§ Mr. ROYDSI desire to bring before the House a subject of much moment, namely, the shortage of cottages and small houses in this country, and the causes of such shortage. The housing problem is an urgent one. Both political parties are anxious to find a solution for it. In seeking for a remedy I think the first step is to ascertain the cause of the disease. I have put a number of questions to the Chancellor of the Exchequer in the course of the last few weeks on this subject, and I have had a similar number of very unsatisfactory replies. The position appears b be this: The Commissioners of Inland Revenue issue annually Returns showing the number of houses in Great Britain. These Returns are prepared for the purposes of Inhabited House Duty. The houses are divided into two classes, those above £20 a year, which are assessable for Inhabited House Duty, and those under that figure which are not liable for the duty. On examining those Returns I find that while under the Unionist Government in the last few years of their administration the number of cottages and small houses increased on the average annually by about 107,000, the average annual increase for the first four years of the present Government fell to 80,000, or rather over. In 1910–11, immediately after the passing of the famous Finance Act, commonly known as the People's Budget, the increase in the number of cottages and small houses fell from 107,000, as it was when the Unionist Government was in power, to 10,650—a drop of nearly 100,000 is one year. There is no question whatever about these figures, for they are taken from the 1486 Returns of the Commissioners of Inland Revenue. I have quoted them to the Chancellor of the Exchequer in this House and he has admitted that they are correct.
On 1st January I put a question to the Chancellor of the Exchequer on the subject. I asked whether, in view of the Fact that in 1905–6 the number of small dwelling houses and cottages increased by 112,838, and that the average annual increase in the next four years was rather over 80,000, he would explain why the increase in 1910–11 was only 10,631, and whether, having regard to the urgency of the housing problem, he would cause immediate inquiry to be made into the subject. The Financial Secretary to the Treasury, answering for the Chancellor of the Exchequer, said, the figures I had given were in accordance with the Returns of the Commissioners of Inland Revenue, and he added that the fall in the rate of increase was largely due to the fact that the year 1910–11 was a year of new valuation—the first revaluation since 1903–4. He added that similar falls had invariably followed the periodical revision of the assessments. I was not satisfied with that answer, and put a supplementary question asking if he would not consider the matter further in view of the urgency of the Housing problem and the startling figures I had quoted. He asked me to repeat the question. I repeated it in the following week and was told that the subject was still being inquired into. On 15th January I repeated it again, and the right hon. Gentleman replied that, as a result of further inquiry, he was satisfied that the fall in the rate of increase in the number of small houses in 1910–11 was due to the fact that it was the year of the revision of the assessments. I was not satisfied with that answer, and on 22nd January I drew the attention of the Chancellor of the Exchequer to the figures for 1903–4, which was the last year of revaluation under the Unionist Government. The Chancellor's explanation having been that the shortage in 1910 was due to it being a year of revaluation similar to 1903–4, I find that in 1903–4, 91,899 more houses were built than in the year 1910–11, so that the Chancellor's explanation was completely cut from under his feet. On 22nd January he stated that I must know that the increases in 1903–4 were the largest on record, and that it was not fair to cite them for the purpose of comparison. I only cited them for the purpose of com- 1487 parison, because the right hon. Gentleman himself had referred me to that year, and because he said the figures for that year bore out his statement that the fall in 1910–11 was due to the fact of revaluation.
Then I put one more question to the right honk Gentleman. I asked him whether the figures for 1910–11 were the lowest on record for fifteen years. His answer was they were; but he added they are not the lowest on record because a year of new assessment prior to the period of fifteen years showed a, still greater decrease. I asked him what that year was, and he replied 1893–94. There were 10,650 cottages and small houses only built in 1910–11. In order to find a year in which the same circumstances occurred, he referred back to 1893–94, and he referred me to that year because it was a year of revaluation like 1910–11. When he gave me the figures for 1893–94 I found that there were about 3,000 fewer houses, great and small, built in that year than in the year 1910–11. I knew that the decrease had nothing whatever to do with revaluation, and so I made inquiries, and found that in the year 1893–94 the shortage was caused solely by reason of the crash of the great Liberator Building Society at the end of the year 1892. The Liberator Society financed a number of subsidiary companies. They all came to grief. Money was withdrawn. There was complete stagnation in the building trade, for builders, not only in London, but throughout the country. Depositors withdrew their money, and building was absolutely at a standstill. That is the year which the Chancellor of the Exchequer selects to compare with the effect of his People's Budget in the year 1910–11. I am perfectly satisfied to accept the comparison. I believe the effect of the Liberator smash was precisely the same on the building trade as the passing of the People's Budget. Both resulted in capital being withdrawn from the building trade or being withheld, and in complete stagnation of the trade.
