HL Deb 06 June 1972 vol 331 cc165-245

2.50 p.m.

THE, MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN)

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord Drumalbyn.)

On Question, Motion agreed to.

House in Committee accordingly.

[The EARL OF LISTOWEL in the Chair.]

Clause 1 [Introduction of Part 1]:

LORD AVEBURY moved Amendment No.1: Page 1, line 7, leave out ("eight") and insert ("nine").

The noble Lord said: Perhaps it would he for the convenience of the Committee to take this Amendment with Nos. 3 and 72, which are connected with it. Amendment No. 1 merely increases from eight to nine the number of subsidies set out in Clause 1. Amendment No. 3 gives the title of the additional subsidy which I am about to propose, "the caravan sites subsidy." Amendment No. 72 describes how this subsidy should be calculated and on what basis local authorities should receive the additional money I am proposing.

THE PARLIAMENTARY UNDERSECRETARY OF STATE, DEPARTMENT OF THE ENVIRONMENT (LORD SANDFORD)

May I interrupt, first of all to indicate that at any rate from my point of view that would be convenient, but also to suggest to the noble Lord that he should include his Amendment No. 5.

LORD AVEBURY

I am most grateful to the noble Lord. I had omitted that and it does go with the increase from eight to nine; and if it is for the convenience of the Committee I will proceed accordingly.

The subsidy I am proposing here is, I should underline, for residential sites and residential sites alone, although I have not drafted it in that form. I think that subsequently one would need to tidy up the wording, but I have explained to the noble Lord, Lord Sandford, that that is what I have in mind. We are not here speaking about any sites that may be provided by local authorities for holiday use only, and it is possible to separate these out according to the type of licence which is awarded. So, with minor changes in the wording this could be put into a form where the subsidy which I am proposing would be payable only on residential sites and not on sites provided for holiday purposes.

Local authorities have had power since the passing of the 1960 Caravan Sites and Control of Development Act to provide caravan sites for people who choose to live on them; that is to say, ordinary residents who think it preferable to live in a mobile home rather than in a bricks and mortar house. It is estimated that there may be as many as 200,000 people in England and Wales who live in caravans out of choice or necessity. Most of these people, it is true, live on privately owned sites and not on sites provided for them by the local authority. If one were to put all these residents on an equal footing, additional Amendments would be necessary elsewhere in the Bill to take care of the needs of people who live on the private sites.

I want to point out to your Lordships that under this Bill the tenants of local authority houses will continue to enjoy some measure of assistance—not as much as many of us would like—from the community in meeting the costs of their accommodation, but the subsidies proposed under this Bill are a means of helping them to meet their accommodation costs. For the first time (except, I think, in the case of Birmingham) the tenants of private landlords will receive help, albeit subject to a means test, if their accommodation is unfurnished; and Ministers have given an undertaking in another place that later on a Bill will be introduced to put the tenants of furnished accommodation on the same basis. Owner-occupiers, of course, already receive substantial assistance, substantial financial advantages, through the income tax system. And, finally, people who live in hostels will benefit from payments which are to be made under Clause 90—although I shall have some remarks to make on that matter later.

So what I am pointing out to your Lordships is that every single type of householder in this country will receive either a subsidy (if one likes to call it that), or some kind of financial help towards meeting his accommodation costs, except those people who happen to live in caravans. This would be extremely unfair to the people who live in caravans and my proposal is designed at least partially to correct the situation so far as those people who live on local authority sites are concerned. Later on I shall hope to bring forward proposals to help the much larger number of people who live on privately owned sites.

Your Lordships will have noticed that in this Amendment no distinction is made between the sites which have been provided by local authorities voluntarily under the 1960 Caravan Sites and Control of Development Act and the sites which local authorities are obliged to provide for use by gipsies under the Caravan Sites Act 1968—a subject which has attracted some little attention in The Times over the last few weeks and which some of your Lordships may have seen was dealt with in a television programme of the B.B.C. yesterday evening. The reason why people are interested at the moment is that the rate of progress towards the provision of sites for gipsies in England and Wales has been extremely disappointing over the last two years, in spite of the assurances which have been given by Ministers, including those given by the noble Lord, Lord Sandford, to the Gipsy Council when he met them 18 months ago on November 5, 1970. The Press release which was issued by the then Ministry of Housing and Local Government reported the noble Lord as having assured representatives of the Gipsy Council that the Government intended to press ahead with the implementation of the Caravan Sites Act. He went on to suggest further discussions between the Gipsy Council and the local authority associations, which have now taken place. But the noble Lord will recall that when the responses to the Circular of May, 1970, had been received from the local authorities, proposals were submitted for 158 sites with accommodation for 2,330 caravans. Yet we are facing a situation 18 months later when no more than about 650–odd (I have forgotten the precise figure; the noble Lord has given it to me and perhaps he would refresh my memory when he comes to reply) have been provided: a rate of progress of fewer than 200 in the intervening 18 months.

I would also draw your Lordships' attention to the fact that if we go on at this rate it will be some ten years before we even meet the problem as it was seen at the time of the 1965 Survey, Gipsies and Other Travellers, published by the Ministry of Housing and Local Government, as it was then. It was found that there were approximately 15,000 gipsies living in England and Wales and they were included in about 3,000 families. So at that time if one had provided accommodation of 3,000 caravans this would have met the need as it emerged from the Survey. But there are two additional factors to bear in mind. One is that the gipsies were almost certainly under-enumerated, because they tend to keep out of the way. particularly when police go round asking questions, even when the questions are comparatively innocuous. It is generally agreed that at the time the problem was studied there were more than 15,000 gipsies in England and Wales. The county of Kent had undertaken a study of its own and was not asked to repeat it in the nationwide survey. The London boroughs of Bromley and Bexley were left out altogether so there were probably more than 15,000 gipsies at that time. It is estimated by the Department that there has been a growth of something like 100 families a year since 1965, which means that we have about 6,700 gipsy families in England and Wales, towards which there was provision made in response to the 1970 Survey for 2,330 pitches which would have accommodated two-thirds of the families.

I recognise that the obstacles in the way of implementation of the 1968 Act are not solely or even primarily financial, and where financial arguments were used at the time of the consultations prior to the introduction of the 1968 Caravan Sites Bill—as it was then—it was mainly because when any new obligation is laid on local authorities there is automatically a tendency for them to say, "You pay for it and we will see what we can do." The noble Lord will remember that the Urban District Councils Association have protested that a 75 per cent. grant ought to be payable on the analogy of the grants which were made under the Countryside Bill for transit and camping sites. I have not been as ambitious as that. I have suggested that they should receive a subsidy of £30 towards the cost of providing each individual pitch. I think this is a modest amount. If it costs a local authority £1,000 to provide a pitch, which is a fairly conservative estimate, the interest alone would amount to something like £80. This is nothing like the 75 per cent. grant towards the cost, even not taking into account repayment of capital, but it would be of marginal assistance to those local authorities who are finding themselves under pressure in meeting expenditure in other directions, who are being forced to increase the rates all the time and are experiencing their local citizens' reactions against these pressures, saying, "Why should we do more to help gipsies when the burden is going to fall on us as ratepayers?" It must be emphasised that this is a national problem. Some councils have a greater number of gipsies per head of population than others. In Kent alone the survey done in 1968 showed 308 travellers, while the next largest number of gipsies in any county was 195. I think it would be fair for the taxpayer to make some contribution towards the expenses which will be incurred by local authorities in this connection.

The other point about this Amendment so far as it applies to gipsy sites is this. It is said that some gipsies will not settle down because they object to paying the rents on the site. This has yet to be tested. Whether 100 per cent. of gipsies would agree to go on to local authority pitches and pay the rents demanded we do not know. The contribution of £30 per caravan would enable charges to be kept down to a reasonable level, as they have to be under the 1968 Act, without imposing any additional burden on the ratepayers.

I hope that the noble Lord, Lord Sandford, when he comes to reply, will shorten the discussion by accepting my Amendment and will enable us to make a good start to the proceedings on the Bill.

3.5 p.m.

LORD SANDFORD

The Committee will note that the noble Lord, Lord Avebury, is availing himself of the flexibility and tolerance in your Lordships' House in moving an Amendment which would scarcely have been in order in another place. Nevertheless, I am glad, and I think the Committee will be glad, of an opportunity to discuss this topic, especially the relatively small, though urgent, important and difficult issue of gipsy caravan sites. I have been grateful to have the benefit of the noble Lord's views on two previous occasions, in connection with both residential caravan sites and sites for gipsy families. But the fact is that apart from the 75 per cent. grant, which the noble Lord has already mentioned, under the Countryside Act for the provision of transit holiday caravan sites, Her Majesty's Government have taken a firm decision not to add to specific grants if it can be avoided, and in particular not to give further specific grants for any other holiday or residential caravan sites. We have taken the decision on the general ground, on which we are strongly supported by the local authorities, of moving away from grants which have the effect of central Government interfering inordinately in local authority decisions.

But there still remains the question of gipsy sites. In this connection we are dealing with provision for something over 3,000 gipsy families. As the noble Lord rightly said, this is a duty which has been laid fairly and squarely on local authorities, county councils, county boroughs and London boroughs. It is urgent; it is not yet being undertaken with sufficient despatch by those concerned in achieving a solution, and progress must be accelerated. More authorities are tackling the problem wholeheartedly than was the case two years ago, and very few authorities now think that the problem will disappear if it is ignored. Nevertheless, indifference in the councils still remains to be overcome, as do the considerable objections among neighbours of gipsy encampments. I would agree with the noble Lord, Lord Avebury, that that is where the greater part of the problem resides.

There is also, however, a financial problem, and it is possible to do something to deal with that. Although it is the Government's view that in general it is right that local authorities should have responsibility for making their own decisions as to the priorities to be accorded to different kinds of expenditure, and that we should be able to rely on local authorities to give sufficient priority to small scale though urgent and important social problems, such as the one we are talking about at the moment, we should be able to do that without the need for special loan sanction treatment. In recognition of the particular urgency which my right honourable friend and I attach to this problem, the Secretary of State is prepared to consider applications for special additional allocations within the arrangements for locally determined expenditure from authorities which intend to provide sites for gipsy caravans this year and are unable to do so from within the normal allocation because of other commitments.

I am grateful to the noble Lord for giving me the opportunity of making this announcement. I trust he will recognise that my right honourable friend and I agree with him in the need to press on towards the completion of proper facilities for the gipsy population. But we do not feel that a new subsidy specifically for caravan sites is the right approach for gipsies or for anyone else. I hope that, with that explanation and that announcement, the noble Lord will feel able to withdraw his Amendment.

LORD DIAMOND

It will be for the noble Lord to decide what to do about that. I am sure that those of us in your Lordships' House who support the Labour Party will wish to say how grateful we are to the noble Lord, Lord Sandford, for the second part of his speech. As to the first part, I hope he will forgive me for saying that a number of Amendments have been put down and are thought to be suitable for your Lordships' House, and it may be that they are Amendments which could not be selected for discussion in another place. I hope, therefore, that I shall not incur the wrath, either of your Lordships or of the Government Front Bench, in treating this House as having a unique contribution to make our legislative process, and I should prefer not to be pushed off that course by the noble Lord, Lord Sandford. With regard to the particular statement made by the noble Lord—and I congratulate the noble Lord, Lord Avebury, on having been so successful in his first very persuasive speech in achieving this result—could the noble Lord, Lord Sandford, make clear to us under exactly which legislative powers the financial assistance to which the noble Lord implicitly referred will be made available? If, as I understand the position, it is on powers outside this Bill, then of course we have no need to pursue the matter so tar as this Bill is concerned.

LORD AVEBURY

Before the noble Lord replies, may I say how grateful I was for the second part of his speech? I do not want to be too controversial, but I think it could be argued, if the noble Lord will allow me to say so, that my Amendment falls within the last part of the Long Title— to make other provisions as to housing finance". In fact the Bill includes clauses which deal with accommodation other than ordinary dwellings. Later on, as I mentioned en passant, we shall be considering the position of hostels. As far as the ordinary householder is concerned he has a roof of one kind or another over his head, whether he lives in a mobile home or in a bricks-and-mortar house.

I thought the noble Lord went a little too far in giving a hostage to fortune when he said that one did not want to interfere inordinately with local authority decisions, because that is precisely what the Government, rightly or wrongly, are doing in this Bill. We shall come to that later on. I was delighted to hear him say that progress must be accelerated, and it may be that the financial inducements which he said are to be offered are not the only means of doing this. I know that the noble Lord has other steps in mind which he is going to take shortly, but the important question which the noble Lord. Lord Diamond, posed and which local authorities will want to know about when they read this debate, is how much money they will get and under what legislation. The noble Lord said that there will be an additional allocation of expenditure. That could mean that he was being a little more liberal in the granting of loan sanctions to local authorities who are intending to set up sites under the 1968 Act. The only other possibility which I can see is that some of the money available for the urban aid programme might be devoted to the provision of gipsy sites, at least in the London boroughs and the county boroughs. The noble Lord said that a sum of money had been allocated for the purpose for this year alone, and it would be interesting for the local authorities to know what the amount is to be; whether it is a case of "First come, first served" and whether in fact there are some limits to it.

May I finally take issue with the noble Lord when he says that he sees this as a particular problem which has to be dealt with outside the general framework which has been laid down for some years, and moving away from specific grants towards helping local authorities through the rate support grant? That was not the example that I gave under the Countryside Act, as the noble Lord admits. We still come back to the situation I described in relation to the nongipsies who live in caravans. When we have passed this Bill they will be the only category of householder not receiving any assistance whatsoever, either through a means test or some kind of general assistance, such as the mortgage interest relief which owner-occupiers receive. I am not going to press my Amendment to a Division, but if the noble Lord is going to leave the ordinary residents who live in mobile homes out of the arrangement while the Government are extending assistance to the tenants of private landlords who live in unfurnished properties, and subsequently, under another piece of legislation, to tenants who live in furnished properties, and taking into account the new hostels grant, we shall arrive at the situation, with this extra allocation of money for gipsy sites, where the ordinary people who live in caravans—the 200,000 people whom I mentioned at the beginning—will be the only people in this country without one penny of assistance from Government or rate support accommodation grants.

LORD SHEPHERD

I do not wish to labour the point made by my noble friend about the first part of the speech made by the noble Lord, Lord Sandford. In my view, one of the benefits of this House is that we have wide, flexible rules, one of which is the fact that we suspend consideration of the Title of the Bill to the end of the Committee stage. If we were ever forced to limit ourselves to the rules of another place we should then become merely an echo of that other place and this House would lose much of its importance and its influence. I want to put just one question to the noble Lord in regard to the admirable second part of his speech. He said that new sums would be made available this year. Are we to take it that this money must be spent within the present year, or do the Government intend that claims can be made on it this year but the actual spending will go an into 1973? Nearly half of 1972 has gone by, and for local authorities to spend this money during this year they would need to work with great expedition.

LORD HYLTON

I am sure that the statement made by my noble friend Lord Sandford on improved loan sanction arrangements for gipsy caravan sites will be much welcomed on all sides of the Committee. Having said that, I should like to express support for the principle of the Amendment moved by the noble Lord, Lord Avebury. I think it should he recognised that caravans, intelligently used, can provide a useful short-term relief in situations of acute housing shortage such as we have in the London area. Secondly, I know from my own experi- ence of the gipsy question in Somerset of the extremely long delays between the putting forward of a proposal and its actual implementation. That arises for many reasons, including the delegation of planning powers. For all these reasons I should like to support the principle of the Amendment, and I hope that my noble friend will be able to reconsider what he has said and perhaps take a more favourable view at the next stage of the Bill.

LORD SANDFORD

May I respond briefly to those comments before the noble Lord withdraws his Amendment? One might have thought, from the comments, that I was criticising the noble Lord for the terms of his Amendment, but all I did was to note it. The noble Lord, Lord Diamond, may have had in mind other Amendments which are to follow. All should like to say, in response to noble Lords who have tried to draw me out a little further on the announcement about loan sanctions, is that the answers to all their questions are contained in the statement, if they will be good enough to read it carefully tomorrow. I can well understand that at one hearing it is not possible to register all the points that are there. In answer to the point made by the noble Lord, Lord Shepherd, this statement is one step, and I cannot in fact be drawn any further on it for the time being.

LORD AVEBURY

I am sure that the local authority associations will be asking the noble Lord further questions about his statement, even though we shall not pursue it in this Committee. We shall wait until we have their advice, and perhaps we can return to this matter on another stage of the Bill, although I hope that it will not be necessary for us to do so and that the local authorities will be able to take advantage of the offer made by the noble Lord this afternoon. Therefore, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

3.20 p.m.

