I am a great admirer of the hon. Gentleman, but I did not think that his proposal was one of the better proposals that he has put forward. We have been working hard on a tenants' charter and it would have been absurd for us to attempt to erect what we wish to erect on a rather inadequate foundation.
I want to return from the rather dismal world of Opposition housing policies to the real world of housing and serious policy making. A year ago, the Government published a Green Paper on housing policy in England and Wales and issued a series of consultation papers on particular topics.
The Green Paper has attracted many responses from those concerned with housing throughout the country. I want to thank all those who have put so much effort into preparing the responses. We have given them serious study and it is right that I should now, before dealing with our specific proposals, tell the House the conclusions that the Government have reached.
First, and very important, we shall continue to provide general Exchequer assistance to both main housing sectors. We shall continue to subsidise local authority housing, and we shall continue to afford tax relief on mortgage interest to owner-occupiers. These are tried arrangements and have been the foundation of the major housing achievement that Britain has had under successive Administrations in the post-war era. Thus we oppose the pseudo-radical alternatives of market pricing and the doctrine of shared misery for home buyers and council tenants alike, both deprived of Exchequer support. Of course, we oppose the Opposition's proposals for a one-sided assault on public sector subsidies. In short, we shall not see millions of household budgets disrupted by rising rents and net mortgage payments through savage cuts in either subsidies or tax relief. Our approach is an even-handed one, because we genuinely recognise the value and importance of both sectors.
Secondly, we reaffirm the need for a more selective and discerning approach to housing policy designed to concentrate resources where needs are greatest—both as regards people and places—and the need to widen individual choice.
Thirdly, we reaffirm the importance of the public sector to the steady improvement of housing conditions.
Fourthly, we support the increasing and broadening desire for home ownership. We shall work with the financial institutions to ensure as stable and adequate a flow of mortgage funds as economic circumstances permit.
Finally, we shall increase our efforts to improve both the quality of the housing stock and the balance between rehabilitation and new construction.
The House will realise that a number of these proposals call for legislation and I want to say a word about the wide-ranging legislative proposals that we are currently preparing. There will be a new subsidy system resting on three cardinal principles. These will be the retention of the non-profit rule, the right of local authorities to settle their own rent levels and the extent of any contribution from the rate fund, and that average rents should rise no faster than average income.
Our aim is to recast the present subsidy system in order gradually to provide a more adequate share of resources for those authorities confronted with the most pressing needs and the highest costs. In doing so, we shall ensure that tenants are not faced with savage and unexpected increases in rents. The amount of subsidy that an authority receives would be based on the subsidy paid to it for the preceding year. That sum would then be increased or decreased by taking into account changes in their qualifying expenditure and the increase in their local contribution from rent and rates.