§ 3.0 p.m.
§ THE MINISTER OF STATE, SCOTTISH OFFICE (LORD POLWARTH)
My Lords, I beg to move that this Bill be now read a second time. It is now almost a year since the Government's White Paper The Reform of Housing Finance in Scotland (Cmnd. 4727) set out our detailed proposals on which this Bill is based. During that time there has been an immense amount of public discussion, and consideration and preparation by local authorities. There has also been a certain amount of confusion between the means by which, in Scotland and in England and Wales, the Government propose to reach their objectives in housing. I need hardly remind the House that there is a comparable English measure so I should perhaps make it clear straight away that although our objectives are 150 similar, Scottish circumstances differ in many respects, and in order to meet these many parts of the Scottish Bill are quite different in principle as well as in machinery. Therefore I suggest to your Lordships that we should consider the Bill on its merits in relation to the circumstances of Scotland, without being too concerned about comparisons with the different circumstances and different provisions for England.
The basic policy of the Government is, of course, the same on both sides of the Border: good housing, in a good environment, for everyone. Equally, we recognise that successive Governments have already gone a long way towards achieving this goal and that, in seeking to provide a new financial framework for the future, we should recognise the sterling service which the old arrangements have given in the past. But although our overriding objective is good housing for everyone, we also want to enable people to have as free a choice of homes as possible, both as to kind and place. That choice must be available on fair and equal terms: there is little fairness, for example, in a system under which poorly-off tenants and owner-occupiers pay heavily through the rates in order to subsidise council tenants, many of whom are financially better off. So we seek to be more fair in future as between different classes of the community, classes which often overlap—tenant, ratepayer and taxpayer—and more fair to people everywhere, regardless of the area in which they live, for example by placing the fixing of rents in the public and private sector on a rational basis, and by providing a model scheme for rent rebates and rent allowances. Fairness demands that those people and places with the greatest need should receive the greatest help, and this is what the principal new Government subsidies are designed to achieve. These principles are common ground, I think, and I now turn to the Scottish Bill itself.
Part I of the Bill deals with housing subsidies, and the first main point I want to make is that they provide a new financial framework for public authority housing in Scotland which is intended to increase the amount of Exchequer help for Scottish housing. This point has been much misunderstood and, I am sorry to say, misrepresented; but the 151 Explanatory and Financial Memorandum to the Bill sets out our estimate that, compared with about £55 million for Scottish housing in 1971–72, we expect the Exchequer expenditure in 1975–76 to be of the order of £70 million to £75 million.
The second main point I must make on this Part, although it is not explicit in the Bill itself, is again mentioned in the Memorandum: namely, that over the same period we expect the Scottish ratepayer—a class which includes tenants as well as others—to obtain real relief from the existing very high burden of housing costs: a relief of the order of £20 million per year, rate fund contributions to housing in 1971–72 being about £40 million and the estimate for 1975–76 being about £15 million to £20 million. Of course, both these developments can take place only because the third element which goes towards the financing of public authority housing, namely, rent, will increase over the same period. But I must make clear that this will occur only to the extent that each individual tenant can afford it, the national rent rebate scheme under the Bill giving protection to those in need.
So far as the Part I subsidies to local authorities are concerned, it is now widely recognised that, at least so far as the immediate future is concerned, certainly those authorities with substantial current building programmes are likely generally to receive substantially more subsidies in total than at present. This is, of course, partly due to the very generous residual subsidy, the means by which all the existing subsidies from 1919 to 1968 will be phased out. While this is still being paid—for four or five or six years for most authorities, and longer for a few—there will also be a build-up of entitlement to the new subsidies. Whatever one's view of the rather longer-term, therefore, it is clear that the next few years provide an unprecedented opportunity for local authorities to tackle their housing problems energetically with the maximum help from the Government. This is particularly true so far as new building is concerned, where houses approved for the purposes of residual subsidy under Clause 2(3)(b) of the Bill will also, of course, contribute to increased housing expenditure and, consequently, to the calculation in the next year or 152 two for housing expenditure subsidy under Clause 3.
Housing expenditure subsidy is the main means by which increased Government help will be given to those local authorities which need it most. It will be calculated on the basis that an increase in housing expenditure in any year compared with the previous year totalling more than an average of £6 per house will create an entitlement to the subsidy in 1972–73. This subsidy will be 90 per cent. of the amount in excess of that £6 per house, and even after 1975–76 this rate will remain at 75 per cent. The figure of £6 per house is pitched at a very generous level: for example, for the last year for which figures are available housing expenditure of local authorities in Scotland as a whole went up by £13 per house, by £21 per house in the year before that, and by £15 per house in the year before that again. In those three years alone, taken together, local authorities in Scotland on average would have built up an entitlement to housing expenditure subsidy of the order of £25 per house, and this average figure means that some authorities would have obtained an even greater entitlement.
The subsidy is also generous in relation to the scope of its coverage. In the past, subsidy was obtainable only in relation to new house building, but in future it will be calculated in relation also to the refinancing of existing debt, repairs and maintenance expenditure on houses on the housing revenue account, and all other costs chargeable to that account. This is a major step forward.
So also is the new slum clearance subsidy, one of the most striking omissions from the range of measures by which successive Governments have tried to deal with this intractable and still most urgent Scottish housing problem. It is an incentive directed specifically to encouraging local authorities to get on with the job. The subsidy is straightforward and clear cut; it is payable not only towards the actual cost of clearance works but on the cost of payments to owner-occupiers and for goodwill to the owners of commercial properties. Also, it is payable whatever the future use of the land cleared: at present subsidy is available only on land to be used for new council housing. This subsidy will be 153 a distinct help and incentive to those authorities still faced with the task of clearing their slums.
Finally I come to the rent rebate and rent allowance subsidies, perhaps the main channel in the long term through which Government help will come to local authorities. In the past, of course, some 90 per cent. of local authorities have operated rent rebate schemes with no direct assistance at all from the Government: in future, the rate of subsidy will start at 90 per cent. and continue at 75 per cent. This again is a major step forward, not only in subsidising rent rebates for public authority tenants but in giving for the first time equal Government help to the new rent allowance scheme for tenants of privately owned unfurnished accommodation.
We then come to Part II of the Bill, which relates to rent rebates and rent allowances. The introduction of rent allowances for private tenants in unfurnished accommodation is the outstanding feature of this Part of the Bill. This has been widely welcomed, in another place as well as in Scotland, and it is something we can all be glad is now at last being done for a category of householder who, on average, has a lower income than the council tenant, but hitherto has had no direct help when he needed it in meeting his rent—and has indeed, through his rates, been helping to subsidise other people.
Rent rebates and rent allowances will be available to all tenants in unfurnished accommodation throughout the country on the basis of the model scheme contained in Schedules 2 and 3 to the Bill; it will be nationally available, in contrast to the patchwork situation in which the quality of assistance under existing rebate schemes varies from one area to another, and in a few is not available to all. It will be flexible, in that authorities may within specified limits take account of exceptional cases and the Secretary of State may, under Clause 17, vary the scheme by regulations from time to time if necessary.
The model scheme is a generous one and it is constructed on principles which give most help to families with low incomes. For example, a married couple with four children, with a gross weekly income of £20 and a standard rent of 154 £1.50 (the current Scottish average) will under the model scheme pay no rent at all; and, although unlike some existing schemes, the amount of rebated rent under the model scheme varies with the level of standard rent, this family would be able to occupy a house with a standard rent of £3.50, if that is what they needed, and still pay no rent at all. I know £20 is a low income but even at £30, which is about the average for Scotland, there is still very considerable help given to this family of four children: for a house with a standard rent of £1.50 there would be no rebate, but in the case of a house with a standard rent of £3.50 the rebate would bring this down to £2.12.
In this context, I should like to pay tribute to the work which the noble Lord, Lord Hughes, and his colleagues in Government did during the last Administration to encourage local authorities to adopt rent rebate schemes. In terms of coverage of the country they were very successful. In terms of getting a generally high national standard, less so. The model scheme under this Bill brings all authorities up to the high level of the better schemes under existing legislation. In the past, leaders in this field have been found in the New Towns and the Scottish Special Housing Association, who will in future also adopt the model scheme under the Bill: as they will also be adopting the subsidy provisions in Part I.
The only point I should like to make on Part III of the Bill is a small but important one, and this relates to housing accounts of local authorities. In framing the new housing accounts of local authorities, the Bill adopts the basic principle that the council house rent payer should meet only those items of expenditure which should properly be a charge on him. Thus, for the first time, expenditure on rent rebates and all future slum clearance activities will be accounted for separately from the housing revenue account and he will no longer bear any of the costs of these on his rent. This again is a real step forward and is evidence of the Government's determination that help in these two areas should be given by a combination of subsidy and associated rate fund contribution and should in no way fall on the rents.
Part IV of the Bill, which deals with public authority rents, is of course fundamental to the Government's objectives. I 155 do not think your Lordships would dispute that, in the past, too heavy a burden has been placed upon ratepayers; that some tenants who could afford to make a bigger contribution through rent to the actual cost of their own houses have been subsidised by ratepayers, and that this has restricted the resources available for the housing effort in Scotland, because so much money has been spent simply on keeping rent levels down. In the light of these facts, this is bound to be fundamental to the Bill.
Clause 28 introduces the principle that standard rents should be fixed in such a way that the housing revenue account is brought into balance; by so doing we believe that over a period of years we shall establish a more realistic rent level in Scotland and a much fairer distribution of the costs of public authority housing between tenant, ratepayer and taxpayer. This principle means, of course, that on the income side of the account, as well as standard rents there are the new subsidies (residual subsidy, housing expenditure subsidy and, where applicable, high cost subsidy) and their associated rate fund contributions; and it should not be forgotten that the income from subsidy and rates will continue to have a very important bearing upon the levels of standard rents which need to be fixed. Indeed, it cannot be overemphasised that, in relation to Part IV of the Bill, we must talk about "standard rent": this is payable in full only by the tenant who is not eligible for a rebate under Part II and, to the extent that Part IV will require local authorities to increase rents, those who cannot afford an increase will be protected by the rebate scheme.
It is for this reason that it is nonsense to criticise the introduction of this Bill at a time of serious unemployment, and while the problems of wage claims and inflation are still very much with us: it is precisely the object of the new comprehensive rebate scheme that the unemployed, like the sick or anyone else in need for whatever reason, will be protected from paying rents which they cannot afford to meet. Equally, those who are standard rent payers are by definition—and this is reflected in the model scheme as in existing rebate schemes—people who can afford to pay the standard rent without hardship out of their existing income.
156 I must also draw particular attention to those provisions of Part IV which ensure that no rent increase for any tenant will be unreasonable in amount. Local authorities, the Scottish Special Housing Association and New Towns will be limited, in their progress towards balancing their housing revenue accounts, to making increases up to a maximum average increase in any year of £26 (or 50p per week), with a maximum for any individual tenant of £39 (or 75p per week). The comparable figures for 1972–73 are slightly lower because of special transitional arrangements. These maximum average and individual rent increases ensure that, despite the principle of balancing the housing revenue account set out in the Bill, the progress towards it will not bear unreasonably hardly on any tenant, whether he enjoys a rebate or not.
The central provisions in Part V of the Bill provide for the speeding up of the process of transferring from rent control to rent regulation the remaining controlled tenancies in Scotland, estimated to number around 100,000. This, I must emphasise, in no way affects the security of tenure at present enjoyed by the tenants of controlled houses. The average rent of controlled tenancies in Scotland is still about 30p a week. Not surprisingly, the general decay of the fabric of properties let under such tenancies is a result of, and a serious criticism of the system of rent control, and its ineffectiveness in the past in helping tenants in need. It has condemned many tenants to live in poor and deteriorating homes.
The transfer from rent control to rent regulation of all controlled tenancies, except of those houses in relation to which local authorities have taken formal statutory action as unfit, will be carried out in stages according to rateable value, beginning with the highest rateable values, over a period of three years beginning on January 1, 1973. This is, of course, a speeding up of a process which, under the 1969 Act provisions, has already begun in a small way. In so far as there is a new principle involved, it is that we hold the view that the fair rent procedures under the Rent Act, combined for the first time with rent allowances, fully protect those tenants in need from 157 hardship and fully justify the view that it is now both unnecessary as well as wrong to insist upon a qualification certificate before a house can pass into rent regulation. It is, in our view, quite misleading to stigmatise this as a "landlord's charter": the system of rent officers and rent assessment committees was set up in 1965 and has not significantly changed either in procedures or in personnel. Their independence is a guarantee that tenancies converted under this Bill will have rent increases only in so far as, in accordance with the statutory criteria, the fair rent is higher than the present rent. No one has yet openly championed the maintenance of "unfair" rents but this is what controlled rents are at present, and this is what seems to us both wrong and unnecessary.
May I emphasise yet again that the Bill itself does not automatically result in a rent increase for anyone: a controlled rent continues to be payable until there is either a rent agreement or the registration of a fair rent—and in either case it is not the landlord but the rent officer (or on appeal the rent assessment committee), who decides what the new rent will be. These provisions in Part V offer a prospect, for at least some tenants, of improvement of their homes being carried out with the help of such additional rent income as is obtained; how definite that prospect is, is a matter of judgment, but it is quite certain that there is no prospect at all of such improvement in most cases under the present ossified system of rent control.
Part IV deals with housing associations, and I will touch on it only briefly. Housing associations are a significant and growing source of help to the solution of Scottish housing problems, although only some 2,000 houses have been provided by them so far. The Bill gives great new encouragement to them through the new subsidies, particularly the improvement subsidy. This is a purely Scottish subsidy and is tailored to meet the emphasis of Scottish housing associations on providing accommodation through work of conversion and improvements. I must also, in this connection, briefly mention that provision in the Housing Finance Bill—or it might be called the English Bill—which applies to Scotland as well as to England and Wales, and extends the power of the 158 Housing Corporation to make loans to all housing associations, and increases the limit on loans to the Corporation. Lastly, my Lords, we come to Part VII which contains various provisions, including consequential provisions and amendments of earlier Housing Act powers, which will no doubt be examined in detail later.
