HL Deb 06 June 1972 vol 331 cc278-99

8.44 p.m.

House again in Committee.

Clause 2 [The residual subsidy]:

LORD GARNSWORTHY moved Amendment No. 10: Page 2, line 39, leave out from beginning to end of line 42, and insert—

("1972–73 Nil
1973–74 The withdrawal factor
1974–75 Twice the withdrawal factor
1975–76 Two and a half times the withdrawal factor
1976–77 Three times the withdrawal factor.")

The noble Lord said: My desire is to calm the situation down so that we can get sweet reason on the other side of the Committee, and perhaps a little more willingness to accept what we hope are valid points. However, I beg to move Amendment No. 10. The purpose of the Amendment is to hold hack the beginning of rent increases until 1973–74. I think many Members of the Committee will feel that one of the most objectionable features of the Bill is the attempt by the Government to push housing authorities into increasing rents in advance of legislation—an attempt of a most objectionable nature. I do not want to use over-strong language, but I find it difficult to regard this attempt as anything other than coercive and undemocratic. Unfortunately, some housing authorities have fallen for it.

First, the demand for 50p increase last April meant a risk, as is now seen as a result of the Birmingham situation, that rents would be raised beyond a so-called fair rent level. Then, if local authorities failed to impose the 50p increase last April they are being compelled under the Bill to impose a £1 a week increase from October. The Government make a great deal of play about rebates and procedures for poorer tenants. They also tell us that they provide for representations regarding proposed rents to be made to a rents scrutiny committee. I do not know how they think all this can operate in October of this year. It seems to me that in this matter the Government are in too much of a hurry to do their unseemly work. To put it in a nutshell, they say, "We have a policy and we are going to implement it regardless." I think they would do well to take a little more time to think out policy and to realise that while progress involves change, as is well known change does not necessarily involve progress. When it comes to proposals being acceptable, they are no more acceptable—indeed, are a great deal less acceptable—when they are seen as change for change's sake. There is a feeling abroad that the Government are determined to make change without taking time to think out thoroughly all the implications of what they are proposing.

At the present time the Government resist wage claims which they insist are inflationary. I am not saying that they resist all claims, but they are resisting many wage claims which they insist are inflationary. Well, good! Let us do what we can in equity to contain the inflationary spiral. As I see it, the proposal is to put £1 a week burden on somebody with, say, a £20-a-week income—I ought not to say "income" but "take-home pay" because it is take-home pay, not gross income, that the housewife has to handle. £1 a week at £20 a week take-home pay represents 5 per cent. of that pay packet. There is more to come. With all the other increases, I think that a very serious situation is going to be created. Before long it will be another 50p, and then in 12 months' time another 50p; and it is inevitable that when the housewife has to meet this kind of increased expenditure—and I want to stress the point that it is the effect it has on take-home pay, as distinct from gross wages—inevitably demands for wage increases are bound to pour in.

I hope that the purpose of the Amendment is clear. It is to delay increases and make them less inflationary when they might become operative. We on this side accept and concur fully in the view expressed by the Association of Municipal Corporations, that if we must have this kind of approach the withdrawal of existing subsidies should be phased over a longer period. The Urban District Councils Association is on record as saying that the withdrawal of existing subsidies and rent increases ought to be phased over a longer period after the Bill is enacted, with the abandonment of any retrospective element in such withdrawal and increases. We ought to get on the record in this Committee the joint view of the Association of Municipal Corporations, the Rural District Councils Association and the Urban District Councils Association as expressed in a statement issued as recently as May of this year. They state that the transition to the new system should be phased over a longer period by a slower withdrawal of existing subsidies and a slower or more flexible progression to fair rents. In particular, this would enable authorities to adjust the incidence of rent increases so as to take into account local circumstances and allow a longer period for tenants to adjust their individual budgets. It seems to me that is a little bit of common sense.

They say that a slower rate of withdrawal of existing subsidies would also allow for the avoidance or reduction of any rate burden. I doubt whether I can improve on what those three associations, speaking for the world of local government, have had to say. I urge the Committee to do what it can to persuade the Government to make haste a little more slowly and to have a little more regard to those whom they are making their Agents—because that is what they are doing to local government. They are making them the agents of central Government's will and I think that they would do well to listen to the plea that the local authority associations have made for a little less haste.

8.54 p.m.


