HC Deb 13 December 1948 vol 459 cc979-88

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. George Wallace.]

11.1 p.m.

Mr. Asterley Jones (Hitchin)

In July of this year I communicated with all the local authorities in my constituency to inquire whether the housing programme for the ensuing months, which had recently been issued by the Government, was in fact in line with the building resources in and around their areas. I am very glad to say that, while some of them had various comments to make, there was general agreement that the programme was in fact commensurate with their resources. But two of the rural councils made a comment which I think the Ministry of Health should consider. That comment was that the allocation made by the Ministry of Health did not take sufficient account of the resources of small builders who are normally unable to tender for large contracts for building local authority houses. The words which were used by the clerk of the rural district council I have particularly in mind were: In a large rural district of this character one always finds a large number of village builders in a small way of business whose resources generally are insufficient to take on contracts for the erection of a number of houses at a time. I think we should be permitted to issue licences to these small builders to build one or two houses by private enterprise. Anything they can do will help in our endeavour to erect the maximum number of houses. I do not suggest that small, firms of builders of this kind are necessarily peculiar to rural areas, although, as I shall show, they are in the nature of things found very much more frequently in villages than in towns. Very many of them are small-scale family businesses consisting of three or four members. They have little transport and, therefore, they are confined in their activities to their immediate neighbourhood. That makes them, of course, willing to take on contracts for people in the immediate neighbourhood. Whey have no clerks or quantity surveyors and, therefore, they are unable to enter into the somewhat detailed specifications and bills of quantities which are clearly necessary in a local authority contract. They have no elaborate equipment and their financial resources are not normally sufficient to warrant the entry into a bond. On the other hand, they are remarkably versatile—one man may be able to do quite a number of jobs—and they do not have the same difficulty with regard to finding specialist labour as do sometimes larger businesses.

The existence of these small firms is admitted by the Ministry of Health in its circular No. 92 of 1946, which was issued on 30th April, 1946. Briefly this circular provides that small builders of this kind may be employed by the council to build houses for the council although not on the normal form of contract. It is on a very much simpler form of contract, which means that the builder builds the houses subject to the general supervision of the council and then the council takes over in the end. I have found that while this circular uses them to a limited extent, there are certain objections to it.

In the first place, there is the difficulty of supervision by the council while an isolated house or a pair of houses is being erected. Obviously, if a house is being built for the council, the council will want to keep an eye on its progress and they will want to be able to give advice and instructions on any changes of a minor nature which may occur during its erection. That is difficult both for the council and for the small builder. It is difficult for the council because these isolated building operations are, maybe, away from the main stream of the council's work. It is hardly worth while for the council's surveyor to make regular visits and for that reason the council itself is often unwilling to enter into a contract on this basis.

Secondly, when the house is built it may very often be separated from the rest of the council's property and although that in itself is not a bad thing, many councils envisage some inconvenience in estate management by having a number of isolated houses dotted around the village, to which it might be argued that the small builder should start on a council site which the council proposes to develop much later on. But very often the difficulty there is that the site is not already provided with services and the small builder cannot do anything until the services have begun. It is usually very much better to deal with places as a whole with a steady stream of work, starting from the provision of the services, until the houses are erected.

Therefore, it appears that the correct way in which we can deal with these small firms, many of whom, I admit, are fully and properly employed on repair work, but many of whom are employed on work which, though necessary, is not so necessary as the provision of new houses, is to issue licences to those firms, provided, of course, that some applicant can be found whose need is the same as the need of those who are being provided for by houses to rent.

If the council does provide licences for this purpose, they have to be taken out of the council's normal allocation and I have every reason to believe that the allocations which in certain cases have been brought to my notice—details of which I have given to the Ministry of Health—have been based solely on the contractual capacity of the large firms and have taken no account of those smaller firms. Therefore, if the licences are granted out of the total allocation to smaller firms, the allocation of houses to rent, which. of course, are needed to a preponderating extent, is thereby diminished. It may be that this practice will encourage builders to decline local authority contracts in the hope that they will be granted licences, but I believe that local authorities which have had good records up to now in the production of houses—and that applies to the majority, at any rate. in my area—should be trusted to exercise a certain amount of discretion.

I have already indicated that the applicants who would benefit from such a provision are in the category of the needy and that they are prepared and willing to buy a house rather than to rent one. It might be urged that the shortages of steel and timber preclude any enlargement, but I doubt whether that could be seriously contended. While we recognise that these shortages are acute, I do not believe that the total number of increases would be such as to make any appreciable difference to the supply position. Therefore, I would ask the Parliamentary Secretary to issue instructions to his regional officers to inquire from local authorities what additional resources, in the form of small builders, exist in their areas, and whether they consider that even a small additional contribution to the housing shortage could be made by employing them.