My Lords, I have spent some time going over the Bill because it is a comprehensive Bill, and inevitably as a result a complicated Bill, but I submit that it is well balanced and forward looking in its provisions, providing substantial help to those local authorities and individual tenants who need it most. It gives a strong new impetus to slum clearance and to building where it is needed. It supplies the basis on which all householders, whether in the public or private sectors, can have a better choice of their own home. I beg to move that this Bill be now read a second time.
§ Moved, That the Bill he now read 2a.—(Lord Polwarth.)
§ 3.25 p.m.
§ LORD HUGHES
My Lords, my first task, and a pleasant one, is to express thanks to the noble Lord, Lord Polwarth, for the way in which he has explained this rather complex Bill to your Lordships. His experience in certain fields in Scotland is very valuable and covers a very wide area in which he has rendered great service to Scotland. In these fields we welcomed his arrival at the Scottish Office, but I do not think he would pretend for one moment that housing in Scotland, whether in private ownership or more particularly in the subsidised field of public ownership, is a subject in which he has been deeply involved in the past. To that extent it is a pity that in his first piece of major legislation it would appear that he is being thrown into the deep end of unknown waters.
I think that Scottish Peers on both sides of this House will recognise that I prefer to say pleasant rather than unpleasant things, and therefore I am glad to be able to say of this Bill that I personally strongly approve the principle of rent rebates. It is more than twenty years since I was converted to the idea. The noble Lord, Lord Polwarth, referred to what the last Government had done in this matter in Scotland. I would point 159 out that if we had not in fact achieved that success in Scotland between 1964 and 1970 it would have been virtually impossible to proceed to a national scheme of rent rebates. There had first to be a very general acceptance among local authorities in Scotland of the principle of having rent rebates, and in 1964 it was a minority rather than the majority who accepted that. Naturally, therefore, I welcome the extension of this principle to the private sector in rent allowances.
Having said that, however, I must make it clear that I intensely dislike the turn which both the rent rebate scheme and the rent allowance scheme takes in the Bill—but I shall have more to say of that later. I am glad—and the noble Lord, Lord Polwarth, rather gently indicated that he seems to share my views—that some of the more objectionable features of the English legislation have not crept into the Scottish Bill. I do not know whether this reflects wisdom on the part of the Secretary of State for Scotland, whether it is a recognition of the maxim that discretion is the better part of valour, or just pure Scottish caution. However, I agree with him and I only wish that his wisdom, his discretion and his caution had persuaded him to go much further than he has gone.
My Lords, if I were to confine my speech to pleasantries I should have to sit down at this point, because I cannot say anything more which is good of the Bill. But I should not be doing my duty to what I believe is the majority of people in Scotland who hold genuine fears or genuine objections to this Bill if I did not say more. We on this side of the House dislike the whole Bill because even in its acceptable aspects it goes on to become bad in detail. I do not propose at this stage to detail all the objections to the Bill. When I was asked how long I expected this debate to last I said it would be reasonable to expect that we should be home by seven o'clock but that if I were to go into all my objections I should still be standing here at seven o'clock, whereas I hope to be sitting down in 15 minutes.
First of all, referring to the new subsidy system, I commiserated with the noble Lord on being landed with this particular piece of legislation as his first major Bill. To a certain extent it has 160 been an advantage that he is dealing with a field which is not his special field of knowledge, because it enabled him to make some of the most extraordinary statements with a perfectly straight face and without the slightest suspicions of a blush. If he had had a wider experience he would have sent that brief back for rewriting.
Frequently he referred to the subsidies as being generous. Only a blind acceptance of the gentlemen in the Box would have enabled him to use that word even once. To have used it repeatedly—well, in another field the noble Lord could make quite a living as a comedian. He also referred to the fact that the Government were not reducing subsidies; that last year's figure of £55 million would become £70 million to £75 million in the year 1975–76. Perhaps the noble Lord would tell us what the Government's estimate would be of the figure it would have reached if they had not gone on to this new basis. I suspect it would be considerably more than the figure for which he is now claiming credit for Her Majesty's Government.
The residual subsidy is the first to which I wish to speak, and this is dealt with in Clauses 2 and 8. Even if one accepted the principle, which I do not, of phasing out the existing subsidies—which I would remind your Lordships in some cases run for a period of 60 years—they go out at far too rapid a rate, and accordingly over much too short a time, to be fair either to local authorities or to their tenants. This is a matter which on this side we shall try to improve in Committee. Before I leave the subject of the residual subsidy, may I ask the Minister when he is replying to tell us (and the reference is on page 3) what Clause 2(5) means? I will not read it because the helpful gentleman in the Box will look it up from the records. I should also like to know what Clause 2(8) means, which says:The amount … shall be payable only if the local authority comply with the conditions set out in paragraph 1 of Schedule 10 … ".When I look at paragraph 1 of Schedule 10 I find it says that any receipts must be treated as of a capital nature. Perhaps the noble Lord will tell me what that means and what it is intended to do, and why it is intended to do it in that way.
161 On the housing expenditure subsidy (Clauses 3 and 9), I would point out that this is one of the occasions when the noble Lord used that extraordinary word "generous" when talking about the £6 limit. In fact, that coupled with the fact that this subsidy is going to run only for periods starting at 10 years and then coming down to five, is the major cause of the excessively high rate of increase of rents which the Bill calls for. When I was at the Scottish Office I accepted the principle that rents had to go up, but I also laid it down that they should go up by amounts which people could accept, in that they did not involve a radical alteration in their standards of living. There have been references in Scotland—the noble Lord spoke about misrepresentation of the objects of the Bill—totally unfair references, to the last Government's figure of 7s. 6d. a week and the present Government's figure of 10s. a week. It has been said, "After all, there is not so very much difference between 7s. 6d. and 10s." But there is a substantial difference in the principle. The last Government said that they must not increase by more than 7s. 6d. a week the present Government are saying that they must increase by an average of 10s a week. In fact, when the maximum was laid down at 7s. 6d. the average increase in Scotland was of the order of 4s. a week. So the Government are proceeding at 2½ times the rate of the previous Government, and in existing circumstances no one can suggest that an increase of 10s a week, considering how many families in Scotland are still existing on wage earners' levels of £20, £22 or £24, is one which is acceptable. We will not willingly allow the Bill to continue in this form.
May I ask, in this connection, referring to page 5, what is the meaning of the last four lines of Clause 3(8), which says:but in the case of expenditure incurred as mentioned in sub-paragraphs (b), (c), (d) and (g) of pargraph 2 of Schedule 4 to this Act they are references to such amount of expenditure as the Secretary of State deems to be so incurred"?Why "deems to be so incurred"? On the high cost subsidy, in Clauses 4 and 10, I shall say little. In another place Ministers admitted that in the first few years it was most unlikely that many authorities would benefit from it. In fact, most local authorities in Scotland hold the view that few, if any, authorities will ever 162 benefit from it. As it is drafted in the Bill, with the financial limits which are laid down, this subsidy is an absolute farce. We will try to make it less farcical in the Amendments which we shall be putting forward. In this connection, on page 7, what is the meaning of Clause 4(5)?
The rent rebate and rent allowance subsidies, in Clauses 5, 6 and 11, are examples of good principles completely vitiated by bad schemes. The first objection we have is to the reversal of the principle of dealing with poverty. It is now 25 years since Parliament accepted the principle that the relief of poverty should be a national responsibility. This Government are seeking to set the clock back by saying that in a few years' time in this particular field 25 per cent. of the responsibility for the relief of poverty in this particular direction should be laid on the ratepayers. In view of the fact that in four or five years from now, if this Bill goes on the Statute Book, a very large proportion of those who will be living in council houses will be those in the lower income groups, the amount which will be paid out in rebates and allowances will be a very much greater proportion of the total than anything which we have seen in the past.
We are going to have financial segregation in Scotland. Those with low incomes are going to live in rent rebate or rent allowance houses, and those who would be required to pay the full standard rent, or full fair rent, are going to move into owner-occupation. The consequences to the ratepayers in many local authorities in Scotland of having to pay 25 per cent. of the cost of that is going to be ruinous. But even if the Government accepted that it should be a 100 per cent. grant, it would still be bad. The Government's justification for the scrapping of the existing subsidy structure, the noble Lord said, is to concentrate help where it is needed and that these clauses ensure that no one will pay more rent than he can afford. But, my Lords, as the Bill is drafted, that claim is totally false. It is therefore natural if I proceed, out of order, to Part II of the Bill, where Clauses 15 to 22 and Schedules 2 and 3 deal with the methods of giving rebate and allowances.
I find little to commend the system of computation of rebates and allowances. Too many of the details are 163 ones which, quite frankly, as a former local authority member and a former chairman of a development corporation I should have been ashamed to be associated with. In fact, the scheme which was in existence in Glenrothes when I became chairman was based on principles like this, and the first thing I did was to get Government approval for the scheme to be scrapped for one which would be fairer to those in need. The objection which I had then is my objection to what is in this Bill. In Schedule 2(10) the minimum rent is either £1 or 40 per cent. of the weekly rent. The object of the rebate scheme should be to establish how much a tenant can afford to pay from a given income. Obviously, there can be different views, and perhaps quite genuinely held different views, as to what proportion of income that could fairly be, but irrespective of one's views on that, one must arrive at a figure which one believes is fair to pay out of a given amount of income. But the 40 per cent. provision knocks that on the head.
Let me illustrate by taking the case of a family consisting of a husband, wife and two children where the gross income is £20 a week and the present rent is £2. The effect of the model scheme would mean that at the present time that man would not pay a rent of £2 but of £1.43 and would therefore get a rebate of 57p; but in terms of Part IV of the Bill the weekly rent at October 1 next year will go up to £2.96—that is, £24 on October 1 this year and £26 on October 1 next year; and 40 per cent. of that figure means that the rebated rent next year will not be £1.43 but £1.61.
My Lords, if there is one thing that is certain at this time it is that food, clothing, travelling expenses, household necessities and the replacement of those household necessities will all cost more next year than they do now. The story that prices were to be cut "at a stroke" is now interpreted as that the rate of increase will be cut at a stroke. Incidentally, it is rather a wry joke at the present time that that should be said; but obviously, whether it is right or wrong, there is no doubt that next year there will be less of the £20 after food, clothing and all the rest have been paid for. So the ability to pay rent will be less next year, rather than greater, and 164 obviously it becomes a greater nonsense as the years go by. Every time the rent goes up by another £26 the rebated tenant has to pay an extra 20p, so that in 1975–76 the man with £20 will not be expected to pay £1.43 in rebated rent; he will be expected to pay £2.04. What is the sense of that?
The Prime Minister said in the Election campaign that if a Labour Government were returned we would in this Parliament see the 15p loaf; the bakers were saying the other day that without the help of a Labour Government the present Prime Minister is going to accomplish that before the next General Election. So this hypothetical family will find that by the time this comes about it will cost them another 20p a week for bread alone. So how can we accept as being reasonable a system which compels a man to pay more for rent? Is he going to eat less? Is he going to wear less? Is he going to do without furniture? Is he going to scrap his television set or his radio set? How is he going to pay this higher rent out of a given income?
I would point out that the Government appear to have made some provision for that, because Clause 17(2) provides that the Secretary of State may make regulations to vary the provisions of Schedules 2 and 3 from time to time. But since the time when this Bill was drafted the cost of living has risen 8 per cent. The £17.50 needs allowance which this family gets in terms of the Bill as it is drafted, with an 8 per cent. increase should now be £18.90. Are the Government going to revise these figures in the light of the increase which has taken place during the past 12 months or are they going to introduce amending regulations bringing the figures up to date (probably by 10 per cent. by that time) immediately the Bill becomes law? Unless the Government are going to revise these figures periodically the needs allowance will be totally unsuitable for any practical purpose. At the next stage we shall give the Government the opportunity to amend these clauses and Schedules in the hope that they will be more reasonable.
I will go back quickly now to Clause 7. The slum clearance subsidy may be an improvement on the present scheme. At first glance it looks at though it will 165 be, and therefore I am prepared to accept that it may be so. I am, however, far from clear about some of its provisions. I should like to know, for instance, the effect of subsection (2)(f) and subsection (3)(b) of Clause 7. I apologise to the Minister, but I do not expect him to do all this noting down when he has those busy gentlemen in the corner.
§ LORD POLWARTH
My Lords, if the noble Lord will allow me to say so, I have no intention of shirking my duties.
§ LORD HUGHES
My Lords, I am not suggesting it, but one does not keep a dog and do one's own barking. On Part V and Schedules 6 and 7, dealing with controlled and regulated tenancies, and Part VI, dealing with housing associations, all I will say at this stage is that the timing and the amounts are in need of considerable improvement, and this we shall try to bring about. My Lords, if I do not refer to other parts of the Bill it must not be taken that silence means consent; it is only consideration for your Lordships' time that allows me to say nothing about them at this stage. This, of course, is no promise for the next stage of the Bill.
There is so little of this Bill that we like that really the only sensible thing for me to do from this Box would be to move that we do not give it a Second Reading. But, my Lords, the traditional attitude of this House is that we do not refuse to give a Second Reading to a Bill which has passed another place and therefore I adhere to that tradition. The second best course—and a poor second best in my opinion—is that we should make a serious attempt to improve the Bill in Committee. That is the task which we shall undertake, and in my concluding remarks I can only hope that the noble Lord, Lord Polwarth, as a beginner in this field, will prove to be a little more accommodating than his noble friend on his right. From that point of view, it was a source of distress to find that the noble Lord, Lord Drumalbyn, might have been drafted as part of the team, because obviously he will have to try—as the noble Lord, Lord Polwarth, will not have to do—to reconcile what he says on English housing with what he says on Scottish housing. Therefore, while I have the greatest respect for the 166 noble Lord, Lord Drumalbyn, I invite him to make his interventions as seldom as he can possibly make them.