I do not want to delay the Committee at this late hour but I want to add a few words in support of the noble Lord, Lord Garnsworthy. This Amendment is fundamental and vital and would make an enormous difference to the successful operation of the Bill. If I am honest I must say that I do not want to see it successfully operated, I want to see it dropped altogether; but if we are going to have to have the Bill let us try and make sure that it is as workable as possible by the local authorities who, after all, are going to have to do the work. The fact that an important Amendment has been introduced late in the day in another place (the Amendment which is referred to as the "Birmingham clause") whereby local authorities who find that more than 2 per cent. of their tenants are going to be above the fair rents level as the result of the bringing into operation of the £1 increases on October 1 can ask for dispensation, as it were, is another powerful reason for allowing this Amendment to go through and for giving effect to some delay in the main provisions of the Bill. What is proposed here is a sensible and reasonable way of doing that. One is simply phasing the amounts that are provided for under Clause 2 until one year later than they would otherwise have occurred.

I do not know whether the noble Lord who is going to reply appreciates that local authorities have tried to consider the provisions of this Bill as best they can. They have tried to wade through the mass of verbiage in these clauses; they have only just begun to understand the full implications. In some cases—for example, we heard earlier of Crawley—the implications are very serious and authorities have started to write to the Department and explain how this is going to affect their tenants and affect the calculations that they have to make and the rebates to which they are entitled. Any delay of this kind is going to be of great assistance to the local authorities. We have heard from the noble Lord who moved this Amendment that it is not just individual authorities who are writing in, it is their associations (who, after all, represent the majority view of their members) who are asking for this kind of amendment to be made to the Bill. After all, in the long run it does not matter very much. The noble Lord who is to reply will reach the same position in 1976–77 as he would have otherwise have done; it merely gives individual local authorities that much more time to move over to the new system, and it gives the tenants that much more time to adjust themselves to the increases in rents which are inevitable sooner or later.

What the noble Lord said on this matter is of vital importance. If the Government are determined, as they say they are, to slow down the rate of inflation to moderate wage demands they have also to control the increases in the cost of living that fall on the average wage and salary earner in this country. I do not think that it is reasonable to expect trade unions and ordinary workers to scale down their demands. I know that some of them do so: the railway men have greatly decreased the demands that they originally made. I do not blame them for doing that; they are trying their best, with scant success, to co-operate with the Government in arriving at a fair wage policy. But how can you expect the N.U.R., ASLEF and the T.S.S.A., or any other trade union, to co-operate in the Government's wages policy when you are continually imposing on their members, and on the wives of their members, increases of the sort which are provided for in this Bill?

If the Government want to get the cooperation of the T.U.C. and of individual trade unions—they are always saying that they want to do this, and I wonder how genuine sometimes these remarks may be, but we can come to that on some other occasion—they will do whatever they can as a Government to mitigate the increases in the cost of living which ordinary workers, wage and salary earners in this country are facing. If at this early stage in the Bill the Minister were to stand up and say that he would agree to this Amendment it could make an enormous difference to industrial relations.


I should like to say a word or two on this Amendment. On Second Reading I made a short speech and I said that if it were not possible for Her Majesty's Government to give some further subsidy help in the case of houses and flats for general need, I only hope they might be willing to phase off the general subsidy over a longer period than is suggested in the Bill. I also declared an interest as being one of the Vice-Presidents of the Urban District Councils Association.

I hope that Her Majesty's Government will look at this point again. It is very important in a large number of areas that houses should be built, and I fear that if a generous subsidy is not given, anyway until we get over the worst of the difficulty, those houses will not get built. Two or three years ago in many areas of East Anglia I thought we had got over the greatest difficulty, but on making a few inquiries before I spoke on Second Reading I found that in the Newmarket Urban District Council and other councils they have quite big housing waiting lists again. So I would ask the Government seriously to look at this matter again and see whether they can phase the subsidy over a longer period. We accept that in slum clearance areas, areas of special demand, there is little housing for letting and only local authorities can build houses for letting. It does not pay to build houses for letting, without a generous subsidy. It is very unfortunate that ever since the First World War we have not been able to build houses for letting, with the exception of a few through housing societies, and the Church. Commissioners are building a few flats in London for letting. I hope that Her Majesty's Government will look at this point again.

9.1 p.m.


