HC Deb 22 July 1929 vol 230 cc947-99

Order for Third Reading read.

The MINISTER of HEALTH (Mr. Arthur Greenwood)

I beg to move, "That the Bill be now read the Third time."

It will be within the recollection of hon. Members that the Money Resolution which originated this Bill and the Bill itself have so far passed through all their stages without much debate. The Bill is one which I described at an earlier stage as containing a very modest proposal. That proposal is merely one to continue for the present the existing subsidy under the 1924 Act and to discontinue, as the late Government suggested, the subsidy under the Housing Act of 1923. All that I need to do this afternoon is to deal with some of the statements which were made by the right hon. Member for Edgbaston (Mr. Chamberlain) during an earlier stage of our discussions. In the first place, the right hon. Gentleman discovered a mare's nest, not, I imagine, the first that will be discovered by hon. and right hon. Members on the other side. We were told that there must have been something in the nature of a Government crisis on this matter, and in order to bolster up this purely imaginary case, the late Minister, my predecessor, quoted some statements from a public newspaper reporting a speech of the Prime Minister's, when he might have saved himself all the trouble by reading the OFFICIAL REPORT for the 3rd July, where the Government's policy was outlined and where it was made quite clear that a short Bill, merely dealing with the continuance of the subsidy under the 1924 Act, would be brought in during this part of the Session.

I should like especially to refer to what was, in effect, the late Minister's apologia for his own policy insofar as it affects this Bill, namely, the question of the relation between subsidy and prices. The right hon. Gentleman, if he will allow me to say so, has an obsession on this question. He has convinced himself that there is that intimate relation between subsidy and prices that he wishes to exist, and it is extraordinarily interesting to observe that hon. and right hon. Members opposite are always prepared to invoke the aid of the twin gods demand and supply when it supports their own pet theories to do so, but that they are equally prepared to ignore their existence when they do not support those theories. The question of the relation between subsidies and prices is, of course, very complex. It is broadly true that the prices of houses will follow the trend of the general price level, and it would be an astonishing thing if the prices of houses to-day stood as high as they did, say, in 1920, because obviously the price level at that date was much higher than the price level now. Apart from the change in the level of prices as a whole, which is reflected in the change in the prices of houses, the outstanding factor which has governed the level of the price of houses has been the change in demand and supply.

I am astonished to think that hon. Members opposite should have thrown over what, I believe, is the only cardinal part of their economic faith which will stand the test to-day. There is obviously a close relation between the demand for houses and the price. We were reminded last week of the course of the price level of houses under the Act of 1919. It was perfectly obvious that when the then Minister of Health resigned, and his place was taken by Lord Melchett, who had orders to liquidate the existing housing responsibility, the price of houses would fall. The price of houses fell because not another house was ordered. It was obvious, therefore, that the price of houses would fall, and when the right hon. Gentleman the Member for Edgbaston took office in 1923, and introduced his Housing Bill with a new subsidy, what was the situation that confronted him? The builders in this country were virtually bankrupt. They had done everything to build houses at prices which were uneconomically low; they were prepared to do anything to get orders, but there were no orders. The right hon. Gentleman became the fairy princess who came with the orders, and prices rose.

Prices rose after the right hon. Gentleman's Act was put on the Statute Book because the demand for houses increased. In 1927, when he reduced the subsidy, and the demand for houses fell off, quite naturally the price of houses fell. I have never denied that that would take place; indeed, I argued that that was precisely what would happen, that the right hon. Gentleman would have his glow of exaltation when prices had fallen, and that we should be able to say, "Yes, but you have not got the houses," and that is precisely what happened. Obviously, in the change of the price level with regard to any commodity, you will always find a number of contributory factors. In the late Parliament I analysed some of them at length. The right hon. Gentleman the Member for Edgbaston added some of them up, and said, "Yes, they will account for £50 in the fall of the price of houses." Then, jumping about 15 hurdles all at once, he said, "The rest of the reduction is due to the fall in the subsidy," without saying a word then or since as to the change which took place in the demand for houses.

I want to carry back the minds of Members who were here in 1923, when the right hon. Gentleman introduced a subsidy of £6 per year for houses falling within a particular size. The idea in the mind of the right hon. Gentleman was to reduce the price to the buyer. He said, "Here is a gap between the price at which the builder can build houses and the price at which people are prepared to buy houses; how can I bridge that gap and bring down the price to the level which is within the competence of the purchaser so that he may buy?" He said to himself, "I will introduce the subsidy," and he introduced the subsidy with that object. If it did not have that object, it had no object at all, except to put money into the pockets of the master builders. If it were not devised with a view to lowering the prices of houses to the purchasers it was a proposal which had no real value at all. The position in which the right hon. Gentleman found himself therefore was that in 1923 he put on a subsidy in order to reduce the price of houses, and in 1927 he reduced it also in order to reduce the price of houses. He never suggested that the subsidy would raise the price of houses. On the contrary, it was to reduce it, and yet when circumstances changed, he used the same argument to show that, if only he took off the subsidy which he put on, it would reduce the price of houses. The right hon. Gentleman cannot have it both ways. He cannot say that, if he puts on a subsidy, it will reduce the price of houses, and that, if he takes it off, it will again reduce the price of houses, because had he done that monthly at regular intervals, houses would have been as cheap to-day as it was possible for houses ever to be. The right hon. Gentleman is guilty of the old fallacy of post hoc, ergo propter hoc.

I do not want to press him unduly on that, but I want to put a question to the House which has never been answered in the course of the Debates on the relation of subsidy and prices. How exactly does a reduction of a subsidy reduce the prices of houses? That is a very pertinent question to put in this discussion. There is only one answer. It is that by reducing the demand for houses, and in no other way, can the reduction of a subsidy affect prices. The right hon. Gentleman said, "Ah, but early in 1927, before the subsidy was actually taken off, the prices of houses began to fall." Certainly, they began to fall in advance of the Act, not because of any subsidy, hut because of the anxiety and uncertainty on the part of master builders, and their desire to get in early for what orders there might be; but it is true to say that anybody might quite well reduce the prices of houses to-day to a level which would bring into the bankruptcy court practically every master builder in this country.

4.0 p.m.

If I were from now onwards to refuse approval for the building of a single house more than those that are on the stocks to-day, of course, the prices of houses would fall substantially, and as soon as orders were put out again, the prices obviously would rise. That is precisely what happened during the last two years. The right hon. Gentleman cut his subsidy and saved his money, and must have known that the only way in which the reduced subsidy could be effective in reducing prices was by reducing the demand. The real difference between hon. Members opposite and ourselves is that they have put the emphasis always on prices, while we have put the emphasis on houses. I am not suggesting that that means that the right hon. Gentleman does not care about houses, nor does it mean that I do not care about prices; it is a question of the emphasis placed upon one or the other of the two things. The right hon. Gentleman has succeeded in reducing the subsidy, and in reducing the price of houses, but he has also reduced the number of houses that have been built. May I ask the House to consider for a moment or two what was the right hon. Gentleman's object in introducing the subsidy of 1923? It was to restore private enterprise in the building of houses. The right hon. Gentleman was not concerned with the development of municipal enterprise. He was concerned with the restoration of private enterprise. He wanted to bridge a gap that existed between 1923 and to-day. He believes that that gap has been bridged, and he has said that in his judgment the subsidy under the 1923 Act should come to an end. I agree with him, but my reasons are rather different. I am not inclined to disagree with his view that the subsidy under the 1923 Act has served its purpose, but the truth is that in the last year or two the situation has been saved by the building of houses by local authorities under the Act of 1924, and that the subsidy of the late Minister has not saved the situation either as regards private enterprise or local authorities building under the Act of 1923.

What has happened? If you go back to 1925 when, it must be remembered, the 1923 Act had had a year's run more than the 1924 Act, the number of subsidy houses built by local authorities amounted to about 27 per cent. of the total number of subsidy houses built, that is, in the year ending 31st March, 1925. In the year ending 31st March of this year, the proportion of subsidy houses built by local authorities, had increased to 53 per cent. and was twice the percentage that it had been four years before. Let me put it another way. In the year ending 31st March this year, the number of houses built by private enterprise under the Act of 1923, was about the same as it was in 1925, four years ago. It was less than three-quarters of the number built by private enterprise in 1926. In other words, building by private enterprise, even with the subsidy, has become relatively less important. But if you turn to the Act of 1924, you find in the year ending 31st March this year, the num- ber of houses built under the Act of 1924 was about double the number built in 1926. In other words, the real contribution to-day is being made by the local authorities rather than by private enterprise, and from that point of view, as far as I am concerned, the 1923 Act subsidy can go. But I would like to make it clear to the House that that does not necessarily mean that all house building eligible for public assistance must necessarily be carried cut by local authorities. As I said last week, my primary object in continuing the subsidy under the 1924 Act at its present level is to enhearten and encourage the local authorities, but it is true that public utility companies and other bodies and private persons may, if they wish, continue to build under the 1924 Act, provided, of course, they fulfil the special conditions which were laid down in 1924 with regard to houses being let, and so forth. Most hon. Members will, of course, be familiar with chose conditions, and it will be interesting to see to what extent public utility companies, large employers, and so on, are prepared to use this Act in order to provide houses to be let.

There is little point in my detaining the House at any length. Last week I was accused of introducing a proposal which did nothing. That was a statement by the right hon. Member for Edgbaston, and a little later he went on to scarify the House by saying it would cost £27,000,000 capital expenditure. It is not a Bill, as the right hon. Member for West Woolwich (Sir K. Wood) has already been told, for dealing with the larger aspect of this question. It is a Measure to get continuity of effort on the part of local authorities pending a more comprehensive Measure including slum clearance. It is, of course, easy now for the right hon. Member for West Woolwich to appear as a housing reformer, filled with enthusiasm for slum clearance, which appeared very low in the programme of the late Government, seeing that they did nothing about it, and when he criticised me for not having done enough, and pointed to the tremendous importance of dealing with slum clearance, I was very glad to think that at a later stage this Session I shall have his whole-hearted support. I am asking for the Third Reading of this Bill merely as a preliminary step to a larger Measure. I have been criticised—I think the word to use is "condemned" —by the right hon. Gentleman the Member for West Woolwich for not having done more. I have not done more, because I was concerned primarily to avoid discontinuity of building, and to give the Government time to produce a Measure of a much larger kind, and the fact that hon. Members have not thought it worth while so far to divide against this Bill, or the Money Resolution which preceded it, leads me to believe that they are prepared to allow me to have the Third Reading of the Bill.

Everybody in this House realises that it would not have been possible at this stage of the Session to have brought in what, I hope I might call, a first-class Measure with any degree of success, partly because it would not have been fair to the House, and partly because it would have been impossible for me to have framed it, and I am asking now just for this simple thing. There is one item of policy in it, and that is the intention to support the late Government in getting rid of the subsidy under the Act of 1923. That is an act of policy. The decision to prolong the existing subsidy and the Act of 1924 is not an act of policy. It does not prejudice in any way what may happen in the future. It is a reasonable thing to do to permit me to stop an act which, I believe, would have prejudiced the building of houses under the Act of 1924, to avoid the great slump in house building which followed the introduction of the cut in the subsidy in 1927, and if I can get local authorities, as I understand I can, to continue their building pending a larger Measure, then I shall consider this Bill will have been amply justified. It is in that spirit that I bring what I call this small Measure to the House.

