HL Deb 13 June 1972 vol 331 cc689-708

2.49 p.m.


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

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

On Question, Motion agreed to.

House in Committee accordingly.

[The EARL OF LISTOWEL in the Chair.]

Clause 5 [The operational deficit subsidy, and associated rate fund contribution]:

LORD BESWICK moved Amendment No. 56A: Page 10, line 16, at end insert— ("(9) Notwithstanding any provisions of this section to the contrary, the Minister may, on an application made to him by a housing authority, pay for each of such number of years as he may determine such additional amount as he is satisfied is necessary to enable that authority to provide dwellings to meet special needs.")

The noble Lord said: My noble friend Lord Diamond is particularly keen that we start the business this afternoon with this important Amendment, because he feels that it will provide us with ample time in which to debate what is a very significant proposed change in the Bill. The object behind this Amendment is lo enable each local authority's special needs properly to be considered, but the detailed argument behind the idea is one which my noble friend, Lord Diamond, is much better qualified to speak to than myself. I will content myself therefore with moving that this Amendment be accepted.


It is hardly necessary, but I wonder whether I could add a word or two to the persuasive arguments which my noble friend put forward and at the same time offer my sincere apologies to your Lordships. I had not fully appreciated that business was moving as fast as it has moved. We are back on the clause with which we have had great difficulty, and we start to-day with an Amendment which goes to the very heart of the Bill. If some of the references which I am about to make are not entirely accurate, I am sure your Lordships will forgive me because all my papers are residing elsewhere at the moment. I shall no doubt have an opportunity to get them when a pause presents itself.

This Amendment goes to the very heart not only of the clause but of the Bill, because the Government have said, time and time again, that the purpose of the Bill is to concentrate help where help is needed. The fact that they are not increasing but are in fact reducing the total amount of subsidies which are at present payable can only be justified, if at all, so long as the Government can show that all those cases of great need are being met and that this oft-repeated statement that the purpose of the Government is to concentrate help where it is needed is being satisfied. They can only justify their reduction in the total subsidies by saying, "We are meeting need where need is felt and therefore we do not have to go beyond that".

What we are proposing to do in this Amendment is to fill a gap in the Bill, because the Bill does not allow the Government to carry out their main purpose. Your Lordships may think that that is an extraordinary lacuna in a Bill, and indeed it is an extraordinary one. You may think it is the more extraordinary because every previous Government, both Conservative and Labour, have taken steps to fill this lacuna. Nevertheless the fact remains that the purpose of the Government is to concentrate help where help is needed and they have no power in the Bill which is before your Lordships at the present time to do so. Therefore, in our attempt to improve the Bill as a vehicle for carrying out the Government's wishes—for which no doubt the Government will be duly grateful and for which all noble Lords sitting on the other side of the House will seek to hurry to support us in the Division Lobby if perchance the Government should not immediately recognise the value of the Amendment which we are suggesting—we put forward this Amendment which does fill that gap by providing that …the Minister may, on an application made to him by a housing authority, pay for each of such number of years as he may determine such additional amount as he is satisfied is necessary to enable that authority to provide dwellings to meet special needs. This is a very simple Amendment. It gives wide discretion to a Minister to do something if he wants to do it. It puts no compulsion on him whatsoever—none at all. It enables him to say that notwithstanding that the Government have tried to anticipate all the difficulties that will emerge from a totally new, untried structure, (and there has been a great deal of thought, I have no doubt, in devising the new structure of subsidies which this Bill provides), if in fact it should emerge that of the many local authorities which are housing authorities several—not necessarily the majority—experience special difficulties which had not been foreseen and which it is beyond the capacity of human beings to foresee in a totally new structure, "I now have the power to do what the Government wanted me to do, namely, to provide help where help is urgently needed."

The first thing I want to make clear is that what we are arguing about is not a Party political point of view. There is no distinction here based on Parties. If there is an argument it is an argument between local and central government. It is an argument as to whether a Minister should have the power to do what he might want to do. It is not a Party argument and it is not a novelty. I am not suggesting here any new revolutionary idea: I do not suppose that I should be highly successful if I were to do so. I am merely suggesting that the Government should accept that they have no more capacity to foresee the future than previous Governments, advised by previous civil servants, had the power to do. Those Governments thought that they should take powers to fill in unforeseen gaps. I cannot at the moment refer by memory to the two particular sections which provide exactly the precedents, but I think I am right in saying that they are to be found in the Financial Subsidies Act of 1957 and in the Housing (Finance) Act of 1968. I may have got those dates slightly confused, but that is where they are to be found. The precedents in those Acts are the precedents one would imagine would give a Minister power to fill in an unforeseen gap, either without limit or within such limits as Parliament thought fit to provide at the time the power was being given.

