asked the Secretary of State for the Environment if he will make a statement on the rate support grant for the coming financial year.

asked the Secretary of State for the Environment whether he will make a statement about next year's rate support grant.

I have already done so.

Will the Secretary of State accept that the likely increases in rates in many areas will be well beyond the ability to pay of many people who will be unable to increase their income to cover them? Does he also accept that further substantial increases will bankrupt many small firms? Will he acknowledge that, particularly in local authority areas bearing the heaviest burdens, the consequence of a cut-back in services must be a cut-back in those administering them?

I hope that the rate support grant settlement that I have announced will not have those dire consequences. If hon. Members look at rate increases for the years since 1973, they will find that this is by no means the most horrifying figure that can be recalled. The effect on particular authorities is always difficult to judge because we make a national settlement. I accept that there will be difficulties in some areas and that some services will have to be cut.

Although I congratulate the Secretary of State on his courageous reduction in the rate support grant, will he tell the House frankly that this reduction will mean substantial cuts in local authority expenditure? Does he accept that the average rate increase of 15 per cent., of which he spoke, will spell bankruptcy to businesses and real and grievous hardship to many ratepayers?

I do not believe that my settlement justifies words of the kind used by the hon. Gentleman. On the other hand, I acknowledge that this is a severe settlement—that is the word I used—but it is also a carefully calculated settlement. I do not want anyone to have any illusions about what we are anticipating. We anticipate that in 1977–78 there will be a reduction in real terms of about 1·6 per cent. in overall expenditure compared with the outturn for 1976–77. That figure will be consistent with what we originally planned in the White Paper at the beginning of the year.

Does my right hon. Friend agree that present circumstances warrant the encouragement of municipal enterprises? Does he agree that in many local authorities, and certainly in many Conservative-controlled areas, considerable reward is gained from such activities as the hiring out of deck-chairs and squash courts? Is not this a golden opportunity to extend municipal enterprises?

From their experience of local authorities, hon. Members on both sides of the House will agree that local authorities can and do operate services and enterprises over a wide area. The only thing I want to add is that it is essential in the present circumstances that such enterprises should be successful and that their cost should not simply fall on the rates.

What figure is the Secretary of State using for the average annual wastage rate that he believes will cover the redundancies?

The figure for the average annual wastage is about 5 per cent. The figure in my mind is about 1 to 1½ per cent. It is nearer to 1 per cent. than to 1½ per cent.

asked the Secretary of State for the Environment why he is proposing to introduce a new Bill to expand local authority direct labour departments.

The Bill we shall introduce will remove obstacles to and introduce improved controls for operating efficient direct labour organisations and thus make the benefits of their activities more widely available.

Do not these Government proposals mean an inevitable increase in local staff—an increase which has been condemned by many members of the Labour Party—and an increased burden on the ratepayer at a time of increasing severity, as mentioned just now by the Secretary of State?

As the object of the Bill and the Government's policy is to increase the effectiveness of efficient direct labour organisations and to detract from the practices of inefficient DLOs, the opposite effects to those described by the hon. Gentleman will be produced.

Is the Secretary of State considering the introduction of further legislation to remove other restrictions on local authorities so that they may enter into more profitable activities? Does my right hon. Friend agree that there is something illogical in the view that only private enterprise may make a

I accept the principle contained in my hon. Friend's latter remarks. If in the general body of his supplementary question he is referring to the abolition of the ultra vires principle, as I imagine he is, that is certainly not under consideration at present. We shall simply proceed with the Bill to deal with DLOs.

Does not the Minister understand that since the Layfield Report the practices of direct labour organisations have been widely condemned? Would it not be better to set out a code of practice under which DLOs had to prove that they were effective and efficient before being given any extension of powers?

The reference to the Layfield Report is not particularly apposite. Several reports over the years have been critical of inefficient aspects of certain DLOs. It is equally true that many DLOs are very efficient, and that many private firms are efficient and others are inefficient. I ask the hon. Gentleman to await the Bill, because we shall undertake to do just what he has put to me.

asked the Secretary of State for the Environment if he will make a statement on the progress made by the district auditors in assessing the size of rent loss certificates under the Housing Finance (Special Provisions) Act 1975.