11.11 p.m.

Mr. Mott-Radclyffe (Windsor)

The hon. Member has made an important point on the employment of small building firms in rural areas. He is right in saying that there is a large number of these small firms who could make a far bigger contribution to the housing problem than they are now doing. But the trouble about a small builder getting a contract from a local authority is that almost every rural district council wishes to build new houses in blocks of four, five or six. The small builder, working perhaps with a son and employing a bricklayer and a carpenter, is not the kind of man to get a contract for building new council houses. It is outside his activity.

It is true that some private builders, a farmer, may be, who wishes to build a new cottage, would be willing to employ the small builder, but the odds are against him as they are against any private employer building at all. What role can the small builder therefore fulfil? What he is really good at is reconditioning. He probably understands more about that than the larger type of building contractor who can run up a block of four or six council houses. But again the odds are against him, because getting a licence takes an incredibly long time; and also because as long as the party opposite persist in refusing to put back the subsidy under the rural workers housing Act the number of people prepared to recondition will not be as large as it ought to be. If the hon. Gentleman really wishes to make use of this volume of building labour he should speed up the issue of licences for repair work; and should apply a little less party prejudice and more common sense to the matter, and follow the recommendations of the Hobhouse Report, and put back the subsidy under the Housing (Rural Workers) Act.

11.13 p.m.

The Parliamentary Secretary to the Ministry of Health (Mr. John Edwards)

I agree whole-heartedly with both the speeches that have been made so far as they draw attention to the supreme importance of getting the maximum housing in rural areas. No one at the Ministry of Health wants to deny work to any competent contractor who can build houses at a reasonable price. No claim from any local authority, backed by proper evidence, that the authorised programme was not large enough to employ all the available resources would be ignored. We try to make allocations on the basis of local resources, and if it can be shown in any case that our estimates are wrong, we are always prepared to revise them.

My hon. Friend the Member for Hitchin (Mr. Asterley Jones) has not yet produced very much evidence. He has suggested that one or two small builders in what I presume is the rural district of Hitchin are not fully employed and on the basis of that he asks that rural district council programmes should be extended—but extended at the cost of ignoring the nationally esittblished balance between private and public building. That is to say, we are asked to authorise an unspecified number of houses under private licence. It is true that my hon. Friend does not want this to be a very large amount, but he is asking for some discretion on the part of the local authorities to go beyond the one in five ratio.

Mr. Asterley Jones

I think the Parliamentary Secretary has misunderstood me. No doubt it is my fault. At the moment let us assume there is an allocation of 30 houses, out of which it would be possible to allot five licences. At the present time those five licences may be given to these small builders. That is admitted. That means that the number which can be used for council purposes is 25, whereas the capacity of the builders who can build large numbers is 30. Therefore, we are five short.

Mr. Edwards

My hon. Friend is saying again what I have said already—namely, that he wants a discretion given to local authorities to go beyond a certain allocation, or, if not that, to alter the proportion; otherwise his argument would not mean anything at all.

Mr. Asterley Jones

But surely the five spare in the hands of the large contractors could be used for council purposes?

Mr. Mott-Radclyffe

The point I made was a little different. My argument was that one in five tilts the balance unnecessarily against the small builder getting any contracts.

Mr. Edwards

I appreciate that point. I am dealing with my hon. Friend's point. Let me continue the argument. If a local authority wants to make a case for a larger programme, it will be examined, but I believe that all local authorities have already quite adequate means for ensuring that all builders, large and small, get a proper share of the programmes authorised. Apart from schemes which the local authorities offer for tender in the normal way, and the licences they can issue for private building up to one-fifth of the total allocation—and I think the hon. Gentleman on the other side of the House will appreciate this—they can make use of the "streamlined" arrangements set out in Circular 92 of 1946 to which my hon. Friend referred for the purchase of houses—not the making of contracts—built by small builders who are not organised for tendering for a full-scale housing scheme. I believe that, taking the country as a whole, there is no builder who genuinely wants to build houses and can do so at a reasonable price who cannot be accommodated in one or other of the ways I have mentioned.

