The Minister deserves our sympathy in having to bring this matter of housing subsidies forward today. It is a matter of great complexity; and, of course, it has a certain impact upon our social life. The fact that the Minister is here today is a sign of the crisis in the affairs of the Government. What is really happening? The hon. Member for Peterborough (Mr. H. Nicholls) presses—I always give him credit for it—at the Tory Party conference for the building of 300,000 houses a year. The Minister of Housing and Local Government achieves the conference target and as a result he moves on to the Ministry of Defence.
In achieving the conference target he sinks the Minister of Education—[An HON. MEMBER: "Nonsense."] Oh, yes, because of the diversion of capital away from the educational programme which his housing achievement causes. Of course there is no way of kicking a lady upstairs to the House of Lords so she becomes a Dame Grand Cross of the British Empire. Today we have here as the Minister of Housing and Local Government the former Minister of Supply.
I wish to deal, if the hon. Member for Peterborough will allow me, with the question of the Minister's notional figure, which I think is £1,575. I say that that notional figure was arrived at by taking the latest Girdwood figure and adjusting the elements in the notional figure to it. I do not think I am twisting the facts in any way in saying that. I have gone into these figures at great length before and I have already mentioned the element of the repairs allowance in the notional figure. At all events, I am not trying to mislead the House.
The difficulty this afternoon—I say this with great deference and in no attempt to be patronising to the Minister—is that he has come rather new to this subject. Some of us have lived with the subject of this debate for rather a long time and there is no room for any smart tactics today. The history of this step lies in the fact that when we left office the interest rate was 3 per cent. It was put up to 3¾ per cent., and at the time I said that the increase of interest rates on local authority houses over a period of 60 years really meant, in the case of a house built under those terms, an increase of 4s. 4d. per week. That figure was generally accepted at the time.
What we are now speaking about in our references to housing subsidies is something which affects the payments of rents by council tenants. Further than that, it was on the figure of 3¾ per cent. that the Minister agreed to confer with the local authorities in order to achieve the present housing subsidy figure. The interest rate has since risen to 4¼ per cent., but it was on the basis of 3¾ per cent. that it was proposed to increase the subsidy to the present figure of £26 14s. Therefore, the hon. Member for Peterborough says that, if the Government after a period of time reduce the interest charges, it is reasonable that they should reduce the subsidies—I think that is the hon. Member's point—if everything else is equal.
We have to address ourselves today to the question whether everything else is equal, when £1,575 is given as a notional figure representing the figure at which it is assumed a local authority will be able to build a house of 900 square feet. In effect, the figure is not £1,575. The Minister himself has agreed that the figure for a house has risen by £58 since 1952. But that is not the whole picture. I represent a northern constituency, but a borough surveyor in a local authority in outer London told me the other week that the average cost per house was £1,850. That rise has been because of the rise in the cost of living.
My right hon. Friend is asking for some reconsideration of this question, bearing in mind that this is a new Minister who is looking at housing policy afresh. The right hon. Gentleman's predecessor indicated a fairly sharp change in general housing policy before he left office. Having achieved the target of 300,000 houses, he was then readjusting the future allocation on the basis of a greater number of houses for sale, a greater number to be built by private builders, and rather fewer to be built by local authorities. We are considering today the local authorities, because this is their subsidy.
I do not want to go on record as being in favour of high subsidies. I want to bring them down at the earliest practicable moment—all other things being equal, to meet the point of the hon. Member for Peterborough. It is salutary to think of the average figure of the subsidy from public funds for pre-war council houses. I think the average national subsidy is about 4s. 8d. per house in cases where local authorities do not operate general pools but consider pre-war houses on their own for statistical assessment. Today many council houses are being subsidised at the rate of over 13s. a week and there are flats which are being subsidised at the rate of over £1 a week. That is the sort of crazy finance which cannot go on for very much longer.
I therefore do not want the Minister or any other hon. Member opposite to suggest that I am arguing the case for higher housing subsidies in themselves. What I am saying—and this is the crux of the argument—is that the Minister has to reconcile this reduction in subsidy with an increase in housing costs.
The hon. Member for Peterborough ranged a little wide on rents and I do not want to go as far as that, but I want to say a word or two about the social implications of a cut in subsidies. I hope that will not be inappropriate or out of order at this stage. On this side of the House we must not suffer from any cowardice on this subject. There are people in West Leeds living in back-to-back houses who will not have the amenities of council houses for a long time. I know of many thousands of people on the housing list who, in effect, are paying subsidy to the tune of 13s. a week in order to maintain other residents of West Leeds in council houses better than their own back-to-back houses.
It is no use the previous Minister bringing forward the excuse that these tenants of council houses are in the same position as the mythical tenants who are presumed to receive a subsidy from private landlords through living in rent-controlled houses. These back-to-back dens of iniquity in my constituency have been paid for over and over again and the tenants are living on nobody's back. In the main, many of them are those who could and would afford to live in a better house if we could provide enough better houses.