Twelve rent loss certificates have been issued in England for amounts totalling £594,187. I understand that no more certificates are expected.

Does the Minister accept that local people have the right to know who in their area is breaking the law? Will he authorise the publication of the names of those involved in the issue of rent loss certificates?

No, Sir. We have given the names of councils, and it is not our intention to give the names of the individuals. If the hon. Gentleman will read the debate on this subject, I am sure he will agree that we need to go no further than we have gone.

Does my hon. Friend appreciate that 11 councillors at Clay Cross were repeatedly named for incurring losses arising out of the non-implementation of the Housing Finance Act, much more so than many other councillors involved in the non-implementation of the Act throughout the country? Why do those people in Clay Cross, who have been bankrupted and are being leaned on by the Official Receiver and thrown out of civic life, continue to be treated in that way by the Government when the names of the other 400 will not even be published?

My hon. Friend will recall that it was three years ago that the names were given. That was before legislation. Since legislation, we have decided not to publish individual names.

asked the Secretary of State for the Environment when he expects to publish the housing finance review.

I expect the policy review to be completed within the next few weeks. I intend that the Green Paper will be published as soon as possible next year.

Does the right hon. Gentleman appreciate that the House has waited a long time for this document? Will he assure us that when its results ale translated into a Green Paper there will at least be adequate opportunity for consultation before he or his colleagues suddenly rush a Bill through the House?

I certainly give that assurance to the hon. Gentleman. I believe that very complex and important questions are involved on which there must be adequate consultations.

Will the Secretary of State postpone, at least beyond next week and until the review is published, any proposals or decisions to cut council house subsidies? Would not such a cut mean a further worsening in the standard of living of millions of families and pre-empt the recommendations of the review, which covers all housing and not only council houses?

My hon. Friend will realise that it is a little difficult for me to anticipate any matters that may be before the House during the coming week. All I can say is that these and many other considerations have been very much in my mind.

Will the Secretary of State expedite the review of the operation of the Rent Acts so that it may be taken into consideration when the Green Paper is being drawn up, especially as it is widely accepted that the Rent Act 1974 has resulted in a reduction in the supply of accommodation available for letting?

Without accepting what the hon. Gentleman said about the effect of the Rent Act 1974, I certainly assure him that we are reviewing the Rent Acts. It is proper for us to do so, and we shall issue a consultation document very shortly. The broader issues of the private sector in housing will also be covered in general terms in the review.

I well appreciate my right hon. Friend's difficulty in replying to the supplementary question asked by my hon. Friend the Member for Salford, East (Mr. Allaun), but does he not agree that it would be tragic to preempt the effect of the review by decisions taken in advance? Will he impress on his colleagues that for most of us it is investment in new house building and improvements which is the vital matter and that, if there have to be cuts, they should be not on investment but on rents and mortgage subsidies?

I note what my hon. Friend says about his preference in terms of making an adjustment to the total housing budget, but I feel I should not comment further on matters which, I assume, will be dealt with during the coming week.

Will the right hon. Gentleman bear in mind that the most easily obtainable source of additional finance to help the already over-pressed local authorities would be from imaginative schemes to enable council house tenants to buy their own homes?

I understand the theoretical attractiveness of that suggestion to Conservative Members, but we should not mislead ourselves about the present possibilities of pursuing that policy. Since the change of control in some councils, efforts have been made to push forward imaginative proposals to sell council houses, but we all know that in the present financial circumstances it is difficult to proceed with those proposals.

asked the Secretary of State for the Environment when he next intends to meet representatives of the House-Builders' Federation.

Frequent contact is maintained with the House-Builders' Federation. My Department will now meet the HBF regularly in a working group set up last month.

What representations has the Minister received from the federation about the effects of Government policy on employment in the construction industry, the price of houses and the rate of house building?

The representations have been widely publicised. We are concerned about the level of employment and the difficult situation in the construction industry. We have had very profitable discussions with the federation.