Some local authorities are in doubt as to whether at this stage they can introduce the Government rent rebate scheme, which is rather more generous, particularly to those not earning a great deal of money, than the schemes that are being operated in a great many authorities at the present moment. I can speak only for Scotland, and I hope your Lordships will forgive me for quoting Scotland here, but I understand that my own county of East Lothian has a rent rebate scheme which is very generous as compared with the schemes of most other local authorities in Scotland. I also had the opportunity of comparing the scheme worked by the Scottish Special Housing Association. It is not easy to compare those two rent rebate schemes with the Government scheme, but roughly the lines cross with a person earning about £26 a week, with the Government scheme being more generous to those earning less than £26 per week and rather less generous to those earning more than that. If Her Majesty's Government can assure local authorities that they can bring in the Government rent rebate scheme now, I think it will place those authorities in a rather better position in deciding whether they can increase rents now or have to wait until the Bill becomes an Act. That is one of the points about which I am a little in doubt. I merely ask this as a question and hope that the Government can answer before too long a time has gone by.

9.4 p.m.


If all the fears which noble Lords have been expressing were well-founded there would be something to worry about, but I think a great number of them are based on misconceptions and I will do what I can to set some of those at rest. The noble Lord, Lord Garnsworthy, sees the relationship between central and local Government as being one in which we in the central Government are putting the housing and local authorities into the status of acting as our agents. Nothing could be further from the truth. They are the housing authorities; the main responsibilities are theirs. What is being provided by this Bill is a better range of subsidies to assist them in their work.

A second misconception which I want to clear up is that this Amendment on its own—and the noble Lord did not link it with any other Amendment—has anything to do with or in any way affects rents. It cannot do so. Rents in some cases will move upwards in line with the progression of fair rents in accordance with Part V, and downwards as rent rebates come into operation in accordance with Part II, but nothing in this Amendment will affect rents one way or the other. In that connection the noble Lord talked about this being tough. This is not the case at all. One group of people who can afford to pay the fair rent will have their rents progressed to that figure, and that rent itself includes a subsidy bringing it somewhat below the market value of the house. Some 40 per cent. of council tenants will have their rents reduced below that figure by the application of more generous rebates to a larger number of people than enjoy rent rebates at the moment. This Amendment has no effect upon them at all. It does have the effect that it delays the changeover to a new system of subsidy. We have come to the conclusion that the existing system of housing subsidies leaves a great deal to be desired and is unsatisfactory, and that is the view which I understood noble Lords opposite had arrived at as well. When you have formed an opinion as to what should replace it, clearly the right thing to do is to move to that system with as little delay as possible and with all due despatch. We are dealing with what is "a due delay". I do not think there is anything now to delay the progress towards the new subsidy system.

Noble Lords also seem to be under the misconception that if the withdrawal of the existing subsidies were to begin as provided for in the clause we are now discussing, some authorities—Birmingham was quoted—that are not able to make the progression to fair rents as envisaged in Part VI would be put at a disadvantage. This is not so. If noble Lords will look at the next clause, which deals with the transition subsidy, they will see that this subsidy is designed specifically to meet the shortfall between the progression of fair rents, on the one hand, and the withdrawal of existing subsidies, on the other. I hope that, with those explanations dealing with the three misconceptions which have been present in this debate, the noble Lord will feel able to withdraw this particular Amendment.


I am a little confused by what the Minister has said about this and by what he calls the misconceptions that have been put forward by those moving and supporting the Amendment. He says that this does not put local authorities into the status of acting as the Government's agents. But surely that is exactly what the Bill as it now stands does. It is trying to force local councils to introduce what are laughingly called "fair rents". He also said that nothing in the Amendment will affect the assessment of fair rents. This may be true. But if the councils themselves had the additional money to use that would accrue to them as a result of the Amendment then it would be possible to revise the whole of the fair rents formula and make it more generous to tenants. Also, as this will occur later in the Bill, I think it is fair to mention that he referred to the question of rent rebates. Quite frankly, if the basis of his argument is going to depend on a fair working out of that then from past experience and the likelihood of the take-up and the number of people who will be forced to apply for rent rebates if they are to live at all, it seems to me to be a very shaky and bad foundation on which to rest the Bill.

9.10 p.m.


