HC Deb 30 May 1951 vol 488 cc362-72

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

11.3 p.m.

Mr. J. Enoch Powell (Wolverhampton, South-West)

I wish to make a suggestion to the Board of Trade which, if he sees fit to accept it, will result in several hundred extra houses being erected and occupied in this country during the present year. I propose to base my arguments upon a particular case that has come under my notice, but I have reason to believe that it is by no means unique, and that the claim I have just made is rather an under-statement than an exaggeration.

On 24th February this year the Lord Mayor of Birmingham inspected, in the City of Birmingham, a block of four Swedish timber houses that had been erected by a Wolverhampton firm on the order of the City Corporation, and it appears from the reports on that occasion that great satisfaction with these houses was expressed by the Lord Mayor and by the councillors who accompanied him. From photographs in my possession, which I hope to show to the hon. Gentleman, he will be able to satisfy himself that these houses are in every way worthy of being accepted, as they are accepted by local authorities and the Ministry of Health, for general housing purposes.

The firm which erected these houses is capable of erecting them in Birmingham and elsewhere at the rate of at least 100 a month. Some time ago they made their tender for the first 100 houses to the City Corporation, which is not the only local authority in the West Midlands interested in this possibility. These houses are subject at present to an import duty which has the result of increasing their cost by approximately 2s. per foot super. The effect of this increase is two-fold. In the first place, it prices the houses out of consideration on the Ministry of Health yardstick—or should I call it foot rule?—of cost per foot super.

In considering housing contracts submitted to it by local authorities the Ministry does not compare unit house cost with unit house cost but compares contracts on the basis of cost per foot super. Therefore, any factor which increases the cost per foot super on a particular type of house, even though that house may provide the same accommodation cheaper per unit, falls by the standard the Ministry operates. The addition of this 2s. thus prices these houses out of consideration under the Ministry of Health standards; otherwise, they would compare approximately with the contracts now coming forward calculated on the new basic prices. The Customs Duty is thereby preventing the City of Birmingham and other authorities going ahead with the construction of these houses.

Suppose, however, that economies were made, so that, even taking account of the Customs Duty, the cost could be brought down to a level the Ministry would approve. We should still be imposing on the ratepayers and the tenants the burden of that 2s., which is merely a sum the Chancellor of the Exchequer is collecting through the customs. This, it will be agreed, is not a very sensible arrangement. Why, then, cannot the import duty be suspended, or at any rate reduced to the level of the duty levied on foreign cut timber as a measure of preference against Commonwealth timber?

In correspondence I have had with the President of the Board of Trade, and I am obliged to the right hon. Gentleman for the fullness with which he has given the considerations which are in his mind, he has advanced two reasons which he thought caused difficulty. The first is this. In a letter dated 3rd April he stated: At the present time the industry"— that is, the British joinery industry— has the capacity to do more business both in wooden houses and in fittings for all types of houses, but they are hamstrung by the shortage of timber. I think they would have a very real grievance if, in these circumstances, they were exposed to duty-free competition from foreign suppliers. The first argument is, therefore, that the British joinery industry requires this protection for its wooden houses. I would be the first to bow to that argument if there were any evidence that the industry could this year offer to local authorities acceptable types of timber houses. As far as I know there is no evidence of that, and unless it can be produced, there is no practical reason for protecting the British joinery industry. The suggestion I am putting to the President of the Board of Trade is strictly limited to this—that for the present building season this Customs Duty should be lifted.

The second reason he gave is this: I am not satisfied that the removal of the import duty on prefabricated houses would in fact mean a net increase in the number of houses erected, since these houses would have to be offset against local authorities' quotas. In that argument I believe there is no substance at all. We have been frequently told by the Minister of Local Government and Planning that he is not only willing but anxious, as soon as a local authority fulfils its quota, to give it an additional quota in the same building season. In fact, that was confirmed only yesterday by the Parliamentary Secretary in answer to Oral Questions, and there can be no question that if the City of Birmingham overshoots its quota by erecting these houses it will get an addition to its allocation.

