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T H I S D O C U M E N T IS T H E P R O P E R T Y OF H E R B R I T A N N I C M A J E S T Y ' S
GOVERNMENT)
SECRET
C . P ( 5 5 ) 155
COPY NO.
n
L£
17th O c t o b e r , 1955
CABINET
H O U S I N G SUBSIDIES B I L L
M e m o r a n d u m by the M i n i s t e r of Housing and L o c a l G o v e r n m e n t
On 21st S e p t e m b e r the Cabinet d i s c u s s e d C . P . ( 5 5 ) 128 g i v i n g
m y b r o a d p r o p o s a l s f o r cutting housing s u b s i d i e s and f o r r e d u c i n g the
house "building p r o g r a m m e of l o c a l a u t h o r i t i e s ( C . M . ( 5 5 ) 32nd C o n c l u s i o n s ,
Minute 1 ) .
Subsequently the P r i m e M i n i s t e r a u t h o r i s e d m e to open
d i s c u s s i o n s on this b a s i s with the l o c a l a u t h o r i t y a s s o c i a t i o n s .
2.
A s w a s to be e x p e c t e d , the l o c a l authority a s s o c i a t i o n s
e x p r e s s e d v i g o r o u s o p p o s i t i o n to any r e d u c t i o n in s u b s i d i e s .
In f a c t ,
they a r g u e d that, in v i e w of the r i s e in i n t e r e s t r a t e s , the s u b s i d i e s
ought r a t h e r to be i n c r e a s e d ,
3.
T h e s e p r o t e s t s h a v e not a l t e r e d m y opinion that the p r o p o s e d
cuts in the s u b s i d i e s a r e b y no m e a n s u n r e a s o n a b l e and w i l l c e r t a i n l y
not m a k e it f i n a n c i a l l y i m p o s s i b l e f o r l o c a l a u t h o r i t i e s t o build houses
and l e t t h e m at r e n t s w h i c h the tenants can a f f o r d to p a y .
A t the s a m e
t i m e , I have l i t t l e doubt that the cuts in the s u b s i d i e s w i l l h a v e the
e f f e c t of r e d u c i n g the t o t a l number of council houses b u i l t .
4.
T h e d e t a i l s of m y p r o p o s a l s f o r a m e n d i n g the r a t e s of subsidy­
a r e s e t out f u l l y in the A n n e x to this p a p e r .
It w i l l b e seen that the
new r a t e s p r o p o s e d a r e , in i m p o r t a n t r e s p e c t s , s i g n i f i c a n t l y l o w e r than
t h o s e which I s u g g e s t e d e a r l i e r to the C a b i n e t .
F o r e x a m p l e , the new
r a t e p r o p o s e d f o r houses t o r e p l a c e s l u m s (which m a y b e f o r e l o n g
r e p r e s e n t n e a r l y t h r e e - q u a r t e r s of the w h o l e l o c a l authority h o u s e "
building p r o g r a m m e ) i s o n l y £ 2 0 , as c o m p a r e d with the £24 which I w a s
authorised to o f f e r .
5.
I i n v i t e m y c o l l e a g u e s t o a u t h o r i s e m e to submit f o r t h w i t h to
the L e g i s l a t i o n C o m m i t t e e a B i l l e m b o d y i n g the p r o p o s a l s s e t out in
the A n n e x and t o introduce it when P a r l i a m e n t r e a s s e m b l e s .
D.S.
M i n i s t r y of Housing and L o c a l G o v e r n m e n t , S.W.1
16th O c t o b e r , 1955.
PR.OPOSED C O N T E N T S OF HOUSING SUBSIDIES B I L L
H o u s e s (including flats in b l o c k s of not m o r e than 3 s t o r e y s )
1.
T h e standard subsidy at p r e s e n t p a y a b l e on a l l houses built
b y l o c a l a u t h o r i t i e s i s £ 2 2 . 1. 0. p e r house p e r y e a r .
2.
It i s p r o p o s e d to a b o l i s h this and r e p l a c e i t by n e w r a t e s
d i f f e r e n t i a t e d a c c o r d i n g to the p u r p o s e f o r w h i c h the h o u s e s a r e b u i l t ,
as f o l l o w s
( a ) £10 p e r house f o r houses built f o r g e n e r a l n e e d s
( L e f o r p u r p o s e s other than t h o s e
specified below).
a
(b) £20 p e r house f o r houses p r o v i d e d in c o n n e c t i o n
w i t h slum c l e a r a n c e .
( c )
£24 p e r house f o r h o u s e s p r o v i d e d b y N e w T o w n
D e v e l o p m e n t C o r p o r a t i o n s or b y C o u n c i l s of
" e x p a n d e d " towns f o r the a c c o m m o d a t i o n of
" o v e r s p i l l " population f r o m the b i g t o w n s .
(In this c o n n e c t i o n , p o w e r w i l l b e taken t o
enable the M i n i s t e r , f o r a p e r i o d not e x c e e d ­
ing t e n y e a r s , to r e c o v e r f r o m the C o u n c i l s
of " e x p o r t i n g a r e a s " 50 p e r c e n t of any
c o n t r i b u t i o n paid b y the M i n i s t e r under
e x i s t i n g p o w e r s , in l i e u of a r a t e c o n t r i b u t i o n ) .
(d) £24 p e r house f o r h o u s e s built (with the
M i n i s t e r s a p p r o v a l ) to a c c o m m o d a t e i n c o m i n g
w o r k e r s n e e d e d t o m a n up i m p o r t a n t i n d u s t r i e s
( e g f o r a d d i t i o n a l m i n e r s to w o r k in
expanding p i t s ) .