I thank the Minister for the clarity of his reply but I regret its nature. I regret it to the extent that I think I shall he unable to respond to the invitation that he made not to press this Amendment. Quite clearly, if the Government are going to be as rigid as they have shown themselves to be, not only in regard to the representations made from this side of the Committee but in their resistance to representations from responsible associations, then indeed one feels an obligation to test the Committee on this matter.

May I say that I very much appreciated the support from the noble Lord, Lord Lubbock.


Lord Avebury.


I suppose he was not like some of us: he had no choice; he had to change his name. I can never understand people changing their names. I apologise to him. I was grateful for the support that the noble Lord, Lord Avebury, gave to this Amendment; he made a number of points that I should have liked to make myself. But may I say to the Government spokesmen that I think they would do well to pay more heed than they have shown sign of doing to what was said by the noble Lord, Lord Wolverton. He has repeated what he said at Second Reading, and it is quite clear that when it comes to influencing the Government he has wasted his breath. We shall give him an opportunity to use it in another direction, and I hope that he will not hesitate to go into the Lobby with us, because quite clearly the association for which he spoke this evening and in which he plays such a distinguished role has a right to have its views taken seriously and pressed with vigour.

I hope that the Government spokesmen will also pay attention to what was said by the noble Earl, Lord Balfour. He said that some local authorities are in doubt as to whether they can operate the Government's rebate scheme entirely. What are the voices that have been heard in this debate, apart from those on the Front Bench opposite? They have been the voices of those speaking for local government and with experience of local government. How determined are the Government not to see the light? The noble Lord, Lord Sandford, rejects the suggestion that local authorities have been turned into agents. He says, "We are devising the subsidy scheme so that they will be more free than they ever have been". Is that the only thing that is going to happen as a result of this Bill? Is that the only effect local authorities are going to feel as a result of this Bill?

Nobody knows better than the noble Lord, Lord Sandford, that most of the argument is about rents, and local authorities are being given no option. They are being told. "Do what we tell you, and if you don't we shall appoint commissioners to take the job over for you; and, what is more, you are going to have to pay money for doing jobs that you have not had to do before and you will do it because we tell you you have got to". If that is not being put into the position of an agent, then I do not know what an agency is. I should prefer they were made free agents, but the freedom they have enjoyed in many spheres is in fact being taken from them.

The noble Earl, Lord Balfour, has no reason to ask to he forgiven for speaking for Scotland in this debate. I have

often wanted to join in debates on Scotland as I have listened for hours to them in this House. I shall now feel that he has provided me with all the excuse that I might have been seeking for a very long time without finding it. It was delightful to hear him and I hope that we shall have many similar interventions. It may indeed cut short consideration of the Bill that deals with Scotland.

The noble Lord, Lord Sandford, said that if all the fears expressed were well founded there would be room for concern. Who is the better judge as to whether there is room for concern—those who hold office in Whitehall, or those responsible for government in the localities? It really will not do for the Government to say throughout the piece, "We know best". Of course they can say that, and with their numbers they can win the day; but that only hastens and makes more certain what will happen at the next General Election. That is the pity of it, that somebody is going to have to unravel all the mischief that is being done here.

I apologise if I have failed to make any reference to Amendments that have yet to be moved. That was perhaps because of an over-anxiety on my part not to anticipate the arguments that will be advanced, and not too far in advance to state the full consequences of this clause that I seek to amend. The noble Lord raised the question of what the Amendment does. May I say that the Amendment is intended to delay the changeover to a new system of subsidy which local government asks to be delayed. And indeed it would have this effect. I do not think that we have missed the point. If I might put it this way, we are right on the ball.

9.18 p.m.

On Question, Whether the said Amendment (No. 10) shall be agreed to?

Their Lordships divided: Contents, 23; Not-Contents, 57.

