Lords Sitting of 8 May 1978

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of London.

"LAW AND ORDER": POLICE AND PRISON SERVICES
Lord GORDON-WALKER: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they propose to make representations to the BBC about the recent "Law and Order series on BBC Television, and in particular about the attacks made therein on the reputation of the Police and the Prison Service.
The MINISTER of STATE, HOME OFFICE (Lord Harris of Greenwich): My Lords, my right honourable friend the Home Secretary has publicly expressed his concern about some features of these programmes, as the Minister with responsibilities for the Police and the Prison Services. At the same time he made it clear that he did not intend to depart from the long-established principle that responsibility for the content of programmes is a matter for the broadcasting authorities.
Lord GORDON-WALKER: My Lords, while agreeing that it is very important that the Government should not attempt to restrict the freedom of the BBC, is it not a corollary of that that the Government are perfectly entitled to criticise the Corporation sharply if, as in this case, it has made a bad and grave mistake? Can my noble friend say, or if not will he find out, whether the Director General himself knew of the content of these programmes before they went out and specifically approved them?
Lord HARRIS of GREENWICH: My Lords, as regards the second part of the question raised by my noble friend I shall have to make inquiries and I shall
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draw the question to the attention of the chairman of the Governors of the BBC. As regards the first part of my noble friend's question, I think that my right honourable friend the Home Secretary has made his position clear in this matter. First, it is important that he, as Minister responsible for broadcasting policy, does not become involved, and that the Government themselves do not become involved, in detailed questions concerning the content of particular programmes broadcast by the BBC. Secondly, he has made clear his concern in this particular matter—which has to some extent been reflected by comment from the outside—that the content of some of the elements of these programmes were, to put it at its very least, unhelpful.
Lord ELTON: My Lords, is the noble Lord aware that we on this side of the House are equally concerned about this matter? Is he further aware that having seen two of the three programmes I formed the private opinion that they were both propagandist and subversive material masquerading as truth? Moreover, I sought the opinion of somebody who spent 38 years visiting prisons throughout the United Kingdom and abroad, who is not in any way an employee of the Prison Service or of any other, and, to quote his opinion: "It is a wicked distortion of the facts". Therefore, can the noble Lord assure us that steps will be taken to ensure that subversive progaganda does not shelter behind the cloak of the BBC's Charter?
Lord HARRIS of GREENWICH: My Lords, certainly I shall ensure that what the noble Lord, Lord Elton, speaking from the Opposition Front Bench, and my noble friend Lord Gordon-Walker have said is drawn to the attention of the Governors of the BBC. There have been a number of protests about these programmes, both from the Police and from representatives of the Prison Service. I think that it would be right for me to say no more than that I recognise the force of the feeling which has been expressed and I shall make quite sure that the BBC is left in no doubt on this particular matter.
Lord WIGODER: My Lords, will the noble Lord consider advising the BBC that, when they put out a series of pro-

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grammes which imply that all police officers, prison officers and lawyers are corrupt and sadistic brutes, the programmes should be preceded by a warning that they are not suitable for intelligent adults?
Lord HARRIS of GREENWICH: My Lords, again I am sure that the BBC will be interested to read these exchanges. However, I think that one must recognise the fundamental truth that the BBC has a difficult balance to strike between the need to permit free expression on issues of major public importance and the accompanying requirement that it should not undermine public confidence in the fundamental law and order services in this country. I am sure that the BBC recognises that, but certainly, as I have indicated already, I shall make known to it what noble Lords have said in all parts of the House this afternoon.
Lord ALLEN of ABBEYDALE: My Lords, is the Minister aware that some quite intelligent viewers, incredible though this may seem, have regarded these pieces of romantic imagination as being realistic? Will he tell the Governors that some people are beginning to wonder whether, when we have programmes of this kind, and then, within a few days another programme glorifying the train robbers who not only stole money but inflicted physical violence, there is a deliberate attempt to denigrate two very fine services of which this country should, in fact, be very proud?
Lord HARRIS of GREENWICH: My Lords, I know that the noble Lord, Lord Allen of Abbeydale, speaks for many people when expressing his anxieties on this particular matter. Having had responsibility for the Police Service and the Home Office for over four years, I would certainly not imagine for a moment that there was even the remotest relationship between what one saw on television and the magnificent job which the British Police Service does for all the people of this country. Indeed, the same remarks apply so far as the Prison Service is concerned. It is perfectly right that we should have free debate in this country on matters of national importance and adopt a liberal attitude on matters of this sort. Nevertheless, there is undoubtedly an accompanying
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responsibility as regards the broadcasters, and I very much hope that that will be borne in mind in future.
Lord ORR-EWING: My Lords, will the noble Lord draw the attention of the Governors of the BBC to the fact that the IBA has set up an arrangement whereby it monitors recorded programmes before they are transmitted, and therefore, if there is thought to be a slant or an imbalance in the programmes, it can take action? Perhaps we ought to do something similar as regards the BBC in view of the many examples now where criminals are glorified and the police are victimised.
Lord HARRIS of GREENWICH: My Lords, certainly I do not think that anybody would wish to minimise the importance of this issue, given the exchanges that we have had this afternoon. However, it is only fair to say that in the past there have been a number of complaints about Independent Television programmes, notwithstanding the procedures which the noble Lord indicated existed within the IBA. However, I think it would be helpful for the Governors of the BBC to have the opportunity of studying the exchanges that have taken place in your Lordships' House this afternoon, and shall ensure that that is done.
Lord BROCKWAY: My Lords, although I sympathise with the prison officers who were treated unfairly in this programme, is it not the case that conditions in our prisons are very disturbing to all who know about them? Will the Government take steps to improve them?
Lord HARRIS of GREENWICH: My Lords, with great respect, I think that that question raises rather different issues. I quite accept what my noble friend Lord Brockway has said, that conditions in prison are far from satisfactory, which is putting it at its very least. Nevertheless, the allegations made in this programme were not about prison conditions; they were made against prison officers, which is a very different thing.
Lord ELTON: My Lords, further to the supplementary question asked by the noble Lord, Lord Allen of Abbeydale, will the noble Lord bear in mind that it

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was not only the general public or teenagers, who I know were widely affected, but also the relatives of those in prison, who will be subjected to quite unnecessary unhappiness about the conditions of those inside?
Lord HARRIS of GREENWICH: My Lords, I very much take the point that the noble Lord has made.

PRIMODOS: PREGNANCY TESTING
2.45 p.m.
Baroness VICKERS: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the drug Primodos is still being used for pregnancy tests, in view of recent statements in the Press concerning the drug.
Lord WELLS-PESTELL: My Lords, I am aware of reports that some doctors have continued to prescribe Primodos for pregnancy testing in spite of advice issued by the Committee on Safety of Medicines in 1975 and again in 1977. For several years Primodos has not been recommended by the manufacturers for pregnancy testing and has carried a warning that it should not be used in pregnancy. Doctors should be well aware of the contra-indications for this purpose. This and similar products have, however, until recently been marketed for other gynaecological conditions. Whether or not to prescribe a product for a particular purpose is a matter for the professional judgment of the doctor treating the patient. I understand that the manufacturers of Primodos discontinued marketing it in February 1978.
Baroness VICKERS: My Lords, I thank the noble Lord for that very informative reply. Can he tell me whether any more of this drug is going on the market? I have been told that it is still being put on the market. Secondly, since there are so many well-known pregnancy tests it would be better to stick to them, but could the doctors warn perhaps junior doctors and others who might be using this drug, not to use it in the future?
Lord WELLS-PESTELL: My Lords, I said that the manufacturers have discontinued manufacturing it. I accept the implication in the question asked by the noble Baroness that there may still be some supplies of the drug in various chemists. I can only say that this is a matter for the doctors. The doctors were notified individually by the Committee on Safety of Medicines in 1975. They were again notified individually in 1977. One would hope that this is widely known and that they will not continue to prescribe it.

SHIPBORNE FIXED WING AIRCRAFT
2.47 p.m.
Lord MOTTISTONE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what shipborne fixed wing aircraft capability will be available to the Royal Navy between the end of 1978 and the coming into service of the Sea Harrier embarked in HMS "Hermes", forecast for some time in 1980.
Lord WINTERBOTTOM: My Lords, none. But air support for the Fleet will be provided by the Royal Air Force, which will take over the Phantoms and Buccaneers from "Ark Royal" for the purpose. Also, the Fleet deploys its own weapons systems for use against ships, submarines and aircraft.
Lord MOTTISTONE: My Lords, I thank the noble Lord for that Answer and, indeed, for his letter—which contained substantially what he has just said—which crossed with my Question in the post. I should like to ask him exactly when in 1980 it is planned that HMS "Hermes" will embark her first squadron of Sea Harriers.
Lord WINTERBOTTOM: My Lords, I am afraid that I cannot answer that question precisely. It will be during 1980 and I suppose that many factors will determine when the squadron is ready to be operational.
Lord ORR-EWING: My Lords, can the noble Lord tell us whether it is not shortage of skilled manpower which is leading to the early retirement of HMS "Ark Royal"? If that is not the case, could not her life be extended until the 1980s, and at the same time could not the refit and modification of HMS "Hermes" be speeded up so that no gap is left in the air defence of our shipping lanes and our shipping?
Lord WINTERBOTTOM: My Lords, I have no evidence that shortage of manpower is causing this particular gap, which we admit exists. It is considered that to continue to run on "Ark Royal" would not be a cost-effective way of dealing with the problem. As I said earlier, there is no evidence that lack of manpower is causing this gap.
Lord MOTTISTONE: My Lords, is there therefore something which, for some extraordinary reason, prevents the running of "Ark Royal" for an additional 18 months or so?—because it would seem most peculiar. Can the Minister not give us a little more evidence on that point?
Lord WINTERBOTTOM: My Lords, first, I hope that the House will realise that we are talking about shipborne fixed wing aircraft capability. The squadrons coming off "Ark Royal" will be able to continue this rôle from shore bases. However, we are talking about a refit of HMS "Hermes", a modification of the shipborne aircraft that are going over to the Royal Air Force and, of course, the creation of an entirely new squadron to man HMS "Hermes". It is almost impossible, with the problems that one faces in doing something new, to give a precise date for the actual closure of the gap.
The Earl of KIMBERLEY: My Lords, will the noble Lord not agree that it seems rather pointless to retire "Ark Royal" and wait for a period of up to 18 months before a new ship is ready, during which time no fixed wing aircraft will operate at sea? Why need we bother to operate fixed wing aircraft after the refit of HMS "Hermes", when we shall have continued for 18 months without them?
Lord WINTERBOTTOM: My Lords, do not let us forget that fixed wing aircraft of the Alliance operate at sea. We have no reason to believe that our allies will not support us during this period. However, the fact is that we must have a gap because of modification of aircraft, refits, retraining, and the rest. I do not think that this is a matter of profound concern in view of the number of alternative weapons that the ships themselves carry.
Lord MOTTISTONE: My Lords, when the noble Lord refers to our allies, is that in the same way as, in the defence review, the French were brought in in order to make the statistics look better? Do Her Majesty's Government consider that the French aircraft carriers may be able to provide what we cannot provide for ourselves?
Lord WINTERBOTTOM: My Lords, personally, I was thinking of the Americans, and American military power is a fact of military life.

PORT OF LONDON AUTHORITY
2.51 p.m.
Lord GEORGE-BROWN: My Lords, I beg leave to ask Her Majesty's Government a Question of which I have given Private Notice. The Question is as follows—
Several noble Lords: Order
Lord MOTTISTONE: My Lords, I have one more question to ask, if I may.
The LORD PRIVY SEAL (Lord Peart): My Lords, I think that we should proceed. I am sorry, but the noble Lord is too late.
Lord GEORGE-BROWN: My Lords, the Question is as follows:
"To ask Her Majesty's Government, in view of the serious nature of the matters affecting expenditure of public monies revealed in the chairman's report and Annual Statement of the Port of London Authority published on Friday 5th May, whether they will make an urgent statement of the Government's intentions".
Baroness STEDMAN: My Lords, I understand very well the noble Lord's concern about the situation which has been revealed by the Accounts of the Port of London Authority for 1977, and by the frank and full Report of its chairman, Mr. John Cuckney, whom my right honourable friend appointed last October.
I appreciate also the concern of the noble Lord about the implications of the situation for public funds. The chairman has reported that the reserves of the Port of London Authority are now almost exhausted, and the problem concerning public funds is the extent to which it may be necessary to call on them in the future to finance measures to maintain the viability of the Authority.
The House will be aware that the constitutional position of the Port of London Authority is a special one, defined under the Port of London Authority Act, 1968. The Statute gives the Government no executive authority over the Board. But any question of providing assistance to the Authority from public funds involves my right honourable friend in confirming the need for such assistance and determining with his colleagues the best means by which it would be provided.
Her Majesty's Government are fully aware of the industrial, social and environmental aspects of the problem. I can assure the noble Lord that my right honourable friend is in the closest touch with the chairman, and has been receiving in response to his questions the views of the Board on the courses of action which they believe should be followed. I am sure that it w ill be in accordance with the wishes of the House that I should amplify this reply to the noble Lord as soon as my right honourable friend is in a position to announce his conclusions concerning the Board's proposals.
Lord GEORGE-BROWN: My Lords, I thank the noble Baroness for being good enough to give such a full report at such inevitably short notice. I draw her attention to the fact that the chairman himself uses the word "bankrupt". He says that the Authority has nothing left; that all its cash reserves have gone in the last five years, and nothing has been done; that its cashable land bank has already been cashed, and that it has taken a £15 million borrowing. Is the noble Baroness further aware that the auditors,
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in passing the accounts, have said that they have been prepared on a going concern basis, the validity of which is dependent on the successful conclusion of the discussions to which she has just referred ? In the absence of that, I would ask the noble Baroness whether she would agree that this is a bankrupt Authority which is trading illegally. Has she any immediate proposals designed to put this concern into a position in which the chairman says in his report it is not—namely, to have cash with which to pay the wages and other bills being presented?
Baroness STEDMAN: My Lords, my information is that the Authority has drawn very heavily on its reserves, but that it is not, as we would term it at the moment, exactly bankrupt. The Price Waterhouse report in July 1976 made it clear then that the financial viability of the PLA was critically dependent on achieving a substantial reduction in its surplus staff and dock workers, which the PLA undertook to do. It said then that if this was done quickly the PLA could be in a sound and competitive financial position by about 1980, but it pointed out in 1976 that the financial results were particularly sensitive to manpower costs, and also to a number of other factors. Since the chairman has published his report, my Secretary of State has asked a set of specific questions. We are still awaiting the answers in detail to all those questions. When we have them, as I advised in my original Answer, I shall be happy to amplify the Statement in the light of the information we then have. At the moment, our information is not complete enough to permit this.
Lord MOWBRAY and STOURTON: My Lords, the noble Baroness has been very good in giving such full information to the noble Lord, Lord George-Brown. Nevertheless, when a concern in 1974 had a £54 million reserve and in this year it is down to £2 million, and the loss is continuing—last year the loss was £8 million—it is not exactly a flourishing concern. I am sure that the noble Baroness will accept—I think I am right—that in 1976 the PLA Board only kept the two upper docks in being on the understanding that there would be increased trade coming to these two upper docks because of better working practices. As neither of these two factors has materialised, will the

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Government—and I hope they will—allow Mr. Cuckney to do what he wants and close down the two upper docks? It seems to me that this is the crux of the matter.
Baroness STEDMAN: My Lords, it is slightly premature at this time for me to say what will be the Government's attitude when we have had all the replies from Mr. Cuckney and his colleagues. What we know is that Tilbury and Riverside are producing a profit, they are viable, and there is an element of considerable profitability which we think can be increased over the years. As the noble Lord has said, the problem is with the upper docks. As a result of recent conversations with my Secretary of State, the chairman of the PLA has said that he will make available to Members, on request, by the end of this week separate accounts for the upper dock with all his supporting information. They will be available for Members who want them, but at the moment I am not able to comment in more detail.
Lord BYERS: My Lords, may I ask the noble Baroness whether she would agree with the chairman of the PLA when he said that there has been a failure, despite everything that the Board has done, to understand and respond to the objective of making the PLA efficient, productive and viable? In these circumstances, with all that has gone on in the past few months, which is clear in the report, who is going to take the initiative now to try to get all the parties together to appreciate the danger of this situation?
Baroness STEDMAN: My Lords, as I said, my Secretary of State has asked a series of specific questions of the PLA chairman and his Board. When the answers to those questions are available, which we expect within a few days, it will be a matter for discussion with my Secretary of State and his colleagues as to what action and what intervention should come from the Government. But, until we have the information, we are not able to act.
Lord BYERS: My Lords, arising from that point, may I say that it is not really a matter of questions to the Board. The question really is who is going to get all the parties—the employers, the union
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representatives, everyone—together to solve this problem?
Baroness STEDMAN: My Lords, after we have had the discussions, and after discussions with the other Ministers concerned and after there has been a collective decision on what shall be the action, then there will be negotiations. But my Secretary of State has no executive power over the PLA. Those powers are confined to the appointment of the chairman and of the Board members. He cannot give them any directions. He can only dismiss them if they do not attend meetings, if they go bankrupt, or if there is illness or other unfitness for their jobs.
Apart from this, we have only a few minor functions under the Port of London Authority Act, such as approving land acquisition, borrowing limits, temporary borrowing, appointing auditors, and matters like that. We have asked for this information. We want to see the Port of London a viable concern, and I am sure that everybody in this House wants that. When we have this information we can act on it, and act on it quickly. We can amplify the Statement to this House, and we can set in train such negotiations as are necessary with all the interested bodies.
Lord GEORGE-BROWN: My Lords, as the £2 million which was said to be left at the end of 1977 must have gone by now, on the basis of the loss which the chairman forecast, and as there are no other monies available to them, apart from their income, at the moment, may I ask the noble Baroness to say—if she cannot answer today perhaps she will let me know shortly—how they are to receive funds to continue until the Minister has a longer-term and fuller Statement to put before us?
Baroness STEDMAN: My Lords, I should have to take advice on that and write to the noble Lord. My information is that there are no difficulties about meeting their commitments at the present time.
Lord PAGET of NORTHAMPTON: My Lords, by way of supplementary to the question asked by the noble Lord, Lord George-Brown, in regard to waiting, speaking from memory is it not an offence for a director to continue to

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trade beyond the point at which he can be satisfied that the obligations he undertakes can be fulfilled as and when they become due? On the basis of the chairman's own report, has that not already happened and, in the circumstances, is it not very difficult to wait?
Baroness STEDMAN: My Lords, I should not like to answer the legal implications of my noble friend's comments on that; I shall take advice about it. As I said, I understand there are no problems about them paying their way or indeed of repaying the interest on the loans they have at this time.
Lord BOSTON of FAVERSHAM: My Lords, would my noble friend agree that the threat to the upper docks is disturbing and that those docks are a very valuable asset indeed to London, providing, as they do, access for cargoes to virtually the very centre of the metropolis? Would he agree that, before any question of their closure were contemplated, let alone seriously considered, there should be the fullest, most thorough and far-reaching inquiry, preferably in public, into all the aspects, not only those to which my noble friend referred in her original Answer but also the question of the effect that such a closure would have on such means of communication as the already overcrowded roads and indeed the railways in the London and South-Eastern area?
Baroness STEDMAN: We accept that the upper docks have a part to play, my Lords, but the fact remains that at present the upper docks are not a viable part of the Port of London Authority's enterprise. As I said, the chairman of the PLA is ready to make available on request by the end of this week the separate accounts of the upper docks with all the supporting information, so that Members of this House and of the other place will be able to have all the information for themselves and then help us to make up our minds in the light of that.
Lord MORRIS: My Lords, would the Minister agree that, other than with banking companies, it is not yet illegal in this country for companies, and unfortunately for individuals as well, to trade while insolvent?
Baroness STEDMAN: That is my understanding, my Lords, but I am not a lawyer and I would rather take advice on the matter.

