The Great Subsidies Mystery
Nobody knows why the Minister of Housing and Local Government has decided, and been allowed, to raise subsidy rates for council houses by more than a third at a time when the right policy is to reduce all subsidy rates. The only reason so far given—to meet the higher interest charge on housing loans—could in any case only justify a small fraction of such a lavish increase. All the other reasons look like being bad ones. It cannot be argued with any conviction that council house tenants, and council house tenants alone, need further assistance with their rent at this time. Earnings figures and the figures of expenditure on drinks and tobacco (more is spent on cigarettes than on rent and rates) make nonsense of any such claim. If any single class needs some adjustment of the rent structure in its favour it is the class of private owners of rent-restricted houses, but the effect of the subsidy increase is to put these victims of the chaotic Rent Restriction Acts at a further disadvantage. If one of the motives behind the Government's action is an urge to take the wind out of the Opposition's sails then this is a most expensive way of gratify- ing that urge. And if Mr. Macmillan, or any other Minister, thinks that it is possible to make just one stark, staring excep- tion to a general policy of cutting down expenditure then he is merely storing up trouble for himself, for the Government and for the country. The idea that one part of the economic system can be allowed to move in the direction of extravagance while all the other parts are forced to move towards parsimony is a crude fallacy. In a policy of retrenchment in Government expenditure there can be no sacred cows.
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