Orders of the Day — Housing and Town Development (Scotland) Bill

– in the House of Commons at 12:00 am on 18 February 1957.

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Order for Second Reading read.

3.40 p.m.

Photo of Hon. John Maclay Hon. John Maclay , Renfrewshire West

I beg to move, That the Bill be now read a Second time.

The main substance of the Bill falls naturally into three parts. The first deals with new rates of subsidy applicable to all houses, tenders for which are received on or after 1st August, 1956; the second deals with overspill. The third part does some miscellaneous but very necessary tidying up.

On the first two parts I will have rather a lot to say. The subject is detailed and of some complexity, and I am anxious to give as full an explanation as is reasonable of what is in the Bill.

On the third part, I propose to say very little as I believe that the Clauses are self-explanatory and, at this stage of our proceedings, need little detailed discussion.

If I were to risk a forecast of our debates both today and in Committee, I would not be excessively surprised if Part I provokes a certain amount of argument. On Part II, I would hope that there would be a substantial measure of agreement, but I would say this about Part I, that our approach is straight forward, that subsidies should not be given to those who do not need them. I believe that the House will realise the logic and fairness of this approach. There may be differences of detail or of emphasis, but we believe that this approach is in the ultimate interest of everybody, tenants, ratepayers and taxpayers, which today, in one form or another, includes everybody.

Having said that, I should like to begin the detail of my speech by calling attention to the major problem which is coming to dominate the Scottish housing scene. That problem is reflected in the emphasis placed in the Bill on the provision for what has now commonly become known as "overspill." In this Bill, we are providing a specially favourable rate of overspill subsidy and a new code of procedure for dealing with this problem.

Congestion in Glasgow itself is without parallel in the United Kingdom: 700,000 people are living within three square miles of the centre of that great city, at an average density of 400 persons per acre; indeed, in the real black spots, the densities are even higher. In one particular area, 12,000 people are huddled together in tenement blocks covering no more than 18 acres—a miniature town with twice the population of Oban, but occupying only one-fiftieth of the area.

Within this densely populated area the present housing standards were, and still are, unbelievably low. Many of these houses are beyond repair. The provisions of Clauses 6 to 8 of the Rent Bill, now in Committee, cannot in most cases apply to them. There is no real answer in the long run but to remove these houses and build modern ones. I was glad to approve the Gorbals Redevelopment Plan as the first major move towards that end, and, in spite of the overspill complication, we must all welcome and applaud that action of the Glasgow Corporation.

Nor are sub-standard houses the only problem. Of the 100,000 families on the waiting list for houses in the City of Glasgow, 43,000 are married couples, many with young children, who have no homes of their own and are living in rooms or with relatives.

In its attack on these problems, Glasgow Corporation has built over 40,000 houses since the war. Most of these are in large new schemes on the outer fringes of the city, many of them of new town proportions. But now, in two more years, virtually all vacant land in the city will have been exhausted and there will be practically no new sites left within the present city boundaries.

In 1948, the Government of the day embarked upon the development of a new town at East Kilbride, primarily intended to relieve Glasgow's needs; and I am glad to say that splendid progress has been made with this project in recent years.

Photo of Mr James McInnes Mr James McInnes , Glasgow Central

Did I understand the right hon. Gentleman to say that East Kilbride was designed to meet Glasgow's needs? If so, can he explain why only 1,500 of Glasgow's citizens are there now, after ten years?

Photo of Hon. John Maclay Hon. John Maclay , Renfrewshire West

What I said was that East Kilbride was primarily intended to relieve Glasgow's needs, yes. I am not quite clear on the point the hon. Gentleman is making, but already about 5,000 houses have been completed.

Photo of Hon. John Maclay Hon. John Maclay , Renfrewshire West

We hope that that will develop, if it is not happening in that way now.

Last year, the present Government embarked on another new town at Cumbernauld, and I am confident that before long this project also will make a major contribution towards meeting Glasgow's needs.

These measures are not of themselves enough. My predecessor in office in 1953 asked the Clyde Valley Planning Advisory Committee to undertake a study of the Glasgow overspill problem as a matter of urgency, and to put forward recommendations for its solution. I should like to pay a tribute to this Committee's work. The 18 local authorities represented on it have co-operated together with great good will, and I believe that no other joint planning body of this kind in the country has such positive results to show.

The Committee has recommended that a number of areas round Glasgow are physically suitable for development to cater for Glasgow overspill. At my predecessor's suggestion, negotiations are now going on between the Glasgow Corporation and the authorities of those areas to explore in a practical way what might be achieved.

There should be no doubt in anybody's mind that an enormous task lies ahead. Our immediate aim, in the next few years, is to keep the annual output of houses for Glasgow tenants up to its present 5,000 level in spite of the impending exhaustion of sites within the city. In the long term, at least 300,000 people will ultimately have to move out to new areas from Glasgow alone. Such a massive operation cannot be achieved without the closest co-operation between the local authorities and the Government, and an entirely new field of inter-authority partnership is being opened up by this problem and by the measures for dealing with it contained in the present Bill.

Against that background, I now turn to the provisions of the Bill. It is in two main parts. The first gives effect to the revised rates of subsidy for new houses built by local authorities as announced by my predecessor on 31st July last. The second contains provisions, chiefly relating to matters of administrative machinery, for dealing with the overspill problem. I should, in passing, perhaps make it clear that the grants for which the Bill provides, in both Part I and Part II, will not be caught up in the proposed new general grant which my right hon. Friend the Minister of Housing and Local Government outlined in his statement on 12th February.

Hon. Members will be familiar with the new subsidy proposals embodied in Part I of the Bill, but I should like to refer to them briefly and to try to clarify one or two points on which there has been some misunderstanding.

In the first place, I should remind the House of the proposed new rates, which will apply to houses covered by tenders received on or after 1st August, 1956. The Bill makes provision for a basic subsidy of £24 a house for sixty years. This will be available for all houses built to meet approved needs. By this are meant houses provided to rehouse people living in unfit or overcrowded houses or to house those who are sharing houses and need homes of their own, and those who need houses on grounds of ill-health or disability. I am, of course, prepared to consider any other category of genuine housing need that may be put to me by a local authority.

Then there are the special needs for which higher rates of subsidy will be payable. As I have indicated, we consider that the most urgent and pressing of these is overspill, for which the subsidy will be £42 a year. Houses provided to meet the urgent needs of incoming industry will, in approved cases, attract a subsidy of £30. There will also be a special subsidy for houses in the form of high flats, calculated on the basis that the Exchequer will bear two-thirds of the additional tender cost over that of ordinary houses. Houses built by local authorities in remote areas or for the agricultural population will continue to attract the existing supplement.

These new subsidy rates were determined in the light of the facts brought out in the Report on Housing Subsidies in Scotland by a Working Party of officials appointed by the local authority associations and by my predecessor, a report that was published at the end of July. This Report does not, of course, commit the local authority associations in any way, but the plain facts set out in it must be reckoned with.

The Government's approach is based on two quite simple principles; first, that subsidies should not be given to those who do not need them; and, secondly, that no one in genuine need of a house should be asked to pay more rent than he can reasonably afford. With these fundamental points in mind my predecessor came to the conclusion—and I am in full agreement with him—that Exchequer subsidies for housing should no longer be related to the cost of building a new house, but that any subsidy that the local authorities receive in future should be regarded as a further contribution towards the available pool of Exchequer subsidies.

The great bulk of local authority houses were built when costs were much lower than they are today, and the annual charges payable on these houses are small in comparison with the annual charges on new houses. At the same time, wages and incomes have risen, and it is hardly reasonable that the tenant of a pre-war local authority house should continue to pay the very low rent that was thought appropriate before the war.

It may be said that, even with the previous rate of subsidy, local authorities have failed to balance their housing accounts. That is true. Many local authorities have followed a policy of charging extremely low rents and balancing their books at the expense of the general body of ratepayers by increasing the rates. That has been the position for many years.

The average net rent—exclusive of all rates—at the present time is £15 10s. With the rates of Exchequer subsidy now being paid, however, plus a contribution from the rates of one-third of that subsidy, local authorities could balance their housing accounts by charging a rent of £34 on their existing houses. With the proposed new subsidies, the average rent necessary to square the accounts would be, not £34, but a slightly higher figure each year as new houses are built, up to about £38 or £39 in three or four years' time. The matter is, of course, in the hands of the local authorities—and of the local electors.

Local authorities, under this Bill, will no longer be under obligation to pay a fixed amount per house from the rates, since the statutory rate contribution is abolished by Clause 5, so the authorities will be free to decide themselves how much of their housing expenditure is to be met by the tenants by way of rent and how much by the ratepayers by way of the housing rate.

That average rent levels in Scotland are at present unreasonably low does not, I think, need much argument, since the facts are clearly set out in the Report of the Working Party. The low average level of net rents has no doubt hitherto been masked by the inclusion of owners' rates in rent, but this will be altered at May next under the Valuation and Rating Act. On the basis of the 1954–55 figures quoted by the Working Party it can fairly be said that while the average local authority tenant in Scotland pays more in rates than the English council tenant, he pays in rent and rates together substantially less than the English tenant.

I have explained these considerations at some length because there has been a good deal of misunderstanding about the basis of the new subsidy levels. These are framed on the assumption that the net rents of local authority houses in Scotland will, over the next few years, rise to an average of £39 a year or 15s. a week on all existing houses.

This does not seem unreasonable against the background of the facts about earnings brought out in the Working Party's Report. I should add that there are two or more earners in at least two houses out of five. Of course, there are many families with incomes under average, but in the case of any individual family hardship can be avoided by a scheme of rent rebates.

It is the Government's view, in the light of the considerations I have mentioned, that the subsidies provided in the Bill will enable most local authorities that are still faced with an urgent housing task to go ahead at least until 1961 without financial difficulty. There will be exceptions, and if, in fact, an authority is able to show that it is faced with an urgent task that it is not in a financial position to discharge, then I am ready to consider authorising the Scottish Special Housing Association, within the limits of its annual programme, to assist the authority. This applies to building for overspill, as well as to building for approved general needs. As hon. Members will have seen, the basis of operations of the Association is restated in Clause 23 of the Bill with this possibility in mind.

I am well aware that since my right hon. Friend made his statement at the end of July there has been a rise in interest rates and also some increase in the cost of new houses. I am, however, convinced that these factors do not invalidate the new approach to housing finance that underlies the subsidy proposals embodied in the Bill, an approach that the Government firmly believe brings into the finance of housing the degree of realism that the present situation requires.

Hon. Members will have noted that the Public Works Loan Board rate for loans to local authorities dropped on Saturday from 5¾ per cent. to 5½ per cent.

Photo of Mr James Hoy Mr James Hoy , Edinburgh Leith

How does that compare with 1951?

Photo of Hon. John Maclay Hon. John Maclay , Renfrewshire West

I have not got the figure here, but it is a drop of per cent., which is a good thing. It is a move in the right direction.

We are not saying that the individual tenant must pay more rent than he can reasonably afford. What we are saying is that there must be some limit to the burden falling on the taxpayer and the ratepayer and that this can be achieved by a more realistic rent policy that has regard, among other factors, to the revised rates of subsidy that we are proposing.

Of course, Mr. Speaker, it is inevitable that there should be protests when subsidy reductions are proposed, but I am bound to say that many of the protests that I have already had seem to ignore the basic point that the local authorities have at their disposal a large pool of Exchequer subsidies on their existing houses built at a time when costs and interest rates were much lower than they are at present. I hope that what I have said will help to remove misunderstand- ing, but my hon. Friend the Joint Under-Secretary of State will be ready to deal with this and other aspects further in replying to the debate.

I turn now to the second part of the Bill, which seeks to establish an administrative and financial basis on which local authorities can deal with the vast and complicated problem of overspill. That problem is how to provide for the excess population that cannot be rehoused on the spot, when overcrowded central areas are redeveloped in line with modern standards. So long as this excess can be rehoused within the boundaries of the same housing authority, existing administrative and financial arrangements are suitable enough. When the excess cannot be rehoused in this way, however, and must go from the district of the "exporting" authority to the district of some "receiving" authority, there emerges an overspill problem of the kind with which Part II of the Bill seeks to deal.

Overspill houses can, with the help of the Bill, be provided in three different ways. The first in logical sequence, although perhaps the one least likely to be of practical value, is for the exporting authority itself to use the powers it already possesses under the housing Acts to build houses in the district of a receiving authority. Such houses can attract the overspill rate of Exchequer subsidy of £42 a year and this would be forthcoming for a development of really substantial size that was clearly a separate community quite detached from the built-up district of the exporting authority. But operations of this kind by one authority in the district of another give rise to a good deal of difficulty, and we should be unwise to expect too much to be done in this way.

Accordingly, the Bill opens up two further ways in which overspill houses can be provided. The first is by a receiving authority acting under an overspill agreement made with an exporting authority, which can in this way discharge its Housing Act duty to provide for its own people. Such agreements can also be made under the Bill between an exporting authority and a new town corporation.

The essential features of overspill agreements are dealt with in Clause 9 of the Bill. The receiving authority must get a payment for each house of at least £14 a year for at least ten years from the exporting authority; this would be in addition to the Exchequer subsidy of £42 a year. The receiving authority would be obliged to let the appropriate number of houses to tenants approved by the exporting authority, who would almost always be tenants coming from the district of that authority.

The precise means by which tenants would be selected for the overspill houses would be a matter of arrangement between the exporting and receiving authorities, the receiving authority, of course, not being obliged to accept any particular tenant nominated by an exporting authority. Except where the overspill houses form part of what is no more than a dormitory development, it will clearly be important that the selection of tenants should take into account the employment opportunities in the district of the new development as well as individual housing needs in the exporting area, in order that the tenants of the overspill houses can become part of a self-contained community.

The third method of providing houses for overspill is through the medium of the Scottish Special Housing Association. It is not the Government's intention that the Association should embark on an extensive new programme of overspill housing, but rather that overspill needs should be given a prominent place in determining where houses should be built by the Association in carrying out a programme on about its present scale. The broad purpose of the Association's activities is to help authorities whose housing needs are particularly great in relation to their resources.

Accordingly, receiving areas for overspill building by the Association will be selected in the light of the financial situation of the receiving authorities concerned. It is not intended that the Association should take over the whole job of overspill building in any particular area. It will be a standard condition that the receiving authority will build a number of overspill houses at least equal to the number provided by the Association.

Neither the exporting authority nor the receiving authority will have to pay towards overspill houses built by the Association. The selection of tenants for them will be regulated by arrangement between the Association and the exporting authority on the same lines as the arrangement between the receiving authority and the exporting authority. [Interruption.] I think that that is fairly clear, but if there is any question, my hon. Friend will deal with it later.

There will obviously have to be co-operation between the receiving authority and the Association, so as to secure that all the overspill houses, by whichever agency they are provided, will be used to best advantage.

So much for the provision of overspill houses. There may be cases where quite substantial numbers of houses can be provided by way of dormitory development, without any great need for new community services or new industrial developments. In those cases, any one of the methods I have already described may be sufficient to achieve the purpose in view.

Commonly, however, there will be a need to do more than this, to provide not only houses but also new services, especially perhaps water supply and sewerage services, and, in addition, to stimulate the provision of additional employment for the tenants of the overspill houses. To this end, Clause 10 of the Bill provides a procedure by way of a town development scheme. This procedure can be invoked by any receiving authority, no matter which way the overspill houses themselves are being provided.

The first purpose of a town development scheme is to rearrange the powers and duties of the local authorities likely to be concerned, so that the provision of houses and public services and other essential facilities can be secured as efficiently and as economically as possible. Clauses 11 and 12, relating to water and sewerage services, and Clause 13, relating to land transactions, are the relevant Clauses.

The other purpose of a town development scheme is to provide a means whereby Exchequer grant can be made available in respect of certain classes of expenditure incurred by a receiving authority. The acquisition of land, and the installation of main water supply and sewerage services, represent the principal expenditure of a capital nature which a receiving authority has to incur in advance of the construction of overspill houses and the receipt of rates from these houses. Accordingly, these are the items which Clause 14 of the Bill selects for the purpose of Exchequer grant.

Photo of Mr Hector Hughes Mr Hector Hughes , Aberdeen North

Before the right hon. Gentleman leaves Clause 14, with which I think he is dealing now, will he say why the aid which that Clause envisages is to be provided under regulations, rather than by putting it explicitly and frankly in the Bill?

Photo of Hon. John Maclay Hon. John Maclay , Renfrewshire West

I think that will be dealt with before I finish what I have to say, but I do not want to get my speech out of sequence. I am coming to that next.

The Clause leaves the precise basis of grant to be laid down in regulations made hereafter, which seems to be very reasonable.

Photo of Mr William Ross Mr William Ross , Kilmarnock

Surely the Secretary of State can tell us what is in his mind in regard to the contribution from the Exchequer? How otherwise can we judge the efficacy of the Bill?

Photo of Hon. John Maclay Hon. John Maclay , Renfrewshire West

If the hon. Gentleman will wait a bit, I will deal with the point, but hon. Gentlemen really are going on a bit ahead. After all, this is a complicated Bill.

Photo of Mr Thomas Steele Mr Thomas Steele , Dunbartonshire West

Surely the Secretary of State will be able to tell us whether he is to use the Distribution of Industry Act to enable local authorities to get finance for the development of sewerage and water services and all these other things?

Photo of Hon. John Maclay Hon. John Maclay , Renfrewshire West

I believe that if hon. Members will wait until I get a bit further, they will see that their points will have been covered in my speech. It would be rather unwise, in a Bill of this complexity, as I have learned from experience, to start dotting about all over it in the middle of a speech.

Photo of Sir William Anstruther-Gray Sir William Anstruther-Gray , Berwickshire and East Lothian

On a point of order. Would it not be much more convenient if my right hon. Friend the Secretary of State were allowed to make his speech without interruption?

Photo of Mr William Morrison Mr William Morrison , Cirencester and Tewkesbury

That is not strictly a point of order. If the right hon. Gentleman gives way, another hon. Member is entitled to intervene, but as a matter of convenience to the House interruptions should be as few as possible.

Photo of Mr Hector Hughes Mr Hector Hughes , Aberdeen North

Thank you very much, Mr. Speaker. I hope the Minister realises that it is very important that the local authorities should know where they stand under the Bill. My question is: why is not the aid which is envisaged in Clause 14 put frankly into the Bill, instead of being provided for by means of regulations? Does not the Minister realise that this will gravely embarrass the local authorities?

Photo of Hon. John Maclay Hon. John Maclay , Renfrewshire West

It will not. This has been very carefully thought out to try to cover the main points. It would be very foolish to approach this kind of speech without the greatest care in building up the various points, which concern hon. Members and local authorities; but if the hon. and learned Gentleman will wait a bit I think he will find that most of the things which he has in mind are being dealt with.

I said before that there will be full consultation with the local authority associations before the regulations are made, but the House will wish to know, at this stage, the kind of arrangement we have in view. This arrangement, I may say, has already been proposed to the Scottish local authority associations and I gather that the underlying principle has commended itself to them—only the underlying principle; there will have to be more consultations.

The financially awkward period for a receiving authority is the first few years, when there is little new income in the shape of rates levied on new valuation created in the course of the development. Accordingly, we think it right to adjust the grant in such a way that the maximum relief is given at this stage, rather than later on when the overspill development will represent a considerable source of revenue, perhaps even in excess of the continuing expenditure.

We propose to do this by drawing up a kind of income and expenditure account year by year for each overspill development. The intention is that the Exchequer should contribute 75 per cent. of the resulting deficit year by year, leaving the balance of 25 per cent. to be met by the receiving authority, less any contribution the exporting authority may have bound themselves to make under the overspill agreement.

There remains the problem of securing that there is enough employment near at hand for overspill population not housed in a purely dormitory development. Our view is that, for the most part, the necessary additional industry should come from the exporting area along with the overspill population. Here I use the term "industry" to include commercial and other office employment.

My noble Friend the Minister of State has very recently discussed this with Glasgow Corporation, which, I am glad to say, is thinking along the same lines. Glasgow has an immense programme of clearance and redevelopment on its hands, and in the course of these operations it is inevitable that a considerable volume of industry will be displaced. Some of it cannot move far away, for it is too closely linked with shipbuilding and other heavy immovable activities.

But we have made a study, with the help of the Board of Trade and the Ministry of Labour, and we have come to the conclusion that a great deal of the industry that will be displaced will be of a kind that can quite well operate at a distance from Glasgow. In making our plans for overspill we must do all we can to cater for the resettlement of this industry in the overspill reception areas.

This Bill helps in three ways. The first is Clause 17, relating to an exporting authority that has incurred an obligation in connection with the rehousing of industry displaced in the course of redevelopment. This clause will enable the exporting authority to discharge that obligation by arranging for the displaced industry to be offered facilities in or near an overspill development.

Then, as regards the provision of industrial sites, a receiving authority operating a town development scheme will have power to include industrial needs when acquiring land, in undertaking the preliminary development of that land, and subsequently disposing of it by lease, feu, or sale as may be appropriate. Any charges falling upon the receiving authority in the course of such operations, from loan charges relating to the acquisition of land for industry and to work done upon it, will be one of the elements attracting town development grant under Clause 14 of the Bill.

Thirdly, Clause 25 of the Bill enables the receiving authority itself to construct factory premises for letting or sale in all suitable cases and not—as at present—only outside the scheduled Development Areas. The Secretary of State's approval will be needed to operations of this kind, and I should not wish hon. Members to look on this as a means of subsidising industry; but even the availability of premises at an economic rent may be of considerable advantage to an industrialist who might not be in a position conveniently to provide the whole capital himself.

Of course, the financial ability of industry displaced in the course of redevelopment to re-establish itself elsewhere is a vital point in the whole process I have been describing. This, again, is something that has been very carefully studied in relation to the Glasgow problem. I do not want to be over-optimistic about this, but the conclusions that we have reached after consultation with the Inland Revenue Valuation Department do suggest that the statutory compensation payable for displacement will, in a considerable proportion of cases, go a long way to provide funds needed for re-establishment.

For some time already there has been a perceptible movement of industry away from Glasgow, stimulated by the fact that labour requirements are sometimes easier to meet in new areas rather than in the city itself. Transfer of overspill population will add to this advantage, and I am very hopeful that a combined operation, led by the Corporation of Glasgow, can result in a satisfactory start being made on the solution of this difficult problem.

An essential factor for success will be close consultation between the Corporation and industrialists in the course of formulating the city's redevelopment proposals, so as to ensure that the longest possible notice is given to enterprises that will be displaced, with a full explanation of the facilities available for re-establishment as part of the overspill operation.

I have already detained the House for quite a long time and I do not propose to discuss Part III of the Bill in any detail. What we have done, as I have said earlier, in this part is to take this opportunity to clear up a number of outstanding administrative difficulties that have come to light in the housing Acts and to deal with certain aspects of the Scottish Special Housing Association.

I would only mention Clause 22, the provisions of which I sincerely hope will help local authorities to overcome some of the difficulties which I know have been encountered, for example in dealing with gap sites or abandoned properties. This is a form of rebuilding which I have always wanted to see encouraged, which in fact must be encouraged, if we are to minimise the sprawl of building over good agricultural land and—what is equally important—if we are to retain as much as possible of the feeling of community which is so important to civic pride and the good conduct of local affairs.

Obviously, I have only been able to cover a certain amount of the ground, but my hon. Friend the Joint Under-Secretary will, I know, deal faithfully with other points which may arise when he winds up the debate.

In conclusion, I would say this. No Member of Parliament could possibly have any doubt about the supreme importance of the human problem which decent housing presents. Certainly, no one who has spent, as I have, a good part of his life moving about Glasgow and the industrial Clyde Valley could fail to wish to do what lies in his power to contribute to the wise and lasting solution of the housing problem. This Bill, I believe, makes an important contribution, and I commend it to the House.

4.17 p.m.

Photo of Mr Arthur Woodburn Mr Arthur Woodburn , Clackmannan and East Stirlingshire

The Secretary of State has in accordance with custom, tried to elucidate what, in his view and the view of the Government, the Bill means. If I might translate it into common parlance, this is a Bill to raise rents. That is all that it means. It instructs or stimulates local authorities to raise rents.

The right hon. Gentleman has used a common phrase to justify this, that subsidies should not be given to people who do not need them. He and his Government will get into great difficulty if they apply that principle all round. These subsidies were never given as a charity. When the right hon. Gentleman talks about people who do not need them, he must remember that these are the people who pay the taxes; and the more they do not need the subsidies, the more they pay in taxes.

My hon. Friends and I took the view that if a person had a high income, and paid a high rate towards the subsidies, he was entitled to benefit from the subsidies just as a person who did not pay anything. This story about people getting subsidies when they do not need them contains a great deal of nonsense. It is simply a cover-up for having another dust at the local authorities.

We do not attempt to justify all the extremes of rents which exist among different local authorities. They may not be justifiable, but they can be explained. Some local authorities take the view that, since people living in old property do not make a proper contribution to the rates because of the low rents on that property, there is no reason why people who pay the higher rents on local authority houses should also pay a very much higher contribution to the rates. Consequently, within their own area they try to obtain a measure of justice by spreading out the cost and balancing it by putting more on the rates and less on the rents.

I agree that that causes anomalies as between authorities. A county with a great deal of pre-war property has a great cushion for the purpose of spreading the burden, but a place like Clydebank, where all the old houses were blown to bits, has no such cushion and cannot follow that practice in trying to be fair. The whole thing depends on the composition of the local authority.

On the other hand, councils have tried to balance their burdens by having low rents and high rates, and in other cases they have tried to spread the burden on the basis of high rents and adequate rates. To force uniformity in rents on local authorities will, curiously enough, create injustices within a given rating area. I cannot justify the present situation where a miner in Dollar has to pay £41 in rent and, if he moves elsewhere, has his rent go down to £17. That is one of the difficulties of getting mobility among miners and it is one of the anomalies in rating. In another area the figure is as low as £16 16s. 5d.

The fact is that houses have to be paid for. We think that there is no more worthwhile expenditure out of the family income than that on a good home. The millions who will never get a good modern house will be willing to tell those who do have one how worthwhile it is and how fortunate they are to be in one. Nevertheless, the policy of building houses is a matter not of charity, but of public health. It is a department of health. When we talk about the cost of subsidies, we must remember that the cost of sickness before the First World War was much greater than what we have spent on subsidies.

We used to spend £360 million a year on preventable sickness. One of the ways of avoiding that expenditure is to make it possible for people to live in homes with a healthy environment, where children can be brought up without contracting diseases before they are five years of age, which will make them a liability on the community for the rest of their lives, as used to be the case. If we can shut down hospitals, we will save far more than the cost of the hospitals. The Bill represents unnecessary meanness on the part of the Government and a policy which should not be developed very much further.

It was recognised from 1919 onwards that there was no possibility of houses being built by private enterprise to form a healthy community. It was realised that this was a matter of public responsibility and that the houses should be allocated not on an income basis, but on need, on the needs of health, of the family and of the community. The cost of houses is divided among the State, the council and the tenant. I agree that there will be no enthusiasm by any one of the parties to raise its contribution to save the others. The argument among local authorities, tenants and the State, has gone on and will go on as long as housing costs are shared among them.