§ 3.47 p.m.
§ LORD TANLAW
My Lords, I should like to underline the words of welcome given by the noble Lord, Lord Hughes, to the noble Lord, Lord Polwarth, in opening this debate on housing. I sympathise with him in having to reply to some of the rather devastating and highly detailed questions asked with all the authority that only the noble Lord, Lord Hughes, can bring to this particular subject.
To me, my Lords, and in so far as I understand it, this Bill looks quite good. The noble Lord, Lord Polwarth, makes it sound quite good, and here and there it appears to be founded on a good intention. Therefore we may be prepared to give it a muted welcome from these Benches. But if it is looked at more closely it will be found that the structures on which it is based appear to be a little shaky; and it is these that I wish to test out and try to discover, in terms of the New Testament parable, whether the Bill is like the wise man who built his house upon rock or the foolish man who built his house upon sand and therefore could not stand up to the subsequent bad weather. To take the analogy one stage further, to-day's weather forecast for housing is hardly a good omen, when a Government Minister publicly advises all those who want to buy a house to wait until the autumn. To me that implies that there are economic forces at work which the Government do not understand or are powerless to control, or both.
The record of housing in Scotland is an interesting one in that it represents all that is best and all that is worst in British housing conditions. Cumbernauld New Town and the thought behind it is an example to the world and is internationally recognised as such. On the other hand, around the perimeters of Glasgow there are areas where people are packed 450 to the acre in hopelessly unsatisfactory housing conditions, second only in the world to Calcutta so far as these densities are concerned. It is to be hoped that this Bill, as it is presented, will increase the number of new houses in the Cumbernauld tradition and greatly speed 167 up slum clearance throughout Scotland, both urban and rural.
We welcome one of the guiding principles of this Bill, which is to reduce expenditure by the ratepayer on housing and transfer the bulk of it to the Exchequer. To-day ratepayers are paying £40 million, with the Exchequer contributing another £55 million. By 1975–76 this Bill anticipates the ratepayers' burden being reduced by between £20 million and £25 million which will be transferred to the Exchequer. At the same time it is anticipated that rents will be rationalised across the board to take out the local variations which exist to-day.
We accept that a large number of Scottish rents are, and have been for some time, artificially low for modern conditions, but we question whether the Government may be pushing these changes through at too fast a rate, thereby in the short-term increasing the hardship and bewilderment often brought about by council rent changes. One would like to see, as the noble Lord, Lord Hughes, said, any increase in rent limited to 37p a week or perhaps to a definite percentage of wage income.
The immense detail and complexity of this Bill leaves me with the impression that the precise figures contained in it are based on formulae that may be neither right nor long lasting. For example, can the Minister give an idea of what is a fair percentage of wages income that should be set aside for housing? Building societies assume between 20 per cent. and 25 per cent. Do the Government have a specific percentage in mind, or would it be a variable one tailored to the cost of living? This might help to answer some of Lord Hughes's questions about how the figures in the Bill can keep up with rising inflation. It could also be relevant in Scotland, where the cost of living is about 2 per cent. higher than in, say, the South-East of England.
It is with some hesitancy that I comment on the rebate scheme described in the Bill. It appears to be complicated, but this may be the result of trying to be fair and to create legislation to suit all conditions. I wonder, to take the theoretical case of an old-age pensioner living on security benefits, how he or she will take a sudden and inexplicable rise in rents? I doubt whether it will be of 168 any use attempting to describe to such a person the intricacies of the rebate scheme. These people will not understand it and they will need every assistance to complete the relevant forms. I wonder whether I or the Minister would be able to complete these forms without assistance? If the noble Lord is as bad at form-filling as I am, the answer is probably in the negative. What provision has been made at every level and in every area for this kind of assistance to be made available to prevent hardship and to prevent people from being penalised simply because they are unable to fill in the forms correctly?
On the technical side, the main objection I have to the rebate system as laid down in the Bill—besides the bewilderment it may cause to the old and uninformed—is its tiresome complexity. It would be more practical and fair to use some system of housing credits through income tax returns. The computers of the Inland Revenue will soon have all the relevant data for every citizen in this country, if they do not have this information already. I suggest that an adjustment to the programmes could be arranged to print out the various entitlements for each family, and the local rent officer or official would be there only to advise in cases where there was a difference of opinion. People would not be penalised through non-completion or incorrect entries on returns, as I am certain will happen when the Bill becomes law.
Scotland has a poor record compared with England and Wales in regard to the private ownership of houses. Still only 25 per cent. of Scottish houses are in private hands compared with 51.6 per cent. in England and Wales. It is not clear from the Bill, or from the debate in another place, how many extra new houses will be built as a result of this measure or how private ownership will be increased. The Scottish Housing Corporation and the Scottish Special Housing Association are making their contribution, but are they enough to meet the demand? From the figures the Minister gave, I doubt it. The sudden and dramatic rise in house prices is making home ownership for young couples not so much an unattainable dream but a daily nightmare. The Government must do more than say that things will be 169 better some day. They should consider a more practical approach. For example, would they be prepared to accelerate the sale of council houses to private buyers by setting up a State building society? If this were to work out satisfactorily in Scotland—and I see no reason why it should not—such a system could be extended to serve the whole country. It is obviously difficult to sell council houses to private buyers who cannot afford to put down even the deposit, and I feel that the establishment of a State building society might, in view of the innovations that have been started in Scotland, be the right approach at this time.
I want housing to be removed completely from Party politics. It is not good enough to play ping-pong with statistics, either here or in another place or at election time, while the basic housing needs of the nation remain unsatisfied. Although we have doubts about its implementation and social effects, we recognise that this Bill is an attempt to rectify many years of housing neglect in Scotland and to start afresh. We therefore feel that we cannot oppose the Bill on Second Reading, in spite of our reservations, and we will look at it, as those in another place have done, closely in Committee.
§ 3.58 p.m.
§ THE EARL OF DUNDEE
My Lords, may I begin by most warmly congratulating my noble friend Lord Polwarth on joining the Government Front Bench. He probably knows as well as anyone that a Minister always gets the blame when anything goes wrong and never gets much credit when things go right. I hope that his work at the Scottish Office will be as successful and beneficial to Scotland as was his chairmanship of the Scottish Council (Development and Industry) a few years ago.
To conform to Parliamentary custom I should perhaps declare an interest in my noble friend Lord Polwarth, because twenty years ago he was a member of your Lordships' Committee for Privileges which restored to me the Scottish peerage of which my family had been deprived 280 years earlier. We were evicted by a regiment of Dragoons from our old house, which the noble Lord, Lord Hughes, when he was Lord Provost of Dundee, did his best—I am sorry to say so far without 170 success—to have reconditioned for the benefit of the city which now owns it. I still hope that some day it may be possible for this to be done.
§ THE EARL OF DUNDEE
I do not know whether it will qualify for assistance under this Bill.
My interest in Scottish housing does not go back 280 years because I am not quite old enough; but it does go back over nearly 50 years. In 1926 I was adopted as Parliamentary candidate for Kirkcaldy Burghs which had a very serious housing problem. In 1931 I was elected to another place for West Renfrewshire, which had an equally serious one. In the three years before the war I was Under-Secretary of State for Scotland in the Baldwin and Chamberlain Governments. At that time there was only one Secretary of State, so the Under-Secretary of State had to be pretty agile in moving about between Scotland and Westminster. Then again, I was Under-Secretary for a year in the middle of the war when it was decided to have two Under-Secretaries: the other one was Joe Westwood. The Secretary of State was then Tom Johnston.
At that time I wrote a departmental memorandum on post-war Scottish housing. I am almost certain that nobody ever read it, and if they had done they would have been wasting their time because it proposed that as soon as the war was over we should organise our economy in such a way as to build half a million houses in Scotland in five years, which of course would have imposed an impossible strain on our balance of payments. Indeed, since the war our balance-of-payments difficulties, and the almost continual inflation which has accompanied them, have been a very heavy impediment even to the very inadequate rate of housing progress which we have achieved in that time. One reason why I feel so strongly that Scotland would benefit very much from our joining the Common Market; one reason why I am so impatient at all this long formal delay in completing the business of joining—about 10 years too late—is that when we do join it will be very much easier, for financial and currency reasons, for Scotland to 171 build a considerably larger quantity of houses than has been possible from the end of the war until now.
But, my Lords, the whole of what we might call the present period which is now coming to an end and which began with the Housing Act 1919—that is, the period from 1919 to 1972—housing policy in Scotland has been based on the same principles. There have been differences in emphasis. Sometimes more emphasis has been placed on slum clearance subsidies and at other times more on a general purposes subsidy; but the underlying principle has been the same: that municipal housing is a social service provided by the State, through the agency of local authorities, and accompanied by extremely low uneconomic rents paid by the tenant, while at the same time privately owned houses to let have to a large extent been controlled at very low uneconomic rents.
The result has been, first, that in the private sector very few new houses have been built in Scotland during this period, and, owing to the uneconomic nature of the rents, a great number of those houses which are controlled, have deteriorated, sometimes degenerated into new slums. As for the public sector, owing to the increasingly high burden on the local rates arising from the building in a local authority area where conditions have been very bad—and there is a lot of building to-day—the burden of local rates has prevented the local authority from building new houses anything like so fast as it ought to do, owing to the fact that the contribution from the rents has been comparatively trivial in relation to the whole housing account of the local authority.
My Lords, in the last three or four years the late Government, of which the noble Lord, Lord Hughes, was a member, went some way towards remedying this state of affairs. I was glad to hear that the noble Lord, Lord Hughes, is strongly in favour of these rent rebates—and his Government did bring in some, although they were neither uniform nor universal. The same Government also went some way in raising rents. They did not raise them to a realistic level, but they did raise them to a half-realistic level—in fact to about half the level of rents in England. When we consider the rather 172 widespread superstition in Scotland that payment of rent is a mortal sin, whatever the rent may be, that action required some courage for which the late Government ought to be given some credit.
Now, my Lords, we have this Bill. I would call it a very good radical Bill. It removes things which ought to be removed and which have been with us too long. Most of the opponents of this Bill in another place, and outside this House (I am not quite sure yet about those in it), seem to be animated by the kind of good conservative feelings which ought always to be respected but not perhaps always imitated—like the old Duke of Cambridge who was Commander-in-Chief of the Army and who is reported to have declared on one occasion very decisively, "All innovation is bad even when beneficial". That is a psychological condition which is often found in politics.
There was one point in the speech of the noble Lord, Lord Hughes, with which I had some sympathy. Whether it is possible to get the answer to-day I do not know; but I should like to be sure that the combined amount of all these subsidies—the residual subsidy, the housing construction subsidy, the high cost subsidy and the slum clearance subsidy—will not just amount, as my noble friend clearly showed they would, to a greater sum than is now being paid. I hope that they will amount to a greater sum than would have been paid if this Bill were not passed. That was the question which Lord Hughes asked—I do not know whether or not he expected to get an answer. Perhaps it may be too hypothetical, because it obviously depends on so many uncertainties. But your Lordships might be grateful if my noble friend could give us as good a calculation on that question as is possible in the circumstances and tell us that the subsidies will probably amount to more—and I hope they will—than would have been paid in subsidy if this Bill were not passed.
My Lords, I have only two small constructive points to make. One is concerned with owner occupiers who are not, I think, explicitly mentioned in the Bill, though they are mentioned in the White Paper which says that certain parts of this new legislation are designed to encourage 173 more ownership of houses by their occupiers. I would impress on the Government how very important this is. In England, progress in house ownership has not been too bad over the last 20 or 30 years, but in Scotland it has been very much slower. In a democracy, especially in an age when so much commercial property is being amalgamated into huge impersonal combines, it is all the more important that as many men as possible should own some property; and the most intimate and personal kind of property is of course a house.
Of course, there are always a great many people, especially unmarried people, who do not want to own a house because it might be inconvenient. But in my submission in a modern democracy the majority of families ought to own their own house, as they do in many countries, such as Canada. You find there that nearly all the working families own their homes, and if they move to another area they sell their house and buy a new one where they are going, and there is comparatively little renting of working-class houses. I do not say that this is something that could be done quickly. I do not think we could change the proportion of house occupiers in Scotland to a majority of owners and a minority of tenants in 10 or 15 years, but I think we ought to try to do it in 25 or 30 years, and I think that ought to be the basis on which the long-term policy is founded.
The other point, with which I would conclude, is about the Special Housing Association, which of course is mentioned and, I think, receives quite satisfactory treatment in the Bill. My noble friend Lady Elliot may perhaps remember when her late husband Walter Elliot started this Special Housing Association when I was his Under-Secretary in 1937. When his officials had asked him what he was going to do about solving Scottish housing problems, Walter always said, "Give me a bag of money and I will solve it". Nobody thought that he would get it, but to our astonishment the Cabinet agreed to this proposal for a Special Housing Association which would be financed 100 per cent. by the Treasury and not be a burden on the rates. He wanted it to be a major factor in housing. But the war came on; it is no good crying over spilt milk; no building could be done 174 in the war. And after the war we had this terrible stringency about balance of payments which affected the housing problem, especially the prefabricated timber housing which the Association had started with. I would put it to the Government that the time has perhaps come to expand the part which this Special Housing Association is taking in our whole housing activities in Scotland. It is performing an extremely useful part but a modest one, and I think it would to the advantage of the country, quite apart from costing the rates nothing, if it were given a much larger scope than it has now.