Will my hon. Friend ask the federation to review its procedure for investigating complaints about the structure of houses? I believe this to be in need of revision. If I send to my hon. Friend particulars of a case, will he look into the matter for me?

Yes. This is one of the difficulties. If my hon. Friend cares to submit a case, I shall consider it carefully and take it up with him.

Will the hon. Gentleman confirm that house builders expect the number of starts of private houses next year to fall by about 30 per cent.? Is that not an inevitable consequence of the enormous size of the public sector borrowing requirement and the consequent high interest rates?

The public sector borrowing requirement is obviously one of the causes. That is why the Government are insisting on their economic strategy. The only way to get the construction industry in the situation that we want for it is by getting the economy right.

When my hon. Friend next meets the federation, will he bring to its attention the low quality of building of many council houses and the millions of pounds that local authorities have had to spend on remedial work as a result of the very bad work that has been carried out by private enterprise when building council houses?

That is an aspect that is giving us great concern. It is one of the matters that we discuss with the builders when we see them.

Will the Minister confirm the forecast of the President of the House-Builders' Federation that housing output in both the private and the public sectors will fall by one-third next year? Has he noted the report today that the Building Societies Association estimates that about £1,500 million less will be available for mortgages next year than this year? Will he consider the effect that that will have on house building and new starts?

We get numerous forecasts, and I am not going to enter the forecasting game. I remind the House that starts and completions during 1975 were almost 50 per cent. up on 1974. That rate is being maintained this year. As I say, I am not going into forecasts for next year.

asked the Secretary of State for the Environment if he will call in the planning application to mine coal in the Vale of Belvoir.

No such planning application has yet been made. If one is made, we will consider the appropriate action.

Is the hon. Gentleman aware that coal is just as much a national asset inside the ground as out of it? Before deciding to extract coal from the Vale of Belvoir, will he take into account the availability, cost and efficiency of alternative forms of energy?

I am sure that the whole question of the energy gap, which Ministers in the Department of Energy have answered, concerns not only the Department of Energy but all of us. My right hon. Friend and I will consider all the environmental aspects when this matter is being considered.

Is my hon. Friend aware that the land that would be lost in this undertaking would be minimal compared with the 50,000 acres that are lost every year to industrial undertakings and roads without any complaint from Conservative Members? Does he realise that the saving of derelict land in town centres and old industrial areas would more than make up for any loss in the Vale of Belvoir?

I am grateful to my hon. Friend for making that point. My Department cannot consider this matter until the local authority has considered it. I feel that the local authority and the local people should have an opportunity to examine the application before anything comes to my Department.

asked the Secretary of State for the Environment what advice he proposes to give to local authorities on how to minimise increases in rates, having regard to the Government's proposed limitation of rate support grants.

The order giving effect to the rate support grant settlement requires the approval of this House. If this is obtained, I would then propose to issue a circular to all local authorities explaining the implications of the settlement.

Does my right hon. Friend agree that increasing rates are now becoming an intolerable burden for many people who are least able to afford them? Will he give detailed and frequent advice to local authorities on how to reduce expenditure, consistent with Socialist priorities?

It is not my intention to give detailed advice. I believe that the local authorities themselves must be the deciders of the pattern of expenditure for which they are responsible. We shall be indicating some of the priorities as we see them. I emphasise that it is for the local authorities to make these decisions. As for the intolerable burden of rates, I do not wish in any sense to minimise the effects of increasing rates, but I am almost as surprised as, I suspect, other Members will be to find by how little rates vary as a percentage of disposable income not only from one year to the next but over decades. We have to bear that in mind.

What value can the local authorities place on the Secretary of State's recommendations when he suggests that unemployment will be only 25,000 and the authorities have calculated that it will be at least 50,000?

Some of the local authorities made calculations. I pointed out to them—I think that I had by far the better of the argument—where they were wrong. They made wrong estimates about the level of expenditure that we were seeking to achieve in 1977–78. They also made other miscalculations. I do not complain about that because they did not have all the information that was available to us. However, I rebut their figure.