It may be, however, that the argument is to be based upon the national allocation of houses, upon the global figure for the country at large; that it is being argued that if one local authority is enabled by this means to build more houses then fewer can be erected by other local authorities. So that there will be no increase in the country at large. That argument, also, is fallacious. The global figure of houses which can be erected purports to be based upon the available supplies of materials and labour. Both as regards materials and labour the Swedish timber houses make far less call upon our resources than the traditional houses. As regards materials that is evidently the case, since the whole casing of the house is imported and no claim is made on indigenous materials. Nor is the timber in the house offset against our timber imports. So, as regards materials, it is obvious at a glance that the calls upon our material resources are far less than those made by the comparable traditional houses.

I pass to labour, which is the other limiting factor, and probably at the present time the tighter of the two limiting factors. I have had figures prepared comparing the man-hours involved of both skilled and unskilled labour in the erection of these Swedish timber houses and the comparable traditional houses. These figures show that almost exactly half the number of man-hours are required, both on site preparation and in erection, and in the two taken together, for the Swedish houses than for the traditional houses. I am perfectly willing to supply the hon. Gentleman with detailed figures, but, in general, the ratio is practically 50 per cent.

It will therefore be evident that we can build two of these houses approximately with the materials and labour required to build one traditional house. Supposing the national quota is ever so tightly and correctly calculated, it still follows that by erecting these houses we could make an increase in the national output equal to half the number of these houses which we erect.

I claim, therefore, that these houses are a means of producing not merely alternatives to the same number of traditional houses, but would enable local authorities to achieve a net increase in the number of families that they could re-house this year and in the early months of next year. That they would be able to do without extra cost to the ratepayer or the tenant and without doing any damage to our indigenous industry if the President of the Board of Trade can see his way to lifting for the remainder of this season the import duty upon these timber houses.

This may appear to be a small matter, but I think that in reality it is one of considerable importance. Suppose that in the City of Birmingham alone this meant, to put it at its lowest, an extra 100 houses. I began by saying that this was not a unique case; this firm is not unique in its potentialities. However, put it at no more than 100. Would not it be well worth the time of this House and the consideration of the President of the Board of Trade to go to a great deal of trouble in the adjustment of the import duty if it meant that even another hundred families in Birmingham are re-housed this year? I hope that the President of the Board of Trade will reconsider this matter and reconsider it favourably.

11.15 p.m.

Mr. Geoffrey Lloyd (Birmingham, King's Norton)

I should like, briefly, but strongly, to support my hon. Friend in asking the Government to take quick action in the matter of the import duty on Swedish houses. I do so particularly from the point of view of the City of Birmingham, which, as my hon. Friend has said, has already erected four of these houses, and which have given considerable satisfaction to the people living in them. Birmingham has been considering ordering 100 more, which, no doubt, would not be the limit to what would be contemplated if these are successful.

The background of the position in Birmingham can be put shortly. Like the rest of the country, Birmingham has a severe housing shortage, maybe more severe than in other parts of the country because of the great re-armament activity which is drawing more people into the city. The housing shortage is causing great hardship and dismay. About 18 months to two years ago there was an atmosphere of defeatism with regard to the solution of the housing problem in the city and with regard to making any substantial progress there. The friends of hon. Gentleman opposite who were responsible for the city administration took the view, which was also the view of the Government about the national problem, that no improvement in the rate of building could be expected.

My friends on this side gained the majority in the election and came into office. I am glad to say—and I think even hon. Members opposite will be pleased—that they succeeded in doubling the rate of house building in the City of Birmingham during last year. How has this been achieved? It has been achieved partly by traditional building, but, to a large extent, by an exceedingly energetic examination of a considerable number of methods of non-traditional building. They made great progress in that direction, but, of course, that is not nearly enough for what we need, and we hope to make it very much better.