Sir KINGSLEY WOOD

I have heard many speeches by the right hon. Gentleman, all of which I have enjoyed, but I do not think I have ever heard him make a more apologetic speech, at any rate during the last four or five years. He seems to be very uneasy about this particular Measure. He has been ploughing the waves very heavily during the last ten minutes or quarter of an hour. I wonder why it is. I think the reason is this; If you hold the views which the right hon. Gentleman holds with regard to the subsidy, there is really no explanation, and there is no excuse for the proposals which are before the House to-day. The right hon. Gentleman said that my right hon. Friend the Member for Edgbaston (Mr. Chamberlain) had raised a mare's nest in his speech on the Financial Resolution when he referred to the statement of the Prime Minister. He did not explain what the mare's nest was. He simply contented himself with referring to a quotation in the OFFICIAL REPORT.

What did the Prime Minister say at Durham a few days ago? He said what everyone would have expected him to say when enunciating the policy of the Socialist party in relation to the housing subsidy. He told his audience at Durham that it was his intention and the intention of his Government to go back to the 1924 Act, and he certainly—as, I think, anyone who will compare the reports in the various newspapers will agree—gave them to believe, as we should all expect, that the full subsidy was to be revived by the present Government. It has always been the policy of the Socialist party. I remember very well when my right hon. Friend first introduced what we call the "cut." It was strenuously opposed by every Member of the Labour party in Parliament at that time. It was denounced most vigorously and most streunously, and the real difficulty of the right hon. Gentleman this afternoon is the thought that he is not following out, not only the policy of the Socialist party, but he is not following out to their proper and logical conclusion the arguments which he has addressed to this House this afternoon.

I said he was apologetic. So he was, and, I think, unduly so. He said that this was merely a minor Measure, that he obviously could not be expected to bring in a great housing scheme at the present time, and that it was right that the House should wait until the autumn for a larger Measure. That was a reasonable statement only in this sense, that the mere fact of preparing a Bill of that character would take a considerable time. But I dissociate myself from the view which has been expressed by Ministers so often during the last few weeks, that they can not be expected to produce their policy within three weeks, when they had carefully prepared their policy before the Election. But where do we stand as far as this Measure is concerned?

I want hon. Members opposite to realise that this Measure does all that the Minister of Health intends to do so far as subsidies are concerned. In his Bill in the autumn he does not intend—as I understand him, at any rate—to deal further with the question of subsidies, because during the debate on the last occasion he said: Therefore, I propose for the time being, that is to say, until after September of next year, when the next revision is due, to maintain the subsidy under the 1924 Act at its present level."—[OFFICIAL REPORT, 15th July; col. 73, Vol. 230.] Therefore, there is no question that in the autumn, at any rate, the right hon. Gentleman is not going to deal with this particular side of the matter. He has made his decision to continue the subsidy on the present level, and hon. Gentlemen opposite, although they have been announcing this policy of subsidies up and down the country as their main solution of the housing question, must not expect anything further at the present time.

But if the Minister believes that subsidies are good, that they accelerate house building and do not affect the question of cost, why is it that we have not gone hack, as the Prime Minister promised at Durham, to the full subsidy of the 1924 Act? Nobody has told us that. Neither the Minister of Health nor the Parliamentary Secretary has explained why they are not going back to the full subsidy, and we await their explanation. It may be, for I have not yet heard it disposed of, that there has been a change of mind. I cannot think the Prime Minister can have been so sloppy and inexact nine days ago when making the statement he then made. I cannot think the Labour party are so inconsistent that this change should have occurred within the last nine days. As I understand it, they need have no apprehension about their political fate in this matter. The hon. Member for Withington (Mr. E. D. Simon), who, I believe, is the chairman of the Liberal Housing Committee, and who spoke for the Liberal party, made practically the same kind of speech as the Minister of Health. He is a full believer in the subsidy. He would even go further. I have had the pleasure of reading his writings and books, and he would give subsidies for the purpose of housing people with large families. Therefore, the right hon. Gentleman need have no anxiety so far as his political fate is concerned. The chairman of the Liberal Housing Committee, whom we welcome with us again this afternoon, is fully in favour of the policy of subsidy. Why, then, are not the Government going on with their full subsidy proposals? The hon. Member for Withington will not stop them. During the last year or two his life has been spent, very rightly and properly, in advocating subsidies for houses. He is an entire supporter of the proposal.

May I, as an outsider, make a suggestion as to why the Labour party have not gone on with the full proposal this afternoon? Is it that the Chancellor of the Exchequer has intervened? Has he stepped forward at the last moment and said, "No, I am looking after the nation's purse and I am not prepared to have the nation's money spent in this way—going into the pockets of all sorts of people."? At any rate, we have had no explanation, and I hope hon. Members opposite will support me in demanding an explanation, because they will have to give an explanation to their constituents. What are they going to say when they go back to their constituents in the autumn? For months and months they have been telling them that the subsidy for housing was cut down by the wicked Conservatives, and now, apparently, they are to go back without any explanation from their leaders on the Front Bench, and say, "We are very sorry we do not know why it is so, but for some unaccountable purpose the right hon. Gentleman, in whom we place so much reliance, is not going on with the full subsidy." At the meetings of the Independent Labour party, even at meek gatherings of that description, surely some one will get up to ask, "Why is it that the Minister of Health acted in this way?" The right hon. Member for Shettleston (Mr. Wheatley) in a powerful speech in the course of the Debate the other day, put the Socialist policy most clearly. I have not condemned the right hon. Gentleman with anything like the severity shown by the right hon. Gentleman who was the Minister of Health in the 1924 Government. A very notable Minister of Health he was, and it is his Act of Parliament that the Socialist party are relying upon to-day. Why are they not continuing his full policy? I think I can say on behalf of Members in all parts of the House that we should like an explanation from the Government on this matter.

Nothing interested me more the other day than the speech which we all enjoyed, because it was a very splendid effort, of the Parliamentary Secretary to the Ministry of Health. She gave a unique explanation of the rise and fall of the Addison house. My hon. Friend the Member for Falmouth (Sir J. Tudor Walters) must have heard the explanation with as much enjoyment and amusement as I did. She had got the novel idea—where she got it from I do not know, but she had got it somehow—that the soaring of the price of the Addison house to £1,100 or £1,200 was somehow or other due to the rise of the wholesale prices index figure. I can imagine the situation; because the hon. Member for Falmouth and myself were associated with the question at the time. Apparently the builders stood back and saw prices soaring up to £700 and £800 and said, "It is the wholesale prices index figure that is doing it." There is an hon. Gentleman here this afternoon whom I hope we shall hear in the course of the Debate who has been a builder and contractor for 20 years. He must have gone through that anxious time when we saw these prices soaring and the wholesale index figure doing all sorts of things and the nation's money going—where? [HON. MEMBERS: "West!"]

But that was not the explanation which the right hon. Gentleman the present Parliamentary Secretary to the Board of Agriculture gave, and surely he ought to know something about the price of the Addison house and why it rose. I do not criticise him for a moment. He said the cause of the tremendous rise, and undoubtedly the great waste of money, was the system which was adopted of limiting the financial partnership of the local authorities with the State to the proceeds of a penny rate. He said that because we gave the local authorities so little financial interest in house-building at that time they naturally did not exercise that vigilance and care in relation to the price of houses we expected from them and would have seen had they had a larger financial interest. Another explanation which we have not heard from the Parliamentary Secretary to the Ministry of Health but which was given by the Parliamentary Secretary to the Ministry of Agriculture blamed the Labour party. He said the unions had failed to meet their obligations in regard to increasing the personnel of the trade, and that from first to last he had never had the slightest support and assistance from the Labour party.

There was another explanation which he gave only as lately as 25th May. He said then that the reason for the high cost was not this extraordinary behaviour of the wholesale prices index figure but that the rise was due to the profiteer, and that he was refused additional powers which would have helped to stay the rise in prices. I wonder why it is we hear nothing about the Profiteering Bill in connection with these proposals? I have never heard a speech in this House from the right hon. Gentleman during the past 4½ years until to-day unless he has mentioned the Profiteering Bill. What has become of the Profiteering Bill in connection with his proposals? As I have always understood it, the submission of the right hon. Gentleman was, "Yes, we must have subsidies"; but hon. Gentlemen opposite will be sorry to hear that so little is the faith of the right hon. Gentleman in building contractors that he must have a Profiteering Bill. This afternoon we have not heard a single word in connection with that matter.

One of the most interesting things I saw during my official connection with the Ministry of Health was a letter which came to my notice a few days after the cut in the subsidy had been first announced. It came from a building contractor. He addressed a letter to a local authority with whom he had a building contract. He had entered into a building contract, he saw the announcement in the papers that the cut in the subsidy was to come some months later, and he wrote a letter in these terms: Dear Sir,—In order to meet the reduced subsidy we have brought down the price of tiles, machine-made quality, by 9s. 6d. per 1,000. It was sufficient for this gentleman to see an announcement of a reduction in the subsidy. There was no question about theories for him; no question about the wholesale index price or matters of that kind. He brought down the price straight away. [HON. MEMBERS: "Profiteer!"] He did not wait until the cut in the subsidy was made. He wrote out a letter straight away, and said, "We have cut down the price already." I think that is a very illuminating record.

Mr. WINTERTON

Will the right hon. Gentleman give us the date of that letter?

Sir K. WOOD

I think that question should be addressed to the Department. There is another explanation which has been offered by hon. Gentlemen opposite. They found it very difficult to get over the fact that houses were only costing £339. That is the average price, and that fact is the best contribution which has yet been made to housing in this country. There is also the fact to be borne in mind that at the time when my right hon. Friend the Member for Edgbaston was in office houses of all kinds, including those with the subsidy and those which were built without subsidy, were built at the rate of at least 160,000 a year. When my right hon. Friend left the Ministry of Health £339 was the average price for a house. I wonder whether the Labour party will be able to point to a record like that when they leave office.

