October. I wonder whether the Government think that the authorities will be able to cope with all the work. I do not think they realise that it is going to be practically impossible, if this unwanted Bill is carried through, for authorities to do all that will have to be done, in time to say on October 1, "We have made all necessary preparations for it." I think nobody who is familiar with the difficulties of local government, nobody who is familiar with all the problems in dealing with tenants, views this other than as a rushed Bill. It is a Bill which in a quite dramatic way changes the whole basis of local authority housing. It is changing it from a public service to a profit-making sector, and the Government would do well to take the advice my noble friend has tendered, and, in the words of the noble Lord, Lord Sandford, to use this Amendment in order to slow down the process. If they do not, they will certainly live to regret their haste.

4.23 p.m.

LORD SANDFORD

My Lords, with the leave of the House, perhaps I may answer a few specific points. The noble Baroness, Lady Gaitskell, asked me about the number of authorities involved. Nineteen have made firm applications, and about fifteen have made preliminary inquiries. Several of those in that first category will receive an answer within a week or so.

LORD AVEBURY

My Lords, it would help me a great deal if the noble Lord could tell me about the situation in London. Since Hammersmith has had an increase of 75p agreed, on the basis that its average rents are 90 per cent. above those for London boroughs generally, do I take it that any authority that can show that its average rents are 90 per cent. higher than the average in Greater London as a whole will receive the same concession as Hammersmith? And if they are 80 per cent. higher than the Greater London average, will they be allowed a pro rata increase? If the arithmetic is so simple, I am sure the Minister could reply and tell the local authorities where they stand, including my own.

LORD SANDFORD

I think the noble Lord will hear before very long. It is 90p higher; I must apologise if I said 90 per cent.

LORD AVEBURY

But is that so? If another authority showed that it was 90p higher would it also be allowed to increase its rents by 75p?

LORD SANDFORD

No; it does not follow. Different authorities have different housing stocks, and all the factors that come into the calculation of a fair rent have to be taken into account. One cannot treat the matter in that simple way. Several authorities that have made firm applications will hear quite soon.

The noble Lord, Lord Garnsworthy, widened the debate, but perhaps it would help to get the changes and the steps in October into perspective if I stressed again the effect as it appears on individual tenants. On Second Reading I invited the House to consider the effect of this Bill on an average group of ten council tenants. Two are already drawing supplementary benefit, so they are not affected by the changes; two already have or will have a rebate under this Bill, and their rent burden may well be reduced, and certainly it will not be increased by anything like the full amount; four of these typical council tenants have already had an increase of 50p in April. So we are talking about two out of ten who may face an increase up to £1. But it may not be the full amount because some of those have already had the rent increase in the latter part of the year—G.L.C. tenants for instance.

LORD GARNSWORTHY

Would the noble Lord allow me to make this point? This has got to be established and each tenant has to be dealt with; nothing can be taken for granted. With regard to those who had a 50p increase in April, they are due for reassessment. I have here local authority forms sent out to tenants making this quite clear.

LORD SANDFORD

I am simply painting the picture in broad terms to get it in perspective. The noble Lord chided us with having rushed this. We are now enacting a Bill which is very close to the intentions issued in our White Paper on July 19, 1971, nearly a year ago. I cannot think this is undue haste. It is all reasonable and due despatch.

LORD DIAMOND

My Lords, it is my duty to explain to your Lordships why I regard the noble Lord's answer as wholly inadequate and unsatisfactory. If I may start off with the part on which we are agreed (this is always a good basis for starting), we are agreed that this Bill should be enacted with all due despatch. It may surprise your Lordships to hear me say that, but this Amendment is intended to enable this Bill to be enacted with all due despatch. Of course, what we have to consider, and what the local authorities have to consider, and what their staffs in particular have to consider, is what is due despatch. There is nothing in this Amendment which alters the principles of the Bill. This Amendment merely slows down the putting into effect of the Bill.

Before I go into the reasons why it should be slowed down, and why everybody other than the Government thinks it should be slowed down, may I deal with some of the points made by the noble Lord?—because they have to be corrected, I am afraid. First of all, he said that there is no need to have regard to the imbalance of the arithmetic because the transition subsidy takes this into account. The answer is that it does not. He said that it takes it fully into account. The answer to that is that it certainly does not, and for two reasons: first, because the transition subsidy starts off with 90 per cent. and is on a reducing percentage; secondly, because the transition subsidy is paid only when the Housing Revenue Account justifies it. The noble Lord will correct me if I am wrong. So in two respects I stand uncorrected in saying that there is less than 100 per cent., the figure starting at 90 and falling to 75 or less; and even that calculation does not result in a cheque being sent if the Housing Revenue Account itself is in deficit or is in such circumstances as to justify a cheque. So one cannot wholly rely on the transitional subsidy and one cannot rely on it at all in certain circumstances. So much then, for the transition subsidy.

Now may I deal with the problem of the date of enactment? The noble Lord said, absolutely correctly, that what the Government have written to these local authorities is an indication of what they will say, or may well say, when the Bill becomes enacted and they have power to say it. At the moment they have no power to say anything effective, and the situation is that this information about these new rates by which rents must be progressed or increased has been made available over the weekend; it is in to-day's Hansard of your Lordships' House—in reply to a Question put down by me and answered with exemplary speed yesterday—and is in your Lordships' hands to-day. It is not surprising, therefore, that many local authorities did not know about this when they decided to increase their rents by 50p a week months and months ago. I am afraid I am not impressed with the noble Lord's argument about those local authorities which have already increased their rents by 50p, but that does not matter, because the noble Lord has been good enough to confirm that, whether they have or they have not, they are equally entitled with those which have not made any increase to make an application to the Minister for a direction under Clause 62(4) in the amended Bill now before your Lordships.

LORD SANDFORD

My Lords, may I make a point here? They are entitled of course, but in their case it will not take effect until April next year.

LORD DIAMOND

My Lords, it would not take effect until April next year, but the subsidy, under this Amendment, covers 12 months. April next year covers the 12 months from the start of the Bill. So April next year would be probably half-way, and that does not deal with the situation. We are saying, with the Government, that this Bill should be enacted with all due despatch. May we now inquire what is due despatch? The first persons to whom this inquiry should be made are the local authorities themselves and they have no doubt what due despatch is. May I refer to a resolution passed last week by the Urban District Councils Association at their annual meeting? One of the elements in it (and I have read the preamble before) was: To ensure smooth transition to the new system, local authorities should be allowed to phase increases towards fair rents, where this is necessary, over a longer period, with corresponding provisions for the withdrawal of existing subsidies to be more slowly phased than is envisaged. This is the Urban District Council's Association being bang up to date and saying "Please will you see to it that the withdrawal of existing subsidies is more slowly phased than is envisaged?" The Amendment before your Lordships' House is to do precisely that. That is what the Urban District Councils Association thinks, and there are other councils which may be concerned. The Association of Municipal Corporations has expressed its view. The Association has always maintained that in this Bill the Government are attempting to do too much too quickly. If I may, I will read out some lines because I think they go to the heart of the situation. We are not talking about voiding the Bill or preventing its being enacted; we are talking about the speed at which it is reasonable to implement the Bill. The Association said, "The Government are asking too much of local authorities and particularly their staff." I need not tell your Lordships that this is not only a question of the Housing Finance Bill. Local government accept and is prepared for the implementation of major reforms at different periods of its history, but to impose upon staff a major reform in housing at the same time as major reforms in organisation of local government itself, health and social services, and the water and sewerage services, is to place on local authority staff unreasonable burdens and stress.

I have read out what the Association of Municipal Corporations have written to me and to their Vice-Presidents on both sides of the House. The noble Lord, Lord Ilford, will have had a copy of that letter; the noble Lord, Lord Milverton will also have a copy. I have referred to what the Urban District Councils Associations resolved at their annual meeting last week and I should have thought that was pretty good authority. All the relevant councils' associations are saying that this Bill is going too fast. I should have thought that was pretty good authority and that the Government would want to bear it in mind. So I really do not need to do more than repeat what my noble and learned friend, Lord Gardiner, said about the excessive speed with which the Government are trying to implement the Bill. It is not going to throw them out at all if they accept this Amendment and agree to spread the timing over a longer period; it is merely going to move a little more slowly. As they themselves have said, it is not going to put a great burden on the Exchequer, it is just moving a little more slowly.

Local authorities are up in arms already at the policy behind the Bill—which we cannot alter—and it is a little unwise to rub salt into the wound by putting an impossible burden on local authority staffs at a time when they are taking their annual holidays. As the noble Lord, Lord Avebury, made clear, most local authorities do not meet in August; this is the period when their staff traditionally go on holiday. So I repeat, the Government are asking for chaos in this Bill. People who now see what is happening to these three authorities and the rates they require are going to ask themselves: "How do we fit in?". As the noble Lord, Lord Avebury, said, all the London Boroughs are going to ask themselves this question. The noble Lord, Lord Sandford, said quite rightly that one cannot simply transfer 90p, and the noble Lord, Lord Avebury, did not expect that one could, but there is not a single London borough which is paying 90p over the average or indeed, 80p or 75p over the average, which will not say: "How does this apply to out authority? We had better make an application to the Government to find out". What the noble Lord forgot to explain to your Lordships was that the clause which empowers the Government to make a direction was not introduced until a late stage in the House of Commons, and it did not appear in the original Bill. Those who earlier put on 50p had probably no idea at the time that there would be a variation in the Bill which might now affect them. So I really do not think that the noble Lord, Lord Sandford, has been as candid as we would wish him to be. But, for whatever reason, he has to stick to his brief and we stick to our view that the local authorities know best. They know best what their staffs can stand. If the noble Lord is not prepared to give way, we shall have to divide the House.

4.41 p.m.

On Question, Whether the said Amendment (No. 3) shall be agreed to?

Their Lordships divided: Contents, 61; Not-Contents, 89.

CONTENTS
Addison, V.	Gaitskell, Bs.	Royle, L.
Airedale, L.	Garnsworthy, L. [Teller.]	Rusholme, L.
Archibald, L.	Geddes of Epsom, L.	Sainsbury, L.
Ardwick, L.	Hale, L.	Seear, Bs.
Avebury, L.	Hall, V.	Shackleton, L.
Bacon, Bs.	Henderson, L.	Shepherd, L.
Beaumont of Whitley, L.	Heycock, L.	Shinwell, L.
Beswick, L.	Hoy, L.	Simon, V.
Birk, Bs.	Hughes, L.	Slater, L.
Blyton, L.	Jacques, L. [Teller.]	Snow, L.
Brockway, L.	Lloyd of Hampstead, L.	Stocks, Bs.
Buckinghamshire, E.	McLeavy, L.	Swaythling, L.
Burntwood, L.	Maelor, L.	Taylor of Gryfe, L.
Champion, L.	Meston, L.	Taylor of Mansfield, L.
Chorley, L.	Milford, L.	Watkins, L.
Crook, L.	Moyle, L.	White, Bs.
Davies of Leek, L.	Nunburnholme, L.	Wootton of Abinger, Bs.
Delacourt-Smith, L.	Pargiter, L.	Wright of Ashton under Lyne, L.
Diamond, L.	Phillips, Bs.
Douglass of Cleveland, L.	Platt, L.	Wynne-Jones, L.
Faringdon, L.	Popplewell, L.

NOT-CONTENTS
Aberdare, L.	Elliot of Harwood, Bs.	McFadzean, L.
Ailwyn, L.	Emmet of Amberley, Bs.	Mansfield, E.
Albemarle, E.	Essex, E.	Mar, E.
Alexander of Tunis, E.	Ferrers, E.	Mersey, V.
Allerton, L.	Fortescue, E.	Milverton, L.
Ashbourne, L.	Gage, V.	Mowbray and Stourton, L. [Teller.]
Atholl, D.	Gainford, L.
Balfour, E.	Goschen, V.	Moyne, L.
Beauchamp, E.	Gowrie, E.	Napier and Ettrick, L.
Belhaven and Stenton, L.	Grenfell, L.	Northchurch, Bs.
Belstead, L.	Gridley, L.	Nugent of Guildford, L.
Berkeley, Bs.	Grimston of Westbury, L.	Polwarth, L.
Brentford, V.	Hailes, L.	Rathcavan, L.
Brooke of Cumnor, L.	Hailsham of Saint Marylebone, L. (L. Chancellor.)	Redesdale, L.
Clancarty, E.		Reigate, L.
Colville of Culross, V.	Hankey, L.	Rhyl, L.
Colyton, L.	Hanworth, V.	Roberthall, L.
Cowley, E.	Harris, L.	St. Helens, L.
Cranbrook, E.	Hatherton, L.	Sandford, L.
Crawshaw, L.	Hawke, L.	Selkirk, E.
Cromartie, E.	Howard of Glossop, L.	Stonehaven, V.
Daventry, V.	Ilford, L.	Strang, L.
Davidson, V.	Kemsley, V.	Strange, L.
de Clifford, L.	Kilmarnock, L.	Strange of Knokin, Bs.
Denham, L. [Teller.]	Kindersley, L.	Strathclyde, L.
Drumalbyn, L.	Kinloss, Ly.	Teviot, L.
Dundee, E.	Lauderdale, E.	Vernon, L.
Dundonald, E.	Long, V.	Vivian, L.
Dunleath, L.	Lothian, M.	Wakefield of Kendal, L.
Eccles, V.	Loudoun, C.	Young, Bs.
Elles, Bs.

Resolved in the negative, and Amendment disagreed to accordingly.

4.49 p.m.

LORD SHEPHERD moved Amendment No. 4: Page 3, line 25, leave out from (" question") to end of line 35.

The noble Lord said: My Lords, I am moving this Amendment on behalf of my noble friend Lord Diamond, and I make no apology to the noble Lord, Lord Byers, for the fact that it is in similar terms to an Amendment which I moved in Committee. Subsection (4) of Clause 2 deals with an authority's subsidies for the year 1971–72 and provides for some exclusions. One exclusion is defined in paragraph (c), which refers to subsection (5), and would mean that subsidies for hostels, to which I am certain the House attaches great importance, would be phased out as a consequence of the Bill. We have already had a very good debate on this matter and Ministers have undertaken to look at it. I feel that it was right to put down this Amendment, and I am indeed glad to see that the name of the noble Lord, Lord Drumalbyn, is also attached to it. Just to make certain that there had been no misprint I went through the remainder of the Marshalled List and was delighted to find that there are subsequently some 33 consequential Amendments to this one. Therefore the Government have accepted at least the first of the issues we have put to them. I hope that the Government will not only move subsequent Amendments which again meet points of view expressed on this side of the House, but will also look very carefully at what is said on Report.

I have always believed that if at first you do not succeed you must try and try again. I think that this is one of the lessons that the noble Lord, Lord Byers, could learn; because I think in Committee he objected strongly to the fact that we were moving Amendments which had previously been moved in the House of Commons. We have succeeded where the House of Commons undoubtedly failed. I am pleased that this success will be a lesson to the noble Lord, Lord Byers. It will perhaps help him to participate more frequently in important Committee stages. I hope that the noble Baroness, Lady Young, will speak here on behalf of the Government because she was put in on a very difficult wicket during the Committee stage. I hope that she will reply, because I think it would be discourteous and ungentlemanly of the noble Lord, Lord Drumalbyn, to intervene at this stage. I beg to move.

LORD AVEBURY

My Lords, before coming on to the Amendment I should make some reply to Lord Shepherd who has mentioned my noble friend on no less than three occasions during the course of his short speech. What my noble friend actually said was that matters which were dealt with in another place should not be ventilated further. I would remind your Lordships that when the question of hostels first came before the Standing Committee, Mr. Channon, who replied on behalf of the Government, said that that was not the place to talk about hostels and that they should be raised on Clause 73 or Clause 75. But those noble Lords who have read the whole of the Committee stage will remember that when they got to Clause 73 or 75 the guillotine had fallen and therefore Members of another place were given no opportunity of discussing the question of hostels in any detail. Therefore I am sure that my noble friend would agree that it was right for the matter to be taken up in this House and for the encouragement to be given us by the noble Baroness, Lady Young, to pursue the matter from Committee stage to Report stage. There is nothing improper in that. I am sure that my noble friend will be as delighted as I that we have apparently succeeded.

