HOUSING DEVELOPMENT.

HC Deb 12 February 1930 vol 235 cc451-507

Mr. PHILIP OLIVER

I beg to move, That this House views with regret the excessive burdens placed upon the occupiers of new houses by the incidence of the present rating "system and by street-paving charges, and the detrimental effect of such burdens upon future housing development, and urges the Government to consider proposals for the reduction of such burdens in connection with any future legislation dealing with the question of housing. 4.0 p.m.

We have been promised in the King's Speech at the opening of this Parliament, legislation to promote an extensive programme of slum clearance and to make further provision for housing in urban and rural areas. The Government have done well to link together the two problems of slum clearance and the provision of new houses, for there can be no really effective slum clearance without the provision of alternative accommodation. But the problem is fraught with the greatest difficulty, because in all our efforts up to the present, the rents of all new houses have been greatly in excess of what any slum-dweller has been able to pay, and that applies not only to the slum-dweller. It applies to all tenants of small new houses. It applies also to the small owner-occupiers. In all these cases the cost of their home swallows up a disproportionate amount of their income, and has made them poor. In this matter I am as much concerned with the owner-occupier as I am with the tenant, and I hope that in any administrative action or legislation which the Government may adopt, they will make no distinction between the two. The owner-occupier is often a man of very moderate means. He is sometimes an owner-occupier simply because he cannot be a tenant. Such is the case of the artisan who is transferred in the course of his work from one town to another. He becomes a stranger in a strange land, and, not being a citizen, he cannot obtain a house on a municipal estate. In cases of this kind, at any rate, there is no distinction in fact between the owner-occupier and the tenant. The small tenant and the small owner-occupier are each equally harassed by the cost of their home.

What are the elements in the cost? It seems to me that they are, broadly speak- ing, four. There is the cost of building, the cost of land, interest charges, and what I may term external burdens, the chief of which are rates and road charges. If we are to solve this problem effectively, it is necessary, of course, to deal with each one of these four elements, but today I propose to call the attention of the House only to the fourth element, the external burdens, the chief of which are rates and road charges. First of all, with regard to rates. Rates, as we know, were originally assessed on annual value, because that was regarded as a rough estimate of the occupier's capacity to pay. That was never even approximately true of industrial premises, as was, of course, so rightly noticed by the late Government in their De-rating Act. It was never approximately true of industrial premises, and I do not think it was ever really true of houses. Rent may, at some time or other, have had some proportion to the occupier's income. That theory now has completely broken down, owing to the immense change in costs since the War, and the great disproportion which to-day exists between an old house and a new house occupied by a family whose means are absolutely similar. As we know, the close-drawn curtain of many a municipal house on a new estate hides behind it just as much deep poverty as you will find in any slum.

My hon. Friend the Member for Withington (Mr. Simon), who, I hope, will be seconding this Motion, in a recent book of his, has published results of an inquiry into the ratio of rate; to family income in a given congested area. As a result of this inquiry, it was found that in this congested area the proportion of income which went in rates varied from 4 per cent. to 9 per cent. with an average of 5 per cent. It may he that one-twentieth of the family income is not an unreasonable charge to levy upon these poor people to meet the communal needs of the locality; personally, I am not sure that that charge is not too heavy. There are many homes in prosperous suburbs in which the ratio of family income which goes to rates is under one-half per cent.—one-half per cent. in marry of the wealthier suburbs, and 5 per cent. in the slums. Great contrasts of that kind can, of course, only in the end be done away with by a complete change in the system of rating, which, perhaps, ought to take the line of a local income tax. But things being as they are, what is going to happen when you transfer these people, as you intend to do, from the congested slums into the new municipal estates? Their rents, of course, will be higher. That is only right, because they are living in better houses. But simply because their rents are going to be higher, their rates are going to be higher, too.

The inquiry to which I have already referred, proceeded to make a calculation as to what would be the ratio of the rates to each of the families living in this congested area when taken out of it and placed in the smallest possible houses that will accommodate them in a new municipal estate. It was found that the ratio of rates to family income which, when they were living in the slum, averaged 5 per cent., would in that municipal estate be increased from amounts varying from 7 to 17 per cent., with an average of 10.8 per cent. One-tenth of the income of these people, the poorest in our midst, going in rates—a burden which it is, quite obviously, wrong to impose upon them. For what have you done? You have taken them—and rightly taken them—from the slum to the new estate. You have doubled—and rightly doubled—their rent. There has been no increase in their income. They have been transferred, probably a considerable distance, from the place at which they work. They have to incur every week a considerable burden in the form of added tram fares. In addition to this, while there is no increase of income, you will have doubled the rates they have to pay. Yet, of course, there has been no increase in the cost to the community; indeed, it may very well be hoped that, having transferred them to healthier surroundings, they may, at any rate, as far as the health services are concerned, cost the community less than they did when living in the slums. Although there is no added burden to the community, the burden on these, the poorest in our midst, is actually doubled.

Quite obviously, there is need for some reform, and we have to ask ourselves what that reform is going to be. There may be, of course, a diminution in the general burden of the rates, either by economy or by transferring to the National Exchequer burdens which ought to be national in their incidence. Those reforms will, of course, affect the general burdens on all ratepayers, and will not remedy this particular injustice, which is the difference in rates levied on the same people according as they live in an old house in a congested area, or in a new house in a newly-developed estate. I myself think that the rating of land values will bring very considerable relief. Land value in new estates is comparatively low, and no one would benefit more from the rating of land values than the occupiers of newly-developed estates. I think, therefore, the time for the introduction of such a Measure is singularly opportune, but I do hope, if it is introduced, it will be in substitution for, and not in addition to, the burdens that we have to bear already. But, in addition to the rating of land values, I think that to meet this particular case, which, after all, is restricting the further development of housing, we shall need to have some system of differential rating. Suppose, for instance, in a town the net rent of the smallest house in a congested area is 4s., the assessment of that house would be approximately £8. You might say the rates are 2s. a week. The proposal is that all new houses built and rented up to 8s. net, should also be assessed only at £8, and therefore pay the same amount in rates, namely, 2s. This would enable people to be transferred from congested areas to new estates without placing upon them an added burden. I do not desire to elaborate that interesting suggestion, which, I hope, will be dealt with by the right hon. Gentleman in his reply.

Let me turn to the kindred subject of road charges. As the House will be aware, the streets at present are constructed according to specifications which are laid down by the local authority and are paid for by the frontagers. The procedure is carried out either under the Public Health Act, 1875, the Street Works Act, 1892, or innumerable local Acts, some of which date back as far as 1850. The law varies from place to place, and is the cause of great confusion. I think that here some uniformity is certainly desired. The cost of the street is obviously added to the cost of the house and has to be borne by the occupier. If the occupier is a tenant, it is borne in the rent, whether it be a house on a municipal estate or an estate which has been privately developed; and if the occupier is the owner, it is borne by a direct charge levied upon him. The owner-occupier purchases his house in complete ignorance of the amount of the charge for road making which is going to be levied upon him. The builder is frequently an optimist and underestimates the charge which the local authority will levy; and when that charge falls it is often the last straw which breaks the owner's back. There is not much romance in paving stones, and every chairman of a paving committee will tell you that sometimes there is a great deal of tragedy.

Let me give one or two instances of these high charges. I will take, first, an instance from a public utility society which is building in the area of a local authority whose charges are not unduly high. Last year the society developed an estate, and the street charges on that estate swallowed up 143 weeks' rent. Nearly three years' rent taken away for the making of the street, the small street necessary to go with small houses! I have an instance from a city in the North where a subsidy house was erected at a cost of £490. Perhaps there were special circumstances here, but that house had to bear a burden of £200 towards the cost of making the street. I have an instance from the South where a corner house, a subsidy house, erected for £450, had to bear an added burden of £170 for the making of the street. These are excessive burdens which are crushing further development.

Not only are the burdens heavy, but there is an amazing variation in the requirements of different local authorities. For similar roads in different parts of the country the charge varies from 15s. to 50s. a foot, and in two cities—I should not say cities, or perhaps hon. Members will guess which they are—in two towns which I know, side by side, so that it is almost impossible to know sometimes whether you are in the one or in the other, one charges 24s. a foot and the other, only a stone's throw away, 40s. a foot, for streets which are exactly similar. Not only is there variation between one district and another, but, unfortunately, variations are to be found in the same municipal area. Where there is a municipal housing estate there will be one standard for its roads and another standard, and a higher standard, for the roads on an estate developed either pri- vately or by a public utility society. In one case of which I am thinking there is a municipal estate with 16-foot roads, and immediately adjoining it an estate, developed by a public utility society, and inhabited, as a matter of fact, by poorer people than live on the municipal estate, where a demand has been made for the making of 24-foot roads, and that has meant an added burden of £15 10s. on each house. These are houses built for the poorest of the poor. The poorer you are the greater the burden yon have to bear. All this is wrong—the great burden to begin with, the variation between one district and another, and then this insane variation within the same municipal area.

What are the suggestions for reform which we make? In the first place, I suggest that road making might very properly become a communal charge. We provide our gas and water mains at the public expense, and why not our streets? It is necessary that gas and water should get into our houses, but it is still more necessary that the inhabitants of the houses should get into them. If the community bring gas and water to your house, why should they not bring you to your house? The cost would be paid out of revenue; or, in rapidly extending towns, it might be more expedient to borrow over a loan period of, say, 20 years. In making this proposal I am thinking principally of the development of these new estates. I do not want to relieve anyone of burdens which he might legitimately be called upon to bear, and in the wealthier suburbs, where there are houses of high rateable value, with a long frontage, owing to the magnificence of the premises and the extent of the garden, such houses might quite properly be separately dealt with. If people want a large plot of land around their houses, quite rightly they ought to pay for the road bordering their large gardens, and not place that burden upon the community.

There is another consideration, and nowadays a stronger consideration, I think, which I would urge in favour of making road charges a public charge. The Ministry of Health and the Ministry of Transport and, I think, all concerned with the amenities of our countryside, are deploring what is known at present as "ribbon development." Why is there ribbon development? One of the reasons is that there are no road charges for houses along an adopted street or a classified highway or an arterial road. Every decent person wants development to be in the form of what is called "block development," and not ribbon development. Then why overburden with road charges everyone who develops housing on the lines you desire, while making things easier for the person who develops along the lines you do not desire. For that further reason I think it is desirable, especially at the present time, that road charges should be regarded as a communal burden. I daresay this proposal is too Socialistic for the present Government to adopt.

Sir KINGSLEY WOOD

Is it too Socialistic for the Liberal party? Is the hon. Member making this proposal on his own account?

Mr. OLIVER

I am proposing it on my own account. This is a Private Member's day, when, without our leaders, we are able to say just what we think. At any rate I can say that both Liberal and Conservative parties have in the dim and distant past made the provision of tennis courts and bowling greens, of museums—to which nobody ever goes—and of art galleries a public duty; but people do go to their own houses, and therefore I think we are entitled to make the streets for them. If that be too Socialistic a proposal, at any rate I hope that some part of the road charge should be regarded as a public charge, as I know it can be already under certain legislation. It seems to me that so much of the cost of a street as is not due to the requirements of the residents in that street might very well be regarded as a public change; so much of the cost as is due to through traffic ought quite obviously to be a public charge. What the proportions ought to be I do not say, but there is a proportion. By far the greater part of the cost of every road which is constructed is not due to the requirements of the frontagers at all, but to the requirements of the public passing from one part of the town to another, and therefore, quite obviously, that part of the cost ought to be placed upon the community and not upon the frontagers.