Does my right hon. Friend accept that while he may advise local authorities he has little power to instruct them, especially in the direction in which they will put their expenditure? What steps will he take to ensure that we do not have a repetition of the action that was taken in Bury last year, when the Tory-controlled authority vindictively and indiscriminately attacked social services and closed a number of establishments?

This is a great problem, but I put it to my hon. Friend that it is one of the hazards that arises out of local democracy. Although I share my hon. Friend's feelings about under-spenders, equally there is great sentiment about what people assume to be over- spenders. Unless we leave discretion to local authorities, I honestly do not see how we can conduct local democracy.

asked the Secretary of State for the Environment what are the latest figures for housing completions in the public and private sectors ; and if he will make a statement.

asked the Secretary of State for the Environment what are the latest figures for house building, both public and private.

The house building figures for October show 153,700 starts and 135,800 completions in the public sector in Great Britain for the first 10 months of this year, and 136,900 starts and 124,800 completions in the private sector. In spite of disappointing figures for the month of October, the figures for the first 10 months of this year show increases over the levels of house building achieved in the same 10 months of 1975.

As public sector housing starts and completions are bound to decline still further as a result of public expenditure restraint, what action does my right hon. Friend intend to take to ensure that the stock of public sector housing is preserved and made available to those in housing need? What action will he take against local authorities such as mine which insist on going hell-bent on the indiscriminate sale of council houses and which allocate houses on the fifty-fifty principle with public money on criteria other than those of housing needs?

I shall be willing to hear from my hon. Friend any details that he cares to give me about the housing policies of his own housing authority. As he knows, there is not an open door to the sale of council houses. The information that I have so far this year shows that the sale of council houses is probably at its lowest level since we started keeping the figures. We should not necessarily assume that what may be the intentions of certain councils are being turned into actual practice. As for the decline of the house-building programme, we have given the figures and our view of what will be the figures of starts and completions for the next year. I do not think I have any reason to add to or detract from that.

Will my right hon. Friend admit that in the past quarter completions are down roughly 10 per cent. across the private and public sectors? Does he accept that it is no longer good enough for him to blame the Tory Government, the weather or the thousand and one other things that Ministers constantly trot out? Does he accept that he and his Department are responsible for throwing building workers on the dole and having millions of bricks stocked? These are the consequences of cutting back public expenditure on housing. My right hon. Friend's job is to ensure that no more is conceded to the IMF in the current negotiations.

I have to advise my hon. Friend again to wait and see what comes out of the statement that is to be made. I am very conscious of the need to maintain the house-building programmes, in particular in the public sector. I remind him that last year, 1975, we built 50 per cent. more houses than in 1973. The information which I have indicates that we shall not do worse than that this year either—that is to say, in 1976 we shall build about 50 per cent. more houses than were completed in 1973. I am not expecting any collapse of the public building programme in 1977 either.

With regard to the private sector, has the Secretary of State seen the suggestion that anything short of a 14 per cent. mortgage lending rate is unlikely to attract sufficient funds to the building societies to enable them to sustain the reduced programme to which he has referred? Will he comment on where, in these circumstances, he feels that funds are likely to come from to complete this unsatisfactory number next year?

I am sure that the building societies will continue—as they have tended to do for some time—to give priority to new building in their allocation of new funds. I am aware that in the last month particularly there has been a drastic falling-off in funds for building societies. I believe that that particularly reflects the very high level of interest rates. But, looking to the period ahead, we have obviously, as have the building societies, to take a view about the likely trend of interest rates and the likely trend of comparable rates. The building societies have built up a certain cushion of reserves, and they have been able so far to manage to maintain a high level of lending, although obviously they will have to keep this under permanent review.

With regard to the selling of council houses, to which reference was made earlier, can my right hon. Friend say whether they are still being sold as public property at 25 per cent. of their value? If that is so, ought he not to take steps to induce the private property holders to sell their property to their tenants at 25 per cent. less than its value?

As I recall the circular that was sent out a little over 18 months ago—and I have no reason to believe that things have changed—certain sales were permitted to sitting tenants at 20 per cent. below the market value—not of the market value, but below the market value. To the best of my knowledge, that remains the situation. If my right hon. Friend needs any more information, he can get in touch with me.

