Orders of the Day — Scotland (Housing Support Grant)

Part of the debate – in the House of Commons at 10:15 pm on 14th January 1980.

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Photo of Mr George Younger Mr George Younger , Ayr 10:15 pm, 14th January 1980

I am not prepared to divulge details of the background calculations. I am delighted to fulfil my statutory obligations that are being brought up in this case in the variation order and the main order that we are discussing. As the hon. Gentleman knows perfectly well, the making up of these assumptions for the future is complicated and involves many different calculations from different sources. Even an earnings calculation is a compilation of many different figures. The question of whether a particular figure is used is complex and cannot be dealt with here.

The principal source of income to housing revenue accounts, apart from Government subsidies, is the local contribution—that is say, rents and contributions from rate funds. The local contribution has this year been increased by a sum averaging over the year about £1·40 per house per week. An increase of that level is necessary partly because the previous Government increased the local contribution in 1979–80 by their unrealistic estimates of earnings increases of 7 per cent. in the year up to 1979–80, which is the subject that we have just been discussing. That was a gross underestimate, and the latest figures show that earnings increased by 14 per cent. to 16 per cent.

My aim this year is to reduce public expenditure by the total increase in the local contribution—that is to say, about £70·8 million. To do that, local authorities will need to recover that sum from rents and refrain from increasing the burden on the ratepayer. To achieve that, rents will have to go up by an amount which will, over the year as a whole, average out at about £1·40 per house per week. An average increase at that level will bring the average rent level in Scotland to £6·28 per week. That is not a large sum in current circumstances when the average wage is nearly £100 a week.

Additionally, it should be remembered that about 40 per cent. of rent payers, as mentioned earlier today, are in receipt of either supplementary benefit or rent rebates. Many of them will not have to pay any increases, and the remainder of the 40 per cent. will face increases of less than the full amount.