The purpose of the Bill is to make local authorities raise rents. What it will do is to stop them building houses and, as a matter of fact, it has already had that effect. Local authorities are beginning to slow down the building of necessary houses and will do so more and more. We are told that local authorities have a big housing pool over which these increases could be spread, but local authorities will ask how much they will lose if they continue building at the present rate, and how much they will save if they do not build any more.

That acts as a deterrent, because in the past subsidies have been a bribe, as it were, to build houses. When subsidies are removed, the inducement is removed and there is, consequently, a big drop in the number of houses built by local authorities. Some local authorities have already stopped and some time we might be told about that. We opposed the Rating and Valuation (Scotland) Measure on the ground that the Government did not "come clean" and tell the House their plans as a whole. This Bill is another instalment of what appears to be "passing the buck" to the local authorities. We demanded that there should be a comprehensive review of the relationships between local and Government finance as a combined operation. Instead, we have had a campaign of infiltration into local authority defences.

The major success of the Government in getting behind local authority defences has been the abolition of landlords' rates. From the tenants' point of view, landlords' rates were a tripwire which sounded the alarm, because whenever anyone attempted to touch the rates, when the landlords were paying them, there was a squeal, because the landlords were organised. That reminds me of the story of the young laird who was driving along a country road in his gig and having a great deal of fun with his whip, whipping at the cows as he passed. His chum said, "There is a wasps' nest; have a go at it" and the young laird said, "No fear; they are organised." The landlords were the wasps and now that the Government have got rid of the wasps the infiltration will continue.

The Government have divided the tenants and conquered them. They have given something to one set of tenants and taken it from the others. In time, the tenants will awaken to find that they have lost on the deal. The tenants think that they will get something on the swings when they lose on the roundabouts, but in the long run the Government will get the best of the tenants, because their defences are down.

I object to this Trojan horse method of getting these things into Scottish legislation on the basis of an English Bill. If it is a nasty piece of work, it is covered by sending it upstairs, and 90 per cent. of Scottish Members do not take part. One of the purposes of the House of Commons is that the Opposition should criticise and expose what the Government are proposing.

Photo of Mr Jack Browne Mr Jack Browne , Glasgow Craigton

This Bill is not quite so nasty?

Photo of Mr Arthur Woodburn Mr Arthur Woodburn , Clackmannan and East Stirlingshire

Not quite so nasty. The one upstairs is the main attack. This is only a satellite. This is a graduated and cumulative process and we do not know what the end will be.

The other day a considerable amount of apprehension was caused by the announcement of the Minister of Housing and Local Government. It was a further attack on local authorities which, to preserve their independence, will have to pay more. The theory may be all right, but the practice may cover much more than is anticipated.

We hope that this Trojan horse method will not be continued in the next step, the reconstruction of local authority finance, and that Scottish Labour Members will not be disfranchised by having the legislation put through in an English Bill to be considered in a United Kingdom Committee upstairs, with only eight Scottish Members present. I warn the Secretary of State that if that happens the legislation will not pass even as smoothly as the Rent Bill, because there will have to come a time when the Scots will stop any further Trojan horse legislation in Scotland.

Photo of Major Guy Lloyd Major Guy Lloyd , Renfrewshire East

I was very interested in the right hon. Gentleman's simile of a Trojan horse. I can see the point he is trying to make, but I cannot see how it has anything to do with a Trojan horse.

Photo of Mr Arthur Woodburn Mr Arthur Woodburn , Clackmannan and East Stirlingshire

The Trojan horse was made of wood and that may have some connection with the hon. Member if he cannot see the point. If one gets something through under another Bill, that is what is usually called a Trojan horse method. The hon. Member's classical knowledge is perhaps better than mine, so I may be mistaken.

We are very apprehensive about this and feel that we are witnessing a gradual, cumulative attack on local authority finances. We want to know where we are going. It is almost impossible to discuss the financial implications of the cuts in subsidies without a complicated unravelling of the whole tangled skein of housing finance. I do not blame the Secretary of State for not being able to answer some of the questions, because once he enters upon the topic of subsidies and rates of interest I am sure that after a few minutes he will not have the slightest idea of where he is.

The whole history of subsidies is about as consistent as the fluctuations of a weather cock. If anybody can make head or tail of the fluctuations of subsidies since 1919 he is a better man than I am, and perhaps a better man than anyone sitting on these benches.

Let me give an example. The Chancellor of the Exchequer starts out to restrain spending. To do so, he raises the Bank Rate and sends up costs. At that time, the landlords were paying rates and whenever these costs were going to raise the rates up went a squeal and along came the Government and raised the subsidies to compensate for the raising of the Bank Rate. That happened only the first time. The next time the Bank Rate went up, a different principle was followed. There was no increase of the subsidies, so rather different principles had to be applied.

Then we have the ups and downs of subsidies and the ups and down of interest rates and there are hardly two sets of houses being built by a local authority on which the same interest is being paid. I do not know what are the clerical implications of this in offices, but it must be an awful business trying to maintain all these public loans on different rates of interest.

My hon. Friend the Member for Leith (Mr. Hoy) has stated that to cover the repayment cost on a £1,700 house £1,976 was required before the raising of interest rates and £4,122 afterwards, an increase of 15s. per week. Some of the so-called increase on subsidies was not for the house at all, but to pay the increased interest that the Government were paying to the moneylenders for the money. The more I look at this, the more I think that it is the economics of a madhouse. The sooner someone in the Government gets down to getting some sense into all this housing finance and local government finance, the better.

The local authorities are now faced with Acts and Bills to recondition slums, to repair and modernise good property, to abolish landlords' rates, to establish notional rents, to supervise rent repairs increases, to balance rent and rates, and all this is going on under different financial arrangements for each. The thing is just chaotic.

We are now threatened with another upheaval which is not a comprehensive reorganisation, but only another still larger addition to the patchwork quilt of local government finance. We propose today to register our vote against this part of the Bill by voting against the Government for not producing a comprehensive picture of what the eventual purpose is in all the changes in these local government financial arrangements.

The Secretary of State devoted a considerable amount of time to the proposals for town development. We are, naturally, not opposing anything that makes a contribution to this vast overspill population of Glasgow. Glasgow is bursting at the seams in the matter of its population, and something has to be done. But we must confess that it is rather over-optimistic to think that there will be any satisfactory solution to an overspill of 300,000 people merely from town development schemes. I must give my own frank opinion. While Clydeside is cluttered up far too intensely, this merely spreading further over the Clyde area will not improve matters but hasten the day when there will not be any good agricultural land in the West of Scotland.

I held an inquiry at the time of the proposal for the new town of Houston, when one of the reasons given for proposing that that area should be used was that there was nowhere else to go in that area without moving on to the last vestige of decent agricultural land there.

Photo of Hon. John Maclay Hon. John Maclay , Renfrewshire West

Houston has some good land, too.

Photo of Mr Arthur Woodburn Mr Arthur Woodburn , Clackmannan and East Stirlingshire

It was not first-class, but it was the only place where they were not encroaching on about the best piece of land that remained in that area.

The Government must consider whether they will not do something more than just spread people out over the Clydeside. They must consider whether a wider solution is not possible. Here, I want to say that all the Government Departments have to co-operate. It is no good the Department of Health trying to deal with this solely as a problem of housing. The Tight hon. Gentleman told us today that the Government had been considering the question of industry. The housing of a community is no use unless it has an industrial stomach. A sort of residential area outside Glasgow will not be the solution of the problem. If we are to rehouse people it seems to me that we have to start at the other end and see that the work goes there, so that the people can live.

The possibilities in this direction seem to me to be three: we can move existing industry; we can foster new industry; or we can expand locally existing industries so as to provide work for the incoming population. In the case of the first two, the Government must do more than is proposed even in this Bill. It may be that they will have to build factories or encourage the local authority to build factories in order to induce people to go there. Even the Development Area arrangements are not necessarily sufficient to bring the factories to the area.

I can speak from experience of my own constituency, where there has been a Development Area ever since the war. In one part of that area not one factory has been built, despite all the efforts of the Board of Trade or anyone else. It may be that the proper way is for the Government to decide what factories shall be built in order to induce industries to go there, but if a great deal of expenditure is to be placed on the industries, that will be a deterrent. I hope that it will be not just a matter of saying, "We will give them grants and wait for something to turn up."

There must be positive action and comprehensive planning. We believe that the best way to do that is to have new towns—that new towns are a better way of approaching this problem than by farming it out on the existing terms, although that may not be wrong. I do not see why we should not go as far as Falkirk. Falkirk is not expanding. In a recent investigation, when a Committee of this House sat in judgment on an application for the development of Falkirk, I remember that it was reported that the Falkirk population was not increasing at all. Though this area may not have an increasing population it may be a very good industrial area, where it is possible that industry in Falkirk and Grangemouth could be developed very quickly.

I should like to ask the Minister to tell us what has been done about this. I understand that the Minister of State has been negotiating with local authorities for some months. If there had been any success, one would have thought that he would have told us something about it. Is this policy going to work? By this time he must have found out whether Kilmarnock and all the other towns are "going to play." My information is that they tend to think that the inducements are insufficient and the liabilities too great. They think that they may he crowded with population without any new industry. Fostering new industry can best be done by the policy, advocated by my hon. Friend, of building advance factories. Then we may attract new industries into an area as well as industries from Glasgow.

I would recommend to the Secretary of State another policy. That is that local industries should get orders from the Government. The Government could do a great deal to stimulate employment by directing these orders on social grounds, and not just on the grounds of keeping as near London as possible. One of the difficulties of the Ministry of Supply is that most experts like to live at places from which it is convenient for their wives to travel to London. We could get rid of that difficulty by sending orders to local towns and stimulating the little industries in the smaller towns, so that they will develop and provide employment for more and more people. That is the way to attract people away from the big cities and to develop the smaller ones.

For that reason, the Government must consider this problem not merely as a housing problem, but as a combined operation for getting communities established in a healthy way. We think that new towns are probably the best way to do that, but, on the other hand, I agree that where small towns have already established a social life it is a great advantage if we can send industry to them. Hawick, Selkirk, and similar places, could do with a variety of industries. This policy has succeeded in Fraserburgh and Peterhead, where a small engineering industry is developing and gradually building up.

During the war we sent an engineering industry to Brechin, which has taken root there. That was the Minister's old constituency and he knows about the development there and what a great success this industry has been. The right hon. Gentleman should follow that comprehensive policy so that these towns may develop and life can be taken into those areas in greater abundance.

Photo of Hon. John Maclay Hon. John Maclay , Renfrewshire West

I am interested in what the right hon. Gentleman is saying. If he thinks back, he will remember my arguing this when he was Secretary of State for Scotland.

Photo of Mr Arthur Woodburn Mr Arthur Woodburn , Clackmannan and East Stirlingshire

I practised it. No previous Secretary of State for Scotland has done more to stimulate industry to help itself than I did during my period of office. I do not often boast, but I challenge comparison with any Secretary of State on that point. The Scottish Council of Industry has repeatedly recommended this course. What we did not do was to take powers to force industry into an area. We allowed private enterprise to be induced to go, and the policy carried out by the Labour Government turned Dundee from a distressed area into a Development Area so that it is now one of the most progressive and successful areas of industry in the country.

We have nothing of which to be ashamed. The late Sir Stafford Cripps did a great deal to take industry into Lanarkshire and elsewhere. Because he was very conscious of the needs of Scotland he used all his influence to build factories in that area. I say, therefore, that the Government should reconsider the question of building advance factories and planning where factories should be. They should instruct Government Departments to direct industry to go where it is socially desirable. This would not mean a great loss. There would be a far greater loss in leaving towns to decay than there would be as a result of the extra money which would have to be paid.

I ask the Joint Under-Secretary of State to tell us, when he replies to the debate, more about what will happen about assisting industries to move. Also, I ask the Secretary of State to tell us whether me Money Resolution is drawn sufficiently wide for us to move Amendments during the Committee stage if we find that necessary in order to help industry to move to these areas.

Many of my hon. Friends will be dealing in detail with the points raised by the right hon. Gentleman, and during the Committee stage we shall examine many of the intricate aspects which he put before us. We must, however, vote against the Second Reading of the Bill to register our protest that the Government have not yet "come clean" about what they intend ultimately to do in making their inroads and attacks on local government finance.

4.44 p.m.

Photo of Major Guy Lloyd Major Guy Lloyd , Renfrewshire East

I differ very much from the right hon. Gentleman the Member for Clackmannan and East Stirlingshire (Mr. Woodburn) in so far as I welcome this Bill, and my only criticism of the Government is that it has not been produced before. There are many hundreds of thousands of people in Scotland who welcome the Bill, and I believe that the Opposition have been mistakenly flogging themselves into a fury, imagining that the overwhelming opinion of the people of Scotland is adverse to this Measure.

If right hon. and hon. Gentlemen opposite believe that, I beg them to realise that they are mistaken. Of course, no one who has been subsidised likes to have his subsidy reduced. Doubtless we would all like to be subsidised, but, personally, I believe that subsidies have gone far enough and that the Government, throughout their period of office, have been showing that they think so too by adopting a policy of reducing subsidies.

I suggest that some members of the Opposition who clamour for them, and who consider that to reduce or abolish them is a form of crime, should sometimes remember who pays the subsidies. There appears to be a theory that subsidies come out of a bottomless purse into which the Government alone can dip their fingers, whereas it is the unfortunate taxpayers, representing every section of the community, who contribute to subsidies.

Photo of Mr Arthur Woodburn Mr Arthur Woodburn , Clackmannan and East Stirlingshire

If I may interrupt the hon. and gallant Gentleman, may I ask whether he would not agree that, ultimately, all these things come out of production? Also, is it not the case that the people who are drawing subsidies are those who help to produce the wealth from which they are drawn?

Photo of Major Guy Lloyd Major Guy Lloyd , Renfrewshire East

Ultimately, of course, subsidies come out of production and, therefore, they come out of the fruits of industry. If production is not the fruits of industry, what is production? [Laughter.] Nobody who understands economics would laugh at that statement. [An HON. MEMBER: "Who produces the fruits?"] If it is true that subsidies come out of the fruits of industry, we do not want to put too heavy a burden on industry in these days, because it is most important that industry should be as competitive as possible throughout the world, and it will not be easy to make it so.

Therefore, if we can in any way lighten the burden upon the community, upon production, upon the taxpayer or upon the individual, why should we not do so? To listen to the right hon. Gentleman one would believe that he believes it to be a dreadful thing to reduce a subsidy, something of which any Government ought to be ashamed. I have quotations here with which I will not bore the House—

Photo of Mr William Ross Mr William Ross , Kilmarnock

The hon. and gallant Gentleman will.

Photo of Major Guy Lloyd Major Guy Lloyd , Renfrewshire East

No, I do not think so, because I will not give all the quotations. I will not distress hon. Gentlemen opposite by quoting at least fifteen Socialist speakers, including an ex-Secretary of State for Scotland, the late Joseph Westwood, who, during the passage of various subsidies, said in the House that they thought subsidies ought not to be high and that, when a subsidy was fixed, the first thing which should be done was to ascertain how soon it would be possible to reduce it.

Hon. Gentlemen opposite may be horrified to think that other Socialists believe it a good thing to reduce a subsidy. [HON. MEMBERS: "No."] I say that only because, listening to the right hon. Gentleman with great respect, as we always do on this side of the House, he gave me the impression that he thought it was a very wrong thing to do, and he failed to mention that the money comes from the taxpayer.

I welcome this Bill because I think that subsidies have been too high for too long. I am glad that they are to be reduced. They should have been reduced before. I believe that taxpayers will welcome this Bill, because they pay the subsidies.

A great many people in Scotland will welcome it, too, because it gives opportunity to the local authorities to charge differential rents, which many of them hitherto have refused to do. Many of my constituents, and many others in Scotland, think that the Bill is a measure of social justice in so far as it will mitigate, to some extent, at any rate, their longstanding grievance that about two-thirds of Scotland's householders, as taxpayers and as ratepayers, have to subsidise in some way or another many council house tenants many of whom are much better off than many of them are themselves. They have long resented that.

My right hon. Friend said just now something to the effect that subsidies would not be given to those who do not need them. My constituents and many others in Scotland would rather put it this way; that subsidised houses should not be let to those who do not need them. I emphatically declare that that is a piece of social justice, and anything contrary to that is not social justice.

Many people in Scotland have long thought that council house tenants have had too low rents and that those rents ought to have been raised before, and they suspect—they may be wrong, they may be wicked, but some of them suspect—that one of the reasons why these rents have been kept too low is one not unconnected with politics. I have a feeling that votes, unpopularity, and considerations of that sort must have influenced decisions upon rents. At any rate, there are those who think so, and there are those who have long resented the fact that council houses in Scotland have been low-rented because local authorities have refused, year after year, to raise the rents.

In that they have been caught out. They are like the unwise virgins mentioned in the Bible. They are too late. Now they have to raise their rents to put their housing accounts on an economic basis, and they have to raise them higher than they would like. Had they raised them slowly and gradually, in a commonsense way, bringing them as nearly as they could to being economic rents, had they had regard to permissive Sections in Acts, which we know all about, had they taken those opportunities, had they charged those council house tenants who could well afford to pay them the full economic rents to their landlords, the councils, and had they tempered the wind to the shorn lambs, the tenants who could not afford them, had they followed that policy, which we on this side have advocated and pressed for a great many years, the rise in rents which may now be necessary would not have been anything like as great.

Now, of course, they have to a large extent been caught out, and because of the lowering of the subsidy they have to raise rents to a level which some people may say is unfortunate, and I agree; but it need not have been so, had the councils followed a more sensible and less politically minded policy in years gone by.

My constituents and many others in Scotland have for a long time been convinced that it is a most unfortunate thing that many local authorities, especially those powerfully influenced by Socialist politics, have refused to institute anything in the way of differential rents. It is really quite wrong that a wealthy man should continue to live in a subsidised house while a great many people who are, unfortunately, less well off than he should be compelled to pay in rates and taxes to keep him there.

How anybody in the House can say that that is social justice, as some people have attempted to do, I really do not know. Many people in Scotland, at least so I think, believe that the Government are very wise and right to adopt this policy of lowering the subsidies, and they believe that high subsidies are not a very good thing, and that it would be a jolly good thing if they were reduced.

I saw some eyebrows raised just now when I said that there are many Socialists who are or have been Members of this House who have said they wished to lower subsidies whenever they could, and I will quote a few examples to substantiate my remark. Here is a statement by a former very dear friend of us all, a former Secretary of State for Scotland, the late Mr. Westwood. He said: I wish to make it clear that the contributions now proposed—this applies to the rate contributions as well as to the Exchequer contributions—are maxima, and it is the intention of the Government that they shall be reduced at the earliest opportunity."—[OFFICIAL REPORT, 19th March, 1946; Vol. 420, c. 1706.] The right hon. Gentleman the Member for Poplar (Mr. Key), who has been in the House a great many years, said this: … high subsidies must not be an incentive to maintaining high costs, and, since we are determined that high costs shall be temporary, high subsidies must be temporary too."—[OFFICIAL REPORT, 6th March, 1946; Vol. 420, c. 342.] The hon. Gentleman the Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop), formerly Parliamentary Secretary to the Ministry of Local Government and Planning, said: … we have never felt happy about the size of housing subsidies; hon. Members on all sides have very properly felt a real anxiety about the size of these subsidies. …"— [OFFICAL REPORT, 21st October, 1954; Vol. 531, c. 1444.] Here is one more, by the hon. Gentleman the Member for Leeds, West (Mr. C. Pannell): 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 …"—[OFFICIAL REPORT, 21st October, 1954; Vol. 531, c. 1404.] If those views represented the views of a large number of Socialists then, do they represent the views of hon. and right hon. Gentlemen opposite now? I shall be interested to learn as the debate goes on. If they do not, there is another large split in the Labour Party.

Photo of Dr Dickson Mabon Dr Dickson Mabon , Greenock

The hon. and gallant Gentleman means a rent.

Photo of Major Guy Lloyd Major Guy Lloyd , Renfrewshire East

Now I come to the Bill itself. The suggestion which the right hon. Gentleman the Member for East Stirlingshire made in his speech was that Scotland has been badly treated and that Scotland has a grievance because of this Bill; but I have studied the Bill, too, and I contend that, by and large, Scotland has been favoured and that England may well have a grievance that we in Scotland have been very much favoured by housing subsidies.

Not only are our subsidies, generally speaking, higher than are the English subsidies, but the Government nave continued for many classes of housing and for many sections of the community subsidies which have been terminated altogether in England. So no one can suggest that Scotland has had a raw deal in that respect. The contrary is the case. We have continued subsidies, although at a reduced rate, for all the major housing needs in Scotland, including overcrowding, slum clearance, overspill, and all the extra new developments, with industrial building, and so on, as my right hon. Friend described in some detail in his speech.

I should not think that the rent increases need be nearly so great or so frightening for all the tenants, although I repeat that they need not have been so great had many local authorities increased them slowly over the years instead of having now to jump them up and to take a big bite at the cherry. I am told that after, say, four years' time, if gradual increases were made, the average weekly increase in the rents of council houses in Scotland would be about 15s. That is really not so very terrible, although it is admittedly unfortunate.

Let us compare that increase with earnings. At present, the average rent of council houses throughout Scotland is about 4½ per cent. of the average earnings of the tenants. Quite a lot; but in 1949 it was 6 per cent. and in 1938 10½ per cent. of earnings. If this 15s. increase is effected in four years' time the average rent will be only 7½ per cent. of average earnings, considerably less than it has been before. If we do away with owners' rates it will be only about 3 per cent., and even then we shall have a much lower average council house rent throughout Scotland than there is in England. There is not the fearful grievance hon. Gentlemen opposite are saying there is.

Photo of Mr James McInnes Mr James McInnes , Glasgow Central

Will the hon. and gallant Gentleman cite the authority for the figures that he has given the House?

Photo of Major Guy Lloyd Major Guy Lloyd , Renfrewshire East

I understand that they are calculated on the basis of earnings—

Photo of Major Guy Lloyd Major Guy Lloyd , Renfrewshire East

—by the Department of Health. Is it denied that average earnings have gone up over these years? Of course they have, and in many cases there is more than one wage-earner in the house. Earnings have increased a great deal and rents have increased very little.

Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

The hon. Member said that the rent at 15s. represented 7½ per cent. of earnings and that if owner's rates were deducted the figure came to 3 per cent., but the 7½ per cent. represents rent and the owner's rates are to be borne by the occupier on top of the rent.

Photo of Major Guy Lloyd Major Guy Lloyd , Renfrewshire East

It still represents only about 3 per cent. of the tenant's earnings.

Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

It represents about 15 per cent. of the tenant's earnings.

Photo of Major Guy Lloyd Major Guy Lloyd , Renfrewshire East

If I am wrong I will stand corrected, but I do not think that anybody can deny that present rents represent a very substantially lower percentage of earnings than they did hitherto. In other words, the tenant can afford his rent better than he could hitherto, because his rent represents a lower proportion of his earnings.

The right hon. Member for East Sterlingshire seemed at one time to deplore the Bill, but he said, in 1948: I do not altogether blame local authorities"— for not providing better housing provision— for this arises from a curious belief we seem to have in Scotland that it is a sin to pay rent."— The right hon. Gentleman seems to think also that it is a sin to lower subsidies. He added: I have never been able to understand why we in Scotland are prepared to spend anything up to a pound a week on cigarettes, while we grudge paying a little more to buy house room for ourselves and our children."—[OFFICIAL REPORT, Scottish Standing Committee, 7th July, 1948; c. 1322.] The right hon. Gentleman does not say that today and perhaps he has forgotten that he said it then.

No one can deny that under the Bill even the new rents in Scotland will still be lower than the rents in England, and that increased earnings should enable the tenant to pay perfectly easily, or without much difficulty, especially when one remembers that in many cases there is more than one earner in the household. I contend that lower rents mean higher rates. There is no doubt about that. Everybody is grousing about high rates.

Photo of Major Guy Lloyd Major Guy Lloyd , Renfrewshire East

If rents had been put up over the years we should now have nothing like the existing high rates. There is no denying that that is true. Is it fair to the remainder of the ratepayers and the rest of the community that they should have to pay high rates simply because certain authorities refuse to raise rents, especially when it is shrewdly suspected that the main reason for that refusal is political?

Photo of Dr Dickson Mabon Dr Dickson Mabon , Greenock

Yes, high interest rates.

Photo of Major Guy Lloyd Major Guy Lloyd , Renfrewshire East

The Bill should help to provide new building, because if the differentials are properly allocated and if, as the Secretary of State suggested, the pool of subsidies is properly used by the local authorities, there should be a proper balance on the housing account, which would mean in many cases a margin available for the cost of building new houses.

The case against the Bill is either grossly exaggerated, or is put forward mainly from prejudice. I am glad to see the Bill and that the Government have had the courage to produce it. To reduce subsidies, of course, is to lay oneself open to unpopularity, but the Government have the courage to do unpopular things because they know that they are right and fair.

5.7 p.m.

Photo of Mr James McInnes Mr James McInnes , Glasgow Central

I listened with interest to the hon. and gallant Member for Renfrew, East (Sir G. Lloyd) and to his vicious attacks on subsidies. He will find ample scope for making such vicious speeches if he attacks the agricultural subsidies, which are three times greater than the housing subsidies. Every man, woman and child in Scotland has to bear £6 per annum to meet the cost of agricultural subsidies alone. This is a typical Tory attack, because all Tory attacks on subsidies relate to rents and rates and matters of that kind.

The hon. and gallant Member made no reference whatever to the fact that average earnings in Scotland are 5 per cent. to 7 per cent. less than those in England and Wales. Nor did he deal with his own Government's activities bearing on the cost of housing. The annual cost of a house to a local authority has increased from £62 to £98 per annum, a difference of £36 every year for 60 years.

Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

Those figures are a comparison of 1951 with 1955. The position is very much worse now. The figure of £98 quoted by my hon. Friend relates to the 1955 position of a house estimated to cost £1,714. Since then, interest rates and other costs have increased. Such a house now costs £1,774 and the £98 has become £109.

Photo of Mr James McInnes Mr James McInnes , Glasgow Central

Yes, the figure to which I referred has increased to £109. If the hon. and gallant Member for Renfrew, East wishes to make a comparison, he should make a true comparison.

Much as I should like to continue my observations on Part I of the Bill, dealing with housing subsidies, I propose to confine myself to Part II. I was extremely disappointed with the handling of that part of the Bill by the Secretary of State. The right hon. Gentleman made absolutely no attempt to explain the full implications of Clauses 12, 13 and 14. Indeed, he made absolutely no effort to do so in response to an intervention by my hon. and learned Friend the Member for Aberdeen, North (Mr. Hector Hughes), who sought to elicit information about the financial arrangements under Clause 14. I suggest that neither the Secretary of State nor the Joint Under-Secretary could enlighten the House at the moment about the financial provisions of that Clause. I will give way immediately if either wishes to take advantage of the opportunity. I go further and say that there is no hon. Member opposite who could define the implications of the Clause.