LORD AVEBURY moved Amendment No.2: Page 1, line 10, at end insert— ("Provided that the total sum paid under the provisions of this Act shall not be less than the amount that would have been paid otherwise and if there is a difference in any year, the rate support grant for the subsequent year shall be increased by an amount equivalent to that difference.").

The noble Lord said: We come to an Amendment which I hope is within the Long Title and which certainly touches the foundations of this Bill and enables us to expose in general terms the difference of opinion which I think exists between the Liberal and Labour Parties on the one side and the Tories on the other. It is Tory philosophy, which has been outlined in the Second Reading debate, to contain the amount of the subsidies which have hitherto been paid to local authorities and used to help council tenants in meeting their housing costs at their present level, whereas if the system of subsidies which had been in operation formerly were left unchanged they would have risen over the course of the years—risen to meet the cost of housing which is also rising. So it is quite possible that they would not have represented, under the former system, a greater proportion of the total amount which is spent on housing. This is a point that I should like to pursue a little further if the noble Lord who is to reply is able to give me some figures.

LORD SANDFORD

May I pick up the noble Lord at that point to suggest, as he has not done so, that here again it might be convenient to the Committee if his Amendment No. 2 and Amendments Nos. 6 and 7 in the name of the noble Lord, Lord Diamond, were all considered together? I think that probably would be a convenience to all concerned.

LORD AVEBURY

I have no objection to that. I notice the noble Lord, Lord Diamond, nodding his head, so we shall proceed on that basis. I was saying that one cannot tell whether, if the old subsidy system had been left unchanged, the total amount of those subsidies would have represented a constant and increasing or a decreasing proportion of the total cost of housing over the rest of this decade. It would be interesting if we could have some figures from the noble Lord, albeit they must be very broad estimates, as were the ones that were given by the Minister of Housing and Construction in another place on Standing Committee. It would have been most helpful if the Explanatory and Financial Memorandum had included some of these figures and if in another place they had been able to see in detail what the effect of the changes were, a great deal of time might have been saved on Committee. I certainly do not blame another place for giving it a very thorough examination, because the more they discussed the matter in Standing Committee E the more figures they managed to drag out of Mr. Amery—with qualifications each time, but even so I think it enabled our colleagues in another place to understand the Bill very much better than they had before.

The only figures I want to quote, which I think are of fundamental importance, are those given by Mr. Amery in Standing Committee E, col. 84, where he said: If the existing subsidy system continued the … total … charges on the Consolidated Fund … including payments made towards rents by the Supplementary Benefits Commission, would increase by about £200 million by 1975–76 and by perhaps £400–£500 million by 1980–31 Those were the best figures that he said he was able to give. Nobody will hold him to them. In fact it is going to be impossible to measure, and I doubt whether any local authority or local authority association when it comes to 1980–81 will be able to do a retrospective calculation and work out what subsidies they would have been entitled to under the former system or whether they would think it worth while to do that for the purposes of comparison. But what we are talking about is being able to get the broad feel of this Bill so that we can say whether we think it is right and just to the tenants who live in local authority accommodation. For myself, I believe it to be fundamentally unjust for Parliament to say, "We are going to subtract £200 million from the pockets of council tenants in 1975 and double that sum in 1980". I think that this proposal will have very serious consequences, not only for the hardship that it will cause to people living in local authority houses but all sorts of side effects which have not been properly considered by the Government: the inflationary effects of large Wage demands that will he bound to occur when trade unions realise the effects of the Bill on the cost of living of their members is just one.

The second consequence, which I touched on briefly on the Second Reading, is the social segregation which will occur as a result of poorer tenants being driven out from the areas where the so-called fair rents are much too high for them to afford and the creation of ghettoes, and ghettoes within ghettoes according to the different types of council accommodation. That is why at this stage it is important for us vigorously to contest the subtraction of these sums from the help given to local authorities by the Exchequer and through the local authorities to the people who are living in their houses. This is a very evil proposal, and if this House does not express a very strong opinion on it then it will be to our everlasting shame. We have to echo what has been said to us by council tenants, what views have been expressed in another place, and to express those views as strongly as we can on this occasion. I beg to move.

3.26 p.m.

LORD DIAMOND

I want to support as strongly as I can the wise words used by the noble Lord, Lord Avebury, in moving his Amendment and to bring to your Lordships' attention the alternative ways of achieving quite the same objective which take the form of Amendments Nos. 6 and 7 in the names of my noble friends and myself.

Amendment No. 6 refers to the provision of a sum of £300 million in addition by the year 1980–81. It talks about the exclusion of the rent allowance subsidy—because of course that is a new provision and we are anxious to compare like with like—and it refers to the total subsidies which authorities, that is to say housing authorities, in New Towns received in 1971–72 as defined in subsection (4) of Clause 2 of the Bill. Your Lordships will have noted in that subsection a full definition of the subsidies inuring to the benefit of housing authorities at the present time. Amendment No. 6 is a method of ensuring that the subsidies to be paid in the year 1980–81 are some £300 million greater than is provided for in the Bill. The path to 1980–81 is not closely so defined that it could move in a straight line or indeed in a wiggly line; that does not matter so long as that is the objective which the Government embrace.

Why the figure of £300 million? There is nothing I could say which would adequately serve to show how very much I am in agreement with the noble Lord, Lord Avebury, in his criticism of the lack of figures which have so far been available on the discussion of this Bill. We shall be coming back to that many times in terms of both the figures and the methods by which the various subsidies are to work and the way in which they are related to one another, because I daresay some of your Lordships may have found the same difficulty which I found in following exactly what was in the Government's mind. The figure of £300 million is an attempt to deal with the following so far unquantified items. First, as the noble Lord, Lord Avebury, asked, what would the central Government contribution have been in the year 1980–81 if existing subsidies had continued? We have been given some information, but it is information which is helpful but not adequately definitive. In the Financial Memorandum to the Bill we are told on page vii that the annual total net charges on the Consolidated Fund are estimated to remain at about the estimated level of such charges for 1971–72, namely, £350 million, at current prices; and that £350 million, I understand, to be £150 million of the Supplementary Benefits Commission and £200 million of subsidies. Assuming that that is right, I refer your Lordships to the phrase "at current prices". There is no need for me to remind your Lordships how important that phrase is; if your Lordships cared to go shopping you would discover from month to month how important a phrase that is. That phrase describes what the additional cost would be in to-day's figures, current prices.

I do not think any Government are going to be sufficiently bold as to assert that the rate of inflation between now and 1981–82 will be nil; and if one makes even a very modest assumption, that the rate of inflation between now and then will be, in the course of nearly 10 years, some 50 per cent., one sees the sort of importance to be attached to a clear definition of where we stand on current prices. If it had said "constant prices" one would know what is involved; but as it says "current prices" I can only assume that what the Government mean is that the proportion of our national resources allocated for this purpose, for the subsidies, is going to drop by 50 per cent. because the nominal amount is going to remain the same. We all know that inflation is an item to be taken into account, certainly over 10 years, and so presumably what the Government are saying is that the main purpose of this Bill is to reduce the level of subsidies not only by £300 million as compared with 1981 what would have been, and 1981 what will be. but also by a further £150 million, being the difference between the purchasing power of the money then and now. I hope we are going to get a very clear answer to this, because, so far as I can gather, we have not seen a Government answer in another place.

That is the first thing I draw the Government's attention to, the phrase "current prices" used in the Bill. If the estimate is made about the level of such charges remaining about the same as for 1971–72, then we are told that they would have otherwise gone up, from £200 million to £300 million during the mid-decade to £400 million at the end of the decade, that is to say by £200 million. That is the amount of the increase, and, therefore, if you add 50 per cent. on to that to account for inflation, you arrive at a figure of approximately £300 million. So this is an attempt to give some kind of quantification to the purpose which we have in mind: seeking to achieve that local authorities continue to have the same assistance towards housing. for all the reasons adduced on Second Reading, which we think are valid and necessary.

I hope, therefore, that the Government will be able to accept, or at least to indicate their attitude to, the different methods by which this same principle might be achieved. The noble Lord, Lord Avebury, has indicated one method which appeals to him and his Party. I am bound to say that the method I prefer is one in which the pressure is put on keeping rents down rather than increasing rents and paying the surplus into the rate fund. The Amendment of the noble Lord, Lord Avebury, would presumably have the effect that the increases which are derived from the tenants will go into the pockets of the ratepayers. Of course, tenants are also ratepayers; but council tenants are not necessarily the highest ratepayers, or indeed the average of ratepayers in a given town or council area. So I think perhaps it would be preferable for the pressure to be against an increase in the rents, which would be achieved by the Amendment which we are now discussing, Amendment No. 6.

Before I leave that matter, however, I want to go further into the statement in the Financial Memorandum, which, having referred to what is likely to happen until 1975–76, then goes on to say "and may be reduced thereafter"; that is to say, the cost of subsidies may be reduced thereafter. I hope the noble Lord who is to reply is now in a position, as this matter has been under consideration for a very considerable time, to give us much greater clarity about the extent of that reduction, because what we are dealing with is a 10 year period, and what we should like to know is whether the figure of £300 million is sufficient. It would be sufficient only if the amount of that reduction were negligible. But if there is going to be a substantial reduction, then the saving which this Bill proposes at the cost of the council tenants for the benefit of the Exchequer is even greater than the figure which was indicated on Second Reading.

So I put two questions to the Minister: one in relation to current prices, and the other in relation to the further reduction between 1975–76 and 1980–81. There is no need to consider whether any of the saving to which reference has been made is done at the expense of the rates, because we have been told that this is not the case, because the rate burden is also estimated to fall slightly; so we can for the moment, having regard to the size of the rate burden, something like £60 million or so as compared with £300 million in subsidies, ignore the question of rates for the time being.

There is only one further thing to say about this Amendment. It excludes the rent allowance subsidy because that is a new subsidy which has not hitherto applied, and therefore it would be right to exclude it in a comparison of like with like. So much for Amendment No. 6. That follows the principle put forward by the noble Lord, Lord Avebury, but arrives at the answer in a somewhat different way.

We now come to Amendment No. 7, which remedies the defect in Amendment No. 6, in that it specifies, or defines at all events, the amount by which the increase is to be made each year. This Amendment proposes a special subsidy and, as the Government feel it right to coin the word "fair" in connection with rent, we think it right to use the word "fair" in connection with a subsidy, so we call it the "fair subsidy". This subsidy is the difference at current prices—that is to say, the prices ruling at the time—between the total of the subsidies which would have been paid had the Bill not been passed, and the total of those which will he paid as a result of the Act. It includes, of course, payments made towards rents by the Supplementary Benefits Commission, because that is where there will be a considerable saving. As I understand it, about £150 million is the present rent contribution made by the Supplementary Benefits Commission, and although I have not seen to what figure that will be reduced, I imagine that it will be reduced to a very small figure indeed.

No doubt the Minister will correct me if my understanding is wrong, but I believe that what the S.B.C. will be called upon to do under this Bill, if it becomes an Act, is merely in appropriate cases to pay the minimum rent. The difference between the minimum rent and the rent which is actually being charged will not be reimbursed by the S.B.C., but will be made up under the rent rebate arrangements in this Bill. So the burden falling on the S.B.C. will be considerably reduced, and one has to take that reduction into account. Amendment No. 7 does not define or quantify the sum, although we think that a figure of £300 million is a modest definition of the amount at issue, but it refers to it by defining the method under which it can be calculated; namely, by reference to the amount which would have been paid each year under the existing subsidy arrangements.

I hope that I have sufficiently explained these two Amendments, which are different methods of arriving at the same principle adumbrated by the noble Lord, Lord Avebury; namely, to make sure that council tenants will not be called upon to foot the bill so as to reduce the burden on the taxpayer and, to a tiny extent perhaps, on the ratepayer—but almost exclusively on the taxpayer—but that there shall be a reasonable system under which help will be given to housing, because housing is in very short supply.

VISCOUNT GAGE

Before the noble Lord completes his speech, can he say how he relates the payment to the council tenant to the payment to the tenant in a private house? Does he cut the private tenants out altogether? How do they get the equivalent of the subsidy?

LORD DIAMOND

I am most happy to respond to the noble Viscount. I do not cut anybody out at all, nor, to be fair, does this Bill. The Bill provides a new benefit for tenants of private unfurnished dwellings. If the noble Viscount is speaking of privately-owned houses, then of course the Bill does not affect the considerable subsidy which, in effect, is being paid to house owners at the present time. Perhaps I should apologise for not having added that one figure—namely, the figure of approximately the same amount, some £300 million—which is being paid at the moment, by way of tax reduction or mortgage option benefit, to those private house owners who are in the fortunate position of being able to own a house and are in the course of paying for it. They are in a fortunate position, because their subsidy is not being reduced; whereas the Bill proposes to reduce the subsidy which benefits the tenant of the council house, and it is the tenant of the council house whom we are seeking to protect from having this enormous increase in his rent, probably doubling it.

3.44 p.m.

LORD SANDFORD

I am intrigued—though it is not for me to criticise—that an ex-Chief Secretary of the Treasury, fresh from another place, should lend his name to one of a group of Amendments all of which were ruled out of order in another place, and which would certainly raise questions of financial privilege if, peradventure, they were to be carried here. What is even more strange is that, in the case of his own Amendment, No. 6, the noble Lord, Lord Diamond, positively obliges the Exchequer to spend £300 million more in 1980. He does not say how, or where, or to whom, or to what place, but he just calls the payment a "fair subsidy" in Amendment No. 7. If that is his approach, it is no wonder that our taxes go up under a Labour Government. Such a programme of indiscriminate and increasing Exchequer subsidy expenditure reveals for all to see the entire lack of a precise and coherent housing rent policy in the Party opposite. Our main purpose is not to take money away from people. On the contrary, what we are doing in this Bill is carefully and precisely identifying the people and the places which still have acute and serious housing needs, and concentrating help on the same scales as at present on those particular people and those particular places.

I have been asked by the noble Lord to prophesy as far ahead as ten years. I will not do that. What I will do is to give some figures going up to 1975–76. I think the figures were given earlier, but I will gladly give them again. The position is that at the moment housing subsidies amount in total to £350 million, of which £200 million is straight housing subsidy and £150 million is paid by the Supplementary Benefits Commission. When we change over to the new system in the year 1972–73, the position will be that the total figure of subsidies will run at the same amount—I confirm, at current prices—of £350 million. Of that, £270 million will be straight housing subsidy of the new kind—we shall be going through a transition at that point—and £80 million will be supplementary benefits. The sum will not be so very small, but certainly there will be a reduction. Then, three years later in 1975–76—I really cannot be pressed to go further than that, and I shall say why in a moment—housing subsidies will be of the order of £220 million to £270 million with a supplementary benefits contribution towards housing of £80 million, still making £300 million to £350 million at current prices.

The reason why I cannot go further, is this. How can we say what will be the precise scale of supplementary benefit in ten years' time and how many people will need it? We do not know what will be the scale of rent rebates and rent allowances—we have already adjusted them once, upwards, since publishing our White Paper—and how many people will need them. What will be the scale of home ownership, and how many people will by then be standing entirely on their own feet? What will be the pattern of local government? We know that it is about to change radically, and the effect will be that the burden of building new houses and dealing with housing stress will be quite differently shared quite soon. We have already undertaken to find ways and means of helping furnished tenants—another group which the noble Lord, Lord Avebury, left out of his reckoning when we were discussing the earlier Amendment—who are not assisted under this Bill, and we hope that they will receive assistance. All those factors greatly alter these figures and make it quite worthless and precarious to forecast and crystal gaze as far ahead as 1980 and 1981.

But what I can reiterate to the Committee is that what we are doing is concentrating the present indiscriminate subsidies on the people and on the places that need them, and this is surely the right thing to do. We are adopting the system which the noble Lord's Party introduced—and we are grateful to them for introducing it—of fair rents. From what the noble Lord, Lord Diamond, said, it seems that he now wants to abandon that, but we are adopting it. We are concentrating the present scale of subsidy, at no greater cost to the ratepayer—probably at slightly less cost to the rate-payer—so that the people in real need are more compassionately and more generously treated than they are at present or have been before, and so that the places in real need, which still have serious problems of housing stress, are given substantial assistance to clear their slums, improve their stock and build anew where necessary. For all those reasons, I cannot recommend the Committee to accept any of these three Amendments.

3.52 p.m.