The second point I wish to make quite clearly is that this is no novel or revolutionary idea which I am proposing. I am merely suggesting that the present Government should equip themselves with the same modesty that previous Governments have done with the method of providing for the unforeseen if, and only if, a Minister at the time was satisfied that there was justification for using those powers. There is nothing mandatory here. As your Lordships will have noticed, it says simply that The Minister may … pay for each of such number of years". The conditions which I have suggested here are not necessarily the conditions which would meet the Government's wishes completely, but they are, broadly, the kind of conditions which the previous precedents to which I have referred have included. They are to enable the Minister to be satisfied that it was necessary for an authority to provide dwellings to meet special needs and that it could not do so without the Government providing special assistance.

This is not a suggestion purely based on theory. The need is not a theoretical need; the need is an existing one. There have been many local authorities, housing authorities, who have made it absolutely clear that they cannot under the provisions of the Bill carry out their housing functions satisfactorily. They cannot do so, that is, unless an insupportable weight is put on their rates. The one that I have previously instanced, and therefore need refer to it only shortly, is Crawley. It is not a problem peculiar to Crawley; it is a problem which exists for every local authority which has circumstances similar to Crawley; namely, a small existing stock of houses and a great need to build additional houses. Where that situation arises, where in order to build additional houses an authority would have to rely on inadequate subsidies, which is the framework of the Bill, it would either be compelled to put an enormous burden on its ratepayers, a truly enormous burden if it is going to continue to build, or, as would be the more likely, it would succumb to the political pressures of the time at local elections by a decrease, or stop building.

This subsidy structure in the Bill is likely to affect all the Crawleys in the same way; namely, make it impossible politically for a local authority to be elected, for a council to be elected, with the political power to go on with a building programme which is necessary for the inhabitants of the area, the citizens of the area. That is a circumstance which is totally at variance with the Government's wishes. The Government want building to go on. One of the Government's justifications for this Bill is that it will encourage building, and the main justification is that the money will be concentrated, Government help will be concentrated, on areas of need. Crawley is an area of need. I refer to it because it has put its figures at length before the Government, and there is no dispute about the facts and figures. And there are many other Crawleys where the Government would, if they mean what they say in their desire to help where help is needed, with this Amendment, be able to provide that additional assistance which at the moment they cannot provide. It is for those reasons, broadly—plus a number of other excellent reasons which reside among my notes but which I shall have to wait for later opportunity on Report stage to bring forward—that I hope the Government and the Committee will see fit to accept this Amendment, which my noble friend has moved in such a persuasive fashion.

3.4 p.m.


In answering the points raised by the noble Lord, Lord Diamond, there are two general points I should like to make. The first is that we are discussing Clause 5, which is concerned with the operational deficit subsidy, which is a subsidy given to a local authority that has made a rate fund contribution for 1970–71 and for 1971–72, to help it to move out of the subsidies of the past into the new subsidies. We feel that it would not really be logical to extend the operational deficit subsidy to cover new building because new building is in fact covered by the rising costs subsidy. So the first point I should like to make it that we feel that, even if it were shown to be necessary, this is not the right place to include this extra subsidy. What we are talking about is a subsidy to meet special housing needs, an issue on which I think we are all very sympathetic. But this particular point would in fact be met by the rising costs subsidy. The cost of providing housing for special needs within the limits of reckonable expenditure would in fact count for rising costs subsidy just as any other expenditure falling on the housing revenue account.

If I may expand that point a little further, at the moment there is no provision within the basic yardstick system for the extra cost of dwellings to meet special needs, but it has been the Government's practice to allow a local authority who wanted to provide such dwellings a generous ad hoc addition to the yardstick. Costs within the yardstick and the ad hoc addition are at present subsidisable, and would continue to be so under the rising costs subsidy. It is the Government's intention to continue this practice in the future, and to be no less generous with the ad hoc additions for dwelling houses provided for special needs than we have been in the past.


