§ Order for Second Reading read.
§ MR. WRIGHTSON (Stockton-on-Tees)rose to move the Second Reading of this Bill. He said he would claim the indulgence of the House on account of the fact that he was a new Member, and also on account of the fact that it was a measure which was of considerable importance, which he was pledged to his constituents to bring forward. He was enabled in this case to follow the example of the Chancellor of the Exchequer and other Gentlemen in claiming that the measure was not in any sense a party question. He would he very pleased if the Government took the matter up and passed this or some similar measure into law, or he should be prepared to leave it for some Conservative Government. Perhaps nothing had been more deplored by Members on both sides of the House than the extinction of what was known as the yeoman class. The possession of holdings of land appeared to produce certain qualities of character which were of great value to the State. A yeoman was not sufficiently independent to dispense with the work of his hands and head, and he was sufficiently independent to form a powerful class which on many occasions did, he might say, yeoman service for the benefit of his country in the various conflicting interests of State. The Small Holdings Act of last year, which was introduced by the right hon. Gentleman the Member for the Sleaford Division (Mr. Chaplin), was described as 813 widening the distribution of land and recreating the yeoman class. The aim of the present Bill was to create, or rather to enlarge, an analogous class of occupying owners in the towns. He regarded one as of as great importance as the other, and he believed that all the qualities that were found in the yeoman class would be found in the class of persons who, by this Bill, would be enabled to become the owners of their houses. It would tend to cultivate in them thrift, self-control, independence, and all the best qualities of a good citizen. The tradition of English politics- had always been not to interfere more than was necessary with the free development of trade and the acquisition of property. There were, however, certain operations which could be done better and more rapidly by the State than by the individual, and if they could only realise the immense gain it would be to the nation to encourage and develop thrift among the largest class of the community, they would readily assimilate the doctrine; he tried to advocate that assisting the working men to become the occupying owners of their own dwellings was a legitimate and most desirable object for the State to undertake. He could appeal to the occupants of the Treasury Bench to assist in the passing of this Bill. One of the traditions of the old Liberal Party was the freeing and cheapening of what were known as the necessaries of life. No doubt clothes and food were the things that were most regarded at that time, but "man docs not live by bread alone," and he thought it could be easily shown that a house was quite as much a necessary of life as food or clothes. It might be urged that building societies could do all that this Bill proposed to do. The objects of building societies might be stated to be twofold. In the first place they enabled a saving man to build houses, and in the second place to provide a recuperative investment for small depositors. Well, if the depositor obtained a large rate of interest, it was quite clear that the borrower must pay this high rate of interest. These twofold objects would, in his opinion, always prevent building societies from being the best means for enabling working men to obtain possession of their own dwellings. This Bill did not 814 propose to aid a man financially except in respect of a dwelling-house he in- tended to occupy himself. One of the objects of building societies would still remain, insomuch as they furnished the means for enabling working men to build more houses than one. In a building society a working man was a depositor until he had a sufficient margin to his credit to obtain a loan for buildings. Unfortunately, building societies were not at present in sufficiently good credit to induce working men to trust them with the care of their savings. He did not wish to allude unnecessarily to matters which were brought before their notice day by day in the newspapers, but certainly they could not shut their eyes to the great importance of greater safeguards being given than was the case at the present time. Many facts had lately been made known which had caused great alarm in the country. In a constituency not many miles from his own it was stated the other day, at a meeting in London, that there were no less than 16 building societies in liquidation at the present moment. That was a condition of things which, in his opinion, should certainly engage the attention of the Government, and he inclined to think that the outcome of it would be that the Government would find it necessary to assume to some extent the guardianship of the savings of the working men. It was obviously important for the working man to borrow at, what was known as the current rate of interest, but at present, although he might have the security to offer, he was obliged to negotiate any loan through intermediate agencies, each of which required a profit, thus adding to the burden of interest he was called upon to pay. This Bill aimed at the substitution for these agents who were interested in getting as much out of the negotiations as possible agents who would not require any profit at all. The agents that he proposed were the State and the Municipalities. The State was now able to borrow at 2¾ per cent., and in the course of a few years would, no doubt, be able to borrow at 2½ per cent. It might, therefore, lend without any loss at 3 per cent. to Municipalities on the security of the rates. The Local Authorities would have the cost of administration to provide for, which by the Bill 815 would be deputed to a special Department. He had been informed on the very best authority that the cost of administration would not, on an average, exceed ½ per cent., so that the working man would not under the Bill pay more than 3½ per cent. for a loan received through the agency of the State and the Municipalities. The saving to the working man was obvious. At present building societies charged from 5 to 6 per cent. for interest, irrespective altogether of the question of redemption, so that under the Bill a clear saving to the working man of 2 per cent. would be effected, an incentive to thrift which, he ventured to think, the Government would not lose sight of. Coming to the security of the two intermediate agencies, the security of the State