Of course, some explanation has to be given if you are going to say that subsidies are a solution of the house building problem. It was said the other day that there had been scamping in connection with house construction in recent years. That has been said again and again in this House. The explanation was not the index figure, because that is the latest suggestion. The previous suggestion was that it was the scamping of houses, and the charge was made against the late Government that the houses they had erected were badly built, and that our policy had brought about the building of the worst kind of houses. I wish to say, in the first place, that the specifications for house building have not been altered by the Ministry of Health. As a matter of fact, in many cases, owing to the reduction in the cost of materials, improvements have actually been made in the standard of houses. I am very anxious to disabuse the minds of hon. Members opposite on this question, and I would like to remind them of a reply which was given by the Minister of Health on this matter on the 18th July. The right hon. Gentleman was asked by the hon. Member for Stourbridge (Mr. Wellock): Whether he has any information as to the quality of houses including materials, fittings, and finish, erected by local authorities under the Acts of 1923 and 1924 during the last 18 months as compared with previously. The following interesting reply was given by the Minister of Health: For some years specifications have been entirely a matter for the local authorities, and I have therefore no detailed information of the subject, but on a number of occasions during the last 18 months my Department have been informed at interviews that improvements in specifications have been made, and these with such other particulars as are available indicate that local authorities generally are fully alive to the importance of maintaining and improving the average standard of construction previously observed in houses erected by them."—[OFFICAL REPORT, 18th July, 1929; col. 644, Vol. 230] Therefore, there is not a word of truth in the allegation that the cost of these houses has been brought down by bad materials, bad specifications or bad finish. The Minister of Health is witness to that statement. If you take the small reduction in size in relation to the cost of the house and the small reduction in wages and cost of material, and make a very generous allowance, you can account only for a reduction of £37 10s. What are the facts? So far from the local authorities having been prevented from getting on with their schemes in consequence of the wicked scheme of reducing subsidies, the result of the cutting down of the subsidy has been that the price of building a house has been reduced to £339, and we have been building houses at the rate of 166,000 a year. [An HON. MEMBER: "That includes non-subsidy houses!"] Why should they not be included? Does anyone challenge that? In addition to that fact, the local authorities are much better off from a financial point of view in being able to give their orders.

I will bring my remarks to an end by saying that if the Minister of Health can end up with a record such as that which I have described, we shall be the first to congratulate him. What is the posi- tion? What is the record which my right hon. Friend the Member for Edgbaston has left behind in relation to housing? My right hon. Friend has restored private enterprise, and a great building industry has been built up. The supply of building materials required for housing purposes has been multiplied many times, and the number of men who have entered the building industry has increased steadily, and, so far as the house-building programme is concerned, not only during the past 4½ years has there been a record established in house-building for this country, but it is a record which has not been exceeded by any other country in the world.

Sir J. TUDOR WALTERS

I think it would be a truism to say that all subsidies and all tariffs are contrary to rigid economic principles. Consequently, there must be some sound reason given why we should depart from those principles and adopt subsidies. I have listened with great interest to the discussions of this subject, and, although every party represented in this House has been responsible for subsidies, we are not quite satisfied yet whether they are good or bad. On this question, my memory goes back to the commencement of 1919, when I was associated with the Parliamentary Secretary to the Board of Agriculture in passing the Housing Act which has been the foundation of all modern housing, and which for the first time imposed upon local authorities the obligation to provide houses for the working-classes. When we came to consider the question of building houses, we found that it was a proposition which would not pay. At that time, the output of building materials was very small, and the building of houses was an unattractive proposition. Consequently, we had to depart from sound economics by granting inducements to people to build houses. What did my right hon. Friend the Member for Swindon (Dr. Addison) do? He fell back upon the subsidy. After that, the Labour party came into office; they wanted to accelerate still further the building of houses, and the measure they adopted was to increase the subsidy. One thing is quite clear, and it is that, whether subsidies be good or bad, they have in fact produced the houses. I think the record of house building during the past few years is a magnificent one, and I can conceive no such achievement as this in the social progress of any other country.

What has been the cost of these houses? It is true that we have secured the houses at a very great cost, and it is only natural that we should ask why house building has been so costly? Why have the figures in the case of ordinary houses soared to such unprecedented prices? I am bound to say that I think subsidies have had something to do with that state of things. At one time, I was associated with the Government's house-building programme until I was forcibly removed from that position by the election of 1922. Since then I have been devoting myself to the actual building of houses, and I have been the chairman of a great working-class house-building trust which has erected 20,000 houses since 1922. We have adopted every conceivable method of building. I would like to point out that the association with which I have been connected has been a nonprofit earning association. It has paid no dividends. Perhaps that may commend itself to hon. Members opposite, and they will not be inclined to regard me as a profiteer. We have adopted every conceivable method of house-building. We have built houses by direct labour, buying our materials in large quantities for cash. We have also built our houses under sub-contractors, and by the orthodox method of the all-in contract. I have kept a detailed account of all these transactions, and therefore I am in a position to tell exactly the cost of the labour of every house, and what the materials cost. I have spent some time in examining these figures. I have come to some conclusions in relation to the subsidy, and, if I am not taxing the patience of hon. Members, I will venture to give a few instances.

There is this great question of supply and demand which we have talked so much about. Of course, if the demand for house-building is greater than the supply of materials, and the labour available, then up go prices, because there would be more people wanting to buy than there are sellers of houses, and consequently prices must rise. That was the difficulty of my right hon. Friend the Parliamentary Secretary to the Ministry of Agriculture who has been blamed so much because the price of the houses under his scheme soared up. He found that there were not sufficient supplies of materials and labour and soaring prices resulted. The Minister of Health was quite correct when he said that a larger demand for houses sends up prices. When a subsidy increases the demand for houses, it therefore puts up the prices. That ought not to be allowed to go on indefinitely. If the arguments of hon. and right hon. Gentlemen who believe in Safeguarding have any substance of truth in them, a larger production means cheaper prices; the more of a particular commodity that you produce, the lower the price should be.

It would seem to follow from that argument that, as soon as you have established a full and adequate supply of materials, and a full and adequate supply of labour, the more houses you build the cheaper they ought to be, and I think there is some substance in that. At any rate, my own experience is that, if I ask for tenders for 500 houses, I get them at a much lower price per house than if I asked for tenders for 100 houses, and that, if I am buying 10,000,000 bricks, I buy them much more cheaply than if I am only buying 10,000. Therefore, I do not think that the supply-and-demand argument has been quite correctly applied during this discussion. When you get your demand stabilised and your supplies equivalent to it, that is to say, when you get a regular building programme—not 100,000 houses this year and 200,000 the next, but a regular building programme—you will get a better output of houses at lower prices. One of the reasons why the price of houses soars and does not come down as much as it ought is that we have not rationed our house-building, that we have been too irregular, and have not stabilised the market. Therefore, if I discover that, with a large building programme, with a full supply of materials, and plenty of available labour, prices are not coming down, there is something wrong, and I want to know what it is.

I have looked into that question with the greatest possible care, and have come to the conclusion that the subsidy has something to do with it. I will explain why I think that that is so. If you put a boom, which I think is the correct nautical term—a barrier—across a tidal river, you prevent the water from falling to its natural low level, and a subsidy is something like such a boom across building trade prices; it seems to prevent them from falling to the lowest possible level. If I were asked why that happens, I would say that I imagine there is something in the psychology of the matter. An hon. Member of this House, speaking the other day, said, in connection with house-building and the subsidy, "All the builders want a bit out of it." That throws an interesting sidelight on the condition of affairs. You have your local authorities and your public utility societies arranging their building programmes, and devising the particular schemes that they will carry out; and, in making their financial adjustments, they know that, in addition to the rents they will receive from the tenants, they will receive another rent, namely, a subsidy from the State. That, I think, tends to less economy in administraion, and I think that the contractors, and builders' merchants, and builders generally, feeling that there is this State money—easy money, as they call it—will exact the maximum prices possible.

I do not want to weary the House with detailed figures, and, therefore, will merely put my conclusions. After careful examination of these figures during the past eight years, I have come to this conclusion as to the effect of the subsidy on prices—it is often exaggerated, but it is very real and very definite—that about one-half of the capital value of the subsidy goes into the pockets of the building material merchants, the contractors and the workpeople, and that only about half the subsidy ever inures to the benefit of the tenant. That is my considered opinion. My financial experts who have been working with me say that two-thirds of the capital value of the subsidy goes as an endowment to the building trade, and only one-third goes to the tenant. I think that that is an exaggeration, but I do think it is a fact, and an unfortunate fact, that, while we are spending all this money, something like half the capital value of the State subsidy forms a permanent endowment for the building trade in its various branches. How is this to be prevented?

We cannot look at subsidies in an abstract, dispassionate light to-day, as though they were not in existence. A certain position has been created, and, if the subsidy were to be withdrawn to-morrow, down would go the output of houses, inevitably. You cannot, by the nature of present conditions, get your houses without a subsidy; let us make up our minds to that. But are these conditions permanent? My memory goes back to a housing scheme which I carried out many years ago, before the War, as chairman of the Leicester Corporation Housing Committee. It was one of the half-dozen housing schemes that were carried out under the Act of 1890. I remember that, when we built those houses, we borrowed all the money at 3 per cent. interest. If I had to carry out a scheme to-day—say a scheme in which the cost of the houses, all in, was £400—I should have to borrow that money at 5 per cent. If I could borrow it, as in the case of the Leicester scheme, at 3 per cent., I should save £8 per house, or 10s. more than the subsidy. If the interest charges could be reduced by 1 per cent., that would mean a saving of £4 per house, and I think that that would be of as much benefit to the actual tenant of the house as the full £7 10s. subsidy.

There is another aspect of the question, namely, that of rating. I have had taken out the figures for the rates that are being paid on the 12,000 houses in colliery villages which have been built under my supervision during the last six years, and I find that the rates range from 2s. 6d. per week, or £2 10s. per annum, to £15 per annum. Actually, in the case of some of these cottages, the annual rates amount to £15, the average being about £10. If my Conservative friends, in their benevolent desire in connection with de-rating, had been less affectionate towards the so-called producer, and had included working-men's dwellings in their de-rating scheme, if they had given us 75 per cent. off the rates of these houses, they would have given us a sum of money which would have amounted to more in real value than any subsidy, because—and I want to emphasise this point—the whole benefit of reduction of rates goes into the pocket of the tenant. No profiteer comes between, no trade comes between, so that the tenant of a house is better off with a £3 15s. per annum reduction in rates than with the present £7 10s. subsidy. In the United States of America they realise that that is the case, and, in their attempt to supply the shortage of houses there, they have given the most generous abatements both on local rates and on State taxes, and they have found that they have got all the houses that they want without any cash subsidy of any kind. I think it would be very desirable if we were to turn our attention just now, when we are beginning to realise the cost of the subsidy, to getting cheaper houses than under the subsidy by a generous measure of cottage de-rating and by a better management of the finances of the country by right hon. Gentlemen who now occupy the Government Benches, so that the cost of borrowed money may be considerably less than it is.

There is one other direction in which I think there is some hope. I do not think we have reached finality as regards the cost of building, I do not know whether the House realises how entirely new are the methods of building that we have been adopting. The old-fashioned pre-War methods were entirely different. They did not produce such good houses, but they did produce houses at very low rates. We are now trying, and I think rightly, to do better, but our methods are as yet untried, and there is a great deal of room still for reduction in the cost of building without in any way decreasing efficiency. Take the production of materials. I have tried this myself, and I find that I can make bricks more cheaply than I can buy them. I have made some millions of bricks, although I had no previous experience. Indeed, I find that in a great many things of which I have had no previous experience I can do better than the experts. The reason for that seems to be that the tendency of the amateur is to simplify the methods of the expert. We have not yet solved the problem of the production of materials. The real reason why materials are so dear is because they are produced in such insignificant quantities. A large output of materials will mean very much cheaper costs.