0
( e )
a
£19 p e r house f o r houses p r o v i d e d i n s m a l l g r o u p s
and in i s o l a t e d a r e a s f o r the a g r i c u l t u r a l
population.
F l a t s in b l o c k s of 4 s t o r e y s and u p w a r d s
3.
A t p r e s e n t a b a s i c subsidy of £56, 8. 0. p e r f l a t p e r y e a r and
i s p a y a b l e on a l l f l a t s with l i f t s , r e g a r d l e s s of h e i g h t .
4.
It is p r o p o s e d to r e p l a c e this by new r a t e s d i f f e r e n t i a t e d on
the s a m e b a s i s a s f o r houses^ and v a r y i n g a c c o r d i n g t o the number of
s t o r e y s , as f o l l o w s : ­
^ storeys
5-8 s t o r e y s
Over 8 storeys
( a ) F l a t s f o r g e n e r a l needs
£20
£35
£42
( b ) F l a t s f o r s l u m c l e a r a n c e ,
o v e r s p i l l , and a p p r o v e d
i n d u s t r i a l expansion,,
£30
£45
£52
5.
A n additional subsidy is at p r e s e n t p a y a b l e (on a s c a l e r e l a t e d
t o the c o s t of the land) f o r f l a t s built on s i t e s c o s t i n g £1,500 or m o r e
p e r a c r e , and f o r houses built on s i t e s c o s t i n g £3,000 or m o r e p e r a c r e ,
6.
It is p r o p o s e d that this a d d i t i o n a l subsidy should no l o n g e r be
p a y a b l e in e i t h e r c a s e until the s i t e c o s t r e a c h e s £ 4 , 0 0 0 .
Otherwise
the conditions g o v e r n i n g the additional subsidy would r e m a i n unchanged,,
M i s c e l l a n e o u s s m a l l subsidies
7.
In addition, t h e r e a r e a t p r e s e n t f i v e o t h e r s m a l l s u b s i d i e s
p a y a b l e on new h o u s e s .
It is p r o p o s e d to a l t e r t w o of t h e s e as f o l l o w s s ­
(a) T h e subsidy f o r p r i v a t e l y - b u i l t houses f o r
the a g r i c u l t u r a l population is t o b e
r e d u c e d f r o m £15 to £ 1 0 ,
(b) T h e l i t t l e used s p e c i a l subsidy f o r p o o r a u t h o r ­
i t i e s in a r e a s w h e r e r e n t s a r e e x c e p t i o n a l l y
l o w is t o be a b o l i s h e d .
A s s i s t a n c e in e x c e p t i o n a l c a s e s
8.
It i s p r o p o s e d t o e m p o w e r the M i n i s t e r , at h i s d i s c r e t i o n , to
pay a d d i t i o n a l subsidy in e x c e p t i o n a l c a s e s w h e r e the p r o v i s i o n of
u r g e n t l y n e e d e d houses would p l a c e an u n r e a s o n a b l e f i n a n c i a l burden
on the l o c a l a u t h o r i t y .
T h i s p o w e r w i l l be l i m i t e d by a p r o v i s o that the
t o t a l subsidy may not be i n c r e a s e d beyond a m a x i m u m of £30 f o r a house
and £40 f o r a f l a t .
( T h i s w i l l not apply to h o u s e s o r f l a t s b u i l t f o r
p u r p o s e s of o v e r s p i l l or a p p r o v e d i n d u s t r i a l e x p a n s i o n , f o r which h i g h e r
r a t e s a r e in any c a s e to be p a i d ) .
P o w e r to r e d u c e or a b o l i s h s u b s i d i e s
9,
It is p r o p o s e d to take p o w e r to r e d u c e or a b o l i s h any o r a l l
of the s u b s i d i e s on new d w e l l i n g s by O r d e r subject t o A f f i r m a t i v e
Resolution.
R a t e contributions b y l o c a l a u t h o r i t i e s
10.
A t p r e s e n t l o c a l a u t h o r i t i e s a r e r e q u i r e d by l a w t o m a k e a
p r e s c r i b e d contribution f r o m the r a t e s f o r e v e r y house on w h i c h an
E x c h e q u e r subsidy i s p a i d .
It is p r o p o s e d t o a b o l i s h this o b l i g a t i o n
in r e s p e c t of a l l h o u s e s , w h e t h e r a l r e a d y b u i l t o r t o be b u i l t in f u t u r e ,
(subject t o the e x c e p t i o n in p a r a g r a p h 11 b e l o w ) .
S p e c i a l contributions by County Councils
11.
In c e r t a i n c a s e s , (usually w h e r e h o u s e s a r e built b y d i s t r i c t
c o u n c i l s f o r the a g r i c u l t u r a l population, with the h e l p of the s p e c i a l
subsidy f r o m the E x c h e q u e r r e f e r r e d to in p a r a g r a p h 2 ( e ) a b o v e ) county
c o u n c i l s a r e r e q u i r e d to m a k e a p r e s c r i b e d c o n t r i b u t i o n f r o m the county
rate.
It is p r o p o s e d that this o b l i g a t i o n should b e m a i n t a i n e d .
D a t e of o p e r a t i o n
12.
It is p r o p o s e d that the new r a t e s of subsidy should apply to any
d w e l l i n g s f o r which t e n d e r s a r e a p p r o v e d by the l o c a l a u t h o r i t y a f t e r the
date on which t h e s e changes a r e announced to P a r l i a m e n t .
-2­