BARONESS BIRK

I have just one point to make. In his reply to the Amendments the Minister kept referring to the fair rent and comparing this proposal with the Labour Government's Bill on the subject. I would say that the use of the word "fair" in this context is completely wrong. What he should be saying is the "market" rent, or even the "rack" rent, if you like; but to call this Bill a "fair" rent Bill seems to me to be quite incorrect.

I should like to support the Amendments which have been discussed, because it seems to me that, leaving aside any argument over the figures, what the whole thing is about basically is whether those who really need the help should get most of the help or whether it should be spread over so that the people who least need relief will in fact get it. This is how I see this Bill; and it seems to me that these particular Amendments are absolutely crucial, because in many respects Clause 1 is the heart of the whole of this Bill. I hope that noble Lords in all parts of the Committee will find it possible to support these Amendments, because this is a thoroughly bad Bill. Even from what has been said so far, it is quite clear that if it is passed in this form it will he incomprehensible in many ways and most difficult to interpret; and we have seen in the past great wedges of legislation which, when they have passed through all the legislative stages and have got on to the Statute Book, have then been practically impossible to execute. This is exactly what will happen in the case of this Bill if it goes through in this form.

BARONESS GAITSKELL

I also should like to support these Amendments. What the noble Lord, Lord Sandford, calls a "precise and coherent rent policy" is what I would call a "Heath Robinson kind of Bill". I can only compare it to that kind of cartoon. It starts from the assumption that there are a large number of people who are paying too little rent for their council houses; but no one in the Government seems to have done his sums, and there is nothing to show that this is true. In fact, we have learnt during the course of the Bill that there are some people who are already paying not only a fair rent but too high a rent for their council houses—a rent that is not justified. It seems to me that, because the Government have not done their sums, we should support these Amendments.

LORD AVEBURY

I am amazed that there have not been any contributions from the other side of the Committee on these two very important Amendments. One would have thought that members of the Tory Party, who are so interested in finance, would at least take part in this discussion, if not on any other part of the Bill, unless they have all been told by the Whips that they must keep quiet and get it through as quickly as possible, as I am rather tending to suspect in view of their conspicuous absence from this important debate.

I want to say just a few words following up what the noble Lord, Lord Diamond, has said. I think he has exposed an extremely important aspect of these proposals. We are talking about current prices, and although Ministers have spoken of the subsidies remaining at something between £300 million and £350 million in total in 1975/76, as compared with £350 million this year, this means in fact a very substantial reduction. If inflation continues, as it has done under the Tories, at something like 10 per cent. per annum, compound, between now and 1975/76, we are talking about an inflation of well over 50 per cent., and that means a substantial reduction in the amount of help that is available to tenants in one form or another even in such a short space of time as the next four years. I think that this fact should be underlined. Tenants ought to be made aware of exactly what the Government are proposing in terms of the erosion of their purchasing power by this whittling away of the subsidies, while keeping them at roughly the same figure, and thus pulling the wool over the eyes of the public by causing them to think that the subsidies are still of the same value when in fact they are being greatly reduced.

The noble Lord, Lord Diamond, said that, of the two formulae, the one which I propose in Amendment No. 2 and the one in Amendment No. 6, he prefers his own. I do not quarrel with that at all. What I was trying to elicit in tabling my Amendment was some better explanation than had been given in another place, not only of what this difference is going to be in subsequent years but also—a question which the noble Lord ignored in his reply—what proportion of total housing costs the subsidies would represent in the year 1975–76 and subsequent years. That, I am afraid, he was not able to give. I understand the difficulties involved in forecasting ahead as far as 1980; but I would remind the noble Lord that, if it is worthless and precarious to do that, then the Minister for Housing and Construction, Mr. Amery, has committed himself to worthlessness and precariousness in giving precisely such a figure.

I refer, as I have already done, to column 80 of the proceedings of Standing Committee E. Why is it so difficult, when the Minister for Housing and Construction has given that figure to another place as long ago as last November, for the noble Lord, when he is asked the same question here, either to reaffirm what his right honourable friend has said, or, if he has a better figure to give the Committee now in the light of sub-sequent calculations made in the Department of the Environment, to revise it? But I must say that it is an insult to his right honourable friend to say that these figures are worthless and precarious when they have been given in another place in Committee.

The noble Lord is also quite wrong in saying—I only mention this en passant—that I did not refer to furnished tenancies in another context. I said that they were going to be brought forward in a sub-sequent Bill. The other point about the Minister's speech is that if he says that in this Bill we are merely adopting the system incorporated in the 1965 Act, I am glad to hear it, because I have some Amendments down later on to incorporate the rent assessment committee procedure, which is also in the 1965 Act, and I take it from the Minister's remarks that he will accept those Amendments when the time comes. This is a hopeful sign, although I am not sure whether he really meant his remarks to be interpreted in that way.

"Carefully and precisely to identify and concentrate help" is the noble Lord's summary of what the Government are trying to do in this Bill. Yet, when one realises that no rents are to be individually assessed; that they are all to be done on a wholesale basis, with the rent scrutiny board not obliged to consider the rent of any particular dwelling but dealing with great estates, with all the two-bedroomed semi-detached houses being given the same rent, that is not "carefully and precisely" identifying what a tenant ought to be paying. But if the noble Lord says that is his object, I repeat that I am delighted to hear it, because we can incorporate into the provisions of Clause 55, when we come to it, in the light of the noble Lord's remarks, some machinery for individual tenants to make appeals to the rent scrutiny-board and either to have representations in writing there considered or to be able to attend for an oral hearing. I must say that the noble Lord's answer was very disappointing. Although I do not find myself inclined to delay the proceedings at this early stage, if the noble Lord, Lord Diamond, wants to press his own Amendments to a Division I and my noble friends shall be delighted to support him.

4.0 p.m.

LORD DIAMOND

We have reached a serious position although we have been discussing this Bill for only a modest one hour. The serious position that we have reached is that I am compelled to say to the Government that they have hitherto been misleading the nation—no less than that!—and we have not had an adequate explanation, or indeed an explanation at all. As the noble Lord, Lord Avebury, indicated, the general impression has been that the purpose of the Government has been to maintain subsidies at their present level. That has been said, sometimes "in small print" as it is in the Bill itself—and, of course, those drafting the Financial Memorandum are careful to use words in their proper way—and sometimes without any "small print" at all. It has been made perfectly clear to everybody in both Houses of Parliament, and to the nation as a whole, that the Government's intention is to maintain the present level of subsidies—I repeat, the present level of subsidies.

That has been a key point in their argument and that has been their justification. They have resisted completely any allegation that they are reducing subsidies: they have said, in so many words, that they are maintaining the level of subsidies. Those previous statements are inaccurate and misleading—and that is a grave charge to level against the Government. But they must be inaccurate and misleading on the basis of the only comment which Lord Sandford, on behalf of the Government, thought fit to make; namely, that he confirmed that they are current prices. That means, to use his own words, that they are the prices ruling in 1975–76.

Let us examine first one aspect of it, that of the Supplementary Benefits Commission. We are now told (I think for the first time and I am grateful for the information) that the figure at present, £150 million in to-day's money—let us be quite simple about it—will be £80 million in the money of 1975–76. This is a reduction of about one half. In fact, if one takes inflation into account it will he a reduction to about one quarter. That is the saving in terms of resources which the Government are making out of contributions to the rents of people who, by definition, cannot afford to pay for the roof over their own head. That is what the Supplementary Benefits Commission pays for. I cannot imagine that any one of your Lordships is content about that situation; nor can I imagine that the noble Lord, Lord Sandford, is content about it.

I do not accuse the noble Lord, Lord Sandford, of insincerity; I say that he has an important and difficult task to perform—and whether he has a guilty conscience or not in performing it is not my concern, for I am not the keeper of his conscience—to satisfy your Lordships that it is right to take money out of the pockets of council house tenants who have an average family income of (I think he said) £28 a week at the moment; to take money out of the pockets of those council house tenants who by definition cannot afford to pay for the roofs over their own heads, in order to make a substantial saving to the Exchequer and accordingly to the taxpayer. I am a taxpayer and I want none of that saving; and I suspect that many of your Lordships share that point of view, no matter on which side of the House you sit. That is why we say that this is a very bad Bill.

I have referred to only one tiny aspect of it, the Supplementary Benefits Commission, because the noble Lord gave us those figures. But there is also the other aspect: the total subsidies which the noble Lord said would be between £220 million and £270 million for 1975–76. May I ask the Committee to be good enough to give their attention to that bracket of from £220 million to £270 million?—a difference of £50 million. We do not complain about that; we are grateful for the information, and we accept the fact that it is difficult to give information relating to the future and that that is why responsible people who give that kind of information allow themselves a latitude of this kind. But what is wrong with continuing to allow a latitude of this kind and to project the figures further? I cannot accept that it is impossible for the Government to make a reasonable estimate of what they have in mind for later years, though I can accept that the margin would be a considerable one. But there must be some indication.

How else could they put their names to a Bill which says that the figure is estimated to be a certain sum "until 1975–1976"—and that is exactly the year which the noble Lord, Lord Sandford, gave us—and (as the Bill goes on to say in the Explanatory Memorandum) "may be reduced thereafter". It does not say, "… may be increased thereafter" but, "reduced". We know that that means that those responsible for the calculations of the effect of this Bill are satisfied that it cannot, under normal contemplation, result in an increase but will result in a decrease. But that decrease has not been quantified. What we are saying is that surely the Government must be able to give some quantification, even if only as a broad bracket of the kind which the noble Lord gave for the year 1975–76!

So I am saying that the Government must not be so shy about the disclosure of the figures—I say "shy" because I think that that is a thoroughly Parliamentary word. Of course, if you disclose the figures and there emerges as a result (as did the disclosure of the figures we have just had), the disclosure of current prices and that what the Government were saying can hardly be regarded as true, then the word "shy" takes on a different meaning. So I am asking the Government to be good enough to look into their files and give some indication of the meaning of the words, "may be reduced thereafter", which are used in their own Bill: because what we have established already in the first hour's discussion on this Bill is that the nation and both Houses of Parliament have been misled as to the effect and the intended effect of the Government's legislation, and that the subsidies are intended to he reduced. The level of subsidies is maintained, but as a proportion of the nation's resources they are to be reduced. In short, it will cost the nation less; a smaller proportion of the "cake" then available will be going to subsidies and more will be going to those who wish to consume that "cake" in other ways. We have already established that we cannot quite quantify the size of that portion of the "cake" until the Government are good enough to say a little more about what the reduction "thereafter" may refer to.

So I am saying that this is already a serious situation, much more serious than the minor comments made by the noble Lord, Lord Sandford. I was delighted to hear him make them; I was delighted to hear him say that he had some doubts about whether I was entitled to nut down Amendments relating to financial privilege. I am a comparative newcomer to your Lordships' House and most anxious to learn; but, so far as I know, no one has suggested that I am out of order. I thought the Government would be delighted to have an opportunity to justify their approach to the Bill; certainly every Government which believe in their legislation are delighted to have an opportunity of having that legislation challenged in any way at all, even if they are unusual ways. So I do not think that I would quarrel with the noble Lord on those grounds. I was delighted to hear him say that the purpose of this Bill is to concentrate help in those places where it is needed, because I have a bundle of Amendments just for that very purpose from local authorities who are complaining bitterly about their lack of success in trying to persuade the Government that theirs is a case of special need, and asking is it not time that the Government carried out the purpose of their Bill, to make provision for their special needs. It will be my responsibility to refresh the memory of the Government on those cases so that there will be ample opportunity for the noble Lord, Lord Sandford, and the whole of the Government, to show how right they are in claiming that the function of this Bill is to provide help in those places where it is specially needed.

We come back to these Amendments. The noble Lord, Lord Avebury, has, as usual, been most kind in comparing the proposals in his Amendments and those in the Amendments which we have put forward. We all recognise that the Amendments are to achieve the same purpose, and the noble Lord, Lord Avebury, has been good enough to say that he would be willing to support Amendment No. 7 which I think is the most relevant of the Amendments. There is no point in voting on each one of them because they propose different methods of achieving the same purpose. If it is appropriate for a Division to be taken on Amendment No. 7, I think that would be the best method of indicating how distressed we feel about the general purpose of the Bill and how astonished we are that the Government should have continued to mislead the nation up to this late stage.

4.13 p.m.

LORD DRUMALBYN

As usual the noble Lord, Lord Diamond, has put his case with considerable logic and moderation; except in one respect, which I regret, that he has accused the Government of having misled the nation. I would say right away that it is for each Member of your Lordships' House, as I understand it, to decide for himself what kind of Amendments he puts down. The questions that he has to bear in mind, or one of them, is how effective the Amendment will be in practical terms. Perhaps my noble friend was referring to that rather than to the fact that a particular Amendment is or is not within the ambit of the Long Title. Our procedures are very flexible and we take great pride in that. My noble friend made clear that nothing he has said has implied any criticism, although I think he was entitled to indicate a certain degree of surprise over the tenor of these Amendments.

The essence of Lord Diamond's criticism is that the Government have been misleading the nation. What is curious is that he then asks what is the meaning of what the Government have put into the Explanatory Memorandum. He finds it is what lie thought it was, and then he accuses the Government of having misled the nation. For the life of me, I cannot see that there can be any case for the Government to answer. They have made quite clear what is their objective. As my noble friend has said, it is to give assistance where needed; and the problem of any such policy is to be able to forecast what assistance will be needed at any particular time.

After all, the basis of the subsidies in this Bill is assistance towards deficits in housing revenue accounts in the future. How is it possible to project from any point what those deficits are likely to be? What the Government have indicated is that at the present levels the subsidies will be about the same after this Bill comes into operation as they were before. It is reasonable to anticipate that in the future, as the country becomes wealthier and people become better off, they will need less subsidy and assistance, and therefore that the subsidies should decline. I should have thought that a reasonable assumption to make. But having suggested that we have been misleading the nation, for the noble Lord then to suggest as he did in his first Amendment, a flat figure of £300 million in five years' time, seems to me quite a contradiction in terms. What he says about the true value of the subsidies would apply equally to the value of the £300 million.

As for the Amendment which he is inviting the Committee to vote on, the problem is quite simple. The noble Lord does not define in what ways the money is to be spent. He does not indicate how the sums he is proposing be made available should be distributed. He gives no indication that they should go to those authorities which are in need; and some authorities will become much more in need in the future than they were, while I have no doubt that others will cease to have need of any assistance at all. But I ask noble Lords to realise from the very start that here we are not talking about specific subsidies and housing needs that can be quantified and projected into the future. We arc talking about meeting the particular needs of individuals as they arise and the particular needs of housing authorities where there is a great need to build more houses. It is in this way that these subsidies have been devised.

I hope that the Committee will accept that while it is right that we should aid individuals who are in need, it is not right to expect that because any individuals have been in need at one time they should receive the same aid indefinitely. whether they need it or not. That is why a system of subsidising house rents for people who may have needed a lower rent at one time but who no longer do so, is not a policy which ought to be pursued any longer; it cannot be justified.

So far from being in any way dishonest or disreputable, the Bill is an honest attempt to try to marry this concept of giving assistance where assistance is needed to the reciprocal concept of not continuing to give aid to those who no longer need it. I hope that your Lordships in dividing on these Amendments—because I think we are in effect dividing on the three, although in the name of one of them—will bear that in mind. It is impossible to understand the purpose of the Government or of the Bill unless those factors are borne in mind through-out the consideration of this Bill.

May I say to the noble Lord, Lord Diamond, in conclusion, that I do not think it helps to throw accusations of bad faith across the floor of the Committee? I do not think the noble Lord could make that stick on anybody on this side, and I hope he will not continue it in future. We are at the start of what may be a fairly long period of consideration of this Bill, and I hope that it will go smoothly.

4.23 p.m.

LORD DIAMOND

I reciprocate that, and I accept immediately the responsibility which rests on the shoulders of anybody who uses the kind of language and makes the kind of assertion that I made. One does not make it therefore without being ready to justify it. It is now my duty either to withdraw the allegation I made or to justify it. I am sorry, but I am going to justify it. I am going to refer the noble Lord to a speech made in this House, and if the noble Lord wishes it I shall prepare all the references which have been made by Ministers in another place to underline the point that I was making. I made it quite clear that in the Financial Memorandum the phrase "current prices" is used. That has never been explained. A question was asked in the other place in Committee, and it was not answered. I followed it through very carefully indeed.