This, I think, will be particularly true when we have the Local Government Act, which may be passed next Session or perhaps the one after; I do not know. I am not going to digress about that now. My noble friend Lord Polwarth is aware, and the Secretary of State is aware, that I am opposed to the Government's decision, which I understand was going to be taken also by the late Government in Lord Hughes's time, to give the control of housing to the district and not to the regional authorities. Your Lordships may remember that the author of the Wheatley Report, Lord Wheatley, made a very convincing speech on that subject to your Lordships in March last year, about fourteen or fifteen months ago. I do not want to digress on it now. I think it is a mistake.
I would ask the Government to consider whether at least the Special Housing Association could not deal more with the regional authorities when this local government reform is carried through, because the Special Housing Association is not like a local authority; it cannot give itself its own planning permission; it has to acquire a site from some local authority and it has to co-ordinate its housing schemes with others. It would be very much more expeditious and very much more efficient, in my view, if it could do that through consultation with eight or nine large authorities rather than with 45 or 50, whatever it is, small district ones. I would earnestly ask the Government to consider that. It is pure gain. The more you can get built by the Special Housing Association, which Walter Elliot established, the more financially advantageous it will be to the national housing account because it will 175 not impose any burden on any ratepayers. I would also in passing again express the hope that the Government even now may reconsider this decision which they have come to about who will control housing under the new local government set-up.
I have seen too many Scottish Housing Bills to get wildly excited about any of them, but I think this Bill is the best one that I have yet seen; and while we understand and appreciate that the noble Lord, Lord Hughes, and his friends will want to do their best to improve it, as is perfectly natural, I hope that, since some of its proposals are rather urgent for the good of our country, your Lordships will do your best to see that it is put on the Statute Book without undue delay.
§ 4.18 p.m.
§ BARONESS ELLIOT OF HARWOOD
My Lords, I rise with very great pleasure indeed to congratulate the noble Lord, Lord Polwarth, on his very clear introduction of this Bill. It is a complicated subject, and, as the noble Lord, Lord Hughes, said, unless one has spent years and years in local government, as Lord Hughes has and as I and many other of your Lordships have, all these complicated arrangements about subsidies and so on are rather difficult to understand. But we have had a very clear exposition of the Bill. I rise to say why I support the Bill, and I do support it very strongly.
Housing has always been on the political agenda of all Parties at all Elections. The noble Earl, Lord Dundee, reminded us of various things that have happened in the past. I cannot remember taking part in any Election—and I have taken part in them since 1923—when housing was not one of the main topics on all Party agendas, and I would say that all Parties have made great contributions to it. I remember the occasion when Lord Woolton made that great speech about building 300,000 houses, shortly after the war. That was a tremendous statement, and we all wondered whether it could be done. It was done, not only by the Conservative Government at that time but also by the Labour Government that followed. I think we have all made great contributions to housing.
176 But still, in spite of that, there are, as we know, slums, over-crowding, the continual running into debt of the housing accounts and the great demand for new houses. It is still going on just as steadily as it has been at any part of my lifetime or at any part of the lifetimes of your Lordships. The sky seems to be the limit. This Bill, it seems to me, makes an admirable contribution to solving the problems of the present day and will help us to build a great many more houses. It will also help to do something which has been a problem for very many years that is, balance the housing revenue accounts. I am told that in the very dim ages before 1914 housing revenue accounts did balance; but they were dim ages, and the housing was pretty dim I should imagine, and I do not think we want to go back to that.
I do not see why, under this Bill, we should not bring about the balancing of housing revenue accounts. It is extremely important, because for too long we have seen people living in very bad conditions, overcrowded houses and slum houses. It is true they are paying very low rents—practically no rent at all—but they are paying high rates, and a great proportion of those rates go to subsidise county council or town council houses. People who are fortunate enough to live in them and who could afford far more rent are paying a minimal rent which nowhere nearly covers the cost of the houses. The fact that the Bill is tackling this is very important.
I know that originally it was quite right that there should be Rent Restrictions Acts. That was done because of the shortage of houses and in the interests of the wage earners who were desperate to have houses, but it has produced the real housing problem of the modern world to-day, in that many landlords are not able to keep their houses in good repair. The houses go down and down, for who could possibly keep a house or houses in repair if all the rent he got was 30p a week? Those figures are totally unrealistic. I support strongly the principle of trying to make the housing revenue accounts balance, of spreading the burden of these charges over a wide population and making those who can afford to pay—there are a great many who can perfectly well afford to pay economic rents—pay economic rents and not have them 177 subsidised by people who are living in bad slums. This is one of the reasons why four out of five houses in Scotland are owned and built in the public sector. Only one is built in the private sector. In England the situation is quite different. There are proportionately far more houses in the private sector in England than there are in Scotland. In consequence there is less overcrowding. There are more houses per head of the population and, on the whole—I am not speaking about the current Bill but about the current situation—the situation in England is better than it has been in Scotland.
The other important thing this Bill does is take the question of rents away from the elected representatives. I helped to fight something like eight or nine contested elections in the city of Glasgow. The noble Lord, Lord Strathclyde, was a member at the same time. He knows and I know, and perhaps the noble Lord, Lord Hughes, and the noble Lord, Lord Hoy, know, too, of the great problems there were in that city. One could mention the whole of the Clydeside area. People who were standing for election to the local town council did not go about saying, "If you put me on to the city council in Glasgow I will put up your rents"; they went about saying, "If you put me on to the council I will see that your rents go down". That was quite irrespective of whether that was something which ought to be done and whether it meant, as it did, enormous debts in the city of Glasgow on the housing revenue account.
Under this Bill, as I understand it, the rents are going to be fair rents. They are going to be fixed by the various means which are described in the Bill. The noble Lord, Lord Hughes, seems to have taken great exception to them, but in my opinion those outline plans are good. I shall listen with interest when we discuss them in Committee. It means that nobody has to be dishonest—because that is what it amounted to—when he is standing for election; he need not try to be elected on the premise that his supporters are going to get brand new, beautiful houses for 30p a week. Certainly not, because that matter is not going to affect the situation. That, in itself, is a very good aspect of the Bill. 178 I also support, as did the noble Lord, Lord Hughes, the provision of rent rebates. I am sure that that is a very fair way of dealing with people who cannot afford the rent which the house is worth. I am anxious that the social service aspect should not be lost sight of. People should have a good house. Perhaps they have a large family. If they cannot afford to pay the full rent they can go and get a rent rebate, and that is an excellent thing.
The word "rents" is a highly charged word. Some of the words which one uses in making public speeches or in ordinary conversation are highly charged with emotion. The word "rent" is one of them. I well remember the only time I fought a by-election. It was in the city of Glasgow in 1958, at the time when the Rent Restrictions Act was being changed by the then Conservative Government in order to free a certain amount of rent-restricted houses and in order that they should be put into good repair. To do that, more rent had to be charged. I did not succeed in the election, the main reason being that the Labour Party at that time went about saying that there would be hundreds, perhaps thousands, of people whose rents would be raised astronomically and they would all be turned out into the streets because they could not pay them. The bailiffs would come along and out they would go.
This rumour went round the whole of Glasgow, including the area in which I was fighting the by-election. I was not returned. About a year later I met the sheriff in Glasgow. I asked him how many people, were turned out as a result of that freeing of the Rent Restrictions Act. He said, "None". The rumour that many people were going to be thrown into the streets was so strong that it actually stopped a great many Conservatives from voting, and it gave a free run to the other side. I am not complaining, because these things happen to everybody, but it is an example of how difficult it is to touch on the word "rent" without raising the most tremendous anxieties or fears in the minds of everybody. If we can have a really good rebate scheme running throughout all local authorities there should be no problem about people whose rents are fixed at a proper level not being able to pay them, because they will get the rent rebate to which they 179 are entitled. I support that very strongly indeed.
The other great problem in Scotland—it has been so for far too long—is the question of overcrowding. For many years overcrowding has been the bane of Glasgow and Clydeside, and possibly also of Dundee and one or two of the other big cities. If this Bill can tackle that, if the people can see that a great many houses are built, and, what is more, if under this scheme there is slum clearance and the reconditioning of houses that are good enough to be brought up to date, that will add tremendously to the number of houses available. I believe that that is going to be of tremendous assistance. I long for the day when there will not be this terrible overcrowding, which is distressing to everybody, and particularly to large families who have to grow up in cramped conditions. These are points which I feel will be dealt with by this Bill. I believe that the Government have shown great courage in bringing this Bill forward. Of course there are points which we shall wish to discuss in Committee, and no doubt some alterations will be made.
I should like to support what my noble friend Lord Dundee said about the Scottish Special Housing Association. I well remember its start, and I hope that in the Borders, where I am on the county council and which I represent, the Scottish Special Housing Association will build large numbers of houses in the big new Tweedbank development programme. If we can increase the number of houses and the number of opportunities for work, we shall be doing a tremendous job for that area. I suggest to the Government that they should use the Scottish Special Housing Association as much as they possibly can, because that method is very much quicker than the elaborate business of going through local authority housing committees. I have sat on a local authority housing committee and I have sometimes been in despair, because it takes two years to do anything. I hope that this Bill will receive a Second Reading. I am sure that it will be of great value, and I congratulate the Government on bringing it forward to-day.
§ 4.31 p.m.
§ LORD STRATHCLYDE
My Lords, I should like to join with others who 180 have congratulated my noble friend the Minister of State on the manner in which he introduced this Bill. I should also like to congratulate the noble Lord, Lord Hughes, on his informative, humorous and detailed condemnation of the Bill, which was highly instructive. I wholeheartedly welcome this Bill. It is the kind of measure which I have been hoping for over a period of some forty years. Glasgow, my native city, presents perhaps the most serious and difficult of Scottish housing problems and, as it is typical of the industrial belt of Scotland and because I should know more about it than about other parts of our country, I hope that your Lordships may bear with me if I speak of the housing situation as it has developed in Scotland and as it is to-day.
Until the year 1920, Glasgow's housing was provided by private individuals; those who through hard work, maybe good fortune, and simple living had succeeded in accumulating savings. They believed that investing in house property was the safest of all possible investments. As it was said, stone and lime could not run away. Much of those savings were put into trusts which were set up for the benefit and protection of wives and daughters. Housing was also financed in a somewhat strange way. A builder who happened to find himself short of work would build a tenement, having, first of all, taken care to create a feu over the ground on which the tenement was built. He was then willing to sell the tenement at cost price, and sometimes even at a little less, and to take the feu duty as his profit. To-day, I almost find it difficult to believe that in those ways the population of the city was housed, and that not infrequently up to 1914 the houses available were in excess of the need.
Rents were modest, because a return of 5 per cent. on the investment was considered perfectly adequate. In that connection, a lawyer friend of mine told me some years ago that when, on the death of his parents, he and his sister came to Glasgow—that must have been about the year 1912—in the first week of their residence there they had the offer of three separate five-bedroomed flats at a rent of £19 19s. 6d. a year. I understand that that peculiar rent figure arose out of the fact that somehow, due to either rate or taxation advantages, it gave a 181 benefit over anything which was rented at more than £20 a year.
As we have been told by the noble Lord, Lord Tanlaw, the density of housing was very high indeed, but that was not due, as is sometimes said, to the high prices demanded by landowners for their land. It was principally due to the very great increase in the population which had occurred during the Victorian era, to the fact that industry was established and concentrated beside the river, and to the fact that there was no means of public transport. One had to walk to one's work, and therefore one was careful to see that one lived close to it. Indeed, in the last days of the last century the only public transport in the City of Glasgow was horse-drawn tramcars, and it was not until the year 1905 that the first electric car appeared on the streets of the city.
Another criticism of privately provided housing has been that private interests built slums. If anyone can bring himself to believe that the citizens of Glasgow with savings to invest put them into slums, then all I can say is that he has no knowledge whatsoever of the canny character and nature of the people not only of Glasgow, but of the West of Scotland. The tenements, providing the housing of the great majority, were very substantially built stone houses with amenities which were considered adequate when they were built, and many are to-day capable of being brought up to near modern standards. In general, they were well maintained, because the owners—small people many of them—were very proud indeed of their property.
With the coming of the First World War, there was a great influx of workers to the whole of Clydeside to meet the need for ships and all manner of supplies which were required for the purposes of the war. The demand for accommodation exceeded the supply; rents rose, and in 1915 the Act restricting rents was passed. It was passed purely as a war measure, yet 57 years later it is still in part with us. Controlled rents have been absolutely disastrous to housing and to those Who have their money invested in houses for the majority of the workers, the white-collared among them. Rents remained static and the cost of repairs rose. I happen to know that in 1957 the cost of repairs was between six and eight 182 times higher than it had been in 1914. To-day, fifteen years later, it must be very much higher than that. The owners of tenements and like property, being mostly small people as I have explained, were unable to meet the cost of maintenance, and buildings which might have continued to meet an essential need fell into decay and some into a ruinous condition, their owners being ruined with them. It may be—and I hope it will—that the transference of those controlled tenancies to regulated tenancies will enable a number at least, of these existing houses to be preserved. Governments and Parliaments have fiddled with these matters for far too long, and I am indeed happy to think that this Bill will enable private interests again to enter fully into the housing field, which I believe will be to the advantage of all.
I am reminded that the abolition of owners' rates has resulted in a very considerable and growing increase in the building of houses for owner-occupation, and I hope that that may continue. After the 1914 war, the Act restricting rents continuing, the building industry showed no inclination whatsover to provide homes for working people, and it followed that in 1920 the local authorities took over. The low rent pattern was set and it has continued. It has resulted in a very great burden on the rates. In 1969–70, the rate contribution to the Glasgow Housing Revenue Account was in excess of £8 million. This amounts to £8 per head of the population. It means that the rents of many were being subsidised by people less well off; in other words, the poorer were subsidising the richer, as the noble Lord the Minister has said. I shall never understand why this completely unjust system has been allowed to continue for so long and why the less well off have tolerated it.
