§ 2.43 p.m.
Lord CAMPBELL of CROY
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government whether they will make a Statement on housing finance in the public sector in the light of the situations in Glasgow and Dundee where initial decisions have 163 been taken on rents contrary to the Government's expectations and advice.
§ The MINISTER of STATE, SCOTTISH OFFICE (Lord Kirkhill)
My Lords, the Housing Rents and Subsidies (Scotland) Act 1975 restored to local authorities responsibility for setting reasonable rents and for deciding how housing costs, after Exchequer subsidies, should be shared between tenants and ratepayers. At the time, my right honourable friend the Secretary of State for Scotland drew attention to the need for authorities to review rent levels, after a15 months' freeze, so that rents make a reasonable contribution to the rising costs of housing.
The Government are now anxious, as part of their counter-inflation policy, to enable local authorities to avoid putting up rents by more than the amount which reflects the general increase in prices between the end of the rent freeze, which was in May 1975, and the financial year 1976–77. A Rent Limitation Subsidy is therefore being introduced for 1976–77 which is designed to moderate rent increases and to avoid excessive rate-borne increases. I understand that Glasgow District Council are reconsidering their earlier decision not to increase rents in the current year. It remains to be seen whether in the light of the full details of the Rent Limitation Subsidy announced by circular on 1st September and of the rate implications, Dundee will reconsider their decision.
Lord CAMPBELL of CROY
My Lords. I am grateful to the noble Lord for that reply. May I express congratulations and welcome on his first appearance on the Front Bench, having already had the pleasure of voicing appreciation of his maiden speech on the last day before the Recess.
While the Labour councillors in Glasgow appear to be changing their minds very late in the day, may I ask whether the noble Lord can tell us when the Dundee Council, or the full council in Glasgow, are likely to take a decision? As the rebate system protects all who cannot afford standard rents, including the unemployed, what are the Government doing to protect ratepayers from massively increasing burdens, since in some areas the ratepayers have been contributing more to the costs of each 164 house than the standard rent paid by a tenant? While the noble Lord himself is in no way responsible, may I ask whether he is not concerned that the Government's housing finance policy is in tatters, and not only in Scotland?
§ Lord KIRKHILL
My Lords, in the first part of his question the noble Lord, Lord Campbell of Croy, posed to me two propositions, about neither of which I can be specific in reply. I do not know when Dundee District Council will meet to reverse their earlier decision, although as a result of the promised reversal of decision on the part of Glasgow District Council, the Government certainly hope that Dundee will take note. I can assure the noble Lord. Lord Campbell of Croy, that, as I understand it, the Glasgow District Council will act at their next statutory meeting as a result of the majority Labour group decision recently announced.
With regard to the second part of the question, I think I can say that the subsidy is an integral part of the counter-inflation package of measures and is intended to moderate the full rent increases which local authorities would have had to face up to, bearing in mind their responsibility to maintain a balance between rents and rate fund contributions. In effect, it will compensate the authorities for limiting the increases which they would have had to consider in view of mounting housing expenditure. It is also intended, of course, to prevent sharp increases in rate fund contributions which only add to public expenditure. Rent limitation subsidy is therefore a means of relieving the pressures on both rent payers and ratepayers which arise from increased housing costs.