What I am saying is that this Government, this Front Bench, has misled this House into believing that the subsidies are not going to be reduced. As we now know, they are. I therefore refer to col. 1526 of the Second Reading debate on May 18, where the noble Lord, Lord Sandford, was replying on behalf of the Government. He said: The noble Lord, Lord Diamond, and the noble Lord, Lord Davies of Leek, both spoke of the resources, or lack of resources as they saw it, being applied by us to the housing sector. "Resources" means what it says. It means resources, and not nominal amounts in cash at current day prices. We are only talking about resources being applied in the public sector in this Bill and the fact of the matter is that so far from cutting any of these subsidies we are maintaining them …". I should have thought that was simple straightforward English that any one of us could understand: the resources being allocated to subsidies are being maintained. We now know that they are being at a minimum cut by the amount of deflation taking place between to-day and the relevant time. So I do not think I am called upon to do other than reiterate the importance of that phrase to which I made inquiry. And, of course, if one does not have Amendments, one cannot make inquiries. So if the noble Lord asks me whether I think this Amendment has served any useful purpose, I am sure that everybody inside your Lordships' House and outside will feel satisfied that it has: it has revealed the true nature of the purpose of the Government's Bill, which is to cut the proportion of resources being allotted to housing in the public sector.

The noble Lord said that there must he the same confusion in my own figure of £300 million. It is not like the noble Lord, Lord Drumalbyn, who has no equal in his skill in getting legislation through this House with speed. to challenge me on something which I had already said and therefore make it necessary for me to delay your Lordships' Committee by repeating it for his edification; but I am bound to do so out of courtesy to the noble Lord. He will recollect that I chose his figure of a difference of £200 million. I made the assumption that the inflationary factor would be perhaps at that point of time 50 per cent. of £200 million, according to my unused arithmetic, as £100 million, and the two together, according to my unused additions, is £300 million. Therefore that inflationary element was taken into account.

The noble Lord then went on to make a much more serious point. He said that he could not accept the Amendment because it did not indicate how the figure was to be distributed. That is a very valid point indeed. If the noble Lord is saying that the Government are prepared to look sympathetically on an Amendment of this kind, then I am sure that the noble Lord, Lord Avebury, and I would have no difficulty whatever in accommodating the Government by withdrawing our Amendment, discussing with the Government details as to how the amount should be distributed, and putting down another Amendment at a later stage: because your Lordships will appreciate that we are at a preliminary stage of inquiry. This is what the Committee stage is for, and very fruitful it is. Therefore, we should be only too delighted if the noble Lord really meant what he said; namely, that his objection to the Amendment is not so much to the principle of the Amendment, but to the fact that we do not say how the £300 million is to be distributed, and we should be glad to help him and have a very tidy, well-drawn and professionally drafted Amendment ready for the next stage of the Bill.

I hope that the noble Lord will respond to what I am saying now and indicate whether that is in the Government's mind, because if it is so we should certainly not wish to divide the Committee so long as the principle is admitted: that it would be a dastardly thing to withdraw the money to save the taxpayer at the expense of the poor council tenant, as this Bill is doing, and to do it on the basis of what has hitherto been a misconception by the whole nation, if we can avoid it. And we can avoid it if the noble Lord is now saying that the Government are having second thoughts and would agree to the present level of subsidies being maintained; that is to say, the proportion of the nation's resources which are at the moment devoted to subsidies being continued at the same proportion. If the noble Lord will be good enough to say that, then neither the noble Lord, Lord Avebury, nor I would wish to press your Lordships into the Division Lobbies. But if the noble Lord is going to come back to his point of view that the £300 million cannot be afforded and that the taxpayer must be saved at the cost to the council tenant, then we shall seek to divide the Committee.

4.31 p.m.

THE DEPUTY CHAIRMAN OF COMMITTEES (BARONESS WOOTTON OF ABINGER)

Tellers for the Contents have not been appointed pursuant to Standing Order No. 51. A Division cannot therefore take place, and I declare that the Not-Contents have it.

Amendment negatived.

LORD DIAMOND moved Amendment No. 4: Page 2, line 5, leave out ("at the end of") and insert ("in").

The noble Lord said: I beg to move Amendment No. 4. Perhaps it would be of assistance to some of your Lordships, particularly those behind me, if I were to say that we shall in due course come to Amendment No. 7 which has already been discussed. When we do reach Amendment No. 7 I shall seek to divide your Lordships' House. At the moment we are discussing, under normal and well-understood rules, Amendment No. 4. which is a simple and straightforward drafting Amendment. The reason for it is that when one comes to read this subsection, namely (3) The subsidies set out at the end of this subsection shall he payable … one wonders where the end starts: one knows where it finishes but not where it begins. So I was confused and wondered which one of these subsidies was intended. I found that presumably they were all intended. Therefore I could not for the moment see the reason—although I am sure there is a good one which the Government will shortly explain—for the use of the words "at the end of" instead of the simple word "in". Therefore, in order to seek that clarification or, if it be so, adjustment, I beg to move this Amendment.

LORD SANDFORD

At the risk of moving on rather too quickly for some of our colleagues to have their tea, and on the strict understanding that noble Lords opposite do not draw too much encouragement from their initial success, I shall be pleased to accept this Amendment.

LORD DIAMOND

May I say how grateful I am to the noble Lord? It was well worth missing tea.

On Question, Amendment agreed to.

LORD DIAMOND

I beg to move Amendment No. 7. We have already discussed this Amendment.

Amendment moved— Page 2, line 24, at end insert — ("( ) There shall in addition be payable to local authorities and new town corporations for the year 1972–73 and each subsequent year a subsidy, to be known as the fair subsidy, being the difference, at current prices, between the total of the said eight subsidies and the total net charges which would, had the system in

force prior to the passing of this Act continued, have fallen on the Consolidated Fund, through the appropriate votes, in connection with housing in England and Wales (other than for improvements), including payments made towards rents by the Supplementary Benefits commission.")—(Lord Diamond.)

4.34 p.m.

On Question, Whether the said Amendment (No. 7) shall be agreed to?

Their Lordships divided: Contents, 67; Not-Contents, 105.

CONTENTS
Airedale, L. Fiske, L. Rusholme, L.
Archibald, L. Gaitskell, B. Samuel, V.
Arwyn, L. Gardiner, L. Seear, Bs.
Avebury, L. Garnsworthy, L. [Teller.] Segal, L.
Bacon, Bs. Geddes of Epsom, L. Shackleton, L.
Bernstein, L. Granville-West, L. Shepherd, L.
Beswick, L. Hale, L. Shinwell, L.
Birk, Bs. Henderson, L. Simon, V.
Blyton, L. Jacques, L. Snow, L.
Brockway, L. Leatherland, L. Southwark, L. Bp.
Brown, L. Llewelyn-Davies of Hastoe, Bs. Stamp, L.
Buckinghamshire, E. Lloyd of Hampstead, L. Stocks, Bs.
Burntwood, L. McLeavy, L. Summerskill, Bs.
Burton of Coventry, Bs. MacLeod of Fuinary, L. Swaythling, L.
Carnock, L. Maelor, L. Tanlaw, L.
Champion, L. Moyle, L. Taylor of Mansfield, L.
Chorley, L. Nunburnholme, L. Wells-Pestell, L.
Crook, L. Ogmore, L. White, Bs.
Davies of Leek, L. Pargiter, L. Williamson. L.
Diamond, L. Phillips, Bs. [Teller.] Willis, L.
Donaldson of Kingsbridge, L. Platt, L. Wootton of Abinger, Bs.
Douglass of Cleveland, L. Ritchie-Calder, L. Wynne-Jones, L.
Faringdon, L.
NOT-CONTENTS
Aberdare, L. Ebbisham, L. Kilmarnock, L.
Ailwyn, L. Eccles, V. Lauderdale. E.
Albemarle, E. Effingham, E. Limerick, E.
Alexander of Tunis, E. Elles, Bs. Long, V.
Astor of Hever, L. Elliot of Harwood, Bs. Lonsdale. E.
Atholl, D. Emmet of Amberley, Bs. Lothian, M.
Auckland, L. Erroll of Hale, L. Loudoun, C.
Balerno, L. Ferrers, E. Lyell, L.
Balfour, E. Ferrier, L. Massereene and Ferrard, V.
Barnby, L. Fortescue, E. Merrivale, L.
Beauchamp, E. Gage, V. Milverton, L.
Belhaven and Stenton, L. Goschen, V. Molson, L.
Belstead, L. Gowrie, E. Monck, V.
Berkeley, Bs. Greenway, L. Mowbray and Stourton, L.[Teller.]
Bessborough, E. Grenfell, L.
Camoys, L. Gridley, L. Moyne, L.
Carrington, L. Hailes, L. Napier and Ettrick, L.
Clwyd, L. Hailsham of Saint Marylebone,L. (L. Chancellor.) Nugent of Guildford, L.
Cottesloe, L. Oakshott, L.
Courtown, E. Harvey of Prestbury, L. Penrhyn, L.
Cowley, E. Hayter, L. Poltimore, L.
Craigavon, V. Hertford, M. Rankeillour, L.
Crawshaw, L. Hives, L. Rathcavan, L.
Daventry, V. Hood, V. Reay, L.
de Clifford, L. Howard of Glossop, L. Reigate, L.
Denham, L. [Teller.] Hylton-Foster, Bs. Rhyl, L.
Derwent, L. Ilford, L. Ruthven of Freeland, Ly.
Digby, L. Jellicoe, E. (L. Privy Seal.) Sandford, L.
Drumalbyn, L. Jessel, L. Sandys, L.
Dulverton, L. Kemsley, V. Savile, L.
Dundee, E. Kilmany, L. Sempill, Ly.
Strang, L. Stratheden and Campbell, L. Vivian, L.
Strange, L. Swansea, L. Willingdon, M.
Strathclyde, L. Templemore, L. Wolverton, L.
Strathcona and Mount Royal, L. Tweedsmuir, L. Wrottesley, L.
Vernon, L. Young, L.

Resolved in the negative, and Amendment disagreed to accordingly.

4.43 p.m.

LORD DIAMOND moved Amendment No. 8: Page 2, line 24, at end insert— ("( ) The Secretary of State shall within one month of the passing of this Act and thereafter not later than 31st January in each year publish in respect of each of the eight subsidies his estimate of the total amount of each subsidy for the ensuing year beginning with the year 1972–73 and in the case of the slum clearance subsidy for the year 1971–72.")

The noble Lord said: I beg to move Amendment No. 8. As your Lordships will immediately appreciate, the essence of this Amendment lies in the word "publish", and of course one cannot publish unless one knows what one is going to publish. So the purpose of the Amendment is to elicit figures and to make sure that everybody who is concerned and interested in those figures shall be made aware of them. At the moment the position is far from satisfactory. Some figures were given on November 30 last year by the Minister at column 81 of Hansard, Standing Committee E, of another place. Those of us who are concerned with this Bill in detail have naturally studied those figures with great care. My own assessment is to allot two marks out of ten. They do not add up; they do not cross-cast; they are of some help, but I should have thought that the Government could do a lot better than that. The Minister in another place gave total figures. He gave, subject to brackets, which one well understands, the figures of the residual subsidy of slum clearance, of rent allowance, and of subsidies other than those two. Those figures were presumably at current prices, although I do not think that that was made clear. They referred to the four years ending 1975–76. Those figures are not sufficiently clear to those who are concerned with the problem of making their own provisions in the local authorities year by year, and arc not sufficiently clear to us who have the responsibility of probing the Government's mind and making such improvements in the Bill as we are able to achieve. So the first comment I have on the figures which have so far been given is that they simply do not add up.

The second comment I would make is that they do not at the moment reconcile with the Public Expenditure figures given on page 40 Cmnd. 4829, Public Expenditure to 1975–76. Of course, I recognise we are now talking about public expenditure and are not talking about central Government grants. I would make the comment, in passing, that these Public Expenditure figures are given at 1971 survey prices, and that there is not a single figure in the Public Expenditure White Paper which does not define precisely the basis on which the price is calculated. But it would be very helpful indeed if there could be a reconciliation. Of course they are not the same things, but it would be helpful if we could at some time or other be supplied with a reconciliation between the Public Expenditure figures, given in a Government White Paper, and the figures given by the Minister in another place at column 81 of the Commons OFFICIAL REPORT for Standing Committee E, 30/11/71. In particular, although Public Expenditure and central Government finance figures are not the same figures, some indication ought nevertheless to be capable of being drawn from the comparative size year by year of the housing figures in the Public Expenditure White Paper.

The interesting point is that the Minister's figures show fairly equal sums, at current prices of course—that means actually falling amounts in real terms —for each of those four years 1972–73 to 1975–76. In particular, the figure for the year 1972–73 was not out of line with the figures of total subsidies for the other years, the figure for 1972–73 being given as £340 million to £350 million. But if one looks at the spread of the figures in the Public Expenditure White Paper one sees a substantial increase for 1972–73. I am sure there are some explanations. Reference has already been made to that figure including some arrears; but I do not think it is a sufficient explanation merely to refer to that. One wants to know how it is that in the Public Expenditure figures there is an enormous surge of expenditure in 1972–73, whereas in the Minister's figures of central Government grants and subsidies there is no surge at all and the figure is in line with those of the other years.

I would repeat what the noble Lord, Lord Avebury, said earlier in our debates about the lack of figures which have been supplied, and I want to go further than that. Perhaps it would be appropriate for me to give the Government warning, if I may put it that way, rather than to leave the matter until we reach the Motion, Whether the clause shall stand part. Perhaps by the time we reach that Motion figures could be made available. I want to ask the Government whether they will not only give us the full figures showing what the estimates are for these various subsidies, but also give us some pro forma examples. In other fields, such as taxation, where legislation happens to be technical and complex, it is extraordinarily helpful to all of us to have examples, which the Inland Revenue used to be excellent at preparing, showing the kind of thing that would happen in different sets of circumstances.

The circumstances defined in this clause are varied and not easily understood. The clause refers to eight subsidies, but those eight subsidies are divided into four different categories. There is the category which has to be credited to housing revenue account; then the category which has to be credited to housing revenue account and is subject to limitation by reference to the state of the account. There is the category which has to be credited to general rate fund, and is subject to limitation by reference to the state of the housing revenue account. There is the category which has to be credited to general rate fund but which is not subject to any such limitation. One would like to know how typical examples are going to work out for various authorities. I am sure that the Government must have had such examples prepared in order that they fully understand what they are doing—I still have the youthful belief that Governments understand what they are trying to do. I shall try to hang on to that belief so long as I can. The Government will underline it and confirm if it they will be good enough to supply examples setting out how the subsidy arrangements are to work.

The noble Lord, Lord Drumalbyn, is looking at me with an unusually puzzled expression. It may be due to the fact that he has the sun shining in his eyes.

LORD DRUMALBYN

It is the sun.

LORD DIAMOND

I thought that was the more likely explanation than that he was not understanding what I was saying. As I now know that he understands, I am grateful to him for listening and I hope that it will be possible for us to have these examples. I am sure that the understanding of the Bill and the speed with which we shall he able to deal with it will be greatly assisted by that kind of information. That is the purpose of this Amendment. It is not the kind of Amendment on which we should seek to divide the Committee, but it enables the Government to explain their views about publishing figures. It enables them to give us examples, and also enables local authorities and others concerned with this subject to get a better understanding than they have at the moment of the Government's legislation. I beg to move.

LORD AVEBURY

It would be valuable if the Minister could give us some further explanations on this, I am equally puzzled by some of the figures and by the discrepancy between the figures given by the Minister of Housing and Construction in Standing Committee E and those in the Explanatory and Financial Memorandum. I could not understand why the Minister for Housing and Construction gave a detailed breakdown for three of the subsidies mentioned here—the residual subsidy, the slum clearance subsidy and the rent allowances subsidy—and then lumped all the rest together, even though he made the remark at the time that the rent allowances subsidy involved the most crystal gazing of all. If that involved more crystal gazing than some of these other subsidies (let us say the transition subsidy), that means he could equally well have given the detailed estimate that he gave to Standing Committee E for all the others and not lump them together as he did, apart from the three which I have mentioned.

If we add up the figures given by the I Minister, we get a band of £320 million to £360 million for the total of subsidies in 1972–73, and £295 million to £380 million in 1975–76. The Explanatory and Financial Memorandum shows that the total amount of the subsidies, including supplementary benefit, remains at £320 million up to 1975–76. So I am mystified by this. If we subtract the £80 million of supplementary benefit which the noble Lord mentioned earlier on from the total of Mr. Amery's figures for 1975–76 we get a band of £215 million to £300 million. I am asking the noble Lord to explain how that figure can he reconciled with the £350 million mentioned in the Explanatory and Financial Memorandum.