Then there is the question of building methods. The clumsy methods employed by some of my friends in the building trade appal me. You could not run a factory in that way; you could not run any business in that way. Consider the number of men who come and look at a job and go away to think about it, the number of unnecessary foremen who have elaborate consultations and get no "forrader." What is wanted is a real live reorganisation of the building trade. I have managed to get some four or five firms working with me during the last few years who can turn out twice as much as the ordinary contractor. I want to see the workmen in the building trade getting good wages and providing plenty of houses, but I do not want to see so much overlapping as there is in the building trade; I do not want to see so many men coming along and doing small sections of a big job; I want all the work well organised. I do not want to see any kind of sweating, or depriving the men of the full opportunities of their industry, but I am entirely satisfied that, with a proper reorganisation of the supplies of materials and of the actual work of house-building, very substantial progress can be made. I am trying now to get, and I think I shall succeed in getting, very good houses built at a cost of, not £340, as mentioned by the right hon. Gentleman the Member for West Woolwich (Sir K. Wood), but £260. What I want the local authorities to do now, or at any rate during the next 12 months, is to set to work and give us cheaper houses. That is what the people want, and I do not think that this House or the country would grudge a subsidy, even a larger one than at present, if it did not go into the pocket of the builder, but if it went to provide cheaper houses for the poorer sections of the community.

Mr. HAYCOCK

May I ask what is the superficial area of the houses to which the right hon. Gentleman has just been referring?

Sir J. TUDOR WALTERS

They are A. 3 houses.

Viscountess ASTOR rose—

Sir J. TUDOR WALTERS

I am talking about broad general principles, nut from any political standpoint.

Mr. SPEAKER

I ought to tell the right hon. Gentleman that if he is basing his argument for or against a subsidy he is in order, but that a general Debate on housing would not be strictly in order on the Third Reading of this Bill.

5.0 p.m.

Sir J. TUDOR WALTERS

I will abide by your Ruling, Sir. You have given me a very free hand, and the prisoner in the dock has managed to say some of the things he wanted to say. I should like to say one or two words on some of the administrative details as set out in the Bill. I notice there is a larger subsidy for rural houses. I want to emphasise the importance of doing something for the housing of the agricultural labourer. My first emphasis was upon cheap houses for the town dweller, and I should like to expand that on some future occasion. When I compare the amount of money paid in subsidy for urban houses and the relatively insignificant amount paid for the rural housing, I at once realise how neglected rural housing has been. I should like to see the Minister of Agriculture, in co-operation with the Minister of Health, take up the building of 100,000 houses for farm labourers. I think I could show him a scheme under which they could be let at half a crown a week, including a nice garden, not weekend dwellings, but for the bona fide worker on the land. They could be built by the county councils. They should not be tied to any farm or farmer. A hundred thousand houses of that kind with good gardens at an all in rent of half a crown a week would be an incalculable boon to the agricultural labourers. They are a very much neglected class. I have spent my life largely in agricultural districts and years ago I was a landowner. Thank God I got rid of it, but I have still intense sympathy with the agricultural labourer, and I think the Labour Government would earn gratitude for itself if it took up the work that previous Governments have neglected and house agricultural labourers.

I support the Third Reading. I believe that, although a subsidy is an extravagant method of achieving the house-building programme, up to the present it is the only method we have before us. We should turn our thoughts in the direction of revising our methods of getting cheaper money, and taking the burden of rates off the cottage dwellings and that, with a proper reorganisation of the building trade, would make it possible for us to obtain good dwellings for an economic price at a rent the tenants could afford to pay. But that time is not yet and, until it comes, the House must, I think, if it wishes for the provision of houses to be continued on an adequate scale, support the Third Reading of the Bill.

Mr. TOM SNOWDEN

I have listened to the speeches on this question with considerable interest and a certain amount of instruction. It is somewhat unfortunate that I should have to speak after such an eloquent and instructive address and it would be unseemly on my part, as a new Member, to say anything that could be construed to be a lecture to the House. It is only because, like so many other Members, I have had some interest as chairman of a local housing committee that I venture to make a few observations. It seems to me that, if we are going to get the best out of this or any other Measure, the first thing we have to try to do is to give each other credit for being sincere. Although we may differ from the point of view of others, surely on this all important question co-operation is far better than recrimination. I am not, therefore, going to say anything, I hope, which will savour of lecturing. It is all a question of policy and the expenditure that is incurred in pursuing that policy. My experience has been that it is far better to get the idea that the development of our social services does not dissipate wealth but creates it, and it is the desire to try to get the best out of that that has prompted me further to make these few observations. We have a false idea of values. There are a good many Members present who have spent considerable time in local administrative work who are growing tired of us spending our time and our means in trying to deal with effects instead of removing causes, and it is because we want to remove these causes that we are supporting this Bill. I cannot help but think that in every quarter of the House, having regard to the circumstances of hundreds of thousands of people, we want to sweep this scourge away for ever. I do not care who gets the credit for introducing a Bill or for making a contribution in whatever form, if it will mean a mitigation of this social evil. I heard a speech last week from the hon. Member for Withington which did me good, because he seemed to find it in his heart to give credit to others, although it was not his own particular party, for having made a contribution in 1924. If we can pursue it in that light we shall get somewhere. There was a speech made by another Member to which I should like to take exception, because he seemed to deplore the fact that the subsidy would mean unnecessary expenditure. The hon. Member for St. Albans (Lieut.-Colonel Fremantle) said: There appears to be either ignorance or indifference to the housing question, or else there is an ignorant defence of it regardless of the amount of money spent, to which we are opposed. This is the point that rather distressed me. We medical officers of health urge as strongly as we can that the Treasury should reduce the vast sums which were spent by the late Government upon housing in order to provide more money for other important health services which are calling out for treatment.—[OFFICIAL REPORT, 15th July, 1929; col. 102, Vol. 230.] I regretted to hear that speech because, if the subsidy will encourage housing—and I believe it will—it will remove evils caused by bad houses and, in consequence, reduce possible expenditure on the other matters to which the hon. Member referred. If it will do that, we ought, without the slightest hesitation, to do whatever we can to remove the causes which are responsible for the things which, no doubt, the hon. Member had in mind.

Lieut.-Colonel FREMANTLE

I only said it was an extremely extravagant way of doing it.

Mr. SNOWDEN

It is rank waste to have to spend the money we are doing caused directly by bad housing. [Interruption.] If he agrees with it, surely the hon. Member will support the Bill and encourage us to build houses, even though the subsidy will mean a certain expenditure. It is better to spend it on housing than have to spend it in building hospitals.

Lieut.-Colonel FREMANTLE

The whole point is waste. So far as it goes to improving housing, we are all in favour of it. I only pointed out the wastefulness of it.

Mr. SNOWDEN

I differ from the hon. and gallant Gentleman and I should like to think he does not represent the views of other medical officers of health, or even of the medical profession. At any rate, it would not do for the medical officer in the West Riding of Yorkshire to adopt the views expressed here. At any rate, I will not enter into a controversy with the hon. and gallant Gen- tleman. I have not said it in that spirit at all. I feel confident, from my experience in Lancashire, that it is only a question of proportion and we are satisfied that, because it was announced to the country that the subsidy was to be reduced, and finally abandoned altogether, local authorities in the towns and cities were reluctant to proceed on what they might call their larger schemes. Like other Members, I do not care for subsidies. I do not know anyone who does. A subsidy to me is something in the nature of a bribe, and I am not so sure that those for whom the subsidy is intended receive it, but until we have decided on safer and better ways of dealing with the matter at the source, in respect of the land question and other things that could be mentioned, which I should not be allowed to develop at this juncture, we are compelled to face the situation as it is and offer something in the nature of an inducement to get along with this important matter.

The withholding of the subsidy, the withholding of anything in the nature of an inducement, whatever it might be, means a continued poverty of body, mind and soul to hundreds and thousands of men, women and children in this country. The right hon. Gentleman the ex-Parliamentary Secretary to the Ministry of Health said that the prospective tenants would have to pay increased rents in consequence of the subsidy and other things. I would remind the right hon. Gentleman and hon. Members of this House that in the small towns, and more particularly in the larger towns, there are scores of families living in rooms, in attics, and even in cellar dwellings who are paying more than 8s., or 10s., or 15s. a week. They are paying as much as £l a week for rooms in houses and would be much better off paying 8s. 6d. or 10s. a week for houses that are subsidised. They are living in rooms with miserable facilities and are impairing the health not only of themselves but of the other occupants of those houses.

Is it not worth something to have a subsidy for slum clearance? Those who have known what it was to have been brought up in a small back-to-back house, amidst a large family, and who now enjoy better housing facilities ought to find great joy in making contributions, either in taxation or in rates, to enable less fortunate ones to enjoy the facilities which they themselves enjoy. The right hon. Gentleman the Member for Penryn and Falmouth (Sir J. Tudor Walters) suggested that there was not much altruism in the building or in any other trade or business. Let us admit frankly that there is not, but there is a desire to build houses which this Bill will encourage. I believe that the people in the country generally will be prepared to pay the cost that will be incurred, and will find great joy in it because of the fact that they are tired of merely preaching and teaching the need for better housing conditions, better opportunities, and giving to men and women a better outlook in life. It is far better that we should do that and know that we have made a contribution to the solution of this problem than dream by day and by night and never do anything. It is because I feel very strongly that something can be done on these lines, that I hope that this Bill will pass the Third Reading and that we can anticipate eventually a more comprehensive Measure that will enable us to express ideals of which we are not ashamed even in this House. I, therefore, support this Bill with a considerable amount of interest, knowing, as I do, that if we can get continuity and encouragement from this Bill we shall get to business in cur respective spheres, in our towns, villages and cities, with the object of sweeping away for ever the bad social conditions which are a disgrace to civilisation.

Miss RATHBONE

I claim the indulgence which this House always extends to a Member who addresses it for the first time, but I cannot claim indulgence as a novice on the housing question. For the past 19 years I have been a member of the Housing Committee of the Liverpool City Council, one of the local authorities which has been, I think, most active in the matter of housing both before and since the War. In that way, I have had considerable opportunities of observing the effect of the various changes in Parliamentary policy on the action of the local authorities which have been controlled and guided by Parliament. The present Debate is limited to the question of whether His Majesty's Government are right in continuing the subsidy at the present level. I have noticed that prac- tically the whole of the Debate that has taken place has turned upon the question of the effect of the subsidy in two respects. First, on the cost of building, and secondly, on the number of houses that are built with the aid of the subsidy. Upon those two questions I will not intervene, but surely there is another factor which affects the question of whether we want the continuation of the present subsidy, which so far has hardly been touched upon. That is the question whether this subsidy will assist in the production of houses which will meet the need of those who cannot pay economic rents. After all we do not pay subsidies for the sake of houses. We pay subsidies for the sake of tenants, and not for all tenants, but for those who are incapable, without the aid of the subsidy, of providing suitable housing accommodation for themselves. If there were not such tenants we should still need a housing policy for town planning purposes, but we should not need housing subsidies.