and the security of the local authority: with regard to the security of the State, the loan would not be made without an inspection by the Local Government Board to satisfy that department that the local authority was justified by local conditions in borrowing. In the second place, the rate of 3 per cent. left a sufficient margin for departmental costs; and, thirdly, the loans were secured upon the local rates, and wore repayable within 50 years. Then as to the security of the local authority. The local authority would, under the Bill, lend on three-fourths of the value of the house and site, and this amount was limited in the Bill to £150. That was to say, a workman could build a house to the value of £200, and be able to borrow three-fourths of the value from the Municipality. This margin in about 15 or 16 years would become increased by repayments to half of the original value, the local authority would have power to insist upon the property being kept in a habitable condition, thus guarding against any fall in the value of the security, and they must not forget what was really one of the greatest elements of securities, the fact that the occupier would put down in hard cash one-fourth of the whole value, thereby becoming interested in acquiring the property to a very substantial extent. It might be objected that the Municipal Debt of this country was already very large. He had taken out of the County Council Diary for 1892 the rateable 816 value and debts of 16 of our large towns, and he found that the total rateable value was £25,400,000; whilst the total debts amounted to £47,896,000. In other words, the debt of these 16 towns was on the average rather more than two years' rental. According to this Bill, he provided that no local authority should advance for the purposes of this Act more than half the assessable value of the district for the last preceding year, and so it would only add half a year's more rental. The next question he-should like to draw the attention of the House to was the great grievance existing among working men who were desirous of buying the houses they lived in, by reason of the legal costs to which they were put. That was no sentimental grievance, for he knew as a fact people had sometimes to pay as much as 15 per cent. on account of legal charge for the conveyance of a few yards of land on which to build. He thought the passing of the present Bill would give an opportunity to Parliament to apply the principle of registration of title in cases of this kind. He thought he had been able to show the many advantages which would follow the passing of the Bill, not only to working men, but to the community of which they formed so large a part. This Bill was not novel in its principle, but resembled Acts which had been recently passed. Building societies would not be displaced, but utilised in the administration of the Act, and the agencies would be guarded against loss. If the House considered he had made out a case he trusted the Bill would be allowed to pass a Second Heading, believing that such a measure would be highly valued by working men, and would make good what was now more of an adage than a fact, that an Englishman's house was his castle.
§ SIR A. HICKMAN (Wolverhampton)said this Bill, if passed, would be in reality a great measure of Temperance Reform. He was one of those who believed that the true way to promote-temperance was to improve the domestic arrangements of a man's household. It was also very desirable, because it was calculated to promote thrift among the working classes. It offered a safe investment which would prove very acceptable to working men, as many of them 817 had lately lost in building societies all that they had saved. In the third place he would support the Bill, because he believed it would be a most Conservative measure—and he meant Conservative not in a party sense, but in the best sense of the word. He believed that the man who owned the house he lived in was likely to be a better father, a better husband, and a better citizen than the man who did not.
§ SIR J. PEASE (Durham, Barnard Castle)said he sympathised heartily with the objects the hon. Member for Stockton-on-Tees had in view. In populous districts working men were often driven into houses which were "run up," so to speak, in a hurry by people who were called jerry builders. They had to go into bad houses for which high rents were charged, and which were very often deficient in sanitary arrangements. The principle of the Bill had been already admitted by the House in regard to allotments and small holdings. It was admitted that the money of the State might be used for these purposes, and surely it was more necessary for a man to be comfortably and well housed than to have land to cultivate. He agreed that they could not make a better step in Temperance Reform than to improve the comfort of the working classes in their houses. In looking through the Bill, he had been struck with some of the difficulties of the position laid down by the Mover of the Second Reading. He did not say those difficulties could not be overcome. He thought they could be overcome if the Bill were well looked after in Committee. One of the difficulties was the defining a "working class" population. Another, was as to whether the Bill ought not to apply to those persons retiring from the working classes—those who had saved sufficient to enable them to retire, and who ought to be assisted to build their own houses, which they could leave to future generations. Then, the working classes gathered together in places where there was an abundance of employment, but where, after a time, the work ceased, or was shifted to other districts. What would be done in the case of houses built in localities of that description, houses that after a time became valueless? There would be a great responsibility thrown upon the 818 local authorities and the Local Government Board who were brought into play under this Bill. Furthermore there was nothing in the measure to cheapen the conveyancing of the small plots of land which would be required for the purposes of the Bill. He had known cases where houses which cost £200 or £250 were built on plots of land which cost £20, £30, and £40, where the cost of conveyancing was £4 or £5. This meant a charge of 4s. or 5s. a year on the working man in the shape of interest for the mere conveyancing of the land. He was sorry his hon. Friend had not dealt with that question in his Bill, for he thought it a most important matter. But though there were many difficulties to face, he trusted that the House would give the Bill a Second Heading, leaving the details to be threshed out at a later stage.