I was asked recently what, if any, action could be taken in the following case. A tenant of a Corporation house had three family cars; members of his family were working, and when occasionally during the year they visited London they stayed at the Dorchester Hotel. The man in question had been spoken to, but his attitude was that the Corporation provided him at a low rent with a house that suited him. He was content and he did not see why on earth he should 183 move merely because the house was subsidised and he could afford to rent a privately owned house. There are many people in privately owned houses who are well able to afford the rent they pay but who, attracted by the low rent, would like a Corporation house. They still have their names on the housing list and this completely distorts the real housing need.
These things apart, the rate burden resulting from the indiscriminate rent system has led to high rates which are a disincentive to new industry setting up in the city and to establish industry remaining there. It has resulted in many of the shops in the shopping centre of the city moving elsewhere and to many owner-occupiers moving outside the city boundaries. The Bill provides that the rents of council houses will in future be real rents, that the real rent will be paid by those who can afford it and that those who are unable to afford it will receive a rent rebate in accordance with their means and family circumstances. Rent rebates will also be available for people living in private property.
These seem to be very reasonable and completely just provisions which will reduce over the next two or three years the rate-borne expenditure on housing in Scotland by some £20 million. Over that same period Exchequer expenditure, existing subsidies having been replaced by the six new subsidies spoken of by the Minister, will increase by some £20 million. So the total expenditure in respect of housing in Scotland will remain the same as it was in 1971–72. The Bill confers benefits on Scotland in a number of directions but particularly in the realm of housing. It is fair to tenants and to local authorities, and I trust that it will receive a very speedy passage to the Statute Book.
§ 4.44 p.m.
§ LORD MOLSON
My Lords, as an Englishman I feel somewhat hesitant in intervening in a debate on Scottish housing. But having for the last thirteen years lived in Scotland and owned a number of cottages there, I cannot help being interested in and concerned with the state of Scottish housing. I know that in many respects it is worse than English housing, because of defects which are going to be rectified by this Bill. The 184 best diagnosis of the troubles of Scottish housing is contained in the White Paper published in 1961. I only regret that it should be ten years after that masterly diagnosis of the troubles that this Bill has been introduced to deal with them.
Paragraph 2 of the White Paper says:But the legacy of the past is not only one of bad housing conditions, of overcrowding and slums; it is reflected also in an inherited attitude to the finance of housing, in a long-established tradition of low rents. A low level of rents was natural in a period of bad housing conditions and low wages; with a rising wage level and standard of living, it is not reasonable to keep the rent of a good modern house at an artificially low level; and the maintenance of unrealistic rent levels has contributed to a distortion of housing demand which, in turn, has led to a diversion of resources from the most urgent needs and an unfair distribution of the financial burden.Paragraph 17 says:The housing problems of Scotland, however, cannot be satisfactorily tackled until housing finance is put on a realistic basis; in other words, until the rents charged for local authority houses reach a more reasonable level.My Lords, that diagnosis of the trouble is in some respect equally true to-day. In fact, the position now is even worse. At that time, 35 per cent. of the expenditure on housing came from the ratepayers; by 1970 it had gone up to 37 per cent. The taxpayers pay 23 per cent. and the occupants of local authority houses in Scotland pay only 40 per cent. of the annual cost. I rejoice that this Bill will at last bring to an end this open-ended liability of ratepayers to subsidise according to no rational principle the rents of people occupying council houses.
In the first place, the effect of low rents in either private or council houses must necessarily be to depress rents in the other sector. Therefore, low rents in the private sector have an adverse effect upon the public sector. In the second place, I rejoice that the Bill will abolish rent control and will convert controlled tenancies into regulated tenancies, in three stages. The present level of controlled rents in Scotland not only makes it impossible for landlords to maintain houses in a decent state of repair but reduces any inducement to private enterprise to provide new housing. In the third place, tenants in worse houses have to subsidise those in better houses, and there is often a difference in the quality of council houses. There is injustice 185 between the richer and the poorer because very often the poorer are subsidising the richer. There is also injustice between one town and another caused by the different rents charged by the respective local authorities. In one town the rate subsidy may be very much greater than it is in another. There has always been an inequity between private and council tenants because the private tenants are called upon to pay rates in order to subsidise the rents of those in council houses. Furthermore, my Lords—and here I confess that the old Adam of the Englishman comes out—there is inequity as between Scotland and England when in Scotland the average council rent is £74 and in England £116.
The effect of this Bill will be to end what I regard as a great abuse. It has in fact been the corruption of local government by the provision of bribes to the tenants at the expense of the ratepapers. The rent rebates and the rent allowances will make these increases of rents, substantial as they may be, and no doubt will be, both equitable and tolerable. I notice that the scheme for rebates in Scotland is identical with that for England.
There are one or two questions that I should like to ask the Minister of State. Why are fair rents not now being introduced in Scotland? Paragraph 14 of the White Paper says that in 1975 or 1976 the Secretary of State hopes to be able to go on to the introduction of fair rents. The fair rents which are included in the English Bill were the wise system introduced by Mr. Crossman, when he was Minister of Housing, and I wonder why this delay. I assume—but I should like confirmation of it—that it is because rent restriction in Scotland is still on such a large scale that there is no pool of freely lettable houses let at a market rent, and therefore it is difficult for any calculation of a fair rent to be reached. At the same time, the unjust and improvident rent policy of so many of the local authorities in subsidising the rents out of rates also make any calculation of that kind very difficult.
I would congratulate the Scottish Office on the simpler and more straightforward subsidies which they have in this Bill as compared with the extraordinary variety and complexity of the subsidies 186 in the English Bill. I think that an increase from the present expenditure of £55 million to something like £70 million to £75 million, if the noble Lord, Lord Hughes, will not take exception to it, can fairly be said to be generous.
At this point, I would ask the Minister of State a question about how far and in what way the policy of this Bill will be made effective. This Bill contains nothing analogous to Clauses 93, 94 and 95 of the English Bill. There may be local authorities who are not disposed to adopt this policy that is likely to be laid down by Parliament. In the case of the English Bill, the Minister of the Environment will be able to appoint a Commissioner and give him direct orders and take the whole of the administration out of the hands of the local authorities. There is nothing analogous to that in the case of Scotland. Is Clause 72 adequate for the purpose of making this Bill effective? It amends Section 195 of the 1966 Act; and I think that that section was introduced to amend the 1947 Act because of the difficulty in obtaining even a modest increase in the ridiculous low rents charged by some local authorities in Scotland, in particular, Glasgow and Dunbarton County. I should like to ask the Minister whether he will spell out what the procedure will be and give an assurance that the policy of this Bill will be made effective even if some local authorities in Scotland are reluctant to put it into force.
My Lords, I would say this, in conclusion. I believe this to be an extremely good Bill. I believe that it is tackling the real causes of much of the bad housing and slum conditions in Scotland. It is long overdue, and I wish the Government well in securing is passage.
§ 4.55 p.m.
§ LORD FERRIER
My Lords, I, too, welcome this Bill as I did the White Paper, and I congratulate the noble Lord, Lord Polwarth, on his presentation of it—not a word too long and every word audible. It is not my intention to speak for long but I feel compelled to express a point of view which I have held for some time in regard to the general principle behind the White Paper and which the over-all intent of the Bill goes a long 187 way to meet. Paragraph 5 of the White Paper reads:But at the heart of the problem lie obsolete financial policies, which are no longer either fair or effective. These must be swept away and replaced if enough decent homes are to be built, at prices which Scottish families can afford.I shall choose my words carefully because I do not wish in any way to give offence to noble Lords opposite whose sincerity and earnest desire to serve Scotland, whose skill in local affairs and whose experience of local affairs as they affect the lower income groups command my respect. My grandfather was a Liberal, my father was a Liberal, and indeed I hold liberal views; but I sit on the Benches because the Unionist Party to-day is and has been for decades a great deal more liberal on subjects such as this than was the Liberal Party, even in my father's day. What I mean to say is that I feel deeply the need for adequate and ample housing for all; and, further, that it is the duty of the Government to ensure by every means in their power that the State in whatever guise should give financial assistance to those whose financial resources for whatever reasons are insufficient to provide them and their folk with a roof over their heads—and not just a roof, but a house in which they can bring up their children in comfort and security and live out their lives free from anxieties such as those which once haunted the poor and the aged. This said—and it is a fair indication of Conservative policy to-day, as again the White Paper sets out in paragraph 15:It is an essential part of the Government's plan that no tenant should be required to pay more rent than he can reasonably afford."—I now come to the system which this Bill is designed to supplant.
The fact is that the Socialist Party has for long enough been in a position to say to the people, "Vote for us and we will see that you get a cheap house!" This matter has been put in different terms by my noble friends Lord Strathclyde and Lady Elliot of Harwood. But it is fair to say that perhaps they would go on, "By a cheap house we mean a house for which the cost to you will be considerably less than what it costs to finance and build and to maintain". There is no need, in view of the speech of the noble Lord, Lord Molson, who has just sat down, to 188 develop what I mean. My view is that this is quite an unacceptable situation to one who believes implicitly in the basic principles of a free democracy. This system has been a blot upon the fair name of democracy in Scotland and has put money—too much money—into the pockets of those who can well afford to pay the full value, and more, of the roof over their heads.
The noble Lord, Lord Tanlaw, said, "Let us take housing out of Party politics". I entirely agree with him, and I believe this Bill goes a long way to do so. There are too many tenants whose level of income has increased over the years of their tenancy and who have other income to their budgets, either from young people in their households or, perhaps, from wives who work. Too many are tempted to hang on, despite a very substantial family income, in subsidised accommodation. My noble friend Lord Strathclyde has quoted an extreme case, but there are too many. Nevertheless, to call such folk parasites, as somebody said to me this morning, may be going too far, because sometimes their problem lies in finding anywhere to go, at a price which even they can afford. The cost of land is a contributory factor to this problem. It is for this reason that one deplores the rise in the cost of land which is the aftermath of years of Socialist economics. It is for this reason that one welcomes the Chancellor of the Exchequer's outspoken views over the weekend.
My Lords, another problem arising out of the shortage of land is the development of high-rise housing blocks. I hope that this is only a passing phase, and I believe that in this many of your Lordships will agree with me. One hopes that the building of this type of habitation will be contained. I like the story of the inhabitant of a fourteenth floor flat who was asked how she liked it. She said, "I don't like it, for when I throw out a piece to the wains the seagulls get it before the wains". However if these high-rise blocks are to stay, and these concentrated centres of habitation have got to continue, there must be adequate provision for community association; ample facilities for children's and young people's recreation; accommodation for places of worship and spaces for the ancillaries which go with the church, whatever the denomination. The object 189 should be not only to provide living accommodation, and leaving it at that, but to re-create conditions, which seem to be disappearing in some respects, for the establishment of a real sense of community. This I believe can be done under the Bill. I was much impressed by what my noble friend Lord Dundee said about the Scottish Special Housing Association and I support what he and my noble friend Lady Elliot said about that factor in the future development of Scottish housing. I wish I could say it with her energy: I do not know how many of your Lordships know that Lady Elliot spent two hours at the Royal Highland Show this morning.
Anyway, the achievement of this end to which the Government have so nobly set their hand will call for wise and social-conscious administration. I look forward to the debates in Committee. It may well be (I think my noble friend Lord Molson, touched upon the subject) that the Bill as it now stands may place too heavy a burden upon local authorities, and when we come to amend it this may be a point worth listening to. But "where there's a will, there's a way", and here is a way. Let us give this radical Bill, as my noble friend Lord Dundee described it, a fair wind. I apologise to your Lordships if I leave the House. I have a meeting to attend, but I will come back as soon as I can.
§ 5.5 p.m.
THE EARL OF BALFOUR
My Lords, in accordance with the Standing Orders of your Lordships' House I must declare an interest in almost every aspect of this Bill: first, as a county councillor of the county of East Lothian; secondly, as a landlord; and, thirdly, my sympathies with families looking for accommodation. But having declared my interest, I hope to be completely impartial in the rest of this speech. I have no doubt your Lordships will have read this Bill and it would be presumptuous of me to describe it further as it has been so ably covered by my noble friend Lord Polwarth, and the problems were expressed so charmingly by the noble Lord, Lord Hughes. What may not be so easy to determine is the effect of the Bill on local authorities and tenants. In this repect I can safely take my own county as an excellent example because we have always made a 190 point of maintaining our council rents, et cetera, at about the average for Scotland compared with other local authorities. Also, we have a comparatively large building programme at present.
In order to give your Lordships a general picture I must ago back a few years; then give you the present position and the best possible forecast as to our financial position in a few years' time. In 1965 our housing deficit in the East Lothian landward area was about £130,000 and we all very much hoped that Mr. Wilson, the then Prime Minister, would be able to achieve his desire that local authorities should be able to borrow money from the Public Loans Board at 3 per cent. interest; but to quote a few lines from the well-known Scottish bard:The best-laid schemes o' mice an' men,Gang aft agley,An' lea'e us nought but grief an' pain,For promis'd joy!The result was that by the year 1970–71 our housing deficit had increased to £184,000 which, with present rents and existing subsidies, we had little hope of reducing. The Public Loans Board rate of interest rose to 9⅝ per cent. in 1969 and I, as a councillor, wondered at what price we stopped buying money to build houses. So many building contractors went bankrupt that East Lothian took out an insurance policy against this eventuality on all their major undertakings. Selective employment tax hit them and us very hard. I asked, through the Association of County Councils, whether local authorities could be relieved of selective employment tax on any of their building programmes, particularly as I considered the provision of council houses as a social service. No such luck! Some of us started to re-write the old song:You build 16 houses, and what do you get?One year older and deeper in debt.We owe our soul to the Public Loans Board.All the existing subsidies are related to houses and not people. But it is worth noting that the one exception was the Labour Government's Housing (Scotland) Act, 1930, which offered local authorities £2 10s. per year per person for 40 years for rehousing from a slum clearance area or an improvement area. That fact enormously helped large families.