It may be that in the lumping together of other subsidies Mr. Amery has included the amount which was paid in supplementary benefit. But if the noble Lord looks at the context of the discussions in Standing Committee E he will see that that is a very unlikely explanation; Mr. Amery was not being asked to discuss supplementary benefit, which is not a matter dealt with under Clause 1. There is a substantial difference of at least £50 million. If you take the upper figure which Mr. Amery gave, £380 million, and subtract the £80 million supplementary benefit, you get a figure of £300 million, which compares with £350 million in the Explanatory and Financial Memorandum. I should be grateful if the noble Lord could not only explain this discrepancy but also give us the breakdown for the other five subsidies, so that we can study the arithmetic and return to the matter at a later stage in the Bill.

4.57 p.m.

BARONESS YOUNG

I have listened with great interest and considerable trepidation to the arguments put by the noble Lord, Lord Diamond, and feel that if ever there was a case of rushing in to do something somewhat unwisely it is to pick an argument with a financial expert. I hope that in answering questions I shall be able to explain the point that the Government wish to make. The noble Lord, Lord Diamond, has said that the essential part of his Amendment is the word, "publish" and I have no doubt that in making that essential point he wishes to make it clear that this will help local authorities to estimate their housing need and the subsidies that they will get year by year.

The present situation is that under Section 91 of the Housing Act 1957 how much new council house building is planned is a matter for each local authority. There is no capital investment restriction placed on it by the Government. What a local authority does is based not on estimates of subsidy or central public investment, but what local authorities decide to spend in the light of the assessment of their own housing needs. The question one must ask is whether a change in the system of publishing these subsidies would help local authorities. It is difficult to see that they would benefit at all by this because the whole purpose of the subsidies is that they will affect housing authorities when they run into deficits on their housing revenue accounts, for they will then have these subsidies.

The particular figures that the noble Lord, Lord Diamond, asked for, are to try to clear up what the Government estimate in detail the new subsidies to be for 1972–73 and the ensuing years. I will try to give him the best estimates that we have at the moment, recognising that these must be estimates. There is the residual subsidy, which is estimated for 1972–73 to be £110 million; there is the rising costs subsidy of £10 million; the operational deficit subsidy of £25 million; the rent rebate subsidy of £90 million; the rent allowance subsidy of between £5 million and £10 million; and the slum clearance subsidy of between £5 million and? 10million. This adds up to a figure of about £235 million and the difference would be made up in supplementary benefit to the total of the subsidies which the Government have talked about.

It is estimated that by 1975–76 the payments would be as follows: residual subsidy, £5 million; rising costs subsidy, £55 million; operational deficit subsidy, £15 million; rent rebate subsidy, between £105 million and £135 million (and this is a very wide range); the rent allowance subsidy between £30 million and £50 million and the slum clearance subsidy between £10 million and £25 million. I hope that these figures are of some help in explaining the general estimates of how the subsidies are thought to work out. It is very difficult to give precise examples of how they would work in each local authority, because it will depend on the details of each local authority which it will know and will be based on each local authority's assessment of its own need.

5.1 p.m.

LORD DIAMOND

The noble Baroness, Lady Young, was so gracious and modest in her appearance at the Box that one is considerably constrained to say anything other than, "Thank you very much indeed". But I feel it my duty, nevertheless, to say to the noble Baroness that what she said was so acceptable that. I am going to ask her to say a little more. We are very grateful indeed for the figures. This clears up the point raised by the noble Lord, Lord Avebury, that the figures for total subsidies include the continuing payment by the Supplementary Benefits Commission. I imagine that in the case of this last year—I do not know whether the noble Baroness has the figures for 1975–76—it must be in the order of £50 million or so. At all events, I understand from what she says that the figure of total subsidies which was given by the Minister in another place is £300–£350 million for the year 1975–76 and is made up of the figure that she has been good enough to give us together with the supplementary benefit payment, whatever that was for that year.

I am surprised that the noble Baroness thinks that the publication of these figures would not be helpful to local authorities. Representations which I have seen have indicated that certain local authorities would be glad. to have this information which would enable them to plan ahead and to work out their rate demands, which is an annual necessity. Some of them are in considerable difficulty, as I understand it, not being able to determine precisely what those figures will be which will determine the individual case, as much from the lack of clarity of the Bill itself as from lack of overall figures which have not been published. I should have thought that there would be some advantage, particularly as publication takes place in another form; namely, in the Public Expenditure White Paper to which I have previously referred, which I hope is going to continue to be published each year and which sets forth the public expenditure likely to be incurred on housing including subsidies for the five years, rolling the five years forward with each annual publication, so that the figures are capable of being ascertained.

I do not suppose it would be possible to get the public expenditure figures without working out the very figures for which we are asking. I have no doubt that they would be available in some file in the Treasury or in the Department of the Environment. I hope that the Government will be good enough, to reconsider whether it might not be for the convenience of those concerned that the figures should be published in a form more readily assimilable by them rather than the present figures which arc published purely as public expenditure and do not divide Government grants from local authority expenditure.

The other point on which I wanted to press the noble Baroness was to ask whether she could not go further with the figures than those for the year 1975–76. I recognise that there has been some hesitation about going beyond the years 1975–76, but the noble Lord, Lord Ave-bury, referred to the fact that the Minister in another place gave a figure for 1980–81. He said: if the existing subsidy system continued, the annual total net charges on the Consolidated Fund in connection with housing in England and Wales, including payments made towards rent by the Supplementary Benefits Commission would increase by about £200 million by 1975–76 and by perhaps £400–£500 million by 1980–81. Those are the best figures I am able to give."—[OFFICIAL RFPORT, Commons, Standing Committee E, 30/11/71, col. 84.] There is a spread of 25 per cent., £400 million to £500 million, but that gives the order of the figures and one knows what one is dealing with. If one makes appropriate adjustments for the inflationary effects one knows the proportion of resources which the Government intend to devote to subsidies. I wondered whether the noble Baroness had further figures, which she felt on one of her far too rare appearances at the Box she ought to be a little hesitant in giving. We are delighted to see her and hear her and would be even more delighted if she would be a little less shy and give us more figures if they are available to her. This is not an Amendment which we are intending to press to a Division, but we want the best information which the Government can let us have.

LORD AVEBURY

It is always hard to try to do arithmetic while on one's feet. I was thinking about the reconciliation which I asked the noble Baroness to make between the total which the Government had given by adding up the amounts given by Mr. Amery in Standing Committee E and the amount that occurred in the Explanatory and Financial Memorandum. I think she has clarified it to the extent that what he called "other subsidies" in Standing Committee E must have included supplementary benefit as the noble Lord, Lord Diamond, says. If one adds together the figures which the noble Baroness gave for rising cost, operational deficits and rent rebate subsidies for 1975–76 one arrives at a total of £175–£205 million. If one subtracts that from the total given by Mr. Amery of £250–£300 million "other subsidies" one arrives at the estimate of supplementary benefit payments for that year. I would be grateful if the noble Baroness could confirm that that is correct. I think it must be. Taking the lowest figure from the lowest figure and the highest figure from the highest figure one gets a range of £75–£95 million of supplementary benefit for that year which reconciles with the figure which has already been given. I should be grateful if the noble Baroness would tell me if by arithmetic is correct.

5.10 p.m.

BARONESS YOUNG

The noble Lord, Lord Avebury, has just raised a number of rather difficult arithmetical questions. I feel that arithmetic is not in fact my strong suit at any time. If I may put the figures in these terms, the total subsidies at present are estimated to be about £350 million, of which supplementary benefit makes up approximately £150 million. The total subsidies that I gave in round figures for the year 1972–73 amount to about £260 million, and in round figures the total subsidy from supplementary benefit would be about £80 million. I hope this answers the question put by the noble Lord, Lord Avebury. These are round figures and therefore they can be adduced in the same way for the year 1975–76. The difficulty about giving any figures after 1975–76 is that it is really much more difficult under the new system to have any really meaningful estimates as to what the subsidy figures will be because it is more difficult to see exactly that far ahead how everything will work out.

In saying that, may I say in answer to the noble Lord, Lord Diamond, who asked what is the purpose of publishing the amounts of the subsidies for local authorities and is this really going to help them to get on with their house building, that we think that the advanced publication of estimates of the total cost of subsidies will not really help housing authorities because the amount of subsidy which an authority can expect to receive for the following year can best be estimated by the authority itself in the light of the knowledge of the factors which determine the amount of the subsidy. In future, it will be the state of their Housing Revenue Account and their building and slum clearance programme. In fact it is much easier for an individual authority to estimate the individual subsidy entitlement for the next year than for the Government to do so, and in a sense I think that the publication of the figures will not necessarily help local authorities in making their estimates, and it could lead to a misunderstanding of what the subsidy system is going to be. However these round figures will of course be published in Hansard and will be available for local authorities to read.

LORD DIAMOND

I ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

5.12 p.m.

LORD GARNSWORTHY moved Amendment No. 9: Page 2, line 24, at end insert— ("( ) It shall be the duty of the Secretary of State to consult with local authorities and new town corporations about the need for housing and the amount of subsidy required to ensure that need is met before publishing the estimates referred to in the preceding subsection.")

The noble Lord said: This Amendment refers to subsidies to be credited to the general rate fund, but it goes a little further in that it brings into play the whole question of housing need. Speaking on earlier Amendments my noble friend Lord Diamond has sought to probe the Government's intentions and to examine the financial strategy of the Bill. The Government have not been amenable in regard to meeting the constructive proposals which he made to ensure that future subsidies ought to reflect not only the pressures of inflation but to provide a really substantial increase in the numbers of houses built by local authorities and New Town Corporations; in other words, houses built to let.

This Amendment would confer on the Secretary of State not only the opportunity to consult with local authorities and New Town Corporations about housing need—an opportunity he undoubtedly possesses and can use if he so desires—but would do more: it would lay on him the duty, an obligation, to consult; and local authorities and New Town Corporations, with the responsibilities they have carried, are entitled to anticipate this. As it is, the Bill threatens to belittle their standing and to usurp their functions to a degree that ill becomes a Government supposedly committed to extending freedoms in the area of local government. I think that local government is becoming increasingly aware of not merely unfulfilled promise in this direction but a contraction of the freedoms they have enjoyed. I hope therefore that the Government will give sympathetic consideration to this Amendment, and incidentally, if they do, they may do a little—but only a little, I am afraid—to redeem what was interpreted as a promise.

I thought that on Second Reading the noble Lord, Lord Sandford, made crystal clear the Government's intentions in regard to future subsidy policy; that is, as has, been pointed out this afternoon already from these Benches, to hold subsidies to a more or less fixed figure regardless of what happens in terms of new building. How, later in his speech, he was able to say, referring to tenants who did not qualify for a rebate, they will no longer be paying for anybody else's rebate or for anybody else's house was—and still is—quite beyond my understanding. It surely would be wrong to lay down in this Bill that subsidies are to be held at present levels regardless of developments. It is surely wrong in principle to introduce such a restriction. The effect on local authorities could be—and many people believe it would be—quite catastrophic. As the Association of London Housing Estates has put it: The new subsidy structure is such as to deter local authorities from ambitious building programmes and therefore the housing shortage will be perpetuated. I think it is worth bearing in mind their further stricture on this Bill; namely, The shortage will inflate the values of houses for sale".

The General Council of the T.U.C. made known their views, which were of a similar kind. They said: The proposals of the Bill would shift the emphasis of housing subsidies to individuals and away from housing costs as such. While there may be a need for individual subsidies (for example rebates) to assist individuals whose resources are low in relation to their housing needs, the basis of subsidy policy should be designed to reduce the general level of housing costs in the various sectors. The aim should be to encourage the diversion of a larger proportion of national resources into housing.

They then pointed out that at present the United Kingdom spends a lower proportion of the gross national product on housing than any other advanced country.

As I have tried to point out, the Amendment charges the Secretary of State with a duty to consult local authorities and New Town Corporations about the need for housing. And who knows more about the problem than they do? They live with it. I was very interested to hear the remarks of the noble Baroness who was lately speaking on that very subject. Local authorities know the need in terms of homelessness. I come from a very wealthy county, Surrey, and even in Surrey the County Council from time to time face the human problem of homelessness, and regrettably they have from time to time to take children into care, breaking up their families.

Local authorities know the need in terms of inadequate housing. They know the extent of the problem of slum dwellers. They know the demand that follows population growth. Local authorities and new town corporations are in the best position to assess new demands following migration to areas of development, and local authorities have the task of compiling the lists of would—be council tenants. They are the best qualified to know real need and to project a future need. They also know what is happening and what is likely to happen in the private sector in their areas. These are the people best qualified to assess the number of homes required in their localities to meet need. They also know local rates of pay. They can best assess what a fair rent, in terms of what can be afforded, ought to be. Not only can they give the Secretary of State invaluable help; they are the people best qualified to do so, to give him help in assessing the number of houses that ought to be built, houses that ought to be built by public enterprise, advice as to the rents that are reasonable and proper for that area, all these things having regard to local factors.

In the past, they have done a very good job and they have done it very much on their own. If their freedom to manage their housing finances is to be taken away, the least that ought to be done is to make certain that the Secretary of State consults them to ensure that housing programmes are related to housing need, in terms of housing as a social service. And it is remarkable how little is said on the Benches opposite about housing as a social service. All the talk is about fair rents, at a level not based even on economic cost but going beyond it in many cases. Total subsidies ought to be variable to permit increases to meet growing need. This Amendment would write into the Bill that the Secretary of State should learn from those best qualified to assess the need for new building the proportion of that new building to be met by public enterprise, and following that assessment—and who can doubt the need for an expansion in this field?—for more expenditure in housing. On the basis of that consultation he could then determine the need and the amount of subsidy required to ensure that that need was met.

If the Amendment does not commend itself to the Government—and to my mind it should be an easy one for them to accept—perhaps they will tell us what their projection of need is, because I was a long way from being satisfied with what the noble Lord, Lord Drumalbyn, has to say earlier this afternoon. I should have thought that it was possible to project housing need, certainly up to 1980. If the Government are unable to accept this Amendment I hope they will tell us how they intend to assess housing need, and what proportion of it—and this is vitally important—as they see it, they intend shall be met by way of public enterprise through, in the main, local authorities and new town corporations. I beg to move.

5.25 p.m.

BARONESS YOUNG

The noble Lord, Lord Garnsworthy, has touched on a great many points in his speech and I do not know that I shall quite follow him on all of them, but I should like to reiterate what I said in speaking on the previous Amendment about the purposes of our present proposed subsidy system. The fact is that I agree with Lord Garnsworthy—and anybody who has been in local government as I have, particularly in a county borough which is a housing authority, knows—that a local authority is able to assess its own need, its need both for housing for social service and for housing for all sorts of other people who are local authority housed. But under the new system of housing finance proposed in this Bill, a local authority, once it has decided, say, to clear slums or to build more houses, knows perfectly well that that is not going to affect the rents which the tenants have to pay, because these rents have been fixed at fair rent levels. It knows that its ratepayers will not be called upon to meet more than 25 per cent. of any loss which arises out of slum clearance or new building which the authority has decided is necessary to meet the housing needs of its area. So to this extent I believe a local authority has a new freedom to go ahead with slum clearance, and the aim of our subsidies is to give them to those places which do have particularly great need. We all know that there are some areas with a much greater housing need than others.

As to the question of consultation, I hope that there is always a continuing consultation between central and local government over a whole range of matters and I should not have thought that by including this Amendment in the Bill local authorities would in any way be able to do their job better than they are able to do it now.

LORD GARNSWORTHY

I have the feeling that the noble Baroness was speaking somewhat with her tongue in her cheek. Local authorities would be able to do their job very much better if they thought the Government were really regarding them as partners and if it was accepted that the Secretary of State had had laid on him the duty to consult—not merely to consult if he wished, but the positive duty to consult. The noble Baroness has said that the Bill confers a new freedom on local authorities. What kind of new freedom is it when the Government, in point of fact, do so much to take away powers that the local authorities have exercised so creditably and then come up with this mouse of an offer and suggest that it really is tremendous? Local authorities would much appreciate it if the Government would accept this Amendment, or at least put into the Bill, perhaps at a later stage, what this Amendment is aiming at. I believe that the Government themselves would Rain as a result, because they must know that local authorities are anything but satisfied with the so-called freedoms that the Government have conferred on them. They see the conferment of the freedoms that the Government have given as restrictions rather than extensions. That is true, and it would be difficult for anybody to claim that overall local authorities gain from the terms of this Bill any additional power to what they have had. In point of fact they are going to be limited in a way that they have not been limited before.