Practically every speaker has assumed that the whole question, or almost the whole question, is to secure a continued, and, if possible, a steady supply of that admirable type of houses with which we have all become so familiar—those three-bedroom houses, with or without parlour, with their little gardens fore and aft, which are spreading themselves round every industrial centre in a broad zone, like a sort of milky way, houses that are a refreshing contrast to the dingy rows of brick boxes, with slated lids in which the great majority of the wage earners have hitherto been compelled to be housed. I agree that we do need a practically unlimited supply of those houses, but I agree with one proviso, namely, not at present rents. The question of rents is vital because it determines who will benefit from the houses, whether the houses will benefit those suffering from the housing shortage most acutely and suffering from it longest, and least by their own fault. The question of whether such persons can enter the new houses depends upon the rents at which the houses will be rated. The rents at present vary according to the type of the houses, according to the variations in building costs of the locality and according to the variations in rating in the locality, from about 8s. to 24s., or even more in London. But for the three-bedroom, kitchen house, which we all recognise as the most needed type of house, I believe the average rent, taking the country over, is about 13s. The Housing and Town Planning Association have recently calculated as one result of rather an exhaustive consideration that the cost of that type of house might be reduced to a minimum of something like £400, and that at that price, with the aid of the subsidy and with rates averaging 40 per cent., it could be let for 11s. But there seems no prospect of a reduction either in minimum cost below £400 or in rent below 11s.

The point I want to impress upon the House is that houses at 13s. or even at 11s. are not going to meet the really acute housing need. Who feels that need? Surely those who are at present living either in overcrowded houses or in structurally insanitary houses. Is our present policy doing anything at all appreciable to relieve the need of those two classes—the dwellers in the overcrowded and the structurally insanitary houses? The hon. Member for Withington (Mr. Simon), who spoke the other day in the Debate, has recently produced an admirable little book, which, I hope, everyone interested in the housing problem will read, called "How to abolish the slums." The hon. Member for Withington has shown himself an enthusiastic advocate of subsidies, and of this particular subsidy, and yet the very words with which he began this book are: We have built over 1,000,000 houses since the War. We are well on the way to solving the housing problem so far as the clerk and the artisan are concerned, but we have done nothing for the poorer workers. The condition of the slums in which they are forced to live is probably worse to-day than it was at the end of the War. The overcrowding is almost certainly no better, and the condition of houses is now certainly much worse. That startling statement cannot statistically be proved until the census of 1931 is to hand. I do not think anybody who has practical experience of the housing problem in great cities will doubt its truth. I have not forgotten that the present Bill does not pretend to contain the complete housing policy of the Ministry, especially its policy with regard to slum clearance. We must wait for that until the autumn, but before accepting a Bill the object of which is to keep on the subsidy at the present rate—and, as the right hon. Member for Penryn and Falmouth (Sir J. Tudor Walters) said, there is no indication that the autumn Bill is intended to raise the subsidy—we are surely entitled to ask, whom are we supplying? Otherwise, when the Slum Clearance Bill makes its appearance and when some of us propose Amendments and extensions to that Bill, we may be told: "That would be very nice, but the country cannot afford it." We shall find that we have spent so much money on the slighter and less pressing needs that there is none left for those who need houses the most. It is no use clearing away slums if there are no houses provided at rents within the capacity of the slum dwellers. It has been said that this is only a small Bill. It will only prove small if it fails in its object of increasing the supply of houses. The Financial Memorandum estimates that if 100,000 houses are built in a year under the Bill the additional cost will be £150,000, but, as the Parliamentary Secretary pointed out in reply to the hon. Member for Withington, that is a mere arithmetical platitude. The Bill concerns a difference in the amount of housing subsidy of 30s. per house. Therefore, if 100,000 houses are built in a year, the extra cost will be £150,000, and if 200,000 are built in a year the cost will be £300,000. That is the direct cost. In considering the real extra cost which the Bill is going to place upon the Exchequer, we must add the capitalised value of £6 per annum for 40 years, multiplied by the number of houses that would not have been built if the Bill had not been passed. As no one can compute that, it is easy to represent it as a small Bill.

I am not opposing the Bill, but I would ask whether a Government which represents the party which considers itself specially the party of the under-dog cannot take some steps to secure that the money that we are providing through this Bill and through previous Bills, or at least some portion of it, shall benefit those lower paid workers who cannot afford the present rents? It is quite possible to do that under present legislation, through administrative regulations and through the influence of the local authorities. The crux of the matter is that the local authorities have assumed that because the subsidy is placed on the house, so much per house, it necessarily follows that the subsidy adheres to the house and must be used to lower the rental of the house by a flat rate amount equivalent to the amount of the subsidy. If the object of the subsidy is to provide for those who cannot pay an economic rent, it ignores the fact that capacity or incapacity to pay an economic rent is a personal factor, which does not adhere to the house but adheres to the tenant. Moreover this factor varies in the tenants. It is not merely a question of the prudent people who are going to be housed, or whether they are slum dwellers, or whether a proportion of the houses are in a particular locality, but what is the occupation of the people who are housed and what are their wages.

There has also to be met this factor, that the capacity or incapacity of an individual to pay an economic rent varies according to the number of people who have to live on his wage. Take a man who is a municipal employé, earning the standard rate of wage for such labour of 50s., and assume that he has three children, who are nearly finishing at school. What is that man's capacity to pay rent? About 6s. a week, allowing for the barest necessities and the lowest standard of life for the family. Wait, however, for three years, when all his children has entered the labour market and has become an asset and not a liability. In those circumstances, his capacity to pay is 15s. or 17s. a week, which would enable him to take advantage of the present type of house. The result of deducting the subsidy from the amount of the rent on a flat rate basis is that the rents are lowered by 3s. 6d. all-round. What proportion of the would-be tenants of municipal houses would be able to pay the economic rent value of the house, reduced to the precise extent of 3s. 6d. a week, neither more nor less? I should say that it is a very small proportion. Of those who need houses most sorely, nearly all of them living in insanitary or overcrowded conditions, the great majority cannot even think of entering into a corporation house, because the difference between the rent charged and the economic value of the house and their capacity to pay cannot be bridged by a mere 3s. 6d., or anything like it. Of those who do enter the houses, a con- siderable proportion pay the rent by pinching it off the food bill, while to others who do not need the 3s. 6d., it is a mere addition to their pocket money.

With respect to the subsidy of £75, or later £50 paid under the Chamberlain Act, my experience is, and I suppose it is the experience of most housing authorities, that when the buyer of the house—the houses built by the aid of the Chamberlain subsidy were invariably sold—entered the house, he almost invariably applied to the local authority for leave to put up a garage, in order to house the motor car on which he had set his heart. A very laudable ambition, but is there not something wrong with a housing policy which for 10 years has been pouring out millions of the nation's money in aid of housing for people who can afford to keep motor cars, and has done practically nothing to relieve the 10 per cent. of the whole of the population who, according to the returns of the Registrar General, are living under a miserably inadequate standard of housing, and in overcrowded conditions?

I believe that the error in the past has been in the method of applying the subsidy. It ought never to have been used for a flat-rate reduction of rents. It would have been far better if the local authorities had fixed the rents—I know that I am enunciating a heresy in the view of most people here—at the economic value of the house, and had then used the subsidy according to principles clearly laid down and carefully thought out, to relieve the needs of those who most needed housing relief, those who were living in insanitary or overcrowded conditions, those who were suffering—there are many who cannot be even touched under the present subsidy arrangement—from infectious tuberculosis, affecting those crowded together with them in one-room tenements; those bringing up young children and whose wages for a temporary period are dragged down by the cost of rearing their children. It is quite possible, even under the present Statute, to meet the needs of these classes. I believe that it has been done to some extent by certain small authorities, such as Banbury, Rotherham and others, which have adopted the plan of making a rebate off rent of 6d. for each child, balanced by 1s. on the rent for each lodger.

It may be said that these look like trumpery schemes, but proud municipalities such as Birmingham, Liverpool and the London County Council need not be ashamed of taking a lesson from small municipalities. There are very few great social experiments in this country that have not begun on a small scale in obscure places and by obscure people. When we have once departed from the economic basis of rent, what is the use of ignoring the factor that incapacity to pay is a personal thing and does not attach to the house, but to the tenant? I suggest that the Ministry, while thinking out their big slum clearance policy, should give every possible encouragement to local authorities to use their subsidies in the way I suggest and get rid of the idea, for which I believe there is no basis in the Statute itself, that because you give a subsidy to aid in the building of houses you need to spend that subsidy on a flat-rate reduction equal over all houses. Why should they not use the subsidy in the form of rebates of rents for children? The principle is not new. There is not one hon. Member in this House who is entitled to it who does not accept from the Chancellor of the Exchequer the rebate on his Income Tax in respect of his wife and the number of his children. The principle is extraordinarily easy to apply. While there may be administrative difficulties in the rebates on rents based on income, because it is possible to misrepresent or conceal your income, it is practically impossible to conceal or misrepresent the number of your children. A baby is the most easily provable fact in existence.

May I make a suggestion which is not irrelevant to the purpose of the Bill? It has been repeatedly pointed out that this is a marking-time Bill, to give the Ministry time to consider and bring forward their bigger schemes. Is not the House justified in suggesting that they should be allowed to consider the policy of the future with His Majesty's Government, through a Select Committee? We have had ample evidence from this Debate that the ex-Minister of Health and the ex-Parliamentary Secretary to the Ministry of Health and the present Minister of Health and the present Parliamentary Secretary to the Ministry of Health, have arrived at precisely opposite conclusions as to the effect of the subsidy on the cost of building and the supply of houses. Presumably, they have had precisely the same data to consider. Why may not the House bring its collective wisdom to bear upon the same problem and have an opportunity of considering the data, not merely with a view to determining the effect of the subsidy on the supply and cost of houses, but the much larger question of the effect of the subsidy on the kind of rentals and the kind of tenants; the practicability of the slum clearance scheme, which will be useless unless we have houses in which the dispossessed people can be put; the limits of the possibility of reconditioning, to which ex-Ministers are known to attach much greater practical importance than many of us who have been long thinking of that method believe it will have; the possible effect of the Kent Restriction Acts upon the housing problem, and also the effects of transport facilities upon the housing problem?

During the closing years of the War, I think there were nine committees appointed to discuss various aspects of the housing problem, but they were nearly all of them content to consider the structural aspects of the housing problem, the cost of building, the type of houses, building materials, labour supply and so forth. Now, after the lapse of 10 years, I suggest that we want a Select Committee to consider the housing problem from the tenancy side, to see how we can manage to put up enough houses and to see that those houses pass into the hands of those whose housing needs are the sorest. At present our housing policy may be compared to our having built, at vast cost, a reservoir intended to relieve the thirst of people who are dying of thirst, and then allowing the first call on the water to go to those who need water only for the watering of their roses.