§ MR. GRAHAM (St. Pancras, W.)thought the House would be doing a good work if it made an effort to pass this Bill during the present Session. As had been pointed out, the three main requirements for working men were food and clothing and houses. During the past 50 years the cost of food and clothing had greatly diminished, but there had been no corresponding falling off in house rents. The present time was particularly opportune for the passing of such a measure as this, having regard to the ruin which had been caused to so many working people through the failure of building societies. If the House made an effort to pass it, it would show that the Legislature was really taking some sort of interest in the working classes, and doing something to help them as well as talking about it. He hoped there would not be any difficulty in the way of reading the Bill a second time.
§ THE PRESIDENT or THE LOCAL GOVERNMENT BOARD (Mr. H. Fowler,) Wolverhampton, E.I cordially sympathise with the motives which have actuated the promoters of this Bill in bringing it forward. The object of the measure is to enable artizans, clerks, and small shopkeepers, whose incomes amount to less than £150 a year, to borrow money from the local authorities with which to acquire the ownership of the houses in which they live. I think that object is a sound one, and that the 819 lending of public money for such a purpose is as legitimate as the lending of money to enable men to acquire small holdings. I shall therefore be glad to see the House of Commons endorse the principle of the Bill by reading it a second time. I think this is one of the directions in which legislation is tending. It is, however, a novel principle, or a novel development of a principle. Whilst we do not object to the Second Reading, when we come to the details we must reserve a very wide discretion. I cannot agree with the hon. Gentleman opposite upon many points. I do not agree with him as to the rate of interest at which the Government can borrow, nor as to the margin which it is necessary to preserve in order to prevent the State incurring loss. That is a question upon which the Chancellor of the Exchequer will no doubt have a word to say. Nor can I admit the accuracy of his contention as to the limit of borrowing powers conferred upon local authorities. Information will be afforded in a Paper shortly to be laid before Parliament respecting the enormous indebtedness of our local authorities. Anything like a limit of one-half in the value represented by the local authority for purposes of loans is a limit to which certainly the Local Government Board could not for one moment assent. I quite agree with what has been said as to the very heavy tax which is imposed upon purchasers in this country by conveyances of small properties, but I do not think the Bill would alter that in the least. The local authority would have to be satisfied with the title to the property before advancing the money, and I am afraid it would be impossible to avoid expense in making good the title. There are several other points with which I need not now trouble the House. I would remark, however, that house property is of a depreciating character, so that the case dealt with in this Bill is somewhat different to the case of laud dealt with under the Small Holdings Act. I am not throwing this out as an objection to the Bill, but simply as a matter which will require consideration in Committee. Before the Government can assent to the Bill passing through another stage, they will have to insist upon very serious modifications of its provisions in the way 820 more of security than of anything else, and in the direction of facilitating ease of working. Subject to this reservation, I shall be quite content to accept the principle involved as a sound one, and to give the Bill a Second Reading.
§ SIR JOHN GORST (University of Cambridge)said he was very glad the Government had been able to see their way to accept the principle of the Bill, and he was sure its promoters would gladly welcome the Government's assistance in dealing with the Clauses. The right hon. Gentleman had put his finger on the difficulty which had to be faced in carrying out a measure of this kind, viz., the expense of the acquisition of sites. It was very difficult to find sites. They generally had to be acquired at a very high cost, whilst the investigation and proof of title were generally of a very expensive character. Efforts made in that House to cheapen the acquisition of land had generally resulted in making it dearer still, and the cost of acquiring sites was now one of the great obstacles to working men becoming possessors of their own houses. He did not know whether the right hon. Gentleman (Mr. H. Fowler) would consider whether a scheme could be devised whereby local authorities might be empowered to acquire sites for working class dwellings. If there was a demand by workmen in a particular town for freehold dwellings, why should not the local authorities be empowered to acquire sites for the purpose, and to sell them to those who desired to buy them.
§ MR. H. FOWLERThey have power now.
§ SIR J. GORSTsaid he know there was power to acquire sites for building artizans' dwellings, but his suggestion was that there should also be power to sell small plots of land to working men in order that they might build houses for themselves. The adoption of such a scheme as this would, in his opinion, much lessen the cost of acquiring the sites.
§ MR. BARTLEY (Islington, N.)thought the Bill a step in the right 821 direction. He felt there was no better way of promoting thrift, and adding to the well-being of the people, than by enabling them to become possessed of their own homes on freehold terms. Although, for practical purposes, freeholds were not much better than leaseholds, there was no doubt a sentimental feeling, especially amongst working men, against leaseholds. Some of the points of the Bill would no doubt have to be carefully dealt with in Committee, but he should give the Second Reading of the Bill his strong support.
§ Question put, and agreed to.