Take the case of a great palace like Chatsworth or Blenheim. You have in one of those ancestral homes a far bigger population than you have in any residential home in a small suburb. For the access of that great population, living in one of those big palaces, we know that all that is required is a modest carriage drive, decently and moderately constructed, and 13 to 20 feet wide; but as soon as we begin to build cottages where not dukes, but poor people, are to live, we have to have a street which is 40 to 50 feet wide, made of asphalt, granite, concrete and such other absurdities, which crush out the life of the houses and often ruin the homes and the happiness of the residents. Why? The whole thing seems to be absurd.

Mr. HOLFORD KNIGHT

Because it is a public highway.

Mr. OLIVER

I know what the hon. Member is thinking about. He is thinking that we must have this concrete and asphalt and tar macadam because when the public have taken over the street the public will have to repair it; but what earthly sense is there in putting all this solid material, feet deep almost, into a street that is, never, perhaps, going to be used by heavy traffic, and certainly never will be used by heavy traffic for the people who live in the street? In so far as heavy traffic does pass along the street, it is the heavy traffic of the public generally, traffic for the convenience of the public, and therefore quite obviously the requirements of the traffic ought to be paid for by the public. That seems to be a good Liberal doctrine, and I should think it would be a good Socialist doctrine; but if the Socialists are going still further to harden their hearts and say no part of this burden is to be a public charge, at any rate the Government ought to lighten the burden on the private individual.

In many places it is becoming a case of My father hath chastised you with whips, but I will chastise you with scorpions. As far back as 1919 the Local Government Board issued a manual of town planning. That manual lays down special requirements for all manner of streets. Almost every local authority is exceeding the requirements officially laid down by the Local Government Board and later adopted by the Ministry of Health. If the cost of these streets is to be borne by private individuals the requirements which the Local Government Board, and now the Ministry of Health, regard as sufficient should be made compulsory upon the local authorities. We do not want these great wide streets. Once they were necessary, because there was nothing between house and house. Now we limit the number of houses to the acre, and wide streets have become unnecessary, but wide streets still persist, the dead hand of the past again crushing the present.

When the Hampstead Garden Suburb was laid out a special Act of Parliament was required. In that Act the promoters agreed—and I think it is the first time this appears on our Statute Book—to limit the number of houses to eight to the acre; and in return Parliament exempted the promoters from all bylaws which were then in existence with regard to the width of streets. The limitation of houses to the acre has now become general. Why not abolish the limit of width of streets? By so doing you would relieve the houses of a crushing burden and aid the beauty of your development. No one who has gone to a place like Earswick, in Yorkshire, developed when there were no by-laws, will ever doubt that here beauty and economy have walked hand in hand. I hope I have shown how, in certain practical ways, the justice and reasonableness of which I think no one will deny, we can reduce one of the elements in the cost of housing, and thus bring to our people decent homes without placing on them a burden which they cannot bear.

Mr. E. D. SIMON

I beg to second the Motion.

The hon. Member for Blackley (Mr. P. Oliver) has dealt with two separate burdens which make new houses more expensive, rating and paving charges. Over 10,000 houses have been built in my constituency since the War, and I must have had hundreds of cases brought to my notice where the paving charges have been something like £30, £50 or even £100, and, in the case of larger houses, sometimes the charge has actually been over £200. The hon. Member for Blackley has dealt fully with this point and I hope the Government will do all that they can to deal with this very serious state of affairs.

I wish to draw attention to the other aspect of this question which is even more important in the national interest. I think it has been universally recognised that in spite of the immense efforts which have been made in house building since the War, we have failed to do anything substantial to meet the requirements of the people who live in the slums. Prom almost every district you hear the same story of overcrowding in the slums, and to-day things are just as bad in this respect as they were at the time of the Armistice; as a matter of fact, the condition of the slums at the present time is actually worse than it was at the time of the Armistice. It was estimated at the time of the Armistice that there were 2,000,000 children living in the slums and 2,000,000 children are still living there and the conditions in the slum areas are actually worse. During that period I believe we have spent £1,000,000,000 of capital in building houses.

The average cost of the houses which have been built during the period I have mentioned is about £600 and that means an actual expenditure of £1,000,000,000 on building new houses since the War. That is a gigantic sum. Our total national wealth is estimated at £20,000,000,000; in 10 years we have spent 5 per cent. of our national wealth in building houses. In spite of that huge expenditure and that gigantic effort, we have done literally nothing for those people whom we set out to help and who most needed our help. I think that is nothing less than a national tragedy and it certainly ought to have been possible to have done more to relieve the slums by a colossal expenditure of that kind than has been done. I hope the Minister of Health before long will be able to bring in some Measure to do what is necessary to deal with slum houses.

The broad reason for this state of things is perfectly simple. It is due to the fact that the houses we have built have been so expensive that the people living in the slums could not afford the rent. This is to a considerable measure due to the very unfair and undesirable way in which our rating system works in making the new houses artificially expensive as compared with slum houses. If we take typical figures for a large provincial town such as Manchester, we find that the net rent of a slum house is about 5s. The net rent of the smallest family house into which a slum family could be moved and in which they could bring up their children in full health of body and mind is about 10s. I think public opinion is agreed that the standard of the smallest and cheapest house must be the A 3 type with three bedrooms, a bathroom and a garden. Hon. Members will agree that there is no real luxury in a house of that kind. It is the cheapest and smallest house in which a family can be brought up in a healthy state and it is the cheapest in which anyone ought to be asked to live. The rates on a slum house are about 2s. 6d. and the rates on such new houses are 5s.

What does this mean? It means that, if the father of a family living in a slum decides to make the sacrifice of 5s. a week, giving up small personal luxuries, and even necessities, so as to give his children a bettor chance by moving out to the suburbs, the municipality, instead of helping him, increases his rates by no less than 2s. 6d. a week. Such a tax on health can only be justified by overwhelming necessity. Now the increased tax on the suburban house corresponds to no increased burden on the municipality. This matter has been investigated, and I think it is generally agreed that the services to the family in the suburban house cost the municipality no more than those required by the family in the slum. On the whole the cost is probably rather less.

As regards ability to pay, it is to be noted that there is no luxury in the suburban house. It is the smallest house in which the family can be kept healthy and the family in the minimum family house has less ability to pay than the one in the slum by 5s. a week. As regards the cost of the family to the municipality, a family moving from a 5s. slum house to a 10s. house in the country will cost them rather less in the case of the expensive house than the cheap house. The charges in the case of the suburban house will be less in regard to everything connected with public health. On the whole there will certainly be no additional cost to the municipality. Under these conditions it seems incredible that we should increase the rent when a man moves out of the slums. The city fathers say, "We want you to get out of the slums and take your families to decent houses. We know it is going to mean 5s. a week more on the rent, and it will not cost us any more on the rates. We want to help you and facilitate your removal in every way. Therefore, we are going to double your rates." I think that is absolutely indefensible. This question was referred to in the Liberal Yellow Book—noted for the moderation of its language, as a thoroughly vicious system.

What is the remedy? The hon. Member for Blackley has indicated a remedy which some of us propose. If you look at the Income Tax in connection with the work of the Liberal party in the past, you will find all kinds of graduations and differentiations have been made to make the tax more in accordance with the real ability to pay. The Income Tax has been differentiated according to whether it is earned or unearned; there are allowances for children and many other ways of making the Income Tax really fair and effective. Further alterations are required, but I think the Income Tax is as good as any tax is likely to be in this imperfect world. The rates have been left severely alone as a percentage of the gross rent. In the case of rates there is no graduation according to income, no differentiation and no allowances for children. The only possible reason why the rates are levied in their present form is because they have been levied in that way for hundreds of years.

I suggest to the Minister of Health that here is an opportunity for the present Government to tackle this very large question of the rates with the same courage that the Liberal party tackled the question of the Income Tax. The present system of rating is quite intolerable. We propose that we should define the minimum standard house which will satisfy family requirements. We suggest £8 as a fair figure for a family house, and so that everything up to the minimum standard house should be rated at £8. That means that a man pays 2s. in rates in the slum and when he gets out into the country he still pays 2s. in rates. I ask the Minister of Health to consider whether some such step as that cannot be taken in connection with this forthcoming Bill. I trust that the Government, will deal courageously with this old and unjust system of taxation and remove the serious but purely artificial barrier which stands in the way of families moving from the slum areas into the country. I hope they will at long last make an effective beginning in the process of moving the children out of the slum houses into decent houses.

Mr. SAWYER

In rising for the first time to speak in this House, I should like to say that I have long held the opinion that the present rating system is responsible for the terrible housing shortage with which we find ourselves faced to-day. I was much impressed by the remarks of the Seconder of the Motion as to what the Liberal party had done in days gone by to improve the lot of the, people, and I think that, if the Liberal party had continued that policy, instead of running away from it after winning two elections on it, that party would probably be considerably larger to-day than it actually is. I hope that the Mover and Seconder of this Motion, and other Members of the Liberal party, will put pressure upon their leaders to take up that matter where they left it in 1914 and 1910.

The Seconder mentioned that we have spent £1,000,000,000 on the building of houses during the last 10 years, and that the position to-day is no better than it was 10 years ago. Overcrowding is just as bad, and nothing is being done for those whose wages are too low to enable them to pay an economic rent. The present rating system acts as a direct tax on housing. We often hear rates and taxes referred to as a burden on industry. Rates are a burden on the building of houses, and the building of houses ceases to keep pace with the population when the rates reach an excessive level. There are two factors which tend to retard the building of houses, namely, high rates and the high cost of land, and, until something is done in the direction suggested in this Motion, and something is done to make land cheaper, there will be no solution of the present housing problem. At one time, we had a great Colonial Secretary who thought it wise to apply the rating system of this country by putting a direct tax on the huts of West African natives, but the West African natives, instead of paying the tax, pulled their huts down and went to live in the woods. We cannot do that hero, because, in the first place, the climate is not suitable, and, in the second place, if people went to live in the woods they would find that the woods belong to someone, and that they were trespassers and violating the law.

I am sure that we shall have the Unionist party with us on this subject, because the Unionist party have brought in a Measure for the de-rating of machinery and agricultural land and factories, which might well be applied also to the de-rating of houses, and, if the Government would be kind enough to carry those de-rating proposals a little further, it would be possible to provide the houses that we need. In all our large towns there is a shortage of houses, and numbers of people are living under conditions which are terrible in the extreme. In the City to which I belong, and a Division of which I have the honour to represent in this House, we have done our best to provide houses for the people, and, speaking from memory, I think we have built more houses during the last 10 years than any other municipality. Our waiting list, however, is as large as it was in 1919, and it does not include newly married couples. We have upwards of 15,000 newly married couples living in rooms, and they are not registered with the Housing Department because they have no children. I have in mind one family that I saw on Saturday night, consisting of a man, his wife, and seven children, who were living in two rooms, one downstairs and one upstairs. The children were like steps, and they all slept crowded together in one room, unable to stretch out and grow, unable to breathe pure air, and thereby doomed to an early grave before reaching manhood. We have been battling against such conditions owing to high rates and high costs of land.

All Governments seem to lean towards the subsidising of the building of houses, but where has all this money gone that was mentioned by the Seconder of the Motion? It has gone into the pockets of landowners and contractors. If £1,000,000,000 has been spent on the building of houses during the last 10 years, it can safely be said that many landowners are millionaires. I hope that the Minister of Health, in considering the future policy of the Government, will extend de-rating to houses. The revenue that he will lose in that way he could get, as suggested by the Mover of the Motion, from a tax on land values, but I am sure he will be successful in providing houses. In the City from which I come, and I suppose in others also, if the council want to buy land they have to buy it through a third party. We must not let it be known that it is the council who want the land, because if we do an extortionate price will be demanded, and, therefore, it has to be bought through a third party. The Mover of the Motion mentioned the district valuer, but I have no faith in the district valuer. If you bring him in to arbitrate, he always bases his decision on the price for which the land was sold. A man sitting in New York would be able to give the same decision as the district valuer.

