§ 2.46 p.m.
§ Order of the Day for the Second Reading read.
THE MINISTER OF STATE, SCOTTISH OFFICE (THE EARL OF HOME)
My Lords, your Lordships have lately had the opportunity of discussing the English Housing Repairs and Rents Bill, and if such a Bill is necessary for England it is certainly more so for Scotland, where housing conditions have always been relatively worse. Of course, the main attack on the housing problem, both in Scotland and in England, must be by way of rapid building of new houses, and by the elimination and the rebuilding of the slums. Those must be the two main lines of the Government's attack upon this problem. But if there are other lines which can profitably be followed and which will result in people having better houses more quickly, then I submit to your Lordships that it is the duty of the Government to go ahead.
This Bill is no substitute for slum clearance, but it faces up to the realities, which are that, clearly, all the slums cannot be demolished at once. The Bill therefore provides means by which people who have to live in these conditions for some years further will be able to live in rather more comfort and enjoy rather greater health. In Scotland there are some 750,000 houses of this type which need additional money spent on them if they are to be put into good and tenantable repair. That is almost half the total Scottish figure, so noble Lords will see that this is a considerable problem and one which we could not neglect. The fact is that all such houses have been controlled since 1939, and a great many of them—some 400,000—have had the rents controlled since 1920. As a result, I think it is clear that with the rise in costs, about which I shall say a word in a moment, it has been virtually impossible for the owners to prevent these dilapidations from taking place. Therefore, the Bill proposes to assist an owner to discharge his obligation to put a house into good and tenantable repair by allowing him to charge an additional rent, subject to certain conditions. I hope, therefore, that nobody will challenge the general objective of this Bill, which is to put this very 1191 large class of houses (about half of the Scottish total) into good repair, because that must be for the benefit both of the tenant and of the community.
Part I of the Bill deals largely with financial assistance to local authorities who wish to take over these properties and to put them into temporary repair, pending ultimate demolition. The Exchequer is going to meet 50 per cent. of the cost of acquisition, and, not only in the case where a local authority has to buy the house, but in every case where the local authority owns such a house, £7 5s. a year for fifteen years will be paid towards the cost of the work which is to be done on it. I think it is perhaps worth noting that these figures were calculated when interest rates were at 3½ per cent.—they are now 3¼ per cent. It may be a modest gain and may represent only a few pounds per house, but nevertheless it is in the right direction. Our experience and that of local authorities has usually been the other way. Houses which look like being occupied for a comparatively long period will obviously need more spent on them, but houses which are going to be occupied for a short time before demolition will need less. I think on the whole that the local authorities should find these terms—an Exchequer grant of 50 per cent. towards the cost of acquisition, and £7 5s. a year for fifteen years towards the cost of the work that has to be done—reasonably attractive; and certainly I think that dealing with this class of house and putting them into good repair fills a gap in existing legislation, and will be of significant benefit to many thousands of tenants. There may be other points on Part I which noble Lords will want to raise, but I think that is the main point of Part I of the Bill.
The main provision in Part II is that which under certain conditions allows the owner to raise his rent by a maximum of 40 per cent., provided that he puts the house into good and tenantable repair—a phrase well understood, of course, by all the local authorities of Scotland. The 40 per cent. rise has been calculated on the consideration that since 1939 the costs of repair have trebled—that fact has been established by independent committees in Scotland and in England, and their findings have coincided. There can be no doubt that there has been a threefold 1192 rise in the cost of repair. During that same period, rates have risen by 41 per cent., and during that time, also, such necessary charges as charges for management and insurance have risen by anything between 30 per cent. and 65 per cent. So I think, whatever method is adopted, there is bound to be a rise of rent, whether this problem is dealt with by allowing the owner to charge some additional rent or whether, as in the case made by noble Lords opposite, the houses are taken over by the local authority. In either case, it seems to me, a rise of rent is inescapable, and 40 per cent. would seem to be the least that could be given.
The Opposition in another place (and I take it that noble Lords opposite will repeat the case here, because it is the case of the Opposition) said that, although the principle of this may be right and we should deal with this problem, nevertheless the method is wrong; that all these houses should be handed over to the local authority, and they should do the repair and the reletting. Now that is a serious argument and it is a possibility, and with that I must tell your Lordships why we have rejected it and regard it as financially and administratively undesirable. First of all, the acquisition of 750,000 houses would be a severe tax on the capacity of the local authorities for years to come. That might not be a decisive reason against the method proposed. If there were any decisive advantage, either financial or administrative, I think that objection would not be conclusive. But taking the sum of over £200 a house, which is quite a modest and, I think, a fair sum to take, the acquisition of these houses would cost £150 million. The loan charges would have to be met, and on average the loan charges would add more than the rent increases proposed under this Bill. In addition to the loan charges, the local authorities would have to do the repairs, and of course would have to add something more for that. And so we have come to the conclusion that at the end either the tenant or the ratepayer, or indeed possibly both, would be worse off than they are under the scheme which the Government propose in this Bill. So, on both financial and administrative grounds, we reject this alternative.
May I, for a moment, deal with the criticism which suggests that this Bill is—as it has been constantly described outside these Houses of Parliament—"a Bill 1193 that lines the landlord's pocket." It is perfectly right that we should be vigilant in this matter, but this Bill is a very different Bill from the Act which is so often quoted, the Act of 1920. In that there were no qualifying conditions. The tenants' safeguards were inadequate, and it was possible for an unscrupulous landlord to put the additional rent in his pocket and not to do the repairs. The propaganda (noble Lords will forgive me for calling it so) by the Socialist Party outside this House, has suggested that this Bill and the Act of 1920 are closely parallel. Well, that simply is not so; because into this Bill we have been scrupulously careful to put conditions which will protect the tenant. For instance, before the landlord can charge the increase he has to make a public declaration that the house is in good and tenantable repair. He has to declare that within a reasonable period he has spent the necessary monies on repair, and, as noble Lords will remember, that is three-fifths of the rent in the previous twelve months or six-fifths in the previous three years. If a landlord makes a false declaration, he is subject to very heavy penalties. He can go to prison for two years, or be fined, or both. In addition to that, he can be asked to forfeit any increase of rent which he was allowed under the 1920 Act. I would suggest that this, on top of the safeguards in the Bill, is really sufficient, and that no reputable landlord will run such a risk—indeed, I think it is fair to say that no landlord will run such a risk.