Part II of the Bill deals entirely with overspill. Where are Scotland's overspill problems? From inquiries which I have made, I have found that there is no such problem in Aberdeen, Edinburgh, Dundee, Lanarkshire, Renfrewshire, Ayrshire or Greenock. The only area I know of where such a problem exists is in the City of Glasgow. This evening we are faced with a Bill the application of which specifically provides for the problem which exists in the City of Glasgow. Glasgow has an overspill population of 300,000, almost as large as the overspill of London, which is 360,000. To provide for London's overspill no fewer than eight new towns have been built, and I understand that those towns have taken about 150,000 people into their areas.

The Secretary of State for Scotland has been handling Glasgow's overspill problem since the latter part of 1952—for almost four years. I should like to know what has been the outcome of his deliberations and consultations with Glasgow Corporation and the Clyde Valley Regional Planning Committee. The only thing I can find that has eventuated from his discussions is one new town at Cumbernauld—a town designed to accommodate 50,000 people, of which it is estimated that 40,000 will come from Glasgow.

I want to compare the financial arrangements of the eight towns provided for London with those of Cumbernauld. The hon. and gallant Member for Renfrew, East said that Scotland was being very generously treated by the Bill. Let us see whether that is so. Eight new towns have been provided to deal with London's overspill, and neither the London County Council nor any London borough has contributed a single penny towards their construction. But in respect of one new town to take Glasgow's overspill, Glasgow is faced with a crippling burden of £14 per year, for the next ten years, for every house to be built in that new town. That will be the situation, even under the terms of the Bill.

Not only did the Secretary of State impose that intolerable burden upon the City of Glasgow; he wanted to be even more vicious by asking Glasgow to pay one-third of the total deficit of the new town, the Government one-third, and I believe that Dunbartonshire was to pay the other third. That is a crippling burden for the City of Glasgow, and I am justified in asking the Secretary of State why this discriminatory and outrageous arrangement is being foisted upon the city when London can have eight new towns in respect of which she does not have to pay a penny.

The Government have decided that there will be no more new towns in Scotland. That statement was made by the Minister of State and the right hon. Gentleman's predecessor. That is why we have the Bill. The Secretary of State obviously assumes that it will solve Glasgow's overspill problem. Does he really imagine that the Bill, providing as it does for the dispersal of Glasgow's overspill over a large part of other local authority areas, will solve the problem? Has the right hon. Gentleman even taken the opportunity to find out to what extent other local authorities are prepared or disposed to accept Glasgow's overspill, or to find out what has been the experience of English local authorities?

In 1952 the Government passed the Town Development Act, applicable only to England, and I want to tell the right hon. Gentleman of the experience of some English local authorities with large overspill problems, in regard to that Act. London still has an overspill population of about 200,000; Birmingham, 150,000; Manchester. 200,000, and Liverpool, Sheffield and Leeds each have a somewhat similar problem. Under the Town Development Act Swindon has agreed to take about 18,000 people from London in the next ten years, and Bletchley hopes to accommodate 8,000 people in the next ten years. That is all that has happened under the Act, and the Bill before us is on very much the same pattern as that Act.

London County Council negotiated with the local authorities of Ashford, Aylesbury, Basingstoke, Letchworth and Peterborough, each of which was quite prepared to accept some of the overspill, but only on condition that more generous grants were given. London County Council also negotiated with Bury St. Edmunds, Haverhill, Huntingdon and Thetford. In those cases negotiations have extended over four years but nothing has eventuated from them. London County Council also considered the question of overspilling into Kettering and Letchworth, but in those cases the proposal was turned down by the Minister of Housing and Local Government.

Manchester City Corporation has been negotiating for the last two or three years with all its neighbouring authorities in Lancashire and it cannot get one authority, except Worsley, to agree to take anybody. That town has taken some of the overspill from Salford. Apart from that, not one authority is disposed to accept any of Manchester's overspill.

Although the Birmingham authority offered to pay to the receiving authority the local rate contribution, not one local authority in the Birmingham area is disposed to accept the overspill from that city. The net effect of the Town Development Act in England, covering London, Birmingham, Manchester, Sheffield and Leeds, has been that about 18,000 people have been taken out of the County of London.

Despite that background, the Secretary of State for Scotland has the audacity at this stage to inflict a similar Measure on us in order to deal with Glasgow's overspill problem. It just will not work, and he knows it. It will not work because the position of Scottish local authorities is precisely the same as that of the English local authorities. The difficulty has been the inability of the exporting authorities to convince the receiving authorities of any advantages to be gained by accepting overspill population.

In addition, there is the demand by the receiving authorities that if London, Birmingham, Manchester and similar places are going to overspill into their areas, they must make up their minds that as they overspill the population they shall also overspill the industry to employ that population. It is no use overspilling 100,000 people from the City of Glasgow into Lanarkshire or Renfrewshire and making no effort to send industry along with them. There is no proposal in the Bill to provide industry for those overspill populations in any of the receiving areas. Indeed, there is no encouragement and no attraction for the City of Glasgow to overpsill its industry.

Another of the difficulties, and perhaps the most important one—certainly the one with which we are faced by the Bill—is that every one of the receiving authorities in England feels that schemes such as this involve some sort of undefined financial commitment. That is exactly the case in respect of Clause 14. I invite the Secretary of State and the Joint Under-Secretary of State to tell the House what precisely are the financial commitments of Clause 14.

The Secretary of State has been in consultation with Glasgow Corporation for the last four years, and he has also been in consultation with the Clyde Valley Advisory Planning Committee. Indeed, he asked that body to deal with the problem as a matter of urgency in 1953. That Committee initiated inquiries among authorities in the West of Scotland likely to be prepared to take Glasgow's overspill. Places like Milngavie, Kirkintilloch, Bishopbriggs, Chryston, Holytown, Tannockside, Kilmarnock, and other places in Ayrshire were consulted, but the Clyde Valley Advisory Planning Committee had to point out to the Secretary of State that the physical circumstances in Scotland and in the Clyde Valley area in particular were not nearly so advantageous, in the sense that there is no convenient cluster of sizeable towns available such as there is around the London area, although the problem is of roughly the same magnitude.

The Committee recommended that a new town should be built at Houston, but that recommendation was turned down by the Secretary of State. Not only did he turn down the suggestion for a new town at Houston. There has developed recently, to put it mildly, considerable friction between the Clyde Valley Advisory Planning Committee and the Secretary of State. When one gets to know the facts and the difficulty, an astonishing state of affairs is revealed.

I listened to the Secretary of State today making one of the most amazing statements that I have heard from any Secretary of State. He said that the new town of East Kilbride was designed to take Glasgow's overspill. Yet here I have his own document, issued on 19th December, 1955, which reveals that East Kilbride new town at that time contained 1,500 Glasgow families, and East Kilbride has been the goal for the past ten years. East Kilbride's population has increased by about 16,000. All that has happened in the last ten years in connection with the town which the Secretary of State alleges was designed to take Glasgow's overspill population is that 1,500 Glasgow families are located there.

But what is this friction that has developed? Why all this procrastination? When I made inquiries I found that the Clyde Valley Advisory Planning Committee had indicated that Kilmarnock was prepared to take some of Glasgow's overspill population, that Hamilton might do so, that Milngavie might provide 400 houses, and that Kirkintilloch would provide about 1,000 houses, but despite the inquiries initiated by the Clyde Valley body, the Secretary of State makes a public statement to the effect that Kilmarnock is to take 9,500, that Kirkintilloch is to take 10,200, that Milngavie is to take 8,300, and that Hamilton is to take 4,700. Yet not one of these towns knows anything about it. Indeed, Milngavie has made it clear that it is prepared to provide only 400 houses, and not 2,400 as was suggested by the Secretary of State.

Even if we were to accept the figures which the Secretary of State now alleges can be accommodated in these other areas, we have 34,000 people still to put into East Kilbride. I do not know where or how it is to be done, but he says that another 34,000 people can still be put into East Kilbride. Some 40,000 are to go to Cumbernauld. That makes 74,000. Where are we to put the rest? The total is 300,000. I suggest that the only remedy, the only solution, is to build two additional new towns under the New Towns Act, one at Houston and another at Lugton or elsewhere. That would absorb about 100,000 of Glasgow's overspill and leave another 100,000 to be spread over all the other areas.

I regard this Bill as simply a staging process. It is a delaying tactic; there is no doubt about that. If the Secretary of State were to designate a new town immediately we should commence work on it and get it organised and developed; but to deal with the problem by putting 2,000 here, 3,000 there, and 4,000 somewhere else, would require 60 or 70 different local authorities in the West of Scotland being prepared to take those numbers. That would be physically impossible. There is not that number of local authorities in the whole of the West, nor in the East of Scotland, but that is the problem we are faced with by the Bill.

For one place to take so many and another place so many more is a proposal which just cannot work. The only solution lies in the provision of two additional new towns. Then the residue could be put into the different areas, as suggested in the letter from the Minister to Glasgow Corporation.

I have spoken longer than I had intended to do, and I have not dealt with the financial provisions. I hope that the Joint Under-Secretary will take the opportunity of replying to the many points which I have raised, and give us some clarification of the situation. I hope that he will not reiterate the statement made by the Secretary of State that there are to be no more new towns, Which I think is a foolish policy.

5.32 p.m.

Photo of Sir John Henderson Sir John Henderson , Glasgow Cathcart

I am sure the hon. Member for Glasgow, Central (Mr. McInnes) will not misunderstand if I do not follow his arguments about overspill—

Photo of Mr Eustace Willis Mr Eustace Willis , Edinburgh East

They were very good arguments.

Photo of Sir John Henderson Sir John Henderson , Glasgow Cathcart

—but I want to go back to the first part of the Bill and deal with the question of reductions in the housing subsidy. I wish also to refer to the remarks made in the early part of the speech of the right hon. Member for East Stirlingshire (Mr. Woodburn), who emphasised that essentials for the happiness of Scottish people were a good home and good health, and that good health was linked to a good home. We on this side of the House are in absolute agreement with those sentiments because from experience we know that, no matter how much may be paid out of the Health Service, the absolute necessity and foundation for happy and a healthy life is a good house. That is why the Tory Party set a target of 300,000 houses a year, which was far in excess of anything the Socialist Party did when it was in office. That target we achieved and so made an admirable contribution to the housing of the people. Consequently we did much to improve the health of the people.

This Bill is another indication of the courage of the Government. In certain circles it is not popular because any thought of having to pay an increase in rent, or in any direction whatever, is never popular. Therefore, misunderstandings have arisen here and there. In making this proposal for a reduction of subsidy, the Government have carried out the same principles as before, namely, that subsidies should be given only to those in need. I think both sides of the House have accepted that principle for quite a number of years. The Minister indicated that the reduced basic subsidy for new houses of £24 a house would extend for sixty years. No objection can be taken to that; it should be accepted by all. That will be a flat-rate subsidy and will take the place of the present three-tier subsidy for different houses.

This is a reduced subsidy on new houses only. The subsidy on existing houses will continue, but that has been overlooked by hon. Members opposite. For houses needed to accommodate overspill population—a matter which has been touched upon by the hon. Member for Glasgow, Central—there will be a special subsidy of £30—[HON. MEMBERS: "No."]—I am grateful for the correction. The subsidy will go up to £42 and for multistorey fiats, which naturally are more expensive, the Government will pay an additional subsidy to cover two-thirds of the amount of the tender cost of the houses at the site.

The hon. Member for Glasgow, Central devoted a lot of time to the overspill problem and it was interesting to listen to him, but I should have thought he might better have devoted some time to the necessity of clearing up the centre of the City of Glasgow, instead of sending people to far-off parts where roads are narrow, where there are no educational facilities, no public services, and where transport is in short supply. If we cleared up from Glasgow Green to Govan on one side of the River Clyde, and from Anderson on the other side through to the Stockwell, that would be a very excellent job. By putting up ten-storey or eight-storey buildings we could accommodate many people near to their jobs instead of sending them to far away parts outwith the city where transport is extremely costly. The Government have provided a very substantial subsidy for houses erected for the purpose of dealing with overspill.

Photo of Sir John Henderson Sir John Henderson , Glasgow Cathcart

No, I am not going to give way. I am going to have my say and the hon. Member can speak later.

The average council house in England and Wales has a very much higher rent than that in Scotland. Before the war most of the occupants of those council houses were drawn from the lower income groups. Earnings in those days were very much smaller than now, sometimes as low as 69s. a week. The local authority's annual charge for rent was 10 per cent. of income, or 7s. a week, whereas today average earnings in industry are 217s. a week and the average rent for a council house is £26 2s. 1d., or 10s. a week, a little less than 4½ per cent. of income.

What is now paid in rent bears no relation to capacity to pay. In industrial districts, where incomes are relatively high, local authorities pursue low rent policies, whereas in agricultural areas rents are much higher. It is a sobering fact that the rent of a post-war four-apartment house in Glasgow is £31 13s. 9d. a week. In Cupar it is £38, in Dunbar it is £40 and in Forres it is £45.

Photo of Sir John Henderson Sir John Henderson , Glasgow Cathcart

There is a progressive town council in Edinburgh. Consequently things are in a much healthier condition.

According to the figures given by the hon. Member for Glasgow, Central, the economic rent of a four-apartment house is about £98 to £100. Towards that the taxpayer contributes in subsidy £42; and the ratepayer contributes in subsidy £14. The tenant in Glasgow pays a rent of £31 13s. 9d. This makes a total of £87 13s. 9d., which leaves a deficit of. £12 6s. 3d. which the rate- payers have to meet. Out of a true rent of £100, the taxpayer and the ratepayer pay £68 6s. 3d. and the tenant pays £31 13s. 9d. Since 1939, local authority rents have risen by 38 per cent., whereas weekly earnings in manufacturing industry have risen by over 200 per cent.

A few weeks ago we had a deputation from the Convention of Royal Burghs which met hon. Members of both parties. The purpose of the visit was to protest against the cut in the housing subsidies. After having listened very attentively to what they said, some of my hon. Friends put questions to them. My hon. Friend the Member for North Angus and Mearns (Mr. Thornton-Kemsley) stated that there were 500,000 existing council houses in Scotland which had been built when costs and interest rates generally were lower than they are now. He suggested that what was needed was the pooling of subsidies and a reasonable rent levy, accompanied by rent rebate schemes to avoid hardships. In my opinion, that is a sound and sensible proposal which could and should be accepted.

It was suggested that if this subsidy cut came into operation it would involve hardship, but it is alien to the Government to place hardship on anyone in this country at any time. All our legislation has been to remove hardships and to make life better and happier for the people of this country.

Photo of Mr Willie Hamilton Mr Willie Hamilton , Fife West

What about the charges for prescriptions in the Health Service?

Photo of Sir John Henderson Sir John Henderson , Glasgow Cathcart

The reply which the representatives of the City of Glasgow made to those helpful suggestions of my hon. Friend was that the policy of Glasgow Corporation was to relate rents to building costs. Houses built twenty-five to thirty years ago might have cost £600 to £700, whereas houses built today might cost £1,800. The proposal that for houses equally in good condition and of equal facilities there should be disproportionate rents was to my mind a fantastic proposal and a fantastic policy for Glasgow Corporation to operate.

If the reduced subsidy were paid over all the council houses in Glasgow, it would involve an increase in rent of 3½d. per week. Spread over all the post-war council houses it would involve an increase of 7d. a week. To suggest that this is hardship and injustice and that tenants are unable to pay this moderate increase in rent is just a lot of blarney.

This is a sound proposal and another indication of the courageous manner in which the Government are carrying through their legislation.

5.45 p.m.

Photo of Mr William Hannan Mr William Hannan , Glasgow Maryhill

The hon. Member for Glasgow, Cathcart (Mr. J. Henderson) assumes that we all agree with the manner in which the target of 300,000 houses has been reached. We attempted to deal with that in the Scottish Grand Committee. Of course, if the houses are smaller we get more from the same materials, and that is what the Government have been doing.

The hon. Member talked about subsidies as though they were vile and in principle wrong. Would he agree that we should dispense with subsidies to farmers in the same way—or subsidies to egg merchants, for that matter?

Photo of Sir John Henderson Sir John Henderson , Glasgow Cathcart

The hon. Member is quite wrong in his assertion. The people in the poultry trade get a subsidy, but the distributors or the shopkeepers get none. The merchants therefore receive no subsidy.

Photo of Mr William Hannan Mr William Hannan , Glasgow Maryhill

I was referring to most of the industries or services which are subsidised. It is not a question of principle which is troubling hon. Members opposite; what is troubling them is the question of who gets the subsidy. It could very well be argued from this side of the House that those who will get a subsidy from the National Assistance Board are the factors and property owners who will be getting the extra rents, because the old-age pensioners will have to go to the National Assistance Board for extra money with which to pay the increased rents.

Photo of Sir John Henderson Sir John Henderson , Glasgow Cathcart

Would the hon. Gentleman agree that Members of Parliament are getting the subsidies? I can tell him that they are getting them.

Photo of Mr William Hannan Mr William Hannan , Glasgow Maryhill

It is the question of who is to get the subsidy which is troubling hon. Members opposite. The hon. Member referred to some houses in Glasgow. It was hon. Members opposite who provided the houses in the first place and then allowed them to deteriorate. If flats were provided on the Clydeside in Glasgow, would hon. Members opposite be prepared to live in them? Do not let us be mealy-mouthed about this; hon. Members opposite should not ask people to do what they are not themselves prepared to do.

One had hoped that with the advent of a new Secretary of State, a new personality to that high office, a review would be made of impending legislation in order to make it more liberal and progressive in its outlook, or should I say, National Liberal in its outlook? This Bill is part of the heritage which has been left to the right hon. Gentleman from the previous Administration, but he has accepted it in a docile fashion which shows how much he and the National Liberal Party have become prisoners of the Tory Party. Evidently they have concluded that if one cannot defeat one's enemy, the next best thing is to be swallowed up by him.

I should have thought that, on entering office, the right hon. Gentleman would have reviewed the legislation and would have looked again at the new towns. But, instead of a fresh breeze blowing through the corridors at St. Andrew's House, it is a chilly blast which is blowing through the offices of local authorities because of the proposals now before us.

The New Towns Act, 1946, was not passed by the Labour Government in order that fourteen new towns would be an end of the matter. It was put on the Statute Book precisely to meet the conditions with which Glasgow and the industrial belt in Scotland are faced today; an area where, as my hon. Friend the Member for Glasgow, Central (Mr. McInnes) has said, there is an overspill of 300,000 people. Yet, for almost six years, the present Government have not designated a single new town, nor, evidently, do they propose to do so. This Bill is a poor substitute for the high purposes of that former legislation. It alters the proportion in which housing subsidies have hitherto been paid as between the local authorities and the Exchequer.

The hon. and gallant Member for Renfrew, East (Sir G. Lloyd), who has been singularly silent since the party opposite was elected in 1951, this afternoon spoke of the principles of subsidies, and in reply I should like to quote his hon. and learned Friend the Solicitor-General for Scotland. Of course, these words were used in 1955, the year of the election, but, in the Evening Times of Thursday, 19th May, 1955, the Solicitor-General had this to say about housing subsidies: Housing is a fundamental social service on which the nation's health so largely depends. That is why we must subsidise the building of houses to let. It so happens that the hon. and learned Gentleman was right. Housing is a social service, and that is how we, on this side, look on it. I want to ask the Joint Under-Secretary of State to give a direct answer to the question whether the Government still look upon housing as a social service. If they do, then the principle of subsidies has been settled and now only the amount remains to be settled. We look upon this Measure as an emasculating attack upon a social service—as it has been described by at least one honourable inhabitant of the Front Bench opposite.

Photo of Mr William Hannan Mr William Hannan , Glasgow Maryhill

The subsidies are paid for by the Exchequer and the local authorities in a proportion of roughly three to one. At present, for a one- to three-apartment house, the Exchequer pays £39 15s. and the local authority pays £13 5s.,; for a four-apartment house, the proportions are £42 5s. and £14 5s. respectively; and for a five-apartment house they are £46 15s. and £15 10s. respectively. That is a proportion of, roughly, three to one. There is now to be a £24 flat rate irrespective of the size of the house, and for hon. Members opposite even to attempt to argue that this is not a cut in this social service is, of course, quite contrary to the facts.

Even these changes, however, are quite unrealistic in relation to building costs. They do not take into account the increase in the cost of building and, what is more important, the freqently increasing interest charges which, in relation to subsidies, is more important than any other factor. Like my hon. Friend the Member for Glasgow, Central, I have made one or two calculations, but the truth of the matter—and the broad principle of this Bill—is contained in the statement that the present Government's policy is actually to try to reduce the number of houses being built. That is the whole purpose of all the operations that have been going on for the past two or three years—valuation and rating, increased interest charges, the change in the Rent Restriction Acts, and the rest. The two main methods employed are high rates of interest and cuts in subsidies.

Let us make a comparison of conditions as they existed in 1951 and in 1956. In 1951, the cost of building a four-apartment house—interest charges, the actual cost of labour and all the rest—was, over sixty years, £3,676. In 1956 that figure had risen to £5,822. The weekly cost in 1951 was £1 8s. 7d., and in 1956 it was £2 2s. 4d. Here we see one of the real causes of the Government's cutting back. Their only solution of the economic difficulties which they have brought upon themselves is to shift the burden from the shoulders of those best able to bear it and to put it on to those of the people who, indeed, need the social service.

Those who earlier heard the hon. and gallant Member for Renfrew, East would have assumed that he was speaking on behalf of his constituents, yet, in principle and in its wording, his speech was very little different from another which he made. Proposing the principal toast at the annual dinner of the Property Owners' and Factors' Association, Glasgow, on 12th February, 1954, the hon. and gallant Member is reported as saying that … he was not 'enamoured' with the Housing (Repairs and Rents) (Scotland) Bill, but he believed that if it was not a whole loaf it was better than no bread at all. He went on to say that his heart was breaking over the position of factors and property owners at that time. He then has the audacity to come here to try to justify such a Bill as this, which will have no result but a deterioration in the standard of living and in the cost of living of old-age pensioners and others.

I disapprove most strongly of this Measure, which will do nothing whatever to relieve the frightful housing problem in Glasgow. In that city, 13 per cent. of our houses are one- and two-apartment dwellings. Thousands are living crowded together, and the fine aspirations already enshrined in the Statute Book are cast aside as having no useful purpose. In this Bill there is nothing but a continuation of the frightful, sordid conditions in which so many hundreds and thousands of my fellow citizens have to live.

This Government cannot forget the small, selfish interests of the people who at present are influencing them behind the scenes; they cannot think in terms big enough and broad enough about the social changes which they can make in our country's way of living; they cannot see that this Bill has no vision. It is small and narrow. Let them take it away and, in its place, bring back something which will do far more good for Scotland in the years to come.

6.0 p.m.

Photo of Sir John George Sir John George , Glasgow Pollok

The hon. Member for Maryhill (Mr. Hannan) will, I know, excuse me if I first make a few remarks about the speech of his hon. Friend the Member for Glasgow, Central (Mr. McInnes). He dealt mainly with new towns, a subject on which he is so expert. I respect his views on these matters. Indeed, I agree with him in the major proposal which he put forward, which was that Glasgow's overspill, estimated at 300,000—though I very much doubt that figure—reduced to 200,000 after East Kilbride and Cumbernauld take their share, could not be dealt with by town development. I must say I thoroughly agree; I cannot see 200,000 people being housed in existing townships or village developments. With him, I look to the future as one which must contain another two new towns before the overspill problem of Glasgow can be solved.

The hon. Gentleman rather deplored the financial arrangements made with other local authorities to take the overspill. I am sure that he was quite wrong. My right hon. Friend fully realises that no local authority will be saddled with the overspill from any town unless it at least breaks even on the project. The hon. Member for Glasgow, Central can rest content that my right hon. Friend will not bring forward something which in the end will not work. He wants this scheme to work, and the hon. Gentleman can rest assured that the financial arrangements finally made will work.

Photo of Dr Dickson Mabon Dr Dickson Mabon , Greenock

They are in the Bill.

Photo of Sir John George Sir John George , Glasgow Pollok

The financial arrangements are not in the Bill. That was part of the argument by the hon. Member's hon. Friends earlier. The same point applies to the housing associations. Unless the financial arrangements result in their breaking even, the scheme will not work. Hon. Members must give us credit for realising that matters must be so arranged that local authorities will take the overspill and housing associations are enabled to do the job that we give them to do.

As regards industry following the "exportee", if I may use that word, the denunciation of the hon. Member for Glasgow, Central was very strong, and he seemed to imply that my rihgt hon. Friend had given no attention to that matter at all. But my right hon. Friend showed quite clearly in his speech that he was fully seized of the problem, and that he had been studying the matter closely with the Glasgow authorities. He found that the Glasgow authorities were keen that industry should move with the people they exported from Glasgow, and indeed arrangements to that end have been made. The hon. Member for Glasgow, Central was less than fair to my right hon. Friend in his denunciation.

Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

Does the hon. Gentleman not appreciate that his right hon. Friend the Minister of Housing and Local Government said exactly the same about the Town Development Bill, now the Town Development Act, 1952? What my hon. Friend the Member for Glasgow, Central was doing was to call attention to the failure of that Act to deal with the problem and the failure of the Secretary of State to make any improvement on the English provisions in introducing this Part of the Bill.

Photo of Sir John George Sir John George , Glasgow Pollok

My right hon. Friend made it quite clear that his intention and Glasgow's intention was to arrange that industry should follow the people out of the town.

Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

Not to arrange, but to desire. There are no means of facilitating the desire.

Photo of Sir John George Sir John George , Glasgow Pollok

There are means in the Bill.

Photo of Sir John George Sir John George , Glasgow Pollok

There are means in the Bill to purchase land on which to build industrial premises to let or lease. That is in the Bill. The matter of industry is being tackled, and we should give my right hon. Friend credit for having studied the matter, and Glasgow Corporation the credit for being well aware that it should move industries when moving out excess population.

Photo of Sir John Macleod Sir John Macleod , Ross and Cromarty

If my hon. Friend will forgive me for intervening, I will tell hon. Gentlemen opposite to look at Clause 9 (5), where they will find it.

Photo of Sir John George Sir John George , Glasgow Pollok

I am grateful to my hon. Friend for his assistance.

The right hon. Member for Clackmannan and East Stirlingshire (Mr. Woodburn) spoke about building factories in advance; and I remember the hon. Member for Hamilton (Mr. T. Fraser) speaking on the same theme a little time ago. This is not an easy matter to deal with, and I believe that tremendous mistakes can be made in building factories in advance. Factories must normally be "tailor" built to suit the needs of the concern which ultimately occupies them.

Photo of Mr Arthur Woodburn Mr Arthur Woodburn , Clackmannan and East Stirlingshire

Do not all the factories in the development areas of Lanarkshire prove that the hon. Member is wrong? There are factories to suit the different sizes of the local populations. Once one has established a housing area, one does not go on to put the factories there later; the whole thing is planned as a whole, and the factories are put there to suit the houses, or the houses to suit the factories, not as two separate operations.

Photo of Sir John George Sir John George , Glasgow Pollok

One could easily plan for the factories being ultimately there by leaving ground on which to build them, as is suggested in the Bill. But I say again that tremendous errors can be made in building factories in the hope that they will suit somebody who comes along to use them. One must be very careful indeed in building costly factories.