HOUSING: FUTURE POLICY
3.4 p.m.
Lord MIDDLETON Lord MIDDLETON rose to call attention to future housing policy with particular reference to the Consultative Document Housing Policy (Cmnd. 6851); and to move for Papers. The noble Lord said: My Lords, the housing problems which lie within my experience are those of that region which contains the great conurbations of West and South Yorkshire and the Humber ports, so if I speak from a somewhat parochial standpoint I must ask your Lordships to forgive me. I believe however that all the housing problems that occur nationally are present to a greater or lesser degree in my region and that the solution to those problems would apply both regionally and nationally.
The names of the Yorkshire towns—Leeds, Sheffield, Rotherham, Bradford, Halifax, Huddersfield—conjure up a picture of the great basic industries in their 19th century heyday: steelworks, coalmines, heavy engineering works and textile mills. They also conjure up a picture of rows of grimy 19th century houses, mean streets and one great urban mass merging into another over an area the size of a county.
In the reality of the 1970s the basic industries are still there, though all have had to reorganise to cope with modern competition and reduce demand. New industries are there, but the overriding priority is to encourage new industrial investment and it goes without saying that a sound housing policy must be part and parcel of a strategy for industry. In the industrial North the worst houses are disappearing, many old houses are being improved, new building is taking place and some city centres are being transformed, but the progress is far too slow.
The trouble with so many housing statistics is that they are based on the 1971 Census, but I have to say that the 1971 figures still apply substantially today in my region; the legacy of the Industrial

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Revolution remains and there is a high proportion of old bad houses in unattractive surroundings. Nearly 19 per cent. were built before 1890 and about 36 per cent. before 1914. In 1971 18 per cent. of the families of the region, about 290,000 households, were living in houses which were still without bath or hot water or an inside WC. Broadly speaking, the pre-1870 houses have now gone, some of the pre-1914 stock has been improved, but the biggest problem lies in the 600,000 or so old houses that will be unacceptable for people to live in in the next 10 or 15 years.
The Yorkshire and Humberside Economic Planning Board's most recent figures are far from encouraging. Compared with 1976, last year's house completions were 9 per cent. lower and, more significantly, house starts were 17 per cent. lower. The numbers of house improvement grants were 14 per cent. lower and nearly 20 per cent. fewer dwellings were cleared—all this despite what are described in Chapter 1 of the Consultative Document Housing Policy as:
"new directions in housing policy that the Government have pursued since they took office in March 1974".
What, then, can be done to achieve a better rate of progress and what priorities should be identified? Let us make no mistake about it, until the blighted areas of the old Industrial Revolution are made more habitable there will not be any investment in industry, which is essential for our economic recovery, because the skilled young, be they executives or craftsmen, will leave and none will migrate in to take their place.
What do the young look for? One thing is quite apparent; they do not wish to go into council houses. A recent survey made that quite clear and it is referred to in the technical volume, Part II, of the Green Paper. Local authority houses are seen as necessary to cater for the elderly, those displaced by slum clearance and the homeless. The young want above all to buy their own houses. They would, I believe, go into rented accommodation, at any rate temporarily, if they could find it, but new tenancies of privately-owned accommodation are virtually unobtainable, and where local authority housing is the only alternative, they are frustrated by rigid systems of allocation.
First, and in regard to the provision of houses for buying, it goes without saying that a stable supply of mortgage funds is required to help the spread of house ownership; secondly, more should be done to encourage the provision of homes for renting in the private sector; thirdly, there should be greater incentives for an adequate supply of suitable land to come forward for development; and fourthly, the present system of allocating funds for improving older properties should be reviewed. That is a very obvious list of fundamental requirements and the Consultative Document devotes much of its space to them. It must also be acknowledged that many useful recommendations are made with which it would be difficult to disagree. The question is what the Government intend to do about implementing those recommendations and how far they are capable of taking the necessary action.
If we may take the requirements in turn, I should say that there is great scope for improvements in the field of house buying. In 1974–75 this Government encouraged local authorities to spend more money to stimulate house purchase, but then, in view of the very rapid increase in housing expenditure generally, the Government had to cut down; and in successive years since 1975 the amounts available to local authorities to lend to private individuals have been reduced by the Government. It is true that building societies have had more money than in the depressed 1974 period, but there were other demands upon the public purse which the Government regarded as having greater priority. To their credit, in the past two or three years the Government have encouraged local authorities to pass on to building societies applicants who fall into categories which the local authorities would have rejected.
I am pleased to see in Chapter 7 of the Green Paper that the Government intend to maintain the current arrangements for mortgage tax relief. Other recommendations are for low-start mortgages, higher percentage mortgages, encouragement and co-operation between building societies and local authorities, and special Government assistance for first-time purchasers. None of these suggestions is original, but all are designed to make it easier for home buyers.
So far as first-time purchasers are concerned, the Government have introduced the Home Purchase Assistance Bill. This is certainly a step in the right direction, though the scheme provided for in the Bill is very complex, and the benefits to potential home buyers are limited. Perhaps the recommendation which would be most effective in my own region would be the encouragement of lending on older properties, including both unmodernised properties and conversions. It would be helpful, in addition, if local authorities that wished to devote more resources to lending for house purchase were given greater flexibility in switching capital expenditure between the spending blocks under the Government's current housing capital expenditure scheme.
I turn now to rented accommodation. In regard to public sector rented houses, I think that local authorities generally should follow the practice already adopted in some areas of opening their waiting lists to people living outside their areas. One must welcome, therefore, the Green Paper proposal that local authorities should reconsider their allocation policies to cater for couples without children, single working people, and mobile households. The document goes so far as to say that the Government will consider legislation to prohibit residential or other qualification for entry to a local authority waiting list.
Next, I take the private rented sector. More should be done to sustain the acknowledged contribution which the private sector is still able to make towards housing, especially for the young and mobile. In February last year we debated in this House the Government's consultation paper on the review of the Rent Acts. It is, therefore, of great interest to those of us who took part to note the contents of Chapter 8 of the Green Paper entitled Private Rented Housing. This contains an admission that the private rented sector cannot be allowed to decline altogether, and even a suggestion that the decline should not be allowed to continue unabated. Not only that—it asks what can be done,
"to stimulate the supply of lettings".
The beneficiaries are identified as, among others, newly married couples, young single people, and people who move to a
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new job. "Rent Act legislation", says the Green Paper, "is voluminous and complicated". That must be the understatement of 1977. We are told that we must wait for the Government's review of the Rent Acts. I hope that the noble Baroness, when she replies, may be able to tell us what progress is being made in that field.
No one wishes to see tenants open to exploitation by unscrupulous landlords, but the result of successive housing and rent Acts, and of the see-saw effect of the reversal by one Government of another's legislation, has undoubtedly persuaded many owners of property not to let. Inflexible rent control has undoubtedly contributed to the decrepit state of so many houses in the private sector. Some alleviating measures are suggested in the Green Paper: grants for repair work; improvement grants for tenants; the speeding-up of procedures by which a resident landlord can regain possession; and special provision for excluding tenants of flats above shops from full Rent Act security. These measures would be useful, so far as they go. However, I venture to suggest that this is about as far as this Government would, or could, go. Much more would have to be done.
It will be very difficult to unwind legislation so complicated as that surrounding the tenure of private housing. But it must be done; and mere consolidation of the law will not do. The resulting legislation will have to be fair to private sector tenants, or it will be subject again to the political see-saw effect; but it must also be fair to the owners, if letting is to continue at all. Any "fair rents" system must result in rent assessments that are fair to all parties. Phasing of fair rents should be abolished. The conversion of controlled rents should be completed.
It is worth considering whether the special cases now in Schedule 15 to the Rent Act 1977 could be extended to include "short-hold" tenancies. These special cases are of limited value because houses can be recovered only in certain very limited circumstances. The short-hold tenancy would be a fixed term letting once, to one tenant. There is already an area in which a form of terminable letting is being encouraged by the Government. In the DOE Circular 76/77 Better Use of Vacant and Under-occupied Housing, the

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Government have said that they would like to see the practice of owners letting to local authorities, under what is known as the "North Wilts Scheme", extended as fully as possible. Unless there is a freer market in private lettings, the prospects of obtaining rented accommodation for those for whom I am suggesting we should cater will be very limited. I fear, however, that it is in this area that this Government are constrained for historical reasons, and therefore least able to act vigorously.
In regard to land for building, I shall be very brief, since this matter was debated by your Lordships only last Friday. I would say merely that in my region it is difficult to form a coherent picture. Some authorities, such as Sheffield, themselves entered into the land market long ago. In some cities, such as Leeds and Bradford, virtually all the suitable land is now built over. One feature throughout the region is that the volume of land buying under the Community Land Act is small. It is true that the Act did not affect land already in the hands of builders—so it may be a little early to judge—but the indications are that local authorities are not in a hurry to buy under the Act, and even if they were, it is doubtful whether they would find many willing sellers.
The Green Paper has surprisingly little to say on the subject of land. The statement in Chapter 7 that,
"Authorities will come to play an increasingly important rôle as suppliers of land to the building industry as the community land scheme develops,"
I should say was unrealistic.
Lastly, my Lords, I want to refer to improvements to older properties. Successive Governments have not found it easy to decide how much to allocate from public funds for this purpose. My own Party, in Government, introduced increased rates of grant for improvements up to 75 per cent. in assisted areas, with a time limit. Much improvement work was done, but by 1974 they felt that the time had come to draw a halt. The 1974 Housing Act provided that expenditure should be concentrated in the areas of greatest need, and it designated general improvement areas and housing action areas for preferential rates of grant. I think that it must be said that the manner in which the Government have imple-
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mented Section 105 has had the effect of strict limits being imposed on money to be spent on improving houses in the public sector.
There is certainly scope for money to be spent on older property. In my region there are thousands of old houses that will not be pulled down in the next 15 or 20 years, and which owners are unwilling to improve. I think it is fair to say that, if the recommendations in Chapter 10 of the Green Paper were to be implemented, the situation might be greatly improved, and my region would benefit more than most.
To sum up, then, if public funds were unlimited, if the political will existed to take hold of some of the Rent Act legislation that has not stood the test of time and produce something better, and if the greater part of the Green Paper recommendations were implemented, then I have no doubt whatever that our people would be better housed. But public expenditure has to be controlled, and this means looking for priorities. This is just what the Green Paper does not do. It merely gives a number of options, many of them very desirable, but only a limited number of which could be implemented by any Government given the present state of our economy.
After repairing our neglected defences, it must be the first priority of a new Government to stimulate investment in industry. A national housing policy must be geared to this prime objective. I believe that the first priority for housing policy, certainly in my own region—and I am sure that this applies throughout the United Kingdom—is to cater for the young and to increase the mobility of our workforce. We must provide housing at a price within their means for those who will man the industries which are essential to our economic growth, and the service industries that go with them. In order to do this, we must concentrate scarce resources towards providing the kind of housing which will be required for this purpose. We must encourage the provision of loans for home buyers, and I have referred in detail to the various ways in which this could be done, many of them fully examined in the Green Paper.
Such a policy, together with a less doctrinaire land policy, must be used to

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stimulate the building of new houses to be bought by individuals. The private rented sector still houses nearly 3 million households; and, as the Government themselves say in their Green Paper, this sector must be rescued before the sector's housing stock falls into total disrepair and ruin. To this end, it must be a priority of government to look at legislation—and not just to look, but to act. Finally, more houses must be made available, both for buying on mortgage and for renting, from the existing large stock of old but sound houses which could, with more encouragement, be improved.
I have concentrated on certain aspects of housing policy to the exclusion of others. I have spoken from a North of England regional standpoint, and, perhaps, in identifying priorities I have over-emphasised the needs of those who are required to man our industries. But if we get our priorities wrong in housing, then we cannot help any Government to do that which I am sure noble Lords on all sides of the House will agree is essential—to give a boost to investment in industry. Of course the social objectives of a housing policy are important in a civilised country, but those objectives cannot be achieved as quickly as we would all wish unless we pursue policies that will ensure the establishment of a sound economic base. My Lords, I beg to move for Papers.
3.24 p.m.
Lord NORTHFIELD: My Lords, I am grateful to the noble Lord and to the Opposition for choosing to debate this subject, which I have had on the Order Paper for some time; and I apologise that I may have to leave on the business of the House before my noble friend replies. Perhaps I might begin on a personal note by explaining some of my own passion for housing. First, not so many years ago I spent some ten years as chairman of a very small company, actually designing houses myself, drawing up the specifications, supervising the subcontractors and personally decorating the houses and laying out the gardens myself because, as a very small company, we could not afford to pay anybody to do it. So all the work of house-building means very much to me personally as a way of earning my living. Second, as chairman of a new town
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corporation, where we are building between 1,000 and 2,000 houses a year, I personally supervise at the early stages all the private and public housing designs and layouts that come before the Board. All the plans come into my office, they are argued by me with my architects, and in a complete process of dialogue we hammer out a final solution for some of the pioneering work which I think we are doing in house types and layouts in my new town.
Against that background I must confess to being fired by the mistakes in some of our housing in the post-war years. Of course we have achieved miracles in providing so many houses of a decent kind for so many people who would otherwise have been without them. But it is true to say, nevertheless, that a lot of our private and our public housing is soulless. It is in drab terraces and blocks on one-class estates. They are unrelieved basic standard designs with utilitarian appearance and internal problems. Sir Hugh Wilson, writing about the private sector in an official report two years ago, talked about the private sector in these scathing terms:
"… houses set in an environment of the most depressing mediocrity".
We are short, my Lords, not on numbers now but on environmental quality. One of our best architects Mr. Eric Lyons, whom I am proud to have as a private housing adviser in my new town, has said that architecture is about a sense of place. How very much I agree with him! People are seeking a sense of place; they are seeking a sense of identity in the houses that they live in. If I may give one example in my new town, we have recently restored a little village in the middle of the town and brought it back to its splendour in old style. People were falling over themselves to buy those houses, and we could have sold many more than we had.
With that background, may I approach the Green Paper. It is a good Green Paper; let us not doubt that. It opens up new ideas; it has a good deal of good sense on page after page. But the starting point I want to pick is on page 4. It says there that there is no longer an absolute shortage of houses in our community. This is an important point of history to have reached. We have cracked the nut of quantity. We no longer need to be in such a rush to build everywhere only

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the most basic house at the most rapid rate. We can relax a little, not in effort but in the sense of standards. We can be more flexible in our approach to housing. I think we can now, with this total behind us—and this is my passion—begin to look at the kind of house that people will want to live in at the end of the century, and not just today—because those houses will be there, and people will still be living in them at that time.
My first criticism, then, of the Green Paper is that it should have considered public sector standards and layouts as well as policy. Housing, in its quality and its standards, must live up to society's needs and aspirations. Here, the background is pretty clear. In 1919 we had the Tudor Walters Committee talking about room for the piano and a separate bathroom from the kitchen. That is how we set standards in those days. Then, in 1944 we had the Dudley Committee; and in 1961 we had, of course, the Parker-Morris Committee talking about room for the T.V., a modern kitchen, space needs and some form of heating. But we are now another 17 years on—exactly the gap between Dudley and Parker-Morris. It is time for a new review of housing standards in our community, especially if, as I say, we are looking at needs at the end of the century.
What sort of thing do we now need to add in? For a start, of course, full central heating, and probably double-glazing. We need to add in kitchens that now take a deep-freeze, because I find them stuck under the stairs and poking out from all sorts of places in houses we are still building. We need a ground-floor room for youngsters to do their homework, in addition to a living room and a living kitchen. We need to encourage people to live in the garden. What do middle-class people put in their houses almost as soon as they can? They put in a double-glazed, sliding, aluminium door that leads into the garden, which brings the garden into the house and encourages people to live part in and part out whenever we have some decent weather. We want changes of level inside a house, so that there is internal ingenuity and attraction. We want identity in these houses. Above all, we want to get back to garages with workshops at the back of them; room for
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people to potter and to create in their spare time.
Look what we are faced with against that requirement. We are faced with the 1967 system of the yardstick when all this was frozen at the minimum standards of Parker-Morris. Parker-Morris minima in 1967 became maxima and we have never been able to get away from them. We now have 10 years of houses built to this standard which is much too low for the remainder of the century. As a result architects have been frustrated and stultified. Above all, of course, the Government banned garages so we now have homes without garages. I had one ridiculous situation in which we designed a beautiful split level house in my new town and we took advantage of the split level of the house to put a car port underneath—if I may explain myself, in the part where the level was split. But I found that was vetoed on the ground that I was getting round the idea of not having garages. That sort of thing is quite ridiculous and the sooner we are interfered with less on matters like that, the better, so that we can get ahead with new ideas and a new flexibility.
This is hinted at in Recommendations 24 and 27 of the Green Paper. But, if I may say so, they are very flimsy recommendtions—discussions, ideas, inquiries—but I want some action on this. Please let us have more flexibility about the standards. Let us have garages back as soon as possible. Let us build above the yardstick; give us a subsidy, if you like, up to the yardstick level and let us change economic rents above that if we spend more than the yardstick. Above all, give us the freedom to begin planning the house for the end of the century.
Secondly, when we come to layout I am concerned about the poor environmental quality, the kind of mediocrity that Hugh Wilson talked about, which appears not only in public housing but also most noticeably in private sector housing at the lower end of the price range. Let us have lakes, trees and village greens. In my new towns I have managed to take architects to a whole rethink about housing layout. We are stopping all the one-class estates; we are building villages. Villages have a heart and a green and a lake in the middle of it; they have ingenuity, and accidental things that happen

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inside a village in terms of layout; they have some high density merging quickly into low density—all as the original English village grew. We are even planning workshops and small factories in the middle of the estate so that women and other people can have part-time jobs. There is a sense of life and community in the place where the people live.
There is the need to create community now, which I think of as one of the basic things that we must work for in approaching layouts. There is nothing about this either in the Green Paper, and I say to my noble friend that we must now press local authorities to give greater design leadership to get this sort of layout—villages, communities that people will want to live in; the kind of identity they sought in purchasing the houses which I mentioned earlier in the small "old" village we have created at Priorslee in the middle of my new town. That is what people want and have every right to ask for. Architects love doing it if you will give them the chance and give them leadership.
Lastly, so far as flats are concerned, what has recently been so terrible is the retreat from high-rise flats to all two-storey houses. We are swinging violently now from one extreme to the other. This is quite mistaken. Communities need flats but not high-rise flats, not 14 storeys, not 16 storeys but certainly three or four storeys properly planned with nice carpeted entrances that people will keep up, and perhaps a garden properly laid out round the flats so that people will have pride in living in them; not these apologies for flats which we design to look like houses but which have concrete staircases that become slums in five minutes. We must get away from the wild swing away from flats to two-storey houses and bring back some proper design.
In looking to the end of the century I come to other matters, some mentioned and some not mentioned in the Green Paper. I continue with my theme of a search for flexibility in housing policy. I agree to some extent with what the noble Lord said about the need for allowing the private sector to have a proper place in housing provision. In Germany since the war the private sector has built nearly
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9 million houses for renting. There should now be a place for that in the remainder of this century in this country. With rent restriction legislation it will be difficult to arrange, but I see no reason why there should not be a proper place for the private sector to flourish in the rental sector.
Secondly, in my final remarks, I welcome the proposals in the Green Paper about housing investment programmes. This is the idea of a four-year assessment made by local authorities to measure the needs of the community against the programme in both the private and the public sector. But may I say again to my noble friend that I hope there will be flexibility in this system of HIP (housing investment programme). We want the chance of virement, of switching the money between the headings so that we can use the money available from the Government for the purposes that come out best in the locality when the needs are assessed. Let us consider all our needs in the round and in every area; and will the Department of the Environment then please stop vetting every single project, so that we can get ahead in the freedom that that brings.
I welcome the concentration in the Green Paper in the excellent paragraphs about the elderly. Here I urge a note of warning. I think the danger in some localities is that although the district councils, for example, are doing sheltered housing there is no real co-ordination with the county council and the National Health Service about the people who need these houses. The county is providing special homes, and home helps, the NHS is providing hospitals and a visiting service; but we need adequate machinery so that what one arm of this activity knows is communicated to the other arm in the district council, so that the right kind of houses for elderly people are provided in the right kind of quality and in the right place. Very often local co-ordination does not exist and has to be brought into existence.
Again, if I may say so, a warm welcome for the measures concerning the young—starter homes, the help for first-time purchasers and the £500 interest-free loan proposed. This is a very good thing and I hope, as an article in The Times said about this Green Paper, that this is not going to start as a Dutch auction between the