Under the Scottish rating system—and here, of course, there is a difference from the position in England—any increase in rent at once attracts an increase in rates, and it is therefore necessary, if the whole of the 40 per cent. increase in rent allowed is to be available to the landlord to carry out repairs, to take two steps: to exclude the increase of rent from the rateable value of the house and to put a ceiling upon the poundage of owners' rates. Clearly, I think, but for this provision we should have had to give a much bigger increase of rent to cover the cost of repairs and to include the extra element for owners' rates, and the result would have been that both the owner and tenant would have had more rates to pay. These provisions are, of course, temporary—and I have explained the reason for them—pending the Report 1194 of Lord Sorn's Committee which is examining the whole of the rating system in Scotland.
Under this Bill we do one other thing of considerable importance. This applies to houses both in the town and in the countryside, although often when we talk of house properties in Scotland we tend to talk of the problems of the towns and rather to neglect the equally important problems of the countryside, To-day, as your Lordships know, it is possible for a landlord to spend a maximum, in the normal case, of £800 on the improvement, as distinct from the repair, of an existing house and to get a grant of 50 per cent. of what he spends, with a maximum of £400. Now labour is not short in the building industry, and supplies of materials are no longer so short. There is no reason therefore to prevent the landlord from spending what he can afford—or what he thinks he can afford—on improving his cottages. Therefore this Bill abolishes the upper limit of £800. A landlord can now spend, in improving his cottages, any sum he likes, but the maximum grant is retained at £400. If any noble Lord would like some figures, I can give some which will, I think, show that already, in anticipation of this, and as the result of some measures we were able to take a little earlier, landlords all over the country are beginning in a large way to improve their cottages; and I look forward to many thousands of people benefiting from this clause.
I think that those are the salient points of this Bill. The noble Lord, Lord Mathers, who I understand is to reply on behalf of the Opposition, will have noticed that I have argued the merits of the measure in a singularly non-controversial and benevolent way. I hope he will not think it necessary to stir up any synthetic indignation, because I have the right of reply, and I should be most distressed to have to alter my tactics and to make any of those comparisons in the field of housing which might cause him acute discomfort. This Bill is one of the ingredients in a comprehensive housing plan. Under it, new houses are being built at a record rate. Under it, for the first time since the end of the war, we are able to turn to slum clearance and the reconstruction of the centres of cities and towns. Under it, we are able to assist persons to improve and to repair their 1195 properties. Under it, we are enabled to give those who have to live a little longer in slum conditions a chance to do so a little more comfortably and more healthily. Under it, the individual is given greater encouragement to build for himself. Therefore, in this pressing social problem of housing in Scotland—where it is relatively worse than it is in the rest of the United Kingdom—I put forward this Bill as a practical measure which will fill a serious gap, and I ask your Lordships to give it a Second Reading. I beg to move that the Bill be read a second time.
§ Moved, That the Bill be now read 2a.—(The Earl of Home.)
§ 3.4 p.m.
§ LORD MATHERS
My Lords, the first thing I wish to do is to congratulate the noble Earl on the way in which he has introduced this Bill to us. I congratulate him particularly on his cheerful demeanour, but if the attitude of those who are especially affected by the Bill were properly represented in this House—I am afraid that I am not capable, synthetically or otherwise, of voicing properly the indignation that is felt about the Bill in Scotland—I fear that the noble Earl would not be quite so cheerful after that was done. He threatens me—for I take what he said as a threat—that if I dare to say anything seriously derogatory of the Bill, before the end of the day I shall be dealt with in no uncertain manner. That does not deter me from saying that the popular opinion with regard to this Bill is that it represents the Government running true to type, that it is another instance of the Government intention, while they have the power, to treat favourably a section of the community to whom they are well disposed, the housing landlords.
I use the term "housing landlords" because I am within sight of other types of landlord against whom I make no reflection, whom, indeed, I hold in high regard for the way in which they have carried out their responsibilities as landlords in the true sense of the term: "lords of the land." The housing landlords' turn has come, just as the brewers' turn came right at the beginning of this Parliament, when the Government came to their rescue in the matter of the new 1196 towns and wiped out the idea of putting the licensed trade in the hands of the State, in the same way as is done under the State management scheme in Carlisle and other districts. We have other instances of this kind of benevolence exercised by the Government in the disposal of road transport and steel. And there are still further instances of this policy which is dictated by the Government attitude that, while it is right to allow unremunerative public services to be carried by the taxpayer, it is the Government's duty to see that, where services can be exploited for profit, such profit should accrue to private individuals and not to the community as a whole.
The housing of the masses of the people is an outstanding example of a realm which, allowed free scope, what is described as "private enterprise" could exploit to its own advantage, for houses are in universal and urgent demand. Since the First World War, however, there has been a very definite reaction against such exploitation, and successive Governments have had to bring the question of housing prominently into the national economy. Great problems of finance are involved, and these are notoriously causing much concern at local and national levels. Notwithstanding what has already been done, the demand for housing accommodation is still far from being fully met, and if this latest attempt by Her Majesty's Government to tackle the problem from a new angle goes some way to ease the position, it will be of that much value, although it may be inequitable and unjust in its working.
I am afraid that it is too much to believe that the Bill will do what its sponsors hope. There is strong disapproval of the Bill, as I have indicated, in many quarters, and hundreds of organisations have protested, including many local authorities. Petitions signed by tens of thousands of citizens have been sent to St. Andrew's House, and the Minister of State himself received a deputation representing two million people, comprised in the Scottish Trades Union Congress, the Co-operative Party, and the Scottish Labour Party. There can be no denying the hostility to the Bill that exists in Scotland.
One vital consideration which seems to be ignored by Her Majesty's Government 1197 is that their desire for restraint in respect of claims for increased wages is rendered quite nonsensical when regard is had to the proposal to increase rents by eight shillings in the pound. Such a rise must result in new wage claims, as the Scottish Trades Union Congress representatives have pointed out to the Minister of State. There are tenants who have been treated very shabbily by the landlords or, more correctly perhaps, by the paid agents of the landlords—for I feel sure many landlords never see for months, and perhaps even for years on end, the property from which rents are being extracted. If they had seen them they would have been ashamed of the source of their income and might have had more consideration for the miseries which the tenants were enduring and afforded them some relief.