The great point made by the hon. Member for Glasgow, Central was, as he argued, the crippling effect which the Bill will have in Glasgow—£14 per annum for ten years for each house allocated to a person sent from Glasgow. But, I would ask, what would the Glasgow Corporation have to pay if it housed the people itself? Even under the new Bill, the Corporation would pay £8 for sixty years. Glasgow is saving money by being allowed to send people out to these places.

Photo of Mr James McInnes Mr James McInnes , Glasgow Central

Does not the hon. Member for Pollock realise that if 300,000 people are exported out of Glasgow, Glasgow's rateable value goes down and the shops and industries of Glasgow will close down, probably moving elsewhere, and the 700,000 people left will have to face a burden of £14 million as a result of Measures of this kind?

Photo of Sir John George Sir John George , Glasgow Pollok

I give the hon. Gentleman credit for thinking more clearly than that. Three hundred thousand people will not be rehoused in a week or in a month.

Photo of Sir John George Sir John George , Glasgow Pollok

It will be a gradual process over many years, and the burden is £14 for ten years. The hon. Gentleman surely cannot believe that all these people or the factories will be got out of Glasgow inside ten years. There will be no question of bearing the whole cost in Glasgow before all the 300,000 have been removed.

The hon. Member for Glasgow, Central said that the unfairness to Glasgow was shown by a comparison with London—Glasgow has to pay £14 for ten years while London paid nothing—and he went on to tell us about the difficulties of London in dealing with its overspill. He said that eight new towns had been built and yet London still had an overspill of 200,000. He said that difficulty had been experienced in trying to make other local authorities take their people; might not that have been because London would pay nothing? Did he not say in the course of his speech that Birmingham had offered to pay the full rate subsidy, and could not get the other authorities to claim people? Birmingham offered to undertake the burden; Birmingham did not feel that it was a crippling burden. But nobody would take them. If London will pay nothing, what claim have they that their people should occupy the new towns? I think it will be found—indeed, we know it was by agreement with the Glasgow Corporation—that the Corporation was quite satisfied with it.

Photo of Sir John George Sir John George , Glasgow Pollok

I was not satisfied with what my right hon. Friend had to say with regard to compensation for disturbance of industry. He indicated that, through the Inland Revenue authorities, he understood that the statutory compensation would, in a large measure, pay for rebuilding industries in a new area. Quite frankly, I have strong feelings on the subject of the displacement of industry and the displacement of homes. I feel that if our plans involve the shifting of industry from where it sits at the moment to another site to suit national or local government planning, then the people forced to shift should be enabled to set up again at no loss. What my right hon. Friend the Secretary of State said does not satisfy me.

Photo of Sir John George Sir John George , Glasgow Pollok

I am bound to say that that is the feeling I have. If the hon. Gentleman made the point before me, I am re-emphasising what he said. As regards homes which are disturbed in the building of new towns, I should like to be assured that we shall do better than either side of the House has done in the past. If a person is deprived of his home for the sake of local or national plans, he should get another home; he should be no worse off because he has to move from the place where he at present resides and intends to reside because of special local or national plans. I trust that my right hon. Friend will give these matters his consideration.

The right hon. Member for East Stirlingshire said that the real purpose of the Bill was to raise rents. The hon. Member for Maryhill seemed to make this his main objection, and it was something upon which he spoke strongly. I always respect his views, although he sometimes expresses them rather forcibly. Here I consider that we should pay a tribute to the ex-Secretary of State who has shown great courage, honesty and integrity in trying to clear up the mess of rating, valuation, rents, subsidies and all the rest. He has followed his course courageously. It has been pursued in spite of the criticism, just and unjust, from the other side of the House. The Rating and Valuation Act removed an anachronistic and anomalous system. I am quite sure that if ever, unfortunately, right hon. Gentlemen opposite get back into power they will be delighted that we had the courage to put that Measure on the Statute Book. They will be delighted about the Rent Bill, too.

They will be delighted that it has been done for them. They know perfectly well that the right hon. Member for Ebbw Vale (Mr. Bevan) had already said that he would have to tackle the rent position. [Interruption.] An hon. Member says that the Member for Pollok opposed the Rent Bill. I had certain views about the Rent Bill but did not oppose the principle. I opposed the timing. I am perfectly in agreement that decontrol must come, in Scotland and elsewhere.

Now we have the third bold Measure tackling subsidies. The fury expressed by hon. Members opposite is phoney fury, just as it was when we considered the Rating and Valuation Bill. They will be relieved that the Bill has been passed for them, if ever they come to power. Our leaders are prepared to be undeservedly unpopular if we can get some of the blunders in our system rectified.

Let me deal first with subsidies. It has been said over and over again that it is the habit for Scotland to be tacked on to the tail of England, that we always follow behind and wait until the English tell us what we should do. Here we have a clear demonstration that Scottish conditions have had full consideration. England has abolished the subsidy for general needs, but we have not. We have reduced it to £24. Let me illustrate the future position. A comparison of subsidies in England and Scotland shows that if 1,000 houses are built in each country, one-third for general needs, one-third for slum clearance and one-third for overspill, the subsidy paid in England will be £15,000 and that paid in Scotland will be £30,000. Scotland is not being trailed at the tail of England. Scotland is a way ahead in making sure that proper treatment is given to Scottish conditions.

The Bill faces squarely the Scottish position. I admit that there is a reduction which I will justify later. We have not taken the step which England has taken and tried to concentrate upon slum clearance. The Working Party's Report handed to the Secretary of State recently stated that in its view we were not yet in a position to concentrate fully and vigorously upon slum clearance. The emphasis, it said, was still on houses to deal with overcrowding. Therefore, we have not given slum clearance a higher place in the subsidy list.

Let us look now at why we reduced the subsidies. I do not look upon it as at all a crime to reduce subsidies. I never thought that they were permanent and inflexible. One recalls that immediately after the First World War the cost of building was high and very little building was done. In the years succeeding the war the cost of building fell rapidly, back to normality. In the 1920's costs even fell below normal.

Could it be that after the Second World War it was expected that the same thing would happen? I as an industrialist expected it. I expected to have to face falling costs and a lower demand. I expected to have to be more efficient. Perhaps it was expected that the same would apply in housing. What was done was that a subsidy was granted, as the right hon. Member for East Stirlingshire said, as a bribe to get on with building. To get the building industry going after the war, subsidies were given as a means of persuading it to go ahead and to induce it to build houses on the massive scale required. But the intention was not that that should go on for ever. We have to recognise that the "normality" of 1938 will never return. We are today in normality as far as costs and wages go.

The hon. Member for Maryhill said that the cost of building was rising. I maintain that we have reached a point in the cost of building, and wages, when subsidies should be stabilised. On the subject of the cost of building, Mr. G. B. Esslemont, City Chamberlain in Glasgow, speaking at the annual meeting of the Scottish National Housing and Town Planning Council on 5th and 6th October, said: On the whole, particularly when taking into account increases since 1952 in wages and other costs, it could be said that the real cost per house, while not lower than in 1952, has not shown an appreciable increase. Housing costs have become static. Having regard to the level of building costs and the level of wages and other costs, this is a time to bring subsidies back to a relative position. What is the position to which we have brought them? The amount of subsidy paid for permanent houses in Scotland last year was over £12 million for 500,000 houses. The average subsidy was therefore £24. That is the subsidy we now propose. The pool of subsidies will not be increased, but for every house now built the average subsidy will be added to the pool so that it will not go down. I believe that a point has been reached when we must consider the cost of building and wages as having reached normal. That is one reason why I favour the Bill. The other reason is perhaps that which has been stressed not just here but all over the country, that subsidies have been misused and, indeed, abused. That is one of the reasons subsidies should be reduced.

Why were they granted in the first place? In my view, they were granted to make certain that no person would be deprived of a home through inability to pay rent. That was the purpose of the subsidy and, by and large, in pre-war days it performed just that purpose. It will be recalled that before the war instructions to local authorities were to build for the working classes. For the most part, we housed the working classes in local authority houses and, by and large, they had about the same level of wages, so the subsidy was being used properly.

Photo of Mr Cyril Bence Mr Cyril Bence , Dunbartonshire East

Before the war those who built their own houses for owner-occupation received subsidies.

Photo of Sir John George Sir John George , Glasgow Pollok

I cannot see the relevance of that observation. I will not repeat what I said. It is well known to everyone but the hon. Member for Dunbartonshire, East (Mr. Bence). The local authorities were directed to build for the working classes. After the war, when the right hon. Gentleman the Member for Ebbw Vale was Minister, that was changed, and we built local authority houses for all and sundry. At the same time, we virtually prohibited the building of private dwellings, so that everybody, irrespective of salary or wage level, had to go on the local council list if he needed a house.

Therefore, instead of catering for a broad mass of people on the same level of income, since the war we have been catering for the great mass of people with great variations in income levels. Nobody would say that because a man takes a local authority house he needs financial assistance. Housing need is not synonymous with financial need; but that is the very position taken up by local authorities. The position is, "If you come to us for a house we will subsidise you whether you need it or not." I believe that a very large number of people now occupying council houses could pay a higher rent than they are paying. To that extent the subsidy is misused.

I should like to quote from a Circular put out by Mr. Greenwood in 1930. It stated: The clear intention of Parliament is that the new grant shall not enure to persons for whom it is not needed. The grant, together with the prescribed rate charge, should be regarded as a pool out of which such abatements or other special arrangements in regard to rent as the local authorities propose may be financed. Rent relief should be given only to those who need it and only for so long as they need it. It was the intention of the Labour Government's Act of 1930 that the benefit of this arrangement should go to those who needed it, and only to those who needed it, but that is not the position today. The subsidies have been misused.

Mention has been made of the level of rents, and, apart altogether from the misuse of the subsidies by subsidising people who did not need them, the local authorities in Scotland have consistently been pursuing a policy of unduly low rents. When the subsidies were fixed in 1946 and 1952, it was made quite clear to the local authority concerned what rent it was expected the local authority should charge. When the subsidy was fixed in 1946 at £23, it was expected that the local authorities would charge a rent of £26. That was the rent which the Government expected them to charge. In 1952, when the subsidy was fixed, the local authorities were expected to charge £30 5s., without owner's rates, and under this Bill, they will be expected to charge £39, without owner's rates.

This has been made quite clear to them all through the years, but they have consistently neglected it, so much so that, when one goes into the figures in order to see what has been taking place regarding rents since the beginning of the war, one is astonished to find that six authorities which own 120,000 houses in Scotland have not touched the rents since 1938. That represents 29 per cent. of local authority houses in Scotland. [An HON. MEMBER: "They are pre-war houses."] They could not very well increase the rent of post-war houses until after the war. They have not touched these rents since 1938 in the case of these authorities, while six other authorities have not touched rents since 1947, and 20 other authorities have not touched them since 1950.

Therefore, we find that the level of rents is being deliberately maintained at an unduly low figure, and it is very interesting indeed to find what these levels of rents are, because the whole position in Scotland has been clouded by this mixing of rates and rent. Council house tenants talk about rents when they mean rates and rent. Owner's rates and rent are now counted as rent. The Rating and Valuation Act will clear this up in a very short time.

The position was very clearly stated by the Working Party when it came to examine the position in Scotland in the light of what would happen when the Rating and Valuation Act became law, and the Report brought out an astonishing figure about rents in Scotland. I am talking now about actual rent, which is the amount which the person pays for shelter, and owner's rates have nothing to do with it. The tenant pays owner's rates for other services such as police, fire brigade, public parks and other things, but the rent he pays is for shelter. The average rent in the cities of Scotland is 6s. 8d. per week; in the large burghs it is 6s. 1d.; in the cities and the large burghs combined it is 6s. 5d.; in the small burghs it is 7s. ld.; and in the counties of Scotland it is 4s. 5d. a week. These are the rents actually being charged by local authorities today, and, what is more, further on in their Report the Working Party say that in many cases the rent will be much lower than this, and, in fact, it is much lower. The right hon. Member for East Stirlingshire dealt with this point when comparing Dollar rents with Ayr County.

In the burgh of Airdrie, there is an astounding rent of 3s. per week, that is, stripped of owner's rates, and Ayr county has the same figure. The Glasgow rate, stripped of owner's rates is 5s., and that in Kilmarnock is also 5s. The Edinburgh figure, incidentally, is 9s. 6d. When I showed these figures to some members of Glasgow Town Council, "incredulous", "fantastic" and "amazing" were the words used in comment.

That is the position which the local authorities have created in Scotland today, and, in the light of the figures I have given, it is evident that they have been abusing the subsidies, and some way must be found to make the position of rents equate with responsibility to the community as a whole.

Photo of Mr Arthur Woodburn Mr Arthur Woodburn , Clackmannan and East Stirlingshire

Is it not the case that, in some of these areas, the rates are so high that the rates have been used as a method of levelling rent and rates, and that this is a method by which a person who has a local authority house is not called upon to pay the high rates and a high rent, and the whole housing account has been pooled in order that people should be able to pay a balanced rent? This is not quite so simple as the hon. Gentleman suggested.

Photo of Sir John George Sir John George , Glasgow Pollok

I cannot pretend to follow the right hon. Gentleman in the point he makes. I only know one system of levying rates, and that is by taking the amount of the rent and putting rates upon that figure.

Photo of Mr Arthur Woodburn Mr Arthur Woodburn , Clackmannan and East Stirlingshire

The hon. Gentleman knows very well that there are a great many pre-1914 houses on which low rents are charged and the tenants of which do not pay anything like the contribution that would be paid by a local authority tenant paying on the higher rents which the hon. Gentleman has been mentioning. We know that there are different types of property, and the local authorities have on occasion tried, but not very successfully, to see that the people in the old houses paid higher rents so that the people in the local authority houses, in a combination of rent and rates, would pay a figure approximating to what was right for those houses.

Photo of Sir John George Sir John George , Glasgow Pollok

I will accept that if the right hon. Gentleman tells me it is so, but I cannot see how they could possibly do that. If rent passing is automatically the valuation they cannot pay more rates than that.

Photo of Mr George Lawson Mr George Lawson , Motherwell

I know that the hon. Gentleman is trying to he fair, but he quoted the Working Party Report. I think he would agree that the Working Party also compared rent and rates in Scotland with those in England and Wales. If the hon. Gentleman does so, I think he will find that the figure is nothing like that which he has produced on the selective basis which he has been quoting.

Photo of Sir John George Sir John George , Glasgow Pollok

I would have to be prepared, in answer to the hon. Member, to compare not just rent burden but the total burden of rent and rates.

Photo of Mr George Lawson Mr George Lawson , Motherwell

Take them both together.

Photo of Sir John George Sir John George , Glasgow Pollok

I was taking only rents, but I will now take the whole burden of rent and rates in Scotland, as against the total burden of rents and rates, compared with England and Wales. For a four-apartment house in Edinburgh, for instance, the total burden of rent and rates is £58 9s.; in Liverpool £68 9s. 6d.; in Birmingham, £77 3s.; in Clydebank £51 12s. 6d.; in Birkenhead £77 10s.; in Dundee £58 2s.; in Hull £71 10s.; in Aberdeen £49 and so on. These figures show quite clearly the total burden of rent and rates in England as being much higher when compared with Scotland.

Photo of Mr George Lawson Mr George Lawson , Motherwell

The hon. Gentleman is being very selective in the examples which he has quoted.

Photo of Sir John George Sir John George , Glasgow Pollok

I could quote further examples, and I have given comparative figures, but maybe the hon. Member for Motherwell may be tempted to deal with the position himself. I was making the point that rents in Scotland have been unduly low, and I say that there is no need to worry about any great burden being put on because of the subsidies being cut. The rents are still well able to bear it.

On the question of interest rates, which has been raised in this debate, I want to take the two figures together. I have calculated what the cost of the reduction in the subsidy would be, and I have already heard mentioned by other hon. Members on this side the argument that the cut in the subsidy spread over all the 500,000 houses in Scotland would represent 3d. per week on the rent. I agree with that figure. Rates of interest must be considered as a whole, and their incidence must be considered as a whole. I repeat what I have said before in similar debates in this House, that a local council does not calculate the cost of the rate of interest paid on a house as one amount, a single item. It is spread over its total capital burden.

Since the Conservatives have been in charge of the affairs of the country interest rates have risen by 2 per cent. I grant that straight away, but in Glasgow, for instance, whereas the overall rate of interest in 1952 was 3.03, it is now 3.56 per cent. Hon. Gentlemen opposite who are well aware of local government finance mislead people by suggesting that a local authority takes all its borrowed money at once. Local authorities if they are clever financiers, do not take it all at once. They borrow on short term, and the result is that they do not pay 5 per cent. or 5¾ per cent. For instance, in Edinburgh the interest charge has risen from 3.23 per cent. to only 3.65 per cent. In Dundee it has risen by 0.51 per cent.; in Aberdeen by 0.55 per cent. This has happened between 1952 and 1956. A local authority does not say, "That house cost us interest at 5¾ per cent."

Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

The hon. Gentleman is taking into account all the outstanding debts of local authorities and is saying what the average rate of interest is at the present time. Does he not know what Glasgow has been paying for money which it has been borrowing on the money market in recent times? Is he not aware that it is 5 per cent. at the present time?

Photo of Sir John George Sir John George , Glasgow Pollok

That is the point I was making. We do not take the position at any one time. We take a running position which is worked out at the end of the year, year after year.

That is the position, and rates of interest have risen by 0·5 per cent. not by 2 per cent. during the last four years. To talk of crippling burdens caused by raising the rates of interest is just nonsense.

Photo of Mr Arthur Woodburn Mr Arthur Woodburn , Clackmannan and East Stirlingshire

While what the hon. Gentleman is saying, that a local authority spreads its interest over all its debts, may be true, would he not agree that when a local authority contemplates building more houses it calculates the loss it will have on those houses, and that that may deter it from building more houses?

Photo of Sir John George Sir John George , Glasgow Pollok

I do not think for one moment that the local authorities, as the right hon. Gentleman suggests, are unduly depressed by what the rate of interest is at any given time. [HON. MEMBERS: "Oh."] They are more concerned with doing their duty by the people, and I do not believe for one moment that a temporary 5¾ per cent. will deter or has deterred the local authorities in Scotland from going on with their building plans.

Added together, the cost of reducing subsidies is only 3d. when spread over all the houses, and even if the interest rates were 5¾ per cent. it would mean only an additional 7½d., over all the range of the council houses. That is not a crushing burden.

Since the new subsidies were announced there has been a campaign in Scotland which has aroused alarm and dismay amongst many people. When my right hon. Friend made that announcement in the House, the hon. Member for Glasgow, Central, who knows housing too well to make any impromptu remark without some calculation, however quick, asked—knowing full well that the reduction of subsidy would mean a loss of only £350,000 to the local authorities— Does the right hon. Gentleman realise that these drastic reductions in Scottish housing subsidies, from an average of £42 to £24, with a corresponding reduction in the local rate of contribution, will entail an average increase in rental of £25 to £30 a year for 500,000 municipal tenants in Scotland?"—[OFFICIAL REPORT, 31st July, 1956; Vol. 557, c. 1165.] That is quite untrue. Such a thought could never have crossed the hon. Member's mind in honesty.

Hon. Members:


Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

On a point of order. The hon. Gentleman, having quoted my hon. Friend, has just said that such a thought could not have crossed my hon. Friend's mind in honesty. Is he not imputing dishonesty to my hon. Friend?

Photo of Mr William Morrison Mr William Morrison , Cirencester and Tewkesbury

I think the phrase unfortunate, but I do not think that the hon. Member for Pollok (Mr. George) meant it in that way. However, I think he ought to put the matter straight.

Photo of Sir John George Sir John George , Glasgow Pollok

Thank you, Mr. Speaker. I will withdraw that very readily. I had no intention of imputing dishonesty, but the hon. Member's knowledge of housing and knowledge of money matters is too good for him to have said that without thought. He said that there would be an increase of £25 to £30 a year in rental and he said that that would cost not £350,000 but £13,750,000. That is what he said would be the amount put on the rents in Scotland, to make up a loss of £350,000.

Photo of Mr James McInnes Mr James McInnes , Glasgow Central

Is the hon. Gentleman aware that I could cite many local authorities which, since the intimation about the housing subsidies, have been compelled to raise rents from 9s. a week to 14s. 3d.? If that does not come to about £25 or £30 a year, I do not know what does. That has been done by some of the local authorities, which have taken that step in advance of the Bill's becoming an Act. Therefore, there will yet be many more local authorities which will have to make similar increases. In the light of that, does the hon. Member not realise that my calculation at that time was pretty accurate and has been proved so?

Photo of Sir John George Sir John George , Glasgow Pollok

The calculation was completely inaccurate, intentionally or unintentionally, I do not know. It was that to meet a loss of £350,000 the local authorities would have to levy £13,750,000 upon their people. That statement has spread alarm and dismay in Scotland and it ought to be withdrawn, and in public.

Photo of Mr James McInnes Mr James McInnes , Glasgow Central

I shall repeat it again here.

Photo of Sir John George Sir John George , Glasgow Pollok

Let me finish. I have detained the House too long already.

Local authority practice in Scotland has been to charge unduly low rents, and the local authorities have squared their housing accounts by putting burdens on the ratepayers year after year. They have been robbing poor, impoverished, badly-housed Peter to pay thriving, well-housed Paul. Two-thirds of the householders have been paying an annual levy for the other one-third, and they are getting tired of it. Let us see this matter put in its proper perspective. Glasgow, with whose affairs I have some familiarity, last year took £1,500,000 from two-thirds of its ratepayers who do not enjoy council houses, to pay into its housing account, and the total amount is £6,200,000 since the practice started. We think that this unfair burden upon the ratepayers should stop. It is not good local Government. It is not good government of any kind. It is selective punishment, calculated discrimination. The withdrawal of the subsidies will force a review of that position.

There is the truth about rents—too long concealed, too long providing an alibi for extravagant or timid local authorities, too long used by hon. Members opposite as an emotional instrument to play upon the sentiments of simple people kept in ignorance of the truth by our archaic rating system. All disguise is now banished by the new Rent Bill. Rents will henceforth stand out in stark purity. The reaction will be healthy. I anticipate that it will shock the smug complacency out of many council chambers in Scotland.

The "Rake's Progress" of rates will be exposed and any upward jump in future will evoke loud angry yelps of indignation. The beneficial effects could easily be the salvation of local government in Scotland which is now slowly slipping into discredit and decay. I welcome the Bill and I believe that it will bring a measure of order into the chaotic disorder of rating and housing in Scotland.

6.42 p.m.

Photo of Mr Hector Hughes Mr Hector Hughes , Aberdeen North

There have been four characteristics in today's Government speeches in this debate. First, hon. Members opposite speak like rich men to whom money is of little concern. The hon. Member for Argyll talked about a mere increase of 15s. a week being inconsiderable and hardly worth the attention of the House, but 15s. a week is £39 a year, and I submit that that is of very great concern to many of the tenants with whom the Bill will deal. Many of them are poor and many are old-age pensioners.

It may be true that in some cases, as the hon. Member mentioned, there will be several incomes coming into the house, but in the main the tenants whose houses will be the subject of the Bill are poor and many are old-age pensioners. It may be that the hon. Member for Argyll or his hon. Friends may spend £39 on a dinner party, and it may be of little concern to them, but it is of great concern to tenants of these houses. It seems to me that hon. Members opposite also speak without any detailed knowledge of the present state of our economy, of the high cost of living and of the burdens which rest so heavily on the tenants of these houses.

Photo of Mr Jack Browne Mr Jack Browne , Glasgow Craigton

The hon. and learned Member has referred to the hon. Member for Argyll. Did he not mean my hon. and gallant Friend the Member for Renfrew, East (Sir G. Lloyd)?

Photo of Mr Hector Hughes Mr Hector Hughes , Aberdeen North

Yes, I am speaking of the hon. and gallant Member for Renfrew, East. I thank the hon. Gentleman for the correction. I hope that it will be duly recorded so that the record will be in order.

Another characteristic of the speeches made within the last hour or so is that all hon. Members opposite have been speaking to a party ticket. This is a matter which should be above party politics. We should consider it on its merits. We should consider the merits or demerits of the Bill, the interests of the tenants and of the people of Scotland, and not speak, as hon. Members opposite are obviously doing, to a party ticket in order to support the Government and support the Bill.

I oppose the Bill because it is a covert and unjust attempt to legalise burdens on people who are unable to bear them. The Bill is bad and wrong and will do a great deal of harm. I asked the Minister, when he moved the Second Reading, one question about the financing of the Bill. I drew attention to Clauses 13 and 14, with a view to pointing out that it is wrong that a Bill like this should come before the House without our having an opportunity of legislating on its finances. Clause 13, in Part II, deals with powers as to acquisition and use of land for the purposes of town development schemes, and Clause 14 provides that the financing of the Bill is to be dealt with by regulations. That is undoubtedly wrong. It is bad that the money which will be required for the Bill should not be dealt with by the House as a whole. Instead under Clause 14 it will be dealt with by regulations and this is wrong.

The Bill is objectionable on a number of other grounds, in its details, in its timing, having regard to the present state of the national economy, and in the fact—and this may be a legalistic point—that it is an instance of legislation by reference, which the House generally condemns. As to its general policy, it would penalise one section of the community, namely the tenants of small houses, by placing upon them a new burden. It does this regardless of the fact that of all sections of the community those tenants are the least able to bear a new burden. It does it regardless of the fact that these tenants are already liable for rates. It singles out this one class for the benefit of other and richer classes better able to bear these financial burdens.

The Bill is objectionable and impracticable. I submit that on greater authority than my own. The associations of county councils in Scotland, Glasgow, Aberdeen and Dundee, and the Convention of Royal Burghs have vast, detailed and skilled experience in these relevant matters. They have considered the Government's proposals and have pronounced upon them in no uncertain fashion, indeed in an authoritative fashion.

They have unanimously condemned the proposals upon which the Bill is based. I do not propose to go into those in detail. I do not want to discuss Committee points which will be debated at the proper time. These authoritative and representative people express in their report general dissatisfaction with the Government's proposals for future housing subsidies and particularly oppose the proposed reductions in subsidies. They ask that existing subsidies provided by Parliament under the Housing (Scotland) Acts of 1950 and 1952 be maintained and frozen at present levels for the periods 1957–58 and 1960–61 and be payable in respect of new houses erected during that intervening period.

These authoritative people further point out that the Bill is not only unsound and wrong but is premature, because the effects of the recent revaluations of property under the Valuation and Rating (Scotland) Act, 1956, are not yet known, and in their view it is necessary that time should elapse and that they should be known before any further change such as that proposed in the Bill is made.

I take my stand upon that report, because it is authoritative, detailed, scientific, analytic and constructive, because it is the work of public representatives with a wealth of experience of housing problems in all parts of Scotland. They approach these problems scientifically and in a detailed way. They summarise the Government's new proposals under ten heads, and they condemn them. They contrast them with subsidies made under earlier legislation, now in operation, which the Government seek to change wantonly without giving the system an opportunity of being fully tested. They analyse the cost of new houses in relation to the Bill. They discuss interest rates, rent levels, valuation and rating aspects. They give reasons which are set out categorically and judicially why they are against the Government's proposals, which they very properly stigmatised as "an altogether unrealistic approach to Scotland's serious housing problem."

