§ Considered in Committee.
§ [Mr. WHITLEY in the Chair.]
§ The SECRETARY for SCOTLAND (Mr. Munro)
I beg to move,That, for the purposes of any Act of the present Session to amend the enactments relating to Housing, Town Planning, and the acquisition of Small Dwellings in Scotland, it is expedient to authorise the payment, out of moneys to be provided by Parliament, of expenses incurred by any Government Department—In submitting this Resolution, I would point out that not only is it on the Order Paper, but it has been supplemented by the circulation of a White Paper, which sets out the Estimate, and which follows very largely the White Paper presented by the President of the Local Government Board in this Committee. I should say that the Estimate issued in England takes the high-water mark for a year's building in England, before the War, I think, 1904–5, at 100,000 houses. Assuming that the shortage caused by the War was 500,000 houses, and that these may be built in the course of the next three years, that works out as follows: 100,000 houses in 1919–20, 200,000 in 1920–21, 1524 and 200,000 in 1921–22. Taking a similar basis in Scotland, and the high-water mark in the same year as in England, the figure is 13,000, so that our shortage accordingly is 65,000. Of these we estimate that 13,000 may be built in 1919–20, 26,000 in 1920–21 and 26,000 in 1921–22, or 65,000 in the course of those three years, which is roughly one-eighth of the total for England. The expenditure annually, as it appears on the White Paper for England, is estimated to be £400,000, and in Scotland the corresponding figure would be £50,000. My right hon. Friend will see that that is the figure which we insert at the end of the first paragraph on page 2. As regards the ultimate annual charge on the Exchequer, the English White Paper states that it must be obvious that on account of the uncertainty of many of the factors, it is not practicable to do much more than to guess at those charges. That is equally true of the situation in Scotland. Estimates are given for England on the basis of deficiencies of £10, £13, and £15 per annum. On those respective estimates, which may be adopted with equal propriety in Scotland, the ultimate annual charge on the Exchequer, in relation to the Scottish programme of 65,000 houses, would be as stated on the White Paper, if we take the figure £10 a sum of £650,000, and if £13 a sum of £845,000, and if £15 a sum of £975,000. With that short, but I hope with sufficient, explanation, I beg to move.
- (a) when acting in the place of local authorities in preparing and carrying out schemes under such Act;
- (b) in recouping losses incurred by local authorities and county councils; and
- (c) in contributing to costs incurred by public utility societies and housing trusts and other persons."
§ Sir D. MACLEAN
We are very much indebted to my right hon. Friend the Secretary for Scotland for the White Paper which he has laid before us, following the excellent model of the English scheme. Thus, for the first time, I think, so far as Scottish financial business is concerned, we are afforded the opportunity of discussing this very important Resolution on something approaching business lines. I would like to ask the righthon. Gentleman how many houses, having in view the shortage of labour and of material, he hopes to get constructed in the first financial year, which will be about nine months. I would point out that the shortage of houses, named by the Commission as 231,000, must be very largely added to now by reason of the factors which we discussed on the Second Reading. Those are the increase of population, notwithstanding the losses of the War, and the very much higher standard which is now necessary. I hope that the estimate which the right hon. Gentleman forms as to the results of 1525 the first year will be a high one, because if the standard is not lofty there is not very much chance of stimulating local authorities to do their best to get near it. I would, therefore, urge my right hon. Friend to aim high, and, if he does so, he will set up an ideal to which even the most sluggish local authorities will be expected to do something to come within reasonable distance. I emphasise this point, because I was rather disappointed to note that he anticipates that the expenditure for the first year will be only £50,000. I should rather prefer that he estimated for £100,000. I do not think his estimate of what he is going to do in the first year is as high as one might have expected, because what can be accomplished will be helped by a stimulus from the Central Authority.