We are very grateful to the noble Baroness for what she has said, and I am very grateful to the authorities of the House who have discovered my case, because I would have been in a terrible jam without it. The noble Baroness said that there was really no need for this kind of provision because it would be dealt with by the rising costs subsidy. With the greatest respect, the noble Baroness has not given herself time to consider the figures or to look at the correspondence, because it just cannot be. The rising costs subsidy will never meet a situation where the new housing requirements are out of proportion with the old housing stock, because the kind of subsidy that you will get is not sufficient to meet your demands. Although the official reply to Crawley was that this is a matter of a temporary nature, the figures which Crawley produced showed that that reply had no regard to the facts as put before the Minister and did not confirm that the Government's wish is to meet needs where needs were shown to be at their greatest.

Of course Crawley and all the other Crawleys could theoretically continue with their housing programme if they put up their rates fantastically so far as Crawley is concerned in the first year by—may I use an old-fashioned phrase to make the point?—one shilling in the first year in order to enable them to continue with their housing programme. If the Government think that any local authority is going to achieve power at an Election time on that kind of programme, they had better think again. If they had thought that Birmingham, for example, would have been likely to achieve power at Election time, they would not have done what they did in relation to Birmingham; namely, making it perfectly clear that although the Bill was going forward in its present shape it really need not hurt Birmingham people quite as much as they thought and therefore they could continue to vote Conservative. So I am bound to be quite clear and specific to the Government and say that they really cannot disregard the facts and figures of the situation. The facts are that the money would not be provided in the early years out of a rising costs subsidy. Nobody has ever suggested this before. The rising costs subsidy is planned for ten years. Why? Because it is going to be that length of time before one is able to make ends meet on the housing which one is putting up when one is in these circumstances. I am bound to say to the noble Baroness that I am not at all persuaded by her suggestion that one can rely on the rising costs subsidy.

That is only half the case. I may not have been listening sufficiently carefully, but I did not hear a reply to the other half of the case. The other half of the case is: why do the noble Baroness and her colleagues think that they can see the future with far more clarity than any previous Government have thought themselves able to do? I will grant immediately that the noble Baroness is a very special and welcome addition to your Lordships' House, and I am sure she has many qualities which we shall see in the full as time goes on. But I should like to be more specific and refer to her male companions such as the noble Lord, Lord Drumalbyn. I find it difficult to be convinced that he would claim that he can foresee the future with greater perspicacity than any of his predecessors, either in the Conservative or the National Conservative and National Liberal Governments. I fail to be persuaded as to that.

I am saying to the noble Baroness: what about the second leg of the argument? Why are the Government satisfied that they should not give to a Minister the latitude of permissive action which previous Governments, both Conservative and Labour, have felt it necesary to do? I am sure the noble Baroness omitted by mistake to answer that part of my argument, and I will immediately resume my seat to give her an opportunity of doing so.

3.12 p.m.


When it suits the Government they can foresee the future with unusual clarity, as the noble Lord, Lord Diamond, puts it, but when we ask for figures extending beyond 1976 into 1977, these are impossible to produce. The argument is a rather selective one, and in this respect we want to probe a little more into why the Government refuse to put into the Bill a flexibility which on other occasions they have accused us of wanting to take out. Where it is for the benefit of the tenants they do not want flexibility. In the case of the rising costs subsidy we were arguing about whether the percentage should be left at 75 per cent. or reduced to 66⅔ per cent. That was a reverse sort of flexibility which the Government did not want to put into the Bill. I am sure your Lordships can see what I mean when I say that the flexibility which the Government seek to import into this legislation is always against the interests of the tenants.