Let us take the question of slum clearance, because once again it has been suggested that the Bill is concerned to secure that monies are, diverted to areas of stress and there are clear indications that it is the Government's thinking that there are many parts of the country that call for no new buildings. Take the question of slum clearance alone. Would anybody dare to suggest that we can say that by the end of 1975, by the end of 1980, by the end of 1990, or the year 2000, we shall no longer have slum clearance problems almost throughout the length and breadth of the country? Because houses are continually reaching a point where they no longer provide the amenities that the age demands. Houses wear out. Although much may be said about the improvement that is taking place at the present moment, refurbishing old houses, putting in new amenities, it is only a matter of time before houses again become slum clearance problems. I just mention that in passing.

I hope that the Government will not he obdurate in such a small matter as this. It seemed to me that even the noble Baroness was anxious to make clear that she thought local authorities knew more about it than anyone else, and that they were the best people to consult because they knew the problems so well. I very much hope that the Government will think again. If they are not prepared to do so, I shall not press this Amendment to a Division, but I cannot see that there is here any principle which the Government must reject.

VISCOUNT GAGE

I am very glad to hear the noble Lord, Lord Garnsworthy, speaking up for the freedom of the local authority. I seem to remember that in the past there have been occasions when he has invited the Government—I think this Government and possibly the previous Government—to intervene to I encourage the Surrey County Council to take a certain action, or to refrain from taking a certain action. What I am rather concerned about is that his Amendment rather suggests that it should be specially laid down in an Act of Parliament if local authorities are to consult with Ministers. I thought that one of the great points about the County Councils Association, for example, was that they should have access to Ministers. I should not like to see this new precedent, that they can consult only when it is laid down in an Act of Parliament that they should do so.

LORD DIAMOND

Perhaps I may say one more word in support of what I thought was a very persuasive speech and a solid point made by my noble friend. In preface to that may I deal with the point which has just been made? If one looks, for example, at Clause 4(12) one sees a reference to the Secretary of State's exercising his powers in relation to this clause, and it says that he shall, follow such methods and principles, and take account of such matters, as he may from time to time decide after consultation with such associations of housing authorities as appear to him to be concerned, and with any housing authority with whom consultation appears to him to be desirable. It is not putting on the Minister a duty to do anything that he is not prepared to do it is simply Parliament saying to the Minister, "Before you reach these important decisions you will consider whether you ought to consult housing authorities and similar bodies which seem to you to be concerned." It puts on the Minister this responsibility. He cannot say, "I did not consult because it did not occur to me that it was a good idea to consult." Here Parliament is saying that it is a good idea on all occasions, laying it down and taking valuable space in a Government Bill to do so. I do not think we can say to the noble Baroness, Lady Young, or the noble Viscount who made an interesting intervention just now, that it is unusual for the desire to consult to be expressly stated in Government legislation. Here it is only three clauses ahead. My noble friend is asking, if it is good enough for Clause 4, which deals with one part of the housing problem, is it not good enough for Clause 1, which deals with the whole of the housing problem. I am bound to say that I thought my noble friend made an absolutely unanswerable case that there ought to be provision in the Act for consultation.

For answer the Government may say, "We do not like the wording. We do not like the form in which the consultation has been described." And they may say that they prefer their own wording about consultation as I have read it in Clause 4. We are not sticklers for wording. The essential point is to deal with the situation which I fear many local authorities and Her Majesty's Opposition in this House are anxious about; namely, that the Government are withdrawing a good deal of latitude from local authorities and are proposing to ride the high horse so far as local authorities are concerned. One of the main functions of the local authority is freedom in rent fixing and carrying out its housing responsibility—a very important function. I have no doubt that the noble Baroness, who has great experience in this subject, will have served on a housing committee and knows what a responsible part of local authority action this is. A good deal of that responsibility, the major part of it, indeed, is being taken away. There are many parts of the Bill where consultation ought to take place and may take place, but where it is not provided for. Our object, seeking to improve the Bill, is to see that it is provided for.

So far as this Bill is concerned, it would certainly do a great deal to encourage local authorities, who fear that they are losing a good deal of their responsibilities. Having regard to other Bills before Parliament, many local authorities will be very anxious indeed—but I must not refer to that aspect too closely. But so far as this Bill is concerned, local authorities are under that anxiety, and my noble friend, speaking with his great experience of local authority work, made what I thought was an unanswerable case for including a reference to consultation, using such words as the Government and the Minister find acceptable. I hope that the noble Baroness will feel it possible to respond a good deal more hopefully than hitherto. Otherwise I think that my noble friends and I will have to change our minds about dividing the House.

LORD VIVIAN

Before the noble Baroness replies, may I say that I feel there is quite a lot in what the noble Lord, Lord Garnsworthy, has said, and also in what has been said by the noble Lord, Lord Diamond. I am wondering whether, if the noble Lord, Lord Garnsworthy, agreed not to press this at the moment, the Minister would consult his right honourable friend in another place to see whether we could perhaps agree to discuss it at a later stage of this Bill.

5.39 p.m.

BARONESS YOUNG

I think that everybody who has ever been connected with local government at all will stand up for local authority freedom—and certainly no one could have served, as I have done, for fifteen years in local government without believing very strongly in local authority freedom. I think the noble Lord, Lord Garnsworthy, and the noble Lord, Lord Diamond, have really raised three major points between them. The first one goes back to this interpretation of what the new subsidies do. We on this side believe that in fact the new subsidies give a freedom to local authorities, because local authorities, in deciding the amount of house building they will do, are dependent not upon the estimate of the subsidy but on their own estimate of the housing needs and the number of new houses they need to build. Anyone who has served on a local authority knows that it has been very difficult, when it comes to building new houses which are very expensive, with these very awkward problems of deciding whether to put up rents or rates, or not to build the houses. Under the present proposals for housing finance, a local authority knows that it can go ahead and clear slums and build houses, and knows that that will not affect the rents which tenants pay and that the ratepayers will not have to bear more than 25 per cent. of the costs. That seems to us to be a great help to local authorities.

The second point which has been raised is that if this Amendment were made it would somehow benefit local authorities, because they would have this highly formal consultation. I should like to begin by reiterating what I said earlier, that there is continuing consultation at all levels between central and local government, because in a sense they are partners in a great many operations and that must continue to be so. The question is whether this highly formal consultation would benefit local authorities. The answer to my noble friend, who is worried about this point, is that if the Government asked all local authorities to give an account of how they were discharging their duties in this sphere, that would not necessarily lead to more freedom for local authorities. Quite the contrary—they would then have to give an account and answer all sorts of questions, and I cannot see that local authorities could benefit by that.

The noble Lord, Lord Diamond, said that consultation is provided for in Clause 4(12). With the greatest respect, I think that the consultation in that case is somewhat different from the consultation which is proposed in this Amendment, because the consultation mentioned in Clause 4 is about a decision of the Secretary of State, which is a somewhat different matter. For those reasons, I hope very much that the noble Lord, Lord Garnsworthy, will feel able to withdraw this Amendment.

LORD GARNSWORTHY

I think the Committee will appreciate that I have been more than anxious to withdraw this Amendment; I do not think the Committee will feel that I wanted it to go to a Division. But after what the noble Baroness, Lady Young, has just said, I feel that I have a duty to those who have been in the Chamber listening to the arguments to go into the Lobby. It may well be that many who have not heard the arguments will come into the Chamber—but be that as it may. I think that those who have listened ought to be given the opportunity of showing what they think about the Amendment.

I was really surprised that, with 15 years' experience of local government, the noble Baroness had not appreciated exactly what the Amendment is aiming at, because, towards the end of her remarks, she said that she did not think local authorities would benefit by being called to account. That is the very last thing that the Amendment seeks to do. What it seeks to do is to lay on the Secretary of State the duty to consult them about the need for housing and the amount of subsidy required to ensure that that need is met. I do not want to take up every point that the noble Baroness made, but may I put this to her? She should not too lightly dismiss the 25 per cent. which local authorities will have to pay, and she should not overlook the fact that in years to come, unless the Bill is modified, they may be called upon to pay a very great deal more than 25 per cent. We have no assurance that, in perpetuity, 25 per cent. will be the limit of what they will be asked to pay.

With regard to their freedom to project housing need and to determine programmes to meet it, the noble Baroness knows, as well as I know, that this Bill will take away from local authorities the right to fix the rate of rent. What is the use of building houses if the rents that are to be charged have no relation to a number of factors which I mentioned earlier, such as wage rates in the area and so on? It may be said that rent rebates, rent allowances and so on are intended to take care of that difficulty. But nobody can be anything but disturbed at what has quite clearly been established as the intentions of the Government about overall subsidy commitment. Therefore, I regret very much indeed being compelled to give the Committee an opportunity of registering its views.

VISCOUNT SIMON

Before the noble Lord proceeds further, I wonder whether the noble Baroness can agree to the suggestion of the noble Lord who is sitting behind her, that this matter should be considered between now and the next stage of the Bill. I make the point specifically because, with great respect to the noble Lord, Lord Garnsworthy, I think that his Amendment is now defective since in the concluding line it refers to the preceding subsection which has not been passed by your Lordships' Committee.

LORD GARNSWORTHY

That could be put right later.

VISCOUNT SIMON

I still suggest that it is a defective Amendment. If the noble Baroness can see her way to having some further consultation, perhaps the noble Lord, Lord Garnsworthy, will be willing to raise the matter again at Report stage if he has not had a satisfactory response.

LORD DRUMALBYN

Before the noble Lord finally makes up his mind to divide the Committee, may I make this suggestion to him? He would be in a very much better position to understand exactly the full implications when we have discussed Clause 4, which gives a great deal of flexibility and is bound to involve a lot of consultation. He would then be in a very much better position to make up his mind on a matter of this kind.

LORD SHEPHERD

My noble friend is in this difficulty. I am certain that he would be ready to respond to the suggestion of the noble Lord, Lord Drumalbyn, if we had an equal response from the Front Bench opposite. An appeal was made from behind that Front Bench that the Government should consider the case that has been made for this Amendment. An appeal was also made from the Liberal Benches. I understand the difficulty of the noble Baroness. We know that on many occasions Ministers have to speak without a departmental responsibility and have no option but to stick closely to the brief. But that is not so in the case of the noble Lord, Lord Drumalbyn, or the noble Lord, Lord Sandford. They should say to my noble friend, "All right, if you will wait until Clause 4 before making up your mind, we will undertake to consider very carefully what has been said, and if we think that we can concede the point we ourselves will conic forward with an Amendment at Report stage." But it is no good the noble Lord appealing to my noble friend unless he, too, is willing to respond to the appeals which have been made not only from the opposite side of the Chamber but also from the Liberal Benches. The choice is open to the noble Lord, Lord Drumablyn. If there is to be a Division it will be his responsibility.

LORD DRUMALBYN

I go some way with what the noble Lord has just said. However, all I can say is that at the moment we see no reason for this Amendment. But our minds remain open, and we think that the minds of the Opposition also should remain open until we have considered Clause 4. But it would be absurd for me to say that until we have considered Clause 4, which we believe will provide the answer to the noble Lord, it does not make sense to divide on this issue.

LORD GARNSWORTHY

The noble Lord makes no concession at all—none whatsoever. It would be so easy for him to say, "We will look at this. We will give it sympathetic consideration, and if you have a point then we will come back at Report stage and put it right." I think that in the circumstances he has created a very great difficulty for me. By his complete unwillingness to unbend in the slightest degree, he compels me to give the Committee an opportunity to divide.

LORD DRUMALBYN

I hope—

LORD SHEPHERD

No.

LORD DRUMALBYN

I hope the Committee will allow me one more word, unless noble Lords opposite are determined to divide on this.

LORD GARNSWORTHY

If the noble Lord—

LORD DRUMALBYN

Would the noble Lord please allow me to continue? The simple point here is that neither of us has yet convinced the other in this matter. The question is whether we should put that to the test of a Division now, when we are suggesting to the noble Lord that there is quite a likelihood, if I may say so, that once he understands (I doubt whether he does yet; it is very difficult to understand) how Clause 4 works, he will be very well satisfied. But, of course, if the hardliner Lord Shepherd wants to divide in all circumstances, the Committee may want to follow him. But I say to the noble Lord, Lord Garnsworthy, that of course we shall consider everything that has been said in this debate. I give the noble Lord that assurance. I cannot give any kind of assurance as to the outcome, and I was not asked for such an assurance, but I will I say that we will consider it.

LORD SHEPHERD

Too late!

5.52 p.m.

On Question, Whether the said Amendment (No. 9) shall be agreed to?

Their Lordships divided: Contents, 68; Not-Contents, 103.

CONTENTS
Amulree, L. Gaitskell, Bs. Ritchie-Calder, L.
Archibald, L. Gardiner, L. Rusholme, L.
Avebury, L. Garner. L. Segal, L.
Bacon, Bs. Garnsworthy, L. Shackleton, L.
Bernstein, L. Grenville-West, L. Shepherd, L.
Beswick, L. Hall, V. Shinwell, L.
Birk, Bs. Hale, L. Simon, V.
Blyton,L. Henderson, L. Snow, L.
Brockway, L. Hurcomb, L Somers, L.
Buckinghamshire, E. Hylton, L. Stocks, Bs.
Burton of Coventry, Bs. Jacques, L. Strabolgi, L. [Teller.]
Carnock, L. Leatherland, L. Summerskill, Bs.
Champion, L. Llewelyn-Davies of Hastoe, Bs. Tanlaw, L.
Chorley, L. Loudoun, C. Taylor of Mansfield, L.
Clwyd, L. Lytton, E. Wade, L.
Collison, L. McLeavy, L. Wells-Pestell, L.
Crook, L. MacLeod of Fuinary, L. White, Bs.
Davies of Leek, L. Maelor, L. Willis, L.
Diamond, L. Masham of Ilton, Bs. Winterbottom, L.
Donaldson of Kingsbridge, L. Nunburnholme, L. Wootton of Abinger, Bs.
Evans of Hungershall, L. Pargiter, L. Wright of Ashton under Lyne, L.
Fiske, L. Phillips, Bs. [Teller.]
Fulton, L. Platt, L. Wynne-Jones, L.
NOT-CONTENTS
Aberdare, L. Dundee, E. Lonsdale, E.
Ailwyn, L. Eccles, V. Lothian, M.
Albemarle, E. Elliot of Harwood, Bs. Lyell, L.
Alexander of Tunis, E. Elles, Bs. Macpherson of Drumochter, L.
Amherst of Hackney, L. Emmet of Amberley, Bs. Mancroft, L.
Astor of Hever, L. Errol of Hale, L. Massereene and Ferrard, V.
Atholl, D. Falkland, V. Merrivale, L.
Auckland, L. Ferrers, E. Milverton, L.
Balerno, L. Ferrier, L. Molson, L.
Balfour, E. Forester, L. Monck, V.
Barnby, L. Fortescue, E. Mowbray and Stourton, L. [Teller.]
Beauchamp, E. Fraser of Lonsdale, L.
Belhaven and Stenton, L. Gage, V. Nugent of Guildford, L.
Belstead, L. Gainford, L. Oakshott, L.
Berkeley, Bs. Glendevon, L. Orr-Ewing, L.
Bessborough, E. Goschen, V. penrhyn, L.
Birdwood, L. Gowrie, E. [Teller.] Poltimore, L.
Bledisloe, V. Greenway, L. Rankeillour, L.
Bridgeman, V. Grenfell, L. Rathcavan, L.
Camoys, L. Gridley, L. Reay, L.
Carrington, L. Grimston of Westbury, L. Redesdale, L.
Clifford of Chudleigh, L. Hailes, L. Reigate, L.
Cork and Orrery, E. Hailsham of Saint Marylebone, L. (L. Chancellor.) Ruthven of Freeland, Ly.
Cottesloe, L. Sandford, L.
Courtown, E. Hawke, L. Sandys, L.
Cowley, E. Hertford, M. Savile, L.
Craigavon, V. Hives, L. Sempill, Ly.
Craigmyle, L. Hood, V. Strang, L.
Crawshaw, L. Howard of Glossop, L. Strange of Knokin, Bs.
Daventry, V. Jellicoe, E. (L. Privy Seal.) Strathclyde, L.
de Clifford, L. Jessel, L. Strathcona and Mount Royal, L.
Denham, L. Kemsley, V. Templemore, L.
Derwent, L. Kilmarnock, L. Wolverton, L.
Drumalbyn, L. Lauderdale, E. Wrottesley, L.
Dulverton, L. Limerick, E. Young, Bs.
Resolved in the negative, and Amendment disagreed to accordingly.

6.2 p.m.