I am quite sure that the House would agree, and also the public outside from whom we derive our authority in this House, that for the Government to ignore these representative persons and their careful, diligent and exhaustive report and to push through in face of that this unreasonable and impracticable Bill would be the negation of democracy and experience. It would be, indeed, an argument for Scottish self-government in the face of the hubristic and obstinate arrogance of the present Tory ascendancy which constitutes the Government today. Therefore, for all these reasons, I oppose the Bill and ask the House not to give it a Second Reading.

Photo of Colonel Sir Alan Gomme-Duncan Colonel Sir Alan Gomme-Duncan , Perth and East Perthshire

Will the hon. and learned Gentleman tell us what he would have said if he had been making a party speech?

Photo of Mr George Lawson Mr George Lawson , Motherwell

On a point of order, Mr. Speaker. The Secretary of State for Scotland came to this House, made a speech and then disappeared. He has not been here since. Is there any way in which we can have him here to listen to this important debate on the housing position of Scotland?

Photo of Mr William Morrison Mr William Morrison , Cirencester and Tewkesbury

That is not a point of order, and the matter is quite outside my control.

6.52 p.m.

Photo of Mr Colin Thornton-Kemsley Mr Colin Thornton-Kemsley , North Angus and Mearns

If I were to deal with the speech of the hon. and learned Gentleman the Member for Aberdeen, North (Mr. Hector Hughes), I am quite certain that I should be guilty of what the House has always known as tedious repetition, because the Secretary of State for Scotland and at least two other hon. Members on this side of the House have completely torn to shreds the points which he has read out from a memorandum presented to both parties in Committee.

I do not want to speak tonight about that aspect of the Bill but about the proposals contained in Part II dealing with town development. I suppose that all of us come into the House with certain ideals, although I am afraid that all too often those ideals tend to be blurred by the passage of time and by other circumstances. One of the ideals, I confess to the House, I have always held, which I find more strongly coming upon me with every year that passes, is the intense desire to see throughout the United Kingdom, and particularly in places like Glasgow and the great conurbations in the West of Scotland, the replacing of slums and congested urban areas by new building at standards of density which allow decent family living. That kind of ideal is often forced aside by the pressure of economic circumstances, by the gregarious instincts of men and women who live in cities and by the sprawl of mile upon dreary mile of continuously built-up areas over the surrounding countryside.

These things have forced us far too often to substitute for the deplorable the tolerable rather than the best. Nevertheless I have seen in the eighteen years or so that I have been a Member of this House two most helpful factors, and I do not hesitate to place first the new town development in this country, the success of which is now assured. I would place second in the context in which I am speaking, the possibility which will be within our reach in Scotland as a result of this Bill of expanding small country towns to take the overspill from our great urban conurbations.

The House of Commons takes most things in its stride, but I remember so well a summer afternoon about four years ago when we had a Scottish debate. Hon. Members came hurrying from all over the place to see the somewhat unusual phenomenon of an hon. Member who had been an hon. Member of this House for eight years rising to make his maiden speech. The hon. Member for West Stirlingshire (Mr. Balfour) broke his silence after eight years, and I do not think he has broken it since, at any rate upon the Floor of the House.

The hon. Member appealed for consideration for the many decaying country towns in the part of Scotland that he knew best. Such as Kilsyth and Lennoxtown in his own constituency. He might have added Shotts and many other towns in Lanarkshire which have been vacated by the miners drawn to the new coalfields in East Fife, who have left behind them only the old and the maimed, like driftwood on the sands after the tides have receded. The hon. Member for West Stirlingshire went on to ask, "What is the good of building new towns to take the overspill from Glasgow when all the time the unemployed from these decaying country towns are going back into the great cities to take their places?"

Whatever disadvantages these small and medium-sized country towns may have—and they have many disadvantages—they have at any rate established communities with an active social life. They have churches, schools, community centres, playingfields and parks. They need, in many cases, only facilities for profitable employment to make them tolerable places to live in and to revitalise them into the kind of life that a decent country town ought to have. The problem of decaying country towns is almost as acute in Scotland as the problem of great overcrowded cities. Each ought to help the other. Each can help the other as a result of the legislation that the House is being asked to pass this evening.

I remember being asked—I think it was in 1953—to speak at St. Andrews at the annual conference of the Scottish Town and Country Planning Association, and I devoted my speech then to the need for comparable legislation in Scotland to the Town Development Act, 1952. The purpose of that Act, I recognise most readily, was not to arrest the decay of country towns in England and Wales. It was not even to encourage dispersal. It was intended to help financially a limited number of country towns to develop rapidly as centres for the relief of urban congestion, particularly in places like London, Manchester, Merseyside and some of the great Midland conurbations in England.

I do not agree with everything that my hon. Friend the Member for Glasgow, Central (Mr. McInnes) said, but I agree with him that so far the English Town Development Act, 1952, has not been a success. Very few schemes have been agreed. Negotiations have gone on which seem all too often to be bogged down in a mass of detail.

However, there are three recent encouraging signs. There is first the fact that the Government have now agreed to make grants of up to 50 per cent. for the work of what I call pump-priming. I mean by that the water schemes, the sewerage schemes, and all those other things which cost a lot and which are not revenue producing in the way of rates for a number of years. Secondly, there is the encouragement given by the differential rate of subsidy, so that the subsidy in England and Wales for houses to take the overspill from congested cities to expanded towns is to be £24 as compared originally with £10 for the general need subsidy and now nothing at all.

Thirdly, it has been most encouraging that an old chief of mine in the early days of the war at Scottish Command, General Sir Humfrey Gale, the Chairman of the new town at Basildon, was appointed by the late Minister of Housing and Local Government to go round all the towns which might be ready to accept an overspill population that might be the subject of a town development scheme in order to try to urge the adoption of more schemes in England and Wales. Where schemes have been adopted in places like Daventry, Swindon and Bletchley, and where they are in process of adoption in places such as Haverhill, Thetford, Letchworth and Huntingdon, it has been because additional help has been forthcoming both from the Government and from the county councils concerned.

Early in 1956 I was one of a small deputation which went to the then Minister of Housing and Local Government. We urged two things principally upon him in connection with town development schemes. We asked, first, that there should be some form of Government guarantee to the reception areas against an increase of the rate burden as a result of the developments they were undertaking. Secondly, we urged a liberal assessment of works that would qualify for the 50 per cent, grant, the cost of which can be very heavy indeed. For example, in the case of Ashford in Kent it was estimated that the capital costs of an expansion for 15,000 people would run into something like £10 million.

I am sure that the Bill which my right hon. Friend has presented to the House today is a great improvement upon the English Act of 1952. I will give one or two particulars to prove my contention. First, houses to meet the needs of exporting areas, whether they are built by reception authorities, by the Scottish Special Housing Association or by the exporting authority itself, attract a subsidy of £42 for sixty years as compared with a £24 subsidy in the case of England and Wales. Secondly, where the reception authority itself builds, the exporting authority has to contribute a minimum of £14 a year for ten years to the reception authority. There is no such provision in the English Act, although quite a usual arrangement has been that there should be a ten year contribution of £8 per annum per house.

Thirdly, as in England and Wales, the amount of the grant for the acquisition, the clearance and the preparation of sites is not specified, and Regulations in England and Wales have specified that in normal circumstances the grant should be 50 per cent. The House will be aware that the Clyde Valley Advisory Committee advised that in Scotland the grant should be 75 per cent.

Naturally we shall all want to read the speech of my right hon. Friend because details are sometimes not easy to absorb from a first hearing, but I understand from him that the Treasury grant in our case is to be 75 per cent. of the difference between the expenditure by the reception authority and the revenue it receives. If that is so, it seems to me to be a sensible and, indeed, a generous arrangement. I am glad to see, too, that in Scotland the Exchequer contributions are linked to the effect of the proposed development on local revenues. That should help the smaller local authorities very much.

More than one hon. Member has spoken about industry, and I am certain that a planned decentralisation involves not only a movement of population but a dispersal of industry. That is the crux of the problem, because industry can be encouraged to move but it cannot be compelled. It is all to the good that there will be competition to attract industry between the new towns and the expanding towns. The new towns are able to offer factories for letting, and they are able to offer them on particularly favourable terms if these happen to be in Development Areas. On the other hand, the expanding towns will, we hope, be able to offer workers. Clause 9 of the Bill, as one of my hon. Friends has pointed out, enables an exporting authority to contribute towards the cost incurred by the reception authority in providing industrial facilities.

I want to say something to my right hon. Friend who returned to the Chamber a few minutes ago. I hope he will not leave for a moment. He said something that made me wonder if his idea of these expanded towns was on all-fours with mine. My right hon. Friend spoke twice in his speech about "purely dormitory development." I know he did not mean that all the development under the expanded towns, under housing development, was to be purely dormitory development. I hope, however, he does not mean that any of it is to be purely dormitory development. We must avoid the erection of dormitory areas, with long daily journeys to and from the city where the workers are employed. It adds to the traffic congestion and the frustration. I do not like the idea of building areas for commuters only; I want to see expanding towns which will take industry as well as populations with them.

Photo of Miss Peggy Herbison Miss Peggy Herbison , Lanarkshire North

Has the hon. Member any constructive suggestions to make to his Ministers as to how he could attract industry to these areas?

Photo of Mr Colin Thornton-Kemsley Mr Colin Thornton-Kemsley , North Angus and Mearns

I have one constructive suggestion. If we are able to move industry out—and I am assuming that we can—there will remain the problem of what is to be done with the vacated factories in the congested urban areas. The cost of acquisition by local authorities will be very high, but if local authorities do not acquire them, the industrialists who have vacated the factories will naturally try to make the best bargain they can with other industries who take them over, and the whole problem will be repeated again. The hole will be filled up, instead of the factories being demolished and the space used for housing upon a reasonable density inside the urban area.

There is a strong case for a generous Treasury contribution towards the cost of acquiring vacated factories in overcrowded areas, in order that industrialists may move either to the new towns or to the expanding country towns. I am certain that the cost of grants of that kind and of grants and guarantees under the Bill generally will be far less than the alternative of high density development in central sites.

The one feature of the Bill about which I am not happy is that which concerns high subsidies for multi-storey flats. I know that such flats are sometimes unavoidable, but they are an extravagant and uneconomic method of housing people, which the Government ought not to encourage. The cult of Le Corbusier, with or without stilts, is not one which those who want to see a Scottish tradition in urban building should seek to emulate. With that exception, I welcome the subsidy proposals, together with the English legislation which has preceded them. It is rather interesting to notice that these are the first economic measures which have been taken anywhere in the world to embody in housing legislation an encouragement of redevelopment based upon planned dispersal.

The hon. Member for Glasgow, Central asked what advantages country towns could hope to gain from a planned expansion. He sought to condemn the Bill, implying that these towns could derive no advantages from such development. I do not believe that to be the case. Country towns can hope to gain prestige and, more importantly, a new life and hope. The amenities which larger populations make possible—perhaps swimming pools, more frequent bus services, large picture houses and Woolworths! All these things play a large part in stopping the drift from the countryside.

I am sure that it must be a source of personal pride to my right hon. Friend that the first purely Scottish Measure which he has introduced will bring hope alike to the overcrowded cities and to the decaying country towns of Scotland.

7.15 p.m.

Photo of Dr Dickson Mabon Dr Dickson Mabon , Greenock

I was attracted by a number of suggestions which the hon. Member for North Angus and Mearns (Mr. Thornton-Kemsley) made. I should not like to follow his arguments about the aesthetic and social advantages and disadvantages of the technique of Le Corbusier, or any of those matters. I want to deal with his argument about industry. In his very gracious and charming reference to my right hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. Woodburn) he mentioned the matter of industry in the new towns, and in response to an intervention by my hon. Friend the Member for Lanarkshire, North (Miss Herbison) he called for generous Treasury grants to factory owners to help them transfer their organisations to the new towns.

Photo of Mr Colin Thornton-Kemsley Mr Colin Thornton-Kemsley , North Angus and Mearns

I want Treasury grants to local authorities to help them to acquire the factories.

Photo of Dr Dickson Mabon Dr Dickson Mabon , Greenock

That may be so, but when we are dealing with a Bill restricting finance it seems to me peculiar to ask for generous Treasury grants. It seems to be out of tune with the main function of the Bill.

The most important name among those promoting the Bill is that of the Financial Secretary to the Treasury. His name suggests its real purpose, which is, first, to try to load a great deal of the local authority burden on to tenants of council houses and, secondly, to unload on to local authorities the Government's responsibility for the creation of new towns and new areas to deal with the overspill problem. I may be wrong, but that is the feeling which many people in Scotland have about the Bill. It really is not a housing and town development Bill; it is more of a means by which the Government can evade their full financial responsibilities in this very important matter.

Without doubt, housing is the greatest social problem in Scotland, and it seems peculiar that in a Bill like this we should have cuts in subsidies, when the Working Party can say that Scotland has by no means reached the stage when it can look simply to slum clearance programmes; it first has to deal with the rehousing of people living in overcrowded conditions and find homes for people without them.

Many comments have been made about the position of tenants. I do not want to go into the argument about subsidies and who should get them. We should be very careful in applying such an argument, and I would counsel hon. Members opposite to be very careful in their enunciation of this principle, in case they find that they are robbing many of their constituents of the economic basis of their existence. Hon. Members opposite must be very careful, in our modern and complex society, that in enunciating such a principle in simple terms they do not betray interests which they represent.

Neither do I wish to go into the argument about differential rents and rent rebates. I want to look at the general position. One-tenth of the houses in my constituency consist of slums. They are not just bad houses; they are slums—unfit for human habitation. That is not saying much for the houses which are declared fit for human habitation. I should not like to live in many of them, and I am deeply sorry for those who are obliged to do so. We have a very long housing list, and it is tragic to have to sit in one's local "surgery" and hear the pathetic cases of housing difficulties. That situation applies in many other towns. My local authority is facing a massive deficit, and even though it is increasing rents, which it is being driven to do, it will be difficult for it to maintain the building of an adequate number of houses with this new burden of housing subsidy cuts.

The hon. and gallant Member for Renfrew, East (Sir G. Lloyd) said that the bulk of the people in Scotland are in favour of this Bill. My constituency has a corporation consisting of eighteen Labour councillors, six Progressive councillors, two Independent councillors—and they are genuinely independent; they are not Progressives or Conservatives in disguise—and one Communist. That is quite a complex and, I would say, fair representation of the political moods of the community which I represent, and almost indeed of Great Britain. That council has unanimously protested against this Bill, not on party grounds but on the social grounds of the problem which it has to face.

In answer to the hon. and gallant Member for Renfrew, East, surely it is true to say that the local authorities in Scotland represent a considerable number of people. One might even argue that they represent the bulk of the people. Yet we have the peculiar situation in which the three major local authority associations have come together and have unanimously protested about this Bill. They have claimed that this Bill is unfair to local authorities and, with the exception of Edinburgh, all the great cities, almost all the large and small burghs and county councils, have joined together to protest about this Bill. How can the hon. and gallant Member for Renfrew, East say that he believes the bulk of the people in Scotland are in favour of this Bill? I cannot understand that statement; its meaning escapes my comprehension completely.

The Secretary of State, in his opening remarks, said that none of the protests addressed themselves to the fact that a large pool of subsidies was now being created. The fact is that almost every burgh and city chamberlain worth his salt has been looking at the pool of subsidies in general actuarial terms for the last six years, during which time the growing burden of interest rates has made the position in respect of the housing accounts much more acute. In 1954–55 the deficit among local authorities in Scotland due to the increase in interest rates over the period 1951–55 was running at £5,112,000.

When one looks at the matter in terms of weekly rent, it follows that 13s. 9d. on an average per family per week extra is being paid in Scotland by somebody simply because there has been an increase in interest rates. That is all. It is nothing to do with any change in building costs. It is nothing to do with management or repairs or factoring; it is simply because the rate was raised from 3¾ per cent. to 5½ per cent. We have been made short of 13s. 9d. per house per week. What a pity we could not do away with that increase, and then there would be no need for this part of the Bill at all.

Indeed, the Secretary of State followed that with his own Liberal inclinations when he said that he is glad that the interest rate from the Public Works Loan Board has dropped by ¼ per cent. and that it is going in the right direction—downwards. Clearly the Secretary of State sympathises with local authorities. He understands this problem. The problem is concerned with interest rates. It is not a problem primarily of rents but it is one of interest rates as such.

It seems ridiculous that we should have complaints from hon. Members opposite about the local authorities because they seem to want a low rent policy and have got themselves into impossible difficulties of high deficits and high rates, when in fact hon. Members opposite are the cause of the trouble in local authority work in Scotland, brought about by the existence of the high interest rates which are borne by the community.

A point which has not been raised—and I am surprised that it has not been emphasised—is the fact that the proposed subsidy rate cuts out completely the differential rate in housing. There is no differential rate for three-, four-, or five-apartment houses. In other words, the people in Scotland who have long been cursed with the "single end" and the room and kitchen are now to be faced with the fact that the Government are no longer giving a financial incentive to provide larger houses but are creating a state of affairs in which smaller houses may be built in which to house homeless people, because the subsidy is not adequate to enable three or four-apartment houses to be built.

The curse of the small house in Scotland is still with us. If my hon. Friend the Member for Glasgow, Central (Mr. McInnes) were here, he would confirm that there must be about 200,000 or 300,000 one-apartment and two-apartment houses in Scotland. I do not think anybody could be pleased with a Bill which can encourage the continuance of that situation.

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Govan

The figure is 300,000.

Photo of Dr Dickson Mabon Dr Dickson Mabon , Greenock

I thank my hon. Friend.

I should like to turn from the first Part of the Bill relating to subsidies to the Part concerning town development. I listened closely to the argument of the hon. Member for North Angus and Mearns. He was trying to argue—and to a certain extent I am following him—that because there are certain detailed features of this Bill suitable for Scotland, therefore the scheme in Scotland will succeed where the scheme in England has failed. I only wish that I could be as sanguine in this respect as he was.

My hon. Friend the Member for Glasgow, Central developed the argument that following the last Town Development Bill which was passed in 1952 the experience in England was that the problem of 1 million persons who were to be found accommodation has not been solved at all. About 2 per cent. or 3 per cent. of the problem has been tackled in four years. Whatever the hon. Gentleman may say, the elements of this Bill are essentially the same as the elements in the English Measure, and that being so, I cannot see how the Secretary of State for Scotland can believe that he will have any more success in this field than his English counterpart. I use the phrase "more success" in the Spenserian appreciation, and that is as a euphemism to avoid the obvious point about the Town Development Bill in 1952.

Surely if the right hon. Gentleman wants this Part of the Bill to be a success, he clearly would have consulted all the local authorities and would know their views and opinions about it. He would know how many of them are attracted to be exporters and how many to be importers. I am surprised that the hon. Member for Pollok (Mr. George) said that Glasgow Corporation will welcome the Bill. The Corporation does not welcome the arrangement into which it was shanghaied on Cumbernauld. It did not like that at all. I can assure hon. Members that Greenock will not be an exporting authority under this Bill. I have it on the best advice that these provisions are not sufficiently attractive to tempt us to export our people.

Glasgow certainly is not attracted to be an exporter under these conditions. I am sorry the hon. Member for Pollok, is not here, because he argued that this was an attractive proposition. My hon. Friend the Member for Glasgow, Central said that there was a decreasing population in Glasgow with a lower valuation roll. The base which supports the contribution is steadily decreasing as the contribution rises in volume. I do not think that that point was answered fairly. One cannot ask an exporting authority with a diminishing supply of money to bear an increasing burden of debt.

Then there is the point about receiving authorities. We have not had an adequate answer about Clause 14. We have a vague sense that the Secretary of State means well in that Clause. He mentioned 75 per cent. as an average and I cannot remember all the circumscriptions concerning this point, but I shall read his speech with interest tomorrow. So far as I gathered, the figure which he mentioned was 75 per cent. I have heard it declared by my local councillors and others that that is quite inadequate to be attractive to a receiving authority.

The hon. Member for Pollok said that in this matter the receiving authority has to break even. I agree with the hon. Member; it has to break even before this action can be attractive to it. Under this provision I fear that receiving authorities will not break even.

The charge which I want to make against the Secretary of State on this Bill is quite a clear and definite one. I fear that he has been very unfair to local authorities in regard to Part I of this Bill in the brief and hasty consultations with them on housing subsidies. I think he will pay for that in the sense that in future he will see that Part II will not work and that if only he had stopped for a moment and asked their advice—and being a new Secretary of State he was in a position to do so—he might have drafted a Bill which would have been a success.

I think that his treatment of local authorities in Part I of the Bill is quite shameful. His predecessor gave local authorities only a fortnight in which to answer his questions and to comment on the proposals in the Bill. Surely the present Secretary of State could have been fairer in that regard, could have thought again and said, "Let the local authorities have a second look at the proposals." He could have listened to new argument on Part I.

In the last paragraph of its Report, the Working Party said: Since the Secretary of State asked to have the results of our deliberations by 16th June, 1956, the Working Party submit this Report now and have deferred for consideration later, as necessary the other points referred to by the Secretary of State: overspill, high flats and remote area subsidy. The Working Party never had a chance to comment on Part II of the Bill. It has never been able to publish anything for the convenience of hon. Members, such as myself, who are interested in overspill or the hon. Member for North Angus and Mearns, who, like Le Corbusier, is interested in the question of high flats.

Nor have local authorities had a chance to discuss the Bill. That is why I think it is doomed to rejection by the Scottish electors. It is unfair on the question of the need for subsidies to be maintained at the pre-July, 1956, level. Although the objects of town development are very good, the Bill fails to recognise the rôle of new towns and to provide a reasonable solution for overspill, and accordingly is certain to fail.

7.34 p.m.

Photo of Sir John Macleod Sir John Macleod , Ross and Cromarty

I am pleased to follow the hon. Member for Greenock (Dr. Dickson Mahon), if only because many of the people from my part of the country may have been responsible for overcrowding in Greenock. I shall not repeat the arguments which have been put already, particularly in the very able speech of my hon. Friend the Member for Pollok (Mr. George).

We in the north of Scotland have nothing like the problems which hon. Members have in Greenock or in Glasgow constituencies, where they are very acute. We have not the problems of the overcrowded industrial belt, but of course we have our own housing problems and our hard cases which have to be tackled. It is satisfactory to note that we are beginning to catch up with the housing problem in my constituency.

I hope that these Exchequer subsidies will meet the needs of Scotland. That remains to be seen. Of course, no one welcomes a reduction, but let us see what happens. As has been pointed out by various hon. Members, we at least come off better than England and Wales. Coming from an agricultural constituency, I am glad to see that the Bill continues the arrangements for the provision of an extra Exchequer subsidy of £12 per annum over and above the basic subsidy provided for agricultural districts.

Photo of Mr Cyril Bence Mr Cyril Bence , Dunbartonshire East

Does the hon. Member believe in subsidies?

Photo of Sir John Macleod Sir John Macleod , Ross and Cromarty

Of course I believe in subsidies, where they are necessary. I believe that housing is a social necessity. We must provide subsidies in certain circumstances. I welcome the Clause, but I believe we have to be more realistic.

Photo of Sir John Macleod Sir John Macleod , Ross and Cromarty

I also welcome Clause 4 in Part I of the Bill, which provides for an additional Exchequer subsidy corresponding to that payable under the existing law in respect of houses provided in remote areas.

I hope to deal with that point later, that is, the overcrowding of the industrial belts and Glasgow's overspill problem. I am glad to see that in Clause 4: … the Secretary of State may, with the consent of the Treasury, undertake to pay, and pay, for a period of sixty years (in addition to any other annual Exchequer contribution) an annual Exchequer contribution of such amount, and in respect of such of the houses so provided, as he considers just and reasonable. I hope that generous consideration will be given to the remote areas where it is so essential to keep our population. In those areas too high rents cannot be paid and the rates are already overburdened. Being honest, and there are many such people in all parties, hon. Members admit that rents are too low to enable properties to be kept in proper repair. I think most people will agree that we must be realistic and fair and to see that wherever possible people who do not require subsidies are not subsidised by others with lesser means.

There is no doubt that all over the country there is a growing need for small houses. Here I would not altogether agree with the hon. Member for Greenock. Surely there is a problem in providing smaller houses for couples whose families have grown up and, in my area, for old retired agricultural workers. I should like the Secretary of State to encourage those types of houses as I think it would help to solve the problem if we had a more even balance between the larger and the smaller houses.

Photo of Dr Dickson Mabon Dr Dickson Mabon , Greenock

I do not think the hon. Member and I are in disagreement on this matter. I agree about small houses as such, but I feel that under this Measure if we need three- or four-apartment houses the financial incentive of a higher subsidy should be given. Since I agree with the hon. Member in the first part, perhaps he will follow me and agree with me in the second part.

Photo of Sir John Macleod Sir John Macleod , Ross and Cromarty

Perhaps it was not fair to give the impression that the hon. Member meant that type of house and not the one I speak about.

The main reason why I am anxious to speak in this debate is on Part II of the Bill, which has been spoken about already so ably by my hon. Friend the Member for North Angus (Mr. ThorntonKemsley). I should like to ask the Secretary of State to explain the Government's views on this: how far are they prepared to go to deal with the problem of the overspill of Glasgow and our congested industrial belt? We are all aware of the Glasgow problem, but I have always contended that we are over-concentrating our population in the industrial belt, and I wonder how far the Bill will help to solve the problem.

I fully agree that we shall have to deal with most of the overspill problem by providing accommodation and amenities near large existing industries, such as the local industries in the Clyde, shipbuilding and heavy engineering. But in the replanning of Glasgow and the Gorbals which we read about recently, not all the industries will be provided with sites in the newly-planned area and some will have to go further afield.

Instead of building further new towns in our over-populated industrial belt—and it may be that if the problem is as acute as my hon. Friend the Member for Pollok suggested, with a figure of 300,000, we shall have to build a couple of new towns—surely we can encourage a wider distribution of population. We should try to make greater use of the existing facilities in our smaller burghs in other parts of the country out-with the congested area. As my hon. Friend the Member for North Angus has said, these burghs already have the amenities and the administrative machinery, and surely these are capable of expansion.

In his maiden speech in the House in 1945, on the Distribution of Industry Bill—

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Govan

When was he elected?

Photo of Sir John Macleod Sir John Macleod , Ross and Cromarty

He was elected about four years before that speech, but he had been doing a very good job in the war effort, and that was the reason he could not make his maiden speech earlier.

In his maiden speech he complained about this drift from the country to the town, pointing out that some of these burghs were too depenndent on one type of industry. Of course, that is the case in many burghs throughout Scotland today. He also pointed out that the trend of thought of the Barlow and Scott Reports had been towards the encouragement of development in smaller towns. I hope he still holds these views. Since those days we have had the Cairncross Report. I wonder whether the Secretary of State has looked at it recently or whether it is on the dusty shelves of St. Andrew's House. I hope the Bill will encourage him to look at it again.