As I look at the name of Lord Drumalbyn attached to this Amendment, I feel that he has no idea what a tremendous relief this is to associations such as the Y.M.C.A. (who are trying to do their best to provide hostel accommodation, largely for single people) and to others in local authorities. I have a letter from the secretary of the Huddersfield Y.M.C.A. saying that he heard this news with the utmost gratification, and that it would enable them to plan ahead and to be sure that financial assistance would continue to be available on the scale that they have enjoyed hitherto. I must say to the noble Lord that we are grateful for this concession. I am sure that many other bodies up and down the country, such as the Huddersfield Y.M.C.A., will echo what I have said.

BARONESS YOUNG

My Lords, perhaps I should begin by saying that I do not think there was any question at all but that I should reply to this debate. My noble friend Lord Drumalbyn manages to combine those two unusual but necessary qualities, chivalry and acceptance of the equality of the sexes. More seriously, when this matter was debated on Committee stage the Government undertook not to jeopardise any existing hostel schemes and to look again at the proposal to phase out the grant. The first of these Amendments is designed to secure the continued payment of hostel grant for hostel schemes which are approved for grant purposes before the Bill comes into force and before any grant under Clause 92 becomes payable. As the noble Lord, Lord Shepherd, has said, there are 33 consequential Amendments which with the permission of the House I shall move formally as we go through the Marshalled List. It means that existing hostel grants will not be phased out as previously proposed. Amendments to Clauses 2, 72 and 74 and to Schedules 7, 8 and 11 will secure this. I hope that this meets with the approval of the House.

LORD SHEPHERD

My Lords, at the end of the Committee stage I think I said that the noble Baroness's second speech was the better of the two that she made. May I say that her third speech on this matter is infinitely more acceptable.

On Question, Amendment agreed to.

Clause 3 [The transition subsidy, and associated rate fund contribution]:

LORD DRUMALBYN moved Amendment No. 6: Page 5, line 2, leave out (" 60") and insert ("66⅔").

The noble Lord said: My Lords, I beg to move Amendment No. 6—perhaps I myself agreed to consider this. With permission I will speak also to Amendments Nos. 11, 15 and 24 because the same point of principle is involved. Amendment No. 6 is one of four Amendments designed to meet Amendments moved by the Opposition in Committee. We agreed to consider them. They relate to transition subsidies, rising costs, subsidies, rent rebate subsidies and standard amount of rent allowance subsidies. They relate to the minimum percentage of subsidy which the Secretary of State may by order substitute for such years after 1981–82 as may be specified in the order in place of the minimum proportion of 75 per cent. in the years 1975–6 to 1981–2 for the first three subsidies, and 80 per cent. for the rent allowance subsidy. They increase the minimum for the years after 1981–2 that may be substituted by order from three-fifths in the Bill as at present drafted to two-thirds.

LORD DIAMOND

My Lords, it remains for me to thank the noble Lord for meeting us on these Amendments. If I may confide in the House, I may say that I am pleased because, having scratched my head and asked myself what figure the Government might accept and how far they would take them, I thought that 66⅔ was about the limit. Apparently I was not very wrong.

On Question, Amendment agreed to.

THE DEPUTY CHAIRMAN OF COMMITTEES

My Lords, I should warn the House that Amendment No. 7 preempts Amendment No. 7A. If Amendment No. 7 is agreed to, I cannot call No. 7A.

Clause 4 [The rising costs subsidy, and associated rate fund contribution]:

5.0 p.m.

LORD SANDFORD moved Amendment No. 7: Page 6, line 3, leave out subsection (2) and insert—

(" (2) Subject to the provisions of this section, a local authority shall be entitled to rising costs subsidy if for the year 1972–73 or any subsequent year there is any increase in the local authority's reckonable expenditure; and, subject to subsection (3) below, in this section "qualifying amount" means, in relation to any year, the increase for the year in the local authority's reckonable expenditure.")

The noble Lord said: My Lords, we now come to the rising costs subsidy, to which rightly we gave a good deal of attention in Committee. Noble Lords opposite argued strongly against the threshold of £6 which did not qualify for rising costs subsidy in the first two years. We undertook in our turn to consider this and, having done so, we have decided that this threshold should be eliminated from the Bill. The effect of Amendment No. 7, taken together with Amendments Nos. 8 and 9, is that the whole of any increase is reckonable expenditure and will be part of the qualifying amount for these first two years of the operation of the Bill as it is for subsequent years. I hope that this will be a welcome change in the Bill.

LORD DIAMOND

My Lords, I am in the happy position of saying, "Thank you" once more to the Government. The noble Lord, Lord Sandford, has expressed the situation with complete accuracy. We moved this very strongly. We did not feel that the £6 ought to stand. The Government have thought about it again, as the noble Lord said they would, and have met our point of view. We are very grateful to the noble Lord.

On Question, Amendment agreed to.

LORD SANDFORD

My Lords, I beg to move Amendment No. 8.

Amendment moved— Page 6, leave out line 20.—(Lord Sandford.)

On Question, Amendment agreed to.

LORD SANDFORD

My Lords, I beg to move Amendment No. 9.

Amendment moved— Page 6, line 21, leave out (" if any ").—(Lord Sandford.)

On Question, Amendment agreed to.

LORD DRUMALBYN

My Lords, I beg to move Amendment No. 11.

Amendment moved— Page 7, line 24, leave out (" 60 ") and insert (" 66⅔ ").—(Lord Drumalbyn.)

On Question, Amendment agreed to.

LORD DIAMOND moved Amendment No. 12: Page 8, line 13, at end insert ("including those affecting the amounts of income credited to that Account.").

The noble Lord said: My Lords, I beg to move Amendment No. 12. If one looks at page 8 one finds that one is dealing with the rising costs subsidy, and subsection (11) says: For the purposes of this section there is an increase in reckonable expenditure … if the authority's reckonable expenditure for the year exceeds their reckonable expenditure for the immediately preceding year. … "— and that means so much of the expenditure debited to the authority's Housing Revenue Account as the Secretary of State may from time to time determine as being reasonable and appropriate having regard to all the circumstances. What we are concerned with in this Amendment is assisting the Secretary of State in a reasonable determination of what is appropriate with regard to reckonable expenditure. I do not think that the words in the Amendment are absolutely essential, but it would be helpful to have them there. The words in the Amendment are: including those "— that is to say those circumstances— affecting the amounts of income credited to that Account.

My recollection is that we discussed this matter fairly fully at Committee stage, and my anxiety at that time was to see that one compared like with like. One knows that, so far as reckonable expenditure is concerned, expenditure above approved limits—the yardstick, as it is called for short—does not count, but one also knows that that expenditure above approved limits, that excess of expenditure, produces excess of income. If, instead of having an average house you build an above-average house, the consequence is that instead of letting it at an average rent you let it at an above-average rent. This above-average rent is taken into account in the Housing Revenue Account on the income side. It is therefore only natural that the expenditure which has been incurred should be taken similarly into account on the expenditure side, because that expenditure has been incurred in earning that income. Alternatively, you exclude that income if you are going to exclude that expenditure.

Whichever way it is done matters not, so long as you compare like with like and exclude both the excess expenditure and the excess income which derives from the excess expenditure. Otherwise, of course, there would be plain injustice to the local authority. Your Lordships may perhaps feel that it is an accounting point, but I think it is more than that. The wording of the subsection is: … so much of the expenditure debited as the Secertary of State may from time to time determine as being reasonable and appropriate having regard to all the circumstances. Although those words could enable the Secretary of State to take into account—and I hope that in these circumstances he would—the revenue which has been earned from this excessive expenditure, it would be much better to have it clearly stated in the Bill, and that is why we propose the words in the Amendment, including those affecting the amount of income credited to that Account. The purpose of the Amendment is to compare like with like. I hope that the Government will agree to it.

THE EARL OF BALFOUR

My Lords, the noble Lord, Lord Diamond, has just referred to the fact that expensive houses may be let at a higher rent. This reminds me again of a discussion at the Committee stage when I raised the question of houses built for people who are disabled, or who are wheelchair cases. Such houses, clearly, are much more expensive to build, but I was assured that they would not necessarily be let at any higher rent than the ordinary type of houses. There will also be cases where houses have to have their foundations grafted, such as where there is liable to be mining subsidence. Again, I have been assured that although such a house costs more to build, it does not necessarily mean that it will be let at a higher figure than any other similar house near to it.

5.9 p.m.

LORD SANDFORD

My Lords, I am grateful to the noble Lord, Lord Diamond, for explaining the purpose of this Amendment. I entirely agree with him that in all these cases we must be careful that we are comparing like with like, and there are various provisions in this clause to secure that. This is a subsidy which is not attracted, as some are, by the state of the balance in the Housing Revenue Account, where it is of course necessary to balance income with expenditure. This rising costs subsidy is attracted by an increase in reckonable expenditure between one year and the next year, so the need to secure a fair comparison of like with like is a question of comparison between one year and the next year. This is why it is necessary to have reckonable expenditure clearly and precisely defined.

I take the point the noble Lord makes that one kind of expenditure may be above the yardstick and in some cases attracts income from higher rents above the standard. But that does not necessarily apply. If, for instance, extra expenditure were applied towards extra floor space, extra income would be attracted by it. If, on the other hand, it were used towards more durable or expensive building materials the house could well last longer or require less maintenance, but there would be no increase in income. So one cannot assume that where there is expenditure above the yardstick there will be an increase in income.

But all of these matters fall to be reviewed when the yardstick proposals as a whole are reviewed, as they will be in two years. If, at that time, it is decided to go some way to meet the noble Lord's points—and it may well be—it can be done within the existing wording of the Bill. As the noble Lord said, his Amendment is not strictly necessary to secure this point. The main point is that this subsidy does not depend on balancing income against expenditure, in which case the kind of comparisons being made are particularly important. It is a question of balancing the reckonable expenditure in one year with that during the next year. I hope that the assurance that the situation can be looked at when the yardstick as a whole is considered will suffice. As I understand it, that is what is chiefly in the noble Lord's mind.

LORD DIAMOND

My Lords, I am grateful to the noble Lord. I share his view that the words in the Amendment are not strictly necessary. My anxiety is that the Secretary of State should have some guidance as to the matters to which his reasoning should be directed. I am not sure that I agree entirely that one is not concerned with the income in this account. We are dealing with the rising costs subsidy. If my understanding of the matter is right—and it may not be, because it is not all that easy—the rising costs subsidy is well at the top of the queue of those subsidies which are reduced or eliminated if the Housing Revenue Account is in surplus. Therefore the situation is that whether one gets the whole of the rising costs subsidy depends on the income credited to the account as well as on the expenditure debited to it.

I am sure the House will grant the noble Lord leave to intervene again if he so wishes. This is not a matter on which to divide. The noble Lord said it would be looked into, and I am sure it will be considered reasonably. He has met my main point, which was that like should be compared with like. But local authorities are naturally anxious that they should not lose the benefit of a subsidy merely because they have attracted extra income into their Housing Revenue Accounts through expenditure which the noble Lord is not going to allow as part of the comparison for subsidy purposes. Would the noble Lord be good enough to bear these points in mind during this period and when the review takes place? I see the noble Lord nods his head, and in view of his assurance I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 6 [The rent rebate subsidy]:

5.17 p.m.

LORD DIAMOND moved Amendment No. 13: Page 10, line 30, leave out from beginning to end of line 37 and insert—

("1972–73 to 1975–76 1976–77 to 1981–82 … 1982–83 and subsequent years.

100 per cent. 90 per cent. 90 per cent., or such other percentage as may be substituted for 90 per cent. for the year in question by an order under subsection (4) below.")

The noble Lord said: I hope it will be convenient if with this Amendment I take Amendments Nos. 14 and 17 to 23. We are concerned here with the rent rebate subsidy, and the figures are set out in a table in the clause. The subsidy starts at 90 per cent. and reduces over a period. When we discussed this matter during the Committee stage I explained that the rent rebate subsidy was really a means of relieving poverty. It was felt strongly by all noble Lords on this side, and by all local authorities, that the relief of poverty was a national rather than a local responsibility, or a central Government responsibility rather than one which should fall on the rates. Under this clause 10 per cent, falls on the rates during the first year; the figure increases to 15, 20 and 25 per cent., and eventually goes up to 33⅓ per cent.

Grave exception is taken all round to this major departure whereby the cost of relieving poverty is put on local authorities. Needless to say, all local authorities are objecting. The Urban District Councils Association returned to this matter at its annual conference. The Association says: It falls on the Government to amend the Bill with a view to securing that the cost of rent rebates and of rent allowances in the private sector is met by the Government as a permanent part of the national responsibility for the relief of poverty. We agree entirely, and I do not think the Government adduced more than one small reason as to why this principle, which is a hallowed one, should not be maintained so far as this Bill is concerned. I think it was the noble Lord, Lord Drumalbyn, who stated that a local authority, spending some of its own money, would generally be more cautious than if it were spending central Government money only. That may be the case, but I do not share the view that local authorities are irresponsible. However, they might well be even more responsible than usual if part of their own money were involved. Therefore I do not think it is impossible to go as far as agreeing with the Government that a small part—perhaps 10 per cent.—of the cost of relieving national poverty should be borne by the local authority which dispenses the funds.

The noble Lord also said that he wanted to relate the rent rebate subsidy to the rent allowance subsidy. I can remind the noble Lord of what he said. At column 742 on June 13 the noble Lord, Lord Drumalbyn, said: The principle of the Bill is that there should be no real distinction between those who need assistance when they are occupying private houses and those who need assistance when they are occupying local authority houses. Therefore I turn straight away to the rent allowance subsidy, the rates of which are described in Clause 8, at page 12, where one sees that the subsidy starts at 100 per cent. It is 100 per cent. for the years 1972–73 to 1975–76. I think it is reasonable that the subsidy should start at 100 per cent. It acknowledges the principle which I have been adumbrating. I think it reasonable that the rent rebate subsidy should coincide with that, and that for those same four years, 1972–73 to 1975–76 inclusive, the rate of subsidy should be 100 per cent.

Next, dealing still with the rent allowance subsidy, one sees that it moves from that year onwards to 80 per cent. I think it is going too far to require the local authority to pay as much as one-fifth of the cost of relieving poverty, and far further than is necessary to meet the noble Lord's argument that the local authority should spend some of its own money in order to achieve a maximum sense of responsibility. Therefore I think it reasonable that this figure should be 90 per cent. It is proposed that the rent allowance subsidy for the period 1976–77 to 1981–82 should be 90 per cent., and similarly, for the period subsequent to that, it is proposed that it should be 90 per cent.

In order to make this table coincide with that, one should therefore have for the first four years 100 per cent. I invite your Lordships now to look at the Amendment, which provides for 1972–73 to 1975–76 100 per cent. ; from 1976–77 to 1981–82, 90 per cent., so as to provide the 10 per cent. responsibility factor; and from 1982–83 and subsequent years 90 per cent., or such other percentage as may be substituted. One would then have achieved what the noble Lord himself set out to achieve; namely, that the two subsidies, the rent allowance subsidy and the rent rebate subsidy, should walk hand in hand, because they are identical subsidies and are relieving need where it is felt. Inasmuch as we start off with 100 per cent. for one, so we should for the other. I have already explained why I think that dropping to 90 per cent. is a sufficient acknowledgement of the noble Lord's view about the sense of responsibility of local authorities. I beg to move.

5.24 p.m.

LORD DRUMALBYN

My Lords, the noble Lord has been very ingenious in his quotation, but if he will look at it again he will see that it was quite plain that I was comparing the rent rebate position and the rent allowance position from the point of view of the beneficiary. What I was saying was that as between a person who occupies a private dwelling and a person who occupies a council house there should be no difference in treatment. Nor indeed should there be any difference between the treatment of a person who is out of work and a person who is in work: in each case the test is housing need. For those out of work supplementary benefit looks after those who are in poverty. It was felt that it was right, in considering the housing need in each case, that they should be treated on the same lines.

I think it can be plainly seen that what we are here trying to do is to establish the principle which I have enunciated several times: that nobody should be denied the accommodation that they need because they cannot afford to pay for it. It does not follow that because they cannot afford to pay the full cost of the rent—say it is a family with a number of children, and they require a fairly large house—that they are in poverty in the normal sense in which that word is used. If I may say so, I think the noble Lord stretched the words that I used from the consideration of the need of the person, on the one hand, to the consideration of the financing of that need, on the other hand.