Before I came to this House I was engaged on the railway, and almost every night we had 15 or 16 trucks on the train with foreign tiles in them. We have to buy our tiles from France and Belgium because of the extortionate prices charged for our own materials. These tiles can be bought abroad, giving work to foreigners, more cheaply than slates can be bought in our own country. If the Minister will realise that fact, he will be able to find work for many of our people who are idle to-day. How is it possible for people abroad to provide tiles and send them over here into the Midlands more cheaply than we can manufacture them in our own country? [Interruption.] One of my hon. Friends says that it is because of the subsidy. I hope we shall hear no more of subsidies to these people, because they have not delivered the goods. If the Minister of Health will carry the de-rating proposals just two steps further, he will succeed where other Ministers have failed. He will be able to bring the idle builders to the idle building sites, and we shall soon see an improvement in the terrible conditions that exist in our country to-day.

Sir K. WOOD

I should like to congratulate the hon. Member for Duddeston (Mr. Sawyer) upon the speech which he has just made, many of the sentiments in which, so far as I was concerned, met with a most favourable reception. I was very glad indeed to hear his observa- tions on subsidies, to which I will refer in a minute or two. May I say, in the first place, how much I welcome the fact that the hon. Member for Blackley (Mr. P. Oliver) has introduced this Motion? There was a good deal in his remarks to which I cannot assent, but I do congratulate him on having been able to put down a Motion enabling us to secure a discussion in this House on the question of housing. It is a remarkable thing that, owing in no small degree to the ability and cleverness of the Minister of Health, we have been prevented from discussing housing matters in this House for many months. I remember very well that when we came back, and the Labour party, flushed with their success at the polls, introduced the King's Speech, the first thing that the right hon. Gentleman did was to put down a Bill to make further and better provision for housing in this country. It did not make much better provision for housing in this country, but it did effectively prevent discussion for many months, because, as you know, Mr. Speaker, under our Rules we were thereby stopped from raising the question of housing. The only opportunity that we have ever had, until now, of discussing any aspect of the housing situation, was when the right hon. Gentleman brought in a Housing Bill which I think he himself described as only a stop-gap Measure, and the present is the only other occasion on which we have been permitted by the Government to make any observations at all on the housing situation. Therefore, I congratulate the hon. Member for Blackley on his success. He has triumphed where a large number of people have failed, because many of us have been very anxious to discuss the housing situation.

Mr. FOOT

There are only four of you here.

Sir K. WOOD

There are only a very few on the hon. Member's own benches, and I see that even the Seconder of the Motion is not here at the moment. I think it is well that we should discuss the present situation, because things are not at all well at the moment with housing development in this country. The right hon. Gentleman may be able to give explanations later, but it is an extraordinary thing, which I do not think the country has realised, and which I am sure hon. Gentlemen opposite have not realised, because otherwise they would have risen to their feet long before now to call attention to it, that, according to the official figures which were given by the right hon. Gentleman a few days ago, the houses completed during the quarter ending in December, 1929, were 14,521, while the number completed during the quarter ending in December, 1928, under the retrograde Tory administration, was 26,858. Therefore, comparing these two quarters, there has been a decrease— [An HON. MEMBER: "Because you stopped the subsidy !"] The hon. Gentleman will, perhaps, give his explanation in a minute or two. No doubt we shall have many explanations, but the fact remains that there has been a decrease, comparing the quarters ending in December, 1928, and December, 1929, of no less than 12,337 houses. Whatever explanation it may be possible to give in this House for the decrease, it gives very little satisfaction to the people who need the houses.

The MINISTER of HEALTH (Mr. Arthur Greenwood)

May I ask the right hon. Gentleman whether his figures for 1928 include the houses built under the 1923 Act as well as under the 1924 Act, and whether it is not the case that his Government abolished the 1923 subsidy?

Sir K. WOOD

Certainly. I include in these figures, as I have a right to do, all the houses that were erected under the respective Administrations. I include the houses erected under the 1923 Act, although I remember a speech of the right hon. Gentleman, when he was in Opposition, in which he told me that I ought not to count those houses. I do count them, however, and I compare for this purpose the numbers of houses erected during the Tory and Socialist administrations respectively.

5.0 p.m.

If I look at another important aspect of the housing problem—and this is why I commend the hon. Member for Blackley for bringing forward this Motion—it is not much more favourable. I have referred to the numbers of houses erected, but, if you look at the number of houses authorised, that is to say, the houses which we are to expect in the future, and which have been definitely adopted by the local authorities, the position is not much better. In the month of December, 1928, when hon. Gentlemen opposite were so critical, the number of houses authorised was 25,305. In December of last year, under this wonderful Government, the number of houses authorised was 19,829, n, decrease of 5,481. That is a very serious state of affairs. An hon. Member opposite, who will no doubt help to give an explanation later on, said it was something to do with subsidies. I was told, when I talked about subsidies on the last occasion, to look at Scotland, where there was no question of any alteration in the subsidy at all and where there has been no change in the position The last figures that were given in the House, which were for November, were 16,228, and this November the figure had got down to 9,613—a very extraordinary state of affairs.

Mr. OLDFIELD

On a point of Order. Is the right hon. Gentleman in order in continually comparing the figures for last year and this year when we are discussing the effect of the incidence of rating, and when there has, in point of fact, been no change in the incidence of rating since the Rating and Valuation Act 1925?

Mr. DEPUTY-SPEAKER (Mr. Robert Young)

I have just come in and I did not hear the right hon. Gentleman's remarks.

Sir K. WOOD

Perhaps I may endeavour to persuade the hon. Member to listen to this very illuminating position. The hon. Member who introduced the Motion dealt at great length with housing development. He quite rightly called attention to the housing needs of the poorer members of the community. Anyone who looks at the housing situation to-day and for some time past is driven to the conclusion that the great necessity of to-day is to get houses at such rents as the poorer paid members of the community can afford to pay. That was the great ambition of the right hon. Gentleman the Member for Shettleston (Mr. Wheatley) when, with great distinction, he filled the office of Minister of Health, and he introduced a Bill for that purpose. I will not dwell too long on that effort because, no doubt, he would not desire me to do so, but the fact remains that, whatever efforts have been made, you are bound to come to the conclusion that to a very large extent rent depends upon the cost of the house. According to official figures, there has been a considerable increase in the cost of non-parlour houses. In December, 1928, the average cost of a non-parlour house, according to the statement of the right hon. Gentleman himself, was £338.

Mr. OLDFIELD

May I repeat the point of order that I put a few minutes ago?

Mr. DEPUTY-SPEAKER

I have looked at the Motion, but I am in a difficulty, because I have not heard what the Mover and Seconder said. The Motion is quite definite.

Sir K. WOOD

I think I can submit quite confidently that I am in order, but I will not try the hon. Member's patience much longer on this phase of the matter.

Mr. MacLAREN

It is true that the Seconder of the Motion traversed a pretty wide field and he was not called to order. I am merely intervening in the hope, seeing that liberty was allowed, that the Debate will not be held within too strict limits.

Mr. DEPUTY-SPEAKER

The Motion itself is certainly not very wide, but I think if they dealt with these matters I should let the right hon. Gentleman reply to the Mover and Seconder.

Sir K. WOOD

I am very much obliged to the hon. Member, whom I look upon as a real friend. The increase in the cost of the non-parlour house is £32 for December compared with the previous December.

Mr. OLDFIELD

I really must press my point of order. It is quite a simple one, that because there has been no change in rating in the last few years the right hon. Gentleman is out of order in comparing costs this year and last year and the year before. That was not done by the other speakers.

Sir K. WOOD

That comparison was not made because I do not think the hon. Member had it with him, but he emphasised that the great problem that was facing us was the cost of housing. During the last three months the number of houses erected and authorised has gone down, the cost of housing has increased and there are many more thousands of building operatives out of work to-day than there were a year ago.

I now come to the remedies that the hon. Member has suggested, and there I must part company with him. I commend him for bringing the subject of housing before the House, but I cannot say he has chosen two of the best remedies for relieving the present situation. He has, in the first place, chosen street paving, and he has suggested that some alteration should be made in connection with the present rating system so far as new houses are concerned. I was not able to follow him in his complaint with reference to street paving charges. I do not know whether he has followed the exact position of people who suffer from excessive demands in relation to street paving charges, but the position is a perfectly simple one. It is true that a number of people, to my knowledge, have very heavy demands made upon them, but I cannot conceive that for that reason there is any necessity or desire, either on the part of local authorities or the great body of people concerned, to alter the law. When you buy a house the first question you should naturally put is, "What are the outstanding charges?" You have only to go to the local authorities and ask if there are any charges outstanding in respect of street paving, and they will say, "Yes," or "No." They will not give you an exact figure of what the cost will be, but I do not think there is a single local authority which would not give a prospective purchaser an estimate of the cost. If you go to any building society, through which a very large number of these houses are being purchased, they will tell you that the very first thing that has to be considered before they make a loan and authorise a house to be purchased is whether there is any sum outstanding in respect of street paving charges.

That is a matter that has to be taken into account when you fix the price you are going to give for the house. If there is a large sum of money, for instance, £150 or £200, that is a very grave matter which you must have regard to in the price you are paying, but the only class of case I can think of where there is a real hardship is where, through eagerness or ignorance, people have actually purchased a house without making that very necessary inquiry. But that is hardly a reason for altering the law. Even when a purchaser is confronted with a very heavy bill in circumstances of that kind I do not know of a local authority which is not prepared to allow the amount to be paid in instalments. Therefore, I cannot congratulate the hon. Member on seizing on street paving charges and saying that is stopping housing development, because it is not. Are you going to say that the old inhabitants of an area are to pay the street paving charges for the newcomers? Surely that is an impossible proposal. Is the hon. Member suggesting that the State should pay it, and has he calculated what the cost will be? If you put the average street paving charges for new houses at £25 apiece, you realise what an enormous burden that would place upon the State, or upon the other inhabitants of the district.

Anyone who looks at this from the point of view, not merely of housing, but of common sense must see that it is not street paving that is hanging up housing development to any extent. It is not a practical proposition to say that the other inhabitants of the place shall pay the street-paving charges of the newcomers, and it is not reasonable that the State should do so. I have thought over this matter on many occasions because when I was engaged in professional work I constantly came across it. The only thing which you can say is unfair is that in a very large number of cases a new inhabitant will be charged the full rates for services which are not really available to him. It is very difficult to think of any system which would differentiate fairly in that respect. Therefore, anxious as I am to see housing progress, especially under present conditions when things are by no means good, I cannot look with any hope upon the suggestion which the hon. Gentleman has made with regard to street-paving charges. I confess that it does not appeal to me.

What is the other proposition? The other proposition has reference to the effect of the present rating system on new houses. I listened to the speech of the hon. Gentleman with the greatest possible interest. What did he tell us should be done in order to bring about the change he desired? He said that there must be a complete change in the rating system, the rating of land values, a local income tax, and a differentiation in rating. Even when you consider the position of the right hon. Gentleman the Minister of Health, with all his ability, this is a lot to ask him to do in his new He using Bill. I do not care to prophesy, but I do not think that we shall see in the new Housing Bill of the Government any of these four things. I think that even the right hon. Gentleman would be sufficiently cautious and sufficiently practical to know that housing development cannot be advanced at any quick pace by means of propositions of that kind.