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Parties as to who offers the most to get young people off, for we might get into a wholly inflationary situation, although I think the Government have fixed the figure about right. I welcome the housing associations who are doing such a good job—more flexibility and a pluralistic approach to the tenure—and I welcome co-operative and shared equity schemes where one buys half the house and rents the other half. I warn my noble friend that shared equity is not going to be the winner that it was first thought to be, for two reasons: First, now that mortgage rates are so low there is not much advantage in renting half the house; one might as well buy the lot while mortgage rates are low. Secondly, many building societies, unluckily for us, are not very good at offering mortgages on the half that is being purchased.
I come now to management. I think here that the tenants' charter proposed in the Green Paper is a very good idea. It is high time that we got away from pernickety interference with council house tenants. How good it is to see the idea of the participation of tenants in management committees! This is a very good idea, and I hope it will get going well. I again warn that I think the local authorities need some more welfare advisers attached to their housing staffs. We find in our new town that they have to take on a great load of the work formerly done by the parson, the schoolmaster, and so on. They all lean on the rent man. We have to provide housing welfare advisers instead.
Finally, I mention one gap in the Green Paper. There is no mention about freehold flats. This was a gap in the 1967 leasehold enfranchisement. There are freehold flats in Scotland. Why are we not moving towards this in England? It is time we cracked this nut. It puts off owners and building societies outside London in advancing mortgages. It is time that we found some way of solving that problem.
I add a final word about the tyranny of highway engineers mentioned in the Green Paper. They insist, as I saw one note saying, on aircraft runways through every housing estate, with the 18-foot carriageways and six-foot footpaths on each side. The Department of the Environment in this Green Paper are saying, rightly, that these highway
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engineers ought to be stopped from dictating so much about these matters. I ask my noble friend: what are you going to do about it? That paragraph in the Green Paper is all very well, but are you going to use a stick against them? My experience is that you cannot beat them. If the highway engineer insists, you do not win. You do not get the road adopted, you will not get your road adopted or he will not propose it for adoption; the fight goes on and on and, in the end, in sheer despair you give in. So he has one other victory, another aircraft runway through the middle of a small housing estate.
I end in this way. I have a passion for this subject for I have spent most of my life in it. We are doing new experiments in my new town. I think people are going to be pleased with the new ideas we are bringing—different houses, different environments, with villages in village settings, with water, trees, village greens and some exciting architecture in the case of individual houses. This is looking forward to the end of the century. The Green Paper only begins to do that in one or two paragraphs. I ask my noble friend to give us a lead on this and to say that some of this relaxation can take place so that the local authorities and the new towns can be set on this new path of flexibility: flexibility in type, flexibility in tenure, flexibility in size—let us have another Parker-Morris Committee as soon as we can—flexibility in layout, in quality. And let us have new speed and progress in management and the democracy inside management of our public sector housing.
Above all, let us have freshness, ingenuity, adventure in architecture. We are in danger now, great though our achievements are with so many people in basic houses, of drabness, uniformity, blocks, streets, in the public sector. Let us bring back adventure, romance, and even a bit of majesty into some of our domestic architecture. Now we have the end of the century in focus, it is not too early to make a start in that direction.
3.44 p.m.
Baroness YOUNG: My Lords, I am sure that the House will be grateful to the noble Lord, Lord Middleton, for introducing this important debate this afternoon. He speaks with authority and his

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particular knowledge of housing in the North-East is valuable. He has made a most important central theme of the contribution that housing policies make to the regeneration and expansion of industry. I am also grateful to the noble Lord, Lord Northfield, who had put down on the Order Paper a Motion for debate on the Housing Green Paper and who has given up this space to the noble Lord, Lord Middleton.
It would be difficult, if not impossible, to debate housing seriously without any reference to the Green Paper which was published I1 months ago but which had not yet been debated in this House. This debate today presents us with the opportunity of doing so. Even so, one debate hardly seems long enough to cover the very many issues in the Housing Green Paper itself: housing finance, home ownership, the whole of council housing and public provision of housing, and the private rented sector, as well as the problems which go with housing, of homelessness and the various housing needs of special groups. Each of these could be the subject of a debate on its own.
All of this is picked up by some invaluable tables of statistics as well as some very interesting international comparisons of housing and 74 recommendations summarised at the end of the report. Even so, the noble Lord, Lord Northfield, managed to draw attention to something that has been left out. Although I agree with him, above all in relation to flexibility and differences in housing, I think that many of the things which he suggests should be put in by individual owners of houses. I hope very much that he will make some mention and some use in his powerful position in Telford New Town of the whole problem of insulation of houses which must tie up with national energy policies.
That said, the first question I think I should ask in relation to the Housing Green Paper is, What is to happen next? This is not simply an academic question, for the Green Paper seems to make a shift in emphasis in Government thinking on housing. It is, therefore, very important to find out whether this is a true shift in emphasis or whether it is not; whether the shift in emphasis will be followed by
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action of any kind; or (dare I say it?) whether, as the Green Paper appears to have been introduced just before a General Election, it really does not represent a shift of view at all. Perhaps I can illustrate this by touching on six aspects of the Green Paper which seem to mark the shift—
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk): My Lords, are we talking about the same thing; or is the noble Baroness now talking about a different Green Paper? The one to which I though she referred and the one with which I am acquainted was published 11 months ago. That seems to me a long time before any Election.
Baroness YOUNG: My Lords, I am talking about the same one as the noble Baroness; but I put it rather in the class of some of the remarks made by the right honourable Lady, the Secretary of State for Education when she talks about raising standards of literacy and numeracy but nothing actually happens. I think that it would be interesting to know whether this really means a change of policy or whether it is put there for us to think about though nothing will happen. This is a serious question and one which I am asking the noble Baroness.
I have read the Green Paper carefully and it appears to me that there are six aspects of policy where there appears to be a shift in Government thinking. It would be difficult to quarrel seriously with the housing objectives in the Green Paper which are set out on page 7. In particular, subsection (7), in effect, offers people the right of choice of housing. It entirely leaves the question of the sale of council houses out of the list of objectives. But, turning to pages 106 and 107 and reading paragraphs 11.34 to 11.40, the Government do not rule this out. It is not my intention today to argue this point at all. I simply want to say that I believe that even on this issue there has been some shift in Government thinking.
I turn next to home ownership. Very shortly, the House will be debating the Government's home purchase assistance Bill, which is designed to help first-time home buyers. The Bill does not go as far as we on this side of the House would

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like, but it represents a real attempt to help one group of people who are most worried about housing; that is, young married couples trying to buy their first house. To that extent, the Bill is much to be welcomed. Nor have the Government altered in any way the £25,000 cash limit for tax relief on mortgages. This, too, is to the good. What I think is essential to note is that the benefits of these measures and others listed by my noble friend Lord Middleton could be swallowed up in rising house prices if there is any sign of the land famine which could arise from the effects of the Community Land Act and the development land tax.
The third issue on which I believe the Government have shifted their view is the very vexed question of council house rents. Those of us who worked on the Housing Finance Act 1972 and its repeal cannot fail to be interested in recommendation No. 34. In this, the Government arc saying, in effect, that the proposed subsidy system will enable the balance to be struck between central and local contributions to housing costs and that they consider that, over a run of years, rents should be broadly in line with changes in money income. This at least suggests that council house rents will rise regularly as money incomes rise. It is therefore a very different proposition from the long debates we had in which council housing was considered as a social service. It perhaps represents recognition of the fact that most people would prefer to have the money in their pockets by way of lower taxes than to have the rather doubtful advantage of what has come to be called, "a social wage" by way of lower rent. To this extent, it is again much to be welcomed.
I was particularly interested in what is said about the private rented sector. We on this side of the House have introduced at least two short debates on the 1974 Rent Act and, with my noble friend, Lord Strathcona, one concerning the North Wiltshire housing scheme. I was therefore very grateful for what the noble Lord, Lord Northfield, said about the importance of this sector. If we look at paragraph 8.11, it is perfectly clear that the Government are considering the private sector in a very different light. Paragraph 8.11 says this:
"If the decline continued unabated"—
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that is, in the private rented sector—
… and no action were taken to compensate for the loss of accommodation from the sector, many people—particularly new or mobile households—might not be able to find the housing they need. It might be argued—though the evidence is tenuous—that this is already beginning to happen in a number of areas. To guard against this, we need to consider what action can be taken to stimulate the supply of lettings within the private sector, and what can be done to provide accommodation in the public sector."
That seems to me a valuable remark and it is followed up by at least three suggestions for improving the supply of private lettings. The first is the speeding up of procedures whereby a resident landlord can regain possession of his own property. Unfortunately it does not go so far as to take the resident landlord right out of the Rent Acts, but it certainly recognises that there is a problem for the resident landlord. There is the possibility of taking flats over shops right out of the Rent Acts, and there is also the suggestion of a new letting agency.
It is, however, noticeable that there is no mention at all of what has come to be called the North Wiltshire scheme, whereby the owner of a private house lets it to the local authority, who in turn lets it to a tenant on the waiting list, and the return of the house to the owner can be guaranteed because, of course, council house tenants do not have security of tenure. The North Wiltshire scheme has been very successful. I wish it could be extended still further, because in paragraph 11.07 the Government propose to give council house tenants—the only tenants who at present do not have security of tenure—this right. If that were to happen, I find it very difficult to believe that the North Wiltshire scheme could continue to exist; so really what would be happening in one part of the private letting market could be taken away if these schemes comes to a halt.
It is disappointing, too, that there is no recommendation about fixed-term letting or indeed about the concept of short hold. My noble friend Lord Hylton, who much regrets that he is unable to be in his place this afternoon, asked me particularly to raise this point. Nothing, I believe, would do more to encourage people to let their property than the belief that a contract, once made, meant exactly what it said. The fourth issue on which I believe there is some shift in

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Government thinking is on the question of housing tenure, and I was most interested to see the proposals for a tenants' charter. There is no doubt at all that many council tenants suffer very much from rather narrow-minded housing policies of authorities as to whether or not they can let rooms, keep pets, paint the house the colour they would like, or even what they do with their gardens.
I was very interested in a survey carried out by the British Market Research Bureau and published in the building societies' evidence on the Green Paper. In this they said that the major disadvantages mentioned by council tenants were the facts, first, that the houses were never owned (16 per cent. thought that); 12 per cent. thought there was a lack of choice, and 12 per cent. mentioned the inability to choose their own decorations. A tenants' charter could do much on this and I hope we may see it implemented. The final issue on which I believe there is some further shift of Government thinking is on the whole question of rehabilitaion or redevelopment. This point was well made by my noble friend Lord Middleton, and I shall not repeat it. We all know how much inner cities have suffered from wholesale redevelopment, and anything which can be done to rehabilitate older houses and to keep communities together is much to be welcomed.
All this said, I return to my first question: Does this really mean a shift of opinion or are we really going to stay where we are at present? My doubts are aroused by the suggestion made by an honourable Member of another place, Mr. Frank Allaun, as reported in The Times of 8th December 1977. This referred to a threat of limiting tax relief on mortgages to those paying at the basic rate and only for houses costing an average amount, which would work out at about £14,000. Perhaps that is not to be the Government's view, although I understand that Mr. Allaun is chairman of the Executive Committee that looked at housing. Therefore it cannot just be taken as Government housing policy.
I was pleased to hear what the noble Lord, Lord Northfield, said this afternoon, although I was disappointed to hear him say last Tuesday, when we were debating the family, that although he was anxious
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that every possible policy should be considered for inner cities, he felt it would be impossible for local authorities to sell land for development by private individuals on a freehold basis and not simply on a 99-year lease.
If, however, we could get some agreement on housing policies, a great many advantages would accrue. First, there would be some stability in housing policy, and that is something which I believe would be welcomed by all local authority associations. Secondly, I believe that, if we had housing policies which would help the young and the mobile, it would do a great deal to help with the terrible problem of unemployment. If I may quote one example from my own experience, I now discover there are five vacancies in London for every secretary. I suspect, although I cannot prove this, that one reason is the difficulty secretaries have in finding anywhere at all to live in London when they come to work here. If this is true in a limited sphere, I have no doubt that it is true for British industry as a whole.
The third great advantage that could accrue if there was more agreement on housing policy would be much greater flexibility in housing. Paragraph 12.1 of the Green Paper lists the various groups of people who, for one reason or another need housing and for whom we have not yet found the answer. These groups include lower income households, homeless people, one-parent families, battered women, the physically disabled and the mentally ill, old people, single people, mobile workers and ethnic minorities. It is very difficult to fit any one of these groups simply into the two major categories of housing provision—owneroccupied houses or council houses—and it does not make it any easier to solve the problem of the homeless. It is scandalous today that homelessness continues side by side with empty houses. I am not at all optimistic that the Homeless Persons Act of last year will do very much to help the situation. No extra money was provided, and the only people who will be rehoused under it are those who are currently homeless—and they will take the place of someone at the top of the council's housing waiting list. We are not providing more houses; we are simply putting different people into the houses that are available.

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Since the publication of the Green Paper a year ago very little has happened except the introduction of the Bill to which I have already referred. This does not seem to me to augur very well for the future. I trust, however, despite the fact that we have not heard anything, that we need not give up hope that there will be some action in the fields that I have mentioned. There are now more homes than households. This fact should enable us to look in detail at housing policies. But nothing has happened over the last year to help break the housing log jam. We are finding ourselves increasingly in the straitjacket of having either owner-occupiers or council tenants. If you are fortunate enough to own a home—and about 52 per cent. of the homes are owner-occupied—you are free to stay or to move. But, as Frank Field wrote in a most interesting article some 18 months ago, the council house tenant is as much tied to his house as a medieval serf was tied to his land.
I very much welcome recommendation 29, on waiting lists, that councils should take people from outside their own area; and I am very pleased that this proposal receives the support of the Association of Metropolitan Authorities. It is unfortunate that there is nothing further to encourage council house sales because, despite the surplus of houses, the households that are increasing are predominantly for the single person, whether the young worker or the elderly single person, and neither of these needs is at present adequately met.
The housing association movement has gained enormously in strength, so that there are now 300,000 houses either built or rehabilitated by housing associations. But they cannot take the place of the private rented sector, though they are certainly making a good contribution. I think that we all welcome the proposals on equity sharing, on co-ownership and on co-operatives as different ways of finding another form of tenure to break what I have described as this log jam. I hope very much that, when the noble Baroness, Lady Birk, winds up, she will he able to give us more information on the various points that have been raised both by my noble friend Lord Middleton and myself. Our first thought on housing policy must be for those needing to be housed; but our second, which is so important to the country as a whole,
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must be for housing to play its part in the regeneration and expansion of British industry. It can help solve the problem of the unemployed and, if it can help to make ours a richer country, then it will give benefit not only to individuals but to the country as a whole.
4.3 p.m.
Earl GREY: My Lords, having read the consultative document, I should like to concentrate on the section dealing with home ownership. More and more people have the desire to own their own homes. By 1971, 52 per cent. of all houses in England and Wales were owner-occupied. By 1976, the figure was 55 per cent.—10 million out of 18·1 million. The vast majority of would-be purchasers cannot afford to buy their homes outright, and therefore have to apply to various bodies for loans. The most obvious method is through a building society, but a society has to have a number of conditions satisfied before releasing funds—the state and condition of the property, the age and earning capacity of the would-be purchaser. The building societies are not charitable organisations, but I believe that they should have a responsibility for easing the problems of home ownership.
We have seen what happened in the early 1970s, when house prices rose at a staggering rate, culminating eventually in a situation where there were no more mortgage funds available. The effects of this were disastrous. It meant that prospective buyers who, two years previously, had had to raise deposits of only £400 to £500, were faced with the situation of having to raise four or five times that amount. Although there has been a stability during the last three or four years, the possibility of history repeating itself has recently arisen and the Government and building societies have now taken measures to keep house prices at a realistic level, as stated on page 45 of the document, at paragraph 620.
To prevent short-term disruptions of the private housing market harmful to both householders and the house-building industry, the Government will develop present arrangements with the building societies for stabilising the supply of mortgage funds, to guard against the

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risk that, in the years ahead, the societies may not be able to secure directly from the personal sector all the finance that they need. The Government wish to discuss with the societies the possibility of their securing fresh sources of funds, possibly through a financial intermediary.
While agreeing that there should be a relationship between the societies and Government on what measures are to be taken, I firmly believe that the Government's involvement should be on the basis of voluntary co-operation and influence. The prime question is the availability of properties. These are split into categories, the first of which is new homes. The Government estimate that the projected average rate of net new household formation in England and Wales in the next 10 years is 135,000 per year. This rate will exceed the number of houses that are unfit, or that have to be demolished. It is obviously easier for buyers to purchase newly built or fairly modern properties through a building society, but due to a rise in land and material costs prices could be higher.
How do the Government help now, and how can they help in future? Tax relief on mortgage interest and the option mortgage subsidy form integral parts of the Government's housing policy. At the basic rate of tax, about one-third of the annual interest charges are offset by tax relief. The introduction of a low start mortgage scheme, for those whose income in the early years is not high, is to be welcomed. The payments are initially smaller, but over the years are gradually increased. Local authorities have already issued low start mortgages, but the building societies have so far issued very few. The Government feel that the building societies could make this scheme widely available. The problem with this is that the lenders will need an extra inflow of capital to maintain the level that is required to issue further mortgages, but I believe this to be a useful scheme.
Another form of buying is the equity sharing scheme, which is a combination of owning and renting. The purchaser—and here I quote from the document—
"buys a lease on a house for half its market value, and also pays rent equivalent to half of what he would pay were he renting normally. He then has the option of buying the second half of a house at a later date".
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I am in favour of this method of buying as, in the long run, it releases a further group of people, who would otherwise have to rely on council houses or rent private property.
With reference to the new savings bonus which the Government have in the pipeline, I welcome it in principle but would rather wait and see what forms and proposals are made for this. An interest-free loan of £500 for five years is an incentive, but one must envisage the cost of this and where it is to come from. There are approximately 900,000 unfit houses in England and Wales, 700,000 of which are occupied. A house classed as unfit is one that is below standard for human habitation. A house classed as sub-standard is one that is lacking in one or more of the basic amenities. A great many of these houses in both categories can be renovated and made suitable for habitation by giving grants and incentives, which is part of the Government's policy.
For those houses that are beyond repair, a plan must be inaugurated at the earliest possible moment to demolish them and create new areas for building. The owners of these properties, especially in the inner city areas, should be persuaded, if the houses are unoccupied, to sell them to the local authority, which would then be able to create new and satisfactory living accommodation. Creating new areas for development is very costly and, if land can be saved by a plan of rebuilding on existing sites, a considerable cost to the community can be saved.
The arguments for and against the right of a council tenant to be able to buy his home are many. The Government reject a statutory right for tenants to buy. I believe—and I speak for myself—that council houses exist for a need and for that they must remain so. But there are certain instances where the sale of council houses could be allowed. Sales of council houses reached a peak of 45,000 in 1972, but in recent years the sales have run at less than 5,000 per year, and that, according to the document, has been where the consent to sale has remained available. Perhaps the desire of council tenants to buy is not so great an issue as one is led to believe. In conclusion, I welcome many of the proposals which are outlined in this document, but if they are to be

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effected efficiently they must continue to be implemented now.
4.10 p.m.
Baroness VICKERS: My Lords, I should like to congratulate the noble Lord, Lord Middleton, on having introduced this interesting debate, and also my noble friend Lady Young. I was delighted to hear the speech made by the noble Lord, Lord Northfield. I want to congratulate him on the speech on the environment that he made the other day, because this is one of the most important questions facing us at the present time. I hope that he will extend me the courtesy of inviting me to see his town.
I am very interested in this document. It is excellent and full of detail. It is clearly written and its conclusions and recommendations are set out very well. However, may I draw attention to something very important which appears on page 89. May I be allowed to read it out, since I should like it to be noted by local authorities. It says:
"Much of what is said above reflects the adjustments which some authorities are already making in response to a changing situation. But it is vitally important that this sort of response is now developed by all housing authorities. The powers of central Government in housing matters are inevitably limited. They must set the legislative framework and distribute the resources available for investment. They can provide a subsidy system of the sort described earlier which is consistent with national housing policy and reflects local needs. They can advise and persuade. But the real effectiveness of the public sector's contribution to the solution of our housing problems depends on the way in which national housing policies are applied ' on the ground'.… No-one should under-estimate the importance—or the difficulty—of their tasks."
I was very disappointed that so few people voted in the local government elections, because housing is left mostly to district councils. I hope that they will note this paragraph and study the document.
A new organisation called "Network" has been set up by voluntary organisations and by lawyers and others who are interested in housing and other problems to advise people on the various ways in which they can obtain a house, obtain a mortgage, or approach their local council. I understand that "Network" has had great success in encouraging people to go to advisory bureaux, and it should be
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encouraged. It is purely voluntary, and I hope that by mentioning "Network" today other people may be encouraged to seek advice. It is very expensive to go to solicitors, estate agents and so on, and this is a step in the right direction.
On page 115, I notice that the Housing Policy Review Advisory Group has only one woman upon it. The same applies to all the other advisory groups; only one woman sits upon them. I know that all the other members have excellent qualifications, but I consider that it is very important to have more women on these committees. A woman usually turns a house into a home. This point ties up with what was said by the noble Lord, Lord Northfield, with regard to architecture. Far too few women architects are designing houses. Not long ago when I was visiting somebody the coalman arrived. We were sitting in her little kitchen, and she had to pull out the kitchen table so that the coal could be put in behind it. In this day and age, that is an impossible situation, for the place was built only about 15 years ago.
I believe—I have said this before—that the moment a child is born its environment begins to play a large part in its life. For this reason, I think that public sector housing is a social service which needs to be improved. Good housing will do away with many problems. I am the chairman of a centre for homeless young people. It is amazing how many young people run away because they are living in overcrowded homes, or because they do not have a room to themselves, or because they cannot fit in since there are too many people living in one house. They are provided with very high standards at school, so when they do not find the same standards in their homes it is very difficult for them to cope with the situation.
The noble Lord, Lord Northfield, mentioned elderly people. I have here a cutting from The Sunday Times which illustrates my point. It says:
"On behalf of elders, will you thank Dr. Muir Grey [who wrote an opinion] for his stimulating suggestion that old people should have the right to fall down and risk hypothermia in their own homes, in view of the Spectrum article and "Will you make these three figures". Dr. Grey is very creative, forward-looking and understanding, and we think he will be very wonderful when he reaches his eighties."