I do not wish to claim that all landlords have been evil and all tenants paragons of virtue. That would be far from a true picture, for I have heard of wanton destruction by tenants, while, at the same time, I have learned of decent tenants striving their utmost to improve the tenement dwellings in which they were obliged to live. They themselves did painting and papering work which was legally the responsibility of the landlord. Some went far beyond that, and at their own expense made improvements, such as putting in electric light, installing new taps and sinks, and even installing modern fireplaces. When they left at the end of their tenancies, the landlords cashed in on that by selling the dwellings, instead of allowing them to go to other tenants—selling them, I may say, at grossly inflated prices. No wonder the Ridley Commission, reporting in 1945, said:We received a considerable volume of evidence to the effect that the permitted increase of 47½ per cent. had not been applied for the purpose for which it was designed but had been regarded as an added increment to the landlord's income. There is evidence of a tendency among owners to look upon house property as an investment to give perpetual income without much expenditure on repairs and replacements.That is more eloquent proof of the exploitation of tenants than I could give from my own knowledge, for it is convincing evidence given under the authority of a body led by a respected noble Lord who is well known in this House. Evidence of this kind, which is commonplace knowledge to thousands of 1198 tenants who have been paying increased rents to landlords since 1920 and getting nothing done for their homes, causes widespread opposition to the proposal in this Bill to make another gift to the landlords of a further 40 per cent. increase in rent.
Part II of the Bill deals with this proposal and I am confining myself to that aspect, leaving my noble friend Lord Greenhill, with his unrivalled knowledge of local government in the largest housing authority in Scotland—indeed, the largest in Great Britain; and I think it is quite probable that the City of Glasgow is the largest single housing authority in the world—to deal with the local authority aspects of the problem. Part I of the Bill covers 324,000 very old houses and Part II covers 426,000 dwellings which are of varying ages up to 100 years. It is, therefore, a big problem that we have to face, and I feel that the tenant's position is not secure. The only thing he can be certain of is that it the clear intention of the Government that he shall hereafter pay an additional rent of 40 per cent. We must endeavour to safeguard his position, and it seems to me that your Lordships' House has the duty of securing safeguards which the Bill at present lacks. For example, there is reference to a condition that, to carry the additional rent burden, the dwelling-house must be "in good and tenantable repair." But there is no definition of that condition which, as shown is much too vague. I ask the noble Earl whether he can tell us now what that phrase actually means. It could cover a great many requirements and we should like to know what they are. The reference is in Clause 16 (1) (a) (i). Again, in Clause 17, there is provision for a "prescribed form" to be served by the landlord upon the tenant when he demands higher rent. We require details in that connection as well.
Another point which I should like to bring to the notice of the House is in relation to the letting of dwellings by landlords who are having the benefits conferred upon them by this Bill. I consider that it is reasonable to ask that the landlord should, as an acknowledgment of these benefits, co-operate with the local authorities in dealing with the allocation of houses. To enable tenants to obtain houses suitable to their needs, I feel sure a method of voluntary transfers could frequently be effected, and it does not 1199 seem to be beyond the bounds of reason for the necessary liaison to be established between private householders and the housing departments of local authorities. These may be looked upon as Committee points, but I mention them now as outstanding points in order that they may be considered before the Committee stage of the Bill is reached.
I hope that the noble Earl, the Minister of State, and the Scottish Office are not building too great hopes upon this Bill, or that it is imagined that its passage into law will re-establish the owners of houses for letting in their former position. They have had their day, and in recent times many of them have been found wanting. To the best and most worthy of them circumstances have not been kind, and the great development of housing as a public service, which must continue, seems to me to spell the end of the era of house-building for letting purposes as a profit-making investment by private individuals. Indeed, the noble Earl will not deny that this is becoming evident at the present time, because, of all the houses built in Scotland since the end of the Second World War, only 1 per cent. have been built by private enterprise for letting. That clearly shows the tendency to which I refer. Personally, I favour individual owner-occupancy, and I believe that there are great possibilities in that direction. I hold the view that the citizen who provides himself with a house of his own is a public benefactor, and that he should be encouraged. I know that the Secretary of State for Scotland has recently announced a scheme of house purchase, involving an initial deposit of only £70, which he considers attractive; but he must realise that, even at its best, this scheme is entirely beyond the capacity of workers earning ordinary wages of £8 or £9 a week. The proposal would involve a payment of at least £3 a week, and clearly we should have to change completely the whole financial set-up in connection with housing if we wished to make a success of owner-occupancy for the masses of our people. But this Bill looks back and not forward. That is, perhaps, its greatest fault.
§ 3.18 p.m.
My Lords, I am somewhat embarrassed at being put into bat so early in the day as this. I 1200 came prepared to make a few remarks later, but I have been held to perform now and I apologise for having to do so. I welcome this Bill as a step in the right direction, although it is only the tottering, uncertain step of a small infant. A great deal is left to be done by this and, possibly, successive Governments. However, so far as it goes, I welcome it. I wish to refer to only one part of the Bill, which is the only one of which I can claim to have any reasonable knowledge. I refer to Clauses 10 and 12, which are dealt with in paragraph 4 of Part I of the Explanatory Memorandum, and which deal with improvement grants. I should like to examine for a few minutes the working of these grants as they exist at the moment. I have done several reconstructions under these grants and know a good deal of what is going on in my own county.
I think this matter requires looking into pretty carefully. Considerable enthusiasm was displayed all over the county when the first grants came out last year, and a very large number of applications were put into the local authority under these grant schemes—those are probably the figures quoted by the noble Earl, Lord Home. But I should like to draw the attention of the noble Earl to the fact that, of those people who applied for assistance under these grant schemes, the number who have carried out the work, or had it carried out for them, is a miserable trickle of the total that originally went in—that is so in our case, at any rate. The reason is that the conditions with which one has to apply are too onerous. For example, if you wish to put in a bathroom and indoor sanitation—which, when all is said and done, is a good improvement to a cottage which has not already got it—that can often be done in the countryside, to which I am referring particularly, for a sum of around £150. I have a cottage to which I desire to make those improvements. In order to qualify for the grant I have to put in the bathroom and provide a scullery up to the specification requirements of the local authority. That is all plain sailing and above board.