I thank the House for the patience with which it has listened to me, and I am glad that the first occasion on which I have had the opportunity of addressing the House has enabled me to express an opinion which, whether it be a right opinion or a wrong opinion, is the fruits of nearly 20 years of theoretical and practical study of the housing problem, and which has led me to the conclusion that while our study of the housing problem for 20 years, even our pre-War housing problem, has been honestly and painstakingly applied, and has done much good, it has done far less good than it might have done, because it has been vitiated from the first by the economic fallacy that, when you are dealing with a State benefit, which is certainly limited to a comparatively small number of people, because you cannot subsidise houses for the whole population, you can best use that subsidy by a flat-rate reduction of cost; all-round. The problem of incapacity to pay an economic rent is a personal problem and can never be solved, whatever the subsidy may be, by so mechanical a device as a flat-rate arithmetical equal reduction of rent by the amount of the subsidy upon the houses built by the local authorities.

Dr. VERNON DAVIES

It is my duty and my privilege to express our deep appreciation of the speech which we have just heard from the hon. Member for the Combined English Universities (Miss Rathbone), a Lady who has come to this House with a very well-deserved reputation in social and housing questions, and a reputation which, I am sure, will be enhanced by the speech which she has delivered. I can assure her on behalf of the House that we shall always be pleased to listen to her, although, perhaps, we may not always quite agree with her. The question before the House is one of vital importance to the people of this country. The housing of the people is not a political question, and this House is to be congratulated upon the tone of the Debate, because on all sides there seems to be a general desire to see that houses are built, and built at an economic rate. The very fact that we have had two Housing Acts, one in 1923, a Conservative Act, and the other in 1924, a Labour Government Act, running side by side throughout the years is distinct evidence that this House is determined that the matter shall not be a political one and that the two classes of houses shall have a fair trial.

The question we have to decide to-day is between two theories. One is the theory of the late Minister of Health, who after great consideration and as a result of his prolonged experience came to the conclusion that a subsidy has a distinct effect upon the cost of houses; that if the subsidy is raised there is a tendency for the cost to rise, and, on the other hand, if the subsidy is reduced there is a tendency for the cost of houses to be reduced. If there is one thing necessary to ensure a sufficient supply of houses at an economic rent it is that they should be as cheap as possible. It seemed to me that the late Minister of Health was on the right lines, and I approved and supported his policy throughout the last Parliament, At the beginning he said that it was an experiment. His theory was that the subsidy had a distinct effect on prices, and that if he reduced it a little he would expect to find a fall in prices. Although hon. Members opposite strongly criticised and ridiculed this view, and prophesied that he right hon. Gentleman was wrong, the facts simply proved that he was right. The number of houses built increased in number, and decreased in price; and decreased by more than the fall in the subsidy. When anyone makes a prophesy, acting upon a theory, and the prophesy comes true, there is fairly good evidence to suspect that the theory may turn out to be true, and I supported my right hon. Friend when he further reduced the subsidy in the last Parliament, because what I want, and what I am sure every hon. Member wants, is to produce a sufficiency of houses at an economic rent which the poor of the country can afford to pay.

Now we have this Bill brought in by the present Minister of Health who takes the exactly opposite view. Although he will not deny that subsidies may have some effect upon prices he is not concerned so much with the matter of prices as with the building of houses. He says: "I want houses and as quickly as possible, even if I cannot get them cheaply." That helps the building of houses, but it does not help to build them at an economic rent which the people can afford to pay. Hon. Members must be puzzled to know which of the two right hon. Gentlemen is correct. Is the subsidy theory good or is it bad? We have had a remarkable speech this afternoon from the right hon. Member for Penryn and Falmouth (Sir J. Tudor Walters), whose knowledge and experience are probably unrivalled in this House and in the country. Every word he uttered must receive the very careful consideration of all hon. Members, and of all those who are interested in housing. When he deliberately makes the statement that he is convinced from his experience that part of the subsidy goes to the builder and that the whole benefit is not going to the tenant in the lowering of rent, it is a point which we must bear in mind. If it is so it means that this Bill is simply going to put more and more money into the hands of builders and builders' merchants, or other parts of the building trade. It means that we are deliberately offering this bribe to the builders, and we are saying: "We will give you such and such a bribe if you will promise to build so many houses." Is that the policy of this House? Is that what this country desires? Are we to go on our knees to the builders and say: "Will you please build houses to house the poor people of this country? And if you do, we will give you a bribe for doing it."

Mr. MacLAREN

That is what you did to the farmers.

Dr. DAVIES

That remark brings up the question of subsidies altogether. During the discussions in this House on the coal subsidy I heard the strongest arguments used against it, and the greatest complaints made about it by the Liberal and Socialist parties. During the same Parliament I heard bitter complaints with regard to the beet sugar subsidy, and particularly from the Liberal party which opposed it for all they were worth. I understand that the policy of some hon. Members of the Liberal party has changed a little, and an hon. Gentleman, the Member for Withington (Mr. Simon) believes in the subsidising of families; thus giving a premium to fertility to the poorest classes in the community. If we are to give a subsidy, the question is how much we are going to give; and for how long; and whether it should or should not be passed on to the tenant. Are subsidies to help the building trade and the building rings, if there are such rings? I am making no accusation, but I am sure the idea of the Minister of Health and the Parliamentary Secretary is that any benefit from the State should really filter down to the tenant.

Mr. MacLAREN

Or the patient.

Dr. DAVIES

We are talking about housing. I am afraid the policy of the Government may not have that effect, but I am not prepared to vote against it for a moment because I think the question is more or less an experiment. I would like to suggest to the Parliamentary Secretary that the Minister of Health has a sufficient amount of information in his Department to enable the House to come to a considered opinion, and when the scheme which is germinating in the brain of the Minister of Health comes to be considered in the next Session it might be well if a White Paper was laid before Parliament giving the whole arguments for and against a subsidy; what it has done in the past, and what it is expected to do in the future. This House could then come to a reasoned opinion with definite knowledge on the subject. If the Minister of Health is right in his theory it would be to his great advantage, and to the advantage of the country. If, on the other hand, it points in the other direction I am sure he is a big enough man to acknowledge it. I believe he is trying to do the best he can for housing, but this difference of opinion between two different theories leaves me to-day as undecided as ever I was.

My belief up to the present time is that the late Minister of Health is correct in his theory and that the Government are making a grave mistake, but I do not go as far as to say that I am right. The arguments of the Minister of Health, from an economic standpoint, seem to me so higgledy-piggledy, so upset, that we are not in a correct position to form an accurate conclusion. It would be a great advantage if the Ministry of Health would issue a White Paper giving all the information and all the relative facts to enable us to form a conclusion. If, in the production of this White Paper, the right hon. Gentleman found that he was wrong, that his subsidy policy was retrograde, not progressive, then he would, of course, be compelled to alter the whole of his scheme, and it might alter the whole of his housing policy. I hope we shall have such information, any-how, as will enable us later on to come to a very definite conclusion as to whether a subsidy is right or wrong. If it is right, then how much it should be, and for how long it should continue; and is it to go to the tenant in the reduction of rent or as a bribe to the builder to help him to build houses?

Mr. STRAUSS

I had intended to follow the excellent advice which my hon. Friends have given me to keep my ears wide open and my mouth shut tight until I had been in the House some considerable time, but this is a matter on which I feel so keenly, and on which I have had a certain amount of experience as a member of the largest building authority in the world, the London County Council, that I intend to throw discretion to the wind and say a few words to the House. Comments have been made by previous speakers as regards the inadequacy of the subsidy in stimulating building in rural areas. I can say nothing about rural areas, but I do know That housing in London has not been proportionate, or anything like proportionate, to the demands for houses reckoned on a purely population basis. The proportionate number of assisted schemes which have been put up in London compared with those put up throughout the country is something like 12 per cent., while the proportion of population in Greater London as compared to the whole country is about 20 per cent. London seems to have suffered as well as the rural areas. I was much struck by a point made by the right hon. Member for Edgbaston (Mr. Chamberlain) when this matter was before the House on the last occasion. It struck at the kernel of the matter. The right hon. Gentleman said: It is a question which I bate never been able to get a satisfactory answer, or indeed to get any answer at all from the party opposite. This is the question? 'How can a cut in the subsidy possibly force local authorities to reduce their rate of building unless it has had the effect of putting up the price to them?' "—[OFFICIAL REPORT, 15th July, 1929; col. 81, Vol. 230.] 6.0 p.m.

I do not like to rash in where angels fear to tread, but surely the answer is this: Local authorities are, of course, the authorities which carry out housing schemes. Until a few years ago they built very few houses, practically none. It is since the War that they have undertaken the building of houses after pressure put upon them by the Government; and they react very closely indeed to the attitude which the Government take in attacking the housing problem. When these subsidies were cut on the first and second occasion, there was strong opposition from local authorities. They were keen and anxious to go on with their building schemes, and a deputation from the County Councils Association and the Association of Urban and Rural District Councils waited on the Minister of Health and asked him not to cut the subsidy. They wanted a bigger subsidy for building, and they were prepared to provide a bigger subsidy out of rates in order to go on with their housing schemes. The Minister cut the subsidy, with the inevitable result that there was a reaction in the housing activities of the local authorities; they slackened their schemes or stopped their schemes, because they felt that the central Government was not really as keen as themselves in dealing with the housing problem. It was a natural and psychological result. There may have been, as has been argued previously, a certain economic result, in the fall of prices, but it is certain that there was a definite human result in that fewer houses were built and overcrowding was consequently made worse.

As regards London I have not exactly a criticism but a comment to make on this Bill, in that it does not really touch the kernel of the difficulty of relieving overcrowding in London. As a member of the London County Council I have every week families coming to me and asking me what I can do to get them out of their housing difficulty. They are probably living four, five, six, seven and even nine in one room. The father of the family may be perfectly well able to pay the rent which is demanded in the ordinary way for a house built under these schemes. He may be getting well above the average London wage, say, £3 5s. or £3 10s. a week. Sometimes the parents bring along a certificate from a doctor saying that it is absolutely essential that the children should be taken out into the fresh air for their health sake. Yet these people cannot, and will not, under this Bill, be able to get houses any more easily. Many of these men are ex-service men. It happens that one of the most famous V.C.'s in the War, Lieutenant Michael O'Leary, lives at this moment in my constituency, with a wife and five children, in a tiny little room, although he has recently been promised better accommodation.

The crux of the matter is this: The man is willing to pay the rent. He maintains that he will be able to pay it. But his work is in London, and the houses which are available are all outside London. If he is to get a house he has to pay, on top of the rent, which he can manage, a considerable fare, which he cannot manage. From the estate at Becontree, for instance, he has to pay a fare of 1s. 1d. or more a day. If there are several children over the age of 14, as there often are, not only the father, but the other children who are wage-earners also have to pay this exorbitant amount in fares. It is that which makes it impossible for the most overcrowded people in London to obtain houses in which they can live. I very much hope that when the Government's bigger scheme is brought forward in the autumn very serious consideration will be given to the essential matter of stopping the pulling down of houses in order that factories might be put in their place, and, even more important still, that provision will be made for the transfer of factories in London to the newer estates, by financial inducements if necessary, and that encouragement will be given to new industries to go to these estates outside London so that the estates can be changed from the dull dormitories that they now are into live and thriving satellite towns.