It is in that light we ought to look at the problem of Swedish houses, which is another method of non-traditional building. In Birmingham, we take the view that the price of this type of house is high, higher than that of the traditional house, and we are considering whether it is possible to go on with this project. If the import duty remains the price will be too much and it will not be possible to go on with the project. If the duty is taken off, it will make a great difference.

I am not in a position to say that it would be certain that the project would then proceed, because the price would still be high, particularly in relation to the price of the traditional house. But I am informed that in other parts of the country where the price of the traditional house is higher than in Birmingham, it might well be that the margin would make it a more favourable project to go in for Swedish houses. If there is an increase in imports and in production, there might be a lowering of price, in which case it would become an interesting project from the point of view of Birmingham.

I have put my case frankly and have not attempted to exaggerate. It is not a case where I can say that the instant the Government act on this matter, we can proceed, but if the Government would act on this matter, so far as our part of the country is concerned I believe there would be a net increase to the amount of houses that could be quickly built, and so far as Birmingham is concerned it would open one more practical avenue for a further effort of the kind that has been put into these methods of non-traditional building which have been so successful—an effort which would enable us to make a further contribution to the relief of the housing problem in our city.

11.20 p.m.

The Secretary for Overseas Trade (Mr. Bottomley)

I do not think that there is any disagreement between either side of the House on the necessity of getting more and more houses. But we have to face the fact that the amount of capital investment available to us, if we are to avoid inflation, is limited. There is also the question of labour and materials. The fact is that if we are to have more houses there will be fewer hospitals, fewer schools, and fewer factories, because it is not possible to build in one direction without hurting something in another.

As the hon. Member for Wolverhampton, South-West (Mr. Powell) has said, the subject matter of the Adjournment has been raised before and the President of the Board of Trade said, in answer to a Parliamentary Question, that he was willing to consider on its merits any application made for the abolition, on a temporary basis, of the import duty on timbered houses. He said it would be necessary, in considering such applications, to have regard to the interests of the United Kingdom joinery industry and also to assess the effects of such relaxation on our timber supplies.

As the hon. Gentleman has indicated, a firm in his constituency is interested in building timbered houses for the City of Birmingham. I think the hon. Gentleman did tell my right hon. Friend that if there was any firm prospect of a substantial order for this type of house—which was dependent on the question of import duty—he would let him know. Tonight, he has endeavoured to give some information; the information I have is that the firm has been engaged to put up four experimental houses, but as yet we do not know the cost. There has been a tender for 100 houses, and we are informed that the cost of the Swedish type would be £150 a house above that of the traditional type.

Mr. Powell

I think that the comparison with the traditional house is one with contracts or tenders dated earlier than this, and if the comparison is made with tenders now being made for some local authorities they will see that difference.

Mr. Bottomley

I know that, and investigation will show whether it is justified, but as at present advised that is the information that I have. The President of the Board of Trade gave the matter full consideration and as the hon. Gentleman has given some indication of this, may I state fully what the President did say. He said it would be inequitable to agree to a more favourable treatment of manufactured products than of the raw materials from which they are made. I am sure hon. Gentlemen are not suggesting we should abolish preferences at present enjoyed by the Commonwealth. He also said that the joinery industry attached considerable importance to the maintenance of protective duties on manufactures of wood, more particularly because so many of their foreign competitors had a natural advantage in the matter of timber supplies.

Supplies in this country are limited, and if we are to take timbered houses from Sweden it necessarily follows that it is at the expense of the timber supplies we may get for other purposes. The more prefabricated houses made from Swedish timber the less likelihood there is of our getting timber supplies for our other needs, not least among which is that of rearmament. My right hon. Friend also said, in his reply, that the removal of the import duty on prefabricated houses would not mean an increase in the number of houses erected, because these houses would have to be offset against the local authorities' quotas.