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This letter is signed by five people, the eldest being 97 and the youngest 80. I sympathise tremendously with them. It is excellent that they should have expressed their opinion in The Sunday Times.
The other people who are mentioned in the document are the disabled. It seems to me to be very unfortunate that very easy and simple alterations cannot be made to existing houses to make it possible for the disabled to live in them. For example, downstairs lavatory accommodation is badly needed by the disabled. I know several families where the mother has multiple sclerosis. She is perfectly capable of doing the cooking and the housework—one, in fact, has five children —but she cannot get upstairs; so she is dependent upon the children helping her, which is not at all pleasant for anybody. Also, there are very good home helps and health visitors. It is very much better that they should come into the home rather than that people should have to go to live in residential homes. I was interested to hear about county residential homes, with local authorities looking after the housing. It is essential that there should be more co-operation.
In paragraph 69 there is a suggestion that local authorities should be given discretion to waive rateable value limits for improvement grants. This is absolutely essential. It has been drawn to my attention that if you insulate your house—the Government are trying to encourage this in order to save energy—your rates go up. This seems to be unnecessary and will not encourage people to take this precaution. Another way of helping certain old people is through housing associations. For example, noble Lords may have heard of the Miles Mitchel estates, which work very well. Old people are accommodated in houses and flats, and there is sufficient room for wheelchairs to be manipulated. The estates are carefully planned, and each estate has its own village hall. This is against the policy of some councils, but the estates which I have seen are very successful.
On the question of exchanges between local authorities and also local authorities taking over private houses, I can give noble Lords the example of an ex-Royal Navy Serviceman who had lost both legs while his wife was crippled with arthritis.
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They had their own home—two up and two down—but they saw some delightful bungalows being built opposite to them by the council. As they had no children, I suggested that they should exchange their house for a bungalow, and they applied for one. It took me 15 months or more before I obtained agreement. There were these two old people—I wondered whether they would survive until the move—having to live in these conditions.
The document stated that a review of mobile homes was currently in progress. This was in 1977. I should like to know whether that review is now completed. I was also delighted to see the Culling-worth Committee's recommendations with regard to housing list policy. It recommended that it is fundamental that no-one should be precluded from applying for or being considered for a council tenancy on any grounds whatsoever. This affects many people who live overseas, and it will affect many more people who will take Common Market jobs for a period of time. It affects men in the Services who cannot get on to any list at the moment, unless they go back to the place where they were born.
When I asked a Question a little while ago, it was stated that there were 18,000 empty married quarters. May I suggest that these could be sold, possibly to people leaving the Services who would like to live in an environment similar to that in which they had worked for many years. The Property Services Agency of the Ministry of Defence is so hamstrung that it is quite impossible for it to get anything done quickly. I now live on Salisbury Plain. The houses around me have been empty for years, because when they were taken over by the Ministry of Defence they had to be dealt with by so many committees—first the local committee, then the district committee and after that the Command committee, until the matter eventually reached somebody who could make a decision. Of course these houses are deteriorating all the time, which I think is a great pity. I suggest that the Ministry of Defence having handed it over to the PSA—and I have been down to see them working at Headquarters and they are very keen to get on—should give them a freer hand in the future.

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In the past I have always been against what I call "cantonments"; in other words perhaps I had better refer again to Plymouth where all the naval people are on one hill in St. Budeaux. Years ago, I tried to get the Government of the day to give money to the local authority so that there could be a mixture. I agree with the noble Lord, Lord Northfield, that we do not want to have one-class estates of any kind. It is particularly awkward for naval wives, because Mrs. Jones may arrive one day and have Mrs. Harris and Mrs. Higgins on either side but the next day they may be gone. So she never gets any real neighbours or anybody to look after her children. If there are 18,000 empty houses, why not let some of the local authorities have them and get the people mixed up again, so that they can help each other?
I was rather sorry that not much was said about rural areas and I should like to bring to the attention of the noble Baroness, so that local authorities may also read it, the fact that some councils in rural areas are being too cheeseparing for words, and in the wrong way. For example, one council that I know has now stopped building chimney breasts in order to save £400 per house. It follows that there are no flues so the house gets damp and the poor tenant has tremendous electricity bills.
I should like to mention Recommendation No. 48 on empty houses whose owner is not known. In the report it says that methods should be speeded up. That has been said for years. In Plymouth after the war there were hundreds of empty houses the owners of which could not be found. In fact it took me over three years, with the help of the Ministry and various agencies, to find the owner of about six houses. He had gone to live in Israel and appeared to have forgotten all about them. These houses were deteriorating but we managed to get them just in time. I am told that there are a great many more such houses (indeed, I heard about three of them in the train when I was coming up this morning) which could be taken over when the proper investigations have been made, and that would be highly beneficial.
Finally, I should just like to mention a housing association which might be of interest to the noble Lord, Lord Northfield. It is the Hummingbird Association,
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which has now obtained a plot in Southwark. There, they have excellent plans for amalgamating different groups of people in need: there will be some accommodation for single people, some for old people, some for people from overseas; there will be a day nursery, and so on. This is to try to get the groups to mix and is also an experiment which I think will be beneficial to the Borough of Southwark. This is not yet built but I hope that we shall be able to go and see it and to see the endeavours that are being made in this connection.
4.25 p.m.
Lord DAVIES of LEEK: My Lords, I am grateful to the noble Lord for raising this problem in this interesting little debate on the Green Paper. It is always a pleasure to follow the noble Baroness, Lady Vickers, because her assiduity in the social service world and for the people in her constituency, in the days when she had one, were second to none. I often find myself following the noble Baroness and, although I shall not speak about her politics, I agreed with what she said about the social service side of housing.
However, we must ask ourselves what the Green Paper is about. Having spent a couple of weekends on the Green Paper and its technicalities, I think we had better address ourselves to its scope. The terms of reference upon which this review was produced were:
"to review the arrangements for finance"—
that is the operative word—
"for the provision of housing and the assistance, direct and indirect, given from public funds; to consider what changes are desirable to facilitate adequate, timely and economical provision to meet the differing needs with reasonable freedom of choice and to secure a more equitable and balanced distribution of assistance and to make a recommendation".
And there are 74 recommendations!
The scope of the review was subsequently widened—like noble Lords on both sides of the House, I have been on committees, and we know what happens on these committees when we work for weeks (and get nothing for it)—to include full consideration of social aspects of housing policy. The supply of land—ah! "there's the rub", as Shakespeare said—for house building, the location of new development and organisation of the

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house building industry, and technical questions of housing design and construction were not considered in detail in the review work. But the Welsh Office and one or two others did a lot of work on it, as I know.
I do not want to go into the history of the matter. If noble Lords opposite find themselves in power in the not too distant future, all the work that has been done here will be of massive importance to the civil servants who have to deal with this very difficult problem of local government housing and finance—and also the private sector, which I am leaving alone at the present time.
One of the saddest words in the English language is "homelessness". It has a euphony in a minor key; "no fixed abode", except for rich men running from big hotel to big hotel, or gypsies who love the life. But to be of no fixed abode—and I have met plenty in my time—and to be homeless: it is now time that this nation saw to it that within reason nobody in Britain should be homeless. It can be done. Here I do not want to make a Party point. Over the years great effort has been made to get homeless people housed. I know the idiosyncracies and the difficulties, and sometimes the mental neuroses, of the people one has to deal with who are in that special position.
I should like to point out that on page 110 reference is made to the responsibility for helping homeless people. It says:
"Responsibility for helping homeless people has often been fragmented. The only clear statutory provision on homelessness—in the National Assistance Act 1948—requires social services authorities to make arrangements to provide temporary accommodation for those in urgent need of it, but it has become increasingly recognised that homelessness must be seen as a housing problem".
I shall paraphrase the next part. The Government therefore see that it is a primary responsibility to assist homeless people with accommodation, and they believe it should rest with local authorities as part of their function, so the Housing (Homeless Persons) Bill which is now before Parliament will give effect to transferring responsibility from social services to local housing authorities.
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If it is going to be pushed on to the local housing authorities, then the housing revenue account must be looked at in a completely new light. I had a brief time as an alderman on a city council. The housing revenue account must be looked at because it is misleading. That account deals with much more than just the local revenue and local donations to housing. So the 64,000 dollar question to whatever Government are in power, is: if responsibility for the homeless is transferred to the local authority how are they to finance it? In each authority will there be a new piece of financial juggling to find the money?
This is a consultative paper; it is not the dogmatic law of the Medes and Persians laid down by the Marxist Labour Party—although I had forgotten that the Opposition now do not mind Marxism so long as it is Chinese Marxism. Of course, they are going up the garden path. I have been to China several times and they have pictures of Karl Marx as big as the pigeon loft up there. Coming back to my point—I do not want to lead the Opposition astray—local government will need this money, and consequently we have to look at new ways of raising local government finance. What is the future to be? What method shall we use?
That brings me to Command Paper 6453, known as the Layfield Committee Report. This deserves going into in depth; I do not think we have done it. You may ask what was the Layfield Report. I always try to be asbolutely explicit in my speeches, so I had better say what it was. The Layfield Committee was the Committee on local government finance, and it concluded that:
"A local income tax on personal incomes levied according to where people live is the only serious candidate for a new source of revenue that could give a substantial yield and at the same time maintain and enhance accountability.".
Accountability is important. Going off into the colloquial and being a little vulgar, if some of the yobbos at football matches, of 18 years of age or so, had to pay for the damage they did to their local authority when they marked up their favourite teams they would suddenly find that they and their parents are paying for the trees and the avenues and the parks. I am all for levying a kind of local government income tax which would bring in young earners. Many of your Lordships have been on a magistrates' bench,

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and you will know that if you fine some of them £100 they can pull it out of their pockets quicker than my noble friend Lord Shepherd, who looks very affluent indeed. I see him looking at me; I will be able to tap him after this.
Let me get back to the point. The need to modernise the housing revenue is of paramount importance, and whichever Government are in power in the text period that will be the case. We were asking for modernisation, making houses with glass fronts that would slide, double glazing; a lot of that can be left to the private owner. But what about the 53,000 people, for instance, who were homeless and applied and nobody could find homes for them ? I asked Shelter the priorities. Shelter, of course, is the London Housing Aid Centre, and Mr. Raynsford, the head, was kind enough to send me the evidence that they sent in when they were advisers on the problems of local government finance. Without boring your Lordships by quoting much of it, they believe—and I just quote the intial introduction:
"SHAC believes there is still considerable scope for exploring the possibilities of housing allowances. The only form of this which is discussed in the Green Paper is the flat rate payment with a tax claw-back. There are many obvious objections to such a scheme and the Green Paper indeed lists these difficulties. Many of them would be overcome by a scheme which took account of income, family size, region, and actual housing costs on an annual basis. The problem would be that such a scheme would entail under current arrangements putting many people on a means test benefit. This would, of course, be unpopular, cumbersome and administratively expensive, in addition to all the other problems associated with means tests. These difficulties, though, would be largely overcome if the housing allowance were made part of an overall tax credit system, and while we cannot here make detailed proposals or examine it in full, a tax credit system would open up possibilities for a housing allowance to which there are otherwise not so many substantial objections."
I throw that into this debate today, because this is a consultative document, and the local income tax that was recommended by the committee deserves analysis.
That brings me to what I consider now is vital policy so far as we are concerned; namely, what shall we do about the sale of council houses? We do not want to go shouting one against the other across the Floor. There is a place for the intelligent sale of council houses. I do not want to mention this particular gentleman's name,
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because I do not want to make a political point, but at one conference of the Opposition a certain chairman said, "When we win we will have the sale of the century", and tens of thousands of council houses were sold. Sincere men and women, irrespective of their politics, must ask what is the result of that, particularly on the homeless people. In 1976 Shelter investigated this problem. Let me tell noble Lords—and noble Ladies; I nearly forgot them—that it found that in England alone there were 1,146,753 families on the council waiting lists. This excludes Scotland and Wales. That is the fact at the base of this Paper; that is the problem of finance, and it is a question of giving shelter to the under-privileged. Some of the under-privileged you may not like, because through the quirk of circumstances some have congenital problems—neuroses; they are not responsible people; it is a very terrible problem. Shelter, bless them, have managed to house 65,000 households who have needed help since 1970. By the way, Shelter is nonpolitical and people of all political points of view are involved in it. It is not that I want to make any political point for my own side of the Chamber. But I would repeat that figure—1,146,753 families.
The numbers are not surprising, since so many still live in intolerable conditions. Thus, in 1976 it was officially estimated that 1½ million families in England and Wales lived in dwellings with no inside we, while 745,000 were in dwellings which were unfit. I will not quote the mass of other figures that I have marked in red; I have made my point. All right, if the nation wants to sell council houses, there could be places where their sale may have a certain justification because of mobility in employment, as the noble Lord said. There might be a drift, say, from the Rhondda Valley. When I was a child in South Wales and West Wales and all around the coal fields, farming and mining, there were 60 odd pits in the Rhondda Valley. There are now only two. The result is that you find Welshmen strewn all over London, anywhere where there is an opportunity of getting a job. I refer to one area of Wales. I was a child when this happened at a horseshoe village, ending in the mountain, Senghenydd. In 1913 there was the most terrible explosion in the history of British mining, when 430 miners lost their lives. I was a young boy,

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just going to school at 8 a.m. One could buy a house in that valley 20 years later for £25. They were derelict houses, row after row, up on the mountainside. There may therefore be a case for the sale of council houses in rural areas or in areas where industrial activity is declining. But please let us be careful how we do it. I think I should sit down after one more minute. I have been speaking for 16 minutes. I do not usually speak for as long as that.
I want to make a case for the countryman. I do not think that there is enough emphasis on the world crisis. I do not wish to be prophetic, but the business system of civilisation—notice the euphemism that I have used for capitalism—is facing great problems. Top level American economists are a little neurotic. When I listen to some of them they sometimes frighten me to death. Thank God that half the time their prophecies are wrong! If the business system is slowing down then we must not have too rigid a system of government housing finance. There must he mobility in housing.
I shall not go into the esoteric realms of beautiful gardens. Most people want a nice little house. They do not want a high-rise flat. They want the opportunity of having dignity in that house. I am glad that as a result of the Green Paper we shall take off some of the restrictions. Formerly one could not keep a cockerel in the backyard of a council house. An old collier, who loved his pigeons, could not have his pigeons there. By the way, I am glad to see that they will now allow lodgers. In my boyhood days apartments were marvellous. I shall not tell you all the stories about lodgers in Welsh houses. It is ridiculous that an old widow living on her own may not have a couple of miners or potters living in her house, because she is told that she is in a council house. In other words, let us be civilised and relax some of these rules.
The last point is on a subject that I cannot understand. All noble Lords must have experienced this. When we go along some roads we see that they are up because telephone engineers are putting in junctions. Two weeks later the gas men come. Three weeks later the electricity people come. Then there is a water main burst. The street is never
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level. In other words, it is time that we computerised these supplies. In these modern days they could easily have one, or at least two, runs through, which could be metal on top and capable of being opened—without all the time being a burden on the revenue accounts. This costs money to the local authorities.
My Lords, I congratulate the Government on having the perspicacity and foresight to get together skilful people. I went through the advisory list of those who received the Green Paper. I hope that its outcome will be of some use to whatever Government may be in power, so that they may try at last to do something real for Britain's countryside, rural housing, and certainly for the homeless.
4.45 p.m.
Lord GISBOROUGH: My Lords, the excellent Green Paper covers a wide scope. I should like to say a few words on the maintenance and regeneration of old houses, which I feel is one of the most important aspects of the subject. There are, according to my figures, 600,000 prewar houses in the local authority housing stock, and about 650,000 in the private rented sector, which are substandard. Surely there is every reason why these should be kept in a good state and not be allowed to degenerate into slum conditions, when it becomes cheaper for them to be demolished than repaired. There is obviously a need for annual repairs and also they need refurbishing every two or three decades with new wiring and so on. It is vital that this work should be kept up, as once there is a big backlog it is almost impossible to recover. Private houses largely are refurbished on change of ownership. Therefore, the most important problem is with the local authorities and with the privately-rented sector, but especially with the local authorities.
To undertake a modernising programme, which would cover all the houses and keep them right, would involve modernising a quarter of a million houses annually, which would be about one-twentieth of the total stock. The cost of this would be anything from £2,000 to £3,000 per house. But this must be compared with about £15,000 or more for building a new house. The total annual cost would be in the region of £1,000 million, a huge amount. But one must compare

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that with the cost of replacing all those houses at some five times the cost of modernising them. The Green Paper accepts the principle of modernising, but regrettably only about half of the money, which the Government accept is needed by local authorities to carry out this modernisation, has been allowed. This surely must be bad economics. It must lead to further decay, future huge housing cost, and the need to build new houses.
The building industry has suffered continually from the change in the rates of Government assistance and the consequent change in demand. For example, in 1969, 1973 and 1975 the number of improvement grants, respectively, were 109,000, 361,000, and 127,000. The money value of the grants was £66 million, £751 million, and then £387 million. That indicates the enormous fluctuations in the workload. It is essential for the industry to have, if at all possible, a reasonably even workload. It is extremely bad for it when it has these enormous ups and downs. It leads to a great shortage of skilled labour at one moment and redundancies at the next, higher costs and lessened efficiency. The economic situation in which we find ourselves is largely to blame. But, on the other hand, there have been a large number of policy changes which ought to have been avoided.
A static rate of grant is necessary, because it has been found that when a new rate of grant has been anticipated people have held off having their improvements, waiting for the new grant. This again has caused troughs and peaks. The industry is worried about the high projection of housebuilding for the 1981–1986 period, which it believes will be followed by a recession. That will again make life difficult for it. However, I am glad that the Government are taking some action to regulate mortgages, which will at least help with evening out demand.
Going back to the subject of improvements, this is very largely, but not entirely, a problem of the inner cities. The problems must be recognised very much to exist also in many of the rural villages, and especially in the villages in my own part of the country, which are either mining villages or villages where mines used to exist. This area is in the North-East. Each house must be considered of
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equal importance to any house in the inner cities, and in some respects more so, as otherwise people will simply return to the inner cities and make the problems greater there. Many of the houses are very good structurally but need modernising. They are live communities. They suffer from high transport costs as regards getting to and from places of work. Also, there is the liability of drift from the rural areas to the main towns. It is important that they should be kept together, given amenities and their houses brought up to the same standards as those enjoyed by people who live in the big towns.
The main problem is the long delay in changing the yardstick. The building costs were lower in the North-East than in the South, and hence the yardstick was designed, as I understand it, to cater for that situation. At present the building costs in the North-East are equal to or greater than those in the South. There has been no change in the yardstick, but change is of great and urgent necessity. As a result, many of the local authorities are unable to maintain their duties even in the housing action areas.
In the private rented sector, the problem of under-repair and lack of maintenance is brought about by the age-old low rents and security of tenure. Of course, there must be some form of control of rents and, of course, one must have some form of security of tenure. However, both of those factors have been "over-killed" and their benefits have led, in my belief, to greater evils. Low rents have led to the complete lack of building of houses for letting, to a situation of low repairs, low maintenance and low improvements leading to decay. Excessive security of tenure has led to many empty houses which are either not being relet or are being kept and resold when empty.
A particular example of the security of tenure problem is the flats which exist over many shops. For example, I think of York where the planners insisted that all shops had a first floor even though it was not required. I am sure that all of those first floors would become available for living in if there were not such complete security of tenure; therefore, if the shops were sold, they could he sold with vacant possession above. It would require a minor change in the law to remedy the