There is another point on this matter of expenses. I do not know when we come to deal with the Bill whether I shall be in order, but I must tell my right hon. Friend that I intend to put down an Amendment to widen the scope of the Bill, so as to give the necessary powers to improve the water supply. I have heard a great deal since the Second Reading Debate, from various parts of Scotland, of the urgent necessity of providing a water supply. There is not the slightest use putting up houses unless you have a proper and adequate water supply. I hope, therefore, that in the financial scheme, which he adumbrates in the White Paper, that he carries in his mind the point which we made on Second Reading with regard to the water supply. That can only cost money, like all these schemes, but it is a positively vital factor in carrying out the ideals and the hopes of those who supported the Bill which has now passed its Second Reading. The cost which will fall upon the local authorities is, of course, at present limited to the 1d. rate, and I fear that a heavy charge must fall upon the Exchequer, and I advise my right hon. Friend in public, though perhaps one ought to do it in private, to get going, as far as the Treasury is concerned, as soon as ever he can, for unless these matters are well formulated I have not the slightest doubt that the pressure from south of the Tweed in regard to the same problem will be so great that perhaps our interests in Scotland may be unduly neglected. I hope in these financial provisions my right hon. Friend and his Department will do their utmost to see that every possible effort is put forward by public utility societies, 1526 including co-operative societies. I will give a concrete instance from part of my own Constituency. There is an industrial village where the lack of housing is most acute. There is no likelihood there of the shortage being met nearly as quickly as it ought to be because the authority to deal with it will no doubt be the county council of Peebleshire and the calls upon that county council will be very strong from other parts of the county. The co-operative society in that village really meets all the needs of the inhabitants. There is practically no other store of any sort or kind. It runs a farm and supplies the whole village with milk, and its operations are extraordinarily useful and varied. It is run and managed by the working people themselves, who very wisely accept any advice which is useful to them, and such a society as that, if properly backed by the Government, could take almost immediate steps, instead of waiting for the rather slow and formal methods of a great public authority. I press that as an example of an existing working unit which, if properly backed, could get to work almost at once and start the supply of these houses which are so urgently needed, not only in Scotland but, I fear, throughout the length and breadth of the United Kingdom.
§ Mr. NEIL MACLEAN
I beg to move, to leave out paragraph (c).
By the inclusion of this paragraph the Government is going directly in the face of the recommendations of the Housing Commission which sat to consider housing conditions in Scotland. In its Report it is stated:If the present crisis is to be met in the way that Scotland, by her many sacrifices of life and treasure, had a right to expect, it cannot be met either by a reversion to the building conditions of pre-war days or by direct subsidies to employers of labour, landowners and speculative builders.Yet we find the Government coming forward with a scheme to subsidise these people. I take the speech of the right hon. Gentleman in moving the Second Reading, in which he said:In other words, 30 per cent. of the whole expenses will be given as a grant by the Treasury. I venture to say that these are very generous terms indeed.He is there speaking of public utility societies. The Report is a sweeping condemnation of private enterprise and its failure in the provision of houses for the people of Scotland as well as elsewhere, a failure which the right hon. Gentleman 1527 himself admitted in pointing to private enterprise as not being able to tackle this problem. Under this paragraph (c) any number of men can gather together to form themselves into a public utility society, and if they put up certain moneys they are to have 30 per cent. advanced to them by the Treasury in order to subsidise them in their private enterprise. The Housing Commission suggests that the State should assume full responsibility and should operate through the local authorities, and place upon them the full responsibility of seeing to the provision of building. There is no suggestion in the whole of the Report and recommendations that any public utility society should be recognised. They wish the State to be the sole sponsor of all that is going to be done, and they wish the local bodies to be the media through which the scheme is to be placed in operation. In this paragraph you are bringing once again into operation the whole of this vast speculative method of putting up buildings, with the nation's backing. The Report is a standing monument to the failure of private enterprise in building. Do not let us get back to that. If they have failed in their methods, do not let us give them Government backing to carry on the scheme, but take this part of the Resolution out. The Labour party intends to oppose any suggestion to grant subsidies to public utility societies.
§ Sir G. YOUNGER
I think the hon. Member is dealing with the matter from an entirely mistaken point of view. The extract he has read from the Report of the Commission undoubtedly states that private enterprise by itself would not meet these difficulties, but everyone knows why. Private enterprise in the matter of building was crushed by the Budget of 1909. [Hon. Members: "No, no!"] At all events that is my view, and it is very generally held.