191 Until I studied this Bill I thought there was little advantage in putting up rents, particularly because our rebate scheme was paid for out of the rates and it was a bit like taking money out of one pocket and putting it into the other. Housing rents have been the only subject where politics have entered into our deliberations, and I never felt that there was much point in placing some genuine councillors in an embarrassing position, a point that my noble friend Lady Elliot of Harwood so amply covered. For a councillor to vote for a council rent increase in an area where 80 per cent. of the people lived in council houses was nothing short of political suicide. As one councillor told me: "On a vote on a question of rent increases, I can do only one of two things: either vote against it, or not turn up at the meeting at all." Additionally, if he lived in a council house, he had to obtain dispensation from the Secretary of State to vote on that question.
This is where I am a tremendous supporter of this Bill, and where the Government have taken a bold and fair step forward. It is here that I should like to look at the present and future position. On the question of economic rents, on which the noble Lord, Lord Tanlaw, touched and covered the varying conditions, I have spent a number of rather fruitless hours trying to ascertain what would be a fair rent in the various authorities in Scotland, but I must admit that I discovered so many variables that no satisfactory comparison could be made; even the Government grant to local authorities varies considerably. But I am able to take as a reasonable case the county council rents of my own area.
This Bill outlines a plan to replace all existing subsidies for council houses with a system of rebates for tenants. To do this, average gross rents are to be increased by £24 in 1972–73, and by £26 for each subsequent year until the housing account is balanced, with a probable further increase of £6 per year thereafter, which will be decided when the position is reviewed in 1975–76. At present, the average rent charged in the County of East Lothian is £86, with a range of between £55 and £133, while the rent required to balance the housing account without either Government or rating subsidies would be £164. I estimate that the 192 housing account will reach balance in 1975–76, at which time the average rent will have been increased to £188 to meet the costs of the schemes now under construction or proposed, and also allowing for the higher repair costs arising from ageing houses and inflation.
East Lothian have always based their rent structure on the gross annual rateable value, which, as your Lordships are aware, was increased in the year 1971. Taking the 1971 figure, in 1975–76, with the average rent of £188 as already mentioned, this will be the equivalent of the 1971 gross annual value, plus 70 per cent. The maximum increase which can apply in any year is £39, and a relatively small number of houses with high rents will require to have somewhat lower percentages applied to maintain the increase within that figure. Therefore by 1976 some rents will be a little more than £300 per annum, or £6 a week, and that I would be a five-apartment new house.
East Lothian is still an area in which there is a long waiting list for local authority houses, and in our present programme we plan to build 397 houses. Not all these houses have as yet been approved by the development department, but we are hoping to have approvals completed by now, which means that we shall be able to get an additional subsidy of between £500 and £600 in the years 1972–76 for a house costing £4,000. Although estimated figures can be misleading and not always correct, I think it is possibly worth noting what the expenditure will be at present and the estimated costs in 1975–76. As a comparison, let me read out the figures rounded off to the nearest £1,000. The estimated gross expenditure for 1971–72 will be £740,000. By 1975–76 it will be £908,000. Deducting interest credit and miscellaneous income will leave a net expenditure this year of £716,000, and by 1975–76 it will be £878,000. The exchequer subsidy, at present of £150,000, will rise in the next two years—we will have completed our building programme by then—and probably drop away to near £2,000 by 1976. The rents at present stand at £373,000 and, allowing for the new houses, will go up to £873,000. One figure that really attracts me to this whole question is that at present £193,000 is being met out of the rates. This figure will drop to a mere £3,000. If we build a great many more houses, the benefit 193 from future subsidies will be much more favourable than under past legislation. I hope that briefly answers the question raised by my noble friend Lord Dundee.
On the question of rate rebates, I cannot obtain any accurate figures. Concerning the rebates, many will pay less rent than at present and some may pay no rent at all. It should also be noted that rebates will apply to private unfurnished house tenants as well as council house tenants. This expenditure, in the initial stages, will be eligible for an Exchequer grant of 90 per cent., which will scale down to 75 per cent. in 1975–76.
I, too, should like to pay tribute to the noble Lord, Lord Hughes, and his Government for introducing the rent rebate scheme. There never has been a rent rebate or allowance subsidy before. East Lothian County Council at present run a council rebate scheme which costs about £10,000, entirely met out of the rates. It is a comfort to look forward to that figure dropping to £1,000 next year if the rent rebates do not go up considerably. The reason why it is impossible to estimate the cost of rebates at this stage is that there is no information about wage levels in the county or about the amount by which these are likely to increase.
It is perhaps worth noting that a weekly increase of 5p on the rents would produce approximately £10,000 in the county's annual rents. I have attempted to get a comparison with other authorities in Scotland; and the Burgh of Salt-coats has often been quoted in the papers. From the latest figures that I have, they charge an annual rent of £26 and they have argued that this is all they need to charge. This rent, however, meets only 24 per cent. of the cost of the house; 30 per cent. is being paid through Government grants and 46 per cent. is being met out of the rates. Forty miles to the North is the Burgh of Largs which admittedly has a small percentage of council houses. There the average rent is £74, representing 59 per cent. of the cost: 39 per cent. is met out of Exchequer grants, and only a mere 2 per cent. from the rates. In East Lothian, at present 53 per cent. of the cost is being met out of rents; 23 per cent. by Government grants and 24 per cent. out of the rates. I hope therefore it will be seen that there 194 seems to be no guideline as to what an economical rent is.
As I have already pointed out, East Lothian has always based its calculations on the assessor's figure of rates. On the other hand, some authorities base their figures on a charge of so many pounds per apartment within the house. I have sometimes thought that this might be a better guide, because identical three-apartment houses have a rateable value which varies enormously in different parts of the country and can even vary considerably in one county.
Having talked to many councillors of different political views, one reasonably common answer I met in respect of what might be regarded as a reasonable rent was one day's wage, but at this stage I think it is important for your Lordships to realise that whenever a council tenant talks about his rent and what he feels he can afford to pay as rent, he is always referring to the combined figure of both rent and rates. In the Government scheme it is up to every tenant, irrespective of where he lives, to apply in the first instance (or as soon as he receives notice of a rent increase) to the local authority or the Special Scottish Housing Association or Housing Association for a rent rebate, because the moment he does this the subsistence rent is calculated on 40 per cent. of the actual rent or, as I would prefer to call it, the economical rent; and for every £1 that the household is above the subsistence earning scale, only 17p goes towards the rent.
Let me take the following example. If the economical rent of a two-apartment house was £3 and a married couple were living in that house, with the man only working, his gross earnings would have to be just over £25 per week for him to be paying £3 in rent. As I have already explained, most council tenants would consider as a fair rent and rates one day's wage. Let us assume that the man is working 5 days weekly. One-fifth of £25 would be £5, and if we assume that the rates are 60 per cent. of the rent (which is a bit more than I expect them to be) the rates would be £1…80 and the rent and rates would be £4…80, which is less than one-fifth.
Now let us consider a family with two children, living in a three-apartment house. Assuming that the wife is not 195 working, the children are of school age and the man's earnings are a little over £36 per week (this being the amount he would have to earn to pay the economical rent of £4…50) and also assuming that the rates are 60 per cent. of the rent, this would mean that the rent and rates would be £7…20 per week. One-fifth of the man's income would he almost exactly the same. You can carry on this calculation again and again, but it starts to break down when you are getting into figures of £9 and £10, and then it can become very unfair. I therefore hope that the examples I have chosen will illustrate that I consider Her Majesty's Government to have put a great deal of thought into this Bill, which is really very fair to all concerned.
Some of your Lordships may not be very good at mathematics, but if you remember that a person pays approximately £1 more in rent for every £6 he is above the scale, it gives us a reasonably good guide. If 60 per cent. is added to the rent to allow for both rent and rates, a man pays £1 more in rent and rates for every £4 he earns above the subsistence scale. It should be remembered that the subsistence rent is only 40 per cent. of the economic rent. Most of these figures can be easily worked out on a slide rule. I have tried to compare the rent rebate scheme of East Lothian County Council and the Scottish Special Housing Association, and although the calculations are such that comparison is not very easy, the lines on the graph cross when a man is earning approximately £26 a week. The Government scheme is more favourable to those earning less than £26 a week and rather less favourable to those earning more than £26 a week.
At this stage I feel it is extremely important that subsidies should be related to people and not to houses, because a person's circumstances can change overnight but the value of a house alters little over several years. In consideration of the value of a house it is important to remember that a local authority has no capital upon which it can depend in any building programme, and has to borrow all the money it needs and pay interest on that money, which can be, under past Government schemes, over the ridiculously long period of 60 years. In other words, many of the housing debts under past legislation will not be cleared until 196 most of your Lordships sitting in this House are dead and buried.
In order to get some idea of the costs involved, let me consider an ordinary person borrowing all the money on a three apartment council house which at present, allowing for all the costs, amounts to £4,000. In order to pay off the mortgage he would have to pay £7 per week plus the rates and including general repairs and maintenance. For a family to be paying the full £7 in rent they would have to be earning nearly £25 above the subsistence scale.
I should like to say a few words about the older houses and some of the cases where I think noble Lords opposite, and the Labour Opposition, have gone astray. The Labour Opposition have considered for some time, and are still considering, the possibility of taking over all rented accommodation and making all housing accommodation the responsibility of local authorities; a scheme in which quite obviously they are totally unaware of the enormous cost involved. My own county has quite a large number of houses built under the 1919 Act which are in the course of being renovated to bring them up to the Building Standards (Scotland) Regulations 1970. This is costing the council an average of £1,200 per house which, as your Lordships know, is not eligible for any subsidy but will be eligible in future.
If all rented property were to be nationalised, I estimate that, ignoring the value of the house as it stands, probably £1,800 would have to be spent on the average privately rented house. This is because the low rents in the past, as mentioned by my noble friend Lord Strathclyde, have made the cost almost prohibitive for private landlords to bring a house up to anything like the required standard. Even if the Labour Party's idea of nationalisation never takes place, the introduction of S.E.T. on the one hand, and the increase in bank charges on the other, put my own county in a position of serious embarrassment from an economic point of view, and it is only with the introduction of this magnificent Bill that local authorities can expect to get their housing on a proper footing. I, as a councillor, welcome this Bill. The noble Lord, Lord Tanlaw, asked if the Bill could increase the amount of privately-rented property. The answer is 197 that it will have no effect on that position at all. As a final remark, I should like to record the great help that I have had from councillors and officials of the East Lothian County Council.
§ 5.36 p.m.
THE EARL OF SELKIRK
My Lords, in the course of her very interesting speech my noble friend Lady Elliot of Harwood said that there was no subject referred to so frequently in political circles and with such heated discussion as housing. That is certainly true. Whether it be the Liberal Party, the Socialist Party or the Conservative Party, fifty years of Housing Acts—some nineteen, or more, of them—and the expenditure of hundreds of millions of pounds have produced a result which none of us is proud about. It represents a great improvement, but none of us can say that the position to-day is anything like satisfactory. The noble Lord, Lord Tanlaw, suggested that the subject should be put outside politics. I first heard that suggestion made some forty years ago. I must confess that I should be surprised if it were attained, however desirable it may be.
This is a radical measure, a bold measure, and I have no doubt that on a short term it will be an unpopular measure. I am sorry that the noble Lord, Lord Hughes, speaking as he does with great authority on housing—a complicated subject—did not go a little more to the roots of the problem. He did not suggest any solution to the deep problems, and he seemed to be satisfied with the status quo and possibly a little more public money. That, at any rate, was the impression that he left on me. I should like to emphasise the depth of the Scottish problem—it is not a bad way of doing it—by comparing some of it to the position in England.
First of all, people in England are inclined to say that there is no overall shortage of housing. Whether that be true or not, nobody says that about Scotland. On the whole, rents in Scotland are a little more than half those in England, although building construction is more costly. Private rented houses are nearly disappearing altogether and, as an interesting example of the distortions which have taken place, I would point out that subsidised houses are pro- 198 vided to help those who cannot pay economic rents, but those who are least able to pay economic rents go to private rented houses. They are deplorable houses, but they have the cheapest rents which can be obtained; and I give that as an example of the distortion. Fifty per cent. of the houses in Scotland are publicly owned. Sometimes the rates amount to 50 per cent. of the annual rental cost. My noble friend Lord Balfour gave examples and showed the variety of the percentage spent in rates in different places, and he also made the point that, when asking what a man can afford, rates are part of the cost which necessarily comes into his account. If a man is paying other people's rents from his rates that is greatly to his disadvantage.
This Bill tries to deal with basic problems and represents a very important contribution in our present circumstances. It moves the costs above rents from rating subsidy to national subsidy. The noble Lord, Lord Hughes, said he did not think it was generous. I do not think that any Government should ever be generous with public money: they do not own the money; they are in trust to look after the money, and should make ample provision for what is necessary. In fact I think the present subsidy from national funds is up about 50 per cent. since the time when the noble Lord, Lord Hughes, was in office, and will go up about 100 per cent. The second point is this: heavy rates distort the process of local government. They prevent other services which are properly the field of local government from being carried out and put a burden on industry which discourages development which all of us are extremely anxious to get. Privately rented houses are now going to be put in a position when they can be properly maintained and developed.