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situation and it would put on the market a great deal of accommodation even if for only temporary tenants.
As regards private rented accommodation, the only solution is to have thoroughly economic rents with adequate, but less protection. In addition, the private landlord must have freedom from fear of retrospective legislation—freedom from the fear that although at one stage he will have some ability to get his house back, the next Government will come in and give back complete security of tenure. A good example is that years ago tenants and landlords entered freely into bargains but then the Leasehold Reform Act was introduced and completely released one party from the bargain. There are many other examples.
In the privately-owned sector, there is the problem of finance because building societies are very loath to lend money on old properties unless a grant has been agreed. As local authorities very often have no money available for grants, there is the chicken-and-egg situation. I hope that the Government have some ideas about how they can help in that regard. Perhaps the greatest owner-occupier problem is that many houses which have low standards are occupied by retired people with low incomes who are unable to find the money to modernise their houses. Perhaps one solution would be the provision of special loans on which the interest due could be added to previous loans to be payable back on the death of the owner or on the sale of the house. That would be of enormous help to the elderly, many of whom live in the least satisfactory of the owner-occupied houses and who at present are condemned to live for the rest of their lifes in sub-standard houses.
The problem of local authority finance concerns the economic situation. It has been said that many of the local authority procedures for building houses are unsatisfactory. It has also been said that many authorities pay up to between 20 and 25 per cent. too much for their council houses compared with similar houses built by private developers. In addition, local authorities could help to finance improvements through reductions in their subsidies to council house tenants, who are, in most cases, well able to pay economic
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rents—particularly those tenants who enjoy the benefits of modernisation. The noble Lord, Lord Davies of Leek, and one other noble Lord have mentioned homelessness. I do not think that the noble Lord is altogether correct as regards the waiting list of 1½ million. The figure is no doubt correct, but all authorities find that when they actually come to—
Lord DAVIES of LEEK: My Lords, I hesitate to interrupt, but I did not indicate that all those people were homeless. They were living in town X and wanted a council house in town B. It was not a figure for the homelesss. I thank the noble Lord for clarifying the situation.
Lord GISBOROUGH: I thank the noble Lord. It has been said by the Minister that the Housing (Homeless Persons) Act would involve no extra cost to local authorities. However, that has been proved totally wrong. In my particular district from 1st December to 31st March, no less than £6,000 was spent on bed-and-breakfast for the homelesss. Throughout the country £3·4 million was made available and our own share will be £7,500 per annum. Yet, in three months we spent £6,000. On top of that, there were two officers who spent 80 per cent. of their time on the homeless and one full-time officer was also involved. It is estimated that the full cost per year, over and above what has been allocated on the special rate grant, will be £30,000 for the district. If the Government want the local authorities to operate the Housing (Homeless Persons) Act, it is essential that they should provide adequate rate support grants.
I turn to London and to one particular case which is representative of a number of other cases and therefore worth mentioning. The repairs and maintenance which landlords can carry out and recover from tenants in rent is, to my mind, now becoming in some cases a racket. I shall mention one particular case which I hope is not typical but which represents, I am sure, a number of cases. The whole block changed hands in 1971. Since then there has been an excessively high number of repairs. The entrance to the block has been made into a luxury entrance with new doors, masses of thick carpet and wallpaper. Many very extravagant

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repairs and improvements have been carried out. The porter was reputed to have cost 50 per cent. extra last year, and so on. The service charge which in 1971 was £25 a quarter has increased to £400 a quarter—an increase of some 16 times. There are many single people in the block of flats who find it extremely difficult to manage. The agents receive their commission on the amount of money they spend on the block. They receive 12½ per cent. on expenditure, and therefore it is greatly to their advantage to spend as much as they can. The agents bully the occupants to pay. It has been discovered that some of the charges for which they have asked have been wrong and they have been trying to charge for insurance and heating supplied to the shops beneath.
It was very difficult to check up on the costs and for a long time it was difficult to discover the owner of this block. There are 40 sitting tenants in it, many of whom are elderly. Section 91(2)(a) of the Housing Act states that the landlord must get a certain amount of agreement from the tenants before spending large, excessive amounts. That section was quite openly flouted; expensive improvements were made without the tenants' agreement. Of course, it was possible for the tenants to take the matter to the High Court, but in practice that would have been very expensive; many of the tenants are old and it would not have been easy for them to do so. They wanted a quiet life and did not want to become involved, if they could help it, in litigation. They were quite prepared to pay for a higher standard, but they did not want a great many extravagant and unnecessary improvements. One cannot help wondering whether the object of all this was to price the tenants out of the block and resell the flats at a higher price. It is interesting that there used to be bullying by nuisance; now it seems to be bullying by luxury.
Who is this landlord? Like more and more properties throughout London, this block of fiats is now owned by an oriental with an Armenian name, who was very difficult to find. I do not know whether his benefits come within the British tax system, but his name has frequently appeared in the Press because other people have been dissatisfied. This is a question of harassment by maintenance and by an increase in the service charge.
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I believe that this position should be examined and that, in genuine eases, tenants should be given protection.
A Private Bill has been introduced—indeed, it has had its First Reading—which allows tenants the opportunity collectively to buy their block when it comes up for sale. In such a Bill great care must be taken not to exploit the other side; because if there was a tenants' licence to purchase too easily, there could be other cases where many tenants would exploit their landlords; the effect would he equally had because it would reduce the number of people providing accommodation. There are many good landlords and their advantaged tenants often suffer from legislation designed to stop a few villains—indeed, very often the villains, against whom such legislation is designed, get away with it anyhow. The greatest care should be taken to be careful of side effects and consequences of legislation designed to stop abuses by a few villains. Just as the low rents led to poor improvements and maintenance in the private sector, excessive security leads to less availability of houses. The Green Paper contains a great deal of good. I hope that the Government will implement many of its conclusions.
5.3 p.m.
Lord MURRAY of GRAVESEND: My Lords, I should like to welcome the Green Paper. I think that we should be deeply grateful to those members of the advisory body and the officials in the Department for giving us all a mine of information—it is a virtual encyclopaedia—on housing in England and Wales at present. First, I should like to declare three interests: members of my family are council house tenants; my wife is a manager of a thriving housing association in Gravesend; and I am an owner-occupier—at least I shall be in a good many years if I keep up my mortgage repayments.
The noble Baroness, Lady Young, suggested that the Green Paper may be an Election document of some kind. In that case, with the permission of my noble friend Lady Birk, I should like to put forward one or two more figures. In the last four years this Government have completed 1·16 million units of accommodation; about 200,000 slum dwellings have been cleared; and 700,000 approvals

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have been given for grant-aided improvements. In the economic climate of the last few years that is quite a formidable record.
Of course, during that period there has been a good deal of encouraging Government legislation. Housing has been one of the Government's priorities. In 1974 the Housing Act gave more powers to local authorities for improvements and urban renewal. To a great extent the Government have helped housing associations. In the Rent Act 1974 the Government gave security to tenants in furnished accommodation who had absentee landlords. Of course, the Rent (Agriculture) Act 1976 did something that we in the Labour Party had been waiting for for a long time; that is, the virtual abolition of the tied cottage. Much to the surprise of some of our opponents, the Government gave a great deal of help to the building societies during that period in order to avoid what happened in the early 1970s during the period of the boom and slump in mortgages. That has been very valuable in furthering the housing situation. Of course, the White Paper—Cmnd. 7049—projects a steady growth in housing expenditure well into the 1980s.
However, having said that in support of my Government, there is still a long way to go. We still have 2½ million households living in unsatisfactory conditions. I am sorry that my noble friend Lord Northfield is not present because he quoted from page 4 of the document where it says that we have overcome the absolute shortage of housing. It is an absolute shortage if you live in what may be considered to be primitive accommodation, if there is a lack of toilet facilities, if you live with in-laws, if you live in someone else's house where there is a great deal of harassment. To that person or persons—be he or she the head of the household, the wife, the children or even a one-parent family—that is an absolute shortage. To say that in a document does not solve the problem one bit.
In this country we need—and I do not envisage getting it under any Government—a renewal and improvement rate of 700,000 houses per annum over the next 10 years to break the back of the housing accommodation problem and difficulties suffered by those living in the
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inner cities, in the South-East, in the North-West, in the North-East or in the rural areas. We need to work steadily at it because I do not believe that we can achieve that target, as much as I should like to suggest we could.
I shall not speak on all the 74 conclusions and proposals in the document; I shall concentrate on merely a few. Over the years in the political battles the Tories seem to take two particular lines, one of which is support for the private landlord and private "landlordism"; the other—in which they have, in many ways, been encouraged by the media—is a general attack on council house tenants. I say, "encouraged by the media" because so often we have read in some of the louder and brasher papers of some council house tenants having two Rolls-Royce and a Jaguar, or whatever it may be, standing outside their front doors. However, I think that there has been a general polarisation and that is the Tory political view.
The noble Lord, Lord Gisborough, referred to private "landlordism". It is a dying occupation. Since the turn of the century the number of private landlords has decreased from 90 per cent. to between 12 and 15 per cent. now. The salvation of private "landlordism" will not be achieved by giving them all the things they ask for, such as freedom to fix their rents, to have no rent controls or to give people no security of tenure. In the period of the Rent Act 1957—when many of the restrictions were lifted—it turned out that more private accommodation, which had previously been let, was being sold; in fact, it accelerated over that period, whereas one would have expected that there would have been a slowdown, or indeed a standstill. It is wrong, and their philosophy is wrong in trying to make this a major point, although in the document it says that there must be some place for it.
On the question of council house tenants, we have had talk in the past of them being over-subsidised and receiving enormous subsidies, and how the tenants are all living on the fat of the land. But if you equate—and it is difficult to equate and work out an absolute average; nobody has been able to do it—the tax reliefs on mortgages for the potential owner-occupiers, this is round about the same figure as council house subsidies.

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It is a nonsense to suggest that council house tenants are in a class of their own, and a specially privileged class.
If you accepted some of the things that have been said in the past—and I hope that the Tory campaign in the coming General Election is not going to be centred on it—about forcing councils to sell council houses and flats, that sort of thing, you would then get those that were left in council accommodation becoming known as second-class citizens. You would only have certain classes being allowed to stay on as paying tenants, or forced to in many ways; those who were too low paid to go in for a mortgage or to obtain one in any way, and older people.
I do not want to get involved about the selling of council houses because it has been over-played. If you take the average number of council houses and flats that have been sold over the past few years, it works out at less than 1 per cent. of the housing stock in most years, and it only reached 1 per cent. in one year. It is an emotive subject because we all want to be members of the property-owning democracy. If you go on a Gallup Poll, or some of the polls that have been quoted, and say to somebody, "Would you like to own your own house or flat?" what is he going to say? If you say, "Would you like to own a nice house in the middle of the town with a big garden?" what is he going to say? The answer must be "Yes" in every case. But it is not possible in every case.
Certainly, I would not be against council houses or flats being sold where the pressure is not on accommodation. But I know of one situation in particular where a father bought a house, and he had a family. Within a couple of years, he had died, leaving it to the son. There were further changes in the domestic circumstances, and a unit of family accommodation which was then occupied by one person. It has to be left to local authorities—with Government guidance—in the areas where there is greatest pressure, to decide whether to sell council houses or not.
I was glad to see the suggestion of the local housing strategy. But I hope that, when this is being carried out, and when
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local authorities are doing it, there will be some form of monitoring by the Department—random monitoring if necessary—in some of the local authority areas. When we talk about homelessness —and I am not one of those who gives wholehearted support to the recent Act on homelessness—I have in mind the pressure that homelessness exerts on certain areas once again.
The noble Lord talked about the problem in his area. But the problems are found in places like Southwark and Lambeth in our inner cities, which are a magnet and honeypot to people coming down and trying to get work and who then become homeless. The pressure on those inner boroughs is quite severe. If we expect areas like Southwark, Lambeth, Wandsworth, Camden, to bear the burdens of homelessness, then they should be given some financial assistance towards solving their problems, and not have to bear the continual brunt.
I am glad to see that housing associations get complimented on the work they are doing. Again, I hope that the Government will give encouragement to local authorities to work with housing associations. In Gravesend there is a happy, informal, good atmosphere of working relationship with the local housing association. I have previously mentioned that my wife is the manager, and I would not dare say anything against them. But, having said that, there are some local authorities that feel that housing associations are in competition with them to provide housing rather than seeing them as an arm complementary to the local authority's housing policy. There are many people who do not fit into any of the categories that the housing authority has in its allocation list, in the number of points, and other things, and it is welcome that the housing associations can play a part in helping them.
I am a little concerned about the question of waiting lists, and I hope that it is going to be carefully thought about. I think there is a tendency for some people, when they are placed on the waiting list, to think that that means being housed within weeks or months. When we are doing publicity about allocations, and the way that allocations are made, it would not hurt if people were informed of the sort of average waiting

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time that they may have, and given as specific information as possible.
Having said that, and having been a local councillor for something like 11 or 12 years, both on a borough council and a county council, I know the difficulties in doing that. But I also know the difficulties that local councillors face when Joe Bloggs, or Mrs. Bloggs, comes to either the Party headquarters or one's home and says, "I went on the waiting list three months ago and I have not been rehoused yet". It creates a lot of difficulties for local authorities if you are going to have to say, "We have to show the allocations and people cannot just go on". It would be helpful if they could then indicate how long that waiting list was going to be, and the kind of problems involved.
The question of building societies needs to be looked at by the Government. I do not suppose that the Government will do anything about it. notwithstanding the fact that some of our opponents suggest that the National Executive says all sorts of things will be done next week. I think the point may be looked at that in this country we have something like 350 building societies. Of course many of them are local building societies, operating just in certain areas. However, there are a number of major building societies which are all competing with each other in virtually the same market. When there is a change in interest rates, one notices that they virtually all change—I am not suggesting that it happens all the time—to the same rate. Therefore, they are not competing by saying. "You come to Blogg's Building Society because we can let you have a mortgage at 1 per cent. lower".
Many of those building societies occupy prime sites in our city centres. They spend a lot of money. You can look at television most nights of the week and see all of them advertising their wares and competing in television terms and time against each other, but not necessarily encouraging new investors or new mortgagees by differences in their rates. Certainly, the question of building societies should be looked at.
Indeed, the noble Lord, Lord Middleton, when he introduced this debate, talked about obtaining loans for
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some of our city areas. A lot of building societies do not give loans in some of the inner-city areas. I believe they call it something like "red lining" certain areas in our inner cities which are not even considered for loans. If we are to refurbish our inner cities and make sure that people are not pushed out, we shall have to consider this matter. To come back to home ownership, a lot of people have been forced out of our inner cities to buy homes in places like Beckenham, Penge and Bromley—some of those lovely Tory areas—and they face a problem in some cases because of the situation of not being able to get accommodation in the inner cities. One can think of certain areas of London where the houses have virtually been taken over by, for want of a better term, the middle-classes—some parts of Islington, Kennington and Clapham—places which at one time provided homes for artisans. Gradually they have been taken over and those people have been forced out, whereas many of them are needed to service inner-city life. I hope that in the longer term some of these matters which spin off from the Consultative Document will be examined.
I agree with the noble Baroness, Lady Vickers, that something should be done about the rating situation. People who put in central heating and make other improvements find them a further burden and are faced with three choices; one is to pay the extra, the second is not to inform anybody of the improvements they have made, and the third is just to leave, and that leads in some ways to deterioration of the property.
I hope the Government will move swiftly on some of the recommendations in the Consultative Document, many of which would not involve much cost, although they would go a long way towards making individuals happier—I am not speaking of the whole mass of the population. I hope my noble friend Lady Birk will give us some reassurance on these issues.
5.22 p.m.
Lord GRIDLEY: My Lords, the House will be grateful to my noble friend Lord Middleton for initiating this debate and for the speech in support by my noble friend Lady Young. It is customary in

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your Lordships' House for a speaker to comment on the preceding speech. I will only say that I listened with interest to the remarks of the noble Lord, Lord Murray of Gravesend. He made what I thought were some rather contentions statements, but I feel that each one of us must deal with the problem of housing in his own way. The basic problem which faces everybody in this country is the need for more houses; it is essential that more houses are produced. I shall confine my comments to that one aspect. I hope not to deviate from it and, accordingly, my remarks will be brief.
I am a former director of a development company, though I am no longer a director of it. When I was associated with that company I was, naturally, conversant with the activities connected with house building, from the points of view of the employees in the industry, the economics involved in obtaining land at the correct price and the construction of houses at the correct price. Every developer—I speak of the developer who wanted a company which was profitable and would stand up in economic terms—conducted surveys in each area to ensure that all the factors involved in house building married up to the price that the individual would be prepared to pay for the house when it was built. In no circumstances could any developer allow a house to remain on his hands for any length of time, and under that system the industry produced a great number of houses.
In view of what I have said, where the operation of producing houses was carried out by experienced people at a price that people were prepared to pay—either to rent or buy as a property of their own—it would have been far better to have left the building industry alone and unfettered; it was producing houses and that should have satisfied any Government of any complexion. But the present Government have not seen it that way. This very industry, capable of producing a great number of houses, has had to contend with the Community Land Act and the Development Land Tax and that, remembering how penal the land tax has been in its application, has caused land no longer to be readily available. The Green Paper, Cmnd. 6851, issued by the Government in June 1977, is silent on the difficulty of obtaining land in these circumstances.
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Nor has the Green Paper anything to say about the length of time it takes a developer to secure the issue of planning consents, which makes it extremely difficult for any builder to pland and provide for the economic operation of his business. It must be obvious to noble Lords that delay causes indecision about materials, the number of men to be employed and so on, and such delay causes great difficulty in economic planning.
On these two issues the Consultative Document on the Government's housing policy is completely silent, though they are real problems facing the industry.
House prices are rising again. It must be obvious from what I have said that it would have been better to leave the industry alone. It was producing houses at economic prices. Why did the Government interfere? Frankly, I find it difficult to give an answer which would stand examination. The collapse of the building industry in 1972–73 was not due to any inefficiency on the part of the building industry; it was not caused by any misdemenour on the part of developers. It was caused primarily by the banks and fringe banks. When times were prosperous they encouraged developers, perhaps over-enthusiastically, to invest in land banks for the purpose of carrying on their activities, and when the slump came and building slowed down the banks wanted their money. It was as simple as that. That is not likely to happen again; I think the lesson has been well learned.
House building for our people is of national concern and should be the interest of both Parties, without too much Party conflict coming into the issue. Not enough houses are now being built, for the reasons I have given, and the building industry deserves better recognition from the Government than it has received. Do not kill the goose that lays the golden eggs. This industry can produce houses in large numbers at prices which, for the reasons I have given, purchasers can pay. But it can do that only if it remains unfettered and if it is allowed far more scope than the Government have been prepared to give it. As a start, a reduction in the penal land tax would help, but even that would be only the beginning. The whole problem needs further and very thorough examination.
5.30 p.m.
Earl CATHCART: My Lords, I should like to add my gratitude to that already extended to my noble friend Lord Middleton for initiating this debate. I intended to speak only very briefly, and to make only one point, dealing with a single aspect of housing policy. I believe that this point is relevant, and it is intended to ensure that one particular section of the nation is not omitted from our housing policy. The section to which I refer is the Armed Forces. Like the noble Lord, Lord Murray of Gravesend, I am afraid that the members of the Armed Forces may become second-class citizens if the standard of their housing is allowed to fall behind. I hope that if this Government, or some future Government, adopt all, or some, of the suggestions in the Green Paper, with the aim and intention of continuing the process of raising the nation's standards of housing, they will not forget the building and modernisation of both barracks and married quarters, and the related amenities for our Armed Forces.
On page 55 of the Statement on the Defence Estimates 1978, in a section headed Living Accommodation, it is admitted, in paragraph 529, that progress in the improvement of single and married quarters in the United Kingdom is
"necessarily affected by wider budgetary considerations"—
that is rather a nice way of putting it—
"and has been slower in the last year than originally planned".
I realise that in certain places in this country there has been a surplus of empty Service married quarters. This has already been referred to by my noble friend Lady Vickers. However, this is a problem which is very local, and it is a question of redeployment and not, I am suggesting, a reason to slow down the provision of modern quarters for the Armed Forces.
One of the problems connected with Service housing is that any expenditure on it is necessarily pegged to the fortunes of the Defence Budget, and as we all know, it is the intended policy of this Government to continue reducing defence expenditure by £1,000 million in each financial year until 1984. Therefore, my point is that, if steps are to be taken to raise the housing standards of the nation, I hope that the Armed Forces of the United Kingdom will be able to receive similar
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treatment and privileges in respect of their housing. Indeed, I hope that they will have a chance to enjoy all the good things which were so vividly described by the noble Lord, Lord Northfield, in his speech. The Armed Forces must not be compelled to lag behind the rest of their fellow countrymen, as has been the case with Forces pay, simply because they are tied to an ever-decreasing defence budget.
5.34 p.m.
The Earl of SELKIRK: My Lords, I should like to intervene in the debate, even though I did not give my name to the noble Baroness. This is probably one of the most important Papers on housing that has been produced in this country. I recognise it as a very bold effort to break into the last quarter of the 20th century, but, listening to some of the speeches today, one realises that it has quite a long way to go in persuading some people to agree with its propositions. I am sorry that we have not been able to make a little more progress with rented houses. I do not propose to argue this point. My noble friend Lady Young mentioned one or two matters in that regard. However, I should like to say to the noble Baroness, Lady Birk, that unless this Government can do something about this matter, it will be much more difficult for another future Government to do so. There is always the possibility of retroactive, or possibly repealing, legislation which would discourage people from taking advantage of what I think the noble Baroness will not deny is an integral and an important part of the housing structure of this country.
The most important point in the Green Paper lies in the phrase—which has already been quoted—
"we must make it easier for people to obtain the tenure which they want".
This is absolutely fundamental, and if the Government can have the courage to carry that through, they will provide an enormous boom for their fellow countrymen. There is no doubt that people want to have their own houses. Any examination of this situation shows that about 80 per cent. of the younger people today want to own their own home. With great respect to the noble Lord, Lord Murray of Gravesend (who is not here), I should say that this is not because they are cheaper; they are more expensive.