Avebury, L. Foot, L. Rusholme, L.
Bacon, Bs. Garnsworthy, L. [Teller.] Shackleton, L.
Beswick, L. Hale, L. Shepherd, L.
Birk, Bs. Llewelyn-Davies, L. Stow Hill, L.
Champion, L. Llewelyn-Davies of Hastoe, Bs. Swaythling, L.
Davies of Leek, L. Maelor, L. White, Bs.
Diamond, L. Milner of Leeds, L. Wynne-Jones, L.
Energlyn, L. Phillips, Bs. [Teller.]
Aberdare, L. Elliot of Harwood, B. Lothian, M.
Abinger, L. Emmet of Amberley, Bs. Lyell, L.
Ailwyn, L. Ferrers, E. Margadale, L.
Amherst of Hackney, L. Ferrier, L. Mersey, V.
Auckland, L. Gage, V. Milverton, L.
Balerno, L. Gainford, L. Molson, L.
Balfour, E. Goschen, V. Mowbray and Stourton, L. [Teller.]
Belstead, L. Gowrie, E.
Berkeley, Bs. Gridley, L. Nugent of Guildford, L.
Bradford, E. Grimston of Westbury, L. Oakshott, L.
Colville of Culross, V. Hailsham of Saint Marylebone, L. (L. Chancellor.) Rankeillour, L.
Courtown, E. Reay, L.
Cowley, E. Harvey of Tasburgh, L. Sandford, L.
Craigavon, V. Hawke, L. Sandys, L.
Craigmyle, L. Hertford, M. Savile, L.
de Clifford, L. Hives, L. Strathclyde, L.
Denham, L. [Teller.] Hylton, L. Teviot, L.
Digby, L. Kemsley, V. Vernon, L.
Drumalbyn, L. Killearn, L. Young, Bs.
Elles, Bs. Limerick, E.

Resolved in the negative, and Amendment disagreed to accordingly.

9.25 p.m.

LORD DIAMOND moved Amendment No. 11: Page 3, line 4, leave out ("£20") and insert ("£10")

The noble Lord said: This Amendment refers to subsection (3), and is closely related to the Amendment which we have been discussing. Subsection (3) defines the "withdrawal factor", and we find that it means the sum produced by multiplying £20 by the number of the Housing Revenue Account dwellings at a particular date. What we are suggesting—and we are not alone in suggesting this—is that instead of that figure of £20 there should be a figure of £10. This is a method of slowing down the changeover, and of course, if the Government were prepared to accept the Amendment, it would be accompanied by an appropriate variation in the table which we have just discussed.

The first point I must make is that we are now at the Committee stage, which is an early stage in your Lordships' consideration of the Bill, because not only do we follow this with a Report stage but we have a further stage beyond that when, if necessary, polishing up and further discussion can take place. So it must he recognised that a Committee stage is quite an early stage in the consideration of the Bill, and therefore it is now proper to look into, investigate and probe in a very general way, and not necessarily expect to finish the Committee stage with the Bill in its final form.

A further point that I want to make is that of course when an Opposition is putting down Amendments at a Committee stage it should, if it has the time and if it is to do a thoroughly tidy job, put down all the consequential Amendments which might arise to all the other clauses and schedules to the Bill if those Amendments were carried. If that were done your Lordships would have in front of you a Marshalled List which was five or ten times as long as the List which is now in front of you, and it would put everybody, including your Lordships, to totally unnecessary trouble. Because, unfortunately, one of the facts of life—even, I gather, in the happy days of a Labour Administration—is that not every Amendment suggested by an Opposition in your Lordships' House is accepted. Therefore we are at a stage when we have to take a practical view and not necessarily link every possible Amendment to the Amendment which is being moved. So, with that explanation, I hope that it will not be put against the argument which I shall adduce in favour of this Amendment that I have not put down the consequential Amendments and that there is therefore some defect in this Amendment.

The reason I say that is that, with the structure of the Bill, this residual subsidy is related to the rent increases. The rent increases come at a much later stage of the Bill and they have not yet been appropriately altered in consonance with the acceptance by the Government of the Amendment which we are now discussing—which I hope will be the case though it may not. But, having, regard to some of the comments made on the last Amendment, I thought it was right to make this point absolutely clear; and, further, to make it clear that the assumption behind this Amendment is that, if it is accepted, not only will there be an appropriate amendment to column 2 of the table in the previous subsection but that we are discussing it in relation to a contemplated increase of £26 per annum in rents—this is what the £20 lines up with. The hope would be that if this were acceptable to the Government, £10 instead of £20, the amount of the increase in rents would similarly be delayed or reduced. So what is being suggested in this Amendment is that, keeping, if you like, the balanced and related structure of the Bill, the whole changeover should be slowed down.