But before I can qualify for the grant, I have also to knock out the windows of that house and replace them with windows equal to one-tenth of the floor area, and to provide heaven knows how much more heating in the winter. Is 1201 it necessary to have that light in a bedroom? In addition, as this house happens to be a shepherd's house (he is an oldish married man whose family is away, and there is ample accommodation for him and his wife) I should have to use a sub-standard bedroom which exists there at the moment as a bathroom. But, again, to qualify for the grant I have to provide another bedroom, in spite of the fact that this man does not require it. The total cost to me of improvements I desire to carry out will be of the order of £500, and if I get a 50 per cent. grant that will be £250. It seems to me that it would be better to allow me to put in a bathroom at round about pound;150, and give me the grant on that. That would materially improve the living conditions. At the moment, these houses are allegedly in good tenantable repair, but they need these improvements.
The crux of the matter is: what is "good tenantable repair?" If you provide a bathroom in the improvements, as I have done in certain cases, it is alleged that you are bringing your house up to modern lettable standards, in good tenantable repair. You go to the inspector of taxes, and he says: "Rubbish! That is impossible; you cannot get it under maintenance." So one is "caned" on that score. Another score on which one is penalised is that although you are allowed to charge a higher rent which is agreed by the local authority—and quite fairly agreed—if that house is occupied by your own farm servant, under the Agricultural Wages Act you can charge him exactly 6s. a week for the house, and no more. Supposing I had to house somebody else's farm servant, I could charge that man, or the farmer to whom I let the house, an increased rent. That seems to be quite wrong. The landlord gets no encouragement to carry out these improvements, and when he does try to benefit a large number of your farm employees he has to squander money. If he has only a limited amount, he is not allowed to spread it on improvements and get the grant. It seems to me that somewhere there should be an alleviation, so that the money available could be made to go further in providing comfort for the individual.
Then there is the point about the rating value—agricultural houses are mostly de-rated, anyway, and possibly this is not quite so cogent a point as it 1202 might have been. I see that the amount that would be obtained by putting up the rates (if that were allowed) in a town, may now be obtained by spreading it as a general increase in rates, over the unfortunate landlords who are struggling with agricultural properties. That provision is to be found in Clause 36 (2), and, if I have read it aright, that seems to be rather unjust. It may be that I have not understood that provision, because I have found some difficulty in understanding this Bill. With those few comments, I would commend this Bill to your Lordships for the good that it will undoubtedly do.
§ 3.26 p.m.
§ LORD GREENHILL
My Lords, having heard the noble Lord who has just spoken, I am more than ever convinced that this Bill ought to be dropped. Obviously it does not please landlords, I know it does not please tenants, and I can say that it does not please local authorities, and they are the three bodies who are most concerned with this Bill. I should like to congratulate the noble Earl who introduced the Bill this afternoon on his non-controversial approach and on the conciseness with which he has stated his case. Not having had the advantage of entering your Lordships' House from another place, I hope that I shall be equally uncontroversial, because I agree with the noble Earl that this is a Bill of immense importance and one which, as we all recognise, deals with a problem that must be tackled. The question is whether we are dealing with it in the best way. My own feeling is that we are adding far too much complicated legislative machinery in the problem that we are hoping to tackle. As your Lordships know, there is already a considerable amount of legislation; the 1950 Act in itself is a tome to go through and understand.
This particular Bill deals not merely with clearing the slums—or, rather, the preservation of slums in a less objectionable way than that in which they have to be preserved at the moment—but also introduces, in Part II a measure of recompense to the landlord for improvements or repairs carried out on these dilapidated houses. I should like to say a word or two about that matter in order to correct what I believe is a widespread 1203 misapprehension. The landlord who owns a house to-day is not necessarily the landlord who suffered most financially when rent restriction was introduced. The effect of rent restriction was that a great many people found it impossible to keep their properties, and they disposed of them at prices which they had to accept and which were remunerative to those who bought. I was told—and it surprised me—of a Glasgow house factor who was able to buy some of these properties at one and a half or two years' purchase. He took all the revenue from those houses for a year or two, ploughed it back in the way of improvements and, after the expenditure of that money for a number of years, was able to draw a substantial dividend on his original outlay. Therefore I feel that a large number of landlords are shedding crocodile tears at the sufferings they have had to undergo, and there is a good deal of make-believe about their complaints. After all, as I see it, it is not the duty of the State to safeguard investors in house property from losses on their investments, and in any event the public good overrides the good of individuals.
The local authorities, while they come into every aspect of this Bill, are very much concerned in regard to Part I. If, as the noble Earl said, it is mainly a financial matter, I should like to raise the question of whether the 50 per cent. acquisition grant and the £7 5s. 0d. per year for repairs is adequate. The noble Earl will know perfectly well that local authority associations and Members of another place have raised this matter, and I myself see no reason why there should be a difference between the Exchequer grant for new houses and that which is given under this Bill. The noble Earl will be well aware that the finances under this Bill are to be included in the housing revenue account and in the housing repairs account, along with the accounts of new houses. If it seems proper that the Exchequer contribution should be three to one in connection with new houses, what possible justification can there be for a fifty-fifty basis under this particular Bill? Although I have taken the trouble to read what Members of another place, both on the Government side and on the Opposition, have said, I must admit that I have seen no convincing reason why a distinction 1204 should be drawn between the grant for new houses and the grant for these bad houses.
Local authorities are not happy, either, about the additional duties imposed upon them. The master of works, for example, already has a great many duties to perform in order to see that houses are kept in a condition which is not dangerous. In Glasgow there are large numbers of these houses—I have not the figures here—and the medical officer of health is against this Bill on the grounds that he wants to see these slums demolished and not titivated up or patched up in order to make them habitable for another ten or fifteen years. The housing committee are not happy about it. They want to get on with the building of new houses, and not the perpetuation of these, at best, dilapidated houses. On the whole, therefore, we do not think that the Government are going about it in the right way.
I have no authority for saying what noble Lords on this side think is the appropriate remedy to take, but my personal inclination would be to say this. If, as I maintain, landlords are not being injured to the extent that they say they are, and if we believe that this is a social necessity which must be carried out, why cannot the expenditure, aided by generous Government grants, be met wholly by the local authority? The local authority could collect from the tenant, by modest additions—not 40 per cent. additions—on the weekly rent in the same way that the tenant now has his rates collected, and in that way recover, if not all, then a great part of the cost incurred in repairing the house. It seems to me a simple method. It would not be necessary, in those circumstances, to have so complicated a measure to deal with the different problems which arise, and it would, I think, work equally as well as the Government's proposals to deal with this admittedly severe problem.