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People want their own homes for sound reasons relating to independence and privacy—qualities which we are all entitled to have, and which I believe are proper and good for the health of the nation.
I should declare my interest, in that I am the president of the Building Societies Association, though I have no authority whatever to speak on the association's behalf. I am not concerned in its guidance or direction at all, but naturally I take an interest in what I believe is one of the most important aspects of building. I am grateful to the Secretary of State for saying that the building society movement is one of the most powerful pieces of engineering ever devised for mobilising small savings. This is true, and I ask the Government never to forget that this movement is based on the delicate premise that you borrow short and lend long. As the noble Baroness knows very well—because she took part in the celebrations—this has been done for 200 years, but it has taken a long time to evolve, and it demands a great many balances which could all too easily be upset.
We welcome the encouragement which is given in this respect, but it is worth reminding the House that there is a higher percentage of owner occupation in this country than in any other country in Europe with, I think, the exception of Finland and Norway. The figure stands at about 55 per cent. But the percentage is lower than those in New Zealand, Australia and the United States of America, although those countries have adopted from us the system of housing finance which we invented; in other words, they have been more successful in developing the very system which we invented. It is no secret that building societies would very much like to sow some seed corn in Europe in order that they may benefit by the invention which we have evolved here. I hope that that will prove possible. It would seem to me to be a very natural devolution of the European Economic Community, at some time or other.
I want to refer to one problem here which I believe is very real. The Green Paper very properly encourages, and seeks to help, people to gain owner occupation. So here the concern would
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be with a considerable increase in demand. What I am concerned about is whether there will be a corresponding increase in supply. Here, I am very worried as to how this will take place. I think it fair to say that up to now, of the houses bought about 40 per cent. had been rented property. We all know that rented property has practically come to an end. I suppose that there are about 3 million rented properties, which could conceivably come onto the market at one time or another. But I doubt whether we want fewer rented properties. They are an integral part of the movement of industry, and of the convenience of certain families, and it would be a great pity to reduce the number of rented properties.
Of course there are council houses. Undoubtedly a certain number of them will be sold, and I believe that there is a movement from council houses to owner-occupation which is quite reasonable and proper. There is no reason why people should not do that. However, there is the other point, concerning new houses. There are very real difficulties here, and the pinch comes in the fact that the price of new houses is governed by the price of existing stock; that is to say, it is not governed by the cost of building the houses, but by the price at which secondhand or other used houses can be bought. This makes it very difficult in present circumstances for builders to produce as many houses as we would like.
Here the old question of planning arises. Anything the Government can do to help here would be of assistance towards speediness and simplicity in planning. Most developers would, I think, say that at present the period involved here extends to about 2½ years, and probably that is not too bad. That time costs money. What it costs per house, I do not know, but it might easily be in the order of 10 per cent. when you come to add up everything.
Then, of course, there is the availability of land—a complicated subject which I shall not go into today. But in spite of what has been said today by, I think, the noble Lord, Lord Northfield, I believe there is a danger of putting the standards too high. Standards are desirable, but they inevitably put up costs. There is, as we have heard today, some very

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fundamental housing which is required which does not need the highest standards, however desirable they may be. If I may say so to the noble Lord, Lord Northfield, sometimes the best is the enemy of the good. The basic requirements may no need exactly the same level of standards.
My Lords, there are ideas here, and we shall look forward very much to seeing how the Government can execute the policies they have in mind. They are at present, of course, restricting lending—they are actually reducing the amount of money the building societies can lend—and they are also trying to extend the lending to marginal properties. This is no had thing, and it is not causing any particular difficulty, for the reason that a borrower and a lender have interests which arc not very dissimilar. It is no good borrowing money on a house which is not worth 10 or 20 years' purchase. You are just wasting your money; you are putting a millstone round your neck: and the same consideration exists for the lender. The difference between the two is not as wide as is sometimes thought, unless you bring in the element of subsidy, which is, of course, a different proposition altogether.
I am just a little concerned as to whether the Government are going to try to exercise too much control. The French say "L'appétit vient en mangeant"—and who knows whether the Government may not want, bit by bit, to extend their control ? Building societies are essentially voluntary organisations. People deposit voluntarily; they lend money voluntarily; they are associated together voluntarily in the Building Societies Association. They can go any time they like. I think the only power the Association has is to dismiss their members if they do something unwise; otherwise, it is purely a voluntary arrangement. The Building Societies go voluntarily to discuss their problems with the Government. I believe the discussions are mutually beneficial, but, of course, I know no details about this. But if the element of master and servant were to arise then I think that perhaps intolerable damage might well be done. I therefore hope that the Government will not try to destroy the goose which is laying the golden egg.
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I am going to add only one more point, and then I shall sit down. We are, I think, gradually building up a stronger body of owner-occupiers. There are owner-occupied houses in the depths of bad city centres. They can deteriorate just as well as rented houses, and it is very important that we should not let this happen in the future. I should like the Government to consider assistance, not so much for rehabilitation or improvement, for which there are grants, but for ordinary maintenance. I believe that, ultimately, it is very important that the first signs of deterioration should be stopped; and I should like to suggest that there should be some income allowances to allow for the proper maintenance, ordinary maintenance, of houses. They are an important element in the capital of this country; their defects must be remedied at once. Almost everything else in this country is allowed some maintenance allowance, some depreciation allowance; but not houses. Why is it, may I ask, that offices are normally kept better than private houses? It is because this is paid for before tax. This is the basis, and some step in this direction, to maintain the quality of our houses, is, I believe, essential. I believe there are many ideas here which are of great value, and I hope the Government really will have the courage and strength to carry through those which are worth while.
5.45 p.m.
Lord O'HAGAN: My Lords, my noble friend Lord Selkirk has made my problem, which was bad enough already, even worse. If he can make a speech of that quality by a process of spontaneous combustion, having given no thought to the matter beforehand, your Lordships will understand that my position, having to say a few words on behalf of this side of the House at the close of the debate, is one of extreme difficulty. I believe that this debate has been one of considerable quality. Of course, much of that is to be put down to my noble friend Lord Middleton, for the particular characteristics of his introduction, when he used his deep local knowledge to illustrate the wider and more general problems that we are attempting to discuss this afternoon. I am sure that even the noble Lord, Lord Northfield, felt a little sadness that he had given up the chance to initiate this debate,

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although he made up for it later on in a most notable speech, on which, after a minute or two, I should like to comment in more detail.
I cannot claim to be an expert on this subject. Indeed, anybody who claimed to be an expert on the whole extent of what we are discussing today would be bound to be a fraud, in my view, because it touches every sphere of our daily lives and it intervenes in the whole range of the nation's activities. I am glad that the noble Lord, Lord Davies of Leek, is saying, "Hear, hear!", because, while I may want to tease him a little later on in a most gentle way, I want to agree with him about the importance of the subject-matter. For me, the subject of housing is the most vivid and important interlocking of social and economic policy. It is where the two bite on each other in a way which means most to the citizens of this country.
At the same time, it is also a range of official activity (if I may put it like that) which brings to the most poignant of argument, sometimes, the relationship between central and local government. How much independence do you allow the councils as against the fears of the central Government that spending may get out of hand, may have inflationary effects or may bring about huge loans, the interest on which will make the management of the economy that little bit more, or perhaps very much more, difficult? Therefore, I think that any serious political discussion must have housing policy at its heart; and I should like to agree with those noble Lords who have welcomed this Green Paper, if only as, at the first stage of my remarks, a way of focusing our minds on the very fundamental issues which we must examine. We may have different views as to the priorities and how we should cope with the problems, but I am sure we can all agree that a housing strategy is a prerequisite for responsible Government in the latter half of the 20th century, and this debate illustrates how your Lordships can apply your collective wisdom to this knotty problem.
I do not want to become argumentative, but as the noble Lord, Lord Murray, was talking about units of accommodation my noble friend Lord Soames lent towards me and said, "Do you remember what Winston said about 'Units of accommodation, sweet units of accommodation'?",
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as a parody on "Home, sweet home". We are talking about homes, places where people live, not just numbers on a board or figures on a graph; and I think that when we are looking at the way in which housing should be considered at a political level we must try to remove ourselves from doctrinaire statements of view and remember that this is something which is meant to enable people to live, work and enjoy a family life. Therefore, I am very glad that since this Government have reached power they have begun to move away from some of the more extreme positions they held.
If you were to examine some of Mr. Crosland's essays in his last volume of collected essays and to contrast the views expressed with the policy now being implemented by the Government, you would see that there is an indication of discreet but important movement. This housing policy consultative document illustrates some of that movement. We have moved away from massive municipalisation, and that attitude which took it as read that it was essential to extend the public sector. In theory, we have moved away from a rigid system of housing expenditure although we have not gone as far as we might. I wonder whether this will be one of the things about which the noble Baroness will be able to tell us more when she winds up. It will be interesting to hear whether the criticisms of housing expenditure which have been acknowledged are going to be acted on. Again, in spite of rumblings in certain quarters, we have not slipped beyond a certain figure towards indiscriminate cuting of mortgage allowances. There is progress in help for first-time buyers—something that has been a concern of this Party for many years and for which we put forward specific proposals. A charter for tenants in council houses has been introduced. Many of the things that we have been asking for in that field have now become part and parcel of the policy of the Government.
There is also some movement towards replacement of the cost yardstick for council housing, and if the noble Baroness could bring us up to date on the Government's views on those aspects of housing policy that would add to the usefulness of today's debate. I and, I am sure, my noble friends would also be grateful if she could tell us more about the review of

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Parker-Morris standards and its outcome. I should add that much of what I was going to say has already been said rather better by my noble friend Lady Young but if the debate is to finish on a tidy note I think it would be useful to remind your Lordships once again of the changes that have taken place during this Government's tenure of office, changes that are indeed marked by the issue of the policy document which we are debating today.
I have tried to indicate that some development, some progress in thought, has occurred in Government circles, and I am sure we are all grateful for it. We should like to know—and I hope the noble Baroness, Lady Birk, will tell us—what Her Majesty's Government plans to do next. What are the signposts in housing policy? Where are we going from here? If a review of this sort has any real purpose it is not merely to provoke learned discussion or to encourage your Lordships to have a worthwhile debate; it is to stimulate action by Her Majesty's Government. I hope the Minister will be able to announce what new action the Government will be taking. Having read that she said about the Community Land Act last week that it was immaculate, perfect and had nothing wrong with it and could not be amended either in practice or on the Statute Book—
Baroness BIRK: My Lords, I have not got a copy of Hansard with me, but I am sure I did not use the words "immaculate" or "perfect".
Lord O'HAGAN: My Lords, I am more than happy to withdraw the word "immaculate". The concluding remarks of the noble Baroness were these:
"I did not get up and say that we were prepared to repeal the Act in the short or the long term; and certainly there is no question of amending it in the near future",
and, speaking to my noble friend, she said:
"I hope he will maybe not love it, but learn to live with it and help to make it work".
I would not describe that as an attitude that showed evidence of wanting to change the situation. I should like to know whether there is any attitude of change in the Government's housing policy. I
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should particularly like to know what the noble Baroness thinks about the points which I shall now put to her: for example, I understand that at the moment it is impossible to transfer revenue from council house sales from the housing revenue account to other accounts, so that the money is locked into one particular account and therefore is not so useful as it might be. If she was able to tell us something about that, it would be an indication of real movement. I understand that there was a proposal to introduce legislation to enable local authorities to charge a mortgage rate equal to that recommended by the Building Societies Association. Has anything come of that? A question raised by my noble friend Lord Gridley was: is any real action to increase the building of new houses to be expected or is it something like the Community Land Act and matters associated with it, which the Government wish to leave as it is?
I do not wish to detain your Lordships much longer but I should like to ask one or two final questions particularly relating to the private sector. This was touched on by many of my noble friends and particularly my noble friend Lord Gisborough, and I think that, in the course of her very interesting speech, my noble friend Lady Vickers also mentioned it, though I may have made a mistake. What is the Government's attitude towards the private sector, particularly in relation to the question of rented accommodation? We note the increased protection for resident landlords and the easing of the position of flats over shops; these are small but welcome steps. Is anything on the lines of setting expenditure on maintenance against income, as suggested by my noble friend Lord Selkirk, being considered? And what about the publicly accountable letting agency by which it was hoped to increase investment in the building of houses?
Lord DAVIES of LEEK: My Lords, I should like to get this straight. I remember, when I was in the other place, Schedule A, about which the noble Earl will know. I think that there is support on this side for the reintroduction of something like Schedule A. Is that what the noble Lord, Lord O'Hagan, is aiming at—that the idea mentioned by the noble Earl, Lord Selkirk, should be reintroduced?
Lord O'HAGAN: My Lords, I am not sure that I am old enough to grasp what Schedule A really was. If it is a method of providing for the setting-off of expenditure on rented accommodation against income before tax, I expect that the noble Lord and I are in agreement.
I do not want to say much about housing associations because I think they were, perhaps, at first considered to have more importance than turned out to be the case. It was hoped in many places, particularly on the other side of the House, that housing associations would fill the gap left by the private sector. But I think that they have an important role to play, as my noble friend Lady Young has said. I wonder whether the noble Baroness would let us know whether the Government have any proposals to assist housing associations in a particular way in the inner city. This is an area in which housing associations could have an important role to play. I should like to know whether the Government have looked at this problem and have come to any conclusion.
I am afraid that my comments have been rather a fruit salad covering in an indiscriminate way all the different topics that your Lordships have looked at in greater detail from a special standpoint. My noble friend Lord Cathcart made a particularly powerful intervention on behalf of the Armed Forces. I will not attempt to spend any longer in trying to sew, with a thread that could never be long enough, all the different fragments that go to make up housing policy. I would try to stress once again the fact that we are not discussing simply bricks and mortar or houses or even units of accommodation. It is a much wider and more deeply important subject than those words would lead one to suggest. If we do not have an adequate housing policy, which means in the end that we do not have adequate housing, we are taking great steps to increase crime, break up families, end the life of our local communities and to destroy the feelings of villages and cities which bind our people together. When we are examining the nature and purpose of housing finance, we are doing something really closely linked with the fabric of our life as a country—something far more than the abstract figures and terrifying tables in this document might lead one to believe.
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I close, if I may, on an extremely pompous note that your Lordships may find wholly objectionable; therefore, I apologise. It comes from having spent five years of my childhood wanting to be a clergyman, so that I have the Bible ringing around in my head. As I was preparing for this debate, for some reason a phrase kept knocking at the corners of my mind. On checking, I discovered that it was a quotation from St. Matthew:
"The foxes have holes and the birds of the air have nests; but the Son of Man hath nowhere to lay his head."
As long as I am not being blasphemous, if one is talking about people who "have not where to lay" their heads—and I mean that not just literally but also in the sense that families may stay together and communities may live in neighbourliness with each other—one is talking about something that is really of remarkable importance. I hope that this debate on the housing policy document will give the noble Baroness, Lady Birk, a chance to explain to your Lordships what steps the Government are now able to take to look forward to the future of housing policy.
6.4 p.m.
Baroness BIRK: My Lords, I, too, am grateful to the noble Lord, Lord Middleton, for his choice of Motion for debate, and, in fact, I think, for the transfer from my noble friend Lord Northfield to himself; because this is the first time that this consultation document has been discussed in either House of Parliament. I would only take issue with my noble friend Lord Davies in his referring to "this little debate". It is not a little debate; it is rather a big debate. I am now the 13th speaker and I should like to reassure the noble Lord, Lord O'Hagan, that the only thing worse than speaking one before last is to speak last of all. I think that all the speakers till now have been people with considerable knowledge in the field and, although there are a number of points on which I would disagree with them, I think they all have had something constructive to contribute; and what, I think, is very important and gratifying is the wide, if sometimes qualified, welcome that has been given to the Green Paper.
I think that all of us would agree that housing is one of the most important

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responsibilities with which any contemporary Government must be concerned. Good housing is part of the cement which binds a stable community together and we would run great risks as a society if we neglect it. The noble Lord, Lord Middleton, drew particular attention to the housing Green Paper published in June of last year. The Green Paper and its companions, the rather difficult Technical Volumes, are far and away the most comprehensive review of housing policy in England and Wales ever published by a British Government. They have become essential reading for everyone who wishes to participate effectively in the development of housing policy.
I can offer no more than a sketch of the essential elements of the Green Paper since, as my noble friend Lord Davies pointed out, it produced no fewer than 74 conclusions and recommendations. It being a rather weighty paper in substance (but not necessarily in volume) to hold, I wish that my noble friend had told us some of his stories of Welsh lodgers. Perhaps he will save that for the bar. I would summarise its watchwords, in a very broad sense, as selectivity, personal choice and stability. These are the principles to be found in its foreward which describes a more selective and discerning approach to housing policy; making it easier for more people and their children as they grow up to get the kind of home they want—this was stressed by all noble Lords and particularly by the noble Earl, Lord Selkirk; and keeping housing costs a reasonably stable element in family finances—and here I think that the noble Lord, Lord Gisborough, put it extremely well. I shall return to these watchwords later but, first, I should like to say a word about existing achievements both since the war and since the present Government took office.
Housing progress—and housing change—over the last 25 years number among the most important social developments of the century. By 1976, about 55 per cent. of all households in England and Wales were home-owners and, as the noble Earl, Lord Selkirk, pointed out, this is very high in the world's records. Thirty per cent. were public sector tenants and only 15 per cent. were still private tenants compared with 90 per cent. in 1914. So home ownership and the public rented
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sector are clearly going to predominate for the foreseeable future. This structural change has been matched by remarkable improvements in housing standards. In 1951, in England and Wales, there were nearly 10 million families living in physically unsatisfactory houses, crowded conditions or sharing. By 1976, the figure had fallen to 2.7 million—or about one in seven. But, of course, 2.7 million is still too high. Nevertheless, it is interesting that this afternoon part of the debate centred on my noble friend Lord Northfield talking about greater improvement and more sophisticated alterations to houses, while the noble Earl, Lord Selkirk, I think, pointed out that sometimes the excellent pushes out the good.
What is important is that we should today be debating this—even though with differences of opinion—at this level, rather than having to discuss a majority of houses or a tremendous amount of housing being in such very poor condition. Even the figure of 2·7 million does not tell us all we need to know, since it includes people sharing voluntarily but excludes those living in unsuitable housing such as families with small children in high-rise flats.
Our estimate in the Green Paper was that about 1.8 million households in England and Wales—more than one in 10—are still living in circumstances which are unacceptable by contemporary standards. This is the hard core of housing need. It shades into conditions which, though less unsatisfactory, still cry out for improvement. Then perceptions of housing requirments alter with changes in the economy and the society at large. And as the housing of more families improves, the less fortunately housed and those with special needs—such as the elderly or handicapped—are thrown into even starker relief; and quite rightly so. That was described very movingly by the noble Baroness, Lady Vickers.
We could not afford to let the housing clock stop when the Green Paper was issued last June. The noble Lord, Lord O'Hagan, asked me where we are going from here, and I should like to point out that we have not stopped: we have been going all the time while the Green Paper was being discussed. Action has been continuing, as my noble friends pointed out, all the time. The Green

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Paper has put forward an evolutionary, and not revolutionary, policy, built on measures taken by the Government since 1974—a policy which has continued since the publication of the Paper. For example, since we took office a substantial body of reforming legislation has been put on the Statute Book—my noble friend Lord Murray pointed this out and I shall not now go into details. And while this formidable body of legislation was being enacted 1 million homes have been completed and over 160,000 dwellings disposed of under slum clearance; over 1·2 million building society mortgages have been granted to people buying their first home; and 700,000 homes have benefited from grant-aided improvement.
I hope the noble Lord, Lord O'Hagan, will not mind if I twit him a little bit. It is all very well to say: "These are the things we are all working for and this is what we had wanted to bring in all the time", but there is a difference between wanting it and taking action. It reminds me of what the late Morgan Phillips said in commenting on the Conservatives' cry at the time that they were fighting for the social services; he said: "Who are they fighting?" So I think there is a difference between wanting to do something and really getting down to doing something. In addition, these substantial achievements—and they are substantial, although not yet by any means total—took place in a time of grave economic and social difficulty, with many implications for public expenditure. The recent Public Expenditure White Paper (Cmnd. 7049) provides for a gradual but steady increase in capital expenditure on housing. Investment planned for this financial year amounts for England to about £2,250 million at survey prices, which represents £265 million more at the same price base than the expenditure of the Party opposite in their last year of office, 1973–74. Capital allocations for 1978–79 made to English local authorities in January amount to £100 million more in real terms than in 1977–78. Substantial progress has also been made since the Green Paper itself was published.
The width and complexity of the review, which has been touched on by almost every speaker this afternoon, required the widest possible debate, and the response to our invitation to discuss the Green Paper has been encouraging. Over 300
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individual responses have so far been I received and some of the most substantial did not reach us until well into the New Year. I am not complaining about this because the subject is far too important to be skimped, but full consideration of so many closely reasoned but differing points of view is a protracted task and we are not yet therefore in a position to say when the final outcome of these consultations will be. Simultaneously, separate consultations have been initiated with interested bodies on the detail of several proposals which were only outlined in the Green Paper, and copies of consultation papers on a variety of topics which were issued subsequent to the Green Paper are available in the Library. I shall be glad to give a list to any noble Lord afterwards.
Many proposals are already being actively pursued. Take home ownership—commented on by most speakers—where my watchword of "personal choice" is especially relevant. The Government appreciate that growing numbers of people aspire to become home owners and are able to do so.
In reply to the point raised by the noble Baroness, Lady Young, on the alteration in the present arrangements for tax relief on mortgages, perhaps I can refer your Lordships to paragraph 5.38 in the document—the one which expresses the Government's view. The Government do not consider that there is a case on grounds of housing policy for alteration to the present arrangements for tax relief on mortgage interest and on the option mortgage subsidy. That is the Government's view and the Government's policy.
Three interrelated factors effectively control home ownership: the cost of buying a home; the supply of mortgage funds; and the supply of houses for sale. In recent years, building societies have provided between 80–95 per cent. of all loans for house purchase. Because of their major influence over the private housing market, we believe building societies should now give weight to social as well as financial criteria when deciding whether to grant mortgages. The Green Paper, therefore, urges societies to he more willing to lend on older property and give higher percentage mortgages and low-start mortgages where appropriate. I think that the noble Earl, Lord Grey,

