Clause 35.—(AMENDMENT AND EXTENSION OF SECTION 7 OF BUILDING MATERIALS AND HOUSING ACT, 1945.) (Hansard, 13 July 1949)

Commander Galbraith
I beg to move, in page 26, line 16, to leave out "eight," and to insert "five."
This Clause deals with the Amendment and extension of Section 7 of the Building Materials and Housing Act, 1945, which imposes a penalty if a house for 609 which a building licence has been granted, subject to a condition limiting the price, is sold or offered for sale during a period of four years; and for the four years in this Section eight years is substituted. We do not think that that is altogether fair. Therefore, we would limit the period to five years.
The position at the moment is that if people wish to move about the country, they find great difficulty in acquiring a house except at very great cost. We do not think that there is any harm in a man who wishes to transfer from one part of the country to another part being able, after a period of five years, to sell his house at the economic price which is actually ruling at the time. What happens is that he sells one house for £2,000, and pays £2,000 for another house, But if the man is limited, as is proposed here, for eight years after he has bought a house, if he should have to transfer to another part of the country, through no fault of his own, and possibly through no desire of his own, then he will be limited to the sum which he paid for the house, and he will be unable to acquire the money to obtain the same, or comparable, accommodation elsewhere. We think that that should not be so. We think it is imposing a financial hardship.

§ Colonel Gomme-Duncan
I beg to second the Amendment.

§ The Lord Advocate
The effect of this Amendment would be to bring to an end the control of the selling price of houses built under licence by 20th October, 1950, instead of by the 20th October, 1953. We cannot accept this Amendment because, with the present shortage of houses in Scotland, it would enable people who had been fortunate enough to obtain a licence to sell a house without any restriction upon the price, and, by virtue of the scarcity which exists, to capitalise the position and make a handsome profit out of the fact that they had been fortunate enough to obtain a licence.
We know that at present houses which are 20 or 30 years old are fetching three or four times as much as their pre-war value. If such prices can be obtained for houses which are 20 or 30 years old, it is almost inconceivable what a new house, up to three years old, might fetch in the open market. Yet the person has had the advantage 610 of getting a licence to put him into that privileged position. It would be inequitable, we feel, with the present shortage of houses, to allow a person to capitalise, not the value of the house which he has, but the value of the licence which he has had for special considerations. We feel that so long as the shortage exists, a definite time should be incorporated in the Clause to allow the market to re-adjust itself before we make any release.
It has been stated that when a man transfers to another district, after having had a licence, and enters the open market, he perhaps pays a much more inflated sum for the house in the new district; but that, if I may use the expression, gives the whole show away; it shows what can happen between one person and another in these present circumstances. But he is not in any different position from the person who has not a licence, because that person would have to pay the price.
On the hypothesis put forward by the hon. and gallant Gentleman, there was special reason why a man should get a licence in the existing district. If that man moves to a new district, and similar conditions apply, then no doubt he would there get a licence. But, if he does not qualify for a licence when he gets to the new district, he is in no worse position than if he had had no licence in the old district. We feel that if a person gets the advantage of a licence to build a house at a definite price, he should be restricted to that price during the period of eight years from 1945. Otherwise, we encourage people to apply for licences and then sell the houses at greatly inflated prices, thus taking advantage of the licences granted to them. For these reasons, I a afraid we have to advise the House to reject the Amendment.

§ Lieut.-Colonel Elliot
I think that the Lord Advocate has given us an argument about which all one can say is that it proves too much. There is, he says, no reason why this agreement should terminate in 1953 because it is clearly brought out that it will be 20 or 30 years before the housing shortage is cleared away. He will have to bring in amending legislation to extend the period beyond 1953; but we should like the Lord Advocate to face up to the question now. The desirability of removing these restrictions in some way or another is obviously very great, and the Lord Advocate does 611 seem to ignore the argument that a man is not going to give up a house and walk about the streets. Surely it must be obvious that what happens is that a man moves to another part of the Kingdom and, to whatever part he moves today, I think he will be faced for a certainty with houses at a higher value than the stiffly-controlled values at present in existence. Anything which can ease that process, and start a moving of the population, and a certain circulation of a free market in houses is, I think, a great advantage.

§ The Lord Advocate
The right hon. Gentleman will admit that if he gave this relaxation, it would also allow a relaxation to the person who wanted to make a racket of the situation, whereby he would get licences to build houses.

§ Lieut.-Colonel Elliot
The real danger is that the Government are so concerned with plugging up any possibility of the slightest relaxation for fear of a racket developing, that they finish up by tying the whole nation of Scotland into a bundle of red tape and sealing wax.

Mr. Ross
Ask the small shopkeeper.

§ Lieut.-Colonel Elliot
Ask the unhappy, ordinary individual who is trying to get a house, and who, because of the meticulous restrictions imposed in the past by local authorities and by building trade unions, finds it impossible to get a house at all.

Mr. Ross
This does not make more houses.

§ Lieut.-Colonel Elliot
Of course, it makes more houses. Anything which encourages an individual to erect a house and to take the risk, trouble and expense involved makes another house. The man going into that house does not burn down the one he leaves. If we could only get it into the heads of hon. Members opposite that if they had had their way the poet Burns would never have been born at all, it would help in the solution of our problem. The father of Burns started to get some materials together and he erected the house in which the poet was born. In these days he would never have been allowed to build the house at all. Unless the Government relax these regulations and change their whole attitude, and refrain from seeing a racket emerg- 612 ing even through the slightest chink, they will not succeed in solving any of the problems of Scotland. I trust that the Lord Advocate will have another look at this Amendment.

§ Mr. Woodburn
I beg to move, in page 27, line 9, to leave out "such."
There is a small group of Amendments here which are little more than drafting. They cover a point of view which was discussed, and that is that the local authority in these cases can give more than one direction which enables a greater rent or greater price for a house to be charged as a result of the amount put down by the owners. This Amendment is put down to cover this particular effort.