As to the financing, the noble Lord compared the rent rebate scheme and the rent allowance scheme quite accurately. I thought that at an earlier stage I had explained that there was more generous treatment to the local authorities, so far as subsidy was concerned, in the rent allowance scheme because this was a new scheme which would involve more expenditure in the early stages; and also that it was not wholly within their own responsibility. The local authority has a responsibility for providing council houses where it thinks fit to meet the housing need; it also has a more general responsibility for the housing of inhabitants in the area. It is because of this second responsiblity that it is felt right that the local authority should make a contribution, albeit quite a small one, to the rent allowance scheme as well as to the rent rebate scheme. On the rent rebate scheme, I do not think anybody could dispute that the local authority should make a contribution, if only because local authorities are at the present time bearing the entire cost of the rate rebate scheme. The rebates are, after all, for their own houses, and it is in a way similar to discriminating in rents in accordance with the resources and the needs of the individual tenant.

So I do not think we are concerned here with the principle of the contribution, because the noble Lord has conceded this. He sought to bring the rent rebate scheme on to the same level as the rent allowance scheme for the first four years and to make it a 100 per cent. subsidy in both cases. He has conceded the principle that thereafter there ought to be a contribution: he thinks that it ought to be 90 per cent. instead of 80 per cent. in the case of rent allowances, and 75 per cent. in the case of rent rebate. We think that our rate is the right level to fix in the long term because of the relevant responsibilities.

I do not think there is very much more I can say on this subject. I would only add that in so far as there is a deficit on the Housing Revenue Account through rent rebate payments, this would receive further assistance, and in so far as one is dealing with an authority which has small resources, that authority would also receive the resources element of rate support. If one works it out, the 25 per cent. contribution that is paid in the case of rant rebates, which we shall come to in the years 1975–76 to 1980–81 and 1981–82, is further reduced by the supplement they receive. So in the end it comes down to a contribution of 15 per cent.—I am sorry, I think I am rather anticipating a point to which we shall come later. My Lords, I can only say that we think that this proportion is the right one, and hope the noble Lord will accept it. We do not agree with him that this is a scheme for the relief of poverty in the sense that the supplementary benefits scheme is a scheme for the relief of poverty. It goes much further than that. It is a scheme to ensure that people on lower income levels will not have to pay more for their rents than they can afford to pay.

5.32 p.m.

LORD DIAMOND

My Lords, I am not at all happy about that answer. First, so far as the principle is concerned the noble Lord has said, and said quite rightly, that this is to prevent tenants having to pay (whether they are local authority tenants or private landlord tenants) a bigger rent than they can afford. I do not know why, having said that, he should say that this is not in relief of poverty. What you cannot afford is what you are too poor to afford, and it is done on the basis of income and needs and the demands made upon income. If you need assistance, you are too poor to pay the rent that is required; and so it is absolutely and simply—as I think, as the local authorities think, as the A.M.C. think, as the urban district councils think and as the Greater London Council think—preposterous that the relief of poverty, which has always been borne centrally since Queen Elizabeth I, should now be put upon local authorities and borne by them, or that any proportion of it should be put on the local authorities.

I should like to remove any doubt from the noble Lord's mind that the principle is a most important principle—and I have not conceded it at all. What I am trying to say to the noble Lord is this. I think this is an important principle but if you think that, notwithstand ing this important principle, there is the other principle that local authorities cannot be trusted to spend money wisely and prudently unless the money is partly their own as well as coming from central Government, then in order to meet your point of view—not mine—let us make a token contribution of 10 per cent. If it were left to me, I should undoubtedly say that the local authorities spend their money responsibly and that there is no need to take any further precautions about it. Why do I say that in particular?—because even so, as the noble Lord knows, this would not be reimbursing the local authorities for their total cost.

There are two limitations here: this is only one of them. I think I am right in saying that the other limitation is what is known as the model scheme. Under the model scheme the amount that counts for this subsidy is not the amount that the local authority spends, but the amount that it spends within the model scheme. So in any event there is an excess and the amount that the local authority spends beyond the model scheme (and every local authority will spend something in excess of that) has to be borne by the local authority. That can be justified because this is the local authority exercising its local discretion and saying: "Here is a scheme: it is a good scheme but it is not quite good enough to meet this particular category or to help that particular person, and therefore we will make a larger rebate in such a case or give a little extra concession here or there". Where a local authority exercises that sort of charitable discretion in that way, it is perhaps reasonable to say that a local authority should pay that out of its rates—in other words, that the citizens should pay.

It is certainly not right to say that, where the Government lay down a model scheme to apply to the whole of the country, that model scheme should be contributed to by anything more than a token extent by the ratepayer. It should be paid by the taxpayer. Inasmuch as the ratepayer and the taxpayer are very often the same person, though the amounts may vary, I cannot see why the Government are resisting this so strongly. The only difference between rates and taxes is that taxes are fair and rates are unfair. Taxes are related to income. Taxes, all told, are neither progressive nor regressive but broadly neutral in their effect. Rates are highly regressive. It is as simple as that: we all know that. That is why the central Government makes a contribution to rates to prevent the injustice being as great as it would otherwise be. So for the life of me I cannot see why the noble Lord is insisting (a) on breaching a major principle which has held good since Queen Elizabeth I, and (b) on insisting that the method of contribution should be an unfair one instead of a fair one. That is all the difference there is between rates and taxes; and so

Resolved in the negative, and Amend ment disagreed to accordingly.

I am certainly not going to accept the noble Lord's view that this is an Amendment which should not be pressed. Indeed, it must be pressed, and subject to seeing whether there is anything more of staggering importance which I have in my notes—well, I have been wholly persuaded by what I have said. I had better divide the House.

5.38 p.m.

On Question, Whether the said Amendment (No. 13) shall be agreed to?

Their Lordships divided: Contents, 57; Not-Contents, 79.

CONTENTS
Addison, V.	Garnsworthy, L.	St. Davids, V.
Archibald, L.	Hale, L.	Segal, L.
Avebury, L.	Hall, V.	Shackleton, L.
Bacon, Bs.	Hanworth, V.	Shepherd, L.
Beaumont of Whitley, L.	Henderson, L.	Shinwell, L.
Beswick, L.	Heycock, L.	Simon, V.
Blyton, L.	Hoy, L.	Slater, L.
Brockway, L.	Hughes, L.	Snow, L.
Buckinghamshire, E.	Jacques, L. [Teller.]	Stocks, Bs.
Champion, L.	Janner, L.	Stow Hill, L.
Clancarty, E.	Kennet, L.	Strang, L.
Crook, L.	Lloyd of Hampstead, L.	Summerskill, Bs.
Davies of Leek, L.	McLeavy, L.	Tanlaw, L.
Delacourt-Smith, L.	Maelor, L.	Taylor of Mansfield, L.
Diamond, L.	Phillips, Bs. [Teller.]	Watkins, L.
Douglas of Barloch, L.	Platt, L.	Wootton of Abinger, Bs.
Douglass of Cleveland, L.	Popplewell, L.	Wright of Ashton under Lyne, L.
Fiske, L.	Rusholme, L.
Foot, L.	Sainsbury, L.	Wynne-Jones, L.
Gaitskell, Bs.

NOT-CONTENTS
Aberdare, L.	Davidson, V.	Kinloss, Ly.
Ailwyn, L.	de Clifford, L.	Lauderdale, E.
Albemarle, E.	Denham, L. [Teller.]	Long, V.
Alexander of Tunis, E.	Drumalbyn, L.	Lothian, M.
Allerton, L.	Dundonald, E.	Loudoun, C.
Ashbourne, L.	Eccles, V.	McFadzean, L.
Balfour, E.	Elles, Bs.	Mansfield, E.
Beauehamp, E.	Elliot of Harwood, Bs.	Merrivale, L.
Belhaven and Stenton, L.	Emmet of Amberley, Bs.	Milverton, L.
Belstead, L.	Ferrers, E.	Montagu of Beaulieu, L.
Berkeley, Bs.	Fortescue, E.	Mowbray and Stourton, L. [Teller.]
Bledisloe, V.	Gage, V.
Bradford, E.	Gainford, L.	Northchurch, Bs.
Brecon, L.	Goschen, V.	Nugent of Guildford, L.
Brentford, V.	Gowrie, E.	Reigate, L.
Brooke of Cumnor, L.	Grenfell, L.	Rhyl, L.
Gamoys, L.	Gridley, L.	Roberthall, L.
Carrington, L.	Grimston of Westbury, L.	St. Helens, L.
Chelmer, L.	Hailes, L.	Sandford, L.
Colville of Culross, V.	Hailsham of Saint Marylebone, L. (L. Chancellor.)	Selkirk, E.
Colyton, L.		Sempill, Ly.
Cork and Orrery, E.	Hatherton, L.	Stonehaven, V.
Cowley, E.	Hawke, L.	Strange, L.
Cranbrook, E.	Howard of Glossop, L.	Strathclyde, L.
Crathorne, L.	Kemsley, V.	Vivian, L.
Cromartie, E.	Kilmarnock, L.	Wakefield of Kendal, L.
Daventry, V.	Kindersley, L.	Young, Bs.

LORD DRUMALBYN

My Lords, I beg to move Amendment No. 15.

Amendment moved— Page 10, line 41, leave out ("60") and insert ("66⅔").—(Lord Drumalbyn.)

On Question, Amendment agreed to.

Clause 8 [The rent allowance subsidy]:

5.47 p.m.

LORD DIAMOND moved Amendment No. 16: Page 12, line 5, after ("authority's") insert ("costs of administering their allowance scheme and of their").

The noble Lord said: My Lords, the words in my Amendment are inserted into the rent allowance subsidy provisions which were intended to result in a local authority being reimbursed for its costs of administering the scheme as well as the costs of the allowances themselves. At the moment subsection (2) provides: The amount of rent allowance subsidy payable to a local authority for any year shall be a percentage of the local authority's standard amount of rent allowances for the year, as defined by section 20(8) of this Act. If one refers to Clause 20(8) one finds that the costs of administering the scheme are not included and therefore the local authority is expected not only to bear a portion of the cost of the allowance after the fourth year, but it is also expected to bear the whole of the costs of administering the scheme from the very beginning. The local authorities can see no reason why they should be called on to do that and neither can I. I should have thought that if one is asking local authorities to administer a national scheme—and I am sure that we are not misunderstood on this side; we are glad that there is such a scheme—it is only reasonable that the local authority should be reimbursed for its costs. It is quite unreasonable that whereas they are going to get 100 per cent. or, later on, 80 per cent. of the allowance themselves, they should be called on to pay the whole of their costs of administering the scheme as compared with no part or, in subsequent years, 20 per cent. of the costs. The noble Lord knows that this is the view of all the local authorities and I hope therefore the Government will agree to this Amendment. I beg to move.

LORD DRUMALBYN

My Lords, I am sorry that I cannot agree to the noble Lord's Amendment. It is normal for local authorities to meet the cost of administering means-tested benefits, including the cost of administering the rate rebate scheme. There is no justification for making an exception in the case of rent allowances, particularly when for the first four years the whole cost of rent allowances on the basis of the model scheme is to be met by rent allowance subsidy. I thought it was rather harsh of the noble Lord to turn that fact back upon us and say that we ought to meat the cost of rent allowances as well. I do not think that follows. It would not be desirable to create a situation in which because the Secretary of State met the cost of administration he might feel obliged also to control the level of an authority's expenditure on administering their allowance scheme. This would be unfortunate and I think it would be very difficult to work in a country the size of England and Wales. Therefore I cannot accept the Amendment.

LORD HUGHES

My Lords, before the noble Lord sits down, having recited all the difficulties of taking the costs of administration into account, why did the Government find it possible to do this in Scotland?

LORD DRUMALBYN

My Lords, I ventured to point out that in England and Wales the level of subsidy in the first four years is 100 per cent., whereas it is not so in Scotland which is a smaller country. In England and Wales I do not think this would be appropriate. I must repeat that it is normal in these cases for means-tested benefits to be administered by local authorities, as is the rate rebate scheme. One has to take the swings and the roundabouts here and I do not think it would be right to expect to get it both ways.

LORD DIAMOND

My Lords, I am grateful to the noble Lord for having given the matter his attention but I do not think there is much left of the argument that this is a principle, having regard to the intervention of my noble friend. This is not a principle; this is what the Government have decided they want to do in the case of England and Wales, as opposed to Scotland. There is no principle left. It is unfortunate that the Government put up the noble Lord, with his Scottish descent, to bat on this Amendment without having informed him of what was going on behind his back with regard to the Scottish Bill. Be that as it may, we do not think this is a principle at all. As the administration is being done at the request of the Government on a matter which is admittedly wholly, or nearly wholly, a central Government matter the local authority ought not to be required to incur the costs.

This is not something on which I am proposing to divide your Lordships' House; I do not think it is a matter of principle of that fundamental kind. But it is unreasonable of the Government not to accept the Amendment. The noble Lord keeps talking about the generosity of the Government and saying that I should not turn the 100 per cent. argument against him, and so on. The Government are not being generous: they are making a decision as to which kind of person shall pay how much, whether it shall be the ratepayer or the taxpayer. That is all that is being decided. If the cost does not fall on the taxpayer, as I believe it would more fairly do, because national taxes are fairer in their incidence than rates, it falls on the local ratepayer. In most cases it falls on Mr. Smith or Mr. Tompkins, let us say, who pay both rates and taxes. There is no question of the Government's being generous. I should like to see the day when the Government are generous, or when any Government Minister pays money out of his own pocket as a contribution towards the relief of national poverty. It did not happen when I was in the Treasury.

I hope that I have made it clear to the noble Lord that arguments about Government generosity do not appeal to me. The noble Lord should recognise the fairness of the argument that it is a national Government scheme, that it should be paid for by the Government and that since taxes are fairer than rates it is therefore wise to put the cost all on to taxes. If he does not accept the general argument that this is a national scheme, and that there is national responsibility for relief of poverty, I can only say how sorry I am. I hope that I can convince him on this point in due course. Mean- while, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

LORD DRUMALBYN

My Lords, I beg to move Amendment No. 24.

Amendment moved— Page 12, line 30, leave out ("60") and insert ("66⅔").—(Lord Drumalbyn.)

On Question, Amendment agreed to.

Schedule 1 [The Housing Revenue Account]:

5.54 p.m.

LORD SANDFORD moved Amendment No. 25: Page 120, line 12, at end insert—

(" ( ) Before giving a direction under this paragraph the Secretary of State shall consult with such associations of local authorities as appear to him to be concerned, and with any local authority with whom consultation appears to him to be desirable: Provided that if the local authorities who are to comply with the direction are all named in the direction, the Secretary of State shall consult with each of those local authorities, and need not consult any association of local authorities.").

The noble Lord said: My Lords, with the agreement of the House I shall also speak to Amendment No. 26 which deals with much the same point. Here are two places where, following the request of noble Lords opposite, we have considered whether it would not be a good thing to make more specific and put into statutory form the requirement that the Secretary of State should consult with the local authority or with the local authority association, as might be appropriate, before issuing two particular directions, one in connection with the matters covered by paragraph 5 of Schedule 1 and one in respect of matters covered by paragraph 10 of Schedule 1. This is in regard to the balance of the Housing Revenue Account in the first case and to the way in which expenditure on amenities shared by the whole community should be met in the other case. I do not think I need say any more. I beg to move.

LORD DIAMOND

My Lords, we are very grateful to the noble Lord for having considered our requests and for having met them in full. It is important not only that consultation should take place but that local authorities should see that the Statute provides that they should be consulted. Especially in to-day's circumstances, when local authorities are liable to have many of their powers withdrawn, it is right that they should see that Parliament recognises their importance and how appropriate it is for them to be consulted on matters affecting them. It is good public relations and good legislation and I am grateful to the Government for having acceded to our request.

On Question, Amendment agreed to.

LORD SANDFORD

I beg to move Amendment No. 26.

Amendment moved— Page 121, line 29, at end insert— (" ( ) Before giving a direction to a local authority under this paragraph the Secretary of State shall consult with that local authority.").—(Lord Sandford.)

On Question, Amendment agreed to.

5.58 p.m.

LORD DIAMOND moved Amendment No. 27: Page 125, line 37, leave out paragraph 21.