Will the Secretary of State recognise that his quotation of and reliance on historic figures for completions is wholly misleading in relation to the crisis facing his house-building programme? The October figures show that starts in the public sector were down 14 per cent. on a year ago and that they were 6 per cent. down in the private sector. Will the right hon. Gentleman recognise that his programme is now in ruins and that the only prospect of restoring faith to the house-building industry is by getting interest rates down, so that in the public and private sectors people can afford to buy and to build houses?

It is all very well for the hon. Gentleman to unleash an attack in that way, but it is no good any of us, if we are serious, bandying figures about on the basis of one or three months. I have given the figures, showing that, based on all the information we have, our completions will be higher in 1976 than in 1975. That is the first point. We shall maintain a strong public sector programme in 1977, and the figures have already been given.

asked the Secretary of State for the Environment what action he will take in connection with the need to provide rating relief for disabled people.

Rate relief is already available for facilities for disabled people under Section 45 of the General Rate Act 1967, as extended by Section 20 of the Local Government Act 1974. I am considering whether action is required to clarify or amend this legislation in the light of the judgment of the House of Lords in the case of Vandyk v. Oliver.

The Minister's reply is not good enough. It is now a long time since the House of Lords' decision in Vandyk v. Oliver. It is seven weeks—[HON. MEMBERS : "Ask a question."] It is seven weeks—[Interruption.]

Order. If the hon. Gentleman will put his question in an interrogatory form, it will help us all.

I was taken aback by the dreadful answer, Mr. Speaker. Is the Minister aware that it is now some time since the decision in Vandyk v. Oliver, and that it is seven weeks since he said that he was urgently considering legislation? The severely disabled need sympathetic treatment. When will they get it from the Government?

May I suggest to the hon. Gentleman that he should avoid rhetoric in this matter? This is a highly legalistic and complex matter—[HON. MEMBERS: "Oh."] I doubt very much whether the people who are doing the oh-ing and ah-ing have read the case. They should do so. I have read the papers and I know that it is a highly complex matter. I shall make the statement as soon as I can, although there are difficulties involved and problems of equity. I shall treat the matter as sympathetically as I possibly can. I remind the House that I was a very active sponsor of the Chronically Sick and Disabled Persons Act 1970, and I am very concerned in this subject.

In view of the Minister's well-known interest in this matter, will he give the House an assurance that he will look sympathetically into the question of rating and rent subsidies for hostels run by societies for helping the disabled, and particularly the mentally handicapped? Is he aware that at present such hostels are unable to attract a housing subsidy or rate relief, although their individual occupants would be able to do so?

I do not know to which hostels the hon. Gentleman refers. It may be that there are some historic cases which he has in mind. But we have already acted on the matter of subsidy by the Housing Act 1974, one of the first measures we introduced. Under it we virtually absorbed hostel provision of all kinds, by housing associations and by local authorities, into the subsidy generally for housing. Perhaps the hon. Gentleman will give me details of the cases he has in mind.

asked the Secretary of State for the Environment whether he is satisfied that under his recently announced rate support grant settlement the burden of cuts is fairly distributed between urban and rural authority and between those who have responded to his earlier calls for economies and those who have not.

I look forward to the opportunity that will be presented by our forthcoming debate on the Rate Support Grant Order to explain more fully the basis of my proposals for the distribution of grant. I consider that a fair and just balance has been struck to meet the varying needs of authorities.

Does the Secretary of State recognise that in rural counties such as Northumberland it is not possible for people to enjoy the same level of services as in some urban areas, and that it has been found hard to cut them in attempting to comply with his earlier request for economies? Is his Department trying to find a way of making sure that in future it will penalise councils which have been spendthrift, and be more reasonable in its treatment of authorities which have tried to comply with the guidelines?

I hope the hon. Gentleman will agree that what we have tried to do in this settlement, as in others, is to assess the situation for needs grant purposes as accurately as we can. Inevitably it is a broad-brush process, but that is what we have tried to do. Needs are greater in many of the large urban areas than elsewhere, although I do not discount the fact that there are also needs to be met in all parts of our land.