Why should it be slowed down? It is because some of the largest authorities which the Government are seeking to help would find themselves in an impossibly difficult position if the changeover took place at the speed and in the time which the Government contemplate. As I understand it, the average subsidy per dwelling is of the order of £60 (it may be a little less than that; between £50 and £60), so that a withdrawal of £20 in year one followed by a withdrawal of £20 in year two (we have now got to £40) would mean that in year three virtually the whole of die subsidy would be withdrawn. In the case of authorities like Liverpool, Birmingham and Manchester—enormous housing authorities, second only to London—with their vast stock of existing local authority housing, the withdrawal factor, as the clause makes clear, is multiplied by the number of the local authority's Housing Revenue Account dwellings—old dwellings, very old dwellings, extremely old dwellings. All of them are included in the multiplication factor. They are dwellings which are possibly no longer attracting any subsidy at all, or only a very small subsidy: it is the more modern dwellings which are attracting the higher subsidy under our current arrangements. Where you have a situation like that, a housing authority of the kind I have mentioned—and we are dealing with enormous numbers in relation to the total number of local authority tenants throughout the country when we include Liver pool, Birmingham and Manchester—will lose the bulk of its existing subsidies within the first two years of the scheme operating. Such authorities find this impossible to deal with, and the A.M.C., as those on both sides of the Committee who have been informed will know, have pressed the Government very hard indeed to slow down this rate of changeover—and that is what this important Amendment is about.

I do not think there is any difficulty in the wording of the Amendment itself. It is indeed extremely simple, and merely substitutes £10 for £20; and I have explained that the associated Amendments, if not tabled now, could easily be dealt with at a later stage. So that is the first and most important point about this matter. We arc not only speaking from our own point of view, but are representing the unanimous view, as I understand it, of the municipal corporations. They all share this view—and the largest ones are the worst affected. In addition to that, of course, there is the problem of inflation—more particularly, an increase in the spiral of wage inflation rather than general inflation—which will be brought about by this proposal.

The related rent increase, as I have already said, if this Amendment were accepted would be capable of being reduced in pace. The proposed rent increase, as my noble friend has already indicated, is a very substantial element, whether it is in terms of points in the cost of living Index or in terms of the impact on the take-home pay of the average tenant. It is an even greater percentage if it is looked at in terms of the rent alone. I am afraid that that is the argument that would be uppermost in the minds of the tenants. The Bill is not yet law; and the requirement under the Bill is that there shall be an increase of £26 a year; and if the Bill is effective for half a year the rent increase will be £1 a week in order to achieve the requirements of the Government. The rent increase of £1 a week, as it is going to be in the vast majority of cases, on an average rent of £2 a week throughout the country will represent a simple 50 per cent. increase in the rent payable by the tenant who is going to be affected this year by this proposal.

I do not have to persuade your Lordships that this is too quick; I do not have to persuade you that the effect of that on the average wage earner concerned with wage negotiations is too drastic. One cannot digest an increase of that amount in such a fundamental matter as one's rent. One cannot digest that without having its spill-over effect into wage negotiations. So whether one puts it from the point of view of the largest, the most numerous housing authorities, or from a point of view of those most concerned, from that of the corporations themselves or from that of the desire of the Government and of the Opposition and of every responsible person in this country to do whatever is possible to slow down the rate of inflation, this is something that is too quick and is totally unnecessary.

What is the great and enormous hurry? What does it matter if the Government's purpose is achieved a little more slowly and without the economically disastrous concomitant circumstances which would arise from this over-hasty action? We are not proposing any alteration to the main principle of the Bill. We dislike the Bill enormously; but we are here concerned with an improvement to the Bill to make it possible for the Government's purpose to be achieved more slowly, but effectively, and without the inflationary effects that would otherwise ensue. I think we are making a reasonable request and I hope the Government will accept it.

9.40 p.m.


This Amendment has the effect of slowing down the rate of progression to the new system of subsidy. The previous Amendment delayed its start. Most of my remarks will be in a similar vein to those I made on the previous Amendment; but as I clearly have not succeeded in resolving a number of the misconceptions or misunderstandings I will make those remarks rather more deliberately and at slightly greater length. We shall hear all the arguments about the rate of progression to fair rents in their proper place when we come to Part VI in the Committee stage, and it will be useful then to have had this preview of what noble Lords opposite think about that.