The noble Lord said: My Lords, this is a very difficult matter. I make it absolutely clear before I start that I hope the Government are going to accept the Amendment both in the interests of good government and in the interests of the standing of the Government. This matter deals with the district audit. The essential question is: should local authorities have the right to exercise their existing option as to whether they should employ district auditors or professional accountants? In case there is any misunderstanding, may I say that the reason why, when I referred to this matter previously, I never disclosed any interest was that I have not got one. I was in practice as a chartered accountant for many years but disposed of my interest completely a year or two before becoming a member of the Government, as one has to do in any event, and had no possibility of resuming practice as an accountant. I am debarred from doing so. I hope I have made it absolutely clear that I have no personal financial interest in this matter. I say that because I feel very strongly indeed about it.

The present position is that, as a result of a long, long fight which the accountancy profession has been carrying on against the Department over years and years—I have first became involved in it when I was Convenor for the Accountants in both Houses in the late 1940s—at last one was able to establish a principle which I should not have thought was wholly unwelcome to your Lordships, certainly not on the Government side of the House. It was that private enterprise had an appropriate part to play in that local authorities should be given the option to employ professional accountants if they wanted to do so—nothing more than that. Of course, if they employed professional accountants as their auditors instead of district auditors, it would mean that they would be replacing some civil servants. It is not surprising, therefore, that some Civil Service departments thought that on the whole it would be more convenient if the work went to civil servants rather than to professional accountants—chartered accountants and others, all carefully controlled by the legislation. As I say, this battle has been going on over many years and, for all practical purposes, was finally won. Local authorities were therefore given the option to decide which they wanted. As your Lordships know from the previous discussion we had in this connection on the Committee stage, the majority of local authorities have opted for professional accountants. I think I am right in saying, from memory, that something like two-thirds of all authorities, and three-quarters of all the largest authorities, have opted for professional auditors.

What we are concerned with here is an alteration of the existing system. The existing system allows local authorities to decide whether professional accountants shall or shall not audit the housing account. The provision in the Bill withdraws that option. How long for? Your Lordships will be astonished to hear that it is for about one year. Why do I say that? Because, under the local government Bill which is before another place, and in respect of which ministerial assurances have been openly given, the right of the local authority to opt is restored. That Bill will come into effect a year later. So what the Government are proposing—it is incredible—is that local authorities should for one year have withdrawn from them the option to decide who should be their auditor in relation to the Housing Revenue Account—nothing else: just the Housing Revenue Account.

The argument put up on an earlier occasion was that the Housing Revenue Account is a complex account and that therefore it is beyond chartered accountants to cope with it! This is really amusing; especially is it amusing when it comes from the Front Bench opposite, which has recently been adorned by three most welcome and able additions, and of those three one is not a chartered accountant but the other two are. They are apparently capable of exercising high ministerial responsibility on behalf of the Government, but are not capable of looking at a Housing Revenue Account, adding it up, vouching it and saying that it is certified correct, or not, as the case may be. Really it is laughable.

I am bound to say, therefore, to the Government that the only conclusion one can draw (I have not dealt with other matters of honour because I hope we shall not be drawn into them at all; statements are on record and I hope we do not have to go into them—and I say this on the basis of the argument, not of what any Minister has said or written) is that it is ridiculous that a Conservative Government should withdraw for one year the right of private enterprise accountants to perform a function if the local authority want them to perform it, rather than that civil servants should do it. That situation is ridiculous, and if this remains the Government's view I am bound to say that it could only be the view of a Minister who cannot stand up to his Department. With respect, I have been a Minister and I know exactly why I am saying this.

So I hope that the Government are going to accept this Amendment in good spirit, because this provision is something that has crept in awkwardly and is entirely out of place in relation to the Bill. The matter of district audit is tucked away in a little paragraph in a Schedule to the Bill dealing with housing, and that is very odd indeed, especially when there is in being a Bill on local government which has to deal with the whole scope of audits, the admissibility of accountants, and care is taken in that Bill to protect public funds, quite properly, in relation to audits. It is very odd that this provision should happen to be—I will not say in small print, but tucked away in a Schedule. I hope that the Government are going to accept this Amendment which removes this restriction and restores the position to what it is to-day, and will be again in a year's time.

6.7 p.m.

LORD SANDFORD

My Lords, I had hoped that we had cleared up some of the misunderstandings and misapprehensions about this matter which existed in Committee, but evidently we have not. I should like to begin on the positive side. There is now an agreement between the Government and the accountancy profession that, with the enactment of the legislation bringing about local government reform, all accounts of all authorities will be open to private professional auditing if the local authorities concerned so desire. This is the battle to which the noble Lord, Lord Diamond, alluded; and, as he said, from the point of view of his late profession it is won. But that is something which does not come about until the local government reform legislation has been enacted.

As part of the total agreement between the profession and my right honourable friend the Secretary of State, the position is that the Code of Law and Practice relating to private auditors has yet to be assimilated to that of the district auditor; and part of the arrangement will be that no private auditor can be appointed to this work unless first approved by the Secertary of State, who has to be satisfied that the proposed auditor has the necessary staff, experience and facilities for undertaking the audit. A rigorous Code of Practice for local government has to be laid down, and the conduct of audits will be reviewed on behalf of the Secretary of State to ensure that standards are maintained. All that is part of the arrangements; but it is still in the future and so it is not available for the arrangements we are discussing on this Bill, and for Housing Revenue Accounts, in particular.

I am afraid the noble Lord is not correct when he states that all local authorities at present have the option to choose either professional audit or district audit. That is not the case. The case is that the boroughs—about a quarter of all the housing authorities—have the option, and some of them have exercised it. The position we are securing in the Bill is that these balances govern the subsidies that will be attracted by the operations of the various housing authorities. Because the balances in the Housing Revenue Account are so important; because none of the safeguards which will be provided when local government reform has been enacted are yet in force; and because only a very limited number of firms at the present moment have wide experience in this field, we do not feel ready at this stage to advance the arrangements under which all authorities will be able to exercise the option of having all their accounts audited by professional auditors.

LORD DIAMOND

My Lords, may I ask the noble Lord to be quite explicit in what he is saying about only some local authorities having this option. We are speaking about the option to employ professional accountants to audit Housing Revenue Accounts. Would he say whether or not, in relation to that limited field, there are local authorities who have the option?

LORD SANDFORD

My Lords, there are a number of authorities. All the authorities other than boroughs—that is the great majority—have no option in the matter in respect of any accounts. There are some accounts, even in the case of those boroughs which have the option, over which the option cannot be exercised. It can be exercised in the case of the Housing Revenue Account by the 390 or so boroughs, and about 200 of those have exercised the option. That is the situation. There is no question of all the authorities having the option, or of the option extending to all the accounts. Nor are there any arrangements yet in force which both parties to this agreement consider to be desirable before the full option can be exercised by all the authorities in respect of all their accounts. The position at the moment is that a count undertaken in the middle of last year showed that, of approximately 130 firms who undertook borough audits, fewer than ten firms audited more than three boroughs, and 97 firms audited only one borough each.

So, although I would not for a moment detract from anything the noble Lord has said about the competence of his profession—all that goes without saying—the fact is that the width of the experience is not yet there; and because of the importance of the Housing Revenue Account and the balances in it, and the need to have expert knowledge in this particular field, we do not consider that this is the moment to allow this option to continue without the safeguards which both parties agree are necessary and have incorporated in the arrangements that come into force when local government reform has been enacted.

I think there have been some substantial misunderstandings, and if I have contributed to them I apologise to the House. I am quite sure, from the correspondence I have had with the President of the Institute of Chartered Accountants, that there was a misunderstanding there; but I hope that these two debates and the correspondence we have had, plus any further correspondence that we may need to have, will be able to dispel these misunderstandings, because the position to which we are working is precisely the position to which the profession wants to move and it is the position to which the Government want to move. However, the safeguards are necessary and they are not available for the moment.

LORD AVEBURY

My Lords, we may be moving towards the position which everybody wants to see, but we are taking a step backwards in the course of doing so. According to the noble Lord, the 200 boroughs out of the 340 have already exercised the option which is available to them to have their Housing Revenue Account professionally audited. So what the noble Lord is saying is that these 200 will have to sack the professional accountants whom they have been employing hitherto and bring in the district auditor just for one year, after which they will be fully entitled—if they are converted to a new authority or are part of a new authority—to bring those accountants back again. In the meantime, they will have lost one year's experience.

If the noble Lord attaches such importance to the relevant experience of the professional accountants one would have thought the last thing he would want to do would be to sack the firms which are already engaged upon the work, thereby preventing them from gaining absolutely critical experience during the period when this Bill comes into operation. Surely he could devise a form of words which, if he thinks it necessary, would limit the firms that are approved for auditing Housing Revenue Accounts to those which have what he regards as sufficient experience to do the job. I should have thought this was a matter which could safely be left to the local authorities. They know perfectly well whether the accountants whom they have engaged in the past have done the job to their satisfaction. If they have not, then they could, without this paragraph in the Schedule, get rid of them for a year and bring in the district auditor if they thought fit. But if, over the period when they have exercised their option, they find that these accountants have no difficulty in identifying properly the items which are to be debited and credited to the Housing Revenue Account and on which the housing subsidies are based, I cannot for the life of me see why the noble Lord is forcing them to go back.

LORD DIAMOND

My Lords, I am grateful to the noble Lord, Lord Avebury, who has picked on the essence of the matter: should local authorities be required to sack their professional accountants for one year? That is a wonderful proposal on the part of a private enterprise Government! It is made all the more wonderful when the noble Lord makes a number of statements with which I totally disagree. He knows that I am in a difficulty in quoting chapter and verse, but if this Amendment is not accepted I shall find an opportunity of referring to it in challenging the noble Lord to produce the correspondence. I am saying that with full sense of the responsibility as to the occasion, and it will refer to all the statements which have been made by various Ministers.

We are not concerned with the totality of the situation, and we are not concerned with any agreement. There is no such thing as an agreement here; there is legislation by the Government, and every citizen has to accept that legislation; and on the basis of what the Government have provided in their Bills and stated through their Ministers the accountancy profession has circulated publicly, to everybody's knowledge, what the situation is. This is a proposal to go back on that and to require 200 boroughs to discontinue their own choice and to sack the professional accountants concerned. I do not suppose it is going as far as being slanderous on the profession, but certainly it is a very odd proposal.

I ask your Lordships to bear in mind the constitution of a local authority. There is always a very responsible town clerk; there is always a responsible treasurer, normally a member of the professional body of treasurers. It is that professional body which has joined with all the other professional bodies in seeking the removal of this provision. They—the treasurers of the local authorities who employ the professional accountants—are among those who join with the other professional bodies in seeking the removal of this nonsensical provision which requires a local authority to sack its accountant for one year (admittedly for one year only) because the Local Government Bill will give the local authority power to reinstate him in a year's time. It is saying to the local authority that it has not sufficient discretion to be able to decide whether it should continue to employ professional advice and knowledge. It is making a most astounding criticism of the profession as a whole, one that I rebut entirely, and it is angering them a good deal more than it is angering me.

The noble Lord referred to what the President of the Institute of Chartered Accountants had said. I can tell him what the President of the Institute of Chartered Accountants thinks of the noble Lord, but it would not be appropriate language to use in your Lordships' House. The profession is absolutely wild, and I very much hope that the Government will not put their head further into this noose by sticking on this ridiculous clause. I am telling the noble Lord, Lord Drumalbyn, that unfortunately I am inhibited from dealing with the whole of the facts. It will go from bad to worse, so I hope that the Government will say they will take away this paragraph and think about it.

6.20 p.m.

LORD SANDFORD

My Lords, I cannot give that assurance. We have given a lot of thought to this. I am certain that a useful decision was come to in respect of local government reform—namely, that private auditors should have access to all the accounts of all local authorities, subject to the provisions of the agreement which will be incorporated in the legislation. In the meantime, because of the importance of the Housing Revenue Accounts and the balances in them, I am sure that the steps which the Government are taking in the Bill are correct. I have listened carefully to what the noble Lord opposite said, but this is the position. I am sure that there has been a misunderstanding. In fact there was a misunderstanding at the beginning of this discussion, because the noble Lord clearly indicated that he thought the option was open to all local authorities. That is not so. Nor is it open in respect of all the accounts, but only in respect of certain accounts.

LORD SHEPHERD

My Lords, I trust that the noble Lord, Lord Sandford, will carefully reconsider his last remarks. Was he not saying that these 130 professional organisations which have been appointed as auditors to various local authorities are, in the view of the noble Lord, incapable and insufficiently aware of their responsibilities to be able to audit these accounts as a consequence of this Bill? That is really what the noble Lord was saying. He may not have intended to say it, but it is the only construction that I am able to put on his words.

I had no intention of intervening at this stage. Although I am not an accountant, I have considerable respect for the profession. My noble friend Lord Diamond made an appeal. If the noble Lord, Lord Sandford, is saying that his mind is completely and utterly closed, so be it; but as my noble friend hinted that he has material which he cannot disclose here and now—material of which the noble Lord, Lord Drumalbyn, and the noble Lord, Lord Sandford, may not be aware—I trust that my noble friend will be given an assurance that the Government will look at this matter again. The noble Lord could give that assurance and have discussions, in private and in confidence, with my noble friend. I am sure that on that basis my noble friend would be willing to withdraw the Amendment.

I have always taken the view that the function of this House is that of a revising Chamber, seeking ways within the great freedom we have to improve legislation. This is not a Party issue on which the sides must die in the trenches. My noble friend simply requested that this matter be looked at again. I ask the noble Lord, Lord Sandford, to agree to do that and then to have discussions in confidence with my noble friend. If the Government change their mind they can take the necessary steps to alter the Bill. Alternatively, my noble friend will remain free to move a similar Amendment on Third Reading.

LORD SANDFORD

My Lords, although that might be the best course at this stage, may I first correct a point which the noble Lord, Lord Shepherd, made. I did not say anything approaching his suggestion that my view was that these 130 firms were not capable of dealing with Housing Revenue Accounts. I have said, and I am now confirming, that we believe it is better in all the circumstances for these new Housing Revenue Accounts, which will be quite different in form, to be audited by the district auditor in every case rather than to continue the partial option which has existed hitherto.

LORD DIAMOND

For only one year.

LORD AVEBURY

My Lords, if the noble Lord, Lord Sandford, is saying that the novelty of these accounts is such that they are different from all Housing Revenue Accounts that have gone before, then the district auditor will have had no experience of them either.

LORD FISKE

My Lords, the noble Lord. Lord Sandford, has stressed throughout the importance of the Housing Revenue Accounts in the present context. Many of us have become cynical about the high-minded motives that are supposed to lie behind this Bill and wonder whether it could not simply be that the Government are determined to have their own civil servant on hand when these balances are declared so that they get their cut.

LORD SANDFORD

My Lords, the noble Lord, Lord Fiske, knows very well that the claims of local government on central Government are always subject to district audit. There is nothing new about that. To answer the request of the noble Lord, Lord Shepherd, certainly we will look at this matter again. I do not think any fresh facts have been adduced, but we are in correspondence with the chartered accountants, who I am sure were under a major misunderstanding which we may not have succeeded in completely rectifying. I am equally sure from the opening remarks of the noble Lord that he, too, was under a misunderstanding, and I hope that my reply has helped to rectify it. As noble Lords opposite are still concerned about the matter, I willingly undertake to look at it once more.

LORD SHEPHERD

My Lords, while I am sure that my noble friend Lord Diamond will wish to respond to the Minister's reply, I rise with the leave of the House simply to say that I am glad of the noble Lord's response. If he had been a little more gracious and not put in the aside of which he will be aware when he first rose to reply to me, he may have got a little more co-operation from this side of the House.

LORD DIAMOND

My Lords, the situation is really very clear. The question is whether 200 local authorities should be required to dispense with the services of their professional accountants for one year and have the option at the end of that year to engage them again if they wish to do so.

LORD SANDFORD

In respect of this one account.

LORD DIAMOND

Yes, in respect of the Housing Revenue Account. That makes it all the more ridiculous. However, as the noble Lord has been good enough to say that he will look at the matter again, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

BARONESS YOUNG moved Amendment No. 28:

Page 126, line 7, leave out from ("order") to end of line 22 and insert (" direct, for any of the purposes of Part I of this Act, including this Schedule—

1. (a) within whose Housing Revenue Account the transferred houses and property are to be treated as falling;
2. (b) how expenditure and income relating to them in the Housing Revenue Accounts of the authorities to whom the order applies are to be treated;
3. (c) how the number of Housing Revenue Account dwellings transferred is to be calculated.