Is my right hon. Friend aware that the metropolitan borough of Moseley, in my constituency, has a high level of rates through no fault of its own and that it also faces serious social and economic problems? Does he not agree that what is needed is more resources from the central Government rather than less?

My hon. Friend will recognise that in the settlement we have reached we have tried to take account in the needs element of the greater social needs which I genuinely believe are to be found in the major urban centres. Although it is not for me to say what is the experience of each individual authority, I am sure that my hon. Friend will want to wait and see the effects on Moseley.

Will the right hon. Gentleman accept from me, as a London Member, that he has behaved very unfairly towards rural areas such as East Anglia, which are notoriously low-wage areas, and that in many cases there is a good deal of rural poverty as well as urban poverty, even though certain areas may look mildly more picturesque?

The hon. Gentleman's comments point to the difficulty of being fair as between different categories of need. I, too, have some connections with East Anglia and I have sympathy with and knowledge of the problems faced by the people in that part of the country. I believe, however, that within our capital city the accumulation of need is greater still.

Will my right hon. Friend accept that the very modest rise from 19 to 19—frac;12 per cent. in the needs element going to London this year is gratefully accepted? Does he not agree, however, that London is still receiving nothing like what it should receive under the normal needs element formula according to the needs that exist at the centre?

As a London Member myself, my heart warms to my hon. Friend's comments, but as Secretary of State I have to discipline those feelings and try to achieve a fair situation for the country as a whole. In London it is true that we have an accumulation of needs which has not before been adequately recognised. Against that situation—and we must take account of this consideration—resources are available in London of which account must be taken, and that is why we cannot give the full amount.

Will the right hon. Gentleman accept that the rate support grant, which is based on outturn, penalises the thrifty and encourages the spendthrift? Is this not something to which we should set our minds, whatever other differences there may be about the rating system?

It is a chicken-and-egg situation. Outturn may reflect actual need, and we cannot dismiss it in that way. I am always prepared to examine new bases of assessing these matters, but the hon. Gentleman will agree that it is a long, tedious and exacting business. I have not yet seen any alternative way of reducing our approach to local authority expenditure and central Government support.

asked the Secretary of State for the Environment if he will make a statement on his discussions with the building societies on making mortgages available to would-be purchasers of older and poorer houses and of houses in districts at present barred by societies and to local authority sponsored applicants for mortgages; and if he will require societies to make 10 per cent. of their advances available to local authorities for the latter to grant mortgages to those unable to obtain society mortgages.

I have no power to instruct building societies to make funds available to local authorities. I hope to make an announcement in January about the arrangements for building societies' replacement of local authority lending in 1977–78.

Will my right hon. Friend act on the latest building society statistics, which show that only 6 per cent. of mortgages are going on houses of a value of under £6,000? Is he aware that outside London many older but structurally sound houses are selling at under £3,000, and therefore that the building societies are overlooking the needs of the less affluent section of the population? Will he bring to bear greater influence on the societies?

I shall look further into the figure given by my hon. Friend, which is a low one. We have been trying to get the building societies to lend down-market. My information is that in the second quarter of 1975 they lent, on pre-1919 properties, about 17 per cent. of the total of loans. In the coresponding period this year that figure of 17 per cent. rose to 23 per cent. That indicates a move in the right direction, but I am not satisfied that the process has gone far enough.

Is the right hon. Gentleman aware that Liberal Members have considerable sympathy with the present predicament faced by the building societies? Did he read the comments made by the Chairman of the Building Societies Association that next month mortgage rates are likely to rise to over 13 per cent? Is that not unacceptable to many mortgagors? What does the right hon. Gentleman intend to do about the situation?

Rates are a matter primarily for the building societies. The dilemma which they and, indeed, all of us face is that if rates continue to be uncompetitive, any holding down will lead to a mortgage famine and to serious hardship for many people who wish to obtain mortgages. That will affect the house building programme. Against that situation, I appreciate the adverse demand effect and the effect on the cost of living of further increases, but judgment has to be made in the light of circumstances.