As the noble Lord, Lord Diamond, said, there is a relationship between a rate of progression to fair rents and the rate of withdrawal of the old subsidies, but it is not of the direct kind which I think he still fears may be the case. If we were to agree that a rate of progression to fair rents should be increased or reduced when we come to that particular part of the Bill, all that could be done without any change, or without a corresponding change, in the rate of withdrawal of the existing subsidy which we are now discussing on Clause 2. The reason why these are not directly related, though they are linked, is because of the transition subsidies which make good the short-fall, if there is a short-fall, between the increase of rents on the one hand under Part VI and the reduction or withdrawal of the residual subsidies under Clause 2; transition subsidies featuring in Clause 3 which we are coming to.


Would the noble Lord say whether the transition subsidy provides for 100 per cent.?


If the noble Lord will look at the bottom of page 4, he will see the way in which the contribution from the rate fund and the Exchequer is apportioned year by year. So there is this direct link between progression to fair rents on the one hand and the withdrawal of the existing subsidies on the other. There is this transition subsidy, of which the Exchequer bears 90 per cent. in the first instance and then reducing by 5 per cent. per annum in all the years in which it is paid, which cushions the effect of the two.

Having once decided that there is a better system of subsidy available, which has been designed to have, and has, the effect of concentrating help where it is needed, on the people who need it and in the places where it is needed, rather than spreading it indiscriminately on those who need it and on those who do not, I submit to the Committee that the sensible thing is to embark on the progress from the old and now outworn system to the new and very much fairer and better system without undue delay and with all reasonable despatch. That is what Clause 2 provides for.

I do not know whether that has helped noble Lords opposite to see why at this point it does not seem to me to be profitable to go into the discussion about fair rents, whether they are a good idea and whether progression is at the right rate or not. This is something which we can discuss extensively on Part VI, but it does not arise at this point because it is quite possible to vary the one without varying the other. The rate of progress to the new system of subsidy and the withdrawal of the old subsidies enables us to start to concentrate help where it is needed. It is one of the things which enables us to give much more generous rent rebates than have been available in the past to snore people than have hitherto enjoyed them. I should have thought that is something which all noble Lords opposite approve of and applaud; they have certainly done so so far.

It also enables us to concentrate the rising cost of subsidy, to which we shall be coming a little later, on those authorities which still have major problems of housing to contend with, instead of continuing a subsidy system which may have been appropriate immediately after the war—when the main problem was to build more houses everywhere for everyone—but is no longer appropriate now. It seems to me that if we have a system which has these two main merits of enabling us to help people and places needing help, instead of spreading the help indiscriminately, the sooner we start moving to that system, and the faster we go within reason, the better it is for all concerned. It is for those reasons that we have proposed the rate of progress set out in Clause 2. For the reasons that I gave at the beginning, the fact that rents progress to fair rents at the particular rate does not come into the argument at this point.

9.45 p.m.


The noble Lord, Lord Sandford, asked whether we thought that his remarks had been helpful. They have been most helpful. They have proved up to the hilt his point that there is grave misconception about the meaning of the Amendment and the meaning of the Bill. The only slight difference between the noble Lord and myself is as to where the misconception lies. Unfortunately, my present view is that the noble Lord has not the remotest idea of what the Bill is about. He is talking about persuading us. The first thing I must remind the noble Lord is that the latest representation I have had from the Association of Municipal Corpora tions is dated yesterday, or the day before, and they have been in touch with the Government throughout. It really is not practical to hope to persuade us that the Association and all their members are so "thick" that they cannot understand the effect of this Bill on their own authorities.

With the greatest possible respect, therefore, to the noble Lord, Lord Sandford, I am going to assume that the Association, and its constituent members and their very experienced treasurers, qualified municipal accountants and so on, are able to understand the financial implications of this Bill and are totally unpersuaded and totally opposed to the Government's present view. That is point number one. It is not us he has to persuade, but a vast body of non-political, impartial, well-informed individuals concerned with the housing welfare of their citizens.

The second point I want to deal with is the irrelevant set of reasons which the noble Lord gave for wanting to get on with the Bill. He talked about concentrating help where it is needed and about all the other kinds of assistance which are available under this Bill. As to those kinds of assistance, if we were to agree that they were assistance, there is no reason why they should not go on at whatever rate the Government want them to go on. With great respect, they are totally unrelated to this Amendment and to the simple proposition about whether rents go up at a given pace and accordingly whether the withdrawal factor is £10 or £20. It is totally unrelated to that; the rest of it could be carried out just the same. Moreover, I am sorry to disappoint the Minister, but his view that this Bill will help individual authorities and persons does not coincide with our view; it does not coincide with the sufferers' view; it does not coincide with the view of those local authorities who are finding that they are being particularly harshly treated under the Bill and who so far have had no success whatever in persuading the Government to introduce Amendments into the Bill which will enable hardship in particular cases to he removed and the Government's allegation that they wish to direct help to those most requiring it to become a fact. That is a further point which I hope the Government will take on board.

