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(THIS DOCUMENT IS THE PROPERTY OF HER BRITANNIC MAJESTY'S GOVERNMENT)

SECRET

C.P.(55) 155

17th October, 1955

CABINET

COPY NO. 63

HOUSING SUBSIDIES BILL

Memorandum by the Minister of Housing and Local Government

On 21st September the Cabinet discussed C.P.(55) 128 giving my broad proposals for cutting housing subsidies and for reducing the house-building programme of local authorities (C.M.(55) 32nd Conclusions, Minute 1). Subsequently the Prime Minister authorised me to open discussions on this basis with the local authority associations.

2. As was to be expected, the local authority associations expressed vigorous opposition to any reduction in subsidies. In fact, they argued that, in view of the rise in interest rates, the subsidies ought rather to be increased.

3.

These protests have not altered my opinion that the proposed cuts in the subsidies are by no means unreasonable and will certainly not make it financially impossible for local authorities to build houses and let them at rents which the tenants can afford to pay. At the same time, I have little doubt that the cuts in the subsidies will have the effect of reducing the total number of council houses built.

The details of my proposals for amending the rates of subsidy are set out fully in the Annex to this paper. It will be seen that the new rates proposed are, in important respects, significantly lower than those which I suggested earlier to the Cabinet. For example, the new rate proposed for houses to replace slums (which may before long represent nearly three-quarters of the whole local authority house- building programme) is only £20, as compared with the £24 which I was authorised to offer.

5. I invite my colleagues to authorise me to submit forthwith to the Legislation Committee a Bill embodying the proposals set out in the Annex and to introduce it when Parliament reassembles.

D.S.

Ministry of Housing and Local Government, S.W.1.

16th October, 1955.

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