I appeal to the noble Lady to think again in response to that part of the arguments of the noble Lord, Lord Diamond. The second point I wanted to make was in relation to the noble Baroness's remarks on the previous clause. She said, "You do not need to worry about special needs because that is taken care of by the rising costs subsidy which we have already discussed." I would refer her to the remarks made in another place at Standing Committee by Mr. Amery. I will read the relevant extract so that all your Lordships can have the benefit of Mr. Amery's advice to that Committee. Your Lordships will see that the noble Baroness has contradicted her right honourable friend. He said: … loan charges arising out of expenditure in excess of the housing cost yardstick will not count as reckonable expenditure both where the excess expenditure has arisen under past schemes to which the yardstick applies, or where it will arise in future schemes to which it may still apply."—[Standing Committee E, Commons, 9/12/71; col. 350.] That is the direct opposite of what the noble Baroness has just said. She said that where the cost yardstick has been exceeded in order to meet special needs, which is what we are talking about in this Amendment, that would be taken into account in the calculation of rising costs subsidy. But the right honourable gentleman, the Minister of Housing and Construction, has said the precise opposite to Standing Committee E. I must admit that I am absolutely confused, having read this statement and having listened to the noble Baroness, to make out what the Government's policy is. This House is owed a further explanation.


Perhaps I could answer that point right away. We seem to be talking at cross purposes. The point my right honourable friend was making in another place is the yardstick plus the 10 per cent. allowance. As my noble friend Lord Sandford said when we discussed this point yesterday, that does not count the allowance for rising costs subsidy. The point I was making was that within, or perhaps as a supplement to the yardstick, an ad hoc amount can be added for special needs. Therefore this is really a different thing from the 10 per cent. allowance, and I do not think there is any contradiction between what I said and what my right honourable friend said in another place.


The noble Baroness has not yet dealt with the argument with which I was hoping she would deal.


I was not intending not to deal with the other part of the argument. I thought that if there was a misunderstanding in this way I ought to correct it right away. I wonder if the noble Lord, Lord Avebury, wishes to say something further.


I only want to say that in another place Mr. Amery did not say "except for expenditure which is designed to meet special needs". He did not say that at all. He referred to expenditure in excess of the housing cost yardstick, and that embraces any additional expenditure which would be needed for the purposes which the noble Lord, Lord Diamond, has in mind. If he had wanted to put in that exception he should have done so. It is valuable to have the noble Baroness's correction to her right honourable friend, but she should liaise with him to make sure they say the same things in both Houses.


I do not want to follow the noble Lord, Lord Avebury, in discussing the 10 per cent. surplus over the yardstick level which is sanctioned. This provision which has been put forward by my noble friend Lord Diamond is designed to apply more particularly to those councils which are likely to have very big building programmes in the coming years. They are going to have to build their houses in an atmosphere of ever-increasing inflation. That means to say they will be confronted by higher costs for the actual building operations and by higher costs for the land which they have to purchase, because it is obvious that there is a rapidly rising market in land. What is more, the loans for housing are usually granted on a basis of 60 years, so that the servicing of any loans which are taken up in the coming years will spill over into the period after 1982.

Furthermore, we know that interest rates are likely to rise in coming years rather than fall. Only yesterday the Public Works Loans Board, whose loans are freqeuently used for housing purposes, put up its interest rates by ¾ of 1 per cent. in some cases and 1 per cent. in another. There will be flooding over into the post-1982 period the charges for servicing many loans which are taken up between now and 1982, and that will be on top of the ever-increasing prices of putting bricks and mortar together and on top of the ever-increasing price of purchasing land for housing schemes. Let me put it very moderately. I cannot see housing costs after 1982 being any lower than they are to-day or any lower than they will be next year.

I feel that it would be not merely an act of generosity but a far-seeing act of policy on the part of the Government if they permitted this subsidy to be available to local authorities—not generally, but to those who can make out a case showing that they have very big building programmes to undertake. In any case, a local authority will itself be faced with a very heavy burden, because it has to find 50 per cent. of the cost. I sincerely suggest that this is an Amendment which the Government could very sensibly accept. They told us yesterday when we were discussing Clause 4 that the subsidy dealt with in that clause could, in certain special circumstances, be extended beyond 1982 at the discretion of the Minister. It seems to me a fairly sensible suggestion that this subsidy should be dealt with in a similar manner.


If I have understood correctly what is being asked for in this Amendment, it is to add another subsection to Clause 5, which deals with the operational deficit subsidy, which would have the effect of increasing the proportion paid by the Government under the rising costs subsidy to meet special need. We do not consider that this is necessary because, for all the reasons which have already been stated, the rising costs subsidy is designed to meet special need and, with its flexible structure, is designed to help those areas of particular housing stress.