I will address a similar question to the hon. Gentleman which I have already put to him and to the hon. Gentleman the Member for Withington (Mr. Simon) with regard to this suggested differentiation in the rating of the owners of new houses. Who is going to pay for it? Is it to be the other householders? Is it to be industrial property? What is the position at the present time? The hon. Member seemed rather inclined, in connection with this new rating system, to favour the idea that the old inhabitants in a district should pay the rates, thus giving some special concession to the new owners. At the present time, I do not think it is inaccurate to say that the municipal houses which have been erected by the efforts of the local authority and by the State are already costing the ratepayers and taxpayers from £4 to £6. In other words, for every new house that goes up, the average working man who is, we will say, living in an old house, and whose necessities are probably just as great as those of the people who are occupying new houses, is really making a very considerable contribution each year to the owners in the new houses. The only justification for this is the necessity of the housing situation.

It is, however, very difficult from the point of view of justice and fair play to defend a proposition that a working man living in an old house and probably without the amenities and conveniences of a man similarly situated as far as industrial status is concerned, and occupying a new house, should make a contribution in respect of these new houses. As far as I can follow the hon. Gentleman, the proposition is that some further contribution, either from the rates or from the taxes, should be made by these people who are already contributing to the cost of new houses occupiel by other people. I think it may be said that perhaps something like 15 per cent. of the rent of the people who occupy what you may call the new houses in the country is already being paid by the taxpayers and the ratepayers, who include a very large number of working men and women. Therefore, I should hesitate very much before I assented to a proposition putting further burdens on a large number of people who are already making their fair contribution.

The hon. Gentleman in his Motion makes no differentiation whatever as to the type of new house, and that is why I cannot see how anyone can accept it. There are all sorts of new houses going up in this country. There are new houses of a considerable value. Does he suggest that there should be some differential rating system for houses of £1,000, £1,500, £2,000, and £2,500? Is that the suggestion? I do not think anyone could assent to that. He does not say in his Motion that these new houses should be occupied by members of the working-classes. It is an impossible situation. He falls back, as one would naturally expect coming from that quarter, upon land values. I want to stand up and protect the right hon. Gentleman the Minister of Health in this matter. Does the hon. Member really expect the right hon. Gentleman in his new Bill to introduce the rating of land values? I hope that the right hon. Gentleman will be wise enough to leave that matter to the Chancellor of the Exchequer who may be foolish enough to do it. Nobody interested in the speeding up of houses would suggest that anything is going to be done by the rating of land values. I have a quotation here which I hope the hon. Gentleman will take home and study. There has been a recent report issued on the finances and financial administration of New York City, where rates are raised by a tax on the capital value of land and buildings. There you have a case where this system is really in operation, and where these theories can be tested. This is a quotation from a report by a committee, which, I contend, we are entitled to respect. They say: There is, however, in the community a general conviction that the Real Estate Tax is to a very considerable extent at least shifted to rentpayers, and that in the case of home-owners, the burden of the tax, with assessments at their present level, has become so great that it is inadvisable to increase it. That is practice and not, theory. That is what is actually happening. Therefore, I hope that the right hon. Gentleman will not be tempted by the proposition which has been made by the hon. Gentleman that the quickening of house production in this country can be achieved by the taxation of land values. No, we must look in other directions for the acceleration of house building which is so badly needed in this country. Not only has this Government failed as far as unemployment is concerned, but it has failed as far as housing is concerned. It is a very unfortunate sign of our national life that in two things which matter so much the Government should have proved such an abject failure. Unemployment going up; progress on housing corning down ! You cannot think of anything more disastrous. The best thing for the right hon. Gentleman to do would be to follow the advice and the successful plans of his predecessor in office, my right hon. Friend the Member for Edgbaston (Mr. Chamberlain), whose name will always be associated in this country with the greatest record with housing which we have ever known. The right hon. Gentleman had better turn back. He was warned when be interfered with the subsidy by the right hon. Gentleman the Member for Edgbaston from one point of view, and he was warned from these benches.

Mr. DEPUTY-SPEAKER

I am afraid the right hon. Gentleman is widening the Debate.

Sir K. WOOD

I will content myself by saying that it is not along this path that we should travel for housing, and, also, that it is not along the path which the Government are at present treading, because that path is leading to less house building. I will invite the House to imagine, since I am not permitted to indicate the way, that there is another and a better way to improve the housing accommodation in this country.

Mr. DEPUTY-SPEAKER

Before I call upon another speaker, I should like to say, seeing that there was some misunderstanding in regard to what was said by the Mover and Seconder of the Motion, that I hope hon. Members will keep to the Motion.

Mr. MARCUS

We are much indebted to the hon. Member for Blackley (Mr. P. Oliver) for introducing this Motion and affording the House an opportunity of again discussing this interesting subject. This matter of the incidence of rating has been repeatedly investigated by several Royal Commissions in the past and also by numerous Departmental Committees. This afternoon, I think the House will be in general agreement upon the nature and extent of the disease. Where we differ fundamentally is upon the question of the remedy. The Royal Commission which sat in the year 1896 ventured for the first time to differentiate betwen classes of services in respect of which rates are levied. They created for the first time a division between onerous and beneficial services, and unless we examine the nature of those services, we shall be unable to get down to the fundamental nature of this problem and find a remedy for it.

What is the purpose of a local rate? It is meant to provide in the aggregate for certain services which I have said are of a beneficial and onerous character. What do we mean by that? Onerous services are, of course, services which are connected fundamentally with national or semi-national or Imperial services. They go outside the local area, while beneficial services on the other hand are services which deal entirely and exclusively with local needs in an area. In my judgment, the real problem in regard to this matter is that we must find a new system of rating, if we are to remove the difficulties raised by the hon. Gentleman who introduced this Motion, which will place the assessment of rates in respect of onerous services upon a sounder and more equitable footing. As far as inequality is concerned, it exists almost exclusively in onerous services. If we recognise that fact and are in agreement upon it, we can move to an examination of the suggested remedy. My hon. Friend the Member for Burslem (Mr. MacLaren) will, no doubt, attempt to deal adequately with the device for the rating of land values. I do not propose to deal with that subject, but I wish to concentrate upon the question of local income tax. I should like to say, in passing, that I do not regard the device of local income tax as in any way inconsistent with the con ception of the rating of land values. I think that one is the supplement and the complement of the other, and that we could apply the two in a properly balanced rating system.

If I had time this afternoon I should attempt to deal exhaustively with the proposals submitted to various committees by Sir Henry Keith, in the field of local taxation. I am an enthusiastic supporter of his conception of local income tax, although I concede; that his views have been subjected to serious criticism. It has been doubted whether a system of local income tax could be applied in practice, but those critics who look upon the scheme as impracticable must recognise that the present system has reached a stage at which it is impracticable, and is breaking down. It is a burden in every respect and is bankrupt, and because of that fact it is not for us to say that this or that proposal is impracticable, and leave the matter there, but we must try to modify proposals, whether made by Sir Henry Keith or anybody else, with a view to introducing them into local taxation.

What do we mean by local taxation? The system of national taxation recognises the cardinal principle of ability to pay. Unless we recognise that system in any rating system we are entitled to say that that system is bound to fail. It is not merely a matter of checking housing development, of checking agricultural development, or of checking industrial development, but it is a matter of checking every possible social development. In Scotland, and I think also in England, so far as I understand English rating law, the rates are levied exclusively on what are called lands and heritages, houses and shops. In Scotland, and here I am giving official figures, only one-sixth of the total taxable income for national taxing purposes is represented by lands and heritages, houses and buildings, while the balance, five-sixths escapes entirely from the burden of local taxation. The scheme devised by Sir Henry Keith seeks to remove that inequality. It is proposed that some kind of system similar to that operating in national taxation should be introduced which will distribute the burden more equitably and, as a result, remove the burden which weighs far too heavily upon the shoulders of the occupiers of lands and heritages.

When we make a comparison between the position occupied by the owner of a house and the occupier we must never lose sight of the fact that the owner, even under the most difficult circumstances, has something as an asset; he has something which adds to his income. The gross or net rent, no matter how low it may be, does ultimately add to his income. So far as the occupier is concerned, the opposite is the case. The rent is a liability which has to be paid out of his income, and it is bound to reduce his aggregate income. He is, therefore, in a position which entitles him to demand that he should be dealt with more equitably. I am not concerned with that point at the moment, but I hope that something will be done to deal with it within the range of our rating system.

To get back to the device of local income tax, I would say that while there are numerous difficulties and complexities associated with the application of the principle, I fail to see what is to prevent the Treasury making an addition to the amount of national taxation of so much per pound in respect of local services of an onerous character, of a semi-national or imperial character. Once that addition has been made I fail to see why we should be unable, with all the expert knowledge at our disposal, to divide the revenue derived in that way between the various localities, in accordance with the estimates of expenditure made each year. When I am told that the scheme is impracticable, I reply that there is no substantial scheme for changing any important system ever been submitted to any body of thinking persons that has not been subject to the criticism that it is impracticable. Every new system is, to some extent, impracticable, but we in this House are here specifically because of the fact that certain schemes have to be evolved and hammered out, and the impracticabilities removed. We have to try as far as possible to find a solution for the problems that beset our present rating system.

This Debate has had one really interesting feature, and that is that the Conservative party offer no remedy. They level criticism at the rating of land values and at local income tax, although its chief exponent is Sir Henry Keith, a prominent Conservative in Scotland, the ex-Provost of Hamilton, a man who has devoted his life to studying rating problems. The Conservatives offer nothing as an alternative to enable the House to decide on the question now before it. Why is it that when a fundamental question of this kind is being considered, the Conservative party do not feel themselves called upon to submit to the House something practical, something which will reconstruct the whole of the rating system under which we live, and something which will let the people see that they really have practicable proposals to bring forward? They obviously cannot disagree with the conclusions that have been reached by recent Royal Commissions. I propose to deal with one conclusion which was reached by the Departmental Committee on Local Taxation, which sat in 1922. Here is their final conclusion: As our fundamental conclusion we express the opinion that the existing system of rating is overburdened and near the breaking-point, and that rigid economy is called for, not only as a measure of financial justice, but to avoid the social Catastrophe which is inevitable if new enterprise in house-building, agriculture and industry continues to be chocked by the undue use of a system of local taxation which relies on rates on land and buildings as its sole fiscal expedient. If I understand the Conservatives' philosophy aright, one thing to which they are very hostile is social catastrophe. Nearly every Conservative speaker in this House and outside devotes a considerable proportion of his or her speech to an exposition of what he or she regards as social catastrophe, violent revolution and so on. Here is an excellent opportunity for hon. and right hon. Members opposite who constitute the official Opposition to tell us exactly what they suggest as a solution of this intricate problem. I had the privilege of sitting for three years on the Edinburgh City Council just prior to coming to this House. We discussed in that Chamber the whole question of rating, and I am glad to say that in Edinburgh and in other parts of Scotland there is an increasing body of opinion coming round to the conception of local income tax as a new solution of the problem that faces us. It is not the only solution, but it is a step in the right direction and, above all, it recognises the cardinal principle which ought to underlie every rating system, namely, that those who are able to pay should pay their share, and that those who are unable to pay should not be called upon to pay a share which is payable by those who have the money with which to pay.

Mr. TRAIN

It is unnecessary for me to claim the indulgence which the House generously gives to one who rises to address it for the first time. I would not have troubled the House on the present occasion had it not been for one or two things which have been said by the hon. Member for Blackley (Mr. P. Oliver), who introduced the Motion. I must congratulate the hon. Member for Dundee (Mr. Marcus) on his adherence to my great friend Sir Henry Keith. We Lanarkshire men all admire Sir Henry Keith. He has sat on every form of local government and has made many attempts to become a member of this House, but the electors would not have him because of his ideas on taxation. I do not disagree entirely with what Sir Henry Keith says about income tax.