§ Sir G. YOUNGER
That may be, but that is my view of the situation, that private enterprise was crushed by these taxes and by the fact that not only the increment on land was taxable, but it was put on house property, therefore, under these circumstances, it is impossible to say that private enterprise has failed. Why should this paragraph be taken out? Is it not desirable and essential that everyone who is willing to lose money on this business should be encouraged to do so? Does the 1528 hon. Member for a single moment imagine that any public utility society or any individual building these houses under present conditions, with a Government subsidy, is not going to lose money? Of course he is. It is perfectly impossible to build cottages or houses at present, with the Government assistance promised in the Housing Bill, without losing money. I can understand the Labour party or anyone else objecting to Government subsidies to private individuals or utility societies at the expense of the State. In this case these subsidies are given, and I suppose are intended to be given, in order to encourage people as far as possible to build houses, in addition to the local authorities, under the duties which will be imposed upon them, and no one who does it can build them without losing money on the transaction.
§ Mr. JOHNSTONE
I am sorry to hear the hon. Member state the attitude of his party toward utility societies. I look upon this method of providing housing accommodation for our people as one of the most businesslike methods which could be adopted under present circumstances. In connection with my own county council we deliberately came to the conclusion some time ago, when we had the housing proposals before us, that the best way to tackle these questions in Scotland was through publicity societies, and we formulated this scheme and sent it up to the Local Government Board. We have had in Renfrew most successful undertakings of this kind carried through, and I really think when we take into consideration the present emergency, the enormous cost of building the houses, the great cost which will be sustained by the State, the loss will be much greater than the right hon. Gentleman contemplates. In my own county we have figured out that the kind of houses required will cost between £650 and £700. The economic rent required would be about £45, and the rent which will be charged cannot exceed £20. I do not know whether the Local Government Board approve of that, but if these houses cannot be offered to the working classes at a rent of something like £20 they will not take them, but will continue where they are, and you will find the State providing houses for better class people, instead of providing houses for the people most requiring them, and I simply warn the right hon. Gentleman that the loss he has estimated will be far greater than he contemplates. There 1529 fore, I think every possible thing should be done to encourage utility societies. It will be a far more business-like undertaking to encourage utility societies, whereby the people who are going to get the houses will contribute their share towards the cost, where local people will take part in the formation of these societies, where local money will be subscribed, and, even although the amount given by the State is a fairly substantial contribution, comparatively speaking it is a small contribution compared with the liability the State will incur through the provision of houses by local authorities. Therefore, I say that, on the lines of public utility societies, far better results will be achieved and a far more businesslike proposition put before the country than by the building of houses by local authorities. I hope, therefore, the Amendment will not be carried.
§ Colonel GREIG
I just want to add a word in confirmation of what has fallen from my hon. Friend the Member for East Renfrewshire (Mr. Johnstone). I happen to know the opinion that prevails in West Renfrewshire, where there is a most successful utility society carried on by working men. I will give the name privately if my hon. Friends opposite want it. There is no use advertising it too widely here. What are the communications I get from them. They say, "Why are we not to get, as a public utility society, the same sort of assistance that is going to be given to a local authority?" I told them that the terms to begin with, are very generous, and, secondly, there is the opposition of the Labour Members in the House of Commons to any subventions at all. Under those conditions I pointed out that they might have a little difficulty, but that my whole sympathies were with them and any assistance I could give would be rendered by me. Another point of view, I think, will commend itself to hon. Members opposite. I have found, in making investigations into this matter, that the great objection which the workers have to the houses being provided by their employers is a very intelligible one. They say that if a big employer of labour put up a big range of buildings—tenements as we call them inScotland—and they inhabit them, if they got the sack from their employer they would be sacked from their dwelling, and therefore they did not like their employer to have control over them, which 1530 he would if he built these places himself. I can understand that position. It is just here that the utility society comes in. They find, in the case of a society limited in profit and separate from the employer—who can provide some of the capital if he likes, but it is open to others to do it—that there is an independent person not under his control dealing with the occupation of the building. That is the way in which a great many housing difficulties in Scotland can be solved, by public utility societies coming in where an employer might be willing to put buildings up, but where that objection prevails.