( ) An order under this paragraph may make different provision in respect of different years or for different purposes in relation to the same year.

( ) An order under this paragraph may amend any order under the said section 23(3), and accordingly may provide that one authority shall pay to another in respect of houses and property to which it relates such amounts calculated by such methods and in respect of such items and such years as appear to the Secretary of State to be appropriate.

( ) Nothing in this paragraph shall be taken to prevent regulations under section 102 of this Act providing for any matter for which an order under this paragraph might provide.")

The noble Baroness said: My Lords, this part of Schedule I is concerned with the Housing Revenue Accounts of London authorities, and the purpose of the Amendment is to widen slightly the provisions of paragraph 22 of Schedule I to ensure that the financial arrangements agreed between the Greater London Council and the London Boroughs Association in connection with the transfer of certain G.L.C. estates to certain London borough councils are fairly reflected in the subsidy provisions of Part I of the Bill. As at present drafted the Bill would not give the Secretary of State adequate powers to make orders to secure this objective. I can confirm that the Amendment is acceptable both to the G.L.C. and the London Boroughs Association. I beg to move.

On Question, Amendment agreed to.

LORD SHEPHERD moved Amendment No. 29: After Clause 19 insert the following new clause:

Application of Section

" . The Secretary of State may by regulation apply the provisions of section 19 to tenants under contract (in this section called a furnished tenancy to which section 70 of the Rent Act 1968 applies or would apply but for subsection (3) of that section) and the expression ' private tenant ' in this section shall be construed accordingly.

No regulations shall be made under this section unless a draft of the regulations has been approved by a resolution of each House of Parliament.".

The noble Lord said: Clause 19 brings in a new provision for rent allowances to be available to those in our community who live in the private sector and who are in a special position of need, and this is a provision which we very much welcome. However, the Bill omits to deal with the position of many hundreds of thousands of persons who live in the private sector but in furnished accommodation. Many of these people live there because no other form of residence is available to them, and, as the Francis Committee Report showed, many of these people live under great hardship and considerable strain as a consequence of the high rents that are being charged because the accommodation is furnished and is, therefore, outside the existing rent legislation.

In Committee I moved an Amendment the object of which was to provide that those who lived in furnished accommodation, and where there is a clear case of need, would have available to them the provisions of Clause 19; that is, a rent allowance. I must say that I was impressed by the Minister's reply. He recognised that there was considerable hardship, that this was a field where clearly Government sooner or later would have to take action and that the Government were considering the Francis Committee Report and, I think it is right to say, were also carrying out their own investigations into the matter; but said that they were not yet ready to include rented accommodation in the provisions of this Bill.

My Lords, I can understand the difficulty of the Government in this matter, but one must also recognise that although housing legislation is a fairly regular feature in Parliament, it may, as a consequence of this major Bill, be some years before we see housing legislation with a subsidy or allowance included in order to deal with the hardship which those who live in rented furnished accommodation are clearly experiencing. Therefore I thought it would be right to include in this Bill a clause which was permissive in character: in other words which would make it possible for the Secretary of State, once he had reached a conclusion about the area of the furnished tenancies with which he ought to deal and the method by which he intended to deal with it, instead of having to wait (as we know Secretaries of State often have to) until there was legislative time available, to take the necessary action by regulation that he would have taken if he could have had legislation before Parliament.

My Lords, the new clause is quite clear in itself that: The Secretary of State may by regulation apply the provisions of section 19 to tenants who live in a furnished tenancy and that No regulations shall be made under this section unless a draft of the regulations has been approved by a resolution … of both Houses of Parliament. I stress that this is a permissive provision. It is very difficult to know the numbers which are involved, but the Francis Committee indicated that there were a considerable number of people who were under hardship. If this clause were included it would make it possible for a Secretary of State, once he has made up his mind about the area in which he intends to act, and having also decided how he intends to deal with it, to proceed to do it by regulation under this Bill, without waiting for future legislation. I beg to move.

6.35 p.m.

LORD DRUMALBYN

My Lords, the noble Lord has moved this Amendment in very persuasive terms but I am sure he well recognises that the purpose of the Amendment is so obviously right that if it could be done it would already be in the Bill. I want to assure the noble Lord that there is absolutely no intention to delay more than is absolutely necessary in obtaining the legislation for this purpose. I can tell him that since the last stage of the Bill the consultations with the local authority associations on devising a feasible scheme have progressed well. We hope that the Minister for Housing and Construction will be able to make a Statement on this matter before the Summer Recess. But until one has reached finality on the point it is not really very wise to take powers to make regulations. In circumstances of this kind one has to know the sort of line that can be taken and whether the subjects are really suitable for regulations. Our view is that this is something that ought to be done by legislation, because there is legislation on unfurnished tenancies already and therefore this would be very much more satisfactorily done in that way.

The noble Lord knows that it is impossible to give any assurance from one Session to another about when legislation will come along, but I can assure him that it is my right honourable friend's intention to bring in the legislation at the earliest possible moment. I hope that he will not press us here, if only because this is something we would like very much to do if we were convinced that it is the right thing to do; but we are not convinced of that, and we do not think it is right in the circumstances to do it in this way.

LORD SHEPHERD

My Lords, I hope that the House will feel that that is not a very satisfactory answer. The noble Lord himself has clearly admitted, as he could hardly deny, that as a consequence of the Francis Committee's Report there is considerable hardship. I accept that the Government would wish to do something about this. I am glad to see that the Minister responsible hopes to make a Statement before the Summer Recess. We are now in the second week of July. Summer Recess is, therefore, some six weeks away. We can expect an important Statement, therefore, in about six weeks' time. I would expect that to be a Statement of policy. I would expect that in that Statement the Minister would indicate that he intends to do something about this hardship. That is right and proper, and I am very pleased to hear it.

The noble Lord then said: "Well, I cannot make a promise about legislation". I am fairly certain that we are unlikely to see further housing legislation for another three years. I may be wrong, but that is a reasonable assumption, knowing the way in which in a Parliamentary timetable time for Bills is allocated to Departments and how the Departments themselves have to allocate time between one subject and another, recognising, particularly to-day, that Departments have a wide span of responsibility. What the noble Lord is saying is that the Minister recognises hardship and that he intends to make a Statement in six weeks' time. This is good; but quite clearly, before anything can be done about this question they have got to wait to some date undisclosed, which most of us who have had anything to do with the Parliamentary timetable well know will be some three or four years hence.

I would accept immediately from the noble Lord, Lord Drumalbyn, that legislation as such is perhaps the best method of dealing with this matter. If I could have legislation next year then I would not have thought any criticism could be lodged with the noble Lord. The choice that we have before us is whether we go for an imperfect way, but perfectly respectable type of regulation (although imperfect in the sense that a Bill is better) or permit these people, who clearly are in hardship—whose hardship was recognised by the Francis Committee 18 months or two years ago, or perhaps even longer—to wait three or four years before their hardship is dealt with, merely because the Government think that a Bill is the cleaner way of dealing with it.

Regulations are perfectly respectable. The basis of regulations is used on many occasions for major matters; therefore, I do not think the Government can say that because this is a major matter it is wrong to use the regulation method. The noble Lord, Lord Drumalbyn, said the Minister might find that it is not possible to do it properly by regulation. That may be so. Then I suppose the pressure would be on the Minister to produce legislation. But my Amendment is permissive. If the Minister finds that my Amendment, if it were in the Bill, would be unsuitable, he does not need to use it. Ministers in the past have taken power in legislation to do certain things by regulation and have not done it. Therefore there is nothing terrible about taking a power in a Bill and then not using it.

So I come back to the choice that is before the Committee. There are many thousands of people who to-day live in rented accommodation because no other accommodation is available. They are paying high rents, rents that they cannot afford, and they are living in hardship. The Government accept this, and there is to be a Statement as to what the Government intend to do about it. What I am asking the Committee to do is, by accepting this Amendment, to give the Minister Dower to deal with it as soon as the Minister himself wishes to deal with it, and to say that the Minister shall not be held back from dealing with an urgent social problem merely by those who control the business programmes of the two Houses. I hone the noble Lord will again consider this matter. I hope that the House will feel that the balance of advantage must lie in accepting the Amendment I have moved, which is purely permissive, which leaves it entirely at the discretion of the Minister whether he uses it or not; if the Minister feels that he ought to use it to alleviate hardship, the acceptance of this Amendment will make it possible for the Minister to act.

6.44 p.m.

LORD DRUMALBYN

My Lords, the noble Lord puts me in a certain difficulty here because he knows how difficult it is to give any assurance on a matter of this kind. I have said that my right honourable friend hopes to make a statement before the Summer Recess, but I must also say to the noble Lord that it is only right and proper that before one takes an order-making power of this kind one should be absolutely satisfied that a viable scheme can be devised. There are formidable practical difficulties, as I said during the Committee stage proceedings. One must also be certain that before a new and difficult statutory duty is placed on local authorities the duty can be effectively discharged. I can only say to the noble Lord that our view is that this is not a subject that is suitable to be dealt with by way of order. I can also tell the noble Lord that it is not the intention—always assuming that a viable scheme can be devised—to wait until we are in a position to legislate completely on Francis. I hope that in these circumstances he will be willing to accept our assurance that we mean to get ahead with this with all possible despatch.

We fully accept that there may be hardship here, and in any case it seems unsatisfactory that allowances should be made available for unfurnished tenants when they are not available for furnished tenants. Before we commit ourselves definitely, we want to be certain we can overcome the difficulties. I do not think it is right to take an order-making power until we know that. I am quite prepared to discuss the matter further with my right honourable friend before the next stage of the Bill, and if by that time he were to form the view that it would be possible to legislate by order then I am sure he would be the first to want to get the power as soon as possible. But I cannot give the noble Lord any kind of assurance on this, and the fact that, as he must realise, this matter has already been very carefully considered does not give me a great deal of hope that I shall be able to do as he asks. We have been able to overcome some difficulties already, and we shall certainly look at this again in the same spirit, but I am afraid with possibly a little less hope in this case than in some others.

LORD DIAMOND

My Lords, I am sure my noble friend is grateful, as I am, to the noble Lord for what he has said, and I hope that the discussions will be as productive as possible. I want to add one or two words in support of what my noble friend adduced in argument a little earlier. We are in the fortunate position that both sides of your Lordships' House are very anxious that legislation of this kind should be enacted, and we all know that the reason for not enacting it here and now is the technical difficulty of getting a viable scheme from an administrative point of view. So it is really only an administrative difficulty that is between us, and it is at the end of the day suitable to be dealt with by regulation rather than legislation.

Alternatively, if the noble Lord feels that we ought to wait for legislation, he is in a somewhat ambivalent position. He knows that I have been pressing time and time again that it was wrong in this Bill to introduce subsidy arrangements beyond 1981–82. Time and time again, when I have said that on the basis of past experience, there is bound to be a Bill before then, the noble Lord has said, "Well, you never know"; and that is the justification for providing now for subsidies running 12 and 13 years ahead. That is a very long time indeed. The noble Lord knows as well as I do the difficulty of finding time for legislation, the kind of fights that go on between Departments and the appropriate committees; there is always one queue, and that is the queue for legislation. It is very difficult for Departments to get their wanted legislation through, not only selecting their own priority but persuading their colleagues that their legislation is more important than that of some other Departments. Therefore, it is optimistic to a degree to hope that legislation can come in anything less than the three years my noble friend indicated.

Look at the difficulties that are going to arise in that period as between tenants of furnished and unfurnished premises, the kinds of jealousies and tensions and so on that are going to arise. If the Government had turned their mind against this proposal, we should have had to accept it. But they have said that they welcome it and are anxious to have it. We know, of course, that the local authorities have their consideration in the matter, too, and it is proper that they should be fully consulted. I am not doing anything more than advising the Government to consider the difficulties of legislation and to consider how appropriate this matter is for regulation. My noble friend has made it clear that the local authorities' powers are purely permissive in the Bill. If the noble Lord thinks the Government would take steps on the matter within two or three years it is really no great sin against the priorities, and I accept what was said about reasonable priorities, to take in powers that one allows to lie idle for two years. This is not a very great sin, so I hope the noble Lord will convey to his colleagues in another place the feelings expressed by his colleagues and also by those on this side of the House of the advisability of enabling the Government to proceed with this valuable reform without the impediment of having to fight for a place in the legislative queue.

LORD SHEPHERD

My Lords, with the permission of your Lordships, may I say that I do not intend to be unhelpful in what I say, but to suggest that there is a possible way out. First of all, we are going to have a Statement before the Summer Recess by a Minister in the House of Commons. My understanding is that the House of Commons' Summer Recess is more likely to commence at the end of July rather than in mid-August. I suspect that your Lordships will be sitting into mid-August. If the noble Lord, Lord Drumalbyn, is willing to take the Third Reading of this Bill in the second week in August I would assure the noble Lord that we would give all possible assistance to see that the Bill is passed through its final stages then. This would give the Government time on Third Reading to move the necessary clauses to implement the Statement that is to be made by the Minister. Having made the Statement, obviously the Government must take into account how they intend to implement their proposals, and therefore they must be well on the way to drafting particular clauses. I do not put forward this suggestion in a mischievious way but, I would hope, in a helpful way because I recognise the force of some of the points which the noble Lord has made. I hope the Government will be deeply conscious of the great hardship many thousands of people are going through, although we, too, recognise that the Government themselves wish to deal with this problem.

As the noble Lord, Lord Drumalbyn, said, it seems inequitable that one is dealing with the private sector in rent allowances and not being able to act for those who are encountering difficulties in the furnished sector. So, the Government will know that they will get their Bill; they will know that they could deal with this whole problem in a most comprehensive way, particularly in the field of rebate allowances, and, therefore, I suggest, in all sincerity, that the Government consider delaying the Third Reading until the Minister has been able to make his Statement in another place and to provide the Government with an opportunity of putting their clauses into the Bill. I am not asking from the noble Lord any assurance; I ask him to consider the matter, because I think he will recognise that he will be dealing in one fell swoop with the hardship in the private sector, whether in regard to unfurnished or furnished tenancies. I am certain that this Bill, about which there are a great many hard feelings, would perhaps be more acceptable if it was felt that the Government had gone out of their way to deal with the undoubted hardship of tenants who live in furnished accommodation. I hope the noble Lord, Lord Drumalbyn's smile is one of consideration and sympathy. Having to that extent got the nod from him, I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Schedule 3 [Computation of rebates and allowances]:

6.55 p.m.

LORD DRUMALBYN moved Amendment No. 30: Page 128, line 41, at end insert (" which is eligible to be met by a rebate or an allowance.").

The noble Lord said: My Lords, this might be a convenient time to move this Amendment because it is one on which I could either make a long speech or a very short speech. It includes six Amendments in Schedule 3, seven Amendments in Clauses 25 and 26, and one in Schedule 9, No. 137. The Amendments therefore are Nos. 30, 31, 32, 33, 39, 45, 54, 55, 56, 57, 58, 59, 60 and 137. I can assure your Lordships these Amendments are basically drafting Amendments. Their principal purpose is to clarify the element of rent which can he met by rebate or allowance; they do not alter the intentions of the provisions of the Bill before the House but seek to ensure that these intentions are made clear. If noble Lords would like to ask any particular questions I should be happy to answer; also if they are willing that these Amendments should be taken together I shall be happy to deal with them now or after dinner. I suggest that having, perhaps, had an opportunity of studying them noble Lords may be content to accept my word that they are basically drafting Amendments.

LORD SHEPHERD

My Lords, I am always willing to accept the recommendation of the noble Lord in a matter of this kind. I should like to suggest that were we to adjourn now we will carefully consider what the noble Lord has said about how these particular Amendments affect the Bill. If, as the noble Lord says, they are drafting Amendments, I can assure him he will get them very quickly, but I think that since we have been at it some hours he may feel he can make better progress if we now adjourn to have some refreshment and return to finish our stint at about ten o'clock.

LORD DRUMALBYN

I do not want to feel that I am bouncing the noble Lord, on the other hand I do not want him to feel I am condemning him to study these Amendments at dinner time, but in view of what he has said I beg to move that this House do adjourn during pleasure until eight o'clock.

Moved accordingly, and on Question, Motion agreed to.

[The Sitting was suspended from 6.58 p.m. to 8.0 p.m.]