The final point is the suggestion that this matter is unrelated to the increase in rents and that this problem can be dealt with perfectly satisfactorily by itself because there is a transition subsidy. I am sorry to repeat the phrase "with the greatest possible respect" to the noble Lord, because on this point I do not think a great deal of respect is due. The noble Lord has said that it makes no difference: you get a subsidy through another channel. That means that you get the same sum through another channel. But you do not. It is as simple as that. You get a proportion of that sum through another channel. It is nonsense to say that you are just as well off under the transition subsidy as if this amount were reduced to £10 instead of £20.

I intervened to ask the noble Lord a question and he kindly directed my attention to the point to which I was directing his attention; namely, the fact that you do not get your money. You get 90 per cent. of it, 85 per cent. of it, 80 per cent. or 75 per cent. of it or—and I am reading from the table: … such other percentage as may be substituted for 75 per cent. for the year in question by an order under subsection (5) below. So you get any figure being not less than, I think, to be fair, 60 per cent. which I the Minister decides on. Well, I may be

a better businessman than the noble Lord, Lord Sandford—indeed I hope I am—but I can tell the difference between 60 per cent. and 100 per cent. of anybody's money at any time, and I daresay that the municipal treasurers of the local authorities can do the same.

So we find ourselves in a situation where the Government are not offering the same amount, or an alternative, and are sticking to a proposal which will have the most disastrous inflationary effect, about which the noble Lord said nothing—for the very sensible reason that there is nothing he can say. There is no argument anybody can put up against the suggestion that an increase of 50 per cent. in a council house tenant's weekly rent, which is put on the mantelpiece every week for everybody to see and know about inside that house, is bound to he inflationary and something which the wage-earner, his wife and family are going to take note of in their next wage negotiations. Nobody can deny that, and in the circumstances therefore the reply has been inaccurate or irrelevant or absent; and we shall divide the Committee.

9.53 p.m.

On Question, Whether the said Amendment (No. 11) shall be agreed to?

Their Lordships divided: Contents, 21; Not-Contents, 58.

Avebury, L. Foot, L. Phillips, Bs.
Bacon, Bs. Garnsworthy, L. Shackleton, L.
Beswick, L. Llewelyn-Davies, L. Shepherd, L.
Birk, Bs. Llewelyn-Davies of Hastoe, Bs. [Teller.] Stow Hill, L.
Champion, L. Swaythling, L.
Davies of Leek, L. Maelor, L. White, Bs.
Diamond, L. Milner of Leeds, L. [Teller.] Wynne-Jones, L.
Energlyn, L.
Aberdare, L. Elliot of Harwood, Bs. Hives, L.
Abinger, L. Elles, Bs. Hylton, L.
Ailwyn, L. Emmet of Amberley, Bs. Kemsley, V.
Amherst of Hackney, L. Ferrers, E. Killearn, L.
Auckland, L. Ferrier, L. Limerick, E.
Balerno, L. Gainford, L. Lothian, M.
Balfour, E. Goschen, V. Lyell, L.
Belstead, L. Gowrie, E. Margadale, L.
Berkeley, Bs. Gridley, L. Mersey, V.
Courtown, E. Grimston of Westbury, L. Milverton, L.
Cowley, E. Hailsham of Saint Marylebone, L. (L. Chancellor.) Molson, L.
Craigavon, V. Mowbray and Stourton, L [Teller.]
Craigmyle, L. Hanworth, V.
de Clifford, L. Harvey of Tasburgh, L. Oakshott, L.
Denham, L. Hawke, L. Orr-Ewing, L.
Digby, L. Hertford, M. Rankeillour, L.
Drumalbyn, I.
Reay, L. Savile, L. Vernon, L.
Redesdale, L. Somers, L. Wolverton, L.
Sandford, L. Strathclyde, L. Young, Bs. [Teller.]
Sandys, L. Teviot, L.

Resolved in the negative, and Amendment disagreed to accordingly.

House resumed.