Crawley Urban District Council has been mentioned, and I think that the noble Lord, Lord Diamond, was not correct when he talked about the rate increase. I understand that it would be a ½p rate increase in 1971–72, which would rise to a maximum of only about a 6p rate increase by 1977–78, falling to about 4½p by 1981–82. This is in many ways comparable with the kind of contribution which ratepayers as a whole make in regard to the housing need in many authorities. Crawley is in many ways a unique case, because it has very few old houses. Nearly all of its houses are new.

To return to the point which the noble Lord, Lord Avebury, made, and because it is very important that there should be no apparent contradiction between what is said here and what is said in another place, I have looked up the reference and it is to the tolerance over and above the housing cost yardstick of about 10 per cent. As has been made clear, this does not count for reckonable expenditure. I was talking about an ad hoc addition to the yardstick, which might vary from just a few pounds for some item in an old person's dwelling, to over £1,000 for a severely handicapped person's dwelling, and it is therefore not counted within that 10 per cent. tolerance. So, I do not think there is any difference between what we are saying here and what has been said in another place.

3.24 p.m.


Your Lordships will not be surprised if I am compelled to pursue the noble Baroness and the Government a good deal further, because we have still had no answer to the main point and such answers as we have had have, regrettably, been inaccurate as to the facts. I am sure that the noble Baroness is merely reading out what she has been advised and briefed to read, but, as in all matters of dispute, I think it is necessary to go to the centre, to the heart, to the origin of the facts, in order to arrive at accuracy. So, first, may I say to the noble Baroness: No, she is mistaken in thinking that this addition can relate only to Clause 5. We are in the difficulty that we have to put an Amendment down where it is most appropriate but there is nothing in the wording which would restrict it to the subsidy described in Clause 5. Indeed, the Amendment starts off with the words: Notwithstanding any provisions of this section to the contrary … So that it excludes the provisions of Clause 5 and goes much wider.

What is being attempted here is to reproduce mutatis mutandis those provisions which previous Governments have put in previous Acts and, if I may now refresh the noble Baroness's memory about those, as she seems extremely reluctant to come to that argument, they are Section 6 of the Housing (Financial Provisions) Act 1958, and Section 5 of the Housing Subsidies Act 1967. Your Lordships will remember which Government was in power in 1958, and which Government was in power in 1967. If your Lordships wish me to read out those sections, which I think would be totally unnecessary, I shall be glad to get them from the Library and read them out. But the fact remains that two separate Governments have provided precisely, in circumstances when housing subsidies were being legislated for, for the one thing for which all sensible Governments have to provide, namely, giving a Minister latitude where unforeseen circumstances arise.

That was the purpose of those two provisions and that is the purpose of this Amendment, but we have had no kind of answer as to why the Government should not give a Minister that latitude to deal with unforeseen circumstances. But if the Minister were right—and I dispute it completely—in saying that my example is not a full justification, that still does not alter the argument one iota, because what we are dealing with here is not anything which I have foreseen or which the Government have not foreseen, but unforeseen circumstances. That is why Governments take these discretionary powers upon themselves to deal with the unforeseen and necessary case. So much for that.

I now come to the rate. Unfortunately, the noble Baroness has been misinformed. May I read her the letter from the Crawley Urban District Council, written by Mr. Tridgell, its solicitor and chief executive, dated January 7, 1972? This is the relevant part: Put in a nutshell, unless there is some variation in the present proposals Crawley ratepayers are going to have to bear an enormous burden by way of contributions to housing—the charge to the rate fund will increase from about £26,000 in 1972/73 to well over £250,000 by 1977/78. The impact of this can be judged against the present product of 1p rate in Crawley of £45,000. If a 1p rate produces £45,000, then I am understating the figure and not overstating it when I say that an increase to well over £250,000 represents more than 5p.


I thought I said it was estimated that the rate would rise to 6p in 1977–78, which is exactly what the noble Lord is saying.


If the noble Baroness is saying that, then I am delighted. But what the noble Baroness said, according to my recollection, was that my statement about a shilling was wrong. It may be a carry-over from the old days when we had a different kind of currency, but I understood the noble Baroness to say that my figure of a shilling was wrong and that the right figure was 6d. or 2½p. If we now all agree that the right figure is the one I used—that is, one shilling in the old terminology with which some of us are still familiar—there is nothing further in dispute. We have both reached the same conclusion, that an intolerable burden would be placed on the rates of Crawley.