Is my right hon. Friend aware that his answer to my hon. Friend the Member for Salford, East (Mr. Allaun) will be disappointing to many people, particularly in areas such as Merseyside, which contain many older but good houses that are up for sale? I could take my hon. Friend to many areas where people wish to buy those houses, which are being sold at reasonable prices, but where they cannot obtain mortgages. Will he have further discussions with the building societies so that people can be provided with homes to assist local authorities, such as Liverpool, to get people off housing registers?

My hon. Friend, and, indeed, all Labour Members, want to see more money being provided down-market to help poorer people or those on lower incomes to buy their houses, particularly in inner city areas. We shall try to do what we can in this process. I promise the House that I shall make a statement on these matters, because I shall be discussing these problems with the building societies in January.

Does the right hon. Gentleman agree that to bring pressure on the building societies to depart from their traditional policy of not lending to people more than they can afford to repay, or not to lend on properties that are likely to fall in value, would put at risk many small depositors in the building societies, reduce confidence, and possibly dry up the inflow of money? Would the Government not be far better served by implementing the promises which they made to the country in two consecutive General Elections, namely, to make more money available by local authority loans at the lower end of the market?

We note the cavalier way in which the hon. Gentleman approaches the subject of public expenditure. We shall try to cost his programme for local authority lending on the scale which he regards as right. On the hon. Gentleman's main point, he is far more traditionalist than the traditional building societies. I am glad to say that the building societies do not take such a rigid and doctrinaire view about their rôle. They are much more forthcoming than the hon. Gentleman seems to think they are or should be.

asked the Secretary of State for the Environment if he is satisfied that the burden of public sector housing is fairly apportioned between tenants, ratepayers and taxpayers.

No, Sir.

I am very glad of that. Is the Minister aware that in many areas it is now becoming clear that the cost of management of the housing stock exceeds income from rent without consideration of capital repayments? Does he think that this is fair to taxpayers at a time when the standard rate of tax is levied on people who are below the supplementary benefit and poverty level?

I am sure that my right hon. Friend the Chancellor of the Exchequer has that last point in mind. I do not accept that there are many areas throughout the country where the rent income is less than the management and maintenance costs. There have been one or two cases which have been publicised in recent years, but it is wrong to take a generalised view of the matter.

asked the Secretary of State for the Environment what estimate he has made of the likely increase in local authority rates in Essex in 1977–78, following his announcement about the rate support grant.

I have made no such estimate.

Is the Minister aware that, if the effects of inflation and of the rate support grant are passed straight on, it will mean that in three years Essex rates will have gone up by more than 70 per cent.? This will hit many people who have already been hit by huge increases in mortgages and commuter fares. The bitterness they feel is even greater because of the subsidising of extravagant metropolitan authorities. Is there not some other way of helping the cities without discriminating against rural ratepayers?

We must avoid that kind of rhetorical nonsense in any sensible discussion of this matter. The recent RSG settlement cannot be extrapolated as simply as the hon. Member has suggested. It takes much more than that to decide the actual rate poundage which a particular authority will impose at the end of the day.

Is my right hon. Friend aware that the likely increase in rates in Essex and in metropolitan areas will, in fact, cause considerable hardship and will increase the incentive in certain Conservative circles to cut back even more rigorously than at present on the standard of services in those areas? Many of us who are anxious to maintain services find it extremely difficult to counter this sort of activity at the present time.

This sort of consideration is very much in our minds, among other things. The question of levels of expenditure or standards of public services of one kind or another does not depend simply—even in the good times, let alone the difficult times we are experiencing at present—on the particular level of State support for rate expenditure. This has varied over the years and will vary in years to come.

The Minister says that he has not made any calculations about the rate increases in Essex. Can he, therefore, explain the purpose of publishing a detailed list of county charges showing the increase in Essex to be 19 per cent. and in many other authorities up to 30 per cent. next year as a direct result of Government policies?

The hon. Member has not taken the point. It is not simply a question of the rate support grant settlement which decides what individual rate levels will be. There are other factors to be taken into account by the authorities concerned in deciding them, such as the level of budget expenditure, provision for inflation and balances, and in areas these will have as much, if not greater, effect as the RSG settlement.

asked the Secretary of State for the Environment whether he is satisfied with the policies of his Department for providing for the homeless.