This is not the occasion when one need deal with detailed Amendments—the Committee stage is, I gather, the appropriate time to do that—but there is one clause which it has been suggested I should ask the noble Earl to withdraw from the Bill. That is Clause 14 which, I am informed, has been inserted since the Bill was first introduced in another place. I admit that my lack of legal 1205 training makes it difficult for me to understand the significance of this legal wording, but I am assured that, from the point of view of local authorities, the Bill would be better without it. Perhaps the noble Earl would indicate whether he can promise that that will be done. I think that is all one need say at this stage. The local authorities are apprehensive about this Bill. They would prefer to see a clean sweep of the slums rather than a perpetuation of repaired slums. They do not think they are being treated generously enough in the way of financial assistance. With reference to that particular grant, I should like the noble Earl to indicate that the Government are prepared to reconsider the 50 per cent. allocation to which they have so far adhered.
§ 3.37 p.m.
§ THE DUKE OF BUCCLEUCH AND QUEENSBERRY
My Lords, after the speeches on this Bill and the two Bills concerned with it, which have been discussed at great length in both Houses, it seems rash for someone who has not closely followed all the debates to intervene. I apologise for not having read the statements by so many Members, in both Houses, who have great knowledge of this subject, but I think there will be agreement that the spate of legislation is so great nowadays that many noble Lords on all sides who have other work to do have difficulty in reading all the debates in Parliament.
I feel that it is right to give a welcome to this Bill as being the first endeavour to deal with a difficult subject. There has been a challenge before the country for many years, and this is the first Government which has endeavoured to tackle it. I understand that a number of suggestions have been made, both in another place and here, on the English Bill, which have not been accepted, and it seems that there is little prospect of the same suggestions being taken up now for the Bill applying to Scotland. My personal concern has been much more with agricultural land, property and buildings than with town property, and I feel it right to remind the House of the great advantage that has existed in past years because of the various rural housing grants which have been made available for agricultural cottages and buildings. Under this Bill they are extended. If the 1206 rural housing grant had not been introduced a great many years ago the cost on public funds to-day for the improvement of farm cottages or the building of new cottages would be enormous. A great deal has already been accomplished in this way, but it is common knowledge that the cost of improving farm cottages, especially in out-of-the-way places, is much more than £800—it is often £1,200 or £1,500, or even more. Therefore, the permission to spend more than £800, for the same amount of grant, will be of valuable assistance to the housing of the population of the countryside.
Perhaps it is fair to mention that the provision of houses in the countryside by landowners is not a matter of investment; it is done to provide houses for persons employed in the countryside. Agriculture alone, of all industries, has had to provide those houses in the past, and even up to the present time, though responsibility now has been taken over much more by the State. It has been upon the landowner that this responsibility has fallen, and, while it is correct to express acknowledgment of the fact that grants have been made for the purpose, the expenditure by the landlord has necessarily been considerable. Therefore, the benefit has been to the industry and to the occupiers of the houses, rather than to the individuals who own them.
I make these remarks before coming to the urban side. I feel that there is a justification also to-day for assistance to enable these houses to be greatly improved. In Scotland, the position is more difficult than in England, for various reasons, notably our rating system. In consequence, the advantage to the landowner there, so far as I understand, of this Bill will be less than in England. In Scotland, owners will still be faced with a greater difficulty in improving houses in towns than is the case in England. Today, and on other occasions, it has been stated that outside this House there is criticism of the Bill and hostility towards it, especially among local authorities. That may be so; but it is acknowledged that something must be done, and it is agreed that more is necessary than is proposed under this Bill. I feel it is fair to ask that there should be a bigger contribution than has been made so far. In Parliamentary circles, one finds among members of all Parties further away from politics a much greater recognition of the 1207 fact that in Scotland attention is needed to the subject both of rents and repairs and of rating. I hope that the Government will go further with this matter as soon as they possibly can.
I understand that at different stages suggestions have been made for reducing the upper limit in this rent restriction. I should like to express surprise that the Government have not taken the opportunity to do so in this Bill, and thereby to modify and reduce gradually the problem which is before us. Is it not fair to suggest that a start must be made with the higher valued houses? The sooner this is done the quicker we shall get to the bottom of the problem. It has been said that local authorities do not like this Bill. There have also been suggestions that local authorities should be obliged to sanction the grant, even though they are opposed to doing so.
§ THE DUKE OF BUCCLEUCH AND QUEENSBERRY
The improvement grant. As the local authorities have a responsibility in this matter, and as they retain the freedom and independence which it is right they should have—and all of us who are members of local authorities value that—they have also, I feel, a responsibility to do the best they can to carry out this Act as helpfully as possible, and to secure the improvement of the houses in their areas. I would say, in connection mainly with the agricultural houses, that the saving of public funds from the use of these grants in the past, which has avoided the necessity for the building of new houses, has been of great benefit to the nation. I hope that the landward side of this Bill will be found useful, as well as the urban side.
§ 3.46 p.m.
My Lords, I must say I thoroughly enjoyed the gallant way in which the noble Lord, Lord Mathers, accepted the noble Earl's invitation to tread on the tail of his coat. It was magnificent. I almost found myself shouting "Up with the soutars of Selkirk, and down with the Earl of Home!" But I followed his speech as carefully as I could, and my criticism of it would be that the great bodies he spoke about as 1208 condemning the Bill are really political bodies; they are bodies with, at any rate, strong political affiliations. I do not think anything else could well have been expected from them, at least, just now.
The noble Lord, Lord Greenhill, made a most interesting speech with a great deal of which I agree. I should like to point out to him, however, that the whole origin of what he said is the trouble to-day is the Rent Restrictions Act. I am not saying that that Act was a good Act or a bad Act, necessary or unnecessary, but it certainly is responsible for an awkward situation to-day. I will go further back and say that in the year 1909 I was employed by a large concern which had great housing interests. Looking back, it is astonishing to note what great improvements were being made at that time in the housing of poor people. At that time, one looked forward to a great and continuous improvement in country cottages and in urban houses for poor people.