4.0 P.M.
Housing is a problem which must be taken up at an early date by one party or the other. The explanation of the Chancellor of the Exchequer of the shortage of houses is that 1910–11 was a year of revaluation. I have shown that that is not the true explanation, that in no previous year of revaluation has such a state of circumstances occurred. There has never been a drop in the year of revaluation in 1488 the number of houses built, though there has been a transfer from houses under £20 a year to the class over £20 a year; but in the aggregate, taking the two classes together, there has been no drop. There is no reason whatever why builders should stop building because of revaluation. It is a paltry excuse of the Chancellor of the Exchequer. It would be much more honest of him and his advisers to admit that the disastrous effect on the building trade is caused by the passing of the Finance Bill of 1910. If he makes inquiries of those engaged in the building trade he will have the unanimous answer of every builder in England that it was that Act and that Act only which accounts for the shortage of cottages and small houses, and for the deficiency of 100,000 cottages and small houses at the present time. The right hon. Gentleman went on to say that I could not be correct in my surmise that the Finance Act was responsible for the state of the building trade, because the unemployment statistics showed that there was less unemployment in the building trade at present than at any other period. The figures front which the right hon. Gentleman got his information are the unemployment returns of the Board of Trade. They only relate to 72,000 men employed in the building trade, whereas in the last Census Returns there are 1,250,000 men employed in the building trade.
If you want to get reliable information in that respect you must find out not how many men are unemployed, but how many men are now employed in the trade, as compared with previous years, because for the past two or three years there has been an immense emigration of builders, carpenters, and joiners, and others engaged in the building trade, more from that trade than from any other, and those statistics quoted by the Chancellor of the Exchequer have no bearing whatever on the subject. His other line of argument was that so far as he had information and returns—I do not know where he got his information from—they pointed to the fact that the building trade was, during the present year, proceeding at a normal rate. I can only say that, having endeavoured to get all the information I can as to the number of plans approved by the various local bodies, I am informed that building is not proceeding at a normal rate, but that on the contrary no man builds a house now as a speculation, and 1489 houses are only built when a man has to build them and when they are actually required by somebody to occupy them. But suppose that building was proceeding at a normal rate and 80,000 houses were being built, we should still be 100,000 cottages behind hand owing to the operation of the Finance Act of 1910. I hope that when this housing problem is dealt with it will be dealt with through the avenue of restoration of credit to land and house property. Land and house property are our greatest national assets, and what we are suffering from now is that capital has not easy and ready access to them, that it has been driven away. I am not at liberty, I believe, on this occasion to suggest that the Finance Act, so far as its valuation and taxation Clauses are concerned, should be repealed. I merely content myself with repeating the fact that the remarkable shortage, the phenomenal drop, in the provision of cottages and small houses is undoubtedly due to the effect of the. Finance Act, and has nothing whatever to do with the explanation offered by the Chancellor of the Exchequer.
§ Mr. MASTERMANThe subject which the hon. Member has raised in connection with the supply of small houses is an interesting one, but it is a sort of economic problem which cannot be bandied between one political party and another in this House, and it involves, I am quite sure, far larger economic questions than any narrow issue which in his philosophy the hon. Member thinks is responsible. The Chancellor of the Exchequer was perfectly correct in his answer he gave to the hon. Member that it was quite misleading to try and estimate the rise and fall in small house property, and to take as conclusive the rate of increase for the preceding year or in any particular year, because that is not a test of the number of houses built, or even of the number of houses of a certain rateable value built. If the House looks back twenty or forty years, it will find that every automatic increase is either checked or becomes decreased, so far as a lower rateable value of the house is concerned, by the valuations in the last twenty years. In. 1887 the increase was £66,000; in 1888 it decreased to £61,000—a comparatively small decrease of £5,000. The next time there was a valuation, in 1892, the increase was £50,000; in 1893 it was minus £7,000; in 1897 it rose to £81,000; and in 1898 it was £32,000—an enormous diminution.