One thing about the arithmetic of the noble Lord, Lord Diamond, is not clear to me. When he says that the product of a 1p rate is so much is he speaking of the product today or of the product in 1978, which is the year about which everyone is talking?


I am talking about the product to-day. The Crawley Council did not think it necessary to estimate what the product will be in 1978. It would depend a good deal on the number of houses built and that in turn would depend on the success I have in persuading the noble Lord, Lord Hawke, to go into the Division Lobbies with me to get the Government on to the right lines. We shall see to what extent I am successful.


I live about two miles from Crawley and I can assure the noble Lord that houses are being built at an enormous pace. The product of a 1p rate when that letter was written is not the same as that from a 1p rate today or in 1978.


I accept that houses are going up at an enormous rate in Crawley. That is the kernel of my argument. The situation is that before the Bill becomes law houses are going up at an enormous rate to supply the citizens of the area. But what Crawley is saying is that houses will not continue to go up at that rate, although the need is there, unless some special provision is made. I am grateful to the noble Lord for confirming that this is the situation in Crawley.

The letter continues: However, the problem is not necessarily peculiar to Crawley or, indeed, any of the other New Towns, and under the proposals as they stand could arise in the case of any local authority which has to shoulder a substantial housing programme in relation to the size and resources of the district, particularly if the existing stock of council dwellings is comparatively small. I am merely reading out the confirmatory detail of what I said in an earlier intervention and which corresponds to what the noble Lord, Lord Hawke, has just drawn our attention to; namely, that Crawley is able to build houses under the present dispensation but it appears that it will not be able to continue to build houses under the proposed dispensation.

Therefore, the Government will have to do something about the rates or we shall need to have power in this Bill to enable cases of special need to be met. That is what the Government say they are after. What I am asking the Government is this: is their claim a true claim or a sham? That is the simple question. Unless the Government are prepared to make provision for special cases such as Crawley, which is not unique, we will only be able to reach the conclusion that there is nothing in the Government's claim that they are prepared to provide housing help where houses are required. On the evidence which has been given to your Lordships houses are going up at an amazing rate. There is everything to be said for the counter claim that this is not a Bill to help housing, that this is not a clause to help housing but that this is a Bill and a series of clauses to save the taxpayer money. That is the claim which we are making; that is the heart of the Bill. I am not going to weary your Lordships by going into this over and over again.

May I read just one further extract to demonstrate that what we are discussing is not a Party issue but an issue between local authorities and the Government? I wish to read from a document prepared by the Urban District Councils Association which, I can assure noble Lords opposite, is affiliated to neither the Labour Party nor the T.U.C. The Association says: The Association has also been particularly concerned about the rate fund burden on those authorities in areas of unemployment and low wages. Here rent rebates and allowances are likely to be at high level. The proposals are intended to give help where it is most needed and the Association suggests that at very least the Bill should include power for the Secretary of State to give special help to areas where (for whatever reason) the proposals produce exceptional rate burdens (a power which has been included in previous Housing Acts). It goes on to list the two sections of the two Acts to which I have referred.

Finally, I do not think we should get bogged down by the yardstick difficulty. The Minister in another place got it completely wrong. The Minister in this House got it half wrong, which was a great improvement on his colleague in another place. I am happy to say that the noble Lord has put the matter right by a further statement which he made last night. We hope that we shall not have "Correct Answers, series 4." We have already had series 3. I do not think we can improve the situation very much by the argument about the access over and above the yardstick. It is a simple matter of providing the Government with the latitude to give help where help is needed. That is the professed object of the Government's Bill. We shall do our best to see that the Government's faith is fulfilled.


Before the Minister comes to reply to the debate, would it be possible for some reply to be given to the point made by the noble Lord, Lord Brooke of Cumnor, on Second Reading? It was concerned with the provision of bungalows for old people in rural areas. This is something which may require special provision over and above the type of help incorporated in the text of the Bill.

3.37 p.m.


Perhaps I may answer the last point first. The point I made about the ad hoc additions to the yardstick are that they would cover the special provision which would have to be made for old people, not only in bungalows but in flats or other kinds of dwelling. That is how that point will be met.