The hon. Member for Blackley began by telling us about the cost of street paving. Probably in Scotland we are better off in that respect than those on this side of the border. The hon. Member talked about the owner of a house of the value of £450 having to pay something like £250 for street paving, while the owner of another house had to pay £170. That is beyond my comprehension. The average price of street paving in our part of the country is about £l per running foot in a 40 feet wide street. The owner bears half the cost, which for the street amounts to £2 per running foot. Suppose the site of the house is 40 feet and you are building four houses in a block, the cost is only £20. The hon. Member suggested as a remedy for these paving charges that we should make it a communal burden. I disagree with that suggestion. I think that the ratepayer who is not fortunate enough to be living in a municipal or council house is paying enough for the people who are fortunate enough to occupy those houses. We have in Lanarkshire, as the right hon. Member for Shettleston (Mr. Wheatley) well knows, because he has taken a great interest in housing, a rat" for housing of 10d. in the £ in some districts. In Glasgow the rate is something like 4d. To ask the ratepayers to contribute more towards the cost of the houses that more fortunate people are occupying, would be a shame.

I put a question to the Secretary of State for Scotland recently as to the number of people occupying these subsidised houses who drive their own motor cars. He replied that he could not tell me. There are a number in Glasgow who lave had garages built in connection with the subsidised houses, and they ace driving their motor cars to-day. Some of them sold their houses in order to go and occupy a house that had been built by the taxpayers' and ratepayers' money.

Mr. JAMES STEWART

Will the hon. Member give details?

Mr. TRAIN

I could give details. The hon. Member knows them himself.

I come next to the question of taxation. It has always been a great puzzle to me why a man's contribution to social services should be according to the valuation which an assessor puts upon his house. It does not matter whether he has five in family or 10 in family, or no family at all, his payment towards social services is based on the valuation of his house, and I think a great deal can be said for the argument which has been used in the Debate to-night. In regard to the question of slum clearances I had the privilege of reporting on the Addison scheme of 1921, and of turning it down, so that I know something about the question. The sooner our slums are cleared from our great cities the better it will be for the good government of this country.

Many local authorities are finding a difficulty in letting the houses they are building. Hon. Friends of mine who have sat with me on the Glasgow City Council and on the Lanark County Council know that both Lanark and Glasgow are finding a difficulty in letting many of the houses which have been built. What is really wanted is a house of the size and rent which people can pay. It can be done, and it has been done in Lanark and in Glasgow, but there are far too many of the bigger houses built in districts where the cost of transport means an extra 10 shillings or 12 shillings out of the family income. The workman wants to be housed near his work, and I suggest to the Minister of Health that when he brings in his Bill for slum clearances he will consider a suggestion which I desire to make. There are many tenement houses in Glasgow with good walls and roofs, and the people who occupy them are helping to pay the rent of those who are more fortunate in living in council houses. A little modernising of these houses, the provision of kitchenettes, bath-rooms, hot and cold water might, be considered. Let me tell the House an experience I had at Alexandra Park—

Mr. DEPUTY-SPEAKER

I do not want to be too hard upon the hon. Member who is making a maiden speech but he is turning away from the subject of the Motion.

Mr. TRAIN

I hope the House will excuse me. I am really speaking what is in my mind, and I must apologise for wandering from the subject. What I want to say is that we must really apply our minds to the housing problem. The Report of 1917 is always brought before us and we are trying to live up to it. Let us benefit by the experience of the past in the matter of housing and do our best to house those people who have been neglected since 1919, even with all the housing that has been done. We must get rid of slums, and in the towns the streets are already made. There is no question of subsidising the landlord by making roads. A landlord should develop his own land and after the road is made then the council should take it over. People should not buy a house without seeing that the road charges are properly discharged. Whatever may be done, I hope that we shall see to it that no further burdens are placed on the people in connection with the building of houses.

Mr. JAMES WELSH (Paisley)

My first duty is to congratulate the hon. Member for Cathcart (Mr. Train) on his maiden speech. We shall look forward with interest to his future contributions to our debates, but I may add that probably he will encounter considerable criticism if in his future speeches he takes the line he has taken to-night. The subject which the House is now discussing is one of great importance, and I must add my thanks to the Mover of the Motion for giving us an opportunity of debating it. I was delighted to hear the speech of the hon. Member who seconded the Motion, and I can bear testimony to the excellent work he has done in connection with housing reform. My only comment on that is that I wish the enthusiastic housing reformers in the Liberal party would spend a portion of their time in converting some of the Liberals in Scotland. Their idea of a good standard of housing is very different from what we hear is the official programme of the Liberal party. I have given a little study to the question of the incidence of taxation. My attention was particularly drawn to it in Glasgow by the stories we had as to the rents which were being charged in England. We were told that in some districts in England they had managed to build and let houses at 5s. and 6s. per week, and when that story was investigated we found that the incidence of rating had a great deal to do with the rent. Bad as is the system in England it is very much worse in Scotland, probably due to the fact that in Scotland the rates are not paid entirely by the occupier but are divided in varying degrees between the owner and the occupier. There was an idea that by this method the occupier was escaping some of the burden.

Whether that was the case or not previous to the municipal housing development schemes it no longer obtains, because local authorities in building houses and making up their estimates take into account what they as owners are paying by way of taxation and strike the rent with that consideration in mind. The result is that the tenant is paying all the rates in ordinary corporation houses which are let at 14s. 7d. inclusive. I took occasion to work out the incidence of rating as applied to those housing schemes where we were making an attempt to keep down the cast to suit those who were occupying slum dwellings. Taking the average rental paid by the tenants of these slum-clearance housing schemes at £13 10s. per annum or 5s. 2d. per week, or including occupier's rates, 7s. 3d. per week, the net rent which they are paying as occupiers is about 3s. 7d., the difference being the owner's rates. It is quite evident that the element of rates enters into the question of housing to an extent which makes the difficulties of local authorities much greater, and also makes it more difficult for those people who want to improve their housing conditions.

From the point of view of improving housing conditions in this country there is no bigger obstacle than the present incidence of rating and any Government that wishes to do something in this matter must tackle this difficult and intricate question as soon as possible. We are all agreed as to the disadvantages of the present system, but when we look for a remedy I am afraid it is not very easy or simple. Personally I should prefer almost any other way of raising money for local purposes than the present method, because the tax on house accommodation is a tax that bears heavily on those who need accommodation and affects the whole of our social problems. If any Government by the taxation of land values can bring in enough revenue to pay for the expenditure of local authorities in this country then the sooner we have it the better. But I am not of that opinion. Whatever contribution we may get from the taxation of land values, it is not going to be sufficient for many years to come to pay for the expenditure of municipal corporations on social services.

I think we should ask the Government, in formulating any new social schemes, to keep this in view, that every scheme which is going to add to the burden of local authorities is going to make the housing problem more difficult. The proposal to raise the school-leaving age to 15 will add to the burden of the local ratepayers of Glasgow £100,000 per year, and if the local ratepayers are to pay up to 45 per cent. of that amount, as is contemplated, it is bound to add not only to our housing difficulties but to the difficulties of local government as a whole. In view of the difficulties of local authorities at the moment the Government should put as little additional burdens as possible on local authorities and every effort should be made to raise money in such a way as not to add to the burdens of the ratepayers.

6.0. p.m.

Mr. LOUIS SMITH

I welcome the opportunity to discuss this important matter, and I congratulate the hon. Member who moved the Motion on his success in the Ballot. I cannot agree with his suggestions for a remedy in connection with rating and the cost of the roads. It is rather surprising to hear from the Liberal Benches again the suggestion of the taxation of land values, having in mind the lamentable failure of such an attempt to raise revenue some years ago by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George). Having regard to the fact that housing was put back by many years owing to the taxation of land values, I cannot think that the Government are likely to adopt the suggestion at the present time. Then we had the suggestion that the cost of the streets should be a communal burden. It is rather surprising that that suggestion should come from the Liberal Benches, because I seem to remember that for many years the right hon. Member for Carnarvon Boroughs has stood definitely for economy, and we should not get much economy if every landowner in the country knew that his streets were to be provided for him, that all he had to do was to build houses, and that the community would provide h m with the means of getting to the houses.

An hon. Member on the Government side of the House said that the Conservative party had no remedy to offer at the present time. If we look back to the history of the two or three years previous to last June we find that more houses, particularly those required by the poorer population—those whom, for lack of a better word, I call the working classes—were built in those years than in the preceding years. It is not for us to suggest a remedy when our record previous to the last election is so excellent compared with the record of previous years. If the hon. Member who made that statement about the Conservative party had spoken to his own Front Bench and had suggested that eight months was rather a long period to elapse before this important matter had had consideration, with the result that at the present time we have more building trade operatives unemployed than previously then—

Mr. DEPUTY-SPEAKER

I would remind the hon. Member that the Motion refers to the incidence of the rating system and to street-paving charges.

Mr. SMITH

I would like to refer to the difficulties that those who have been attempting to clear away slums have had in connection with the cost of rates and streets. I personally have had a good deal to do with the clearing of some very bad slums in the city in which I am living. It was with the greatest difficulty that we could build houses at rents which the poorest section of the population could afford to pay. In the building schemes of the local authorities, the rents, including the rates, amounted to 9s. to 9s. 6d., and it was certainly not possible for those whose income was round about £2 a week and less to pay that sum. It was only through the efforts of a voluntary organisation that was brought into being that £70 a house was found to supplement the cost of these buildings and the cost of streets and drains, etc., and that a rent of 6s. 6d. per week, inclusive of rates, was made possible. Of this 6s. 6d. per week paid by the tenant no less than 4s. represented rates.

The proposer of the Motion to-day suggested that the rates in the case of old houses were approximately 2s. It will be seen, therefore, that the cost of the rates in the case of these newer dwellings was just double that of the older ones. I do not know whether the Minister can influence the local authorities to assess the rates on these workers' dwellings according to the accommodation. I think he will find in many districts of the country that houses of similar accommodation are rated at varying figures. In fact I know that in my own area houses of similar accommodation are being assessed at anything between £11 and £19 a year, which seems a very big variation.

One speaker has said that he was strongly in favour of withdrawing the subsidy. I for one feel that we could help to reduce unemployment very considerably if we could attract the private builder into this trade again. The private builder certainly built a tremendous number of houses in the past, particularly during the years to which I have referred. Every effort should be made by the Ministry to attract the private builder into the trade rather than to depend merely on the houses that are built by direct labour under the municipalities. With regard to the cost of roads, attention should be drawn to the fact that some local authorities are de- manding that subsidiary roads, roads that lead nowhere except to the particular dwellings which they serve, should be constructed in exactly the same way as main roads. The cost is far more than is necessary. Sometimes I fear consideration is not given to the purpose for which a particular road is to be used. I have in mind a road which was built to serve seven small houses rated at about £18 per annum. These houses were seven of 15 built on a plot of about two acres. The eight other houses were built on the front and with no expense for road making. The road supplying the seven houses was a dead-ended road with a circle at the dead end for traffic to turn road. The cost of that road was no less than £539.

On the outskirts of a town if such a road had been left with grass around the asphalte of the path, and if the road itself had been made to carry traffic of the kind that would use the road, the expense would probably have been reduced by half. That is a way in which economy could be exercised and builders of small dwellings could be assisted. There ought not to be the great expense of kerbing and channelling and the laying of concrete slabs on every path and the construction of a roadway suitable for carrying eight ton lorries. Such construction is quite unnecessary in the case of a road serving cottage property. One speaker on the Government benches has said that he did not consider wide streets were necessary. I strongly oppose the idea of reducing the width of our main roads, and I hold that even our subsidiary roads should be kept up to the width that is adopted to-day in the majority of our cities. If possible we should go even beyond that width, as is done in several countries of Europe.