As one who has been very closely in touch indeed, during the last few years, with housing in London, I welcome this Bill, and particularly the announcement that it is the forerunner of something greater in the autumn. I am sure that this legislation has brought hope to thousands of Londoners and, I suppose, to people in other big towns as well who had given way to despair. If the Government did nothing more than pass this Bill and the other larger Measure which is to come later, it would, on that alone, have more than justified its election to office.

Mr. E. D. SIMON

I wish to congratulate the hon. Member who has just spoken on the very valuable and interesting speech he has made, especially in reference to housing in London. I want to deal with one matter which was mentioned by the hon. Member for the Combined English Universities (Miss Rathbone), and that is that the Bill will not provide houses for the poorest workers with the larger families. That is quite clear. It is a matter which, I understand, the Minister of Health proposes to deal with in a later Bill. None the less it is very valuable that the matter has been brought forward to-day. I want to deal this afternoon shortly with one point. I am very glad to see that the right hon. Member for West Woolwich (Sir K. Wood) has returned to his place. The point to which I wish to refer is the main and fundamental question as to whose pocket the subsidy goes into. Will this extra 30 shillings go into the pocket of the builder or will it enable us to get cheaper houses? It has been erroneously stated that I have an affection for subsidies. I am very far indeed from liking subsidies for their own sakes. There is one thing that I want and care more about, and that is the building of cheap houses at rents that the workers can afford to pay. I put that first. If it involves subsidies, I am prepared to waive my objection to subsidieis. The question is whether or not subsidies are really an important factor in providing cheap houses.

The right hon. Member for West Woolwich said, on the Second Reading of the Bill, that there were two bodies of opinion—one that held that the only way in which to get houses for the lower-paid members of the community was to pay an adequate subsidy; and the other that held that the sooner we got rid of the subsidy the better and the more quickly would houses be built. You could not have stronger statements on two differing points of view. If the right hon. Gentleman really felt that the sooner we got rid of the subsidy the better it would be and the more quickly would houses be built. Why did he not carry his convictions into effect when he had the power during three years? Why did he not wipe out the subsidy altogether and get the houses built more quickly?

It really is an economic question, into whose pockets the subsidies go. It is extraordinary that in this House the opinion on this economic question seems to depend entirely on the party to which a Member belongs. Almost everyone in the Conservative party believes that subsidies do not enable you to let cheaper houses to the workers, but almost everyone on the other side of the House believes that they do. Suggestions have been made that a Select Committee or some kind of Committee should be appointed to consider the matter. I would almost like to suggest a Committee of economists to advise the Government where the subsidy goes. It is generally agreed that what we want is a house at a rent of something like 10s.—not more than 10s.—for the artisan class, and then some very much cheaper house for those who cannot afford to pay that rent. What are the figures? Let me first quote the figures given by the right hon. Member for Edgbaston (Mr. Chamberlain) the other day. I will show by one set of figures how the subsidy under proper conditions affects the price.

In December, 1922, the right hon. Gentleman said, the lowest price for the non-parlour house was £346. At that time there was no subsidy available; builders were practically in bankruptcy. In the first quarter of this year there was a subsidy available, a very large subsidy indeed, the capital value of which was no less than £187. If the right hon. Gentleman's figures were correct one would think that with a subsidy of £187 the price of the house would be very much higher. In fact it was nothing of the kind. The price in the first quarter of non-parlour houses was actually lower than in December, 1922, that is to say £339 compared with £346. If you take the capital value of the subsidy at £187, and deduct that from the £339, which was the cost of the house, you are left with the actual figure, on which you have to charge interest and sinking fund, of only £152. That is to say, that in the first quarter of this year the average non-parlour house was only £152, on which interest and sinking fund had to be charged. That was owing to a subsidy of £187.

I would like to challenge right hon. Gentlemen on the Front Opposition Bench as to whether they really think that if that subsidy were abolished we could in some extraordinary manner start building satisfactory non-parlour houses for £152. Everyone knows that it is wholly out of the question. The most optimistic suggestion of my right hon. Friend the Member for Falmouth (Sir J. Tudor Walters) was that he could build them for £260, but he did not give the area of the house. It probably was something like that of some of the houses built in Birmingham, which are very small indeed and very much below what most people in this House would be prepared to accept as reasonable A 3 houses. The houses in Birmingham, I believe, are of 320 square feet, and are very much smaller than most of us would accept as reasonable houses, which are generally put at 700 or 750 feet. Those are striking figures. I hope that the right hon. Gentleman will tell us how he is going to get a decent A 3 house built for £152, which is the actual average price, after deducting the subsidy, in the first three months of this year.

Before deducting the subsidy the house cost £339, and the economic rent on that is 14s. After deducting the subsidy the economic rent is 10s. We have, therefore, by the gradual reduction of price and with a subsidy of £7 10s., now arrived at a position in which the local authority which builds economically and does not build unnecessary large houses, can let them at 10s. a week. That is a very great advance, and it should undoubtedly begin the process, which has not yet begun, of drawing families out of the slums into these houses, if you can build a large number of them. That is why I welcome this Bill. It means practically 10s. a week rent for these houses with a subsidy of £7 10s. That is a very great achievement. We can now, thanks mainly to the Act of 1924, hope to do this. The building trade has been expanding and is able to build 160,000 houses a year of a kind which the economical local authority can let at 10s. a week.

I hope that the right hon. Gentlemen on the Opposition Front Bench will let us know how they believe it to be possible to let a house of that sort at 10s. without a subsidy. My right hon. Friend the Member for Penryn and Falmouth said there were other forms of subsidy such as reduction of rates and reduction of interest. I remember that in 1924 the right hon. Gentlemen the Member for Shettleston (Mr. Wheatley) said that under real Socialism there would not be any interest, and he would then let the houses at 3s. 3d., but that was a very fantastic calculation. If you like to give a subsidy in the form of a reduction of rates, it really makes no difference whether you do it in that way or the present way. The point is that either by a reduction of rates, or a reduction in the rate of interest, or by an actual subsidy of the present type—somehow, you have to bring that price down to somewhere in the neighbourhood of £150. I am very glad to know that nobody in the House wants to cut down the size of houses and therefore we are left with this question. The price of £339 is not necessarily a minimum price. It might be possible to bring it down to £260 and the right hon. Gentleman would have the best of our good wishes if he succeeded in doing so. He would be doing a very good service if by means of mass production or in any other way he found it possible to achieve that result and it would be possible either again to reduce the subsidy to a certain extent, or to reduce the 10s. to 9s.

I should like to say how much I agree with the hon. Member for the English Universities that it would probably be a mistake to increase the flat rate subsidy beyond the present figure. The right hon. Gentlemen the Member for West Woolwich taunted the Minister of Health with not increasing this figure to £9 and was good enough to assure him of my support if he did so. The right hon. Gentleman is quite wrong on that point because I think it would be the greatest possible mistake to put the subsidy back to £9 for the reason given by the hon. Lady. If there is any more money available I hope it will be applied not to increasing the flat rate subsidy, but in enabling local authorities to build much cheaper houses for those large families in the slums who cannot be drawn out of the slums in any other way. Taking into account land, drains and roads which add about £50 to the cost, roughly speaking the cost of a decent non-parlour house is about £400 which by the subsidy is brought down practically to the equivalent of £200. If the right hon. Gentlemen on the Front Opposition Benches believe that reduction of subsidy is the quickest and best way to get cheap houses, I hope they will explain by what means they propose to bring down the cost of houses from £400 to £200. That is the crux of the whole question and if they could do that, I would be in favour of abolishing all subsidies. But I believe it to be utterly impossible and for that reason I wholeheartedly support the Bill.

Mr. F. RILEY

I have listened to a good many of the speeches upon this subject during this and the previous Debate on the Bill. I was particularly interested in the speech made last Tuesday by the hon. Member for Withington (Mr. Simon) who seemed to divert the discussion to the main problem of dealing with those cases in which greater difficulty than the ordinary is experienced in paying the rents. I was also interested in the speech of the right hon. Member for Penryn and Falmouth (Sir J. Tudor Walters), because I remember his work 20 years ago. He expressed the hope that at a future date it would be possible to build houses at a price of £250 or £260. I wonder if he left out of account some of the influences which might be encountered in any such scheme as that. At the risk wearying the House, I should like to relate an instance from my own area. A parish council not 20 miles from London, two years ago instituted an inquiry and discovered that the housing conditions of a large number of the people were extremely bad. There was a very keen tussle with the parent body—the rural council—ending, as was perhaps inevitable, with an appeal to the Ministry and a public inquiry. The rural council were instructed to build houses and presumably those houses were to be built for the people who needed them most. With hardly an exception, the schedule of information showed the names of people who were on very low wages.

The scheme has been going on for nearly two years; 10 houses have been built and all the houses are not yet occupied. Now it is discovered that the tenants have to pay a total of 15s. 6d. or 16s. per week, with the result that the very people for whom the houses were intended will not be able to occupy them. Most of the people who were quite ready to give information about wages, number of children and so forth, were on very low wages. An agricultural worker's wage is 31s. per week and it is a question whether an agricultural labourer with 31s, per week can afford even the 6s. mentioned by the hon. Member for the Combined English Universities (Miss Rathbone). There you have a case in which the purpose of the Act has gone astray—I will not say that it has been abrogated, because there were difficulties but I think it should be open to somebody to get the report of the analysis of costs in connection with such a scheme. I do not know how far the land purchase factor entered into that scheme, but I suspect that it was an important factor and I know that nearly eight months were consumed in negotia- tions between the rural committee and the only land-owner who could sell or did sell land, before an agreement was reached on that matter.

There you have an interest which might cut across any scheme of the kind in similar circumstances, unless, while we are dealing with the question of houses, we also deal with the ownership of land. That appears to be a fair deduction from our experience. The right hon. Gentleman the Member for Penryn and Falmouth has a wide experience of building. He has built all sorts of property from mansions and large residences to farm cottages. I would welcome any advice or assistance which he could give in work of this kind, but I think the Government must necessarily take into account any influences which may cut across the purposes of building or the machinery for building. One of the tragic things about the housing problem is the manner in which other things are affected by it. The other day I heard of the case of a young boy aged six years who was attending one of those excellent institutions known as open air schools and who constantly wanted to go to sleep. Sleep is part of the routine of an open air school and a very excellent provision too; but this boy wanted to sleep all the time, and when the circumstances were investigated by the teachers, they found that he belonged to a family of six who lived in one small room and that the sleeping accommodation of this little boy was the bottom of a cupboard. There is an instance where the question of housing affects the question of education. It may be that in the future we shall consider the whole social question from one point of view, but these are matters which I suggest to the House and the Cabinet as worthy of consideration.