What killed the whole of that progress was the introduction of the taxation of land values in the 1909 Budget. I remember, when we were in that little cubby hole, our temporary Chamber, my noble and learned friend Lord Maugham rising and saying precisely what I have just said, and in support of him I gave the House some actual details of houses that were constructed in London at that time. The noble Lord, Lord Latham, sitting opposite, would not at first believe me and I had to emphasise the point. I had to impress upon him that I knew my facts before he would accept them from me. It is the interference of the Governments of the day in housing conditions that has bedevilled the whole situation; and that is what we are up against to-day. That has to be the excuse and justification for a great many provisions in this Bill that the noble Lord may not quite like.
The Bill is an effort to deal with the present situation and, as such, it must be accepted. At the same time, there are a few points to which I should like to refer. I am afraid I am going to refer to them a little quickly. For one thing, I naturally rejoice that the £800 limit has gone. When the £800 limit was imposed, I think the noble Earl in charge of the Bill to-day will remember that I criticised that limit very much indeed. I want to 1209 say how it has worked. I am not doing this just to say, "I told you so," but because I want to show the House how these things work. Not very long ago a friend of mine was put in a very difficult position because it was absolutely necessary for him to repair a number of condemned houses in the country. The worst of a grant is that everybody engaged in work for which the grant is to be given always endeavours to see how much of the grant he can extort for his particular section of the industry. The man who is in the weak position—namely, the proprietor who has to do the work—has a very difficult time, because he finds costs rising.
I have forgotten the exact number, but I think about half a dozen houses were to be improved, and it was hoped to get the improvements which had been specified by the sanitary inspector carried out for an average of £800 a house, for which a grant would be obtained. The estimates came out and I think they were roughly about £1,000 a house. The proprietor was told, "That is all right. What you should do is to spend £200 a house now and then you put in a new claim for the rest of the £800. Mr. So-and-so is the man to trust the work to; he will get it through." I submit that that is a bad system to have in any country. It raises in every one of your Lordships' minds a number of questions to which I do not propose to suggest any answer. But look at the position of the proprietor. What is he to do? Which is the greater crime—to let poor people live in filthy and horrible conditions which are detrimental to civilisation, or to evade an Act of Parliament? He cannot do anything else; he has not got the money, and he does not get enough out of the property. As a matter of fact, this particular project fell into abeyance because, when the whole thing had been arranged and settled, the tenant refused to pay interest on the repairs; and so the scheme was quashed. I mention that to your Lordships as an example of how an arbitrary limit like £800, which everybody knows is too low, works in legislation. I hope we shall avoid mistakes of that kind in the future. My Lords, I am bound to say that I thought the noble Earl's speech was far too conciliatory to the Opposition.
When he spoke about the declaration that the proprietor has to sign and swear to before he can get paid his grant, I am bound to say that the noble Earl frightened me. He went on to say that if the proprietor swears to something which he may believe to be true but which is not true, he may go to prison for two years. Certainly that will prevent any man from rashly undertaking to repair a cottage.
THE EARL OF HOME
I am sorry to interrupt, but I think that here there is a danger of misunderstanding. The only declaration that a landlord has to make is in respect of the money he has spent on repairs to a house. He has to declare that he has spent so much, either for the previous year or for the previous three years.
I am obliged to the noble Earl; that removes that difficulty. There are three other questions and one observation that I should like to put. I make the observation first, that I do not think that the inducements held out under this Bill are sufficient to make a man spend money unless he has to spend it. Under this Bill a man who spends money will be poorer in the end than he was at the beginning, but it makes a proprietor who is in the position that he must spend money on repairs at any rate less poor. In fact, if the noble Lord, Lord Mathers, wants a really remunerative occupation in his spare time, he could find it in showing landlords in Scotland the benefits which they receive under the Bill and which he talked about in his speech. But I do not think there is anything they will gain by it.
I should like to ask the noble Earl how, if these improvements and the money paid in respect of the improvements do not appear in the valuation roll, they are dealt with. Will there be a separate column for them? The noble Earl knows how much we depend on the valuation roll. I should very much like to know how that is going to be dealt with. With regard to the point raised by the noble Viscount, Lord Stonehaven, is it possible, when a grant is to be given in respect of repairs, that when one is ready one can get some sort of compulsory order from the local authorities to go on with the 1211 work—something analogous to the conditions laid down in regard to concreting a byre for milking, in order to avoid income tax? I think that is a very important point, and one which ought to be considered. Another question has been raised by the Institute of Chartered Accountants of Scotland. Clause 14 of the Bill limits a liquidator's liability to the funds he has in his hands on behalf of the creditors of the company. The Institute suggest that it ought to be "the creditors or members of the company," because the members may very well not be creditors; and they want to be sure that the liquidator is safe in all cases. It is a question of interpretation and I should be obliged if the noble Earl—
§ LORD GREENHILL
Would the noble Lord mind telling us whether he is right in referring to Clause 14? I think that deals with trustees, does it not?
I think so. I conclude by saying that I think the machinery of the Bill provides a useful way of meeting the present situation, but I shall be very much surprised if the conditions for proprietors do not have to be improved in order to make the Bill more widely useful.
§ 3.59 p.m.
§ LORD BOYD-ORR
My Lords, I will not detain the House with any detailed consideration of any aspect of this Bill, which has been well described as "a halting step to the solution of a great national problem." I congratulate the Government on building their 300,000 houses—all Parties agree on their achievement and I hope that they will reach and exceed their target for next year. But whilst these new houses are being built, other houses are going out of repair, and dilapidations are increasing. These slums will increase, and in some areas will get worse. We all agree that these slums are a running sore on the body politic, and are a great crime. It is impossible to rear decent human beings in sub-human conditions. This Bill deals with Scotland. I should like to refer to some of the conditions in Scotland before the war. In proportion to population, in Scotland, there were six times as many people living in houses unfit for human 1212 habitation as in England. To-day, there are 750,000 such houses, and half the people of Scotland are living in houses not considered fit to rear a decent family in. I wonder whether noble Lords have seen some of these slums. Two years before the war I visited every country in Western Europe and asked to be taken to the slums in the cities; and they had nothing to show us to compare with the slums in Glasgow, these huge filthy tenements, which a former Conservative Secretary of State described as "tiled up passages of misery." They still exist.