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also showed some sympathy for this down-market lending. This means that local authorities, in their turn, must be ready to reinforce these policies through improvement grants and loans; by topping-up loans; and by offering to guarantee repayment of building society mortgages. These are ideas we shall pursue in continuing discussions.
A good example of voluntary cooperation by the BSA in this field is the building society support lending scheme for local authority nominees. It has had its teething troubles, but progress has been made. This year, building societies have agreed to make available £276 million for allocation to mortgage applicants nominated by local authorities in England. And several steps are being taken to improve the scheme; for example, an appeal procedure has been introduced for applicants dissatisfied with the building society's valuation of the property they wished to purchase. The noble Lord, Lord O'Hagan, raised a point concerning local authorities charging their mortgagors a rate related to the BSA mortgage rate. That is certainly under consideration and we are asking for the views of local authorities, but. I am sure the noble Lord will appreciate that it will require legislation.
A high Government priority has been to do more to help prospective first-time buyers who cannot manage to scrape together a deposit or who find it difficult to meet the initial monthly outgoings. This is why the Government have introduced legislation to provide bonuses and loans interest free for five years for first-time buyers. The Bill is making progress in another place and will be coming to this House, when we can debate its provisions more fully. The noble Baroness, Lady Young, gave it her qualified support but said she would have liked more to be given. I would only say, "So would I"; but there is a certain limit to usable resources at the present time.
A steady supply of mortgage funds is, of course, closely connected with another of my watchwords: "stability in family housing budgets". Here the Government are building on the voluntary policies operated by the Joint Advisory Committee on Mortgage Finance. The broad objective of the committee is to
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secure a reasonably steady flow of mortgage finance at a level sufficient to promote a good rate of new house building without bringing about a house price explosion of the kind we witnessed in 1972 and 1973. This is one of the central points of whatever is being done: to try, to the best of our ability, to avoid what happened only a few years ago, something from which we are still suffering.
This Government have no intention of presiding over the indiscriminate sale of council houses, irrespective of local housing need. Where there is no shortage of rented accommodation, some sales may be, and are, a sensible way of widening access to home ownership. But we are not going to see local authorities sell off their best stock and run second-class estates for second-class citizens. These points were emphasised by my noble friends Lord Davies and Lord Murray. We propose to continue to watch the situation but to allow authorities to determine their own sales policies within the constraints imposed by the general consent. In any case, the issue needs to be seen in perspective—11,200 sales in England during 1977, out of a council house stock of 5 million.
Home buyers need houses to buy, as the noble Lord, Lord Gridley, pointed out, and, if it is to deliver the goods, the house-building industry needs stability above all —not quick and illusory profits in boom and bust conditions. The industry needs a reasonably stable level of effective demand for housing, if it is not to suffer from periodic, damaging under-utilisation of its resources, with all the other things that go with it, such as the terrible tragedy of unemployment. It will therefore benefit from policies designed to secure a stable level of effective demand. A comparison of the switchback figures of annual starts between 1970 and 1974, and the much steadier level since then, proves that some success has been achieved. If I may here interpose a reply on the point made by, I think, the noble Baroness, Lady Vickers and the noble Earl, Lord Cathcart, defence housing is a matter for my right honourable friend the Secretary of State for Defence, with the PSA as agent, but I will certainly pass on to him what has been said this afternoon.
I need, perhaps, say little more about the supply of new houses and land, since the

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question of land supply was discussed only last Friday, as the noble Lord, Lord O'Hagan, pointed out. However, we do not accept that there is a general shortage of land for house building, although, as I agreed then, there may be certain local difficulties in some areas, in regard to which joint consultations are now taking place with local authorities. The encouraging rate of starts for houses in the private sector does not sustain the view that land shortage is seriously delaying production.
I should now like to say a word on the private rented sector, about which the noble Lord, Lord Middleton, the noble Baroness and most other speakers spoke strongly. This sector has been declining since before the first world war, and it is unrealistic to think in terms of a reversal of this trend. I do not think it makes any difference how many times we discuss it on Unstarred Questions, on Motions or on Starred Questions; it will not alter the pattern. Words will not do that. But the Green Paper makes it clear that there are groups of people who will go on seeking accommodation in the private rented sector; for example, those who need quick access to housing and wish to stay for only a short time in one place.
The Green Paper outlined a number of proposals to help stimulate the supply of lettings, but it remained firm on one point; the Government intend to retain the general principle of security of tenure for the tenant in his home. However, having said that, there is probably room for minor changes in order to increase lettings at the margin. That is an answer to the noble Lord, Lord O'Hagan, and other noble Lords, who mentioned inner cities, in particular. The Green Paper suggested encouraging letting by resident landlords, and temporarily absent homeowners, by speeding up the procedures for re-possession, and encouraging lettings of flats over shops and other accommodation normally let with a business, by providing that they should not attract full security of tenure. This, again, is under discussion with the rest of the proposals. I do not want to say any more today about the private rented sector, because we are still working hard on the review of the Rent Acts—which, as noble Lords all know, is a quite different review—and have not reached conclusions on that. Furthermore, I have
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recently answered several Questions on the Rent Acts.
I now come to the public rented sector, which must be looked at in the context of the need to gear solutions to different local circumstances, and the principle of selectivity in the use of policy instruments. It is essential that primary responsibility for assessing housing needs should rest with the local housing authority. Authorities now have to prepare comprehensive housing strategies, embodying an assessment of local requirements across the board, as a basis for their own annual Housing Investment Programmes. I was pleased to hear the enthusiasm with which my noble friend Lord Northfield referred to these programmes. Local strategies and HIPs were first introduced last year and the new system is still running in. But we are confident that it can give increased scope for local judgment, and it is very heartening to have support from the people working in the field. There are also other ways, which are currently being considered, of reducing detailed central Government supervision of local authority construction programmes.
The new housing cost yardstick—which was mentioned by my noble friend Lord Northfield and other noble Lords—buttressed by Parker-Morris standards, is an established feature of public investment in new housing, and cannot, of course, he lightly thrown aside. Resources are not yet so abundant or needs so few that value for money can simply be forgotten. But needs and tastes are certainly changing and a simpler system, providing local authorities with greater responsibility and incentives to seek out value for money, is definitely our objective. My right honourable friend has therefore now placed some initial proposals affecting the yardstick before the local authority associations at the Housing Consultative Council, and detailed studies are to be taken forward in a joint working group. I must, in answer to the noble Lord, Lord Gisborough, say that the yardstick was increased in March this year, and always reflects regional variations in prices on the basis of tenders analysed.
The Green Paper also contains proposals for a reform of the public sector subsidy system. The present system was set up on an explicitly temporary basis, and the

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main aim of the new proposals is to ensure that subsidies are more closely geared to the different and changing needs of local authorities. But this must be done gradually, and must not impose any sudden new burdens on rents or rates.
We intend to retain the present framework of housing revenue accounts, with freedom for local authorities to decide their own rents, subject to not budgeting for an annual profit. But we propose to adjust subsidies in such a way that authorities will be enabled to keep rents down to a reasonble level. In answer, again, to the noble Lord, Lord O'Hagan, the Government have no intention of causing local authorities to generate surplus rent revenues. I certainly do not imagine he is suggesting that tenants should subsidise the rates.
Before I leave the public sector, I must make one point quite clear. While the Government welcome the trend to home ownership, we know that many people find that they can obtain what they want by renting in the public sector, and prefer to do so. Many just cannot afford to buy, even with special help, and I agree with the noble Earl, Lord Selkirk, that some people are not prepared to sacrifice other things in order to buy their own homes. But if we are to have, as I believe we should, very open options for personal choice, then not only must we accept, but we must cater for, the people who, for whatever reason—whether financial, social or personal—want to rent in the public sector. This Government will certainly not let public sector housing decline into a welfare role, so that the people in rented council houses are considered to be at the outer end of the social spectrum. The public sector has a variety of rôles, developed over the years, and we believe that a strong and attractive social sector, and one which gives as much independence to the individual as possible, is essential.
It is for this reason that I am delighted that, from all sides of the House, noble Lords have stressed the need for flexibility, with which I absolutely agree. This is why I consider our proposal for a "tenants charter" so important. It calls for a revolution in attitudes towards the management of housing, which means changed attitudes on the part of many local authority elected members of all
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Parties, and of some of the professional officers, too. It also calls for help and advice from central Government, such as the new Housing Services Advisory Unit is designed to give. It means that, locally and centrally, we have to bring housing—by that I do not mean just the physical bricks and mortar but people's needs, aspirations and desires and the trends relating to what they want—into the latter part of the twentieth century and not behave as though it were many years behind the times.
The noble Lord, Lord Middleton, touched on the question of improvement policy. The preservation and renovation of the existing housing stock is a key element in our housing policy. As I am responsible for building conservation in my Department, I feel very strongly about this, for it is one way in which we can conserve old houses which intrinsically are worth conserving and add them to the housing stock. About one-third of our housing stock is over 60 years old. Even if we wanted to, we could not replace those 5 million houses with new ones, except over a considerable period. Most of these houses are structurally sound, but many of them lack the kind of facilities which most of us take for granted. Therefore, at the one end we have housing which needs to be provided with basic facilities, while at the other we have the kind of housing that my noble friend Lord Northfield spoke about, where improvements at a higher level—the garages and other refinements which many people demand—are required.
We have already implemented one proposal in the Green Paper for increases in the cost and rateable value limits for house renovation grants. Cost limits for grants towards the installation of basic amenities, for example, were increased by more than 80 per cent. The Government have also launched a major publicity campaign. One of the problems, like so many of the problems in the whole of the social field, is that too many people are not aware of what is accessible and what they are entitled to. Grants approved in the last quarter of 1977 following these increases were the highest for two years. Considerable additional resources have been made available for grants in 1978–79, and we shall shortly be publishing proposals designed to make the grant system more flexible and responsive to the needs

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of both those living in older housing and of the housing itself. But we are not going to reopen the door to the kind of abuses which took place prior to 1974.
This has been a wide-ranging debate, and in winding up I cannot pretend to have dealt with every point that has been raised. However, may I end by reminding the House that we as a nation can honestly claim to be better housed than ever before. What remains to he done is not, therefore, the easiest but the most difficult part. This is the paradox of our present housing policy. It is to identify and tackle the remaining hard core of personal need, which gets harder to identify as we whittle away. It is to replace the great housing drives of the past with sensitive redevelopment of our cities to standards that will sustain rapidly changing tastes and requirements and also help to build up the inner areas. It is to raise the standards of management to meet the aspiration of every tenant so that he or she is a customer rather than a case. And, above all, to ensure that every householder, young or old, better or worse off, able or disabled, obtains the housing that suits his or her personal requirements. This is a daunting task for the 1980s, and central Government cannot do it alone, yet this is what we must aim for and we shall bear our full share of responsibility by injecting drive, imagination, flexibility and humanity into our housing policies.
6.33 p.m.
Lord MIDDLETON: My Lords, I am so grateful to the two noble Baronesses and the nine noble Lords who have taken part in this debate and to the noble Baroness, Lady Birk, for her reply on behalf of the Government. After my noble friend Lord O'Hagan has summed up so admirably, at this stage it would be proper for me only to pick up just one or two points from so many constructive contributions and to be very brief about it.
It is most valuable to have the benefit of the experience of the noble Lord, Lord Northfield, especially as he is the chairman of the Telford New Town Corporation. I agreed with so much that he said. For instance, it certainly is the case in my own region—we have heard it several times this afternoon—that housing problems are not so much those of quantity as of quality and
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distribution. I agreed with the noble Lord's very realistic view about the privately rented sector and about the need to give local authorities more flexibility in their programmes.
I agreed also with so much that was said by the noble Lord, Lord Davies of Leek—especially his emphasis on the need to encourage mobility within our economic system. We had the advantage of the long experience of conditions in London and the LCC of the noble Lord, Lord Murray of Gravesend. I recognise that he is not fully in accord with some of the reasoning behind so many of the Green Paper recommendations, but I am glad that he said what he did about extending mortgage loans to older property. With his great knowledge of building societies, we must be more than grateful for the notable contribution of the noble Earl, Lord Selkirk.
Many noble Lords who have spoken have said that this is a good Green Paper. There is a great deal of good in it. As my noble friend Lady Young said, it represents a substantial shift by bringing housing policy on to common political ground. That is good. As my noble friend also rightly said, the question is: what do the Government propose to do about it?
May I end by again thanking the noble Baroness, Lady Birk, for her reply to this debate. As the noble Baroness said not long ago, she and I have spent many hours facing each other debating housing, local government and allied subjects. This has always been a great pleasure—to me, at any rate. The noble Baroness said to me the other day that she did not think that during those hours in this House either of us had ever convinced the other on any single point. However, if this Green Paper brings us a little more on to common ground—and I really think that it does —perhaps that state of affairs may change for the better.
We should not be content with any euphoria that may arise from the study of a Government document that does at last face housing problems realistically. We shall wait with much interest to see how much of it is taken to heart and adopted as a programme for action by the Party opposite. My Lords, I beg to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

BRITISH AIRWAYS: AIRCRAFT PURCHASES
6.38 p.m.
The Earl of KIMBERLEY The Earl of KIMBERLEY rose to ask Her Majesty's Government whether they have given any directives to British Airways on the possible purchase of American aircraft, and if not, why not. The noble Earl said: My Lords, I beg leave to ask the Unstarred Question standing in my name on the Order Paper. This Unstarred Question is twofold. It is short term and long term. If we take the short term, the immediate question is the replacement of 19 aircraft, whereas the long term is replacing the rest of British Airways' short- and medium-haul fleet by the mid- to late-1980s, and in all there is a total of about 105 aircraft. Last November we had a debate on the short term, and so far as I can see, since then, alas! little progress has been made. Last Tuesday at Question Time the noble Earl, Lord Kinnoull, raised the point with the noble Baroness opposite and again I did not think that we got very far.
Who is to blame for the fact that this Unstarred Question is put down for debate tonight? Whether it is the Government I do not know, but it does not really matter. What matters is that there seem to be two nationalised companies which are both connected with the air, one of which does not appear, on the face of it, to want to co-operate that much with the other. So let me say here and now that this is no criticism in any way of British Aerospace. But it must be a slight criticism of British Airways whom I criticised last November for the same reason as I am going to criticise them tonight. They have got themselves into an unprecedented mess in that they, a world's major airline, find that they have to replace part of their fleet at 24 months' notice.
Somewhere along the way there must have been some forward planning which was badly at fault, and therefore somebody must have blundered. Therefore, if we can clear the air a little tonight and thereby perhaps see where we are all trying to go, the whole future, not only of British Airways hut of British Aerospace, should become much more positive and very much more lucrative.
Briefly, if we look at the timetable, we see that last November British Airways requested proposals from British Aerospace and other manufacturers. Proposals came from British Aerospace for an improved version of the BAC 1–11—the 600—and the other aircraft that was produced was the Boeing 737. British Airways have since made comparative technical and commercial evaluations of these two aircraft and I believe they are now asking the Government to give them the go-ahead to buy Boeing.
British Airways' arguments for the 737 are that, in spite of operating a multi-type fleet—they already have 25 1–11's—there will be a substantial improvement in their operating surplus during the years 1980 to 1994. I should like to ask the Government to say whether these costings, which have been produced by British Airways, have been audited by the Department of Trade or by some other independent body. British Airways say that they have gone through all the data and the assumptions with the Department of Trade and with British Aerospace and have explained how they did their sums. They go on to say that these have been audited—and I quote—"in all important respects". If that is so, presumably British Airways will have no objection to being cross-examined on this subject. I believe that British Aerospace could and should dispute the difference in profitability that British Airways claim. I presume that British Airways worked on a traffic forecast several years ahead and, on this assumption, worked out a percentage load factor and seat-mile cost.
We in this Chamber know only too well how such calculations can sometimes go awry. We only have to go back to the unhappy case of the VC 10 versus the 707, where all those assumptions were subsequently proved false. If we buy 19 Boeings, they will be considerably more expensive than 19 1–1l's and so to justify the 737 the operating revenue must be considerably higher—I repeat, considerably higher—in order to make it a commercially viable operation.
If we briefly take some comparisons, we find that the 1–11 600 is a considerable improvement on the existing 1–11 which has nevertheless been very successful worldwide. Also, due to the high commonality that British Airways would have

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because of their 400 and 500 1–11s, spares including engines and everything else would be much more economical and on British Airways routes both aircraft would perform equally well. Both aircraft conform to present and future noise requirements.
If we look at the commercial evaluation, it must surely he that British Airways have spread the high introductory costs of the 737 and then taken credit for the traffic growth in later years so that it may fill the slightly larger aircraft. But, by the mid-1980s, with the advent of high technology and new aircraft with improved environmental qualities and a lower fuel consumption, the existing aircraft that they have will be steadily replaced. At the best, this is a stopgap for British Airways and therefore in my opinion the 111–600 should be chosen while at the same time British Aerospace can simultaneously immerse itself in new projects. British Airways admit that their equipment and spares costs will be reduced by the 1–11 and I also think that British Aerospace believe that there are even greater benefits from introductory costs in commonality even though these may possibly be harder to account for.
If we take the operating surplus, which is receipts less expenses for the 19 aircraft over 14 years, this can be the yardstick for British Airways. We find that the receipts over the total expenses are only marginal. The operating surplus is very sensitive to the smallest percentage change and 1 per cent. out—well within existing margins of error—makes a difference of £15 million. So, even if all the rest of British Airways' assumptions are fair, the degree of accuracy surely must be open to doubt. Also we must not forget that we may well put in jeopardy the 1–11 600 sales to Japan as well as the licensed production of these aircraft in Romania. At stake are potential exports of up to 50 Rolls-Royce Spey-powered 1–11's, with an export value of over £300 million, against stiff competition from Boeing, Douglas and Fokker.
So, according to my calculations, if we bought 19 737's, that would produce a negative balance of payments of nearly £250 million. US dollar assets of this magnitude have to be earned the hard way from other sectors of British industry.
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In the last few weeks, we have had a lot of publicity about Europe v. America and there can be no doubt that Boeing and the other United States manufacturers are very frightened of British Aerospace in Europe. This week the heads of the three giants are coming over here to see the Secretary of State for Industry. I say that they are coming on bended knee because they realise that if we were to go into Europe we should give the United States aerospace industry a very real setback. The 737 will, they hope, be the wedge in the door; the 757, their new-old aeroplane, is the trap they are laying for us. The bait is the power plants going to Rolls-Royce, while we build the wings and the under-carriage and a hit of the rear end of the fuselage, as a result of which British Airways will once again buy Boeing.
But the 757 is not the ultimate objective for Boeing. Their ultimate objective is two new—new aircraft—the 767, which is a twin 180-seater, and the 777, which is a tri-jet and a larger aircraft. So if British Airways should buy the 757, which may force British Aerospace to go in with Boeing, it will be the beginning of the final demise of our own aerospace industry. We shall just become plain sub-contractors. The Americans are the toughest businessmen in the world. They ride roughshod over all opposition. They have one objective, and let nobody forget it: that objective is the total and final destruction of British Aerospace, together with the aerospace industry of Europe. The easiest way for them to do this is to offer us the carrot of the 757 and probably on favourable terms the 737, as a result of which British Airways and British Aerospace will then have internal strife.
To me, it is incredible that Sir Leslie Murphy, the chairman of the NEB, came out in favour of Boeing, but maybe Rolls-Royce are very dear to his heart. That is quite right and proper: Rolls-Royce are very dear to my heart. But alas! it is a short-term view and I sometimes wonder why British Airways have this powerful Boeing lobby, particularly in view of what the Prime Minister said last April: "Buy British". I hope his speech is heeded by his senior Ministers in the Cabinet.
We so often seem to be like ostriches with our heads in the sand. Will we never learn? America has its anti-Concorde