LORD SHEPHERD

My Lords, the noble Lord, Lord Drumalbyn, moved Amendment No. 30, and also spoke to a series of other Amendments. I have looked at them with care and they do not seem to raise any matter of great prin ciple. Therefore, we should be quite willing to see them inserted into the Bill.

On Question, Amendment agreed to.

LORD DRUMALBYN

My Lords, I beg to move Amendments Nos. 31, 32 and 33.

Amendments moved— Page 129, line 35, leave out ("weekly rent and") Page 129, line 36, leave out ("the rent or") Page 129, line 36, at end insert— (" (2) References in this Schedule to ' weekly rent ' are references to the amount which represents the rent which is eligible to be met by a rebate or an allowance as converted in pursuance of sub-paragraph (1) above.").—(Lord Drumalbyn.)

On Question, Amendments agreed to.

8.2 p.m.

LORD DRUMALBYN moved Amendment No. 34: Page 130, line 33, leave out ("blind") and insert (" registered in pursuance of arrangements made under section 29(1) of the National Assistance Act 1948 (welfare arrangements for handicapped persons) ").

The noble Lord said: My Lords, with permission, I shall speak to Amendments Nos. 35, 36, 37 and 38 with this Amendment. These Amendments result from an undertaking which I gave at Committee stage to consider extending the special needs allowance for the blind in the model scheme to the chronically sick and to other disabled, in recognition of the additional expenses which my noble friend Lord Crawshaw said some of these people have to incur. The Amendments go further than the original undertaking. I am glad to say that they also extend the higher needs allowance to those of the chronically sick and disabled who receive attendance allowance. The increased needs allowances are to apply to persons registered in accordance with arrangements under Section 29(1) of the National Assistance Act, 1948. Accordingly, the Amendments relate to the "substantially and permanently handicapped persons" registered with local authorities under Section 29 of the 1948 Act. All persons, whether employed or not, receiving help under that Act, as extended by Section 2 of the Chronically Sick and Disabled Persons Act 1970, are eligible for registration.

As a result of the Amendments now proposed, it is no longer necessary to refer specifically to the blind as they will be covered by the revised paragraph 8(2). I think it is important to make this point, because of course it is not intended by these Amendments that we should in any way go back on the provision made for the blind in the Bill as it stands at the present time. We have done our best to meet the case which my noble friend Lord Crawshaw and others made, and I hope we have succeeded. My Lords, I beg to move.

LORD CRAWSHAW

My Lords, I should like to say a word or two, having raised the point at a very early hour a month ago. I should like to put on record my thanks and appreciation to the Government for putting forward these Amendments, because not only am I thoroughly satisfied with them but they are certainly an improvement on my original Amendments, the definition in the National Assistance Act being that much wider than in the Chronically Sick and Disabled Persons Act. I have discussed this matter with the various disabled associations, and I am also delighted that those receiving attendance allowance will come into this enhanced needs allowance category. I took the opportunity before dinner of having a word with my noble friend Lord Fraser of Lonsdale, because, as your Lordships will see, the word "blind" is completely removed from the Bill. He assured me that he saw no objection at all, so far as the blind were concerned, and he was quite happy to extend this allowance to other physically disabled.

Finally, in passing, may I say that this ruse was, like a good many other good ideas, hatched at Oxford—not in the gown part, but in the town part. Although I speak with a strong dark blue bias, I would express appreciation of that fact, and would suggest that in future Oxford should be known as the place of former lost causes, rather than the place of current lost causes. I am grateful to the House for the warm reception which these Amendments have had.

LORD SHEPHERD

My Lords, this is a major concession and I am quite certain that the House will be grateful to the noble Lord, Lord Drumalbyn, and his colleagues in the Government for finding ways and means of meeting the undoubted wish of the Committee when it discussed this matter some weeks ago. I should like to congratulate the noble Lord, Lord Crawshaw, and his colleagues whose names were put to the Amendments, not only on having succeeded in persuading the Government about the justice of their cause but on the manner in which, despite the very early hour of the morning, they were able from their chairs to organise a very formidable front. I do not believe the Government ever had any choice but to concede, whatever may have been the merits of the case. The Committee had already taken up a view, whether in your Lordships' House or somewhere else, and a great deal of work had clearly been undertaken. All I can say to the noble Lord, Lord Crawshaw, is that if ever he wishes to be a Chief Whip I am certain that we on this side of the House will always bear him very much in mind.

The Government are right about this matter. I have put down Amendment No. 40, which is the same as an Amendment which I moved in Committee but did not press, but I should like to ask the noble Lord, Lord Drumalbyn, whether anyone in receipt of war disablement pension or industrial disablement benefit, who has not so far registered, can now register and qualify under these Amendments, if he meets the needs of the Act. If that is the case, there is no need for me to move my Amendment. I should like to conclude by expressing my grateful thanks to the Government and to the noble Lord, Lord Crawshaw, for a major improvement to this Bill.

LORD AVEBURY

My Lords, may I add one word of congratulation to the noble Lord, Lord Crawshaw, on his splendid achievement in having these Amendments written into the Bill and on his assiduity in persuading a number of noble Lords to come along at a very early hour and speak on his Amendments when we were in Committee. I do not think the Government knew what had hit them when noble Lords in all parts of the House rose to support the noble Lord with powerful arguments which were impossible to resist. I am delighted that the Government have seen fit to accede to the pleas that were made on that occasion. Obviously, one does not want to get up to thank the Government every time they give way on the twenty-one retreats they are making during the course of this Report stage; but I think that this is a particularly important concession, bearing in mind that it goes even further than the noble Lord, Lord Crawshaw, proposed at that time. As we have been told, the definition of "disabled" under the National Assistance Act 1948 is a wider one than under the Chronically Sick and Disabled Persons Act. I am delighted that this is so because I think the concession is going to be a valuable one to those disabled who are able to benefit from it—and the maximum possible number should be entitled to that benefit. I would add my congratulations to the noble Lord and to the Government for their good sense in giving way. I only wish they had had such good sense on many other occasions.

LORD DIAMOND

And future ones.

LORD DRUMALBYN

My Lords, I am glad that what we have done on this occasion has found favour in the eyes of the House as a whole. The answer to Lord Shepherd is that it must necessarily depend upon the degree of disability. Where persons are qualified to be registered they will also get the benefit under these Amendments.

On Question, Amendment agreed to.

Amendments moved— Page 130, line 34, leave out ("blind") and insert (" so registered ")

Page 130, line 35, leave out ("blind") and insert (" so registered ") Page 130, line 37, leave out ("blind") and insert (" so registered ") Page 130, line 38, leave out sub-paragraph (3).—(Lord Drumalbyn.)

On Question, Amendments agreed to.

LORD DRUMALBYN

My Lords, I beg to move Amendment No. 39.

Amendment moved— Page 131, line 4, leave out paragraph (a) and insert— (" (a) any rent received from a sub-tenant of part of the dwelling, exclusive of any amount attributable to furniture provided by the tenant, or to services provided by the tenant.")—(Lord Drumalbyn.)

On Question, Amendment agreed to.

8.14 p.m.

LORD DRUMALBYN moved Amendment No. 41: Page 133, line 20, at end insert—

(" ( ) for each person aged 18 years or more, but under 21 years and neither undergoing full-time instruction at an educational establishment nor in receipt of supplementary benefit … … … £1.00;)

The noble Lord said: This Amendment is in response to an undertaking I gave at Committee stage to consider the effect of the £1.50 abatement of rebates and allowances in so far as this applied to young earning non-dependent persons living with the tenant. The reduction from £1.50 to £1 a week for such persons aged 18, 19 or 20 recognises that in many cases these persons may have relatively modest incomes and that in many occupations the full "adult" wage is not payable until the recipient is 21. I commend this Amendment to the House. I beg to move.

LORD SHEPHERD

My Lords, the noble Lord has used, pretty well word for word, what I said in supporting this Amendment on Committee. The Government have been most wise and I am grateful that they have reached that degree of wisdom. I support the Amendment.

On Question, Amendment agreed to.

LORD DRUMALBYN

My Lords, I beg to move Amendment No. 42 which was spoken to on the last Amendment.

Amendment moved— Page 133, line 21, leave out ("18") and insert ("21").—(Lord Drumalbyn.)

On Question, Amendment agreed to.

EARL FERRERS moved Amendment No. 43: Page 134, line 29, after ("is") insert (" either—

The noble Earl said: My Lords, I beg to move Amendment No. 43. Perhaps we may consider with it Amendment No. 44.

The purpose of these Amendments is to remove a technical difficulty which may arise in the special case of those authorities who, in advance of the enactment of the Bill, have introduced a rebate scheme which is based on the model scheme in the Bill, and includes a provision on the lines of paragraph 16 for granting transitional rebates.

As the Bill is now drafted, an authority which has, before the coming into force of the Bill, already commenced granting transitional rebates under a scheme based on the model may find that, when their scheme becomes a statutory one under the Act, the tenant cannot satisfy the condition at present in paragraph 16(3) of the Schedule because his rebated rent under the model scheme could be identical in the two rental periods on either side of the date when the scheme becomes a scheme under the Act.

Accordingly, the Amendment will enable the Secretary of State in such cases to accept that the condition in paragraph 16(3)(a) has been satisfied because the authority had a comparable provision in its scheme, which although introduced before enactment was based on the model scheme in the Bill. Without this Amendment an authority which has already commenced granting transitional rebates might have no power to continue their payment when their scheme becomes a statutory one, and the tenant would thus lose the benefit of the transitional help under paragraph 16. I beg to move.

LORD SHEPHERD

My Lords, this was a technical Amendment and we have heard a very complicated explanation. I shall have to look carefully at what the noble Earl has said to see whether we can agree with it. If not, we shall have to come back to the matter on Third Reading.

On Question, Amendment agreed to.

LORD DRUMALBYN

My Lords, I beg to move Amendment No. 44 formally.

Amendment moved— Page 134, line 34, at end insert (" or— (b) that the rebate or allowance granted for the rental period immediately preceding that in which the relevant scheme under this Act came into operation consisted of or included an amount granted under a provision which in the opinion of the Secretary of State was comparable to this paragraph.").—(Lord Drumalbyn.)

On Question, Amendment agreed to.

LORD DRUMALBYN

My Lords, Amendment No. 45 was spoken to with Amendment No. 30. I beg to move.

Amendment moved— Page 134, line 38, at end insert— (" (5) In this paragraph "rent" means rent which is eligible to be met by a rebate or an allowance.")—(Lord Drumalbyn.)

On Question, Amendment agreed to.

LORD SHEPHERD moved Amendment No. 46: Page 134, line 43, leave out ("the duty") and insert ("within the discretion").

The noble Lord said: My Lords, this is an Amendment which I moved in Committee. I wondered whether the Government might not have given it further consideration; and since they have not themselves put down an Amendment on the Marshalled List, I thought I would do so to see whether the noble Lord will go a little further than he did on Committee.

In this part of Schedule 3 a local authority is required to take into account, when a person is applying for a rent allowance in the private sector, the size of the dwelling, whether it is larger than he reasonably requires and, secondly, in head (b), whether the rent is exceptionally high in comparison with the rent payable in a comparable private tenancy in the authority's area. One could not really question the wisdom of such a provision in the Bill but one had to recognise that there may be individuals who would find it difficult to move. We therefore thought it right that before any person was denied part of any allowance to which he had a right under the Bill, the authority should offer alternative accommodation. I understood from the Minister's reply in Committee that this would be the sort of matter that the authority itself would take into account. It is not spelt out in the Bill, and I wonder whether the noble Lord still feels that the words in the Schedule are sufficient, or would it be the intention of the Government, apart from what is in the Bill, to give guidance to local authorities in this particular matter? I beg to move.

8.20 p.m.

LORD DRUMALBYN

My Lords, it would be possible of course for my right honourable friend to give guidance to local authorities in this matter, and of course he also has an order-making power under which he could alter the provisions if he found that they were being applied unduly restrictively, or unduly harshly. We have looked at this point again, but I think that the arguments that I put forward on the last occasion really stand. There is no duty placed by this paragraph on the local authority except to consider whether they ought to reduce a rent allowance in the circumstances stated.

It would be a little odd if the Amendment were carried because there would be a kind of double discretion: there would be a discretion to exercise the discretion. That I think would be rather curious. After all, if they have to consider whether they ought, in all the circumstances—and these are all the circumstances that the noble Lord mentioned at the last stage, including age, health and personal circumstances—to reduce the rent, equally they are considering whether they ought not to reduce the rent in all the circumstances.

We think that we have the Bill about right here. We do not think that the local authorities are likely here to use their power in any harsh way, but we think it important that cases of this sort should be brought to the attention of the local authority, and that they should be given consideraion. Obviously, abuse of public funds might be involved here, and it is right that the local authority should consider this. In the light of what I have said, I hope that the noble Lord will be prepared to withdraw his Amendment.

LORD AVEBURY

My Lords, I do not agree that the noble Lord has satisfied the House that the phrase "in all the circumstances" adequately covers the contingency envisaged by the noble Lord in putting down this Amendment, which we also discussed on Committee. If you leave the complete discretion to the local authority to decide whether these circumstances justify the rent being reduced by an appropriate amount—and that is what we are discussing—in calculation of the rebate, the local authority can say to the tenant, "In our opinion you occupy accommodation which is too large for you and in all the circumstances we are not prepared to grant you the full rebate which otherwise you would have obtained under the Bill". If the local authority is going to take an extreme step of that nature, it ought at least to have offered the tenant some alternative accommoda tion. It is not obliged to do so under the Schedule as it stands.

The noble Lord may say that any reasonable local authority will obviously go to the tenant and ask him whether he will come into a two-bedroomed house, when he has previously occupied a three-bedroomed house. We know that this happens, and that our own local authorities, if they wish somebody to move because they can see that he is occupying accommodation which is too large for him because his children have grown up and left home, will say, "Look, Mr. So-and-So, perhaps you would like to move into something smaller". I can tell the noble Lord that in many cases in my own local authority tenants used to go along to the housing manager and ask to be moved so that they could have a reduction in their rent, but it so happens that our local authority is very unsympathetic to this approach. They do not like the bother—

THE EARL OF BALFOUR

My Lords, I am sorry to interrupt the noble Lord, but I must point out that this is rent allowances and not rent rebates. This concerns private property, not local authority property. I hope that he understands the difference, but from what he has just said he did not give me that impression. I think there is a very big difference here.

LORD AVEBURY

My Lords, the principle is exactly the same, if I may say so to the noble Earl. From the tenant's point of view—and this is what we are talking about in this Amendment—it makes no difference whether his landlord is a local authority or a private person: he is in precisely the same situation. It is no good the noble Earl shaking his head; from the point of view of the tenant, if he is occupying accommodation which is too large for his needs—and that is the supposition here, is it not? in paragraph (2)(a)—it is said in this Bill that he is not entitled to the full amount which would otherwise have been available to him because, in all the circumstances, the rent should be reduced by that appropriate amount in calculation of the allowance which he receives. I hope that I have read the paragraph right. The noble Earl is now nodding his head, so he is agreeing with me.

What is the difference? If the noble Earl can explain this to me, I should be delighted to hear that there was such a difference. I do not think he has ever been a tenant, otherwise he would not get up and make a remark of that nature; and he could not possibly envisage a tenant occupying accommodation that is too large for his needs and for which he has not been offered any alternative—and that, I think is the pre-supposition of this Amendment—and who is perfectly prepared to move but no one has ever asked him. Otherwise, it would not have been necessary to put this Amendment in. He is in a situation which is far worse, in fact, than the local authority tenant about whom I was talking a moment ago, because in the case of the local authority tenant at least he can go to his councillor and say, "I have asked for a move and the housing manager has not been able to accommodate me". In the case of the private tenant, no such opportunity is available to him because the councillor will say, "How can I bring influence to bear on your landlord? He is not subject to the control of the local authority."

Therefore, I think that the Amendment which has been tabled here is extremely important, and much more important, if I may say this to the noble Earl, Lord Balfour, than in the case of the local authority tenant. Sometimes he appears to be sympathetic, and sometimes he appears, if I may say this to him, to display an obtuseness about the needs of tenants which is truly astonishing. I would say that the needs of the private tenant in this respect are absolutely vital, and that if we do not have such a provision as is mentioned in this Amendment here then many tenants of private landlords are going to be victimised, and are going to be deprived of allowances by unjust action on the part of local authorities which we could avoid if we only were to write this Amendment into the Bill.