Let me return to the two points raised by the noble Lord, Lord Diamond. He quoted other Acts which gave subsidies for special need. The whole point about the new subsidy, the rising costs subsidy, is that it will cover until 1981–82 75 per cent. of reckonable expenditure. It is designed to be a flexible subsidy in that when a housing authority incurs expenditure 75 per cent. will be contributed by the Government. The authority itself will know its special need, will build to meet it and will get the subsidy. This is how it will work. The Government feel that it is not unreasonable to ask that the other 25 per cent. should be met by the ratepayers.

Let me come back to the question of Crawley. The noble Lord, Lord Diamond, in his original speech, said that the rates bill for Crawley would be 6p higher this year. I tried to correct that and to explain that it would be ½p in 1971–72 and that it was estimated to be 6p by 1977–78. The point is that this percentage would drop in the ensuing years and would not result in the ratepayers' having to pay a greater amount of money than is borne by many local authorities at the present time.


How on earth can the noble Baroness say what is going to happen after 1977–78 when the Government have consistently refused to give us any figures for that period?


The noble Lord, Lord Hawke, raised a new point in this discussion when, in an endeavour to undermine the argument of my noble friend Lord Diamond, he said that year by year in Crawley, as additional houses were built, those houses would become rateable and would contribute to the revenue of the local council. That of course is true. This is one of the problems with which I used regularly to be confronted when, for many years, I was finance committee chairman of one of the biggest county councils in the country, where we had an annual budget of between £60 million and £70 million. This is a legitimate argument; but it needs to be given its proper proportion. Let us assume that Crawley builds 2,000 new houses each year. Let us assume—and I do not put this forward as a definitive figure—that they are rated at £100. That would increase the rateable value of Crawley by £200,000. Now, what is the yield of a new penny rate on that extra £200,000 rateable value? The yield would be 200,000 new pence, which is precisely £2,000. So, with all the new houses that are likely to come into existence in a growing town of this description, the current yield to the borough treasurer year by year is likely to be only an infinitesimal figure when compared with the gross expenditure of the council.


I think this ought to be the final intervention, because we do not seem to be getting any further in the argument. We are merely getting figures put up which continue to be erroneous, in an attempt to excuse the Government from doing what they ought to do, whether the figures are right or wrong. The noble Baroness has not addressed her mind yet to the point that previous Governments found it necessary to provide for the unknown. This Government do not think it necessary. Perhaps I may read to the noble Baroness what the Crawley Urban District Council's view is of their own rates and their own contributions—and, of course, I can hand this letter over to the noble Baroness if she has not got it; it is merely a copy of a letter which has been addressed to her Department. The noble Baroness has just told the Committee that the rate burden would fall, that the cost would fall, after 1977–78; and if I ever said it was for one year when it is as plain as a pikestaff that what we are talking about is 1977–78, then I can only apologise for a slip of the tongue. What we are talking about is the rate increase up to 1977–78, beyond which, the noble Baroness says, it would fall.

May I refresh the memory of the noble Baroness as to the view of the Crawley Urban District Council? They say: The much more likely event of a continuation of the substantial building programme would result in a progressive increase in the rate fund burden after 1977/8; i.e., annual charges to the Crawley ratepayers even higher than £262,000". That was the figure on which the 6p or shilling rate increase was formulated. So that is the Crawley view as to whether the rates will go up or go down. The noble Baroness will forgive me, but I think I am bound to pay attention to what the Solicitor and Chief Executive of Crawley has to say. He goes on: To summarise the position, on the best estimates which can be made the Crawley ratepayers are going to have to bear an enormous burden by way of contributions to housing which shows no sign of real amelioration over the next fifteen years". The noble Baroness knows that the subsidy which she is suggesting to meet this point goes, at the most, for ten years, and in later periods is phased out down to five years.

So this is what the Crawley authority has authoritatively put forward to the Government, and I am saying two things, very clearly and for the last time. First, I believe that Crawley are honest in putting forward their figures, and I believe that they know their job. I believe that they fear that they will not be able to build the houses under the proposed scheme. Second, whether the Crawley situation is typical, unique or non-existent does not affect the fact that any sensible Government interested in maintaining the provision of new housing would see to it, if they really believed what they had said about giving help where help is needed, that they took power in the Bill, as previous Governments have done, to enable that very thing to happen. In these circumstances, if the noble Baroness is not going to accept the Amendment or undertake to produce something like it at a later stage, I can only invite the Committee to express its views.