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lobby; America has its "anti-Harrier to China" policy. We have the disaster of the TSR 2 and the F-111 and recently we have had the loss of the British landing guidance system. One-third of our aerospace industry is in the equipment and material sector, including avionics and there are many thousands of people employed in those sectors. The loss of our indigenous civil airframe design capability will lead to the decline and eventially the demise of these vital sectors and will lead to even more unemployment.
It will not end there. A further and equally important, but nevertheless disastrous consequence will occur. We shall inhibit and destroy our military aircraft design and capability. Rolls-Royce may argue that they will lose a big contract in America but to develop a derivative engine from the RB-211 at a cost of £250 million seems to me to be putting the cart before the horse. It is making a powerful engine less powerful; it is like putting the engine of a heavy duty truck into a sports car. I fear, too, that Rolls-Royce have little chance in the long-term market with the 767 and the 777 against the American engine giants. So the 757's engines can only be described as a short-term and short-sighted policy. I say categorically here and now that Rolls-Royce, for its capability in the long term, needs a European airframe industry to help support it.
So, to conclude, let British Airways buy the 1–11 600 which will then help British Aerospace to develop the Jet 2—the wide-bodied new European aircraft—instead of sub-contracting for a narrow-bodied new-old 757 fuselage designed in 1974. Let the Cabinet tell British Airways that it must think and buy British and Anglo-European, by which means British Aerospace and British Airways will keep their rightful places as leaders of the world in their respective spheres.
6.51 p.m.
Lord TREFGARNE: My Lords, we are, as so often, grateful to the noble Earl, Lord Kimberley, for raising a matter such as this in your Lordships' House. But having said that, and having listened to his speech with great care, I am tempted to wonder whether the matter is quite as black and white as he would have us
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believe. Nobody is a greater champion of British Aerospace than I am, and I yield to no one in my admiration of the BAC 1–11 and the other products which they now produce. It would indeed be tempting to follow the noble Earl along the lines suggested in his Question and try to persuade the Government to direct British Airways to buy a British product, which is what I fancy the noble Earl would wish.
Without doubt the Government have the power to issue such a direction. Section 40 of the 1971 Civil Aviation Act certainly enables them to issue directions to British Airways in matters such as this when the national interest is thought to be at stake, and certainly it would not be difficult to argue that this was such a case. The law—if that is the right word—of that particular clause has been explored fully in your Lordships' House in 1973, when the noble Baroness, Lady Burton, was anxious that British Airways should be directed to follow a certain course. Indeed, I remember your Lordships supporting her in the Lobby to that effect. But that particular matter was not held to be in the national interest and no direction was issued.
I doubt, however, whether that would be a very good idea. Nor will I follow the temptation of attempting to compare the two aircraft, the merits of which the noble Earl has so graphically described. But I think we should consider the implications of the Government forcing British Airways, with or without a Section 40 direction, to buy one or other of the two aeroplanes which the noble Earl has discussed. The first and perhaps the most important implication, we are told, would be that the decision on subsequent requirements of British Airways, the Boeing 757, for example, or the European Jet 1 or Jet 2 aircraft would be pre-empted by a decision to buy one or other of the two options now before us. I am not entirely pursuaded by that argument, because I am not sure that a decision, for example, to buy the 737 now would necessarily prevent our proceeding with one of the European options for a later requirement. However, that is one of the points that is put to us. Of course, it would be bad PR for the 737 or the 1–11—and I imagine it is the 1–11 we are really considering—if British Airways were clearly shown to be

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buying the aircraft against their so-called better judgment. It would be bad, I think, for the management of British Airways to have an aircraft, as they saw it, foisted upon them, because they would then feel that they were not being given the tools which they thought were best for the job. Tied up with that would be the possible need for a subsidy. It is common knowledge that British Airways were pressured—I will put it no stronger—to buy the Trident 2 and 3 and were able to extract from the Government of the day a subsidy of £25 million, if my memory serves me right, to cover what they thought were the increased operating costs of the Trident aeroplane. They at that time, I believe, would have preferred to have bought the Boeing 727, but the Trident was felt to be a better idea for political and social reasons.
There are, of course, a number of equally powerful arguments, many of which the noble Earl has described, as to what would be the outcome of a Government direction to British Airways to buy the American aeroplane. I do not think it needs a Government direction for that; it would be the outcome of British Airways following their own inclination. Maybe it would preclude British Airways from proceeding to buy the Boeing 757 in due course, with all the implications that that would have, not least, perhaps, the loss to Rolls-Royce of the sale of their engines for that aeroplane. It would mean that there was no immediate work to British Aerospace in the manufacture of the 18 or 20 1–11s which are now under consideration.
It would mean that the cost of the Boeing 737 aircraft would have to be paid across the foreign exchange market and thus to the disadvantage of our balance of payments. It may be that, on the other hand, it would allow some form of redress in that way to British Airways' operating figures, because British Airways themselves claim that they will make better profits by the use of the American aeroplane.
I want to make it clear that the technical decision on which of the two aeroplanes is the best is not one on which nor I fancy is any Member of your Lordships' House really competent to make a judgment. It is a very highly technical matter. British Airways have said quite
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clearly that they prefer the Boeing aeroplane, but even their judgments, with all the information available to them, with all the skill and expertise at their command, have not always proved to be entirely correct. The early Tridents—not the ones to which I was referring just now—were later thought to be too small, and they were tailored precisely to British Airways' own requirements. The noble Earl, Lord Kimberley, referred to the question of the VC 10. Certainly British Airways were very reluctant to take on board all the VC 10s which they were subsequently obliged to do, but in the upshot they wished they had had more. Thus, if the technical decision is really so difficult, I think we ought to take very real care before we endeavour to force a decision for political or social reasons upon British Airways. I am not saying that there are no circumstances under which Section 40 or any other directive power should be used, but I believe that this in particular is a case in which we should take the greatest care.
Having said that, I hope and believe that British Airways themselves will take the greatest care before reaching a hasty conclusion, and I do not think it would be right for them to dismiss the 1–11, particularly the improved version which has been offered to them, with quite the alacrity which they seem to have done thus far.
7 p.m.
Lord HARMAR-NICHOLLS: My Lords, the noble Earl, Lord Kimberley, deserves more robust support on the Question, and the way in which he presented it, than my noble friend Lord Trefgarne felt he could give him on this occasion. I agree with my noble friend that one should not be precipitate in using reserve Government powers to force an organisation such as British Airways to change its mind on a matter as important as this. But that, as I understand it, is not what the noble Earl asked for. Both in his Question and his speech he said that this decision seemed to have been taken purely on economic grounds, that figures had been produced to show that in operating costs it would be better for British Airways if they had the American aircraft; and they have given all the details to try to arrive at that conclusion. The noble Earl doubted whether those figures, which

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perhaps caused the decision to be made, could withstand detailed examination. He asked whether the Board of Trade, or the people who vetted the figures, could be questioned; could they be examined technically to find out whether or not the conclusions at which they arrived could withstand examination? That, as I understand it, is all that he has asked for at this stage.
Lord TREFGARNE: If the noble Lord, Lord Harmar-Nicholls, reads the Question on the Order Paper, he will see that the noble Earl, Lord Kimberley, asked whether the Government had issued a direction to British Airways, and if not, why not?
Lord HARMAR-NICHOLLS: Yes. That is right. But the noble Earl in presenting his case on this made it perfectly clear that the first step for which he asked was that the facts on which the decision had been made should be proved to be well based. He went on to say, in his judgment—this is perhaps where I am with my noble friend and not with the noble Earl—that if on that initial examination by experts the main facts could not be sustained, then he would like the Government to use any powers they have to bring about what he would obviously prefer; that is, the purchase of British aircraft rather than American aircraft. I believe that the noble Earl should be supported as strongly as we can do so in asking the Government to examine and re-examine the figures which have apparently caused the decision.
The figure I have heard is that on payload and so forth it is worth about £10 million a year, on the figures that have been put forward, which have caused British Airways to come down on the side of the purchase of American aircraft.
That £10 million is under question. I believe that we owe it certainly to the future of the British aircraft industry, to see that any possible doubt be removed on that issue. If we have reached the point where the operating costs of British aircraft as against Amercian aircraft were about the same, we would have a duty to see that the benefit of the doubt was given to the British aircraft.
The part which I do not think has been taken fully into account is that by giving the orders to the British builders we are likely to help the unemployment situation,
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which will get worse and worse if we lose our world market for aircraft. We should take into account the future prospects of the aircraft industry such as the noble Earl described. There can be no doubt that if we eventually purchase the American aircraft, as against the British one, it is bound to undermine the appeal of the British aircraft industry over the whole field of building aircraft. That is bound to happen.
This is where we come up against one of the problems of the industry being nationalised. If this were still a private industry, if British Airways were a private company, and if it had a duty only to look after the interests of that private company, it could be excused for coming to a decision where the immediate operating cost and the short-term advantages must be taken into account. However, this is not a private enterprise industry. It is nationalised. The Government have these reserve powers if they want to use them. If the impression is given abroad that, although the British Government have these powers they are so convinced that the American aircraft is so much better than the British that they must use those powers, that is bound to affect the appeal of the British aircraft industry over the whole factor. That is a danger. We must avert that if we possibly can.
In one matter I go the whole way with the noble Earl. When dealing with the American aircraft industry we are dealing with some very tough "cookies" indeed. We are dealing with people who really understand the subtleties and tactics of giving short-term advantages to the customer in order to obtain long-term advantages for themselves.
I was struck over the weekend when discussing this with what the noble Earl would call one of the sub-contracting companies. I was trying to examine them upon the arguments that have been presented here today. One manager said to me, "It is all a bit phoney, really, because we are actually going to produce quite a large part of the aircraft that will be bought. It will be made of British components. British parts will go in. On balance it is not as bad as you think. We shall not lose the order."
I personally am knowledgeable only on what are called small businesses. In

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all small businesses this trick is as old as the hills; that one has a loss leader in order to collar the market. When one has the market one makes up in later sales for the losses sustained on the loss leaders that one had to gain the monopoly. I am convinced that Tesco Stores do it. The stores in the High Street do it. It often works. The American aircraft industry is likely to do it in this instance. We should be alerted to that.
I believe that all the long-term arguments—and that is what we should be concerned with because we hope that the aircraft industry will go on for many years—insist that the most rigorous and careful examination is made of the supposed economic advantages in the short term of buying the American aircraft. If those advantages are proved to be correct, it makes it much more difficult to take the next step that the noble Earl has in mind. But if those short-term advantages are proved to be ill-based, or have been exaggerated, it could well be that those would be good grounds for the Government using the powers given to them to have the whole matter looked at again over the whole of the field.
I want to support the speech of the noble Earl. I believe he made it clear that there is some doubt about the advantages, which seem to have tipped the scales, as to whether they are soundly based. If we cannot, at any rate, promise our own aircraft industry that we shall look at that as a Government and make certain that is so, by means of actuaries, accountants, quantity surveyors and engineers' figures being examined, we shall be ill-serving one of the major industries of the next century.
7.8 p.m.
Baroness STEDMAN: My Lords, I began to realise on Tuesday of last week, when the noble Earl, Lord Kinnoull, asked a Question on this subject, that your Lordships are not only interested in this matter, but also very knowledgeable about it. Although this has been only a short debate tonight, in the light of the fact that we had a similar one with many more speakers six months ago and have had Questions since then, I should like to thank those noble Lords who have taken part tonight, and the noble Earl,
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Lord Kimberley, for giving us the opportunity to have some further discussions on the matter, and also to thank them for the valuable contributions that they are making, by degrees, to my knowledge of aviation matters.
The subject has a number of important aspects. It gives rise to the varying viewpoints that we have heard tonight with only a very few speakers. Additionally, it is important to be clear that some of the issues to be discussed are, to an extent, separate. I shall say more about that later in my speech.
The noble Earl's primary Question is whether the Government have given any directions to British Airways on the purchase of American aircraft. The answer to that is, no. All aircraft acquisition proposals by British Airways require the approval of the Government under the British Airways Board Act 1977. But there is no power of specific direction which can be used to instruct an airline to acquire a particular aircraft. Therefore, the formal reason why the Government have given no directive is that we did not have the power to do so—our power is a negative one in that we can withhold approval for a particular proposal.
Lord TREFGARNE: My Lords, I am sorry to interrupt the noble Baroness, but I am not sure that she is right, or to put it another way, perhaps I am quite wrong. Is not Section 40 of the Civil Aviation Act 1971 available to the Government and is this not a matter in the national interest as required by that section?
Baroness STEDMAN: My Lords, yes, in so far as it is a matter of national interest, but it is still a negative power. We can say, "You cannot do this," but we cannot specify what you can do under it. That is my interpretation. I see that the noble Lord does not agree. I shall take the matter up with my advisers and we shall certainly write to him about it. However that is my understanding.
The Government's White Paper on the nationalised industries, of course, proposes that there shall be powers of specific direction for the nationalised industries. But this proposal has yet to be enacted and it is therefore not relevant to our debate tonight because it needs legislative

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time. The immediate issue which has prompted the debate is the proposal by British Airways to acquire 19 Boeing 737 aircraft.
I think that it might be helpful if I sketched the background to this. British Airways' most pressing need is for a short-haul aircraft to replace some of its older Tridents which will not meet the noise regulations due for application in the United Kingdom on 1st January 1986 and these are also becoming increasingly uneconomic to operate. Against this need, the Board evaluated three aircraft: the BAC 1–11–600, the Boeing 737 and the McDonnell Douglas DC 9–40 and following such detailed evaluation the British Airways Board decided unanimously that the Boeing 737 is the plane which would best meet their requirements. Accordingly, they have proposed to the Government that they should be given permission to acquire it. In doing so they have made it quite clear that they are in no way denigrating the BAC 1–11, of which they already have a number in their fleet. It is now the Government's responsibility to consider that proposal and, in reaching their decision, to take into account all the relevant wider considerations including those which have been raised by noble Lords this evening.
Considerable concern has been expressed about the effects on British Aerospace of a decision in favour of Boeing 737s, and I should like to take this opportunity to assure your Lordships that all aspects of the interests of British Aerospace are certainly factors which the Government will take properly into account in reaching their decision. As the noble Earl, Lord Kimberley, said, one aspect which has caused particular concern in some quarters is the possible effect on British Aerospace current efforts to sell a version of the BAC 1–11 to Japan. In this respect I am grateful also for the opportunity to make it clear that the Japanese requirement is for a specialised aircraft with short take off and landing capability and this requirement is met by the version of the BAC 1–11 which British Aerospace have offered to them. This is not the same version considered by British Airways who applied quite different criteria in assessing their own replacement needs and the two cases are therefore not comparable. I hope that all concerned will bear this point in mind.
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There has also been reference in your Lordships' House and elsewhere to recent exhortations to buy British and it has been suggested that this should apply to British Airways in the national interest. However, it has never been proposed that buying British should involve any element of compulsion and indeed it is not only a matter for purchasers but also for domestic suppliers who should aim to offer the the right goods at the right time at competitive prices in the domestic market. This is one of the objectives of the Government's Industrial Strategy. As I have mentioned, all aspects of the national interest will be given due weight by the Government in considering British Airways proposal including the position of British Aerospace, the need for the airline itself to continue to be competitive and profitable and also all the environmental considerations. Some reference has been made to the evaluations which British Airways carried out in the course of considering their proposal and the fact that these have been subject to some dispute by British Aerospace.
The operating cost has been referred to this evening. The 737 has 114 seats as against 99 in the BAC 1–11. British Airways claim that the former's extra seats will be filled in a high proportion of the flights. So, because of its smaller size, the BAC 1–11 is more expensive per seat to operate. British Airways have calculated that the operating surplus of a fleet of 19 Boeing 737s would be £10 million a year more than for a fleet of 19 BAC 1–11 s, or, to put it another way, £500,000 per aircraft per year, which is a total of £140 million over the life of the aircraft. British Aerospace have disputed these figures. They say that the assumptions upon which they are based are unfairly biased towards the 737. Therefore, the Departments of Trade and Industry are attempting to establish the facts in consultation with British Aerospace and British Airways with a view to reaching agreement on these details between the two industries so that a proper decision can be made. The question of aircraft noise is also an important aspect.
Lord HARMAR-NICHOLLS: My Lords, can the noble Baroness—I do not suppose that she can—if it is found that the £10 million (which I also mentioned

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had been put to me) could be questioned, give an indication whether that would affect the Government's attitude as regards the advice they would give to British Airways?
Baroness STEDMAN: My Lords, I cannot commit the Departments of Trade and Industry as to what their line would be, but I should have thought that if the facts are not as they have been put and are proved to be wrong, then these are facts which must be taken into consideration before the final decision is made. That surely is sensible and good business practice.
As regards environmental considerations we must face the question of aircraft noise. That also is one of the factors of British Airways' proposal. The airline is faced with a need to replace some 80 aircraft including the older Tridents before the end of 1985 in order to comply with the more stringent noise regulations which are in firm prospect. In this respect noble Lords will no doubt be pleased to know that any aircraft that British Airways may acquire will be distinctly quieter than the Trident 1's and 2's which they are to replace. Some people have argued that British Airways should wait until the next generation of even quieter aircraft becomes available before they even begin their replacement programme.
However, the noble Earl, Lord Kimberley, has already chided us that we were behind in starting our replacement programme. As I have explained, the current proposal is now the first stage of the major replacement programme linked to noise considerations and in order to train the new pilots for the new aircraft and to ensure that normal operations are not too severely disrupted it is essential that the total programme should be phased in between now and 1986 and that we should start it soon. No new technology quieter aircraft yet exists which would meet British Airways' immediate requirements. We understand that it is unlikely to exist until well into the 1980s. The airline's immediate requirement on the other hand is for replacement aircraft which can be in service by 1980 and British Airways has therefore to make its selection from the aircraft that are, at present, available.
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I turn now to some of the wider issues which have been raised. At the forefront of these is the decision which has yet to be taken on whether British Aero space should look to Europe or to America for future collaboration on new aircraft projects. The current position is that there are a number of new projects, mostly in the medium size range, on the drawing board in Europe and America and British Aerospace are examining the various options very closely to determine which is the best course to pursue. In this respect I am sure that British Aerospace will note the views expressed by noble Lords in this debate on the relative merits of the options that will be available. It will be clear from what has been said that the issue is highly complex with very far-reaching implications for the future of our Aerospace Industry. Therefore, all of us concerned are most anxious that the eventual decision should be the right one. The initial assessment is one for British Aerospace themselves to make and the Government await their final view on this.
The Earl of KIMBERLEY: My Lords, I am sorry to interrupt the noble Baroness, but could she please give some assurance tonight that she will tell her right honourable friend that when these American chiefs arrive he must be very wary of the carrot he will be offered?
Baroness STEDMAN: My Lords, I am sure that my right honourable friend does not need telling by me, but I shall certainly draw his attention to the comments of the noble Earl. In the circumstances, there is nothing more definite that I can say on this matter at present, but the views expressed by noble Lords represent a valuable contribution to our continuing consideration of the subject.
As regards British Airways future aircraft requirements, it has been argued that their proposal to acquire Boeing 737s to meet their immediate replacement needs is the thin end of the wedge and binds them inextricably to American sources for future requirements of medium-sized aircraft. Others argue that the best prospects for British Aerospace in the future do lie in American collaboration, and that therefore their interests will be further served by British Airways choosing further United States aircraft.

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The fact is that, if British Airways were permitted to acquire Boeing 737s now, it does not commit them to American sources in the future for medium-sized aircraft replacements and in that respect the two issues are distinct. When the time comes British Airways will be free to consider which of all the aircraft that are then available—whether they be European or American—is the one which seems best fitted and best suited to their needs. The question of commonality is only one of a number of considerations that the airline will need to take into account when the time comes and, as in the present case, Government approval will be required for any acquisition proposals. It is important to remember that the future projects about which we hear and read so much are still in a sense "paper planes" and that British Airways have yet to reach a firm view on their future acquisitions.
Noble Lords have in this debate and at Question Time last week expressed their concern about the possible effects of an acquisition of Boeing 737s by British Airways on our relationships in Europe, and in response to this I would make two points. First, apart from the BAC 1–11, there is no alternative European aircraft available which can be considered to meet British Airways immediate short-haul requirements. In this respect, it is interesting to note that the national airline of one of our EEC partners, France, has been trying to lease 737s to replace their ageing Caravelles and was only prevented from finalising this by a pilots' dispute over related manning levels. Secondly, as regards the future, I have made it clear that British Airways acquisition of 737s would not prevent them from considering whatever European aircraft may be developed to meet further replacement needs in respect of other types of aircraft.
I am sure, from all this and from my answers to Questions last week, that noble Lords will realise that the Government are not yet in a position to announce decisions on the main issues which have been raised in this debate; nor can I tonight give any indication of when they will be able to do so. However, I can give noble Lords the assurance that all the relevant factors and viewpoints—a number of which have been covered by contributions from Members of this House—will be given due weight
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by the Government in their continuing deliberations. Perhaps I may conclude by saying, as I did at Question Time last week, that when we have considered all these, I hope that we shall have made the right decision for British Airways and for British Aerospace.