I should like to suggest that houses are in a sense part of our national heritage. We are short of houses and it is our task to encourage everyone, whether a private owner or a public owner, to see that houses are maintained and brought up to a proper level of accommodation. In any case, I believe that over the last fifty years we have never built enough houses. The United Nations figures—I do not say that they mean very much—indicate that Scotland should 199 build about 50,000 houses a year. We have not done so. I do not believe that through local authorities alone we shall ever do this. That is the importance, to my mind, of having a much larger percentage of privately built houses. Without that I do not believe we shall get a sufficient number of houses.
I am very glad that the slum clearance group of proposals has generally found favour. I cannot help feeling that we are a little too complacent about the standards which still exist in some big cities. I was talking recently to a man who was interested in housing in Montreal in Canada. He said that some of the housing there was very bad. I said, "Do you have any houses without hot water, without a fixed bath or an inside lavatory?" He said, "No, we have nothing like that, but many houses are highly unsatisfactory". I think that something like 25 per cent. of houses in Scotland fall into one or other of those categories. This is something which we ought to be thoroughly ashamed of. I think the rent rebate scheme has been very well received, whether or not one likes the details, and I hope that criticism of this Bill will not discourage people from making full use of the rent rebate scheme.
There was one other point made by the noble Lord, Lord Tanlaw, and indeed by the noble Earl, Lord Dundee: the extremely low percentage of owner-occupation in Scotland. I am president of a building society association, which does not give me a vested interest—no building society has a vested interest because they are mutual organisations. Scotland is not only lower than England and Northern Ireland and barely half of Wales, it has the lowest recorded percentage of owner-occupation of any country in Western Europe, or indeed in the world so far as I know. Australia, Canada, the United States of America have fully double the percentage of owner-occupation which we have in Scotland. This is one of the things that I hope will eventually proceed from this Act.
I attach immense importance to owner-occupation. I believe that there is no relationship in the world more likely to produce friction than that of landlord and tenant. I have been both, and I know how extremely easy it is for friction to occur. I think it is a great mistake 200 to assume that owner-occupation is a luxury for the middle classes or for what are called the well-to-do. This is just not so. If I may, I will quote figures given by the Nationwide Society which is probably the best Society for statistical analysis. In December, 1970, in England 50 per cent. of the mortgagors had weekly incomes of less than £30; 28 per cent. less than £25. In Scotland the figures are not so satisfactory—20 per cent. of mortgagors had incomes of less than £25. Now, of course, inflation has taken place but those are, I believe, the latest figures. This is a bold measure. I wish it every success; I hope and believe it will be successful. I am sure that if we do not remove the distortion from Scottish housing it will be remain blighted for many years to come.
§ 5.45 p.m.
§ LORD HOY
My Lords, first of all may I apologise for the absence of my noble friend Lord Wynne-Jones, who had to attend another meeting, and the other meeting has obviously not finished yet. I would add my congratulations to those of my noble friend Lord Hughes for the speech delivered by the noble Lord, Lord Polwarth. He made a speech which was a very tolerant one in your Lordships' House, but he can have my assurance and no doubt that of his noble friend Lord Strathclyde, that if he had attempted to make it in a place next door it would have taken much more time to deliver in face of the interruptions it would have received. I thought he was a little tiresome when he reintroduced the old argument about the poor old old-age pensioner subsidising the better off tenant. That one has become hoary with time, although it was repeated by some noble Lords who sit on the Benches alongside him. What he failed to say was that those who are owner occupiers receive in tax allowances a sum not less than that paid to municipal tenants. In other words it works out slightly better for the owner occupier. The last figures I received showed that while the municipal tenants receive £340 million spread over the whole country, owner occupiers received about £360 million in relation to taxation.
THE EARL OF SELKIRK
My Lords, I thought the noble Lord was quoting English figures, and not Scottish figures, and I thought that was a pity.
§ LORD HOY
I was using a figure overall. I do not always want to be as singular as that. I thought if I gave the total returns as I last saw them I should not be misleading the House. The noble Lord, Lord Strathclyde—I almost referred to him as "my noble friend", as we have known each other for so long—never fails to produce this Glasgow tenant with three motor cars who brings his family down for a holiday to the Dorchester Hotel. Obviously this municipal tenant has very good taste in hotels. I have heard the story before, except that apparently this particular tenant has got sick of the Savoy where he used to stay and has now changed to the Dorchester. I also want to say to the noble Lord, Lord Strathclyde, and the noble Lord, Lord Molson, and also I think to the noble Earl, Lord Dundee, that with all this talk about the Labour Party attracting votes by saying, "If you will only return us you shall have cheap rents", we have been singularly lacking in power; we have failed. Since the first Housing Act of 1919–53 years ago—we have had 38 years of Tory Government. And so I turn—for which noble Lord am I to give way?
§ BARONESS ELLIOT OF HARWOOD
My Lords, I was only going to say to the noble Lord that in the City of Glasgow, the one I know far the best, the municipality, with the exception of I think one Lord Provost whom I knew, was solidly Labour, and the electioneering that went on there on the subject of rents was well known both to the noble Lord, Lord Hoy, who I think was then in the other place, and to others.
§ LORD HOY
My Lords, I shall have a word to say on Glasgow in a few moments. All I can say is that it is never a great credit to say that one city has had the same type of Lord Provost all the time, whatever the reason. We 202 have elected a Labour Lord Provost in Edinburgh for the first time in Edinburgh's history. So there has been no magnanimity shown by the Tory Party over all these years. If I remind the noble Baroness of it, I am sure she will want to reflect upon it.
I want to make just one correction to the contribution from the Liberal Party, that of the noble Lord, Lord Tanlaw. I believe he said, "We will give this Bill a muted welcome." I think those were his exact words. I wondered why the Liberal Party had made such a decisive decision. However, I heard the noble Lord make his explanation of what he thought the Bill said, and then I could understand why that decision was reached. I only want to say to him that during the Committee stage of the Bill he will find a considerable difference between what he thinks the Bill says and what it really does.
This Bill is a peculiar Housing Bill, because it is extraordinary that as a result of passing it we shall not get a single extra house—not one. Not even the noble Lord, Lord Polwarth, would claim that it will produce one extra house. Indeed, I should have liked to take up cudgels with the noble Earl, Lord Balfour, on this point. But he came into the debate fairly late and delivered a speech which was very technical, from what one might describe as copious notes, as a result of which he spoke longer than even the Minister. So I would not dare to reply to what he said. But not even he would claim that this Bill, even if it were passed now without a single correction, would produce one extra house, because it will do nothing of the kind. There will be no extra houses. I wish noble Lords would not say, "If we only sold them to corporation tenants …". Even if we sold them to corporation tenants it does not mean more houses; all it means is that there are fewer houses to let.
This Bill has one purpose, and one purpose only. Indeed, it was declared in 1970. The Chancellor of the Exchequer had no humbug about producing extra houses and bringing in equalising conditions. It does not matter how any Member of your Lordships' House, or any other place, juggles with figures, what the Chancellor of the Exchequer said was that, as a result of this legislation, by 203 the mid-years of this decade the Government will have saved £100 million to £200 million. That is the purpose of the exercise: to create a greater burden on those in municipal houses. While the burden might not have appeared to be falling on the local ratepayer, I am certain that many local authorities will, as my noble friend Lord Hughes said, come to a difficult period when, because of ever-increasing rents, younger people will be driven to buying houses and municipalities will be left with the poorest sections of the community and the debt burden will be all the greater because of it. I beg noble Lords to think it out to its final conclusion.
We had a quotation from the noble Earl, Lord Balfour, about what a Labour Government said; even indeed what Mr. Harold Wilson said. Perhaps we might now turn to consider what the Conservative Party said, because it would be very difficult to produce a local authority in Scotland which supports the Bill. If all these undoubted benefits are going to fall on local authorities, why are not the local authorities being very vociferous in support of the Bill? There is not in fact a large local authority which would support the Bill as it stands. So much so that one thinks: How does this come to be foisted on them, in view of the written record of the Conservative Party? What did they say at the last Election? They said this:We must not interfere with local authorities. It will be for a Conservative Government to restore to the local elector and the local councillor the freedom of action he needs to make life better for himself and his fellow citizens and to control his own destiny and that of the community.That was the carrot offered to the local electorate. How the Party opposite can have written these words and said them and now introduce this Bill makes me say that I simply cannot understand how the noble Lord does not feel a little sick about it. Because this Bill has nothing to do with freedom for local authorities. Conservative freedom—or this Government's; I had better not blame the Conservative Party; I am sure that there must be a number of people who, like myself, love freedom and so I shall put the blame on the Government alone—the Government's freedom for local authorities is well understood in the city of 204 Glasgow, to which the noble Baroness has referred. The Government will not allow Glasgow to operate, not only on housing but on education; and at the present time the central Government are imposing their will on the electors of Glasgow with the aid of the Scottish courts. I do not regard this as being freedom for the local authority.
Indeed, when one thinks of the resounding election results in Glasgow only last month, one realises that, whatever else one might say, the electorate understood and knew what the majority Party was going to do because they had said it and taken action on it. They got an overwhelming vote of confidence. And along came this Government and said, "You may want this in Glasgow; your electorate may want it. But it ain't good for a Conservative Government and we will take you to court and enforce you to do what we want because Whitehall knows best." This is exactly what they are doing in this Bill, because in this Bill the same freedom is given—the freedom to do as they are ordered by Government. They have to take the orders, which are these: that in the first year all rents over £50 will be decontrolled; in the second year rents between £25 and £50 will be decontrolled; and in the third year rents less than £25 will be decontrolled, and there will be no option for the local authority. The local authority will not be able to say, "Look here, we think some changes ought to be made", because along will come the Minister of State—no, I do not believe he will come, but the Secretary of State will come along and say, "I have decided, and you, the local authorities, will do as you are told." The noble Lord may smile, but let me ask him whether he is saying that the local authorities will have a right to make adjustments? If he is not saying that, then he must agree with me that the Secretary of State will be telling local authorities what they must do.
I was interested in the case he quoted of the private tenant. We are always being told of the private tenants who are subsidising the local authority tenants. There always comes the great contradiction that apparently in these privately tenanted houses the rents are round about—well, perhaps I may ask the noble Lord what was the rent he quoted. Was it 205 6s. a week or 9s.?—I am taking it in the old coinage.
§ LORD HOY
Thirty pence, my Lords; 6s. a week. One can imagine the rates they are paying on a 6s. rent to subsidise the local authorities. What a piece of nonsense! This is why my noble friend said that when the noble Lord got that brief he should have sent it back. Truthfully, we do not blame him. He has never really taken part in local government. I do not profess that I have, but I have served for a long time in the House of Commons. As a consequence of that, he allowed himself to read these words. But even supposing these particular tenants were paying 75p a week, or even supposing they were paying £1 a week, under this Bill they will have to pay, I think I am correct in saying, 40 per cent. of the weekly rent, and that weekly rent may be £4, £5 or £6. So that even with the subsidy they will be much worse off than they are at present. If noble Lords could see what sort of property is being let to human beings at 30p a week, they would not house their animals there.
That brings me to my next point. I am always astonished that noble Lords argue about people getting subsidies that they do not require. For six years I was at the Ministry of Agriculture, Fisheries and Food. During that time we paid out considerable sums of money in subsidies, and I never heard a demand made of anybody who applied for an agricultural subsidy or a forestry subsidy or a fishing subsidy that they should first be brought up before the Committee for a personal test, and if they were found to be worthy of it they would get the subsidy. I know that there are certain differences in subsidies. In the main an agricultural subsidy is designed to keep prices down. Requests were made for subsidies for forestry and fishing but there was not a request from any noble Lord that this personal test should apply. Now, not only will local authorities have to do this but they will be ordered to raise their rents, and when this Bill becomes an Act they must keep raising them year by year until they have reached the level ordered by the Government.
206 My final observation to the noble Lord is: what has become of the great cry of the Conservative Party at the last Election, of their promise under the Charter of a "better home tomorrow"? This is what they said:We think it is wrong that the balance of power between central and local government should have been distorted but we will redress the balance and increase the independence of local authorities. Under our new style of Government we will devolve Government power so that more decisions are made locally.My Lords, whatever we might think of this Bill, whether we agree or disagree with its contents, at least there can be no dispute about where the power lies. The power will lie with the Central Government to order every local authority in Scotland to do as it is told.
§ 6.4 p.m.
§ LORD POLWARTH
My Lords, we have had a fascinating and informed debate—informed from a variety of aspects, with some speeches more informed than others. I am extremely grateful to all the noble Lords who have made kind remarks about my introduction of the Bill. I am grateful to the noble Lord, Lord Hughes, for his kind words at the beginning of his speech. I am not sure that I entirely need sympathy, in which I detected a slight note of condescension, both from him and from the noble Lord, Lord Hoy, about my being obliged to speak to this brief. I can assure both noble Lords that while I do not have the Parliamentary experience of either of them I am perfectly prepared to speak to a brief on a Bill which I believe to be eminently right and fair. Incidentally, the noble Lord, Lord Hughes, questioned my need to make written notes on some of the points he was making. I can assure him straight away that the reason is not because of any fear that I should be unable to read the notes coming to me from the Box—a fate which I understand befell him on one previous occasion when he was occupying my place on this Front Bench.
§ LORD HUGHES
My Lords, if I may intervene briefly, I must then congratulate the noble Lord: if the Government have accomplished nothing else they have apparently raised the standard of writing in the Civil Service.
§ LORD POLWARTH
My Lords, the noble Lord, Lord Hughes, of course speaks with considerable experience in a number of roles. In addition to his experience as a city councillor and a member and chairman of a New Town Corporation, he has much personal experience of the building and repair of houses. In the light of that experience it is disappointing, certainly to me, that we did not have more constructive criticism from the other side of the House. It seemed to me that the criticism was entirely destructive and a defence of the status quo rather than designed to produce any suggestions as to how the Bill might be improved. Perhaps the suggestions will be coming along at the Committee stage—I hope so.