Resolved in the negative and Amendment disagreed to accordingly.

3.47 p.m.

On Question, Whether the said Amendment (No. 56A) shall be agreed to?

Their Lordships divided: Contents, 71; Not-Contents, 101.

Airedale, L. Garnsworthy, L. Sainsbury, L.
Arwyn, L. Gladwyn, L. Samuel, V.
Avebury, L. Granville-West, L. Seear, Bs.
Bacon, Bs. Hale, L. Segal, L.
Balogh, L. Hanworth, V. Shackleton, L.
Beswick, L. Henderson, L. Shepherd, L.
Birk, Bs. Hoy, L. Shinwell, L.
Blackett, L. Hughes, L. Simon, V.
Blyton, L. Hylton, L. Slater, L.
Brockway, L. Jacques, L. Southwark, L.Bp.
Buckinghamshire, E. Leatherland, L. Stocks, Bs.
Burntwood, L. Llewelyn-Davies of Hastoe, Bs. Stow Hill, L.
Champion, L. McLeavy, L. Strabolgi, L. [Teller.]
Chorley, L. Maelor, L. Strang, L.
Clwyd, L. Meston, L. Summerskill, Bs.
Crook, L. Milford, L. Taylor of Mansfield, L.
Diamond, L. Morrison, L. Wade, L.
Donaldson of Kingsbridge, L. Moyle, L. Walston, L.
Douglas of Barloch, L. Nunburnholme, L. Watkins, L.
Douglass of Cleveland, L. Phillips, Bs. [Teller.] Wells-Pestell, L.
Faringdon, L. Platt, L. Williamson, L.
Fiske, L. Popplewell, L. Wise, L.
Gaitskell, Bs. Ritchie-Calder, L. Wootton of Abinger, Bs.
Gardiner, L. Royle, L.
Aberdare, L. Drumalbyn, L. Mar, E.
Ailwyn, L. Dundee, E. Margadale, L.
Albemarle, E. Eccles, V. Merrivale, L.
Alexander of Tunis, E. Effingham, E. Merthyr, L.
Allerton, L. Elles, Bs. Milverton, L.
Alport, L. Emmet of Amberley, Bs. Mowbray and Stourton, L. [Teller.]
Amory, V. Exeter, L.Bp.
Auckland, L. Ferrers, E. [Teller.] Napier and Ettrick, L.
Balerno, L. Ferrier, L. Oakshott, L.
Balfour, E. Fraser of Lonsdale, L. Rankeillour, L.
Balfour of Inchrye, L. Gage, V. Rathcavan, L.
Belhaven and Stunton, L. Garner, L. Reigate, L.
Belstead, L. Gisborough, L. Rhyl, L.
Berkeley, Bs. Goschen, V. Rockley, L.
Blackford, L. Gowrie, E. Ruthven of Freeland, Ly.
Brooke of Cumnor, L. Grenfell, L. St. Just, L.
Brooke of Ystradfellte, Bs. Hailsham of Saint Marylebone, L. (L. Chancellor.) Sandford, L.
Buckton, L. Sandys, L.
Burton, L. Harvey of Prestbury, L. Selkirk, E.
Caldecote, V. Hatherton, L. Sempill, Ly.
Clancarty, E. Hawke, L. Shannon, E.
Clifford of Chudleigh, L. Hives, L. Stonehaven, V.
Coleraine, L. Howard of Glossop, L. Strathclyde, L.
Colville of Culross, V. Hylton-Foster, Bs. Strathcona and Mount Royal, L.
Cork and Orrery, E. Ilford, L.
Cottesloe, L. Ironside, L. Tweedsmuir, L.
Cowley, E. Kindersley, L. Tweedsmuir of Belhelvie, Bs.
Craigavon, V. Kinloss, Ly. Vernon, L.
Crathorne, L. Lauderdale, E. Vivian, L.
Crawshaw, L. Long, V. Wakefield of Kendal, L.
Cromartie, E. Lothian, M. Willingdon, M.
Daventry, V. Loudoun, C. Wolverton, L.
de Clifford, L. Luke, L. Wrottesley, L.
Denham, L. MacAndrew, L. Young, Bs.
Derwent, L. Macpherson of Drumochter, L.

House resumed.