I have visited Holland frequently. When the Minister is considering the question of reconditioning houses, such as those to which an hon. Friend referred in an able maiden speech, I think it would be well if one of his representatives visited Amsterdam and The Hague and one or two other cities where big blocks of dwellings have been built. He could study the method of housing the people in those big blocks, and he would possibly learn a great deal of the inside arrangements that could be fitted into the good shells that we have in some parts of the country. These re-conditioned houses would provide suitable dwellings for working-class people, who would not be taken away from the centre of the city as far as is now necessary in the case of smaller dwellings in the country districts. I hope that no suggestion for paying the cost of street making out of public funds will ever be considered by the Minister. It seems very strange indeed that Members of the Liberal party should suggest such help for the landlord, for that is what it amounts to. I would urge on the Minister the necessity for clearing a great many of the slums which exist. Such work would help greatly to lessen the numbers of the unemployed. I hope that the Minister of Health will not wait any longer, but will get busy at once on the problem.

Mr. GREENWOOD

I am very glad to have the moral support of the hon. Member who has just spoken on the question of the urgency of the problem to which he has referred. But I find myself in some difficulty regarding this Debate, because up to now it has ranged over a very wide area. It has indeed been, if I may use the expression, a "preliminary canter" in anticipation of the Debate on the Bill which will shortly be before the House. It has raised questions of future general policy which obviously cannot be discussed on this occasion, and it has also been a preliminary to the discussion of my administration, which can be raised at any time by hon. Members opposite on the Estimates of my Department. I have no intention, however, of following certain of the speakers in dealing with questions which are entirely outside the range of this discussion, except to reply to the right hon. Gentleman the Member for West Woolwich (Sir K. Wood) who spoke about the failure of housing administration under this Government. I should not myself have gone into any irrelevant matters if the right hon. Gentleman had not insisted himself on being irrelevant. With his customary carelessness and lack of understanding of common figures, the right hon. Gentleman quoted statistics which he himself knows must create a wrong impression on the minds of people who do not know, how to use them, and I must, in my own defence, say something about the figures which he quoted.

What was the right hon. Gentleman's case? It was that fewer State-aided houses had been built since the present Government came into office than before. That is perfectly true. But who is primarily responsible for it? The right hon. Gentleman himself. He, in his wisdom, with the right hon. Gentleman the late Minister of Health, decided to drop the subsidy on what are called Chamberlain houses. As I have said before in this House, far be it from me to question the right hon. Gentleman's wisdom on that matter, but the result has been that in the last three months of last year there were no Chamberlain houses built and completed. I am not responsible for that result. But apart from that, in so far as State-aided houses are being built to-day, the numbers are steadily increasing; and if we are to com-pare like with like, we must consider the houses completed under the Act of 1924. The right hon. Gentleman quoted figures for the last three months of 1928 and the last three months of 1929. Let me give the House the really comparable figures—which the right hon. Gentleman would not have ventured to give, because they would not have assisted his case. In the last three months of 1928 the number completed was 12,661. In the last three months of last year the number was 14,507. Therefore, the number of comparable houses, built with State assistance, was increasing. If the right hon. Gentleman says that the private builder who was building under the 1923 Act is not building now, then he misled the House, because he said, and the right hon. Gentleman the Member for Edgbaston (Mr. Chamberlain) said, "When we drop the subsidy on the 1923 houses the private builder, this public-spirited servant, will still continue to build houses." If those houses are not there—and the right hon. Gentleman has not said whether they are or not—the responsibility is not mine, but his.

I am sorry to have been diverted to a matter which is not really appropriate to the Motion before the House. The Motion of the hon. Member for Blackley (Mr. P. Oliver), which he introduced in an interesting, logical, and very sincere speech, is primarily, concerned with the reduction of the cost of houses. The hon. Member drew special attention to two charges—the charge for street paving and the incidence of the present rating system. I gather that the Mover suggests further public assistance, whether by reducing the street-paving charges through some additional form of public grant, or by means of de-rating. The point is that what is being asked for is another subsidy. I have never been against subsidies; but I would rather have an honest straightforward subsidy, stated in terms of so many pounds and so many shillings, than what is, in effect, a hidden subsidy. Proposals are continually made for reducing the cost of house building, but in nine cases out of ten the proposal is in effect one for a hidden subsidy. My own view is strongly in favour of an open subsidy, so that the public may know precisely what we are doing out of public funds to assist housing.

The position to-day is that under the Act of 1924 passed by my right hon. Friend the Member for Shettleston (Mr. Wheatley), a subsidy was given which was a substantial contribution to the cost of housing. If we take the existing subsidy of £7 10s. per house per annum, the capitalised value of that subsidy amounts to £129. If we take the subsidy at present operating in agricultural parishes of £11 per house per annum, the capitalised value is £189. At the present time the average cost of State-assisted houses is between £300 and £400—about £350 in the case of non-parlour houses, and £390 in the case of parlour houses—so that at present the State is contributing something like one-third of the cost of the publicly-assisted houses which are being built. I do not mind the House pressing for a further addition if they think it right to do so; but I would rather give it openly and frankly than in a way which savours of what I may call tariff policy.

Attention has been drawn to two special problems, and the first is the question of street charges. I feel that this is a problem into which there ought to be some definite inquiry. It is true that the situation has changed. It is probably true that local authorities are demanding roads which are in excess of requirements. There may be something in that view and I have already promised in the House that that matter shall be investigated. Already discussions have taken place between officers of my Department and some representatives of the Institu- tion of Municipal and County Engineers to consider, not merely the cost, but the incidence of the cost. That inquiry I hope we shall pursue, and it is not necessary therefore for me to go further into that question at the moment.

With regard to rating. I have never pretended to defend the present rating system. It is hopelessly antiquated. It is quite out of touch with modern circumstances and requirements, and it leads to anomalies. It does not fulfil the condition which we have been told, the Income Tax more or less fulfils to-day, namely the apportionment of charges in accordance with ability to pay. I am not going to defend the present rating system but I cannot accept the view that the right way out is a local Income Tax. That is far too "chancey" a way of dealing with this problem. I can imagine some secluded village in Sussex, fortunate in having in its midst a multimillionaire, and an equally secluded, equally worthy village somewhere else, with no millionaire; and because of the accident of the habitation of the millionaire, one local authority would have practically no rate to levy on the rank and file, while the other would have to levy a relatively heavy rate. If Income Tax is of any value at all, it is a tax which must be levied nationally, for the income of a person does not necessarily derive from his residence in a particular area. Therefore, I could not subscribe to the theory that Income Tax should be made a locally-administered tax, as a great reform of our rating system. Then we have the proposal that there should be some more de-rating. Last year I said that there was far too much de-rating, and I believe that to be true. We have already de-rated far too many people who ought to bear local burdens. It is not going to help local authorities who today find themselves with restricted resources, to pursue still further this suicidal policy introduced by the late Government.

Sir K. WOOD

And continued by you.

Mr. GREENWOOD

Moreover, as between particular classes of house occupiers, it is not right to de-rate people who happen to be fortunate enough to live in new houses, at the expense of people who live in old houses. The truth is that the problem of rating cannot be dealt with as a side-line to the housing problem. Many of these matters it is true are closely related, but the problem of local rating raises far more questions than those affecting the provision of working class dwellings, and it would be no more possible to undertake a drastic reform of the rating system in a Housing Bill than to introduce the Budget in a Housing Bill. I should be only too glad if I could solve all our social problems in the Bill which will shortly be placed before the House. If we could deal with rating and many other allied social problems in one Bill—above all, if we could carry out that famous idea of the one-Clause Bill—nobody would be more pleased than I would be. I would then be able to kill not two birds but many birds with one stone. But in a Bill dealing with the problem of housing one cannot deal at the same time with a large number of other fundamental questions which, while quite appropriate for other Measures, can be no part of a Housing Bill.

We have been asked about rent restriction. Rent restriction has its own code of law and is separate from the problem of the provision of new houses. Bating has its own code of law, and it is something much more far-reaching than can be dealt with in a Housing Bill. At the same time, I think all my hon. Friends on these benches are as dissatisfied with the rating system as are hon. Members opposite, but the point of the Motion is to suggest that the question of street paving charges, which has its own law, its own regulations, and the question of the burden of rates should be added to a Bill which, when it comes before the House, will certainly terrify hon. Members opposite even if it is confined to housing. I submit that it is not reason-able, in a Bill designed to deal with the housing problem as such, that we should be asked to deal with a large number of problems which fringe the housing problem.

Most of us on this side, I think, agree with the substance of the case made by the hon. Member for Blackley and the hon. Member for Withington (Mr. Simon), as regards the incidence of rating and street paving charges, but I would ask the House not to commit itself to this Motion, and I do so be- cause it is utterly impossible, in the Bill which will shortly be before the House, to deal with questions which, however important, are really irrelevant to the main issue. We have had an interesting Debate, a Debate which has he-en illuminated by more than one maiden speech—and ail Members are glad to hear such speeches—a Debate which has roamed far and wide, but a Debate which, I believe, shows that in all quarters of the House there is still a genuine interest in this great problem of housing.

I would ask the House to bear with patience such little delay as there might be, to await the Bill which will come before it, to judge that Bill on its merits, to await what may grow out of our present inquiries into street paving charges, and to await a fuller consideration, because of the many implications involved, of the rating system as a whole. I would suggest that this Debate has allowed the right hon. Member for West Woolwich to let off a little steam and has permitted other Members to make speeches—it has had that good effect—and we might perhaps, without dividing on this Motion, agree, whatever may be said about the rating system and street paving charges, that they are problems that cannot be confused with the problem of housing. I hope the same enthusiasm for housing which has been evinced on the benches opposite will be manifested in the House shortly when the new Bill comes before it.

Major NATHAN

The right hon. Gentleman the Minister of Health, in his interesting speech, has spent most of his time in discussing a Bill which is not before the House, and in explaining and excusing, in anticipation, omissions from that Bill. The question which the House is now debating is not the Bill, the details of which, and even the date of the introduction of which, we have endeavoured to ascertain by questions across the Floor from the right hon. Gentleman, but have signally failed; the question is the broad question of policy indicated by the Motion brought forward by my hon. Friends the Members for Blackley (Mr. Oliver) and Withington (Mr. Simon), and I should like to bring the Debate back to its real subject-matter. The right hon. Gentleman knows the contents of his prospective Bill, but we do not, and I, for one shall not be horrified by his anticipatory description of his Bill as terrifying. My only fear is that the Bill produced from those benches will not go far enough or deep enough into the problem with which it has to deal.

The root problem towards which my hon. Friends' Motion is directed is the excessive burden of rates, which prevents the rents of houses being brought down to a figure which the ordinary working man or artisan can afford to pay. I do not know if it is realised that, taking the latest figure that I have readily available, the burden of rates spread over the population is no less than £4 2s. per head. Think what £4 2s. per head is, when translated into a burden resting upon a working class family. The rates alone, irrespective of rent, often absorb 10, 15, or even 20 per cent. of the week's earnings of a working class man. There are, in my constituency, hundreds of dwellings where that is the burden that falls upon working class families, and the problem is how to adjust the expenditure in the manner that will inflict the least harm. I myself, like others in this House, believe that much advantage is to be gained by the taxation of site values, but I think perhaps its most enthusiastic adherents are apt to be sometimes a little optimistic as to the time within which and the scale upon which the benefits will accrue. I think the taxation of site values is just and should be adopted, but meanwhile, before it can become effective, there are many alterations to our rating system which can far more easily be carried into effect and which will have immediate results.