I am going to make a suggestion which I hope the Government will seriously consider. These slums are a national problem—they are more than a Scottish problem. Conditions being so bad in Scotland, Scotland should have received special consideration. I would say to the Government, when you are allocating materials and men for housing, instead of going by 11–80ths—raised to 13–80ths —if you are allocating in accordance with need you should say that, in proportion to its population, Scotland should have six times as much timber and other materials needed as England is having. One of the difficulties, of course, is expense, and the Government have generously proposed that 50 per cent. of the cost of carrying out the provisions of this Bill should be defrayed from the Exchequer. In view of the worse conditions in Scotland, and the need for greater expenditure of money there, I suggest that the Government consider a contribution of 75 per cent. from the Exchequer and 25 per cent. from the local authority, to encourage them to go ahead and get rid of these slums. If that cannot be done for the whole country, could it not be done for certain towns and areas where conditions are so very bad?
The Bill, very wisely, takes account of conditions where the owner is unable or unwilling to carry out necessary repairs. I think the Government might have some sympathy for some of these owners. I do not know whether it was so in England, but I know that in the West of Scotland, with which I am conversant, in the late nineteenth century and early twentieth century tradesmen and thrifty people saved money. They knew nothing about the Stock Exchange, but they invested their money in stone and land, and they built houses; and if they looked after 1213 themselves and got a return of 3 per cent. or 4 per cent. it was considered a good investment. These people bought or built these houses as an investment for their old age. With the restriction of rent and the increase in the cost of repair a great many of these owners, however willing they were, however much they might regret seeing tenants living under these conditions, were quite unable to carry out the repairs they would have liked to carry out. Not only were they unable to carry out the repairs but many saw that income which they had expected to live on gradually vanishing.
It has been suggested that the local authorities might take over the whole of these houses. If they cannot do that, may I suggest that they should be encouraged, by bigger grants, to take over as many as possible from people who have not the money to repair these houses? Where compensation is warranted, give the owners compensation, and let the local authorities go ahead with a big drive to get these abominable slums cleared. There are other conditions in Scotland, apart from the conditions in housing, which need attention—some of which will come up for consideration at a later stage. I am sure that noble Lords on both sides of the House will give favourable and sympathetic consideration, without any political bias, to any suggestions which will improve the Bill, and which will enable us to accelerate the rate of getting rid of these slums, so bringing about the day—which is very important for the health of this country and in order to stop the spread of Communism and crime—when every one of Her Majesty's citizens will have a decent house to live in where he can bring up his children to be the decent kind of citizens we should like our children to be.
§ 4.4 p.m.
THE EARL OF HOME
My Lords, I think there has been universal agreement among your Lordships who have spoken that this matter of houses falling into disrepair is a national problem which must be faced. The noble Lord, Lord Mathers, made a response to my plea for moderation in his attack upon the Government by voicing the representations of, I think he said, two million people outside who were united in opposition to this Bill. I should like to ask him: what else could 1214 the Government have done? Could they have done what the last Government did for six years, which was precisely nothing? What would the Opposition do if they were in power now? It being Ascot week I thought I would look up the form, and I got the Election prospectus of the noble Lord's Party. It contained not one single word about repairing houses; so, as social reformers, they met this pressing social problem with masterly inattention, and it was not until 1953, when goaded and shamed by a Conservative Government, that they put into their 1953 Challenge to Britain the proposals which the noble Lord, Lord Greenhill, has made to-day. There has been a belated conversion, and not for the first time a Conservative Government have been first in the field on a particular aspect of social reform.
However, the Opposition have put forward this proposal that the local authorities should take over the houses, repair them and re-let them—and I think Lord Greenhill's words were, "at a modestly increased rent, rather less than the 40 per cent." Well, I do not think the noble Lord should encourage anyone in that assumption, because, as I pointed out earlier, the local authorities would have to buy the property, which would mean loan charges which they would have to meet; and they would have to do the repairs. Then I think the tenant would find he had to meet a greater increase than 40 per cent.; or, if he did not, then the ratepayer would have to carry the burden. I think that, of the two schemes—that of the Government and that of Lord Greenhill and the Opposition—the noble Lord would find, on looking at the figures, that his would be the more expensive from the point of view of the tenant and the community.
§ LORD GREENHILL
Much as I dislike controversy, I think (I am relying on my memory) the Secretary of State, in a statement in another place, spoke of 2s. 6d. per week as being the likely additional cost.
THE EARL OF HOME
I do not know what the actual sum of money is, but whatever it is, whether it is 2s. 6d. or not, I think it would be more under the noble Lord's scheme than it would be under ours. I do not think we ought to put this administrative burden on to local authorities when it can be borne by the 1215 owner. Certainly we ought to give the owner the first chance to do it. After all, look what the local authorities are already undertaking. We have asked them, and they have responded with great success, to undertake a great drive for new houses, which the noble Lord, Lord Boyd-Orr, and others have said must be the main line of attack. They are doing it. We have asked them to begin attacking their own slums. I think it would be bad administration to place this additional burden on them when I think it can be done by the owners.
Both Lord Mathers and Lord Greenhill said, "Very well, if you must have this scheme, although we disagree with it, let us have different financial arrangements. The 50 per cent. is really not fair to the local authorities: the ratio in most housing grants is three-to-one in favour of the local authority, therefore why 50 per cent. in this case?" But surely the answer is that the building of new houses and the patching-up (with which in this case we are dealing) of houses which are going to be temporary are so different in scale that they deserve different treatment. I think one can justify different treatment. After all, the charges on a local authority for new building may be loan charges of, perhaps, £70 per annum for sixty years or so—perhaps more. Here, the loan charges are £14 10s. for fifteen years. There is a considerable difference in scale, and I think we can justify a difference in treatment. I think we have achieved a fair balance as between taxpayer and ratepayer. I do not see any hope of agreeing with the noble Lord on this, so, perhaps, the only thing for us to do is to agree to differ upon it. We have done our best. There are much more generous subsidies available to local authorities for the building of new houses.