Let me take the position in Hitchin. The local authority have completed 157 houses. Another 93 are under construction and another 55 authorised but not yet under construction. They have ten licensed houses, if I may use the term, under construction. These 93 houses are divided among five contractors, all of them from outside the rural district. The council, in fact, could get no local tender at an acceptable price. Of the last local builders to build for the council, one of them took 23 months over six bungalows and another took over two years over six houses. I think these facts do not suggest a body of local contractors eager and able to build houses at competitive prices. And I would say, with all respect, to my hon. Friend that, if he or the local authority claim that firms are being starved of work, when apparently they are so unwilling to compete for council contracts that the council are obliged to go outside the area to find builders who, in spite of the initial handicap—and it is a handicap for anyone to come in from outside—are, nevertheless, able to compete successfully with local firms, I think they are arguing against the facts. It will not do to say that the builders in question are small men seeking small orders and afraid of specifications, bills, quantities and the other accompaniments of a formal contract.

Circular 92 of 1946 lays down a procedure which was designed for just this difficulty. The council is at liberty to get as much of its programme as it chooses worked out in this way. It was worked out in this way with the National Federation of Building Trade Employers who urged that a substantial increase in the number of permanent houses could be secured by enlisting the services of private builders, who could undertake contracts for local authorities on the usual basis. It provides means for employing the small contractor on this work and giving him a continuous flow of orders whenever he has the capacity.

It is the simplest procedure which could be devised. The local authority selects a private-enterprise builder whose work is known to it, and in whom it has trust and confidence. It invites him to build a number of houses of a kind which he may have already built in the area, with such simple modifications as may be necessary, at agreed prices subject to variations in the cost of materials and labour. The builder submits plans and a brief specification, and the contract is concluded. The builder can build on his own or the council's land. We have so far had 18,394 houses erected by local authorities in this way and I do not believe there is any reason why any small builder who is really capable of building houses in Hitchin or any other rural district should not do so under this scheme. I do not accept the view that my hon. Friend put forward that there are difficulties from the side of the local authority in supervising this work, or in managing the houses once they are bought..

The rural district council is in the habit of dealing with small groups of houses. It will have houses in this village and in that village, and so on. The rural district council can plan a little group of houses, some to be built by contract, some to be built under this circular. It can have a small estate laid out, if it wishes, and can service it, but can have one or two houses built by the builder under Circular 92. It can so arrange it that it can give the builder a continuous flow of work over the years. When we worked out this scheme we thought that we had met the interests of the builders. The National Federation thought so anyhow. I do not believe that any builder who cannot build under Circular 92 will be able to build in any other way.

It is suggested that if he builds by way of licence he will be less subject to supervision, that it will be easier for him to make any adjustments e needs with the person who is going to buy the house from him in due course. I do not accept that. I do not believe it is any more difficult for a builder to build and sell to the local authority under Circular 92 than it is for a builder to build under licence and sell to a private customer. I see no ground for supposing that the one is any more difficult than the other.

Mr. Mott-Radclyffe

I wanted to ask the hon. Gentleman to explain if the builder builds on his own bit of land and subsequently sells to the local authority, who pays the development charge under the new Town and Country Planning Act?

Mr. Edwards

That, I am afraid, is not a question for me it does not arise on this Debate at all. May I. therefore, suggest that the rural district council, which has already fifty-five houses authorised; but not yet under contract, can, if it is so minded, deal with the situation, but always granted that the builders are not fully employed and are able to build houses and are able to build them at reasonable prices. If a person gets a licence to build, the cost of the house and the selling price have to be related to the cost of building council houses and, if the builder cannot build under Circular 92, he is not likely to be able to sell under cost and selling price terms which would be imposed if he were building under licence from the local authority.

I would be more impressed if I could be assured that the builders concerned were doing all the work which is available to them. Many, it must be admitted, are not in the field of builders, but are repair-and-maintenance people and it is not possible to deal with re-conditioning until the law is changed; and, I need not remind the House, it would not be in order to pursue that subject tonight. But perhaps I might be permitted to say that there was a reference to this matter in the Gracious Speech to which I would draw the hon. Member's attention if it has escaped him.

I think that if there are cases of builders of this sort who do not build houses it must be because they do not want to do so, and not because they are prevented by any Government regulation. It must be admitted that a great many are not equipped for building houses at all, but, in any case, we have gone just as far as we know how in order to make it easy for the man who could build one or two houses in his own time and in his own way; and what I am asked is that those who want to build should be allowed to build on their own terms. But since their own terms would be a contradiction to the national housing policy I cannot agree, because those terms which involve a complete breach with policy and a radical change for which no sort of case has been made.

Adjourned accordingly at Twenty-nine Minutes past Eleven o'Clock.