Yes, Sir. As we made clear during the debate on the Gracious Speech, the Government remain committed to legislation on this subject, and it is our wish that authorities should in the meantime continue to act in accordance with the advice in the joint circular on homelessness issued in February 1974.

In view of the extreme anger caused by the Government's failure so far to honour their promise to introduce new legislation to make adequate provision for the homeless, will my hon. Friend state clearly whether there is or is not the slightest chance of any new legislation to this effect being introduced this Session? If not, will he say that the Government will support a Private Member's Bill to make provision for homeless families and the single homeless, who include many young people?

I understand the concern of many hon. Members that the homelessness Bill was not included in the Gracious Speech. However, we are committed to it and we will honour that commitment. In the meantime, if a Private Member comes forward with a Bill the Government will give it careful and detailed consideration.

Since it costs four times as much to subsidise a council house tenant as to subsidise a private house owner through mortgage tax relief, will the Minister stimulate the private sale market? If he did this, he would liberate a large amount of extra resources which would be a positive contribution to the relief of homelessness.

I cannot think of any approach that would give more anger than would that suggestion to those who are concerned with homelessness. The hon. Member's allegation is simply not true.

asked the Secretary of State for the Environment what is his estimate of the likely average increase in rates for the Greater London boroughs as a result of his decision on the rate support grant for 1977–78.

I am not in a position to make such an estimate: but in London as a whole percentage rate increases in 1977–78 should be lower than the national average.

Would not the Secretary of State agree that the likely outcome would depend on an extensive drawing from balances, which would be a once-off opportunity? Would this lead to a substantially higher increase in rates the following year?

I do not think so. I take the hon. Member's point, but we have made estimates about the drawing down of excess balances because local authorities rated in 1976–77 for a level of expenditure which was much higher than forecast, and which they agreed was inappropriate in the circumstances. They have cut back on that, and now most local authorities will have moneys in balance which they would not otherwise have had.

Is my right hon. Friend aware that the gap between the rate bills faced by ratepayers in London and those in the rest of the country has narrowed since local government reorganisation? In recent exchanges from the Opposition Front Bench there has been no reference to the pledge that the Opposition made last year to abolish domestic rating. If they had mentioned this, it would compound the problem which Opposition spokesmen have mentioned this afternoon.

I am grateful to my hon. Friend for mentioning that. We would be interested to hear at a later stage what the Opposition have to say about that. My hon. Friend is quite correct: there has been some narrowing of the gap between the rates in London and elsewhere, but it was a very large gap indeed. It needed to be narrowed, and the need for further narrowing will continue.

asked the Secretary of State for the Environment whether he intends to act upon the Layfield Report on local government expenditure.

As I told the House on 19th May, before taking any decisions on the Layfield Report the Government first want to consider the views of the public and interested bodies. I asked for comments by the end of November. We are pressing ahead with our studies of the report and the comments now put to us. I shall announce decisions as soon as we are in a position to do so.

As we are now in December, may we look forward to a very early reply in view of the fact that the present situation with the rates is causing very great concern and is likely to get worse? Will the Minister indicate whether he is providing us with an alternative source of local government finance to take the strain away from the rates?

I cannot answer that in the way the hon. Member would wish. The Layfield Report put forward a particular proposal for a new source of income for local government in the form of local income tax. The Conservatives have attacked this and I am still considering it, although I am well aware of the difficulties involved. I remind the hon. Gentleman that it is only seven days since we received all the comments which we invited on this matter, and I am still digesting these and thinking about them.

Does my right hon. Friend agree that the only basis on which there is any possibility of ever introducing a local income tax is a regional basis? Will he therefore encourage the Government to bring forward their proposals for the regions of England as well as the proposals for devolution in England and Wales?

My hon. Friend may be leading me far from the question of local government, but on the other hand he may not. I advise him to await publication of the White Paper on devolution in England, which I hope is now virtually upon us.