There is also this objection, I understand, from the employer's point of view. The employer, perhaps, sets to work to erect these buildings for his own people. As a business man he will run it as a separate part of his own business, and if he starts on that footing he is bound to run it as a paying concern, that is to say, exact an economic rent. It is not for me to suggest how business men should carry on their business, but I do suggest this point of view to the employer—of course, it does not meet the objection I have already mentioned—but if he does that sort of thing, then he should run the tenements for his people as part of his daily business and neglect the question whether or not it produces a profit. Then I think employers might see their way to do this sort of thing. But I did not rise to put that point of view, but mainly with regard to the other point of view, and to mention the difficulties we meet here from the members of the Labour party on the benches opposite.
§ Mr. ADAMSON
The last two speakers have been anxious, evidently, to ascertain what are the objections of the Labour party to public utility societies or private individuals being given certain privileges as provided for in this Bill. There are two reasons. The Labour Party does not want public utility societies or private individuals to be in the position of making profit out of public funds. The second point is this. After the debt on these buildings has been liquidated, to whom will the buildings belong? In the case of those that are put up by the local authorities they will belong to the public, but in the case of the public utility societies or private individuals, after the debt has been liquidated, they will belong to the members of those public utility societies, or to the private individuals who may get 1531 the benefit of this Act. That is a very important difference and one that deserves the serious consideration of the right hon. Gentleman in charge of this Bill. My hon. Friend who moved the deletion of this paragraph (c) pointed out that in the Report of the Housing Commission the Commissioners stated that they were strongly of the opinion that private enterprise had failed to provide the necessary housing accommodation for the people. But I want to remind the Committee that the right hon. Gentleman in charge of the Bill has himself emphatically made that statement. When he was addressing a meeting on the housing question at Perth, a short time ago, he stated that private enterprise has failed, and that it was the duty of the Government to come in and provide the houses. Holding such strong views as he expressed at Perth, we were very much surprised to find this paragraph in the Expenses Resolution to-day. Not only has he made provision for utility societies and other persons, but he goes further in this Resolution than was done in the English Bill, because he also brings in "and housing trusts," which goes much further than is the case in the English Bill. Like my hon. Friend who moved the deletion of the paragraph, I want to intimate to the Secretary for Scotland that we will certainly do all we can to have this deleted. Private enterprise having failed, in his opinion, and in the opinion of the Commission, it is not good enough for the right hon. Gentleman to come along and try to bolster up, by grants of money from public funds, a system that has entirely failed, and I hope that he will see his way to agree to the deletion of this paragraph. I cannot understand, but possibly later on he may explain, why it is he goes further than is done in the case of the English Bill. Whatever his reason may be, we strongly feel that public money ought not to be given either to a public utility society, to a housing trust, or to—as he puts it—"other persons." If these parties have failed to house the people properly, and the Government has had to step in and provide the money, then the Government ought to own the houses, either directly or through the local authorities. We hope that, either during the course of this discussion, or when we reach the Committee stage upstairs, the Secretary for Scotland will accept the Amendment and will delete this paragraph.
§ Mr. MUNRO
I am afraid I cannot assent to the suggestion made by my right hon. Friend. My hon. Friend the Member for Govan (Mr. Neil Maclean) spoke about a clan-raid being made on the Government. I do not mind any of these clan-raids, provided they are of this character, because the clans are divided, and while my right hon. Friend invites me to delete all reference to public utility societies from this Resolution, my right hon. Friend the Member for Midlothian presses me, not only to retain it, but to put it into operation at the earliest possible moment. The arguments which my right hon. Friend has adduced have largely, I think, been answered in the speeches already delivered, but it is probably right and courteous that I should say a few words in answer to the arguments propounded. In the first place, I would remind my hon. and right hon. Friends that, under the English Bill, provision is made for a contribution from State funds to public utility societies, and, speaking from recollection, housing trusts as well. On the latter point I may be wrong, but I do not think I am. There is certainly provision made for dealing with public utility societies, and, so far as I recollect, my right hon. Friend made no protest whatever on the Financial Resolution which related to the English Bill.