The question of ability to pay is another aspect of this subject which we ought to bear in mind and from which those of us who have any connection with industrial areas cannot escape. I represent a constituency, part of which is an industrial town. I refer to Stockton-on-Tees. In that town there are 14,000 houses. In nearly 1,700 houses two families live; in over 70, three families live; in nearly 30, four families live; and there are seven cases of six families living in a six-roomed house. Things of this sort make us afraid when we consider them from the point of view of overcrowding. The difficulty of the house rent factor is likely to be felt most where there is a large degree of unemployment, and the unemployment figure in Stockton since 1920 has been almost static. It has stood at about 4,500 in a population of 68,000. That is tragic. There is no other word to describe it. How can these people who are now living in one or two rooms hope to move into houses which the local authority has built while insecurity of employment is just a normal factor in their lives? So we have this tragedy of the housing shortage cutting across education and employment and hitting us wherever we look. An hon. Member has referred to housing conditions in London, but I have here a report of an independent inquiry which has been made and no more terrible document, I think, has been penned of late years.

It is the sort of thing from which one would like to escape in silence, but we can purchase silence too dearly. We have been too silent about the terrible conditions in which our people live. There are tens of thousands of young and inexperienced persons upon whom these terrible housing conditions are imposing a severe test, which never ought to be imposed, even upon adults. They are bearing it, and they are fighting it magnificently and successfully, but the social organism which supports it and which expresses its attitude even in silence is utterly condemned. Those who have read the Report of the Glasgow Housing Committee know what a fearful document it is. It reveals a condition of things which literally makes every right-thinking person in the Kingdom quite afraid of the future. It is not that our people cannot stand these conditions; it is not that they are going to be subdued by them, but that they create such a burden as our constitution is quite unjustified in placing upon them. I would, therefore, appeal to the Government not to be satisfied with the small thing in their housing proposals. I hope that, when their next Bill comes forward, it will propose something so definite that those least able to pay will be taken care of first, certainly. If we do not do that, the charge against us in the future will be a very serious one indeed. I support this Bill, as I say, in the hope that the next one may be both a wider and a better Bill.

Brigadier-General CLIFTON BROWN

I do not know if it is the first speech of the hon. Member for Stockton-on-Tees (Mr. F. Riley), who has just sat down, but, if so, I am pleased to give him my very sincere congratulations, and I hope we shall often hear him again. He will forgive me for defending myself as an agricultural landowner about one point, and I wish hon. Members would realise that an agricultural landowner is very different from an urban or town landowner. I have 50 odd cottages, for most of which I get 3s. rent, and I do not get 6s. for any of those that are not let for that to my own labourers or estate workers. I do not think there is any local authority or anyone else in the country who really helps in this problem of low rents as the agricultural landowners. What we all want is enough houses, and houses at rents which people can afford to pay; and, looking at this Bill from that point of view, I must own that I think we are right to go on giving a subsidy for a bit longer at the present moment. I have never quite agreed with the last two cuts proposed by my own party, though I think the first cut has been justified from the point of view that it has cheapened building and, therefore, tended to bring down rents. I have always said, in my election addresses and on the platform, that the Socialist 1924 Act was a most useful Act for local authorities.

In my own constituency, at Hunger-ford, a year ago they built 120 to 150 houses, in a very poor agricultural district, with the agricultural subsidy, and those houses worked out at very little over 5s. rent; and at Newbury, lately, they have been putting up houses under that same Act, and they work out at 7s. rent. I can assure any Minister of Health that if he wants to help the country people—and that is what I want to do—he should certainly continue that Act and help local authorities to go on building. If local authorities in the country districts can build and let houses at those rents, why cannot the Minister fix the rents? Would it not be possible to say to the local authorities, "You get this subsidy, and therefore your houses are not to cost more than 5s. or 7s. rent "? I know there are objections very often to fixing a minimum, as it is apt to become a maximum, but I hope that something of that sort might be done in future legislation, so as to ensure that the subsidy goes to the tenants and not to the builders of the houses.

Another point to which I should like to draw the attention of the Minister of Health is this: Subsidies must be carefully looked after, and in very many cases where you get a subsidy the houses are not let to workers and agricultural labourers, but to other people, who make better tenants for the local authorities. Local authorities, like private owners, like to get us much rent as they can, and the result very often is that the poor labourer gets left. There is one other point from the country point of view which, though I am afraid it cannot be altered in this Bill, will, I hope, be kept in mind, and that is that in every village and town in this country there are old people, who do not require the big subsidy houses. They can neither afford the rent nor do they require such houses, but their children, who have grown up in the village, do. Very often there is a shortage of houses, and you ought to have a couple or three or four almshouses in every village, or more in a bigger town, where the old people could be moved into the two-roomed cottages, and those cottages could be let at rents of 3s. or 4s. almost without any subsidy.

I have great sympathy with the plea of an hon. Member opposite that a certain amount of de-rating should be applied to our housing, instead of a subsidy; it might be applied to small houses for old people which could be excused paying rates for 25 years. You would then get private enterprise building a great many of these houses, which would help considerably. Where I think the Minister may fail and may not provide the number of houses necessary is if he does not encourage private enterprise, either in the way I have suggested or in other ways, or enable private enterprise to believe that it is quite safe in building houses and able to get 3s. or 4s. rent for them. I do not think we should have had any success in producing houses in the past if we had only trusted to the local authorities and subsidies and had not had the full benefit and help of private enterprise. What we want to do is to look at this problem from the point of view of producing houses at rents which the poor people can afford to pay, and I can assure hon. Members opposite that, if they will treat private enterprise fairly, it will not only be cheaper for them, but they will get the numbers required and will help to bring rents down to what the people can afford to pay.

The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Miss Lawrence)

With some regret, I recall the House from the Debate to the Bill. This is a very small and modest Bill, but we have had a very long, a very expert, and a very interesting discussion. The feature of the Debate has, I think, been the number of Members who to-day and on a previous stage of the Bill spoke for the first time in this House. I think that is a sort of indication of the extreme interest with which the House considers this question and I may say that it is very encouraging to my right hon. Friend the Minister. Let us consider for a moment what an enormous and wide Debate we have had. Almost every Member who has spoken has attacked the root problem which lies before the Government, namely, the question of securing enough houses at rents low enough for the poorest class of the inhabitants to pay, and every other Member proposed some new and interesting manner of dealing with the question. The Debates have been very fertile in suggestions. We have had the question of lower rates of interest to be charged for the loans to the local authorities, we have had, from three or four quarters of the House, a proposal as to special de-rating for small house property, we have had, from other quarters of the House, and particularly from the hon. Lady the Member for the English Universities (Miss Rathbone), a proposal of a kind of family allowance. The right hon. Member for West Woolwich (Sir K. Wood) asked why we did not get on with the Housing Bill before the autumn—

Sir K. WOOD

I asked why you did not go back to the original subsidy.

Miss LAWRENCE

The right hon. Gentleman gave a regular cross-examination about what we were going to do in the autumn with reference to the subsidy, and why we did not put up the sub- sidy, and he showed an enormous curiosity about a whole number of things. My point is that, with a House so interested and so critical, with a House so desirous of exploring every possible avenue, we could neither have brought in a Housing Bill at this period of the Session, nor could we have restored the original subsidy. The hon. Member for Withington (Mr. E. D. Simon), for instance, said that if we had attempted to go back to the 1924 subsidy, he would have opposed it, because he could think of a better way of spending the money. What is quite certain is that if the House had once embarked on the fascinating topic of how we could spend any increased subsidy, we might have spent August and September here before we should have finished, and I think that is plain to everybody who considers the question and the extraordinary fertility of the suggestions which have come from various hon. Members.

Now I turn to the Bill. I will give the House two or three figures to show why we want this Bill. I have here the figures of the different classes of houses that were built in the quarter ended September, 1927, the quarter before the subsidy cut, and the figures after that quarter. Under the 1923 Act the local authorities built 6,486 houses in the quarter ended September and 2,176 in the next; private enterprise built 37,000 houses in the quarter ended September and 8,000 in the next. The local authorities, under the Financial Provisions Act, 1924, built 45,000 houses in the quarter ended September and 13,000 houses in the next quarter. Altogether, under assisted schemes, 89,000 odd houses were built in the quarter ended September, 1927, and 24,000 houses in the quarter ended January. I want this House to consider what sort of objection would have been raised if we had forced production up in one quarter and had such a slump in the next. The actual figures were 89,900 houses in one quarter and 24,300 houses in another. In a slump of that kind you make prices capricious and disorganise the trade. These are the only considerations that led us to bring in this little emergency Bill before the autumn. It would have done a very bad service to house building if we had dislocated the trade, and it would have done a disservice to employés if we had created an artificial slump in the building trade in the months of October and November. That is the only case with regard to this little Measure, and it has so far won the favour of the House that there is not going to be a Division on the Third Reading, any more than there was on the Second Reading, or any more than there was any Amendment in Committee.

I want to say one or two words about prices. Some people talk about these grants as if they are subsidies of the same nature as subsidies for the sugar beet industry or for the coal trade. People say that subsidies are unpopular but grants-in-aid of local finance are perhaps the most popular thing in the country of which I know. This is not a subsidy in the usual sense of the term. It is a grant-in-aid of the finances of local authorities. It is not a new thing that the State should make a grant-in-aid of capital expenditure of local authorities. When we are building a clinic, the interest on the capital ranks for grant, and it is exactly the same principle, though a rather different shape, when the State contributes to the capital expenditure on housing. No one ever argues that the fact that the capital cost of education was defrayed by the State was a factor in raising prices. People argue that builders raise their prices more when the money comes from taxes than when the money comes from the rates. We are giving the money on the grounds that the local authorities have had more burdens than they can properly pay from the rates. That has been the justification of the State assisting local authorities in housing. To cut off the subsidy would really leave the local authorities, very much overburdened as they are, to shoulder the whole of the burden. The truth of the matter is that you can alter the price of houses enormously by certain manipulations. You can bring them down to whatever price you like and push them up to scarcity values, but you can do that without a subsidy.

The late Parliamentary Secretary seemed to think that I said that the wholesale price index had something to do with causing the prices of the Addison houses to go up. I said that it was absurd to drawn any conclusions about the subsidy with regard to the Addison houses in the time of acute money crisis from 1923. When we had that violent crisis every single commodity was not only going up and down with the rise and fall of money, but was being blown about with every wind of panic, and it is quite a senseless thing to talk about the Addison subsidy when every business man knows that money values changed violently every two or three hours. That is what I said in regard to the Addison subsidy, and that is why I took the index of wholesale prices as an indication of the depth of the fall and the quickness of the recovery of the value of money. This Bill is the smallest thing in the world. It is to prevent dislocation in prices and employment. The greater considerations which Members have urged are occupying the mind of the Minister, and will be published before the discussion in good time. It will obviously be improper of me or of my right hon. Friend to indulge the House at this stage with any glimpse of what he is proposing. The object of the Bill is to get out of the way one of the obstacles to a rational scheme of housing.

Question put, and agreed to.

Bill read the Third time, and passed.