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Subsidies

Volume 530: debated on Tuesday 13 July 1954

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29.

asked the Minister of Housing and Local Government what he estimates will be the effect of his reduction in housing subsidies on the rent of houses built after 1st April, 1955, of the same standard as those built prior to that date.

My right hon. Friend would refer the hon. Member to the reply he gave to the hon. Member for The Hartlepools (Mr. D. Jones) and to the hon. Member for Sunderland, North (Mr. F. Willey) on 6th July.

Is it not evident that there will be increases of rent, and is this not an example of Tory policy equalising-misery by first forcing up the rents of private houses and now of council houses?

The attitude which the hon. Gentleman takes on this matter is really very curious. When the interest rates went up, he demanded an increase in the subsidy at once, and he got it. When the interest rates came down, my right hon. Friend decided to adjust the subsidy, but only after a period of time in order to give the local authorities notice. Nothing could be more generous, and nothing could be more unfair than the hon. Gentleman's supplementary question.

Is my hon. Friend aware that the reduction in local authority subsidy contributions will be of real assistance to local rates and should be borne in mind when considering this matter?

30.

asked the Minister of Housing and Local Government what change has taken place in the cost of house building since February, 1952; and how far he took this into account before deciding to reduce the housing subsidy paid to local authorities.

The estimated cost of building a standard three-bedroom house has increased by £58 since subsidy was last calculated. This increase, together with other offsetting factors set out in the Report which my right hon. Friend has already presented to the House, was taken into account in calculating the new rates of subsidy.

Is the Minister aware that many local authorities estimate that the average cost of building a three-bedroom house is now well over £1,700 as against £1,522, the figure taken by the Minister two years ago on which to calculate his subsidy? In view of that, does not the hon. Gentleman agree that costs have risen very much more than any benefit which local authorities may obtain from reduced rates of interest?

I think not. The £58 was calculated most carefully and is only one of the factors which has to be taken into account. It is easy to distort the question of subsidy by taking only one factor and ignoring the others. There will be an opportunity for the House to discuss the matter when the Order is before it, because it requires an affirmative Resolution.