The right hon. Gentleman made one statement in particular which, I must confess, struck me with very considerable surprise, when he said that de-rating is a hidden subsidy. The time is not so far distant when Members of the Socialist party stood up in their places in this House to protest against the transfer from the Exchequer to the localities, by the late Chancellor of the Exchequer, of certain burdens which had theretofore been borne by the central Exchequer. They protested, and I think they rightly protested, but does the right hon. Gentleman suggest that those were hidden burdens? So far from being hidden burdens, they were burdens which were felt and almost seen and about which the right hon. Gentleman and his friends were justly vocal. If a transfer of burdens from the Exchequer to the rates is not a hidden burden, how can a transfer from the rates to the Exchequer be a hidden subsidy? Indeed, it is along the lines of a transfer from the rates to the Exchequer that, in my view, the solution in some degree lies. We need to reverse the policy of the late Government and to ease the burdens upon localities, with a view to centralising certain items of expenditure which readily lend themselves to centralisation. After all, there are many services the expenditure upon which is laid upon localities, but over which, as a matter of fact, the localities have no control whatsoever. They are mandatory obligations, and they are imposed by Act of Parliament.

I was told only a short time ago by the chairman of the finance committee of one of the county councils in the home counties that there was only 12½ per cent. of local expenditure over which the county councils had any jurisdiction at all; the remaining 87½ per cent. was imposed by Act of Parliament, and could not be modified in any way by the local authorities. Just consider what the services are which fall to be carried out by the local authorities. If I take certain headings in the Ministry of Health Report, I find that they are these: "Education," "Other Health Services," "Housing," and "Poor Relief." Those absorb upwards of 45 per cent. of the expenditure by local authorities. Then upon "Highways and Bridges" they spend about 20 per cent., and the remaining 35 per cent. is made up of what are purely local and administrative services, such as "Sewerage and refuse," "Police," "Fire Brigade," "Miscellaneous and General Administrative Expenses."

Surely the right line of attack is to divide the liability up in the manner in which it naturally opens itself to division, namely, between the central services, the social services, and the administrative services. The central services would naturally be transferred to the central exchequer. The social services, especially those where the locality is under a statutory obligation, which it cannot escape, as regards the whole or at least a great part of them, might well be transferred from the localities to the central exchequer, from the rates to the taxes; and I do not think that it is over sanguine to calculate that of the £150,000,000 and upwards which are expended by local authorities to-day out of rates, a third, and perhaps even more, might properly and reasonably be transferred to the Exchequer and thus pro tanto relieve the local burdens. That still leaves a large and important sum in the neighbourhood of £100,000,000, to be expended by the local authorities, and, at a rough calculation, probably that amount might be divided as to two-thirds on social services, and as to the remaining one-third on administrative services. Anyone who looks into the figures will find an adjustment of that nature is approximately right.

Administrative services might be based upon a rate levied on the rateable value of premises according to the present system. Social services, on the other hand, might be levied over a wider area, and there might reasonably be, not a local Income Tax, as the hon. Member suggested—for I agree with the Minister of Health that that is impracticable—but a system of graduation and differentiation which would place the burden where it could most easily be sustained. It is not beyond the limits of ingenuity to devise swiftly and practically a scheme which would answer the problem by shifting the burden to a large extent from the rates to the central exchequer, and I would suggest to the Minister that it is essential, in connection with any proposals for housing, that this problem should be taken into account. Without some solution along the lines which I have sketched—too briefly, but, at least, on practical lines—any scheme for housing will be doomed to failure before it starts. I would ask the Government to prosecute with vigour the inquiry which the Minister has indicated is at present being pursued, with a view to being able, either to incorporate adequate proposals for overcoming this problem in the Housing Bill, or to bring in another Bill designed to achieve that purpose, and to come into operation at the same time.

Miss LEE

I have listened with keen interest to the speech of the hon. Member for North-East Bethnal Green (Major Nathan), because in his remarks were re- flected some of the ideas which, I believe, will form a practical solution of the difficulty. Like all preceding speakers, he made no attempt to defend local rating as we have it now. I think that we are in general agreement that a system of rating which discourages, rather than encourages, better houses is indefensible. All modern tendencies are towards making an increasing number of burdens national instead of local. It is very true that when we try to make the Income Tax the basis for local rating, great difficulties arise, but if we get our taxation as much as possible on a national basis there will be no injustice done. I find that, my figure is also 35 per cent. for purely local rates. It would be a tremendous service to the poorest sections of the community if steps could be taken to make the rest of that percentage a national burden. I would remind the House that we on these benches stress that the maintenance of the able-bodied poor ought to be a national charge. I suggest to the Minister that we have there a sure and a practical and helpful step towards relieving this problem of rates, which we might take while we are investigating the difficulties of some alternative system of rating.

Still more interesting in this Debate has been the recognition that even a completely different rating system will not solve the housing problem, with which we are fundamentally concerned, and the recognition that our housing problem has ceased to be merely the need to build new houses, and that the very essence of it is that we should build new houses at rents and rates which the working people can afford. The right hon. Gentleman the Member for West Woolwich (Sir K. Wood) and other speakers from the Conservative benches preened themselves on the housing record of the Conservative Government. We all agree that many houses have been built, and that over 1,000,000 have been erected n post-War times, but all who are interested in studying this problem are almost unanimous that these houses have solved the problem for the middle-class and for the more prosperous section of the working-class, but that the problem of the poorest section of the working-class, the men and women struggling in difficult circumstances to bring up young and relatively large families, we have not even begun to solve.

At one period, I thought that this Debate was going to develop into a Scottish Debate. That was no accident; it was simply a reflection of the fact that in Scotland we have this housing problem more acutely than in any other part of the British Isles. The right hon. Member for West Woolwich spoke about what had been done to provide houses. I wonder if he is aware that, after all his magnificent effort, he has left 52 per cent. of the population of Scotland in what we call "buts and bens," that is, one or two apartment houses, and that 11 per cent. are living in one-apartment houses? No wonder Scottish Members are here in considerable force! When we turn to England, we find that only 5 per cent. of the population is living in one or two apartment houses, and only 1 per cent. in single apartments. We have still to devise legislation which will bring good houses within the means of the poorest sections of the community, and I hope that we shall tackle our probblem, not along one line, but along every conceivable line, so as to deal with taxation of land values, with profiteering in building materials, and with excessive profits made by building contractors, and have direct labour wherever it is necessary.

Important though these factors are, the chief factor is the interest that must be paid on money for building purposes. Because that is the chief factor, we must come back to some form of subsidy. I heard the Minister of Health state in rather an aggrieved tone of voice that he admitted that subsidies were necessary, and that we should recognise that already the State is paying one-third of the cost of houses. I was interested in that statement, because in the "county in which my constituency lies, there is a desperate and most urgent need for houses. We have whole villages in which there is not even a sewerage system. We have our people living in conditions that would be a disgrace to mediaeval times, but in that county we are granted in some instances 75 per cent. subsidy from the State when we want to build new roads or bridges. It seems absurd that we should be given three-quarters of the cost for roads and bridges and such services, and only one-third of the cost for houses. The Lord Privy Seal wants to know how to employ his men, and I suggest that we in Scotland can give him endless schemes for providing work in the building of houses that are so urgently needed, but a necessary condition of that is that we should be given a greater subsidy than ever before in whatever form that subsidy may take.

I was interested in a remark made by the hon. Member for Withington (Mr. Simon), and I would like to be clear about one side of his suggestion. We must get a subsidy in one form or another. Many of us are chiefly concerned with the housing problem of the family with young children, and the hon. Member for Withington suggested that, in order to encourage such families to remove from the slums into a better environment, special conditions should be given to them. He wants some form of rent allowance; but what has always puzzled me is this: If we have two families with an income of £4 each and three children in each family, and find that one family has struggled into a new house, are you going to deny additional assistance to that family, and yet give it to the other family which has identical circumstances and which still finds itself in the slums? I believe that I should be more in agreement with him if he would extend his conception of subsidy so as to include all working-class families or families which financially require assistance in this way.

7.0 p.m.

I would ask the House not simply to take a dutiful interest in this problem of providing cheap houses, but to become excited about it, to recognise that it is one of the biggest tasks that we have to undertake. An hon. Member opposite referred to the houses which he had seen at The Hague. I saw houses in Vienna and in the Ruhr area of Germany, and I came back to Lanarkshire feeling ashamed of what the hon. Member for Dumbarton Burghs (Mr. Kirkwood) describes as "the land of the brave and the free." We find that abroad this problem has been tackled not simply from the point of view of building houses, but of giving houses to people at rentals which they can afford. It has been tackled so in Germany and Austria—the defeated countries; we find there magnificent houses, playing fields for the children, and every modern convenience, and then we come back to the glories of Great Britain, the country which won the War, and find that we are tied down by old-fashioned, obsolete, conventional ideas of finance. Those defeated countries, with resources much less than ours, have had the courage to do these things, and I appeal to the Minister of Health and to the Chancellor of the Exchequer that they should consider if necessary new financial methods to deal with this need for cheap houses, and consider the suggestions I have made, that if it is not unreasonable to give 75 per cent. of the cost for roads and bridges, some of which are not desperately needed, they should give at least that proportion or more for the building of houses that are so urgently needed. It is not only a housing problem, it is an educational problem, it is a health problem and what we would be spending on housing we would be saving in health services, in social services and probably in criminal services. At every stage in our life this problem of housing is absolutely fundamental. We on these benches are standing for family life and for all the best interests in our national life. I was glad to hear a Liberal Member say that he was afraid the Ministry of Health Bill would not go far enough instead of going too far. That is a good omen, and I hope an increasing number of Members of this House will demand more and more that we do not delay or make apologies or excuses for ourselves in dealing with this problem, but that we get down to the concrete facts. I have seen children studying for their examinations at school in rooms where there have been wet clothes round the fire, in rooms where there have been younger children playing on the floor, in rooms where there have been older people talking and arguing. Can we say that we are giving them a fair educational opportunity when they are studying under such conditions? In the later stages of life you will find that the young men and women want to have a pride in their homes and want to bring their friends there, but they have to go in the streets and to learn things they otherwise would not, because conditions at home prevent them from entertaining their friends there.

For health, for cultural standards and for all those things that raise the standard of national life, this problem is so fundamental that I hope the Debate to-day is only the beginning of extended interest which will be reflected in the Second Reading of the Housing Bill and that the Labour Government, whatever else it may do or omit to do, will at least have the credit of showing that, while the Conservatives built houses for those to whom the rental was a secondary item, we started and went very far on the way to building good, pleasant homes for the working people of this country, especially for the parents struggling with young children, and that we raised in that way to a higher state than they ever enjoyed before the general standards under which our people live.

Mr. MacLAREN

I have listened all the afternoon to this Debate, and I am sure that there are many in this House who will be able to appreciate my feelings as to what has been going on all the afternoon, because I have heard King Charles's head mentioned so often by other people that I was almost becoming jealous of them. The Motion on the Paper seems to me an intimidating factor in the Debate. The major point of the Motion is to call attention to the heavy burden of rates on houses. We can all become extremely eloquent if we like to play on the awful conditions of housing in various parts of the country and to harrow each other's feelings with accounts of what we know and have seen, but in this Motion we have to deal with the burden of rates on houses. I have one objection to make to my right hon. Friend's speech when he spoke about the Bill. It is quite true that it is not the function and that it is not part and parcel of the Housing Bill to incorporate Clauses dealing with rating, but I would like him to remember that, at the same time as you are dealing with the housing problem, you must keep in mind the rating problem. You cannot keep one in a water-tight compartment, and hope to solve it by ignoring the other. That is the major blunder of every Government which has tried to deal with the problems of housing, as if it had nothing at all to do with rating. Their hope to solve it has been made practically impossible. Housing development and the rating problem must go together.

