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Housing Subsidies And Rents

Volume 892: debated on Wednesday 14 May 1975

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7.

asked the Secretary of State for Scotland what effect the Government's proposed reduction of £80 million at current prices in housing subsidies for the financial year 1976–77 will have on the average standard council rent in Scotland.

The saving estimated for Scotland in the year 1976–77 is £10 million. Exchequer subsidies are not affected. The Housing Rents and Subsidies (Scotland) Act 1975 returns to local authorities the responsibility for deciding how housing expenditure after Exchequer subsidies should be met as between rentpayers and ratepayers. I expect local authorities to take a responsible view of the need to see that rent income bears a proper share of rising housing costs.

Although my right hon. Friend is a former schoolmaster, he does not seem to be able to do much about arithmetic.

The question is coming, Mr. Speaker. Is my right hon. Friend aware that the Chancellor announced in the Budget a cutback in subsidies of £80 million in the financial year 1976–77? Taking the figure of 5·7 million dwellings on a United Kingdom basis, is my right hon. Friend aware that that will mean an increase of £14 a year on the rent of the average council dwelling? Is he further aware that in view of the Chancellor's increase in the standard rate of income tax from 33 per cent. to 35 per cent., because of tax relief and mortgage interest the average person now buying his house will receive a further subsidy? This year a person buying an average house—[HON. MEMBERS: "Too long."]—will receive an increased income tax relief of £24. Is this—

My hon. Friend was also a school teacher. His subject was geography. He was wise to stick to that subject. My hon. Friend did not correctly quote the figure which was given by the Chancellor. That figure was £65 million. I quoted a figure in respect of Scotland of £10 million. That is the right figure, which I agree in respect of that matter.

We must face the facts of inflation and that for 15 months and more we froze the rents in Scotland. However, there comes a point at which with increased costs of building, mantenance, repairs and management, the bill must be footed. It is right to expect the local authorities to be reasonable in their adjudications as between rents and rates.

Does the Secretary of State agree that Scotland has a desperately serious housing problem? That being the case, does he argue that Scotland should be exempt from these cuts? Can he explain why in these discussions it appears that Scotland, with a £10 million cut, is carrying more than its British share?

If the hon. Gentleman will consider the relationship between the number of local authority houses and private houses in Scotland as against elsewhere he will realise that the Scots are not carrying more than the British share. Secondly, there is no cut in relation to housing. These expenditures have nothing to do with housing subsidies. The housing subsidies will be increased. We increased them by removing the £6, which had to be faced by the local authorities. If the hon. Gentleman is interested in housing, may I draw his attention to the fact that from 1971, until the time when the Conservative Government left office, there was the most disastrous decline in house building in Scotland. That should make him keep quiet about the matter.