LORD GARNSWORTHY

My Lords, I think that the noble Lord, Lord Avebury, has mentioned something that we should do well to pay attention to. It seems to me—and it certainly seemed to me when the noble Earl, Lord Balfour, intervened—that we were getting a very long way away from the idea that an Englishman's home is his castle. Furthermore, I think that we ought to bear in mind not only (2)(a) but (2)(b), because this is not only just a matter of whether the house is considered too large, it is a question of whether the local authority considers that it is too expensive. I venture to think that there are consequences here that ought to be borne in mind.

When the noble Lord, Lord Drumalbyn, was speaking he said that his right honourable friend could alter the position if people were being affected unduly harshly. I want to point out that if his right honourable friend is going to wait for that, the damage will have been done so far as many people are concerned. I think that the noble Earl, Lord Balfour, would do well to remember that we are discussing not merely houses, we are also discussing people. People live in houses, and there is not one of us in this Chamber who would like it if somebody came to us and said—other than in war time—" The house you are living in is too large. You must move into one more suitable to your need." Yet if we bear in mind the problem of homelessness and overcrowding in this country at present, there is more justification for asking some of us to move than for proceeding with this part of the Schedule as it is worded at present.

There is a much better case to be made for sale. While people are in misery because they have nowhere to live, noble Lords with large properties should make room for them. There is certainly more justification for saying that than for saying to somebody who has lived in a house for a very long time, and whose income has fallen drastically, that he is now in need of a rent allowance and must move. I venture to suggest that there is much more in the Amendment than has been indicated from the Government Front Bench. I hope that they will think again. As I see it, this could result in the segregation of economic groups. The noble Lord, Lord Drumalbyn, will remind us that he has already said that his right honourable friend could do something if this situation developed. A number of people feel that they are being placed in a position of jeopardy which they do not deserve. It may well be argued that allowances and so on ease the situation. Anybody who is caught up in the effects of this provision will not appreciate his position. While the Amendment is very mild and modest, it is very helpful in that it leaves local authorities with some discretion. I am quite certain that the noble Lord's right honourable friend will have just as much power to pressurise local authorities as he claims he has to deal with the position if it should prove that some people have been treated unduly harshly.

THE EARL OF BALFOUR

My Lords, I interrupt the noble Lord because I feel it is important to stress that we are dealing with rent allowances. First, this is public money; part of it will be paid out of the rates. I do not think public money should be used to subsidise a person who does not need it. A local authority tenant living by himself in a three-apartment house can be moved comparatively easily by action on the part of the local authority.

LORD GARNSWORTHY

My Lords, I do not know whether the noble Earl would mind my intervening to say that many of us feel that the local authority tenant has needed and needs greater protection than he has enjoyed and enjoys.

THE EARL OF BALFOUR

My Lords, I can only comment on the law as it stands, right or wrong. A local authority can move a tenant. The person about whom we are talking is obviously a tenant in private property with complete security of tenure. I admit that it is a very big sacrifice for a person or a couple to have to move to a local authority house where security of tenure would be lost. But should we subsidise fully people who are living in a private five-apartment house when three apartments should be sufficient? A landlord would like to be able to move a single person to a smaller house but, so far as I know, he has no rights under the law. The local authority has. This might be just the sort of machinery a private landlord would love. If he could move a tenant, he could have the house done up beautifully and let it to a large family, perhaps from over-crowded accommodation. This happens all over the place.

LORD AVEBURY

My Lords, the Amendment presupposes that the landlord has made an offer for this tenant to move from one property to something more suitable to his needs. The noble Earl is arguing in favour of the Amendment.

THE EARL OF BALFOUR

My Lords, not entirely. In my opinion it would be restrictive. It would place the onus on the landlord as against the local authority. The present wording is perfectly clear. The Secretary of State can step in at any time in a case like this. According to the present wording it is the duty of the local authority to protect itself, and in my opinion no improvement is necessary.

LORD SHEPHERD

My Lords, the noble Earl provokes me. First, may I address my remarks to the noble Lord, Lord Drumalbyn. I am disappointed that he cannot see the virtue of this Amendment. All we are seeking here is the removal of the word "duty". Any reasonable person, looking at the provision which refers to the duty of every authority in relation to the circumstances, can see that it is more than an invitation. It will be construed as a direction. There is a duty to consider without specified circumstances. Clearly it is an invitation to the local authority to take these matters into account when granting or considering a rent allowance.

LORD SOMERS

May I intervene? I did not think that I would speak on this Bill, but surely a duty to consider does not imply any duty as to conclusion?

LORD SHEPHERD

My Lords, we have seen these words before in other types of legislation. A local authority could well consider this to be a duty to consider. What we are saying is that before a person is required to leave his premises, if he is to continue to receive rent allowance he should be offered alternative accommodation. Surely that is a perfectly reasonable request. The Minister may say—indeed, he has said—that one would expect a good local authority to do this. That is true. But then there is the question of the provision of proper alternative accommodation. There is perhaps a matter of dispute between the tenant and the local authority. If the Bill made provision for an appeals procedure many of our fears in relation to this part of the Schedule might well disappear. The Amendment refers to the tenant's age, health and other personal circumstances being taken into account. This again is merely a matter of opinion: the local authority may be right or wrong. There is no method of appeal, so the tenant is very much at the mercy of the local authority. I am very disappointed that the noble Lord, Lord Drumalbyn, is unable to meet us on this Amendment.

Now I come to the noble Earl, Lord Balfour. First of all, he speaks of the public purse. We have as much interest as the noble Earl in regard to the public purse. I suppose the difference between the noble Earl and noble Lords on this side of the House is that we seek a greater share of the public purse for the people who are in greater need. The noble Earl, I suspect from where he sits and the way he speaks, takes a view of the public purse for that part of the community that is far better off than the persons in whom we are interested. I have just bought a motor launch. I bought it for cash, but I could have bought it through the bank: I could have taken an overdraft, and I could have put the interest on my overdraft against my income tax. I hear the noble Lord, Lord Avebury, say that I ought to have done so. I am against the public purse being used in this way. But no doubt the noble Earl, Lord Balfour, thinks that this is a right and proper way in which the public purse should be used. If I were to buy a house for £25,000, £50,000 or it may be £100,000 and my bank was prepared to give me an overdraft, I could set the interest against my income tax—the public purse. I have no doubt at all where the noble Earl would vote on an Amendment to delete that from the Finance Bill. It is a different form of public interest.

Let me come to the noble Earl in terms of shares. He can get an overdraft from the bank in order to dabble on the Stock Exchange and make a profit. He can use the interest on that loan against his income tax. Therefore, when I know where the noble Earl sits, when I know him as a loyal supporter of the Government who have brought in this particular measure which has made possible these three instances, frankly, when he talks of the public purse, it makes me feel rather ill. But I suppose it is because our view of the public purse and the way it is to be used is quite different. I apologise to your Lordships for the delay, but I just could not take any more from the noble Earl.

I come back to the Amendment. I should like to test the view of the House. It is a fairly sizeable House. What we are seeking to do here is to give some form of protection to a person who has fallen on had times and who is in a house that is larger than perhaps he ought to be in. We feel that if that person is required to move, the local authority should provide or offer to provide him with alternative accommodation before they refuse to grant the rent allowance, and that the question of the person's age, health and other personal circumstances should be taken into account. I think this is fundamental. Your Lordships have listened to the debate and know the difference of view between myself and the noble Earl, Lord Balfour, who has consistently supported the Front Bench opposite. It is for the House to judge on the merits.

VISCOUNT SIMON

My Lords, before the noble Lord seeks to divide the House. I wonder whether he could help me and possibly some other noble Lords, because I am puzzled by this Amendment. I am not clear who is going to offer the alternative accommodation. The noble Lord spoke as if the local authority were going to. But the tenant of the private accommodation may be very low on the waiting list. Are the local authority to make him an offer of accommodation before a lot of people on the housing list?

LORD SHEPHERD

My Lords, why not?

VISCOUNT SIMON

My Lords, I do not understand the machinery, and perhaps the noble Lord can help me.

LORD SHEPHERD

My Lords, may I speak again with your Lordships' permission? Here is a person who has fallen on bad times and is in a house far too big for him. Under this Bill, quite rightly, this person is now to have an entitlement to a rent allowance to help him in his difficulties. Schedule 3 requires the local authority to consider, in the light of all the circumstances, whether the full allowance or any part of the allowance is to be paid to that individual who has fallen on hard times. I should have thought that before that person's allowance is reduced or abolished it would be for the local authority, who are responsible under the Bill, as we all know, but also have a general responsibility to the people in the locality, to say: "This house is too big. We cannot, in all justice, give you this rent allowance, but we will offer you this local authority accommodation "—or they may be able to assist with private accommodation. It is for the local authority to step in and say whether they can provide alternative accommodation.

LORD HAWKE

My Lords, I am not so worried about the local authority aspect of this problem, but I am worried about the private landlord aspect of it. When the words used are "reasonable accommodation" I ask who is to be the judge of what is "reasonable"? A tenant may receive a reasonable offer of a smaller house anywhere else, but he may say: "I do not like that house. It is a noisier place; it is further from the bus stop, and it is up two floors instead of one." Who will judge on that sort of thing? I think this Amendment is defective in the way of trying to make somebody a judge of what is a fair exchange in housing.

LORD SHEPHERD

My Lords, the local authority is going to be put into a position to judge, in any case, whether a person receives a rent allowance or not.

LORD DRUMALBYN

My Lords, with the leave of the House, may I say a word or two on this matter? First of all, I think that the first Amendment does not make sense because there is a double discretion. I suggest to the House that it is right that the authority ought to consider whether in the circumstances it is right to pay out public money. Secondly, if there is an old lady in the house and it is difficult for her to move, no doubt the local authority will come to the conclusion that they ought not to reduce the rent allowance. But what about a young healthy man who may have fallen on hard times? If he has first to be offered another house, what incentive is there for him to go and look for alternative accommodation? Who thinks it is right for a young person like that to occupy accommodation that is too expensive, beyond his own purse, when he could house himself properly elsewhere?

LORD SHEPHERD

My Lords, the noble Lord should read the Amendment.

LORD DRUMALBYN

My Lords, I have read the Amendment. If you say he is to be offered something first, what incentive is there for him to go and look for himself?

LORD GARNSWORTHY

My Lords, I wonded whether the noble Lord will allow me to ask him a question, because I think it is important. Bearing in mind what the housing situation is—how few houses are available in the private sector, how difficult it is to get on a local authority housing list, and how long one has to wait—does the noble Lord really think that these people will have any opportunity to find alternative accommodation themselves?

LORD DRUMALBYN

My Lords, of course I think so. A young and active person can go and look himself for suitable accommodation. I really think we are losing our sense of proportion altogether over this Amendment. One must leave it to the local authority to judge whether, in all the circumstances, they ought to use the stick as well as the carrot and say, "We think you could find accommodation more suitable to your needs elsewhere and it is absurd that you should occupy accommodation that is far too expensive for you and for us to have to supplement that by a subsidy" The circumstances will vary enormously. Surely it is right: first, that the local authority ought to consider the question; and, secondly, that they ought to be left to make up their own minds as to whether, in the circumstances, it is right to reduce the rent allowance or not. As I said before, there will be circumstances where they will come to the conclusion that they ought not to reduce the rent allowance, but equally there will be cases where they will think it is their absolute duty to do so in order to bring the person concerned back to a normal sense of values.

LORD SHEPHERD

My Lords, the noble Lord speaks about a "young person". I wonder whether the noble Lord would read to the House Amendment No. 48? I should have thought that the last two lines dealt quite conclusively with the point made by the noble Lord.

LORD DRUMALBYN

Amendment No. 48 reads: and reasonable alternative accommodation has been offered to the tenant which the tenant has unreasonably refused and provided that there shall be taken into account when determining whether the refusal was unreasonable the period during which the tenant has occupied the dwelling, his age, health and other personal circumstances, I do not see why one should restrict the range of consideration of the local

Schedule 4 [Rebates and allowances: procedure]:

9.2 p.m.

LORD DRUMALBYN

My Lords, I beg to move Amendment No. 49. This is to make it quite evident that this matter applies to allowances as well as rebates.

Amendment rnoved— Page 138, line 28, after ("rebate") insert ("or an allowance").—(Lord Drumalbyn.)

authority to these particular factors. One must keep all the considerations open to them to see where their duty lies in the circumstances. I really do think we are losing our sense of proportion on this.

8.53 p.m.

On Question, Whether the said Amendment (No. 46) shall be agreed to?

Their Lordships divided: Contents, 32; Not-Contents, 65.

CONTENTS
Addison, V.	Hall, V.	Shepherd, L.
Avebury, L.	Heycock, L.	Simon, V.
Bacon, Bs.	Hoy, L.	Slater, L.
Beaumont of Whitley, L.	Janner, L.	Strabolgi, L. [Teller.]
Beswick, L.	Maelor, L.	Taylor of Mansfield, L.
Blyton, L.	Milner of Leeds, L.	Watkins, L.
Champion, L.	Morris of Kenwood, L.	Wells-Pestell, L.
Diamond, L.	Popplewell, L.	White, Bs.
Donaldson of Kingsbridge, L.	Rhodes, L.	Wright of Ashton under Lyne, L.
Gaitskell, Bs.	Rusholme, L.
Garnsworthy, L. [Teller.]	St. Davids, V.	Wynne-Jones, L.

NOT-CONTENTS
Aberdare, L.	Elliot of Harwood, Bs.	Milverton, L.
Ailwyn, L.	Essex, E.	Mowbray and Stourton, L. [Teller.]
Allerton, L.	Ferrers, E.
Auckland, L.	Fortescue, E.	Moyne, L.
Balerno, L.	Fraser of Lonsdale, L.	Northchurch, Bs.
Balfour, E.	Gage, V.	Nugent of Guildford, L.
Barnby, L.	Gainford, L.	Oakshott, L.
Beauchamp, E.	Gisborough, L.	Reigate, L.
Belstead, L.	Gowrie, E.	Saint Oswald, L.
Berkeley, Bs.	Gridley, L.	Sandford, L.
Brabazon of Tara, L.	Hailsham of Saint Marylebone, L. (L. Chancellor.)	Selkirk, E.
Coleraine, L.		Sempill, Ly.
Colville of Culross, V.	Hawke, L.	Somers, L.
Craigavon, V.	Hood, V.	Stamp, L.
Cranbrook, E.	Jellicoe, E. (L. Privy Seal.)	Strang, L.
Crathorne, L.	Kemsley, V.	Strange, L.
Crawshaw, L.	Killearn, L.	Strathclyde, L.
Davidson, V.	Latymer, L.	Sudeley, L.
Denham. L. [Teller.]	Lauderdale, E.	Terrington, L.
Drumalbyn, L.	Lothian, M.	Vernon, L.
Ebbisham, L.	Lucas of Chilworth, L.	Vivian, L.
Eccles, V.	Macleod of Borve, Bs.	Young, Bs.
Elles, Bs.	Massereene and Ferrard, V.

On Question, Amendment agreed to.

LORD DRUMALBYN moved Amendment No. 50: Page 140, line 3, at end insert—

(" Provided that the authority may, if in their opinion the circumstances are exceptional, allow the new period to commence with the first rental period after the end of the former rebate or allowance period.")

The noble Lord said: My Lords, the purpose of this Amendment is to allow authorities discretion in dealing with renewals of a rebate or an allowance where the tenant has failed to re-apply within the one month period allowed under paragraph 10(3) of Schedule 4, but wishes the new rebate or allowance period to commence at the expiry of the former one. The Amendment allows authorities to back-date the renewal period if the circumstances are exceptional. The authority can thus deal with the case where, for example, a tenant had unavoidably been unable to put in his application at the correct time owing to illness or because he was away from home. I beg to move.

LORD SHEPHERD

My Lords, I am grateful that the Government have seen the wisdom and force of the arguments that were made from this side of the House from the Liberal and Labour Benches in this matter. I am glad to see that the Government have now moved this Amendment and I can only think that if they had been a little less rigid in Committee we might have had a shorter Committee stage and perhaps a shorter Report stage. But so be it.