§ Mr. ROYDSI called attention to the fact that we were dealing only with houses under £20 a year, and the figure of £32,000, is met by the fact that 85,000 larger houses, were built, and thus the diminution was. no diminution whatever.
§ Mr. MASTERMANI was challenged to deal specifically with the question of houses under £20 a year, and the mere fact that there has been the decrease to which the hon. Member referred is not of itself a conclusive argument to demonstrate that it is due to any single cause beyond that of the reassessment. I should like to see an impartial Committee going fully into the question of the increase or decrease of houses, because I find there is a large number of economic factors in the matter, quite apart from legislation. I cannot agree with the hon. Gentleman, who says that the statistics of unemployment are misleading, for during the last thirty years the statistics of unemployment in certain trades have been accepted as representing the unemployment in those-trades. The statistics published in the "Labour Leader" are referred to by all parties in our discussion, and when hon. Gentlemen opposite quote figures from it in support of their arguments they invariably maintain how impartial those figures are. It is not true to say that the statistics deal with a decrease in the number of those employed in the building trade. The statistics of the Board of Trade show an increase in the number of those employed in the building trade. Despite that continually increasing number there has been, as you might naturally expect, because of the increased prosperity of the country, a continual decrease. in the number of the unemployed since the coming of the Budget. A month from the introduction of the Budget the statistics disclosed 8 per cent., and last autumn that had been reduced to 2 per cent., the lowest they have ever been in the modern history of this country. It is idle to tell me these statistics mean, in spite of this enormous increase, that building in this country has steadily gone down as the result of the Budget.
Another item to which the hon. Gentleman referred and which is altogether independent of the Budget, is the item which is, very manifest to these who, like some of us, are hoping to build a house, and that is the enormous increase in the price of building materials. There is also the diminution in the number of houses which has always taken place a few years after trade 1491 depression and before the trade boom has been completed. First of all, you can always assume that the result of a trade boom is felt in ordinary trade immediately, but it is only two or three years after you find it in the building trade, when the prosperity represented by the trade boom has been garnered, and when men begin to build bigger houses. You will find the building trade is not particularly flourishing in the years of the trade boom, and begins to flourish after the prosperity of the trade boom has been garnered. That is an interesting fact. Then the hon. Gentleman says those statistics show that the diminution in the number of houses is due to the Budget, and the diminution is permanent. He is wrong in both those statements, and I think I can prove from statistics that he is wrong. If the diminution in the number of houses built was due entirely to the fear of the builders of the effects of the Budget, that would be accompanied by a diminution in the number of empty houses which had been built, and which were standing empty; but if the number of empty houses has increased at the same time that shows that the causes of any diminution must be looked for outside the question of the number of new houses built. As a matter of fact during all those years there has been a persistent increase not only in the number of new houses built, but in the number of houses concerning which duty is discharged in England and Wales in respect of empty property, which would lead to exactly the reverse deduction from that which the hon. Gentleman wishes the House to believe. In 1902–3 that percentage represented 4.8. In 1909–10 it represented 6.3, and in 1910–11 it represented 5.9. That shows that either through overbuilding, or, as I think, as a certain factor owing to the decrease in the birth-rate in this country; a fact which has got to be recognised, and is often lost sight of, not only the demand for new houses was less, but the demand for old houses was less too. Not only were less new houses being built but more old houses were standing empty. That cannot be ascribed to anything in connection with taxation.
I am very glad to tell the hon. Gentleman as he is concerned, and rightly concerned, in the provision of houses at low rents, that there has been a very large increase, as far as we can estimate, this year to make up for the decrease of last year. The increase in 1911–12, so far as 1492 the estimate is made, is something like 83,000 on the number of those small houses. That seems also to show that the building trade, through the economic operation, passes through periods of great deficiency, overbuilding and surplus and check in the building trade now that the surplus has been absorbed; and then again a rush of capital into that trade. It is quite possible, and I certainly have no figures to disprove it, that one of the factors influencing the building trade in the year in which the Budget was passed was a temporary withdrawal of capital from the trade during that Budget year, and a temporary withdrawal which appears, now that people are beginning to understand what the Budget is, to be arrested. I can show without a shadow of doubt that if that temporary with drawal of capital took place it was not due to the Budget, but to the agitation concerning the Budget. So long as one great political party in this country is carrying on a furious agitation explaining that, as the result of taxation not yet passed and consequently imperfectly apprehended, absolute ruin is corning to their trade and probably to the whole country, the capital of the old women of the country will not be put into the building trade. I have no doubt at all that the agitation did harm not only to the building trade, but to other trades. If that harm was done it was due to the desperate attempt of hon. Gentlemen opposite to excite political feeling against the proposals of the Government. People are new realising that the Budget was not the end of all things; they are realising that so far from the Budget being the end of all things, it has given what the hon. Gentleman might more correctely have said was a greater national asset to this country than even the houses which are built on the land, and that is confidence in a just system of taxation. That confidence being restored, we have this most desirable boom both in the oversea and in the home trade of this country, a boom which, as I have shown from the statistics of the increase of 85,000 houses and the statistics of unemployment, is now being reflected in the building trade, which is realising what nonsense was talked three years ago.