On Question, Whether Clause 1 shall stand part of the Bill?

LORD GARNSWORTHY

We on this side of the Committee do not agree that Clause 1 should stand part of the Bill. We find the Government's proposals as set out in Clause 1 quite unattractive. We believe them to be quite unhelpful to local authorities, and particularly unhelpful in so far as the procurement of new houses at reasonable rents is concerned. I use the word "reasonable", as distinct from "fair" as defined by the Government. The purpose of the Government's proposals is to save some £200 million a year by the mid-'70s. That is less than the figure would be if the present situation were to continue. My noble friend Lord Diamond pointed out what we can anticipate by the mid-'70s or by 1980 as a result of continuing inflation. He made the point that the position would be quite serious compared with what it would he if the present system of subsidies, with all its faults, were continued. The saving has to come from somebody, and the saving, quite clearly, is going to come from the tenants of council houses. It may be said, "Yes, but only from the better-off tenants. "But, of course, there are not so many really better-off tenants living in local authority houses. Why should they, in particular, be picked upon to subsidise poorer tenants not only in their own locality but nationally? And this will be the case when the Government take half the£60 million surplus that they estimate; that is to say, when they take £30 million from the local authorities. Incidentally, this figure is strongly challenged as being an underestimate of what they might achieve.

Clause 1 contains no encouragement at all to local authorities to build; indeed, as I tried to stress on the last Amendment, there is a positive discouragement. I know that the noble Lord, Lord Drumalbyn, has a tongue of silver and that he can present any case in such a way as almost to convince the critics that they do not understand and that really this is a Government of nothing but good intentions. But the Government's good intentions are to penalise tenants of local authority houses to the advantage of taxpayers. What the Government are going to achieve is a penalty tax on a comparatively small section of the community who happen to live in rented accommodation; and I think it wrong that there should be this kind of discrimination against any section of the community.

What is wrong with living in rented accommodation? When I look at the prices of houses in the private sector. I am inclined to ask the Government this question: do they want to force everybody into the position of becoming fodder for the gazumper? Are the Government satisfied with what is happening with regard to the cost of houses, and particularly those being offered for resale? I raised this subject by way of Question in this House a month or two ago; and if the situation to-day is any indication, I am more than justified in feeling that the reply which the noble Lord, Lord Sandford, gave me on that occasion showed that the Government have no policy effectively to deal with the situation. The Government simply optimistically expect a large increase in house ownership.

The levels of house prices to-day are really frightening. I think that the Government's own figure for last year's increase was about 17 per cent. As understand it, that is the national figure; for the South-East it is a good deal higher. When I asked the Question I mentioned that the Nationwide Building Society have estimated that in the South-East the increase was something like 21 per cent. I was grateful to the noble Lord, Lord Sand ford, for writing to me following those Questions. I have to say that I reread his letter this morning, and I am left with the feeling that the Government are not alive to the situation, in the sense of wanting to do anything effective about these spiralling house prices. There are some to-day who believe that the figure is rising rapidly to a great deal more than 21 per cent. There are some people who believe that it is now well over 40 per cent. In the little village where I live, the prices being asked, even for two be droomed cottages that must be 70 to 80 years old and desperately in need of bringing up to date, arc really frightening. They are at a level of about £8,000. Even then, because of the gazumper, would-be purchasers have to wait months before they know whether contracts will be exchanged. It seems to me that the Government are sitting by supinely while house prices rocket.

A few weeks ago the Sunday Times issued a coloured supplement telling readers what had happened to some property in London and how the cost had gone up and up. The eventual figure, one would have thought, was for a mansion, not a cottage which had been played about with. Increasingly, in this situation where the price of houses for sale is rising so rapidly, public enterprise will have to meet the need. If that housing need is to be met, I see no alternative to a massive expansion of building by local authorities and new town corporations. Despite all the criticisms from noble Lords opposite about house construction in the last year or two of the Labour Government, the present Government have a long way to go to catch up with the finest achievements of the Labour Government. Overall, in terms of the number of houses we produced, I do not think that we did badly though I should have liked us to do more. But if the housing need is to be met, there will need to be, having regard to what is happening in the private sector, and if we are to avoid inflation or contain it, a substantial increase in the building of houses by local authorities. I do not think the Government realise where this Bill will lead us in that connection.

Houses built by public enterprise will have to be let at reasonable rents. Again, it is no use riding off on the business of rebates and rent allowances. Let us be under no illusions. The noble Lord, Lord Drumalbyn, invited us to consider what is said in Clause 4 and the subsequent clauses. This Bill imposes on local authorities an obligation to put up rents by 50p in the pound as from April of this year or from October this year, by another 50p next year and another the following year. The level of fair rents is to be reviewed every three years. I wonder whether the Government would care to give us a projection of the eventual fair rent figure by, shall we say, 1980. Surely it is the aim of everyone to avoid unnecessary means testing and unnecessary poverty. One wonders what kind of wage rates are anticipated by the Government throughout the length and breadth of the country if these fair rents continue to go up and up, as under the provisions of this Bill they certainly will. I can only think that the Government know that they will not have to face the problem in 1975, let alone 1980; and that in the meantime they are set on a course designed to do as much damage as possible. I sometimes doubt whether the Government understand exactly the position which they are in danger of creating.

We on these Benches are concerned with the total availability of houses. We extol the great initiative and achievements of local housing authorities in providing homes for one-third of our people, as distinct from this Government who see housing as a profit-making enterprise. We seek to encourage those housing authorities who have done so well to continue and to extend their enterprise. We want to see an increase in the number of houses available for letting at reasonable rents. There is nothing shocking about living in a rented house. We are living in times when the mobility of labour is recognised as being essential. Surely even members of the Government are aware of the difficulties which are created to-day. Let us take the teaching profession as an example—and the noble Baroness, Lady Young, will know that what I am saying is true. There may be a vacancy for a teacher in a school, and this is advertised. The governors want to appoint the best candidate who may live in the provinces. Let that teacher come to Surrey. to Oxted, in the stockbroker belt, and see what are the price of houses. Then the teacher may think of what he can get for his home in the Provinces. I am not exaggerating: people whom boards of governors would like to appoint withdraw their applications before they are interviewed; and often after they have been interviewed and have been offered a job.

I ask the Government what they intend about the proportion of new building between the private and public sectors having regard to this inflationary situation in the private sector. I ask whether they intend that the present trend shall continue. I beg them, before the Bill goes further, to tell us what they are prepared to do about containing the price of land and houses. As I understand the position, the overall expectation is for a modest percentage increase in house production in the years 1971–72 and 1975–76. I think that the White Paper (Cmnd. 4829) gives the figure on page 13 as 0.2 per cent. If the private sector grows it will leave the public sector in decline. It may be that the expansion of the public sector is part of the strategy to contain subsidies at their present level.

In the Guardian for June 2 there was a report that the number of houses and flats started in April was 1,700 down on the figure for a year ago at 29,400. Private sector starts were up 1,600 at 18.000. But public sector starts were down by 3,300 at 11,300. Private sector completions were 1.100 up for the month at 15,300 and public sector completions down 1,700 at 10,800. I do not like playing about with statistics too much, and I have little doubt that figures may be produced by spokesmen opposite to show that, for different months and quarters, these figures are not typical. All I would say is that I went to the Printed Paper Office yesterday and asked for the latest housing statistics, because I was not anxious to use figures that could be shot down. The housing statistics with which I have been provided are for February 24, 1972. T have no doubt that the Printed Paper Office give all the help that they can, but I am asking the Committee to take note of the fact that I have tried through the normal channels to get a complete picture and to ascertain the figures and I have been unable to do so. I hope therefore that I might he foreiven for relying on that report in the Guardian.

I come now to areas of stress. This is surely a national problem towards which everyone should contribute a solution. I hope that nobody will say that in the end we shall only be taking £30 million, because I believe that we have no right to take even £30 million from tenants. If we need special subsidies for areas of stress, then the money ought to come from the general body of taxpayers. It is wrong to levy a special form of tax on council tenants through rent. Whatever faults the present subsidy system has, we at least can be sure—and we are sure of nothing in the Bill; we can only get assessments and estimates that vary by as much as £50 million—of what the present subsidy system involves and how the assessments are made. Let me say that we on this side, had we remained in Office, would have had a new look at the subsidy situation. Let nobody ask, as the noble Lord, Lord Sandford did: What would you do? What is your policy? The Government's representatives sit on those Benches and it is for them to find an answer to current problems.

Had we remained in Office we should have completed our investigations. I am not inhibited; I did not hold office in the previous Administration. But I had every confidence that my colleagues would bring order out of the present system without inflicting penalties on council tenants, and would do so in such a way as to ensure that the public sector played an increasing role, in the present situation, in providing houses at reasonable rents for those who need them; for the children, who arc surely entitled to grow up in a decent environment.

I sometimes think that we forget the real problem of housing. We are fortunate in that we have homes. What worries me is the large number of families—not percentagewise, but numerically—who go to the local authority or to the county council and say: "We are being turned out of our house". I wonder how much attention the Government give to the small number that are housed temporarily, all too often in sub-standard accommodation, and how many are turned away and left to fend for themselves. I believe that the authority on which I sit have recently been taking accommodation in hotels. It would be far better if local authorities in the area were building houses at rents that people can afford. Never mind the "fair rents" that will result from the formula of this Bill. I honestly believe that those who run away with the notion that this formula for fair rents is acceptable have no conception of how the other half lives.

This clause is so lacking in clarity and information that I certainly should like to invite the Committee to divide against it. We shall listen to the reply. But we ought to be told at this stage how the total figure of £350 million—if that is the figure—is to be broken down. If I am told, "Well, you have already had it", then I think I can say that I am probably as had a mathematician as anybody here, and I certainly could not do the sum sitting down on the Bench behind me, let alone standing on my feet. But if it is said that the figure has already been given in detail, then I will await until tomorrow when I can read it in Hansard.

The information that we have been given overall is very confusing. One of the major faults of this clause, and indeed of the whole Bill, is its lack of clarity. Last evening one of your Lordships—I have tremendous respect for him and his business experience, as no doubt all your Lordships have—said to me: "What does this Bill mean? I have tried to read it but cannot understand it". I think that is the difficulty that many of your Lordships have experienced. It is written in a jargon that is unhelpful, and presented in a way that is unhelpful. It really is no good for noble Lords opposite to say: "We know what we are talking about. You can trust us". I think that others apart from those on the Benches behind me will not take kindly to that kind of appeal, if it is made. We object to the clause in that it is unfair in making the least able members of the community bear the burden of providing better houses.

LORD FRASER OF LONSDALE

May I ask the noble Lord who these least able ones are to whom he is referring?

LORD GARNSWORTHY

Tenants of local authority houses.

LORD FRASER OF LONSDALE

But are they the least able? Are they not quite obviously the most able?

LORD GARNSWORTHY

Out of respect for the noble Lord, I think I ought to leave his question on the Record without answer.

LORD FRASER OF LONSDALE

I thank the noble Lord.

LORD GARNSWORTHY

Who can imagine that people living in local authority housing are best able to help to pay for the building that we are going to get?

LORD FRASER OF LONSDALE

They are the people who are going to get the help.

LORD GARNSWORTHY

Perhaps the most important thing that we feel on this side is that we cannot see this Bill making the contribution to the provision of additional houses that in so many places is so desperately needed.

VISCOUNT M ASSEREENE AND FERRARD

Before the noble Lord sits down, can he say why it is unfair that, for instance, half a million people, or perhaps more—I have brought up this question before—earning between £40 and £50 a week will, if this Bill goes through, probably have to pay rents of £5 to £6 a week? I suggest that the noble Lord should study the structure of rents on the Continent, in Germany and France, and the price of land and houses in those countries. The housing situation here may be difficult for council house tenants, but it is a lot easier than it is on the Continent. Surely it is fair that a man earning £40 or £50 a week should pay a fair rent, and that out of that rent the council should take some money to help people in council houses who are not so well off. What is unfair about that?

LORD GARNSWORTHY

We shall be coming to what is fair and unfair later, and I hope the noble Viscount will be here to listen to what we have to say. When the noble Viscount talks about continental countries, it is about time that we in this country said that not only do we know how to do some things better, but we are going to continue in our way and are not going to be intimidated or influenced by what happens on the Continent.

BARONESS GAITSKELL

I should like to say a few words, partly in answer to ithe noble Viscount, Lord Massereene and Ferrard. I am against Clause 1 because I think it is unnecessary. It is unnecessary, among other things, because in cases where council rents are too low it does not need this tangle of subsidies to remedy the position. It is possible to raise rents where they are really too low without having this complicated structure of subsidies. And these subsidies are socially most undesirable. Also, when analysed, they are intrinsically unfair as between the occupiers of rented homes and home owners. I am against this legislation because it is based overwhelmingly on the myth that there are thousands of council tenants who are very rich. I think the problem of housing is much too serious for it to be based on such a myth.

LORD HYLTON

I feel that the debate in this Committee has been most useful, and in particular we are indebted to the noble Lords who have spoken from the Opposition Benches for pointing out the probable effect that inflation will have on the total of central Government subsidies for housing. Considerable light has been thrown on the exact meaning of "current prices" on page vii of the Financial Memorandum. This is something for which we must be grateful, but I think it gives rise to fear and apprehension. We have been assured by my right honourable friend Mr. Amery that it will be possible for all existing slums and unfit houses to be cleared by 1980. In aiming at that very desirable target, surely we must take into account the decline in the value of money, even in the short term between now and 1976, when perhaps, with luck, half of this very large task may have been accomplished. But one surely has to bear in mind the great length of time which elapses between the initiation of a slum clearance scheme and the actual completion of new houses and the moving in of tenants. That can easily be a period of five years, and if the subsidies are adequate at the beginning of that period it is well on the cards that they will be inadequate at the end of a five-year programme. I believe that my noble friend on the Front Bench could allay a great deal of anxiety if he would assure us that there would be an annual review of the central Government subsidies for housing. I hope he will be able to give some reassurance on that score.

6.32 p.m.

LORD LEATHERLAND

We have heard a lot of talk about subsidies and I expect we shall hear a lot more. But what is there that is particularly sinful about subsidies? Rich landowners get them; rich farmers get them; Rolls-Royce get them; Upper Clyde get them; owner-occupiers get them; owners of Stately homes get them: why should not tenants get them? Why are they to be discriminated against when other sections of the community are treated with generosity? And who are these council house tenants? Many of them are men who fought in the War; many of them are women who made sacrifices and suffered in the War. They are the people who are working in our factories and producing the wealth of this country. What is wrong in those people being treated with equal generosity to the treatment meted out to those who have rich bank accounts?

Clause 1 is the very essence of this Bill. What it does, stated quite simply, is to take away £200 million a year from the council house tenants—the working—class section of the community—and make it available in the Exchequer to be handed out in doles to surtax payers in the next Budget. This clause is where the vampire really shows its teeth. Our Amendments—and they are reasonable Amendments—were aimed at trying to reduce the viciousness of the Bill as it now stands. The Government, I am sorry to say, have been recalcitrant from start to finish. I can quite understand that. It is typical of the arrogance they inherit from the Prime Minister who now, fresh from beating the trade unions to their knees, is eager to advance on his next objective: that of putting up the cost of living to millions of people "at a stroke". Over the next few years he is going to put two or three pounds a week on the rents of large numbers of council houses—and that is simply taking away from these people the tax remissions they have had during the last two years and in many cases taking away the wage increases that they have had during those years. And if we take into account, in addition to the increased rents, the increased rates these people will have to pay, the increased prices they will have to pay for food, shoes and clothing, the increased prices they have to pay for practically everything they buy, then I am afraid their wage increases have been wiped out just as their tax remissions have been wiped out. This seriously worries me.

What the Government have virtually done is this: they have told the trade union leaders and the shop stewards in every factory—some of them very moderate and reasonable men, some of them very wild men, some of them very mischievous men—to put in bigger and bigger wage demands from this moment onwards. In my view, that would not be good for the country. But if these people are going to get it into their minds that they cannot obtain economic justice through political channels, then they will pick up the only weapon left to them—the industrial weapon—which means strikes on a bigger scale than we have seen in the past. I should regret to see that, but that is the way in which the Government, by these punitive measures—because this is not the first of them—are driving the thinking of many working people in this country.