We can all think of many places in Scotland which could be developed, but naturally I am looking towards the Highlands and my own constituency. The hon. Member for Glasgow, Central (Mr. McInnes) may think it a little far away, but let us consider such places as Dingwall, Invergordon and Tain in the eastern part of my constituency. I should like to dwell for a moment on the situation at Invergordon, which has been in the news recently. The Admiralty are closing the base at Invergordon. The hon. Member for Lanarkshire, North (Miss Herbison) asked for some practical suggestions, and I will try to give them. At Invergordon we have a fine harbour, piers, slipways and buildings which will shortly become available. There are wonderful playing fields and sports grounds which have been developed by the Admiralty. Most important of all, it is in a Development Area.

The right hon. Member for East Stirlingshire (Mr. Woodburn) said that in his own Development Area no serious development was taking place. I am afraid that the problem is even more acute in the Development Area known as the Highland Development Area, which contains a great part of the eastern seaboard of Ross-shire. In 1946 a very extensive survey was made by the planning consultant of the county, and shortly afterwards the right hon. Member for East Stirlingshire, when he was Secretary of State, had plans produced for a new town at Invergordon in this development area. I would say, in passing, that the right hon. Gentleman did a great deal when he was Secretary of State to encourage industry to go to the remote parts of the country.

I have glanced recently at the survey, which pointed out that we have here a deep-water natural harbour, a trunk road with an existing by-pass, a main railway line, airfields nearby, projected water schemes and hydro-electric schemes, together with a dry, sunny and frost-free climate, which should certainly be very attractive to Clydeside.

The Cromarty Firth—and this is very important—is about the same distance from the rapidly developing North American ports as are Liverpool and Glasgow, and it is nearer than all the other British east coast ports.

Photo of Mr Thomas Steele Mr Thomas Steele , Dunbartonshire West

The hon. Member has said nothing to the credit of the nationalised public houses.

Photo of Sir John Macleod Sir John Macleod , Ross and Cromarty

I would not give anybody any credit for the nationalised public houses. Perhaps that is not quite fair; but I will not be drawn on that matter. They have improved recently, but that is not saying a great deal, because they are not very popular.

I am fully aware that the development of these burghs will deal only with a fraction of the problem of the overspill of Glasgow and the industrial belt, but surely we can at least encourage those people with Highland connections to move to these burghs. Although the Highlands have helped to bring about this unhappy problem, they have already contributed greatly in manpower to places such as Greenock and Glasgow, and it is only right that in return Greenock and Glasgow should help the Highlands. By helping the Highlands they will help themselves, because in moving people and industry to these burghs in the Highlands they will help to stop the drift from the area which increases the problem we are here trying to solve. I hope the Secretary of State will encourage this type of development, because it will be for the benefit of our whole nation.

7.48 p.m.

Photo of Mr Willie Hamilton Mr Willie Hamilton , Fife West

I hope the hon. Member for Ross and Cromarty (Mr. John MacLeod) will forgive me if I do not follow him into the Highlands of Scotland. I want to get a bit nearer to the industrial belt, where the wealth is produced.

This is one more Government attempt to solve the housing problem in Scotland. We have had a series of attempts since 1951, and this is what I might call another page in the Tory horror comic of Scottish housing. It has had a violent reception by the local authorities. From our point of view, there has been an encouraging unanimity among local authorities of all political persuasions. I want at the outset to give one or two figures for the Fife County Council to show why the local authorities are concerned about the proposals in the Bill as they are at the moment.

The Fife County Council has provided me with figures for all types of houses affected by this Bill, and perhaps I may take the figures given for a four-apartment house. The estimated capital cost is rather less than the figure of £1,700 given in the Working Party's Report. The annual loan charges on that amount at 5¾ per cent, over 60 years are £101 2s. 5d.; insurance and management, £6; statutory repairs fund contribution, £8, making a total annual cost of £115 2s. 5d. As from August the Government subsidy will be £24, which means that the total annual cost will then be £91 2s. 5d. The current rent for a four-apartment house under the Fife County Council is £30 10s. The balance, which has to be met from the rates, is £60 12s. 5d. per annum.

In this example, even if the £39 rent is charged—an increase of 30 per cent. on the existing rent—the deficit will still be well over £50 a year—£52 2s. 0d. to be exact. Therefore, even if the £39 rent is reached over a period of years, as is I think the Government's intention, the housing finance of Fife County Council and, I am sure, of many other local authorities, will be in danger of collapsing. Indeed, on those figures, an overwhelming case may now be made out for an increase rather than a decrease in the existing subsidies.

Too little play has been made of the effects on local authority finance of interest charges. It is no good the Government saying, "Local authority finances have got into an awful mess and it is time that they were more realistic about rents." It is the Government's policy in manipulating interest rates that has put those finances into such a state. In 1951–52, the last year of the Labour Government, the interest charges on the Fife County Council housing revenue account amounted to £264,934. In 1956–57 that figure had risen to £520,300—almost exactly double in interest charges alone over the last five or six years. In the last two years, the loan charges alone on a four-apartment house have increased from £75 to £106. That increase of over £30 is equivalent of 12s. a week increased rent to meet interest charges alone.

That, of course, is, as my right hon. Friend has said, a gift to the moneylenders. Let us be under no illusion about that. That is what the Government want. When, in Committee, we were debating the Housing (Scotland) Bill, the present Minister of State, referring to the charges that had been made from our side, said that the charge had been made: …that this Amendment was forcing people into the hands of the moneylenders and the building societies. I do not know that that is really a bad thing."—[OFFICIAL REPORT, Scottish Standing Committee; 11th May, 1949; c. 2432.] Therefore, it is deliberate Government policy to make the local authorities, and through them their tenants, pay for the moneylending that is going on at the moment. This attempt to force up the rent to £39 is coming at a time when owner's rates will also have to be met by the tenants—after May of this year—and when the valuations will be frozen for the years up to 1961. The picture for the tenants is, quite simply, this. They will have increases in rates; they will have the responsibility of owner's rates after May of this year; they will undoubtedly be faced with increases in rate poundage due to rising valuations and rising local authority commitments. All that has to be collected within the narrow compass of local authority finance, brought about by the Government's policy.

What is the alleged purpose of the Government's Bill, as distinct from the Government's real but undeclared aim? Let us first look at the undeclared aim. I believe that is deliberately introduced to curtail council house building, and to attempt once again to make house building a speculators' paradise—to put cash into the moneylenders' maw.

Photo of Mr Willie Hamilton Mr Willie Hamilton , Fife West

That is all they are doing. The hon. Lady who is now trying to intervene referred, in 1949, to what she called "shiftless council tenants."

Photo of Lady  Grant of Monymusk Lady Grant of Monymusk , Aberdeen South

As I have been challenged, perhaps I may say that that is a very old charge. It has followed me at every Election. It was a misprint in HANSARD—[HON. MEMBERS: "Oh."] What I said was "shifting council tenants."

Photo of Mr Willie Hamilton Mr Willie Hamilton , Fife West

On the contrary, if the hon. Lady will refer to her own speech on 10th May, 1949, she will see that she spoke of "a shiftless council tenant". Further than that, when she was taken up, she said that it was not quite what she meant. She retreated, but she still maintained the charge. Her hon. and gallant Friend the Member for Perth and East Perthshire (Sir A. Gomme-Duncan), speaking after her, said that the Socialists were trying to create "the charity State", and that the council tenants were the people who were accepting the charity.

I have in my hands at this moment a list of hon. and right hon. Gentlemen opposite who are directors of companies which have been derated by 75 per cent. since 1929. In that way the industrialists on the other side get £10 million a year subsidy in Scotland—almost exactly the same amount as the council tenants get in housing subsidies. The farmers in Scotland get £30 million a year in subsidies. The entire wages bill of every Scottish farmer is paid by the taxpayers in subsidies.

If hon. and right hon. Gentlemen opposite talk about subsidies in relation to council tenants, let them apply the principle elsewhere. They seem to be in no haste to apply it to themselves and to their own concerns. Even those who are not industrialists—and this, of course, applies to both sides—are taking family allowances. There is no means test for those. That is a subsidy, is it not? And the party opposite increased those allowances.

The simple fact is that the basic philosophy of hon. Members opposite is in terms of "the shiftless council tenant" and "the charity State". That, of course, applies only when these subsidies and this charity are dispensed to working class people; when they are dispensed to people who could well afford to do without it, that philosophy does not apply. Indeed, the argument against the farming subsidies is precisely opposite to that produced against housing subsidies from that side. The criticism of those subsidies is that the bulk of them go to farmers who could best afford to do without them. That is the argument used against farming subsidies.

Of course, there are other quotations, but they are coming less frequently now, and will come less frequently after the Lewisham by-election, but we remember the President of the Board of Trade's stock phrase about treating them mean and making them keen. That is the philosophy which comes out quite suddenly and unexpectedly in various quarters on the other side of the House, and therein lies the real purpose of the Bill. Of course, the argument the Government produce in this House, and which they will produce in the country, is a plausible enough argument. Housing subsidies, they say, really ought not to be paid to those who can do without them. That sounds plausible enough, but it is not applied in the right way.

Having said that—and I feel a lot better for having got it off my chest—I want now to make it clear that the paying out of public money in the form of subsidies is a sound Socialist principle, for which nobody on this side need apologise, and for which nobody on this side will, I hope, ever apologise. It is a sound Socialist principle, and a means by which the national wealth may be redistributed on a fair and equitable basis. That was one of the main points of the social legislation pushed through this House by the Labour Government between 1945 and 1951. Housing subsidies are an essential element in that redistribution principle, and they have the further advantage that they bring certain necessities of life within the means of millions of folk who could not otherwise afford them. In so far as they do that, they produce not only advantages to the individual but social advantages to the community as a whole which far outweigh their financial cost.

How far do housing subsidies today achieve those ends? I do not think anybody would deny that the social advantages to the community at large are evident throughout the United Kingdom. Housing subsidies have undoubtedly achieved a great deal in the last 30 or 40 years. Most of the houses built in Scotland since the First World War have been local authority houses.

Photo of Mr James McInnes Mr James McInnes , Glasgow Central

The proportion is three to one.

Photo of Mr Willie Hamilton Mr Willie Hamilton , Fife West

My hon. Friend the Member for Glasgow, Central tells us that the ratio is three to one. The local authorities have been the best landlords in Scotland during all that time. As was said in the document Housing Policy Scotland, published in November, 1953, their houses were built to modern standards with good equipment and in good repair. The better environment created by those local authority houses has led to the living of fuller lives and the production of better citizens. There can be no argument about the social benefits derived from subsidised council housing.

As regards the redistribution of the national wealth, housing subsidies have certainly played their part. But I should be the last to deny the existence of anomalies in the system and the subsidising of relatively well-off people by the less well-off. There is no doubt that such things exist. Speaking for myself, I cannot defend the paying of, say, a subsidised rent of 10s. a week by someone earning quite substantial wages whilst some people relatively worse off are helping to pay the subsidy which the better-off person is receiving. Nor, indeed, would any good Socialist, I think, defend that kind of anomaly.

What we must do as a nation is to try and solve the problem while still maintaining the principle that housing is a social service. I would go further and say that, in the examination of housing finance which, as far as we can see, we shall face as a nation which has limited capital resources, we must have regard to this principle. When we have competing claims throughout the whole economy for capital resources, we need to employ subsidies in order to produce the greatest social justice and advantage to the community. If we accept that, we must, I think, accept also, in the context of our present situation, that the hardest hit among our people today are the old folks and the young married couples with families growing up.

I do not know what the exact figure is, but assuming that in the United Kingdom something like £100 million for housing subsidies is spent annually, is that money best spent on housing subsidies or would it be more to the social advantage to spend it on other things? For instance, it is well worth bearing in mind that, if there is a total of something like £100 million spent on housing subsidies in the community yearly, that could give an increase in pension for old couples of about 16s. a week. Is it better from the national point of view, from the point of view of social justice, to pay it out in housing subsidies or redistribute it in the form of social benefits of that kind? The Government do not think along those lines. We shall have to wait, not too long, I think, until we get another Government before we can bring about that kind of change.

In the context of increasing, indeed, penal, interest charges, and in the context of the Government's determination to make these radical reductions in housing subsidies, I take the view that rebate schemes are the lesser of two evils as between them and schemes for differential rents. No doubt Labour-controlled authorities will do what they can to ease the burdens which will be put upon tenants as a result of Government policy.

The Government has said that we must introduce an element of reality into rents payable by council tenants. But rents have been related to wages all along. Throughout the United Kingdom, the worker assesses his wages and his rent, and he sees them in one picture. If we are to introduce "an element of reality," to quote Government spokesmen, into the rent structure, then the workers will say, "All right, we will introduce 'an element of reality' into the wages structure."

Nearly every industry today is undermanned; nearly every industry wants more men. The Government's philosophy is that we need to equate supply and demand for houses and for everything else under the sun; and this applies equally to labour. If these rents are to go up, when Scots workers have been accustomed to relatively low rents, then they will certainly try to recompense themselves by wage demands.

The Government's policy must be condemned for this reason if for no other. Seen in the economic context of our nation, in the light of the request for increased productivity, the request for wage and price stabilisation and for efforts to improve our ability to compete in foreign markets, this Bill will do nothing but give another vicious twist in the inflationary spiral which might have effects which the Government have not yet realised. That is the main argument against the proposals of the Bill. The workers who are, in the main, council house tenants must be convinced that the Government are "playing ball" with them and making conscious efforts to keep down the cost of living so that they can modify their wage demands and the inflationary spiral can be stopped. If they do not see evidence of that, no one can blame them if they seek to recompense themselves for the inflationary policies which the Government are now setting in motion.

8.10 p.m.

Photo of Lady  Grant of Monymusk Lady Grant of Monymusk , Aberdeen South

First, I must express my regret both to you, Mr. Speaker, and to the House that I was not present during the early stages of the debate. I had to attend the meeting of a Government Committee. In view of that, I greatly appreciate being called upon to speak.

Unlike the hon. Member for Fife, West (Mr. Hamilton), I welcome the Bill. I would say to him, when he teases me about a very old speech, that the shifting council tenants have returned me at three subsequent Elections. Therefore, I suppose that they must have approved the speech.

I welcome this Bill as a distinctive Scottish Bill, for two reasons. First, it proposes higher subsidies than those for England and Wales and, secondly, it not only covers the problem of slum clearance and overspill but it deals with our main problem, in Scotland, of overcrowding. It goes further, because the Secretary of State has said that he is prepared to consider for the £24 subsidy any other category of genuine housing need, where the local authority is of opinion that it should be applied for subsidy purposes.

I submit that that sums up the object of the Bill, which is to provide subsidies to relieve need. It is with that at the back of my mind that I want to tackle one limited aspect of this complex Bill. I think that most people, not least the right hon. and hon. Members opposite, have recognised on several occasions that high subsidies cannot go on for ever. Indeed, there was a Socialist Secretary of State, who was here when I first came to the House, Mr. Westwood—

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Govan

It has been read out before.

Photo of Lady  Grant of Monymusk Lady Grant of Monymusk , Aberdeen South

It bears repetition. When introducing the Housing (Scotland) Bill, 1946, he said: I wish to make it clear that the contributions now proposed … are maxima, and it is the intention of the Government that they shall be reduced at the earliest opportunity." —[OFFICIAL REPORT, 19th March, 1946; Vol. 420, c. 1706.]

Photo of Mr Eustace Willis Mr Eustace Willis , Edinburgh East

The Tory Research Office has been busy this week.

Photo of Lady  Grant of Monymusk Lady Grant of Monymusk , Aberdeen South

It shows what an excellent speech it was, if it can be quoted now. I suggest to hon. Members that if they wait they might hear even better ones.

Photo of Mr Eustace Willis Mr Eustace Willis , Edinburgh East

We have heard them all.

Photo of Lady  Grant of Monymusk Lady Grant of Monymusk , Aberdeen South

I am well aware of the objections of three of the main cities of Scotland, although not, of course, of the City of Edinburgh. Since the 1930s I have understood that it has been accepted, at any rate in principle, by both Socialist and Tory Governments that Exchequer subsidies should be pooled. It has been accepted in principle that rents should be charged according to what a person can pay. It is quite true that in some instances, despite what was said—

Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

We have had two previous housing subsidy Bills since the hon. Lady came to this House. Does she remember any occasion in 1946 or 1952 when any statement of policy has been made from either Front Bench in favour of all housing subsidies and rents being pooled?

Photo of Lady  Grant of Monymusk Lady Grant of Monymusk , Aberdeen South

I have always understood that it has been accepted since the very early years that that was so.

I disagree with my hon. Friend the Member for Pollok (Mr. George)—

Photo of Lady  Grant of Monymusk Lady Grant of Monymusk , Aberdeen South

I agree with most of his speech, but not with all of it. I disagree with his statement that, generally speaking, all council rents were too low. I believe it to be true that some families are finding that some council rents are too high. It is with this point that I wish to deal. One naturally realises, on the other hand, the problems of local authorities. Therefore, I think it strengthens the arguments which were so courageously supported by the hon. Member for Fife, West for economic rents. I imagine that he has in mind rebate schemes for those who are unable to pay. That has been applied in some places in England and Wales with considerable success.

As I have said, it has been accepted in principle by former Socialist Secretaries of State. On the whole, we have a higher standard of living today. The local authorities express concern that the average rent foreshadowed in the Bill of £39 a year will be difficult to achieve in view of the accepted rent standards in Scotland. I was bold enough, at a meeting of the Scottish Standing Committee, which hon. Members may or may not recall, to suggest that the time had come in Scotland when men and women could pay a higher proportion of their weekly income in rent. Many hon. Members opposite did not like that at all, and they shouted for a great deal of the time. I was merely echoing what was said many years earlier by the right hon. Member for East Stirlingshire (Mr. Woodburn). As hon. Members have obviously heard my next quotation, I will not weary the House.

Photo of Mr Eustace Willis Mr Eustace Willis , Edinburgh East

The Tory Central Office again. We are a little tired of it.

Photo of Lady  Grant of Monymusk Lady Grant of Monymusk , Aberdeen South

I should indeed be flattered if it were thought that the Tory Central Office had circulated my speech.

In Scotland we spend a smaller proportion of income on shelter than do people in the rest of the country. An average council rent, excluding owner's rates so as to make a proper comparison, is about half of that in England and Wales. It is true that earnings in Scotland are roughly 5 per cent. lower than those in England, but they are a little higher than those in Wales. In 1938, council house rents, including owner's rates, represented 10½ per cent. of average earnings; in 1949 they represented 6 per cent.; and in 1954, 4½ per cent. If in 1954 the proportion of income spent on the provision of shelter was 4½ per cent. I think that women who spent a large part of their time living in these houses would like to see a larger proportion spent on shelter if it meant that they could get a good house and if, of course, they knew exactly what went into the house in income.

The Aberdeen average rent, including owner's rates, was, in 1954, for a four-room pre-war council house, £27 9s. 5d. For a four-room post-war council house, the rent was £30 4s. 2d. Therefore, the average rent for all council houses in Aberdeen, both post-war and pre-war is £29 4s. 6d. a year. The housing deficit in the City of Aberdeen is £163,435. The Working Party on Housing Subsidies in Scotland calculated that a net average rent of £32 10s. a year for all existing council houses in Aberdeen would almost enable the housing account to break even, and if we take the foreshadowed £39 a year, there would be a surplus of just above £6 a year which could be used for new building.

There has been an example of a differential rent scheme put forward in the City of Aberdeen by the Aberdeen Progressives. As, so far as I know, no one has yet quoted any particular scheme, I should like to give an outline of what they had in mind. It was suggested that standard rents should be established for all tenants, subject to a rebate scheme which should only be operative after application by a tenant. As an example of standard rents, which altogether amounted to an increase of about 50 per cent., that for a two-roomed house would be £27 a year, for a three-roomed house £40, for a four-roomed house £45, and for a five-roomed house £48.

The standard rent would be payable by all tenants where the household earnings amounted to £450 per annum. Rebates would be calculated proportionately. There is a detailed scheme, with which I will not trouble the House, which among other things suggests that family allowances and war liability pensions should not be reckoned as income. It was also suggested that key workers and local authority officials occupying council houses should pay an economic rent.

I think that that kind of scheme should be seriously considered, because I believe it would accord with general public opinion, and because it would ensure what is the whole object behind this Bill—that those in need get shelter at low rents, even lower than is the case today, in some cases. That, after all, is the whole object of Governments, in the beginning, in introducing subsidies at all.

I cannot myself accept the view that this Bill will retard building, but I do accept the view that it may change the character of building. That is what we need, especially when we consider that of all the houses built since the war in Scotland more than 50 per cent. have four rooms and more than 40 per cent. have three rooms. Everyone knows that there is a need for houses for older people, for married people whose children have grown up or gone away, and indeed for single persons. We do not wish those people to be condemned for ever to living in some of the older properties of which we know.

Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

At the beginning of her speech, the hon. Lady said that the really great problem which had to be solved was the problem of overcrowding. How do we solve that problem by building two-roomed houses?

Photo of Lady  Grant of Monymusk Lady Grant of Monymusk , Aberdeen South

I am coming to that point, and if the hon. Gentleman will wait for a moment, he will see.

I certainly think that the result of this Bill will be a greater choice for those who are seeking shelter, and that in that way, and taken together with another Bill which is now passing through Committee upstairs, it will mean that more accommodation will be released, and will ensure that it is properly and fully used, which is certainly not the case at the present time.

To turn to the slum clearance problem in Aberdeen, the city has 6,200 houses that are due to go. It is planned over the next three years to replace 1,500 of these houses, and, in that case, it will take from twelve to fifteen years to complete the scheme. Admittedly, it is necessary to rebuild in the centre of the city, for the obvious reasons of reducing the distance to and from work, ensuring that people are able to live in a district to which they have become accustomed, and what is very important, to stop the use of good agricultural land.

Unlike my hon. Friend the Member for North Angus and Mearns (Mr. Thornton-Kemsley), I personally welcome the higher subsidy for multi-storied flats. I think the centres of some of the large cities of Scotland are particularly suitable for the erection of blocks like these. In Aberdeen itself, it is planned to erect as an experiment a ten-storey block. It is to have, I am delighted to say, central heating, which is a very necessary feature in that part of the world, and which reminds me of the first-class housing with central heating which I saw many years ago in Dundee. Those blocks are not cheap to build, but, on the other hand, I think they will bring a new way of living which will be very acceptable to our people in the cities. This particular block will be mainly of three-roomed flats, with a few of two rooms, and will take about a year to build in concrete and brick.

I submit to the House, and I am speaking on a local point, that this is a realistic and imaginative approach to modern needs, and I therefore hope that the Aberdeen Town Council, which unfortunately is not of my political persuasion, will tackle the thorny problem of differential rents with equal courage. I think that this Bill as it stands is both realistic and fair, because it gives the power to local authorities to meet real need for shelter, and allows them to develop these great cities in the way in which, whatever the political views of the local authority, they have very much at heart.

8.25 p.m.

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Govan

During the course of this debate, I have noticed with interest how easily some hon. Members opposite have been moving the citizens of Glasgow around. Unlike myself and others of my hon. Friends, they do not represent Glasgow divisions, and so they fail to realise that hundreds of thousands of her citizens believe not only that they belong to Glasgow, but that Glasgow belongs to them. Consequently, when it comes to shifting them, it will require a much greater inducement than is presented in the Bill we are now discussing.

The second intriguing point we have heard tonight, and I have heard many hon. Members opposite referring to it, is this lament for the drift from the country to the town. I do not know how many Highlanders are in my division, but there are a great many of them, and most of their forbears came to Glasgow because they were evicted from their homes and homesteads by Tory landlords. Now, the Tories are anxious to reverse that process, but again I say that the process will not be reversed by the provisions of the Clauses contained in this Bill.

Before I go any further, I should like to refer to a remark made by the Secretary of State when introducing the Bill. He referred to the fact that, if I followed him correctly, East Kilbride would be a town that would receive some of Glasgow's overspill.

Photo of Mr James McInnes Mr James McInnes , Glasgow Central

The right hon. Gentleman was more explicit than that. He said it was designed to do this.

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Govan

I thought he used the word "designed", but I did not want to attribute too precise a meaning to what he said.

I was interested, because in the debate on the Queen's Speech of the 7th November, I raised exactly this point with the then Secretary of State, and this is the answer which appears in column 243 of the OFFICIAL REPORT for that date: Since the housing in East Kilbride of any tenants from Glasgow's waiting list, or any tenant who vacates a Glasgow Corporation house, is a direct contribution to Glasgow's housing problem, it would seem that there is a great deal of scope for balancing housing needs with available employment. While no actual agreement has been reached between them, I will do all I can to encourage this method, and I intend to pursue the matter with the parties concerned."—[OFFICIAL REPORT, 7th November, 1956; Vol. 560, cc. 243–4.] That was in November. Are we then to understand that an actual agreement has been reached since November, and that this problem of relieving part of Glasgow's overspill has now been finally settled between the new town and the corporation of Glasgow? If I followed the Secretary of State correctly, that is what he said tonight, and I hope that when the Under-Secretary comes to reply, he will tell us when that agreement was actually made.

I am sorry that the hon. Gentleman the Member for Pollok (Mr. George) is not in his place, because I want to say one or two things about his speech. His criticism was fairly put, but it is not a criticism which I can accept, although it was an accusation against the Prime Minister, the Leader of his own party, who, when he was Chancellor of the Exchequer, introduced this policy of higher interest rates in order to prevent inflation. The hon. Member for Pollok said that this policy of high interest rates, which was a policy directed at local authorities as well as individuals, had had no effect upon the local authorities because, he said, the interest rates which were being charged now to the local authorities were having no effect whatsoever on the position. In effect the hon. Gentleman was telling the Prime Minister that his policy had failed.

I dissent from that conclusion, and I want to produce one or two proofs of the view I take. I have here a memorandum from the Association of County Councils in Scotland, the Convention of Royal Burghs, and the Corporations of Glasgow, Aberdeen and Dundee. These are the men who are experienced in the handling of the affairs of our towns and cities and counties. These councillors are unanimously of the view that the policy of increasing the cost of money has proved very satisfactory indeed, and will continue to prove effective in slowing down the rate of house building. That is what it was designed for.

Despite what the hon. Gentleman the Member for Pollok said, the memorandum, after dealing with the rise in the rates, says: It will be observed that the loan charges on a four-apartment house estimated to cost £1,774 have increased from £74 14s. 8d. in March, 1955, to £105 13s. 11d. at present, an increase of £30 19s. 3d. per house. The hon. Member for Pollok dismisses that as of being of no account whatsoever.

Let us look at the effect on the individual of this increase in the price of money. I have cited the effect on the local authority. The figures which I am about to give are figures which are vouched for by a chartered accountant. I deal with a house which cost the purchaser £2,500, on which no deposit is necessary, and on which one can get the full advance at a cost of 6 per cent.

These are the costs which would accrue if one had to pay for a house of that type. The annual instalments of principal and interest is £217 19s. 6d., and insurance £2 16s. 3d. A sum of £36 6s. is allowed for rates and water, and the moderate sum of £10 for repairs, making a yearly charge of £267 1s. 6d. to meet for a house of three bedrooms, a sitting room and kitchen. Nobody will allege that that type of house is too large for a family at the present time. That means a total weekly cost of £5 2s. 9d. with a weekly instalment to be met of £4 3s. 10d.