§ Sir GEORGE YOUNGERWhenever charges are made against the legislation of the Government the right hon. Gentleman invariably passes it off by saying that it is entirely owing to the fight that was 1493 made against the Budget and things of that kind that the difficulties have arisen. The right hon. Gentleman lives in an atmosphere of a very rarified kind, and does not come much in contact with actual experience in these matters. He is entirely a theorist, and speaks from a very exalted position, and, I am bound to say, with very great knowledge of his subject and extreme ability. But some of us who have come up hard against the facts in these matters know that, although there may be a good deal in what the right hon. Gentleman has said on some other questions in connection with this subject, there is undoubtedly at the present the greatest possible difficulty in inducing any speculation to be carried on in the building trade. I can speak, at all events, from knowledge of my own Constituency in Scotland, where at the present minute there is very great difficulty in getting houses for workpeople, a demand which formerly was rather anticipated than otherwise by the speculative builder. Houses cannot now be got; nobody will build, although land is very cheap. None of the speculative builders who used to build these houses in large numbers will now build a single cottage; they all say that they do not see why they should build when any profit they are likely to make is sure to go into the pocket of Lloyd George. The result is that at present many of the owners of these smaller houses, usually let at £13 or £14 a year, are putting up the rents by two or three pounds. That is a practical result, at all events. Builders may be quite wrong in thinking that the profit is going into the Chancellor of the Exchequer's pocket, but the fact remains that they do think so, and a recent judge has rather confirmed them in the belief, with which I agree, that it is very likely going into the Chancellor of the Exchequer's pocket in a way which this House never intended. But that is another matter which, perhaps, had better be dealt with at another time when there is a larger attendance of Members. The right hon. Gentleman must not really believe that the effect of the Budget is as he has tried to make out to the House. It has had a very bad effect on the building trade, as builders will tell him if he asks them. When he talks of agitation on this side of the House, does the right hon. Gentleman forget the agitation on his own side? Does he forget the deputations that went to the Chancellor of the Exchequer, and what they pointed out to him? Does he 1494 forget what my hon. Friend the Member for West Aberdeenshire (Mr. J. M. Henderson) pointed out in respect to housing in Aberdeenshire? All these things seem to have been forgotten! But the burden rests, not upon us on this side of the House, but upon your shoulders on that side! It is your legislation; your responsibility. It is our criticism. We only showed the people what the result would be, and we were right in almost every respect. We know how little you have got out of the Land Taxes. We foretold that it would stop building, speculative building, and we have proved that to be true in some cases, if not in all. When the Chancellor of the Exchequer tells us that it was a new valuation in that particular year 1910–11 which accounts for the falling off in the number of these houses, may I ask him how far that valuation covers the country? We have no quinquennial valuation in Scotland, and no effect of that kind is produced in Scotland by that valuation. We have a valuation every year. Why should the valuation affect the building of houses? The thing does not apply to Scotland, and so far as I remember, it does not apply to the country districts in England. It only applies to London where there is a quinquennial valuation. I do not know whether I am quite correct when I say that the quinquennial valuation only applies to London, and that in all the other parts of England there is an annual valuation such as we have in Scotland, where rents are adjusted year after year. At all events if there is a Periodical valuation of that kind in England it is certainly not in the same manner as in London. For these reasons I do not think that the right hon. Gentleman has been quite successful in his defence. He has been extremely clever, as he always is. He has given us some interesting facts. But I do seriously think it is very desirable that there should be some Commission or Committee to inquire into this matter, because I am perfectly certain that the right hon. Gentleman, whether he likes it said or not, will find that most people blame the Budget for the difficult position they are placed in, and I can speak of my own knowledge and so can others.