I want to refer to one or two things which I observed this afternoon about the Liberal party opposite. As an old Member of that group of Radicals, it was psychologically interesting to me. When I heard the Seconder speak, my mind went back to Alexander Ure, the late Lord Advocate for Scotland, and I wondered what he would have said if he had heard the hon. Member for Withington (Mr. Simon). No amount of sentiment will ever solve this problem, and no amount of tinkering about with charity rates here and charity rates there. When anyone is going to take into account the poverty of a man's pocket as to what he should pay for rent and rates, he is clearly getting away from a scientific adjustment of the whole problem. The Mover said that his solution for the housing burden of rates and houses was the rating of land values and he spoke about the local Income Tax. The hon. Member for Withington left land values out. Is he afraid of them? The third Member of the party opposite, while giving a sort of passive benediction to the rating of land values, seemed to be so far out of date as to consider it impracticable. He then suggested the old Tory remedy of removing rates from the local authorities and adding them on to the taxation of the country in the hope that you are doing something. It is no remedy of an economic problem to pass the rate from the ratepayer on to the taxpayer, because the working classes will have to bear it all the same.

Boil this whole matter down. Shred it of all the ornamentation we have heard in the Debate this afternoon, and what is the task before us? We in this country are suffering to-day from antiquated laws. "1601" should be in large figures above the gallery here so that we can all see it. This country in 1930 is trying to operate a rating system based on a rating law established in 1601 in this country. What is that rating law? I have said it before, and I hope the House will forgive me if I repeat it. It has been referred to by hon. Members opposite this afternoon. The assessors under the rating law are instructed to levy a rate upon the property at the price it will let from year to year in its present condition, with the result that if it is a good house, a house new to that local authority with modern equipment, it will let for more than a poorer house, and, naturally, the rates under the existing law must be higher. No amount of sentimental appeal to the Government that if a man spends most of his time in producing infants, he is to have no rates, or the sentimental suggestion to put people with families in houses, while people with no families who may be equally hard up must pay for the others, will affect the position. No amount of that sentimentality is any good. You have to change your rating. Put the rates on the property according to what it will sell for from year to year, the property in that case being the land alone and not the building. Take the rates off the building entirely.

While I was watching the right hon. Member for West Woolwich (Sir K. Wood) this afternoon I was wondering how ho was going to deal with the proposition of changing the rating system to land values. He is extremely careful not to touch it, and I thought this afternoon that the right hon. Gentleman would be shrewd enough to keep clear of it. But before he resumed his seat he was gallant enough to come forward and draw the dagger upon the proposal of my hon. Friend. He made a quotation from New York. I should like to verify that quotation. If he had understood the thing criticised he would have known even from the quotation, even if it is possible under the rating and valuation system of New York, for the landowner to pass the tax on to the tenant, that the land valuation in the first instance must have been a wrong valuation or that between this year's and last year's valuation the land value has risen so that the tax can be absorbed by passing it on to the tenant. I shall not go into that now, because it is a technical matter. The joviality which showed itself on the right hon. Gentleman's face when he let that slip seemed to show that he was convinced in his heart that once for all he had destroyed that proposition.

I would like to correlate another point. In dealing with housing you have got to keep in mind any handicaps of taxes and rates which tend to make rent higher than it ought to be. There is also another question, that of wages. We have heard complacent speeches this afternoon that houses should be built for the working-class man—as they are pleased to term him—and references to his having a non-parlour house and his living near his work. Those are phrases of the age of Queen Victoria. The working men in this country are beginning to appreciate the fact that the house is their tabernacle, that it is the main centre of their communal life, and there is no reason why they should be robbed of a parlour or the other appurtenances of a modern house any more than the man with a higher income. My point is this, and it brings me to my proposal this afternoon about local Income Tax. It should be the canon of rating law, as it should be the canon of taxation, that taxation should be not merely predatory, it should not be merely a question of rating or taxing a person who can well afford to pay, as the saying is. That is a fallacious idea. Taxation and rating should follow the principle that the basis on which you levy your rate and tax should be such a basis as would not in any way endanger the production of wealth or the production of houses, and would at the same time have an economic effect in society at large. The local Income Tax proposal would not have any economic effect any more than the national Income Tax now has. You have increased the national Income Tax greatly beyond what was ever dreamed of in its earlier days, but you have not affected the economic relationships between man and man in society.

The same thing would happen if you imposed a local Income Tax. The Minister of Health rightly pointed out the difficulties that would arise if you attempted to pursue the policy of a local Income Tax, because you have always got the old difficulty. A man is quite entitled to ask, "If you are going to put a local Income Tax upon me, are you going to put it on the place where I am employed, where I make my money, or where I live?" You would have half a dozen local authorities quarrelling as to which of them should absorb the local Income Tax. No, it will not do. You try to get round corners, and yet allow antiquated laws to remain in force. The burden of rates upon houses to-day is making housing an impossibility. One Commission after another has been set up to inquire into the question; the party opposite were responsible for the most important inquiries ever held in this country. They said, and quite rightly, that if the present antiquated rating system were maintained there would come a time when housing would become an impossibility, and that is the position in which we find ourselves to-day.

The better we build houses, the higher become the rates upon them; as soon as we improve old houses, new assessments are made; and then we ask ourselves why we have a housing problem! Go on taxing and rating men for building houses and you will assuredly be faced with a housing problem ! The introduction of de-rating showed that the Conservative party were recognising that the burden of rates upon industry was tending to stop industry. Eloquent speeches were made by the late Chancellor of the Exchequer to show how the rates levied on industry were merged into prices and how these increased prices were hindering our competition in foreign markets. In order to save the industry of the country, the Conservatives came forward with a de-rating Bill, but the farce of it all was that the sums they de-rated from the rates were passed on to the taxes, and so we are just as we were. So it would be if we adopted the local Income Tax. This country is more heavily rated per capita than any country in the world, despite even the de-racing Act.

Another interesting feature, of this Debate has been the reminder that the sum of £1,000,000,000 has been spent on housing subsidies. I do not know what influence I may have with the Minister of Health, but I implore aim to turn away from this vicious idea of subsidies. Subsidies do not solve the problem. If I were a landowner and knew that the Government were committed to paying subsidies for years to come, I should rub my hands with pleasure, because I should know that I had a first charge on them. If I were interested in promoting the production of bricks and mortar and other building materials, and knew there were subsidies, again I should rub my hands; because we know from experience that these subsidies inflate the price of materials and encourage landowners to hold land out of use until they can get a pretty fair price for it. Subsidies do not solve the problem and never will, and I have but little patience when I hear this see-saw argument between the two sides of the House as to which gave the more in subsidies. Let us make the penalty fall upon the man who withholds land from use, let us make it economic- ally impossible for land to be withheld from use, and encourage local authorities to put every ounce of energy they can into the production of houses. I only wish the late Government had recognised that the production of houses is perhaps the greatest producing industry in this country and had derated that as much as they derated agricultural land. But this is all by the way, Mr. Speaker. You will be saying to yourself that the Member for Burslem is having a night out; and many hon. Members will be saying that the satisfaction which I seem to get out of this comes to me but very seldom.

I join with the speaker who preceded me in saying that the housing question is perhaps the most important we have. If I believed subsidies would solve it, there would be no more enthusiastic supporter of subsidies. If I believed that some paternal form of adjustment and graduation of rates would solve the problem, I would support that also. Because I know from actual experience, and by studying the relationship of rating and taxation to production, that this vicious system of rating has brought us to the pass in which we are; because of the encouragement of the withholding of land from use, which creates unemployment, and keeps wages low whereby men cannot even pay for the houses we are building to-day; because of these things I am driven to a stronger belief in the faith with which I am identified in this House. Unrate the houses of this country, levy your rates upon the value of the land. I have got one hope, and that is that the Chancellor of the Exchequer will be the man who will fulfil the promises he made before he got into the position which he now occupies; and I think that will be the turning point of all the housing and other economic difficulties in this country.

Mr. GOULD

It is not my purpose to follow the most interesting speech of the hon. Member for Burslem (Mr. MacLaren), though I would like to deal briefly with his argument that if we transfer burdens from the rates to the national exchequer we drift the burdens back on to the working classes. If the logic of that were carried far, it would nullify the basis on which we have instituted the great national services which come to the aid of the sick, the unemployed and those who are in receipt of old age pensions. I regret that the terms of the Motion have been too narrowly drawn. To my mind we are not facing up to the real problem in dealing simply with the burden of rates on new houses. However much we may regard this discussion as academic, the problem of rating will be forced more and more on the attention of this House and a solution of it will be demanded by the mass of the people. There have been three stages in this growth of opinion. The Rating and Valuation Act, 1925, and the quinquennial valuation of property have brought valuation into the arena of discussion among the working classes. There are anomalies in assessment values. I know of new council houses where we have an annual value of £12 fixed for a house with three bedrooms and bathroom, and the annual value of a similar house in the same assessment area is around £26. In the same area you have a worker paying rates on an assessment of £16 or £18 net, and the same class of toiler, with the same income, and deriving the same benefit from the public services, rated on the basis of £8 or £10 for the same type of house.

In 1928, the Local Government Act brought the mass of the people up against the problem of the burden of rates. They felt that if it was a good thing to de-rate industrial properties and agricultural land there was a case for dealing with the burden of rates on the dwellings of the people. This Motion is, therefore, very opportune, because it does give the House an opportunity of facing up to the very real problem of housing those people whom it is most difficult to house on account of their economic circumstances. One point on which there is general agreement is that we should consider the classification of burdens in order to see how far we can make national services a national charge and put local burdens on to local shoulders. I have here figures which give a picture of the problem as it is in my own union. In 1909 road charges amounted to £2,847 and in 1927 they had risen to £32,925.

This road problem is creating heavy local burdens. The roads are becoming more national in their use, and we have had contributions from the Road Fund, in spite of the regrettable inroads made upon it by the late Chancellor of the Exchequer; and the House must take the view that in the main the cost of these roads ought to be lifted from local rating. That we should go to a woman with a family of children and say to her, "Because you want a house with three bed-rooms you must pay a bigger share of the cost of this national service of road maintenance," is an anomaly which no one can defend. Take the cost of asylums. There you have almost the whole cost of mental cases thrown on the local rates, with the exception of an antiquated State contribution—dating back hundreds of years. The same sort of thing is seen in connection with education, although there some progress has been made in making education a national charge.

It is an essential thing that the public services of the country shall be apportioned on the basis of national charge-ability and local changeability—the latter where the services can be regarded as purely local. I have no desire to prevent hon. Members opposite getting a Division on this Motion, although I feel that it is too limited to be of much value, because it does not deal with the problem as it exists to-day, and I regard the new Bill referred to by the Minister this afternoon as one which would bring us closely against the problem of housing. The problem in the rural districts has not been solved by any Measure promoted so far. Further, I hope the incidence of rating and the anomalies in the assessment values of existing properties arising from the Rating and Valuation Act will be inquired into by the Ministry and that we shall get equity.

Question put, and agreed to.

Resolved, That this House views with regret the excessive burdens placed upon the occupiers of new houses by the incidence of the present rating system and by street-paving charges, and the detrimental effect of such burdens upon future housing development, and urges the Government to consider proposals for the reduction of such burdens in connection with any future legislation dealing with the question of housing.