It was stated from the benches opposite that average earnings in Great Britain today were 217s. There are 21 million people working in the country. Therefore, these figures show that there are 21 million who have no earthly chance of ever occupying a house of that kind unless they are helped by the community. Far more adequate subsidies are necessary if this type of house is to become even a possibility for half the population of Great Britain.

The House should notice that the total interest charge which will have to be met on that house over 20 years is £1,859 5s. 2d. Therefore, by the time the owner has discharged his obligation he has repaid £4,359 5s. 2d. for a £2,500 house. The problem that we face tonight is primarily an interest problem and that problem has been created by the Government. Having created it, they go to the local authorities who are faced with meeting it and say, "We cannot afford to pay you the subsidies that are necessary to enable people to live this type of house." When we fought the last Election the former Prime Minister, then Leader of the Tory Party, said that one of that party's aims was to create a property-owning democracy. In the conditions which have been fostered by the Tory Government since they came to power, a property owning democracy in Great Britain is now a complete impossibility. That possibility lies buried with other promises, like that of a lower cost of living, which the party opposite made at the last Election.

If the local authority built and paid for that same house over 60 years it would carry an interest charge of £6,781 5s. 7d., with a total payment of £9,281. It is absurd to try to ignore the impact of interest charges on our housing situation. Therefore, because of that impact it is essential that the Government should use the total of the national income and redistribute it to make it possible for people to get into these houses at rents which they can pay.

The system is leading to grotesque results. At the present moment it takes £1,000 to put one single individual into a new town. Glasgow wants six new towns. One single town of 50,000 people would therefore cost £50 million. That is the price that would have to be met, and that is the reason why the Government are seeking to get rid of the moral obligation which rests on them to try to find new homes for 300,000 people in the city of Glasgow at the present moment who have no chance of getting a new home within the city. It is a vast problem. If we are to have six new towns, as we must have, a total capital outlay of £300 million is necessary. It has become fantastic. The people who are responsible for that situation are the people who have pushed up the price of money to its present unprecedented cost and who are now taking a little credit because it has fallen by ¼ per cent. in the last two days.

Because of that appalling cost to build a new town, it is becoming cheaper for the city of Glasgow to pay £10,000 for an acre of land in the city in order to re-house a little handful of the 300,000 who are needing houses. Ten thousand pounds is being paid now for an acre of land in the city. The hon. Member for Cathcart (Mr. J. Henderson) was speaking a little earlier of clearing the north and south banks of the Clyde—at £10,000 an acre—and the Government condemn us when we ask for a bigger subsidy than £24 for a house. They are not even logical. Their attitude is stupid. I do not like using such words—but it is positively stupid. The figure of £10,000 is now being paid for one acre of land in the part of Glasgow where I live.

I know that my hon. Friend the Member for Dunbartonshire, East (Mr. Bence) wants to say a word or two, and I shall therefore, conclude with a brief observation about the general policy of the Government in this matter. I say that it is stupid. So it is, because the building of houses ought to be the creation of wealth. The more houses we build the wealthier we should become. That is not an act of inflation. The real act of inflation is being carried out in the Rent Bill by which we are transferring money into the hands of a small number of people without creating value for it.

Here we can create a value, and in my view that value could represent currency. It could carry a currency issue in the same way as engineering products and every other type of human endeavour. We could issue money on the strength of the wealth we create in housing, and by using that as a pool, we could loan money to the local authorities at merely a working rate of interest. In that way we could break one of the biggest props of the capitalist society, the interest-bearing section, which is fattening on the slums of this country at the present time.

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Govan

I am sorry, but I cannot give way to the hon. Gentleman because I shall get into trouble with my hon. Friend the Member for Dunbartonshire, East if I do so. We can solve this problem without inflicting any extra charge on the common purse, and that is by using as the basis of a loan a pool—

Photo of Sir John George Sir John George , Glasgow Pollok

It is already mortgaged.

Photo of Mr Jon Rankin Mr Jon Rankin , Glasgow Govan

It is not. It can carry more, and the hon. Gentleman knows this very well. When we approach a solution of this problem along those lines, we shall make an infinitely greater contribution to the solution of the housing problem than the present Bill will do.

8.47 p.m.

Photo of Mr Cyril Bence Mr Cyril Bence , Dunbartonshire East

We have had a Bill in each of three Sessions, all ostensibly directed towards solving our housing problem. Does nobody ever notice that the same thing happens in every Parliament throughout the world in each of its Sessions? It is because this housing problem concerns all Western civilisation wherever there has been an industrial revolution, and it becomes worse as the speed of that industrial revolution is stimulated.

The hon. Member for Pollok (Mr. George) is an able engineer, and during his lifetime he has seen, as we all have seen, technological development in different spheres of production and processing. When the first war ended, subsidies were given to induce private building contractors to provide houses for sale, as they could not provide houses for letting. Then the railways had to be recapitalised after the First World War, and a subsidy was provided in the form of a huge loan—I think it was £26 million—by a subsidiary set up by the Bank of England. Later shipbuilding was given a subsidy because plant and equipment could not be replaced out of the depreciation provisions.

So a system of subsidies has been used in the sphere of economic activity where a balanced production cannot be obtained on a commercial basis. That is why we pay subsidies to agriculture. We assume a general level of food prices in this country compared with imports from abroad. Our farmers cannot produce at those prices, so we provide them with a subsidy because they cannot conform to the commercial prices and processes of the rest of the world. So we give them a subsidy to enable them to do that. We do exactly the same in connection with houses.

There is a story which I should like to tell to hon. Members: I do not know whether I have ever told it in the House before. It is about a building contractor. I knew the daughter of an old gentleman who in 1904 was building six-room houses at £125 each. As a matter of fact, I was looking at one of those houses this weekend. They had a back and a front garden with iron railings which the Government pinched during the war. None of them had a bathroom, and they were built for letting.

The eldest son of that building contractor was a motor engineer. He was working in Coventry engaged on making a motor car costing £800 to build and which needed a mechanic to drive it. It used to break down after every ten miles. In 1936, the son was carrying on his father's business and was building houses in the West Country at £625 each. I was a production engineer in the motor industry and in those days we were turning out a 10 h.p. car that cost £35 to make.

We have been able to use a technology which has created a price-wage level which puts the production of houses for letting outside the field of commercial practice. I challenge any building contractor, from Wimpey's downwards, to build for letting either semi-detached or terrace houses in the provinces, after clearing the land and conforming to recognised orthodox commercial practice, without subsidies or grants. I bet that they would not let one of them and that in two years' time they would be filing their petition in bankruptcy.

We reached that stage before the war. I knew a contractor who put up a street of houses. I said to him, "I will bet that you do not let one of those houses at that figure," and he did not. Some of us, after he had filed his petition in bankruptcy, bought one of those houses. It is impossible to build houses to let. It is nonsense to bring in Bills of this sort with the idea that by so doing we can solve our housing problem. We cannot solve the housing problem by fiddling with the rent structure, with subsidies or with anything else. We have to realise that house-building for letting to ordinary people is no longer a commercial proposition. If it were, building contractors would obviously be building houses to let.

In the same way, cereal production is not a commercial proposition on the farms. We only get such production because we give farmers a ploughing grant. The production of fat cattle in the quantities in which we need them is not a commercial proposition in face of Australian and New Zealand competition. The farmers produce the fat cattle because we give them a calf subsidy per live cwt.

We shall never get houses built for letting in this country by anybody unless we give a subsidy. If we take away the house-building subsidy then house building will slacken off and finally stop. The cost of everything produced in this country must be reckoned in terms of what the people engaged in production have to pay for what they use, either in processing or in order to be around to use those processes. A house is one of those things.

I know that it is the argument of many people that we have too much purchasing power to use in purchasing consumer goods and that if we can take more money out of the pockets of the people by making them pay more rent it does not matter whether or not it feeds the moneylenders; so long as it goes to them it eventually goes back into the banks, and perhaps is cancelled out or used to increase the liquidity of the banks.

A shrinkage in demand for consumer goods is caused unless the people who are using houses have the power to demand higher rewards for the function they are performing, in order to compensate for the higher rents they have to pay. If those people who have to pay higher rents cannot get higher rewards they will spend less money on consumer goods.

Between the wars I read several national surveys which showed the rate of malnutrition, and it was clear that the greatest degree of malnutrition was found where people were paying the highest rents. In South Wales it was not the people who were living in cheap, back-to-back houses and paying 2s. 6d. or 3s. a week who suffered from malnutrition; neither was it their children. The greatest degree of malnutrition occurred amongst owner-occupiers and people living in local authority houses and paying high rents. Once the rents are driven up the prices of consumer products have to be brought down, or the people will do without them.

The former Economic Secretary to the Treasury expounded Boyle's law to the House. My hon. Friends will remember him propounding the theory. His point was that if we make people pay more by way of Purchase Tax and Income Tax, provided that they have not the economic power to recoup by their efforts the extra taxes that they have to pay, and provided that they have to pay extra rents, the demand for consumer goods is reduced, and a deflationary situation is created.

I could continue for a long time on this theme, but my right hon. Friend wants to speak. I wanted to speak because, although I admired parts of the speech of the hon. Member for Pollok, I did not accept his suggestion that subsidies were intended only for poor people. At one time it may have been true, but that is not so now. I had a fairly good job when I got a subsidy of £110 for my house in Newport. I was not poor, and I have never pleaded poverty, but I got a subsidy of £110, which is more than any council tenant in Newport ever got. I got it as an owner-occupier, and it was paid because building contractors could not do the job unless they received the benefit of it. That is what subsidies are for; they are producer subsidies, not consumer subsidies.

I enjoyed the speech of my hon. Friend the Member for Fife, West (Mr. Hamilton) more than any other speech this evening. I thought that he hit the nail right on the head. In discussing the question of differential rents and rebate schemes we have to take into consideration the incidence of taxation.

The hon. Lady the Member for Aberdeen, South (Lady Tweedsmuir) referred to a differential rent scheme. I have experience of such a scheme, and I never saw such a fantastic thing in all my life. A man earning £16 a week had to pay a rent of 59s. a week, but it was interesting to see what he was paying in Income Tax because he had no children. The authority had not taken into consideration the man's Income Tax payments. One should take into consideration cases where a man and wife are both working as against cases where a man is working and his wife is not. One must have regard to the Income Tax payments by the higher income groups; otherwise the burden of the man paying on the basis of the higher income is doubled, and that is surely a disincentive.

I suppose it is a waste of time to ask the Secretary of State to take the Bill away. I do not know what sort of a time he has experienced on the Rent Bill, but I should hope that he has had a very rough time. I hope that this Bill will be considered by a Committee of the whole House, or, failing that, by the Scottish Grand Committee. If it goes before the Scottish Grand Committee, I can assure the Secretary of State that my constituents and my burgh council, who have already made representations to him on this matter, will expect me to be very awkward and persistent. They will expect me to get the Bill thrown out, and I shall do my best, with my colleagues, to get it thrown out.

9.1 p.m.

Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

This has been a very interesting debate. Several hon. Members opposite have welcomed the Bill while asserting that it will help in the solution of the housing problem in Scotland, but every hon. Member who has made that assertion has taken great care not to try to show us in what way the passage of the Bill will help in solving the housing problem in Scotland.

All that the Bill will do will be to transfer a burden upon the Exchequer to the local authorities. Hon. Members opposite have expressed the hope that the local authorities will handle this additional burden by passing it to the tenants of council houses. That is what it adds up to, and I think that is what the Bill is about.

There is nothing in the Bill about rents, but the Secretary of State has introduced a Bill the purpose of which is, as I have described, to increase the burden on the local authorities, in the hope that the local authorities will pass the burden not so much to the ratepayers as such, but to those who happen to occupy local authority houses.

The Secretary of State repeated what we have heard so often since the Minister of Housing and Local Government made his first statement on reduced subsidies in November, 1955. He said that subsidies should not be given to those who do not need them. Is that a principle or is it not? Do hon. Members opposite stand by that as a principle? One evening last week, quite late—hon. Members for the most part were not in their places—I sat here when we passed a new Regulation made by the Secretary of State in order to provide a subsidy for farmers for building silos.

Photo of Mr Cyril Bence Mr Cyril Bence , Dunbartonshire East

There was a subsidy for cowsheds not long ago.

Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

The Government introduced this Measure under an Act that was passed a short time ago, the purpose of which is to give to the farmers of this country a grant of 50 per cent. towards the cost of building silos. Does anybody suggest that this grant should be paid only to those farmers who need the subsidy? Of course not. We on these benches did not oppose the passage of that Statutory Instrument making grants to farmers. We gave the Instrument our blessing; we supported the subsidy. We are consistent. We accept the justice of subsidies, farm subsidies as well as housing subsidies and other subsidies which seek to improve the social standing and social standard of our people.

As I heard one of my hon. Friends interject, there was a subsidy for pigstys a little time ago.

Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

I prefer the illustration of pigstys. The Minister of Agriculture has announced that, in addition to subsidies running at over £200 million a year, he is introducing new subsidies for which we have yet to get the legislation. They provide subsidies to farmers for a whole wide range of capital works on the farm. They will apply to cowsheds as well as to pigstys, but will they be payable only to farmers who need the subsidies? What has the hon. and gallant Member for Renfrew, East (Sir G. Lloyd) to say about the subsidies to all his friends who are farmers and support hon. Members opposite?

Photo of Major Guy Lloyd Major Guy Lloyd , Renfrewshire East

Since the hon. Member has asked me, I think he will remember —as my hon. Friend will and I remember —that I said subsidised houses should not be provided for those who did not need them.

Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

No, but subsidised houses for farmers pigs? It is not the pigs which pay for the pigstys but the farmers.

Photo of Major Guy Lloyd Major Guy Lloyd , Renfrewshire East

The argument is illogical.

Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

Hon. Members opposite will have to take a lesson in logic. If they are to go round the country saying that subsidies are to be paid only to those who need them and they drive that principle far enough—

Photo of Sir John George Sir John George , Glasgow Pollok

I read a quotation from a circular issued under the Greenwood Act of 1930, by the late Mr. Arthur Greenwood, which stated that subsidies should be paid only to those who need them and only so long as they need them.

Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

I am not going to have an argument with the hon. Member about what the late Mr. Arthur Greenwood said in a circular in 1930. The hon. Member has quoted something from a circular. I have not read the circular and do not know the context in which that was said. I am not going to dispute that the hon. Member has put the correct interpretation upon it; I do not know. However, I shall come at once to the principle upon which housing subsidies have been based since the war and leave with the Secretary of State and the Joint Under-Secretary and hon. Members opposite all I have said about other subsidies. To complete the sentence I had started when the hon. Member for Pollok (Mr. George) interrupted me—I do not quarrel about that—if hon. Members opposite drive us too far on the question of paying subsidies only to those who need them, we may well make matters very awkward for hon. Members opposite when they endeavour to make available subsidies to people who do not necessarily need them, but who are very well known to be their political friends.

The burden of the argument of the hon. and gallant Member for Renfrew, East was that local authorities kept down council rents because of the politics in the matter, because they were afraid to increase rents of people whose votes they would be looking for. Does the hon. and gallant Member ask for the votes of the farmers of East Renfrew and tell them that he supports subsidies for them whether they need them or not, or does he say that he would like a means test applied? [HON. MEMBERS: "Answer."] The Secretary of State said in his opening speech that he wants a rent of £39 a year, or 15s. a week. I hope he is happy with some of the local authorities which have been increasing their rents recently.

I hope that the efforts of Dumfries County Council, a good Tory Council, have satisfied him. According to the most reputable newspapers in Scotland, on 9th January last Dumfries County Council raised their rents to £95 a year, irrespective of the size or location of the house. To that there has to be added the rates. According to the Press reports, the average in Dumfries will be £2 15s. a week. That is in a rural county with many agricultural workers who have a wage of £6-odd a week. Is that what the Secretary of State wants? Did he know about this increase in rent? I know that he was very preoccupied about this time, because this meeting of the Dumfries County Council took place on the day that Sir Anthony Eden resigned.

Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

For the next day or two the right hon. Gentleman was very preoccupied. We do not know what was in his mind.

Photo of Mr Emrys Hughes Mr Emrys Hughes , South Ayrshire

Is my hon. Friend aware that in Ayrshire County Council, just a short distance from the boundary line, tenants are paying only one-fifth of the rent which tenants in Dumfries are paying?

Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

I am not surprised about that since I have learned from the miners that the increase in rent to £95 represents an increase of 133 per cent. That is a nice little increase—and all that before the Bill had even been published. I do not know what the rents in Dumfriesshire will be after this Bill has appeared. I accept my hon. Friend's word about the Ayrshire rents, because I do not know what they are. I should not have known what were the rents in Dumfriesshire but for the Scotsman and the Glasgow Herald and other reputable Scottish journals, which told me what the Dumfries County Council had been doing.

So much has been said about the principle underlying subsidy rates that I should like to quote what the right hon. Member for Moray and Nairn (Mr. J. Stuart) said in moving the Second Reading of the Housing (Scotland) Bill in 1952. He said: As the House will be aware, the necessity for this Bill arose out of the decision to increase the rate of interest charged on the longer dated loans of the Public Works Loan Board. The Chancellor of the Exchequer announced the first increase on 8th November, 1951. I think he became Chancellor on 7th November, 1951. when the rate was raised from 3 per cent. to 3¾ per cent., and then on 9th February of this year it was raised from 3¾ per cent. to 4¼ per cent. The Chancellor at that time, realising that this would be very disturbing to local authorities' finances and the housing accounts, agreed that a review of the subsidy arrangements for housing would be undertaken by the Government. That has been done."—[OFFICIAL REPORT, 3rd July, 1952; Vol. 503, c. 624.] The right hon. Member should have been advised by his hon. Friend the Member for Pollok, who says that local authorities are not interested in the housing interest rates.

Nevertheless, the whole case for the Housing (Scotland) Bill in 1952 was that the interest rate on the money borrowed by the local authorities to build houses had increased by 1¼ per cent. and that this had increased the annual burden of the house by £20. The subsidies were increased by £19 5s. for four-apartment house. That was the point of the Bill in 1952. Since 1952 the interest rates have been increased by another 1¼ per cent. Do we get another £20 increase in subsidy? No—this time, they take it off. That is exactly what has happened.

In 1952 the Secretary of State kept referring to 1946, and hon. Members on the benches opposite said, of course, that the Secretary of State had been more generous than the Labour Government had been in 1946. Let us look at what happened in 1946. The capital cost of the house was, on average, assumed to be £1,130. Annual loan charge, management, maintenance, etc., made a total annual burden of £56 a year. There was an assumed of rent of £26 a year, leaving a deficit of £30 a year which was met by an Exchequer subsidy of £23 and a rate contribution of £7. That is what happened under a Labour Government in 1946.

In 1952, the cost of the house, it was said, had gone up to £1,635. The Secretary of State and the Joint Under-Secretary explained very patiently—and, in fairness to them, I am bound to say that they explained it over and over in Committee—that the annual burden then was £98 10s. They assumed a rent of £42—that was in 1952; and we said that that was too high—leaving a deficit of £56 10s. which was met by an Exchequer grant of £42 5s. and a rate contribution of £14 5s. But the Secretary of State does not want this rent of £42; he now wants a rent of £39. But let us see what happens.

The house that is to be built with the subsidy provided by this Bill will cost, on average—I think that these are official figures from the Scottish Office—£1,774. I must say that I have been looking up local authority figures and have not yet found any local authority which has been able to build a house for as little as that, including the cost of land and services. However, let us take the figure of £1,774. The annual burden at 5¾ per cent.—and that was the rate of interest until today, and until today that has been the rate of interest since this subsidy was announced; it has now taken a steep drop to 5½ per cent.—is about £117. There is an Exchequer subsidy of £24, so the local authority has to find £93. If the tenant is not to pay a rent of £93, someone has to subsidise him.

Hon. Members opposite say that it is those people who live in the local authority houses that have been built in the last 36 years who should subsidise them—not the ratepayer or the taxpayer. What cannot be denied is that the tenant has to be subsidised if he does not pay a rent of £93. The Secretary of State suggested—or his predecessor suggested, and I am not sure whether the right hon. Gentleman repeated it—that there should be a rate contribution broadly equal to one-third of the Exchequer contribution. Therefore, let us assume a rate contribution of £8. That reduces the £93 to £85. I must say that I thought that that was too high, but the Dumfries County Council now have rents of £95.

All that is true if we stick to the principles that have been applied up to now, but, for some reason or other, we have decided to depart from the basis used in calculating the subsidy in 1946, under the Labour Government, and from the basis on which the subsidy was calculated in 1952, under a Tory Government. We now calculate it on some other basis—or do we? Do we calculate it at all? We have not been told on what basis this subsidy of £24 has been calculated. We have had no calculation whatsoever. I should very much like the Joint Under-Secretary, in seeking to justify the Bill, to tell us the justification for a figure of £24. How did they arrive at it? In 1952, they told us how they arrived at the then subsidy. We were able to say how we arrived at the subsidy in 1946. But no one has told us how this new subsidy of £24 was ever arrived at. It is just a figure, a guess, a shot in the dark. I do not know—perhaps it is the most that the previous Secretary of State could get from the Chancellor of the Exchequer.

Let us see what effect this interest rate has on housing finance. The hon. Member for Pollok tells us that it is quite unimportant, that local authorities are not interested in the rate of interest charged on the money they borrow. It does not make any difference, so he tried to tell us.

Photo of Mr Emrys Hughes Mr Emrys Hughes , South Ayrshire

His town council protested.

Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

I am not a bit surprised, and I should hope that the town council will protest about his speech today.

Photo of Sir John George Sir John George , Glasgow Pollok

The hon. Member is misrepresenting what I said. I said that local authorities were not concerned what the rate of interest was in any one week or in any one month; they look at it over the year and year by year.

Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

If the hon. Member for Pollok is saying that local authorities are not interested in the rate of interest they pay on moneys they borrow at the time they borrow the money, then I do not believe him.

Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

I know the hon. Gentleman did not say that, but he said nothing with any meaning at all when he talked about rates of interest. When he said local authorities were interested only in what they paid over all, that has no meaning, because they do not borrow money over all at any one time; they borrow it over a period of sixty years, and they are interested in what they pay for the money they are borrowing now to pay for the houses they are building now.

Taking the present house building cost of £1,774, by increasing the interest rate from 3 per cent. to 5¾ per cent. the Government have increased the annual burden of the house by no less than £42. I have listened with great care to what my hon. Friends have said about the effect of interest rates. Taking this notional house costing £1,774, that has to be paid for over sixty years, and working it out over sixty years it is just about £30 a year. That does not seem very much for a house which costs £1,774. But when one adds the interest rate, that sum of £30 jumps to £106, which means there is £76 for the money lender. Of every 20s. paid by the local authority for that house, 6s. is for the house and 14s. goes to the money lender. That is the economics of Bedlam.

Who subsidises whom? Is it the taxpayer and the ratepayer who subsidise the council tenant, or are not all three of them being fleeced to satisfy the money lender? That is how I see it.

If this rent of £84 or £93 is not to be paid, which I think it is not, and if we have the rent of £39 which the right hon. Gentleman the Secretary of State asks for, it is going to be not only a matter of doubling the rent of some houses after the deduction of owners' rates, but trebling the rent of some. We have had quoted today cases where they will have to be multiplied some five times in order to get the rent of £39. A study of the Report of the Working Party on Housing Subsidies in Scotland shows that the rents of the existing stock of local authority houses have to be raised to about that level before they themselves cease to be a drain on the ratepayer.

I am not here saying that rents should not be increased. Indeed, I would say that local authority rents in my own county of Lanarkshire would have to be increased, even without the Bill. I say at once that the rents of the existing houses will have to be raised in order to reduce the burden of the housing rate which is now 5s. 8d. in the £; but by imposing this new burden the right hon. Gentleman is making it impossible for the Lanark County Council to reduce the housing rate.

It is quite wrong to assume that we have a vast pool of houses the rents of which have to be increased by only 2d., 3d., 5d. or 7d. to meet the deficit which will arise under the Bill. That is on the assumption of a certain rate of house-building by particular local authorities. The right hon. Gentleman knows full well that there are many local authorities in Scotland which will not build one single house under these subsidies. Their tenants will not have to pay any of this additional burden.

Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

That is in the constituency of the Secretary of State. There are many Tory councils in Scotland which have already stopped building houses because of the high cost of building on existing subsidy rates. It is the local authorities with a dreadful housing problem—a dreadful problem of overcrowding, slums, unfit houses and the like—which need to go on building if they are to play fair by the people they represent, which have to incur this tremendous burden. They will have to pass it on to their tenants. This is a national problem. This is a social service which should be borne in good part by the State, by all of us. We all have to make our contribution.

It has not passed the notice of a lot of people in Scotland—it certainly has not escaped my notice—that the Government have taken this turn in favour of putting new burdens upon the local authorities, new burdens upon the ratepayers, since they got the landlord relieved of the responsibility of paying rates. That is what they have done. They were guilty of sharp practice when they passed the Bill in 1954.

We said on many occasions that we could have borne to consider the proposition to abolish owners rates if we could be assured of the circumstances of the whole of the plan, if the Government would have recognised the narrow basis of rating in Scotland on which they were lectured by the Sorn Committee; but they narrowed the basis of local rating still further. Having narrowed the basis and put all rating on to the occupiers of properties—and to a considerable extent in Scotland that means on to the occupiers of houses—they are now transferring more and more burdens to these people.

It is madness at this time to introduce a flat rates subsidy in place of the differential subsidy related to the size of houses. I challenged the hon. Lady the Member for Aberdeen, South (Lady Tweedsmuir), when she was speaking, about being guilty of a contradiction. She asked me to be patient and said she would come to the point. I was patient, but she failed to come to the point. She did not deal with the problem of overcrowding.

She called our attention to the problem of overcrowding and to the Report of the Working Party and then she proceeded to ask for more small houses in order to solve the problem of overcrowding.

Photo of Lady  Grant of Monymusk Lady Grant of Monymusk , Aberdeen South

As I have been challenged, perhaps I may say—

Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

No. I am sorry. The hon. Lady said that she would answer my question. She failed to answer the question. She completed her speech and walked out of the Chamber. Now she has come back, but I think that I had better finish my speech uninterruped.

In any case, the Secretary of State, in introducing a flat rate subsidy to financially severely harassed local authorities, is surely giving them a plain encouragement to cut their costs by building smaller houses. Will the Joint Under-Secretary say if that is what the Government want? If the Government do not want smaller houses, how on earth can they justify departing from the differential subsidy relating to the size of the house? That seems to me to be again the economics of Bedlam.

I had wished to say something about the town development part of the Bill, but I have not the time. I think myself that Glasgow needs most a number of new towns to deal with her problem—new towns to be built under the New Towns Act, 1946. However, I have never opposed and I do not now oppose the suggestion that some help should be given to solving Glasgow's overspill problem by building up existing communities, and I do not know that any of my hon. Friends have ever done so. We think that we should try to help all we can in all ways, including building new towns.

Perhaps the Joint Under-Secretary will be able to tell us whether we are to have any more new towns under his Government. We think that they could help, and that some help could also be given by town development, but when I think of the Secretary of State's proposals, and, indeed, of the way in which he has dealt with the Cumbernauld project, it seems to me that he had already anticipated this Bill. He has made Part II of the Bill—the whole town development part—quite unnecessary, because he showed to us, in settling the Cumbernauld issue, that all the powers were there already.