Lord Boyd-Orr said it was clear that this is not the end of the story—indeed, there is no end to the story of trying to solve the housing problem. Nevertheless, as I was saying, there are some very special subsidies which local authorities can get if they want to tackle slum clearance. The Exchequer contribution for a typical four-apartment house is now £42 5s. a year for sixty years. Where the cost of providing houses in a central area is high—in other words in cases of slum clearance—there is an additional contribution of up to £20 per house per annum 1216 for sixty years. So a local authority can take advantage of these two and obtain a total subsidy of £62 5s. for sixty years, which might be payable for four-apartment houses built for rehousing purposes in a slum area. Some people do not think that goes far enough, and it may be that in future years we shall have to step this up. It may be that we shall find that there is not sufficient progress under the present provisions—I do not know. But there are special provisions of which a town council can take advantage, and there is in addition a proposal to make regulations under the Town and Country Planning (Scotland) Bill, whereby a flat rate grant of 50 per cent. will be payable in respect of the full cost of the acquisition and clearing of land during the period when land is being made ready for re-development. I will have another look at these provisions to see whether they are, in fact, adequate. But special provision is made. Though noble Lords may argue that we should depart from the 50 per cent. in favour of the three-to-one ratio here, I think that over the whole field it cannot be said that the Exchequer is ungenerous in grants.
The noble Lord, Lord Mathers, put one or two questions to me. For instance, he asked for a definition of "good and tenantable repair." It is not thought possible or desirable to define that expression. No Government have thought that it was. This formula is well understood, and has been administered by local authorities for thirty or forty years. I do not think it is capable of definition. It is based on Case Law, and it is understood by the local authorities. Perhaps we may have further conversations on this matter, and then I can explain the real difficulty of defining, the phrase.
THE EARL OF HOME
I will examine that point, but every one I have spoken to in Scotland is reluctant to attempt to define the term. I will examine the English parallel if there is one.
If I may interrupt, I should like to say that I feel sure that anyone who is renting a house would far rather accept the local sanitary inspector's idea than any definition in words.
THE EARL OF HOME
My noble friend Lord Mancroft tells me that, speaking from recollection, he does not believe there is any definition in English law; but I will check up on that. Lord Mathers asked me about the form of declaration which the landlord has to make. The form of it is to the effect that he has spent a certain amount of money in the past year, or it may be in the past three years. That is open to challenge by the tenant. In so far as owner-occupation and building of houses is concerned, our sympathies are all with him. The Scottish rating system has operated against the building of houses for owner-occupiers by private builders. But we are having this inquiry into the rating system, and something may come out of that.
The noble Lord, Lord Greenhill, asked about Clause 14, and questioned me as to whether I could withdraw it. This clause seems to me an essential provision. What it does is to say that where there is a trustee or a liquidator of a company he personally shall not be liable for any debts or losses which there may be. I cannot see how you would get a trustee or a liquidator to act if his own personal fortune was to be liable. Both the Law Society of Scotland and the Chartered Accountants would be very reluctant to see any interference with this clause. I think that on further reflection the noble Lord will find that it is impossible to withdraw the clause.
§ LORD GREENHILL
My Lords, I should like to say that my own copy of the Bill is not the copy which I should have had here. Therefore the Clause 14 in my copy did not coincide with the one to which the noble Earl has, rightly, been referring. Now that he has mentioned the correct Clause 14, I may say that I know a little about it. I also know why the City of Glasgow have asked that that should be withdrawn. As the noble Earl is probably aware, actually it has reference to a power in a Public Health Act—I forget the year of it—and it was felt that Glasgow had suffered from a court case in which there was an appeal. That is why they prefer to have the old powers and not this new power which is included here. However, I will not go further into this matter now.
THE EARL OF HOME
It was not Glasgow that suffered; it was the trustee who suffered. He found that his 1218 personal fortune was put in danger by a ruling of the court. I think that the chief concern in this matter has been that it might be possible to float a bogus company, and that certain undesirable people might do it, and might appoint their own liquidator. I am afraid that I cannot altogether follow the noble Lord's reasoning, but I feel convinced that we should never get a trustee or a liquidator to act in any case if his own personal fortune was at stake. This clause makes it certain that his own fortune will not be at stake. All that will be at stake will be the money in the trust.
The noble Viscount, Lord Stonehaven, and the noble Duke, the Duke of Buccleuch, talked about the improvement clauses in this Bill, which deal largely with the improvement of cottages. One of the noble Lords rather thought that the figures I was quoting were figures relating to cases where owners had made application for grant but where no grant had been made. I am glad to say that that is not so. The figures are very encouraging, so far as they go. In the year 1951, the number of houses approved was 681; in 1952, it was 830; in 1953, it was 2,512. In the first quarter of 1954, the number was 788, which will mean, if this rate is maintained, something over 3,000 this year. That shows that landlords in Scotland are taking advantage of the improvement grant, and that is satisfactory. I have some sympathy with the noble Lord when he says that conditions asked of the landlord by the local authorities are sometimes too onerous. Of course these are conditions which are applied by the local authority and not by the central Government. What we have done in the last few months is to send out suggested by-laws to the local authorities which I hope will lead to the adoption of more uniform standards in what they ask of the landlords. The noble Duke asked that we might begin by lowering rent ceilings so that there might be fewer rent-controlled houses. That may come; but we do not think it will come yet. We are not in a position to do that at the present time. But this is a beginning, because no new house which is built to let after this Bill becomes law will be subject to rent control. I will look into Lord Saltoun's points, and particularly the point which he and the noble Viscount, Lord Stonehaven, raised about income tax. 1219 I undertake before the Committee stage to look at the point he raised about the possibility that a liquidator might be unfairly victimised.
I think I have covered most of the points raised in the debate. The noble Lords, Lord Boyd-Orr and Lord Greenhill, will realise that no one wants to perpetuate slums. I have every sympathy with the Medical Officer of Health for Glasgow. We should like to see all slums abolished, and abolished quickly; but if that cannot be done, we feel that we must make some provision for these persons to have more healthy homes. I hope the Opposition will not be too glum over this Bill. The noble Lord, Lord Mathers, said that I was cheerful. But the Opposition should not be so glum, because they will find in their cupboard, when they open it before the next Election, a singularly uninviting lot of things to put before the voters. This Bill, after all, is a gift to their propaganda machine. Mr. Morgan Phillips can use it to distract eyes from the Party's record by putting up the bogy of higher rents. No doubt he will illustrate it with photographs which have no relevance to the subject at all. The Government are prepared to put up with all that, in the knowledge that we are doing a public duty. Once again, I ask your Lordships to give this Bill a Second Reading.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.