I think the noble Lord, Lord Hughes, slightly contradicted himself. He started by welcoming some of the provisions in the Bill, though I thought his welcome for the slum clearance subsidy was somewhat grudging in the light of the improvement which I feel we almost universally believe it to be. He then went on to say that he and his colleagues dislike the whole Bill, and finally proceeded to attack a fairly narrowly selected range of aspects of the Bill. I am sorry that neither he nor the noble Lord, Lord Hoy, referred to the aspects of fairness as between the different classes of house occupier, whether they are council tenants, privately owned property tenants or owner occupiers. He also made considerable play of my use of the word "generosity" on one or two occasions in my opening speech. It is a matter of opinion as to what is generosity, and I can only assume that what the noble Lord wants are open ended commitments or unlimited sums of money from the State. I hope not, and I am glad to see that the noble Lord is shaking his head.
The noble Lord asked me a number of questions, most of which I will endeavour to answer although I may ask him to forgive me if I ask to be allowed to leave some of them for further discussion at the Committee stage.
§ LORD HUGHES
My Lords, most of them are Committee points and I was really seeking information to determine whether it would be necessary to table Amendments. I should be quite content if the majority of them came to me in 208 writing, provided there is sufficient time to enable the Amendments to be moved.
§ LORD POLWARTH
My Lords, I will do my best accordingly. The first major point of substance raised by the noble Lord, Lord Hughes, concerned what level the existing subsidies would be estimated to reach, if they were to continue, by (I think he said) the year 1975. The answer is that because of the imponderables it is fruitless to speculate on something as far ahead as that. I appreciate that this point was raised elsewhere but I do not think it is possible to give a detailed answer to the question.
§ LORD HUGHES
My Lords, the noble Lord says that it is difficult to speculate so far ahead. Is he aware that I have chosen exactly the same year as the Government have speculated for the cost of the new totally untried subsidies? If it is possible to estimate what these new subsidies are likely to cost in 1975–76 why is it so difficult to speculate on what the existing known subsidies will cost in that year?
§ LORD POLWARTH
My Lords, in the light of uncertainty about the rate of the building programme and other factors it is difficult to estimate, but we believe that the present system has outlived its day and we rest on the intention that Government help to housing over the next few years will increase.
The noble Lord, Lord Hughes, then raised the question of the rate of phasing out of the rates of existing subsidies. Here again, nobody likes to lose anything he has been getting, even when it is replaced by something else, as it will be in this case. We feel that the rate of withdrawal of £10 per house per year related to all the other factors in the equation is not unreasonable and that the balance is correct.
The noble Lord then referred to the question of rent increases of 50p per week and the ability of people to meet them. In the case of the less well-off the increases will not amount to 50p per week because of the rebate system. He also spoke at some length about the level of rebates and allowances and said that relief of poverty was a national responsibility. Of course it is, and it is met in a great many ways, including National Assistance, which takes into account all the circumstances of the case. He then 209 complained that this provision for rebates and allowances demanded an unduly high contribution from the rates. Up to now the entire cost of rent rebates under existing schemes has been met from the rates and council rents between them. Under this Bill the rates contribution will be confined to 25 per cent. of the cost, so that for the first time help is given to local authorities to meet rent rebates and the new rent allowances.
The noble Lord inquired about the position regarding increases in the cost of living and feared that the fixing of figures in the Schedule to the Bill took no account of the rising cost of living with which, unfortunately, we are still faced. When the Bill was originally published the needs allowance, for example, for a couple with two children was set at £18…50. Following the increase in supplementary benefit and other pensions and benefits announced in the last Budget, the needs allowances were increased by Amendments made to the Bill in another place. The needs allowance for such a couple is now £20…25 per week, an increase of almost 10 per cent., which is more than the noble Lord himself suggested. We believe that the needs allowance is fair in relation to the present cost of living, but we will ensure that as money values and other factors change these allowances will be kept up to date.
The noble Lord, Lord Hughes, raised a number of other points, some of them quite involved, such as the one relating to something being treated as capital. Perhaps I may communicate with him on that and similar points. He raised certain matters relating to the slum clearance provisions. Again I suggest that they are mainly Committee points, and I will communicate with him about them, too.
The provisions here relate to the subsidy being payable on the costs of compensation to owners of trade and business premises acquired in connection with slum clearance, costs which are a heavy burden on these slum clearance operations, and local authorities have in general very much welcomed the introduction of these provisions. Perhaps the noble Lord will allow me to communicate with him on this and similar detailed points, or we can return to them in Committee.
§ LORD HUGHES
My Lords, the noble Lord may agree that many of these points relate to early parts of the Bill. As the first day of the Committee stage is not far away, I shall have to start tabling Amendments to-morrow.
§ LORD POLWARTH
As the noble Lord wishes. I will do my best to deal with the other points he raised.
§ LORD HUGHES
My Lords, so long as I get the answers to which the noble Lord has referred within the next few days, that will be satisfactory.
§ LORD POLWARTH
That will certainly be the case.
The noble Lord, Lord Tanlaw, I am glad to say at least gave some welcome to the Bill and I appreciate the points he raised. He questioned how tenants could be helped to complete what will obviously be quite complicated particulars, and I assure him that I am well aware of the point he made. I doubt whether this exercise will be any more complicated than completing football pools forms, something which I cannot claim to be able to do. Already 90 per cent. of council tenants are covered by existing rebate schemes and those who have claimed under these schemes have had to complete very complicated forms. In some respects, the model scheme in the Bill requires less information about the applicant than do some of the existing local authority schemes; for example, by only taking account of the income of the tenant and his spouse and not inquiring into the incomes of non-dependants but only taking a flat rate for them. This will mean work for local authorities, but I see no reason why they should not deal with this point and make it clear to people precisely what their entitlement will be. There will be considerable central and local government publicity for the scheme and I am confident that with the help of all concerned, those entitled to an allowance or rebate will get their entitlement.
The noble Lord, Lord Tanlaw, then discussed the interesting question of the proportion of one's gross income which it was reasonable to spend on rent. I am not sure that a proportion as such is absolutely relevant in this context. We have heard already that at present the portion of income spent on rent in Scotland is 211 about 4 per cent. and we believe that some Scottish council tenants can, without hardship, afford to pay rather more than that. Many, however, cannot afford even 4 per cent., and the rebate scheme in the Bill goes as far as to give some tenants a nil rent; a complete rebating of their rent. I do not feel, therefore, that it would be helpful to try to arrive at a precise formula of the ideal percentage. It depends enormously on the circumstances of individual tenants. The cardinal point is the rebate scheme in the Bill which will ensure that people will not have rents that they cannot afford.
I am very grateful for the remarks of the noble Earl, Lord Dundee. He more or less seemed to indicate that it was only due to my fortuitous membership of a committee a great many years ago that he is occupying a place in this House. I am quite sure that if that had not happened he would still be occupying a place here on his own merits. He spoke of encouragement to owner-occupation, something which I believe, from things I have read that he has written, the noble Lord, Lord Hughes, is in favour of. Although the Bill does not deal directly with this subject, it is very encouraging to note that a record number of new houses have been built for sale in 1971 by the private sector—I think the figure is 11,600—and that the figures for the first quarter of 1972 augur very well for a very good performance again this year.
The noble Earl, Lord Dundee, and the noble Baroness, Lady Elliot, spoke of the role of the Scottish Special Housing Association, and I note the noble Earl's suggestions about its future role. I also note with pleasure what the noble Baroness said about her late husband's part in its inauguration, a most valuable part, of which she must be very proud. Questions about local government reorganisation do not, of course, arise directly on this Bill, but I can assure the noble Lord that we see a continuing role for the Scottish Special Housing Association in helping to solve the Scottish housing problem.
Moving on, the noble Lord, Lord Molson, raised one or two points and in particular asked how will the Secretary of State ensure that local authorities 212 implement the Bill. The noble Lord, Lord Hoy, spoke of the same subject though in somewhat different terms.
§ LORD POLWARTH
And spoke about the Government removing freedom from the local authorities. The question is, my Lords, freedom for what? Is it right that there should be freedom to impose what we feel is quite unjustifiable discrimination as between different classes of people? The noble Lord shakes his head and he is quite entitled to disagree, but we feel that one of the great troubles, one of the worst parts of the present scheme, is the totally different form of policy adopted by different local authorities which result in completely different treatment of people according to where they happen to live. We feel that we are leaving considerable freedom to local authorities in other directions and surely it would never be contested that it should be left to local authorities to decide levels of national assistance or other matters of this kind which affect people's means and their abilities. The basic facts should be more nearly in line.
I do not want to say much about the Secretary of State's powers. I know he feels that they are sufficient for what I believe is the unlikely event of a default by a local authority, and I would emphasise that we believe that all local authorities will take a fresh look at this Bill once it is law; that they will in general behave responsibly when this legislation is on the Statute Book and, therefore, it would be positively unhelpful to speculate at this stage on what might happen in circumstances which we hope and believe will not arise.
The noble Lord, Lord Molson, also raised the question of why the Scottish Bill provided for adopting the scheme in this Bill as opposed to the fair rent system. He more or less answered his own question. I see he is no longer with us, but he told me he was unable to stay until the end. The circumstances in Scotland are so different that it would really be quite impossible to arrive at a fair rent basis in view of the ratio of different types of housing there.
My Lords, other noble Lords contributed to the debate. The noble Earl, Lord Balfour, made a lengthy speech 213 about which, if may say so, some of the remarks of the noble Lord, Lord Hoy, are a little unkind. It was indeed a lengthy speech but it was an extremely thorough one and, if I may say so, it was very good for your Lordships.
§ LORD POLWARTH
Perhaps I thought it was implied when in fact it was not. Nevertheless, it was helpful to have something from the very great experience which the noble Earl has of local government problems and I should like to pay a tribute to the amount of time and work he is giving to his local authority in this respect and the extent to which he has made himself familiar with the detail and fine print of this Bill.
§ LORD POLWARTH
And of the English Bill. I am particularly happy that his county has such a good record in housing. I should like to think that it is due not entirely to his efforts and those of his colleagues but that it owes a little to the efforts of my grandfather, who was Convenor of that county during the years between the wars. Incidentally, he took particular interest and pride in the good housing of the people of East Lothian, not only in the material respect but also in the aesthetic respect. The county owes much to him for the appearance and, in particular, for the use of the traditional East Lothian tiles for roofing on many of the houses in East Lothian.
Lord Strathclyde gave us a forthright speech and review of the history of housing in Glasgow. He said a number of things which I felt needed saying and in a style which only he, in his inimitable way, can use. Lady Elliot again gave us the benefit of her great experience in the local authority field—and I know from my own experience what sterling work she is doing in that respect in my own county of Roxburgh. I am sorry that the noble Lord, Lord Wynne-Jones, was prevented from taking part. I should have welcomed the 214 prospect of a Welshman, at least by origin, contributing to our problems even though I know that he was for a while, very sensibly, a professor of a Scottish University.
§ LORD POLWARTH
My Lords, I hope that other noble Lords will forgive me if I do not try to answer all their points. They have made useful contributions, but many of these points we must leave to the Committee stage. In conclusion, my Lords, some points were raised by the noble Lord, Lord Hoy, to which perhaps I could return briefly, even if we leave most of them until another occasion. He quoted figures about mortgage interest. As I think the noble Lord, Earl Selkirk, pointed out, in a speech again made from great experience in this field, those figures are quite out of line with the position in Scotland where the question of mortgage interest and tax relief looms very much less large indeed. I am not sure whether I have the exact figures here. The estimated figure of mortgage interest relief for 1971–72 in Scotland is about £11 million; the total of Exchequer assistance to local authority housing, together with rate borne deficits, totalled about £95 million. So that in Scotland this is a very much less dominant feature than it is in England.
§ LORD HOY
My Lords, I do not want to mislead the House at all. At the same time one has also to say this: in the £11 million given to the mortgagor a considerable proportion of that is represented not in rent but in actual savings and against that the Corporation tenant, whatever else he gets, will have no capital investment made, even if he lives in the house for 40 years.
§ LORD POLWARTH
My Lords, the great point made about the private owner and use of mortgages is that while he may be receiving tax relief he is relieving the local authority and the State of the responsibility and other costs of housing him.
The noble Lord, Lord Hughes, also said that this Bill will not produce a single extra house. It may be difficult to say what will or will not be the direct result of the Bill. We believe it will give substantial encouragement to those 215 local authorities who still have a major housing need to meet. The residual subsidy provisions have already given encouragement over the transitional period; the housing expenditure subsidy will continue to do so. I understand that in fact the City Chamberlain of Glasgow in a much publicised memorandum last December estimated that Glasgow would receive more than £2 million by 1975–76 through this subsidy. Indeed, in that year the estimate for all subsidies was nearly £10 million, compared with £6 million in total in 1971–72. I should have thought that those figures indicated a very strong probability of more houses being built following the passage of this Bill. It may be a matter of opinion. Finally, the noble Lord raised the question of people getting a better home. All I can say is that many stand very little chance of getting a better home under the present system, and I would lay odds on their chances being a great deal better under the new one.
I do not think there is a great deal more I need say. We have covered the ground very adequately and we shall be going into it in considerable detail later on. I would only say that this is a brave, bold and comprehensive approach to Scottish housing problems. In legislative terms it is almost unparalleled. I think the Government deserve credit for having been bold enough to tackle it in a thorough way. It reflects a need felt by many people in local authorities and elsewhere, for some time: the need to free ourselves from the fixed ideas of the past half century and look forward to deal with what are the real problems in the period ahead, rather than in the past. These are our broad aims. We believe that this Bill is essential to achieving them, and, despite the criticisms which have been made of it, we believe that the House will generally share those aims. On that basis I commend the Bill to the House as the best foreseeable means of achieving them.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.