§ Mr. MUNRO
All I can say is that I think there has been no sufficient reason assigned for treating Scotland in this matter differently to England. The House as a whole decided, after hearing what had to be said, what was proper in the case of England as regards public utility societies. I for one, as I hope, a thrifty Scot, see no reason whatever why, if England is to get this money, Scotland should be deprived of a similar sum. I am really 1533 surprised that my right hon. Friend the Leader of the Labour party is willing to sacrifice, for the benefit of England, what is tendered to his native country. On the Second Reading of this Bill I stated that the provision regarding public utility societies was made for the purpose of relieving the strain on the local authorities, and thereby relieving the strain on the ratepayers, of whom my right hon. Friend is one. It is for that purpose this provision has been introduced, as I understand it, into both measures. I would remind my right hon. Friend of the conditions under which these Grants are to be made. He seems to have forgotten what is contained in Sections 14 and 15 of this Bill. He seems to have forgotten that the assistance which is given by the local authority to these societies, must be subject to any regulations or conditions which are imposed by the Board, and that the assistance given under Secton 15—that is to say, direct, and not by way of or through the local authority—again is to be given under such conditions as are approved by the Local Government Board. Accordingly, all this money which is to be contributed is to be contributed under conditions imposed upon these societies by the central authority. That, I think, to a large extent meets the point which my right hon. Friend put. He spoke about private enterprise. I really do not think that these societies are a very happy illustration of private enterprise.
§ Mr. ADAMSON
May I intervene? The Resolution says:(c) in contributing to costs incurred by public utility societies and housing trusts 'and other persons.'
§ Mr. MUNRO
Let us deal with one thing at a time. The words "other persons" is a phrase introduced into both Resolutions to cover any contingencies which might arise in the course of the progress of the Bill through Committee. I think the Government would have been short-sighted if they had omitted these words.
§ Sir G. YOUNGER
The Government were obliged to put it in this way as a whole so that it could be amended in Committee, if so desired.
§ Mr. ADAMSON
If I may intervene again I would like to remind the right 1534 hon. Gentleman the Secretary for Scotland as to the position of these words in the English Bill.
§ Mr. MUNRO
I have no information of what has taken place in Committee to-day. No doubt my right hon. Friend will be thoroughly alive to the necessities of the situation if and when a similar proposal is made in Committee in regard to Scotland. But one has to remember the type of society with which one is dealing. These public utility societies are really not societies which are trading for profit. They are restricted under the Act under which they operate nowadays to a return of 6 per cent. upon their capital—it used to be 5 per cent. Surely my right hon. Friend does not for a moment assimilate the position of a society of this kind to that of the speculative builder. The analogy is not quite fair or reasonable
§ Mr. MACLEAN
I should like to be quite clear on this point in relation to this 30 per cent. grant from the Government. Is that part of the capital of the public utility societies on which the 6 per cent. will be paid?
§ Mr. MUNRO
I would not like to argue that point now with my hon. Friend, but if he will put down a question I will endeavour to give an answer. I am scarcely prepared to answer a question of that nature without having considered all the circumstances. I think I have said all I need say in regard to the divided attack made from the Front Opposition Bench. My right hon. Friend will, no doubt, renew it in Committee. His warning leaves me cold. I am ready to meet him in Committee, which will be a more appropriate place to raise these points. In reply to several questions put to me by my right hon. Friend the Member for Midlothian, he asked me first of all as to the number of houses which it was anticipated would be erected in Scotland in the course of the first financial year. The, estimate is 13,000. That appears, I think, on the front page of the White Paper, and that is according to the advice I sought and obtained before this Financial Resolution was discussed. Secondly, I have been asked whether or not the sum of £50,000 is not an underestimate. It was suggested that it might not unreasonably be a larger sum if we looked at the matter from a more courageous point of view. I imagine what is meant is—
§ Mr. MUNRO
And, therefore, a more courageous programme. The sum follows exactly the proportion of the English estimate, which is £400,000. That is the Scottish quota provided on the same basis as the English estimate. Apart from that I would remind hon. Members of another consideration, which is that the financial year in Scotland is a shorter and a different year to the financial year in England, being from 15th May to 15th May. Accordingly we budget for the half year ending 11th November. The period during which we shall be erecting houses in Scotland will be shorter than the period allowed in England. When the right hon. Gentleman bears that in mind, I think he will be disposed to agree that we are embarking upon a more courageous programme than the English programme. On the question of water supply which he raised, I content myself at this stage by saying that I fully appreciate the importance of that question. It shall have anxious and full consideration before the question, is raised in Committee upstairs.
§ Amendment negatived.
§ Main Question put, and agreed to.
§ Resolution to be reported To-morrow.