It is the pressure of national physical capacity against family needs which we face here, and anybody who has been on a local authority housing committee and has allocated houses knows of the different types of hardship which we have to assess. I have always considered that amongst the greatest types of hardship is one which has received very little consideration by local authorities; and it is that of the decent young married couple who have never had a home of their own and who are anxious to have a family and to bring up a family decently and in comfort. We tend to think of the big family as always having priority, as, of course, it must have priority for the sake of the children.
This sort of thing is reflected in the rents which have to be paid and the Ministers must somehow address themselves to a national rent policy in relation to the subsidy. The hon. Member for Leeds, North-West (Mr. Kaberry), who sits beside the Minister, was on the city council which is the home of the differential rents system. One of the greatest housing reformers in this country, the Rev. Charles Jenkinson, was the father of these systems. All my experience tends to make me recoil from the differential rent.
I have generally found that few people can be trusted to make an accurate return of their income where their own interests are concerned, and I am not in favour of setting up all sorts of inquisitorial methods at local level. The Income Tax man can do that sort of thing and it is far better to set a basic minimum rent where there is one income in the house—a rent which the tenant should pay. Here I am in common with many Labour local authorities who have decided that where there is more than one income in the family everyone over the age of 21 will add a figure of 2s. 6d. or 3s. to the rent. That is a simple device which obviates the necessity of a means test.
The other day I was going over a housing site and I saw motor cars parked on the green in front of a row of houses —a green which had been meant to beautify the estate. I do not say that it is a bad thing for council house tenants to own motor cars; I want to see more cars; but it makes one consider the question, for when one knows how much it costs to run a motor car one must ask whether such a person should receive a subsidy as compared with the tenant of a back-to-back house who will never get a council house in Leeds.
We can easily overcome this part of the problem. The council can compel tenants to have proper garages built and can charge such a rent on the garage as will recoup the deficiency on the house. In Leeds they are considering two possibilities. They have considered letting a piece of land alongside the house at £4 a year ground rent and allowing the tenant to build his own garage. I imagine that that is a good financial undertaking for the local authority. The new policy is to say that where a man has a car he must have a garage built by the corporation for which he will pay 10s. a week, which again is a financial benefit to the housing fund.
We must cut out the overheads and the non-producers—those who go round looking into other people's business. We must produce simple schemes which will reconcile the position of the family man who is trying to bring up his family with the position of the middle-class person who wants a house and cannot afford to purchase it. I support the theory of my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) of abolishing the idea of housing for the working classes. I take the general view that need should be the determining factor. A man may come back from abroad on a decent income and not be able to buy a house at present prices. It is a question of charging an economic rent. We should let the Income Tax deal with all the rebates for the family. Let us have simple housing schemes which will enable the local authority to obtain a contribution from the man who can pay more—a contribution which will enable the authority to create a pool by which we make available a low basic rent for the lower-income groups.
The second point which disturbs me about all this is the fact that it costs £1,800 to build a house in London. I should be out of order if I went into the various devices employed by local authorities to keep the rent down, but these debates are useful if they bring us to realise that it is not how the local authority repairs the houses, it is not even how they build the houses, which determines the rent. What determines the rent is the contribution which we pay in interest to the finances in that building. The fact that three-quarters per cent. on interest charges for the Public Works Loan Board makes a difference of 4s. 4d. a week in rents is indeed a consideration.
If I associate myself with my hon. Friends in asking the Government to take back this Order, it is not illogical. If a Labour Government came in and they reduced interest charges, there would be an obligation on them to lower subsidies. We are not only speaking about Exchequer subsidies but about the rate fund subsidy.
One factor that presses on local authorities is that with every house they build they increase the figure of the rates, and those rates are paid by the whole of the community. It is entirely bad if we organise subsidies in such a way that they, somehow or other, divide our local communities into council house tenants and private tenants. All are members of the same community. Many of the people who go into the houses are ex-Service men. We hear the claims made for ex-policemen and ex-prisoners of war, and we should remember these things. We do not want to divide our communities.
In the last resort, we can get over the business only if we deal in equity between man and man, ratepayer and ratepayer, tenant and tenant. I am afraid that the general trend of subsidies has been to drive people into one or other of two camps. Often chairmen of local finance committees have had to choose between a 6d. increase in the rates for the generality of the tenants or an increase of 4s. a week for council tenants. That is a bad thing. Many of the ideas of subsidies as between one tenant and another outrage our sense of social justice. They should be looked at against a broader background than that provided by the Order brought in by a new Minister, whom we all wish well.
This is a most complicated matter. It is necessary for a new Minister to make himself familiar with his Department. Ministers come and Ministers go. Sometimes they go because they have got fed up with their last job. I have often said to the last Minister of Housing and Local Government that local Government reform would never come under him because he was looking over a foreign field.
The new Minister has come from the Ministry of Supply. In negotiations with him on questions connected with the engineering trade I found that he was a forthright Minister who did not appear with a conglomeration of officials so that he could get information at second-hand. I think that he is a man who is prepared to look at the job and to rest on his own judgment. In this case he has inherited rather too much. He ought to have given himself a breathing space if he wants to fashion a new policy which will do credit to him and justice to the people.