LORD AVEBURY

I should like to remind the Minister that we spent a long time on this matter in Committee. If anybody blames us for prolonging the Committee stage over nine days we must reply that if the Government had been more forthcoming, as the noble Lord, Lord Shepherd, has said, we could have dealt with the matter in five minutes instead of having to return to it now.

On Question, Amendment agreed to.

Clause 23 [The Advisory Committee on Rent Rebates and Rent Allowances]:

9.6 p.m.

LORD SHEPHERD moved Amendment No. 51: Page 28, line 20, after ("appointed") insert ("after consultation with the local authority associations and with organisations with experience in social work").

The noble Lord said: My Lords, I beg to move Amendment No. 51. Subsection (2) provides for the Advisory Committee on Rent Rebates and Rent Allowances to be set up. The purpose of this Amendment is to ensure that the Secretary of State, before making an appointment should have consultations with local authority associations and with organisations who have experience in social work. The noble Lord, Lord Drumalbyn, on behalf of the Government, is moving Amendment No. 52 and it appears that the Government accept the general philosophy that we put from this side of the House that the Committee should represent a broad experience, not only of local government, but also of other matters, particularly in the social field. I will not press my Amendment if I can have the assurance from the noble Lord, Lord Drumalbyn, that the Secretary of State will undertake consultation with organisations before making appointments to what will be a very important Advisory Committee. The noble Lord, Lord Avebury, has a similar Amendment down and if the noble Lord, Lord Drumalbyn, can give me the assurance I seek I will not press my Amendment.

Lour AVEBURY

My Lords, perhaps it would be for the convenience of the House if we took these Amendments together because they are all concerned with the composition of this body. We could discuss the three Amendments together.

LORD DRUMALBYN

My Lords, I can certainly give the noble Lord, Lord Shepherd, the assurance that he wants. If we are speaking to all three Amendments at the same time, perhaps I may explain the purport of the Amendment which is in my name. It says: The Committee shall consist of persons with experience of local government and other persons (with or without such experience) whom the Secretary of State considers to be specially qualified to advise him on the matters mentioned in subsection (1) above. There are here two questions that we discussed at some length in Committee. The first is the type of experience on which the advice tendered to the Secretary of State should be based and the second relates to the bodies whom the Secretary of State should consult when appointing the committee. Various suggestions were made on the Committee stage as to the types of experience which the Secretary of State should look for when appointing members of the Committee. The noble Lord, Lord Shepherd, mentioned experience of social work then and he has put it in his Amendment. My noble friend Lord Crawshaw, mentioned experience of work among the chronically sick and disabled. The noble Lord, Lord Shepherd, mentioned the experience of problems of lower-income families. The noble Lord, Lord Shepherd, backed up by the noble Lord, Lord Avebury, mentioned the experience of elected members of tenants' associations. Important as all these qualifications are it can hardly be claimed that they constitute an exhaustive list.

My Lords, my right honourable friend and his advisers have considered this very carefully and they do not think it would be safe to try to enumerate all the kinds of experience which he would wish to tap nor does he think it desirable to pick out certain types of experience as pre-eminently important, other than experience of local government which is included partly because local government has not only to pay part of the cost of the rent rebates and rent allowances but also to operate the scheme. To try to cover all possible types of experience that might be useful would be to run the risk of having a Committee of unmanageable size. To mention particular types of experience might be considered invidious by these who resent the omission of qualifications which they consider indispensable. The best course seems to be to leave it to the Secretary of State to pick a team which he considers collectively to possess the qualifications and the experience that cover the whole field on which they will be advising him. It would be a team that could work together and not a collection of individuals and still less a sounding board for particular interests.

Since the members are not be appointed as spokesmen for specific interests it seems to me that it is not appropriate to define bodies representing specific interests who should be consulted on the appointments. Obviously the Secretary of State would in practice consult the local authority associations on the choice of members with experience in matters relating to local government although to require him to consult the local authority associations alone and on all the appointments might be thought to be invidious.

My Lords, Amendment No. 51 does not, I agree, restrict consultations to local authority associations. It goes on to include organisations with experience in social work. While the meaning of the words "the local authority associations" is definite the meaning and extent of the expression "organisations with experience in social work" is far from definite. Any organisation with such experience could claim to be consulted and complain if it were not. This is one of the difficulties of this kind of drafting, This drafting defect could no doubt be remedied but it would be difficult to draft a requirement which would not have the defect either of obliging the Secretary of State to consult a very wide range of organisations with experience of social work or leaving the Secretary of State open to criticism for not having consulted widely enough. But I can assure the noble Lord, Lord Shepherd, that there will be consultations in order to get the appropriate type of membership for the appropriate bodies.

My Lords, it is for these reasons that it seems to me far better to leave the Secretary of State free to consult those bodies most likely to suggest or comment on the persons with the qualifications or experience which he is looking for. Undertakings have been given in Parliament that the Secretary of State will include persons with experience which I will list—supplementary benefits, the effect of means-tested benefits on the incentive to increase earnings, valuation, the problems of low income families, the point of view of council tenants, the point of view of private tenants, the point of view of landlords and the problems of the chronically sick and disabled. I am sure noble Lords would not want to try to tie the Secretary of State down as to the organisations he should consult to obtain people with such experience. The Secretary of State will want to get advice on appointments just as he will want to get advice from the persons whom he appoints. He really does not have to be told to do so. I hope your Lordships will be content with Amendment No. 52 which is a genuine attempt to meet the wishes of the House in the most practical way.

LORD AVEBURY

What are these people going to be asked to advise on? I would refer the noble Lord, Lord Drumalbyn, back to subsection (1) which refers to any question relating to the operation of rebate schemes and allowance schemes in general, or of particular rebate schemes or allowance schemes, That is what these persons will be required to give advice on. To exclude persons who are tenants and who have experience of such schemes is ludicrous. If the noble Lord wants the best advice, and I have no doubt he does, obviously he must have persons who have been subjected to such schemes—persons who have been on the receiving end of them for many years. I do not refer to the kind of schemes as are in the model which is called for under this Bill, but to tenants of local authorities (not private landlords as yet) who have had to work out their arithmetic under rebate schemes which have existed hitherto, and who will therefore be in the best position to advise the Government on how these schemes have operated in the past and how the scheme proposed under this Bill is likely to operate in the future.

LORD DRUMALBYN

My Lords, I mentioned that they would be among the persons who would be appointed.

LORD AVEBURY

No, my Lords; the noble Lord did not say that. He said, "persons who represent the point of view of council tenants and private tenants". That is not what my Amendment says. I refer to persons who are council tenants or private tenants. Guarantees have been given by the Government that their point of view will be represented. This could involve somebody who is brought in as a stooge, with the Government saying, "This person is going to represent the interests of the council tenants" or "the private tenants", as the case may be. I am saying: Why should there not be a council tenant or a private tenant on the advisory committee? What is wrong with that? If the noble Lord will go one stage further with me I shall be perfectly satisfied. Perhaps "representatives" is the wrong word because this is not a delegate body; I am with the noble Lord there. But if he is saying that the persons who are on this committee as representing that point of view have no experience of it personally—they have not actually been council tenants or private tenants but are there only to represent a point of view—this is inadequate.

I am not asking for elected members of tenants' associations to be brought in. I mentioned during the course of the Committee stage bodies such as the Association of London Housing Estates only because I felt a deep and bitter sense of resentment because the Government had refused to consult these bodies during the formulation of their proposals, and had failed to bring them into the dis cussions which took place subsequently. Ministers refused to see them, as I mentioned on that occasion, because they thought that once they brought one of these associations into consultation they would not know where to draw the line; they would have people from Birmingham, Leeds, Liverpool and so on wishing to be included, and so they refused to consult any association representing the interests of tenants.

I have withdrawn somewhat from the point of view I expressed on Committee in that I am not now saying that the Association of London Housing Estates—or Birmingham tenants or any other—should be nominated on to these advisory bodies. I am merely referring to persons who have been tenants and who therefore, by definition, have the kind of experience that the Government are looking for. I do not think that this situation would be invidious, as the noble Lord says. Who could possibly argue that tenants should not be represented on this committee? Would the social workers say that it was improper for the noble Lord to have a council tenant or a private tenant there to advise?

LORD DRUMALBYN

My Lords, I said that it might well also be the social worker; the same person might be the council tenant.

LORD AVEBURY

My Lords, that would be even better because then the noble Lord could kill two birds with one stone. If he could find a social worker who is also a council tenant, and say in advance that this would be done, then he would satisfy many people. What we are complaining about is that the discretion is too wide. Even on the Amendment that the noble Lord has now proposed, which refers to other persons whom the Secretary of State considers to be qualified, one must say that we do not know who the Secretary of State is going to be in a year's time when this Bill comes into operation, if it does come into operation then. We do not know what sort of persons he will have in mind. We want the provision to be more specific—or, at least, I do—so far as the tenants are concerned. This is a perfectly reasonable request. This is not asking for sectarian interests or for particular points of view to be pre-eminent in the committee. It is quite astonishing that the Government should not be prepared to give an undertaking in terms of the Amendment I am proposing. Merely to say that the point of view of these people will be expressed and will be taken into account is completely unsatisfactory.

9.19 p.m.

LORD HAWKE

My Lords, I have listened for over 25 years to noble Lords' speeches on every major Bill that has gone through this House. Every Opposition has endeavoured to pin down the Government to name the specific people they are going to have on their advisory committees, and generally every Government has managed to wriggle out of any such undertaking. On the whole, the end result has been rather good advisory committees, and I should not think it a good idea to change the system.

BARONESS GAITSKELL

My Lords, what about the committees concerned with private tenancies at the moment? Are the people on those committees experienced in local government? Are they people of experience in any particular walk of life? I know one or two people who are on these committees and they are sensible, democratic people but they have no specific experience of anything. I do not know where the Government will find these experienced people and they have given us no indication whatever of the kind of people they want on these committees. It is left wide open.

LORD DRUMALBYN

My Lords, in my speech I tried to give some indication of the sort of person who would be appointed. The words "the people to

express the point of view" I think are a direct quotation from what my right honourable friend said in another place—or it may have been Mr. Channon: I am not quite certain—but I took that to mean people who had had experience of such committees. I may have been wrong but I will certainly take note of what the noble Lord has said. I cannot commit my right honourable friend, of course, but I shall ask him what his intentions are and I will let the noble Lord know. I am sure they are honourable.

On Question, Amendment negatived.

9.22 p.m.

LORD DRUMALBYN

My Lords, I beg to move Amendment No. 52.

Amendment moved— Page 28, line 23, leave out subsection (3) and insert— (" (3) The Committee shall consist of persons with experience of local government and other persons (with or without such experience) whom the Secretary of State considers to be specially qualified to advise him on the matters mentioned in subsection (1) above"). —(Lord Drumalbyn.)

LORD AVEBURY

My Lords, I beg to move Amendment No. 53.

Amendment moved— Page 28, line 24, at end insert (" and persons who are tenants of local authorities and private landlords respectively.").—(Lord Avebury.)

9.24 p.m.

On Question, Whether the said Amendment (No. 53) shall be agreed to?

Their Lordships divided: Contents, 25; Not-Contents, 60.

CONTENTS
Addison, V.	Donaldson of Kingsbridge, L.	Simon, V. [Teller.]
Avebury, L.	Gaitskell, Bs.	Strabolgi, L.
Bacon, Bs.	Garnsworthy, L.	Strange, L.
Beaumont of Whitley, L. [Teller.]	Heycock, L.	Taylor of Mansfield, L.
	Hoy, L.	Watkins, L.
Beswick, L.	Janner, L.	Wells-Pestell, L.
Blyton, L.	Milner of Leeds, L.	White, Bs.
Champion, L.	Rusholme, L.	Wright of Ashton under Lyne, L.
Diamond, L.	Shepherd, L.
NOT-CONTENTS
Aberdare, L.	Belstead, L.	Crawshaw, L.
Ailwyn, L.	Berkeley, Bs.	Davidson, V.
Allerton, L.	Brabazon of Tara, L.	Denham, L. [Teller.]
Auckland, L.	Colville of Culross, V.	Drumalbyn, L.
Balerno, L.	Colwyn, L.	Ebbisham, L.
Balfour, E.	Cranbrook, E.	Eccles, V.
Beauchamp, E.	Crathorne, L.	Elles, Bs.
Elliot of Harwood, Bs.	Hood, V.	Oakshott, L.
Essex, E.	Jellicoe, E. (L. Privy Seal.)	Reigate, L.
Ferrers, E.	Kemsley, V.	Saint Oswald, L.
Fortescue, E.	Killearn, L.	Sandford, L.
Fraser of Lonsdale, L.	Latymer, L.	Selkirk, E.
Gage, V.	Lauderdale, E.	Sempill, Ly.
Gainford, L.	Lothian, M.	Somers, L.
Gisborough, L.	Lucas of Chilworth, L.	Strathclyde, L.
Gowrie, E.	Massereene and Ferrard, V.	Sudeley, L.
Gridley, L.	Mowbray and Stourton, L. [Teller.]	Terrington, L.
Hailes, L.		Tweedsmuir, L.
Hailsham of Saint Marylebone, L. (L. Chancellor.)	Moyne, L.	Vernon, L.
	Northchurch, Bs.	Vivian, L.
Hawke, L.	Nugent of Guildford, L.	Young, Bs.

On Question, Amendment agreed to.

Clause 25 [Treatment for purposes of Part II of sums payable in respect of rates or for use of furniture or for services]:

9.30 p.m.

LORD DRUMALBYN

My Lords, Amendment No. 54 was discussed with Amendment No. 30, one of the many, as was the next one also. I beg to move.

Amendment moved— Page 31, line 15, leave out subsections (1) and (2) and insert— (" (1) In Schedule 3 to this Act " rent which is eligible to be met by a rebate or an allowance " means the occupational element of the rent less, where part of the dwelling is sub-let, the occupational element of any rent payable by the sub-tenant. (2) For the purposes of subsection (1) above " the occupational element " of any rent means the amount of the rent—

1. (a) exclusive of any sum attributable to rates, and
2. (b) subject to any regulations made under this section, exclusive of any sum attributable to the use of furniture or the provision of services.

(3) The Secretary of State may by regulations—

1. (a) prescribe circumstances in which amounts are to be reckoned or not reckoned for the purposes of this section as payable for the use of furniture or the provision of services, and
2. (b) prescribe circumstances in which amounts payable by the tenant are to be treated for the purposes of this section as rent notwithstanding that they are expressed to be something other than rent.")—(Lord Drumalbyn.)

LORD DRUMALBYN

My Lords, I beg to move Amendment No. 55.

Amendment moved— Page 31, line 26, leave out ("a tenant's") and insert ("any").—(Lord Drumalbyn.)

LORD DRUMALBYN

My Lords, Amendment No. 56 is a drafting Amendment. I beg to move.

Amendment moved

Page 31, line 27, at end insert ("the provision of").—(Lord Drumalbyn.)

LORD DRUMALBYN

My Lords, Amendment No. 57 is a drafting Amendment. I beg to move.

Amendment moved

Page 31, line 41, leave out ("subsection (2) of").—(Lord Drumalbyn.)

Clause 26 [Interpretation of Part II]:

LORD DRUMALBYN

My Lords, Amendments Nos. 58, 59 and 60 are all involved with Amendment No. 30. I beg to move.

Amendment moved— Page 32, leave out lines 30 to 35 and insert— (" "sub-let", as regards a tenant's dwelling, includes a case where part of the dwelling is held by another person under a statutory tenancy as defined in the Rent Act 1968, and references to a sub-tenant of part of a tenant's dwelling shall be construed accordingly.")—(Lord Drumalbyn.)

LORD DRUMALBYN

My Lords, I beg to move Amendment No. 59.

Amendment moved— Page 33, line 4, leave out from ("a") to end of line and insert ("successor in title of").(Lord Drumalbyn.)

LORD DRUMALBYN

My Lords, I beg to move Amendment No. 60.

Amendment moved— Page 33, line 12, leave out subsection (2) and insert— (" ( ) Where part of a tenant's dwelling is sub-let then, in this Part of this Act, unless the context otherwise requires—

1. (a) references to that tenant's dwelling do not include references to the part which is sub-let (but without prejudice to the application of this Part of this Act where the subtenant is himself a tenant as defined above);
2. (b) references to a person who resides in the dwelling occupied by the tenant are references to a person who resides in the part which is not sub-let.").—(Lord Drumalbyn.)