My hon. Friend the Member for Glasgow, Central (Mr. McInnes), my right hon. Friend the Member for East Stirling-shire (Mr. Woodburn) and the hon. Member for North Angus (Mr. Thornton-Kemsley) have called attention to the weakness of this part of the Bill. If we are to get our overspill from Glasgow accommodated in other existing communities by way of town development, we shall have to have assistance from central funds in order to finance these industrial developments and transfers. As far as I can see, the Financial Resolution makes no adequate provision for that, and the terms of the Bill would seem to me to be inadequate to help us in that regard. Therefore, I would say to the Joint Under-Secretary that it would help us if he would say a word about the financial provisions and the Money Resolution, because we may feel obliged to say a word or two about it later on, unless the hon. Gentleman can satisfy us now.

This Bill seems to us to make no contribution whatever to the solution of our most serious social problem in Scotland, and we think it is the duty of every fair-minded and right-thinking Scotsman to vote against it.

9.33 p.m.

Photo of Mr Jack Browne Mr Jack Browne , Glasgow Craigton

The hon. Member for Hamilton (Mr. T. Fraser) and his right hon. Friend the Member for East Stirlingshire (Mr. Woodburn) have asked whether the Money Resolution is drawn in such a way as to allow Amendments to the Bill in Committee to make possible Exchequer grants for the erection of factories and the like. The answer to that question is "No". I am sure that the right hon. Gentleman will appreciate that this Bill cannot be the place to deal with an issue of this kind, even if, which we do not accept, the need for such grants was made out.

I should repeat that the Bill does make possible the provision by local authorities of factory space under the Planning Acts,—with the approval of my right hon. Friend, to be let, as a rule, on an economic basis, inside the Development Area, as well as outside the Development Area, as at present.

Photo of Mr Arthur Woodburn Mr Arthur Woodburn , Clackmannan and East Stirlingshire

There is another point. The hon. Member for North Angus and Mearns (Mr. Thornton-Kemsley) raised what I thought was a very important point. It was that if a firm has to leave what the hon. Member called a slum factory in Glasgow, there is no compensation at all and the local authority receives no assistance in demolishing it. Both the firm concerned and the local authority will be in the position that when one slum occupant goes, another one comes in. Would the Joint Under-Secretary say how the Government think that that will be any solution to the problem in Glasgow if, immediately the factory is vacated, it is filled again?

Photo of Mr Jack Browne Mr Jack Browne , Glasgow Craigton

Yes, I was going to reply to that point later, but I will reply to it now. My right hon. Friend has authorised Glasgow to spend £250,000 a year on buying up factories in advance of actual clearance in approved redevelopment areas to avoid just the risk which my hon. Friend feared. This will earn block grant which will be 50 per cent. of outstanding loan charges.

The right hon. Member for Clackmannan and East Stirlingshire began by saying that this was a Bill to raise rents, and his hon. Friend the Member for Hamilton, in winding up for the Opposition, said it was a Bill to transfer a burden from the Exchequer to the local authority. My hon. Friend the Member for Pollok (Mr. George) had an argument with the hon. Member for Glasgow, Central (Mr. McInnes) about the effect of the Bill on the rents of local authority houses. The hon. Member for Hamilton said that rents should go up in any case.

Photo of Mr Jack Browne Mr Jack Browne , Glasgow Craigton

I want to get dear at the beginning of my speech exactly how much effect the Bill will have on rents. I have here, and I have kept it for some time, a short article out of the Weekly Scotsman which starts with the headline, "Subsidies slash will double Scots' rents". That is exactly the point which my hon. Friend the Member for Pollok was talking about.

The fact is that the average rent in Scotland today is £15 10s., and if the local authorities were to balance their books and we were to tear up this Bill, the rent, to balance the books, to balance the housing accounts, should be £34 and not £15 10s. The effect of the Bill would be to raise those rents from £34 in three or four years' time to a figure of some £39. That is the effect of the Bill. It will not of itself double the rents.

The hon. Member for Hamilton made great play with our contention that subsidies should not go to those who do not need them. I ask him one simple question. Would he happily live in a house at a rent far less than he personally could afford to pay, because somebody else who could ill afford it was subsiding him?

Photo of Mr Thomas Fraser Mr Thomas Fraser , Hamilton

That is like the question "Have you stopped beating your wife yet?"

Photo of Mr Jack Browne Mr Jack Browne , Glasgow Craigton

I appreciate the hon. Gentleman's answer, but does he object to rent rebate schemes, and does he not realise that while we are bandying words about the Chamber we have to get some realism into the position?

What is the position of the pooling of subsidies? It is that about which the difference between the two sides of the House arises. There are a large number of local authority houses which were built when costs were lower, built when interest rates were lower, and for such houses the economic rent, as everyone will agree, is less than many people can reasonably afford to pay. Today, when costs and interest rates are high and the situation is reversed, the economic rent of a new house being built is well up to or even, in some cases, more than what we would consider to be a reasonable rent. If a local authority charged reasonable rents for all its existing houses which have been well maintained over the years—and in many cases the older ones are more conveniently situated—it could create the necessary surplus to subsidise the cost of new houses being built today, and so charge fair rents. It is quite ridiculous to calculate the new subsidy on existing costs and to ignore the position of the pool.

The Working Party gave information on rent levels. After taking a wide selection it decided in round figures that average rents were in England £35 8s. 4d., in Northern Ireland £33 and in Scotland £16. That is a striking difference, even allowing for the higher proportion of four-apartment houses in England. The Scottish housing authorities cannot claim that there is justification in charging less than half the English rent for a more or less comparable house.

Who pays the difference? My hon. and gallant Friend the Member for Renfrew, East (Sir G. Lloyd) asked that 64 dollar question and himself answered that it must be paid for. Government subsidies begin to pay for the difference. They have always been higher in Scotland than in England, and the difference remains in the Bill. I sometimes wonder whether we in Scotland really appreciate the English taxpayer for his understanding of the Scottish position, and whether right hon. and hon. Gentlemen opposite appreciate support of the Secretary of State for Scotland for Scottish interests.

The larger Government subsidies make up some of the difference, and the rest falls on the unfortunate Scottish ratepayer, who pays more than his English neighbour. But, and this is a very big but, the Working Party's Report makes it clear that the tenant of the average local authority house in Scotland pays in rent and rates together less than the English local authority tenant. Therefore, the Scottish local authority tenant is better off. But at whose expense? At the expense of the Scottish ratepayer who is not fortunate enough to have a corporation house.

I should like to give to the House details of the effect on the ratepayer if the local authority did what we suggest under the Bill should be done, and in 1956–57 charged an average net rent of £39. The saving to Edinburgh ratepayers would be 1s. 3d., Glasgow 3s. 4d., Aberdeen 3s. 7d., Dundee 3s. 10d., Midlothian 4s. 7d., Hamilton 5s. 9d., Clydebank 6s. 7d., Kilmarnock 6s. 11d., and Lanark County 8s. 8d. In Coatbridge, if there was an average rent of 15s. a week per corporation house in 1956–57, the reduction in the rate poundage would be over 10s. in the £.

To what extent are the present housing accounts distorted? The present average rent is £15 10s. net or 6s. a week. If this average were increased to 15s. a week for existing houses, the local authorities could reduce the ratepayers' burden on each house from £19 to £2 6s. As my right hon. Friend said, it has been considered fair and right that for every £3 subsidy given by the taxpayer towards local authority housing an additional £1 should be paid for by the general body of ratepayers.

Photo of Mr Jack Browne Mr Jack Browne , Glasgow Craigton

That is classical. I do not know why, but a proportion of three to one has always been considered the right proportion.

The average Exchequer contribution per house is £21 9s. for all existing houses at May, 1957, not £24, as my hon. Friend the Member for Pollok said. A third of £21 9s., is £7 3s. If the local authority charges, not £2 6s. per year but £7 3s. a year, that is 2s. 9d. a week, and there is an average rent of 15s. a week, this will produce a surplus over 500,000 existing houses of over £2,400,000, which is nearly £100 a year per new house for the first year's output of 25,000. That is more than is needed to meet today's high costs.

These figures show—I know that one can make any case that one likes with figures—that there is plenty of room for manoeuvre in adjusting rent and rate burdens, if necessary by stages, to give fair play to all with the help of the rent rebate scheme, and to take account of current building costs. The situation, as local authorities know, especially those building houses in large numbers, can never be static. I know that averages are deceptive. When the hon. Member for Hamilton (Mr. T. Fraser) was being so sorry, as we are, for local authorities below the average he did not say that the Scottish Housing Association is there to help by providing free houses to hard-hit local authorities whose finances do not fit into the general pattern.

Photo of Mr Jack Browne Mr Jack Browne , Glasgow Craigton

Yes, free houses.

I should like to turn from that to Part II of the Bill, and to refer, first, to the size of the overspill problem which has been creeping on us gradually over the years. I think that the position is very serious. The Glasgow problem is by far the greatest, as has been said.

In Glasgow, about 300,000 people cannot be rehoused within the city boundaries. Within three years, the building on new sites within the city boundaries will virtually come to a stop. No more than about 10,000 families can still hope to have new houses on new sites within the city boundaries, but 100,000 families are on the waiting list, of which 43,000 have no homes of their own. The balance of these 100,000 families must stay where they are, wait for people to leave houses, consider buying houses, or remove outside Glasgow. Of course, there will be extensive building of additional new houses in Gorbals and other redevelopment areas, but that will mean better new homes for fewer people, and the balance displaced will have to move elsewhere. The proportion displaced in Gorbals may be about 60 per cent., and overall it will be between 30 and 50 per cent.

The hon. Member for Glasgow, Central asked: "What does Clause 14 mean?" and challenged me to tell him. I will try to do so but it is not very easy. The intention is to draw up a notional income and expenditure account year by year for each town development scheme. The expenditure side would show the loan charges incurred on the preparation and purchase of land not yet appropriated or resold for particular uses and also the loan charges incurred on the installation of water and sewerage services with current outgoings on these services, that is, maintenance, etcetera.

Photo of Mr Jack Browne Mr Jack Browne , Glasgow Craigton

No, not factories.

The income side would show the proceeds from the disposal of land and a figure representing the income which the receiving authority would have earned from the new valuation on water and sewerage account if that valuation had borne rates at the level which would have obtained in their district if there had been no town development. [Interruption.] It will read very well in HANSARD.

Hon. Members:

What does it mean.

Photo of Mr Jack Browne Mr Jack Browne , Glasgow Craigton

The Exchequer would contribute 75 per cent. of the deficit on this account year by year, leaving the receiving authority to meet the balance, less any contribution undertaken by the exporting authority.

The hon. Gentleman the Member for Kilmarnock (Mr. Ross) raised the point—

Photo of Mr James McInnes Mr James McInnes , Glasgow Central

May I apologise to the House for having asked for this information?

Photo of Mr Jack Browne Mr Jack Browne , Glasgow Craigton

I, at any rate, accept the hon. Gentleman's apology. The English town development grant is fixed administratively, so we in Scotland deserve praise —not blame, such as we have received —for fixing all the details by regulation subject to annulment by either House.

The hon. Member for Glasgow, Central painted a gloomy picture of the partial failure of English local authorities to make overspill arrangements. He said, about this Bill, that it just will not work. We are starting to tackle a problem that may well take twenty years to solve. In answer to several questions, one from my hon. Friend the Member for Pollok, may I say that new towns are not ruled out.

We believe, however, that with two new towns on our hands already we should not look to new towns to be the sole answer, and that we should now seek to exploit the expansion of existing communities with all their facilities. We hope to succeed in that. We have learned from experience in England, and I for one do not agree that the Bill just will not work. I agree., however, that town development is not the whole solution.

Questions were asked by the right hon. Member for East Stirlingshire and others about the movement of industry. It is a question which has been exercising our minds a great deal. As the right hon. Gentleman will know, a number of firms have already moved out of Glasgow without any Government assistance, and we have made the most careful investigations. Heavier industries cannot move easily. They are part of the Clydeside shipbuilding; they depend on the river. Lighter industries are easier and cheaper to move, and the compensation provisions of existing Acts are reasonably satisfactory. I will give some particulars in a little while.

Under Clause 25 local planning authorities can, for the first time, undertake factory building, the cost of acquisition and clearance and preliminary development of land for which qualifies for grant. Under Clause 17, which is a provision new to Scotland, the local authority engaged in central redevelopment and obliged to reinstate displaced industry, can meet its obligations by finding a new site in or near one of the overspill areas. Finally the local authority will have power, subject to the consent of the Secretary of State, in exceptional cases, to accept rebated rent from industry while it is settling into that new area.

My hon. Friend the Member for Pollok asked me specifically about compensation. The Department of Health, in consultation with the Inland Revenue Valuation Department, has considered a range of specimen factories likely to be affected by redevelopment in Glasgow. The estimates made are, of course, confidential but broadly speaking the study made by Departments shows that the statutory compensation will, in a considerable proportion of cases, go a long way towards meeting the cost of reinstatement.

For example, the consultations with the Inland Revenue Department show that in one specimen case of a textile firm employing about 300 workers, the statutory compensation might amount to about £200,000, and the capital cost, at present prices, of providing accommodation for the same number of workers, designed and built to industrial estate standards, would be about £160,000 against £200,000 received. For another specimen case, a light engineering firm employing 200 workers, the estimates were £170,000 for compensation and £230,000 for a new building, which is slightly less. So compensation can work both ways. But I am reasonably satisfied that we shall find sufficient cases of factories that will get enough compensation to enable them to move without hardship, after allowing for the other provisions of the Bill.

The hon. Member for Hamilton and others spoke about the size of houses. I should like to put the hon. Member for Hamilton right about that point. Immediately after the war and until 1949 local authorities, as he knows, concentrated on four and five-apartment houses. There was an urgent over-riding necessity to provide houses for large families. From 1949 it became apparent that these rows of four and five-apartment houses would result in the next generation, when those families grew up and when there might be many childless couples, having to move from the neighbourhood because there would be no suitable houses for them. So the restrictions were relaxed and the local authorities were encouraged to build more three-apartment houses which was in tune with their waiting lists.

Today we leave the local authorities to decide. The subsidies are similar for all types of house because, as I miss no opportunity to remind local authorities, a stable, properly balanced, properly housed community needs the right proportion of every type and size of house.

This Bill contains the last two parts of a fivepart pattern of legislation spreading over four years of which we Unionists can be justly proud, and in which I am very proud to have myself played some part. The Housing (Repairs and Rents) (Scotland) Act, 1954, set the pattern for long overdue slum clearance and the maintenance of deteriorating house property. The Valuation and Rating (Scotland) Act, 1956—the Sorn Bill—removecl for all time the basic cause of the steady deterioration of Scotland's housing standards over the years.

The Rent Bill, now under consideration in Committee, will help to improve these standards, increase the availability of property, and improve the pattern of maintenance set by the 1954 Act. Part I of the Bill now before us and the true facts about net rent levels now revealed as a result of the Sorn Bill will show the Scottish people in proper perspective for

Division No. 64.]AYES[9.58 p.m.
Agnew, Sir PeterCower, H. B.Macmillan, Maurice (Halifax)
Aitken, W. T.Graham, Sir FergusMacpherson, Niall (Dumfries)
Amery, Julian (Preston, N.)Grant, W. (Woodside)Maddan, Martin
Anstruther-Gray, Major Sir WilliamGrant-Ferris, Wg Cdr. H. (Nantwich)Maitland, Cdr. J. F. W. (Horncastle)
Arbuthnot, JohnGreen, A.Maitland, Hon. Patrick (Lanark)
Armstrong, C. W.Gresham Cooke, R.Manningham-Buller, R. Hn. Sir R.
Ashton, H.Grimond, J.Maude, Angus
Astor, Hon. J. J.Grimston, Sir Robert (Westbury)Mawby, B. L.
Atkins, H. E.Grosvenor, Lt.-Col. R. G.Milligan, Rt. Hon. W. R.
Baldwin, A. E.Gurden, HaroldMolson, Rt. Hon. Hugh
Barber, AnthonyMott-Radclyffe, Sir Charles
Barlow, Sir JohnHall, John (Wycombe)Nabarro, G. D. N.
Barter, JohnHarris, Reader (Heston)Nairn, D. L. S.
Beamish, Maj. TuftonHarrison, A. B. C. (Maldon)Neave, Airey
Bell, Philip (Bolton, E.)Harrison, Col. J. H. (Eye)Nicolson, N.(B'n'm'th,E. & Chr'ch)
Bennett, F. M. (Torquay)Harvey, John (Walthamstow, E.)Nugent, G. R. H.
Bevins, J. R. (Toxteth)Harvie-Watt, Sir GeorgeOakshott, H. D.
Blggs-Davison, J. A.Heath, Rt. Hon. E. R. G.O'Neill, Hn. Phellm (Co. An[...]m, N.)
Birch, Rt. Hon. NigelHenderson, John (Cathcart)Orr-Ewing, Charles Ian (Hendon, N.)
Bishop, F. P.Hesketh, R. F.Orr-Ewing, Sir Ian (Weston-S-Mare)
Body, R. F.Hill, Mrs. E. (Wythenshawe)Page, N. G.
Bossom, Sir AlfredHill, John (S. Norfolk)Pannell, N. A. (Kirkdale)
Bowen, E. R. (Cardigan)Holland-Martin, C. J.Partridge, E.
Boyd-Carpenter, Rt. Hon. J. A.Hope, Lord JohnPickthorn, K. W. M.
Boyle, Sir EdwardHornby, R. P.Pike, Miss Mervyn
Braine, B. R.Horsbrugh, Rt. Hon. Dame FlorencePilkington, Capt. R. A.
Bromley-Davenport, Lt.-Col. W. H.Howard, John (Test)Pitt, Miss E. M.
Browne, J. Nixon (Craigton)Hughes Hallett, Vice-Admiral J.Pott, H. P.
Bullus, Wing Commander E. E.Hughes-Young, M. H. C.Powell, & Enoch
Butler, Rt. Hn. R. A. (Saffron Walden)Hulbert, Sir NormanPrice, David (Eastleigh)
Campbell, Sir DavidHurd, A. R.Price, Henry (Lewisham, W.)
Channon, Sir HenryHyde, MontgomeryPrior-Palmer, Brig. O. L.
Chichester-Clark, R.Hylton-Foster, Rt. Hon. Sir HarryRawlinson, Peter
Cole, NormanIremonger, T. L.Redmayne, M.
Cordeaux, Lt.-Col. J. K.Irvine, Bryant Godman (Rye)Rees-Davies, W. R.
Corfield, Capt. F. V.Jenkins, Robert (Dulwich)Remnant, Hon. P.
Craddock, Beresford (Spelthorne)Johnson, Dr. Donald (Carlisle)Renton, D. L. M.
Crouch, R. F.Johnson, Erlc (Blackley)Ridsdale, J. E.
Cunningham, KnoxJones, Rt. Hon. Aubrey (Hall Green)Rippon, A. G. F.
Currie, G. B. H.Kaberry, D.Robertson, Sir David
Davidson, ViscountessKeegan, D.Robinson Sir Roland (Blackpool, S.)
Deedes, w. F.Kerby, Capt. H. B.Ropner, Col. Sir Leonard
Digby, Simon WingfieldKerr, H. W.Russell, R. S.
Donaldson, Cmdr. C. E. McA.Kirk, P. M.Scott-Miller, Cmdr. k.
Drayson, G. B.Lambert, Hon. G.Simon, J. E.S. (Middlesbrough W.)
du Cann, E. D. L.Lambton, ViscountSmyth, Brig. Sir John (Norwood)
Dugdale, Rt. Hn. Sir T. (Richmond)Leavey, J. A.Spearman, Sir Alexander
Duncan, Capt. J. A. L.Leburn, W. G.Spence, H. R. (Aberdeen, W.)
Duthie, W. S.Legge-Bourke, Maj. E. A. H.Spens, Rt. Hn. Sir P. (Kens'gt n S.)
Eden, J. B. (Bournemouth, West)Legh, Hon. Peter (Petersfield)Steward, Harold (Stockport S.)
Elliot, Rt. Hon. W. E.Lindsay, Hon. James (Devon, N.)Steward, Sir William (Woolwich, W.)
Errington, Sir EricLloyd, Maj. Sir Guy (Renfrew, E.)Stewart, Henderson (Fife, E.)
Farey-Jones, F. W.Longden, GilbertStoddart-Scott, Col. M.
Fell, A.Lucas, P. B. (Brentford & ChiswtckStorey, S.
Finlay, GraemeLucas-Tooth, Sir Hughstudholme, Sir Henry
Fletcher-Cooke, C.Summers, Sir Spencer
Foster, JohnMacdonald, Sir PeterTaylor, William (Bradford, N.)
Fraser, Sir Ian (M'cmbe & LonsdaleMackeson, Brig. Sir HarryTeeling, W.
Freeth, DenzilMcKibbin, A. J.Temple, J. M.
Galbraith, Hon. T. G. D.Mackie, J. H. (Galloway)Thomas, Leslie (Canterbury)
George, J. C. (Pollok)McLaughlin, Mrs. P.Thomas, P. J. M. (Conway)
Gibson-Watt, D.Maclay, Rt. Hon. JohnThompson, Lt.-Cdr.B.(Croydon, S.)
Godber, J. B.MacLeod, John (Ross & Cromarty)Thornton-Kemsley, C. N.
Gomme-Duncan, Col. Sir AlanMacmillan, Rt. Hn. Harold (Bromley)Turton, Rt. Hon, R. H.

the first time the facts about local authority housing finance, and will help to bring about action that should have been taken long ago. Part II of the Bill is the tool with which we hope to progress far in the solution of Scotland's greatest and most difficult hosing task, the Clyde Valley problem.

Question put, That the Bill be now read a Second time:

The House divided: Ayes 200, Noes 160.

Tweedsmuir, LadyWaterhouse, Capt. Rt. Hon. C.
Vosper, Rt. Hon. D. F.Williams, Paul (Sunderland, S.)TELLERS FOR THE AYES:
Wade, D. W.Williams, R. Dudley (Exeter)Mr. Wakefield and
Wall, Major PatrickWills, G. (Bridgwater)Mr. Brooman-White
Ward, Dame Irene (Tynemouth)Wilson, Geoffrey (Truro)
Ainsley, J. W.Hall, Rt. Hn. Glenvil (Colne Valley)Palmer, A. M. F.
Allen, Arthur (Bosworth)Hamilton, W. W.Parker, J.
Allen, Scholefield (Crewe)Hannan, W.Paton, John
Baird, J.Harrison, J. (Nottingham, N.)Pentland, N.
Balfour, A.Hayman, F. H.Popplewell, E.
Bence, C. R. (Dunbartonshire) E.)Harbison, Miss M.Price, J. T. (Westhoughton)
Benson, G.Holman, P.Price, Philips (Gloucestershire, W.)
Blackburn, F.Holmes, HoraceProbert, A. R.
Blenkinsop, A.Hoy, J. H.Proctor, W. T.
Blyton, W. R.Hughes, Cledwyn (Anglesey)Pryde, D. J.
Bottomley, Rt. Hon. A. G.Hughes, Emrys (S. Ayrshire)Randall, H. E.
Bowden, H. W. (Leicester, S. W.)Hughes, Hector (Aberdeen, N.)Rankin, John
Bowles, F. G.Hunter, A. E.Redhead, E. C.
Braddock, Mrs. ElizabethHynd, H. (Accrington)Reeves, J.
Brockway, A. F.Hynd, J. B. (Attercliffe)Reid, William
Broughton, Dr. A. D. D.Irvine, A. J. (Edge Hill)Roberts, Albert (Normanton)
Brown, Rt. Hon. George (Belper)Irving, Sydney (Dartford)Robinson, Kenneth (St. Pancras, N.)
Burton, Miss F. E.Janner, B.Ross, William
Butler, Herbert (Hackney, C.)Jay, Rt. Hon. D. P. T.Silverman, Julius (Aston)
Butler, Mrs. Joyce (Wood Green)Johnston, Douglas (Paisley)Simmons, C. J. (Brierley Hill)
Carmichael, J.Jones, David (The Hartlepools)Skeffington, A. M.
Castle, Mrs. B. A.Jones, Elwyn (W. Ham, S.)Sorensen, R. W.
Champion, A. J.Jones, J. Idwal (Wrexham)Soskice, Rt. Hon. Sir Frank
Chetwynd, G. R.Jones, T. W. (Merioneth)Sparks, J. A.
Clunie, J.Kenyon, C.Steele, T.
Coldrick, W.King, Dr. H. M.Stewart, Michael (Fulham)
Collick, P. H. (Birkenhead)Lawson, G. M.Stones, W. (Consett)
Corbet, Mrs. FredaLee, Frederick (Newton)Strachey, Rt. Hon. J.
Craddook, George (Bradford, S.)Lee, Miss Jennie (Cannock)Summerskill, Rt. Hon. E.
Crossman, R. H. S.Lever, Leslie (Ardwick)Sylvester, G. O.
Cullen, Mrs. A.Lindgren, G. S.Taylor, Bernard (Mansfield)
Dalton, Rt. Hon. H.Logan, D. G.Thomson, George (Dundee, E.)
Darling, George (Hillsborough)Mabon, Dr. J. DicksonThornton, E.
Davies, Ernest (Enfield, E.)MacColl, J. E.Timmons, J.
Davies, Stephen (Merthyr)McGhee, H. G.Turner-Samuels, M.
de Freitas, GeoffreyMoGovern, J.Ungoed-Thomas, Sir Lynn
Delargy, H. J.McInnes, J.Warbey, W. N.
Dugdale, Rt. Hn. John (W. Brmwch)McKay, John (Wallsend)Weitzman, D.
Dye, S.McLeavy, FrankWells, Percy (Faversham)
Ede, Rt. Hon. J. C.MacPherson, Malcolm (Stirling)Wells, William (Walsall, N.)
Edwards, Robert (Bilston)Mann, Mrs. JeanWest, D. G.
Edwards, W. J. (Stepney)Marquand, Rt. Hon. H. A.Wheeldon, W. E.
Fienburgh, W.Mason, RoyWigg, George
Finch, H. J.Messer, Sir F.Wilkins, W. A.
Fletcher, EricMikardo, IanWilliams, Rt. Hon. T. (Don Valley)
Forman, J. C.Mitchison, G. R.Williams, W. R. (Openshaw)
Fraser, Thomas (Hamilton)Monslow, W.Williams, W. T. (Barons Court)
Gaitskell, Rt. Hon. H. T. N.Moss, R.Willis, Eustace (Edinburgh, E.)
Gooch, E. G.Moyle, A.Wilson, Rt. Hon. Harold (Huyton)
Gordon Walker, Rt. Hon. P. C.Mulley, F. W.Woodburn, Rt. Hon. A.
Grenfell, Rt. Hon. D. R.Orbach, M.Zilliaous, K.
Grey, C. F.Oswald, T.
Griffiths, Rt. Hon. James (Llanelly)Owen, W. J.TELLERS FOR THE NOES:
Griffiths, William (Exchange)Padley, W. E.Mr. Pearson and Mr. John Taylor.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 38 (Committal of Bills).