Now let us have a look at the effect of this Bill on the economy. People are going to have less money with which to buy food; they are going to have less money with which to buy furniture, carpets, curtains and kitchen equipment. They are going to have less money with which to buy bicycles, motor bicycles and motor cars if you like—and all this is going to be reflected in the factories of this country, where production will slow down and unemployment increase. It is going to have one more effect: a number of these tenants, with increased rents and the prospects of still further increased rents as years go by—the first three years and then the next three years—are going to find themselves forced into buying houses. This, in the present inflationary state of the housing market, is going to force up prices higher and higher. This is not only my view but the view of people who are supposed to know even more about it than I do. Let us look at the Property Owners' Letter, which is a publication advertised regularly in the City pages of our newspapers. This publication advises speculators to buy up small houses in areas where there are many council tenants. These areas, it says, are most "fertile for investigation". It adds that the North-East generally has the largest ratio of council property, quoting Durham with 41 per cent., Northumberland with 44 per cent., and so on. It also points out to these would-be speculators that the new towns have a very large proportion of council housing.

Then, if we want to go to a more authoritative source, there is the Investors' Chronicle of April 21. It was talking about the rise in house prices, and it said: Council tenants seeing increased rents coming are approaching building societies for loans to buy. Do not let it be thought that I am against home ownership; I have always owned my home. Unfortunately, I have not a mortgage on it so I cannot draw the subsidy the Government give to mortgage owners. But let the Investors' Chronicle continue. It says: One reason for at least postponing the new Housing Bill is that it may be directly responsible for increasing the pressures of demand on the present housing market. If and when the Bill becomes law applications for mortgages from this new source of home owners will become a flood. Societies' liquidity would be reduced. They may have to consider raising mortgage interest charges. It is pretty obvious that if you force on to the house-purchasing market large numbers of council tenants, in addition to the huge queues that are waiting for every house that is built at the moment, up will go the prices: this Bill will become a Gazumper's Charter.

There is one more, final point I should like to make. This is about the sinister secrecy that has been preserved by the Government about the amount by which rents are going to rise. We have had many authorities, rent officers, planning officers and so forth saying that the rents may be doubled. Some Ministers have denied this. But the same Ministers have resolutely refused to tell us the exact figure by which these rents are going to rise. Judging from the Circular that has been "going the rounds" at the Ministry during the last few months, there are many districts in the country where the existing rent is certainly going to be doubled and in some cases is going to rise to a level in excess of double. If the Government will not tell us—it can tell us orally in the House or it can tell us in the form of a Schedule attached to the Bill—what the average rise in rents will be in every area in the country, then we are being asked to pass a Bill the effects of which we know not. I think it is an insult to any Parliamentary Chamber to be asked to pass a Bill where the consequential results are not known.

LORD WOLVERTON

I only want to say one word about the level of rents because I think the position has been very much exaggerated. The Minister has given one view and the Opposition have referred to 100 per cent. I took a little trouble, like a number of your Lordships, and went to my local authority a week or two ago. They told me at Newmarket that a good post-war house built about 10 years ago was renting for £3.38 a week. It has now gone up to £3.88 because they have moved towards the fair rent level. They think that the fair rent level would necessitate the figure rising to £4.50. That is a rise, when the figure reaches fair rent level in another year's time, of £1.12. It is an average rise of 30 per cent. These are not my figures but the figures of the local authority, given by the clerk and the finance officer. The position has been greatly exaggerated. Some areas of course have extremely low rents, and there the rents will go up a lot more. The rents I have referred to might be called "middling "rents. They are neither the highest nor anything like the lowest. The position has been exaggerated and many tenants think that their rents are going to go up to double the present amount. I do not see it.

6.44 p.m.

LORD FISKE

I was impressed by what the noble Lord, Lord Sandford, told us: that even if one looked into a crystal ball one really could not see beyond 1975, which is now less than three years away. That surprised me because I thought that Governments had resources to look rather more than three years ahead, and that if they were in any doubt about it they could at least make an inspired guess. Apparently this issue is so confused that not even an inspired guess can be made. I do not know whether it would help the noble Lord, Lord Sandford, if he went to Epsom to-morrow, where I am sure he would find many crystal balls and perhaps if he used enough silver he might get an answer concerning the position in more than three years' time.

However, to take the analogy of Epsom a little further, my complaint about this whole Bill is that the approach is blinkered. The Government in looking at the world of housing have not really looked at the world of housing; they have looked at the council tenant and at £350 million a year. I do not think this was the way to do it. I would agree with any Government in office which maintained that the reform of our housing finance is long overdue. But in saying that it is long overdue, remember that it is the whole of our housing finance that is long overdue for reform and not 50 per cent. of it. I would therefore ask your Lordships to look at the kind of money that is available for redistribution in the world of housing.

As I see it, the situation is something like this. Three hundred and fifty million pounds a year is going out in housing subsidies to council tenants. Another £350 million a year is not being collected by the Inland Revenue from owner-occupiers. There is another figure, one which I cannot determine with any great accuracy but which seems to me to be about £200 million a year which is being paid out by the Supplementary Benefits Commission. We have so far a total of £900 million a year. There must be another £100 million a year that is in the profits that housing authorities will make on their housing account in the costs of administration, which are going to be enormous, and so on. In round figures, we could surely speak of having a figure of £1,000 million available to cushion the impact of modern housing on the whole of the population. I should have thought that out of that figure something could be left over for the Government as well. I am sure that that is one of the real objectives of all this legislation. Really what is needed is a fresh approach; not jiggling about with all the old devices we have used since the beginning of the century, but a new and fresh approach to the whole problem of housing finance.

While I am on my feet I want to underline one other point on which the noble Lord, Lord Leatherland, has touched, because I am worried about how this will operate in the future. I have calculated to my own satisfaction (I should be prepared to tell any noble Lords who are interested how I arrived at it) that these rent increases which will come about will result in a figure of between 2 and 4 points on the cost-of-living Index for tenants. So we shall be arriving at a situation where tenants, whether council or private, will be carrying an extra 2 to 4 points of inflation beyond and above the rest of the population. Bear in mind that they will be the poorest part of the population who will be bearing this extra burden. It is only an Index, but it becomes something very potent when it comes to negotiating wage increases, because these are certainly the people who will need the wage increases first. Therefore, unless we are in future to have two indices, one for tenants and one for owners, which takes the common line so far and then divides, so that tenants get the credit for the extra money they will be paying out, then we are going to put another great injustice on tenants—just tenants as such. If they are only on a par with the rest of the population, their greater need for a wage increase, as compared with their better-off brethren, will not show up. I should like to know whether the Government have given thought to this, and what they propose to do about it. But in the meantime my main contention is that I should have liked to see this clause taken away so that a new, vigorous and fresh look at the whole business of housing finance could be considered to last us for the next 50 years.

6.50 p.m.

LORD DIAMOND

There is little that it is necessary for me to add to the excellent speeches which have been made by my noble friend Lord Garnsworthy and other noble friends on this side of the Committee and, if I may say so, to the excellent speech made by the noble Lord, Lord Hylton. I hope that his suggestion for an annual review will fall on very fertile ground. I do not therefore wish to underline the points already made but will deal shortly with three separate points. First, I come back to the matter of figures. I must ask the Government to be good enough to think again about giving us figures going farther than three years ahead. I do not think I made myself absolutely clear in the suggestion I made about having examples of how the subsidy arrangements might work out in different authorities.

This clause sets out the subsidy structure and although there is no problem about the last category, the subsidy to be credited to the general rate fund—that is perfectly simple and unconditional—there are others which are conditional and their treatment is conditional. There could be a number of conditions arising and one would be helped if one knew which condition arose first and had priority of treatment. Therefore I repeat my request for examples to be set out in whatever form is convenient to the Government, either in a Statement, a letter or something in Hansard, so that one would know what the Government have in mind as to how the subsidy arrangement may work in a number of different and perhaps difficult cases. This clause sets out the subsidies which are provided in the Bill. When we consider the Question, Whether the clause shall stand part of the Bill, it is right that we should consider what subsidies are provided and also what subsidies might have been provided.

The next point I want to make is with regard to the one glaring omission of the subsidy which ought to have been provided, which Governments of both Parties have previously provided, but which is absent from this Bill. I refer to the discretionary allowance, the discretionary subsidy, the discretion being exercised by the Minister broadly in hardship cases. If the noble Lord will look at Section 6 of the 1958 Act, or Section 5 of the Housing Subsidies Act 1967, he will find clear examples of discretion being given to a Minister over and above the legislation provided in cases of individual hardship and individual authority hardship of making a special payment, albeit it a payment which may be limited as to amount, and that is very understandable.

The reason why I come to this is the helpful speech made by the noble Lord, Lord Sandford, who said that the whole purpose of the Bill was to concentrate help where it was needed and deal with particular cases of need in that form. Time is getting on and I do not want to give a number of examples, but I will give one example of Crawley Urban District Council, which has been in correspondence with the Department of the Environment. I have a letter sent by the town clerk and chief executive dated January 7 of this year. This is one of a series of letters addressed to the Government dealing with this specific point. What Crawley is saying is that it is typical—not unique—of all those cases where there is a small housing stock but a large housing need and, accordingly, a large housing programme, that the effect of the subsidy structure outlined in Clause 1 will be to put an impossible burden on the rates. The figures are set out with complete authority and nobody challenges them. That is not in dispute. What is in dispute is this. Where there are circumstances like this (and there will be many cases; it is not uniquely Crawley, with its own particular position in relation to new towns and so on) and where there is a rigid structure of subsidies such as is provided in this clause, would it not be sensible to give the Minister discretion—not compulsion—in cases where he is satisfied that there is real hardship and need and that the whole purpose of the Government's Bill is failing: that is, that help is not being given where it is particularly needed? Surely it is right in those circumstances to give the Minister the discretionary power to make a special payment, a special subsidy. You can call it what you like and you can limit it in any way that you like; so much per house or whatever form of limitation seems appropriate to Parliament.

The noble Lord, Lord Sandford, has reminded us that the whole purpose of the Bill is, in the view of the Government, to direct help where help is particularly needed. If there are on record authorities which are put in an impossible position because of the Bill, the Government ought to think of some method whereby they can continue to achieve their original purpose. I am not inventing a Labour purpose; I am talking about the Government's purpose and of the Government's being able to carry out their purpose by the simple and well-precedented method of giving discretionary powers to a Minister. Those powers are absent. I hope that the Minister will say that he will give consideration to introducing such a power at an appropriate time. I think I refer to the matter now quite properly, because it is the obvious omission from the list of subsidies. Perhaps I may read one sentence from the Crawley correspondence, which says: This is in fact exactly opposite to the Government's avowed intention to assist most those authorities with the greatest need. That is almost word-for-word what the noble Lord, Lord Sandford, and others with equal authority have said as being the main purpose of the Government's Bill. I hope that we shall get some explanation why the Government are not repeating what Governments of all Parties have done in the past in making that provision.

The third point I want to touch on is whether the Government are proposing to continue with their general strategy on this Bill. This is the clause which outlines the strategy in the form of subsidies. It was drafted on the basis of fixed rent increases of a minimum of 50p per week per annum and of the corollary of a subsidy of £20 a year—and a withdrawal of that amount. Since the Bill was created on that basis there has developed a totally new and fundamentally different situation; namely, the Birmingham one. At the Report stage in another place, the Government introduced powers to deal with the Birmingham situation. In other words, whereas this clause contemplates a given set of facts, a new set of facts, the Birmingham situation, has arisen and has been given legislative recognition by the Government. I could go into that in more detail, but I think it is well within the knowledge of your Lordships that Birmingham, at a convenient moment in relation to the local elections, decided that it could not put up rents in the way which the Government said it could do. The Government replied broadly, "That is O.K. If they have to be smaller increases, then they have to be smaller increases", and the Government have taken power so to provide in the Bill. This Part of the Bill was drafted on the basis of a different approach, and I am asking whether the Government really intend to carry through this Bill on the original, now outmoded, now punctured, strategy as outlined in Part I of the Bill.

7.2 p.m.

LORD DRUMALBYN

We have had a fairly lengthy debate on the Question, Whether Clause 1 shall stand part of the Bill, and we had a very interesting debate on the Amendments to the clause before that. I am impressed with the obviously deeply felt sincerity of the noble Lord and I think that almost everything he said will come up several times again in the course of our debates, so I hope he will excuse me if I do not go in any great detail into the points that he raised.

There is one point that I should like to pick out. He talked about a penal tax upon local authority tenants. What we have to ask ourselves is whether it really is a penal tax. This is what represents our view on this side of the House—whether it is really a penal tax to ask people to pay for the value of services they receive if they can afford to pay. This is an issue which we will come back to again and again so I do not need to press it but merely to express it.

May I take, for convenience, the points which the noble Lord, Lord Diamond, has made. First of all, I shall be very glad to find out whether I can provide more useful figures and find an appropriate way in which to do so. The circumstances of local authorities vary so widely that it will be difficult to give typical examples and one may have to give synthetic examples. The second point concerns what the noble Lord described as the glaring omission of discretionary subsidies in hardship cases. As we go through the Bill I think noble Lords will he surprised to find what great flexibility there is on the part of the Secretary of State to vary the percentages in different cases. This is governed largely by Clause 16. Perhaps I may join to that observation the remarks made by my noble friend Lord Hylton and the noble Lord. Lord Fiske, which I think were based to some extent on a misunderstanding of the way these subsidies are going to be paid in future. Where you have deficit subsidies that are a percentage of the expenditure, it must follow that as the cost of things goes up the percentage of the cost that has to be met will also go up. We have talked a great deal during discussion of Clause 1 of the Bill on the forecast of cost over a period of years of this system. The reason why we cannot forecast cost is because it is so terribly difficult to forecast how prices and costs are going to move in the future. Nor is it easy to forecast exactly what needs are going to arise from time to time in particular authorities. Again, if I may say so, I want to refer to these points only in passing as we shall be coming back to them from time to time.

The third point which the noble Lord, Lord Diamond, raised was whether there was a change in strategy. The answer is that there is no change of strategy. Clause 63(4) to which we shall come in due course deals with the situation which the noble Lord raised and enables these matters to be considered on their merits by the Secretary of State.

To the noble Lord, Lord Garnsworthy, who introduced this discussion, may I say that there are really two aspects of this Bill. The first is giving help to individuals who are in need and expecting those who can afford to pay, to pay the full cost of services; and the other is giving help to areas that are in need—he made reference to the areas of stress. I am sure we shall find, as we look at the various subsidies that are outlined in skeleton form in Clause 1, that the main emphasis on expenditure will be on helping those authorities which have housing problems. If they have a big housing problem and a lot of housing construction to carry out they will be the beneficiaries of subsidies. As I said before, we shall look at the deficit on the housing revenue account and it is to that deficit that the subsidies outlined in Clause 1 are directed. There really is nothing in Clause I except a statement of what the subsidies are—the bare bones of them to which we shall be putting flesh as we go through the Bill—together with a statement as to who is to pay the subsidies, to whom and when they will start to be payable. This is what we have been talking about on the Question, Whether Clause 1 shall stand part of the Bill?

The noble Lord says—and I have every sympathy with him here—that we must have more local authority building. That is very likely true in some areas, but not in all areas. As I have said, the purpose of the Bill is to concentrate assistance on those areas and those individuals who need assistance. I would add only this, because I think it is very important: local authorities will judge for themselves what number of houses they need. The reason why I was reluctant to give the assurance which the noble Lord sought on the last Amendment on which we divided was that the consultation by the Secretary of State was consultation about a decision of the Secretary of State where that decision might adversely affect a local authority. In that case he was to consult the local authority. I find it a little odd—I hope the noble Lord will not mind my saying this—to compare that with the case where the Secretary of State was asked to consult with the local authority when the decision was that of the local authority itself, and where, if the local authority has a particular need, it will come to the Secretary of State and ask, no doubt, for a variation in the percentage subsidies.

These are matters that we shall come to as we go through the Bill. I quite understand if noble Lords feel that they ought to take strong measures about this; but I hope that they will not, because, as I have said, this is merely an expository clause and when we come to consider the various clauses in the Bill I hope that noble Lords will begin to see their merit.

LORD GARNSWORTHY

When the noble Lord speaks about tenants of local authority houses paying the full cost, I think that if it can be agreed that the fair rent as laid down in the Bill will frequently be in excess of that full cost we shall avoid getting at cross purposes. I think I am right in saying as a fact that the fair rent is not based on the full cost; it is computed in a different way. That is why we are objecting so strongly and why I referred to a "penal tax", because the profit made out of those paying a fair rent will in part be used to pay the subsidies to the other tenants.

I have no wish to take up the time of the Committee unduly at this stage and I think perhaps it would be as well, as the noble Lord, Lord Drumalbyn, said we shall be returning to this matter later on, if we were to leave it there for the time being.

Clause 1 agreed to.

House resumed.