That is right. If there is going to be a capital investment programme in which so many houses are going to be built and the City of Birmingham was to build Swedish houses instead of traditional types it would not be an additional number, as this would add to the capital investment programme.

Mr. Powell

I am sure the hon. Gentleman realises that the capital investment programme is one of labour and materials and that if we are going to build two houses of one sort against one of another it does not mean an increase in that programme.

Mr. Bottomley

It cannot be done that way, because prefabricated houses still need essential services like sewers, roads and things of that kind, and the imported house has to be paid for by exports from this country. The whole content has to be looked at, and there we come up against finance, raw material resources and particularly labour.

I was going on to say that the point made by the hon. Member that the United Kingdom industry does not make prefabricated houses is not quite accurate. It does, in fact, make them, and would make more if only it had the timber. It is in that sense that the Joinery Association have stated that they wish for some measure of protection, which I think is quite reasonable.

Mr. Geoffrey Lloyd

Protection for something which they, in fact, are not supplying to this country?

Mr. Bottomley

They would if they got more timber.

Mr. Powell

But not this year?

Mr. Bottomley

If timber is imported into this country in the form of the manufactured article then the possibility arises of not getting timber for the industry making prefabricated houses in this country. The two things must be taken together. If the normal supplies of timber to this country from another country are to come in the form of the manufactured article in that way harm will be done to the industry itself, because we shall not get the timber supplies that we would otherwise get. If the traditional class of building materials are available broadly for all the purposes for which they are required, they would be used within the present housing programme. There will not be an opportunity tonight to develop that point further.

There is a scarcity of timber and, that being so, it has to be used to the best possible purpose. I am told that the traditional house built by the local authority requires less than 1.5 standards of timber, but for the prefabricated houses three standards are required. To that extent it means a draw upon the limited amount of timber that is available.

I think the hon. Member for Wolverhampton, South-West, said that until some competition arises, in practice the import duty is raising the price of wooden houses in this country without conferring any benefit on the United Kingdom industry. I have tried to answer that point by saying that if we assume that there is no United Kingdom interest in producing prefabricated houses, the United Kingdom joinery trade would still have to be protected, because it would otherwise suffer a disability in providing the window frames, doors and other joinery work used in house building.

Mr. Garner-Evans (Denbigh)

Could the hon. Gentleman say how much unemployment there is in the joinery industry in this country?

Mr. Bottomley

I am informed that there is under-employment at present, and if these houses were let in duty free it would worsen the position of that industry.

The imported prefabricated houses to this country not only affect the United Kingdom industry, but also the Commonwealth interests, because the Commonwealth has a free rate of entry. If this duty were removed it would still remain on the materials used and—

Mr. Powell

Are there any such houses entering this country?

Mr. Bottomley

The point is that the raw materials would still carry the duty, and it would create an unfortunate position if we let in the manufactured article free and, at the same time, there was a duty on components for these houses which come from countries other than the Commonwealth countries. I am quite sure that the hon. Member does not want to suggest that. We have to pay for imports with exports, and we consider that it is much better that our exports bring in the kind of goods which are wanted; and we are doing that by the policy being employed at the moment of getting the timber into the country in its raw state rather than in the manufactured state.

It has been said that the houses brought in would be an addition to the total number of homes erected. It has been said that the local authority quotas could be increased, but I have tried to show that that is not correct. These imported houses would have to be set against the number allocated to local authorities; they would not be additional, and the same amount of work would have to be put in on the sites, and 50 per cent. of the labour demands would still exist. Furthermore, we should have to make up in industry for the imports, and I suggest that all these reasons more than outweigh any possible advantage which there might be from the use of these prefabricated houses.

Mr. Geoffrey Lloyd

Why does the hon. Gentleman call them "prefabricated" houses? They are more permanent than the buildings called "prefabricated houses."

Mr. Bottomley

I agree that they are a manufactured product, in a more complete sense, but, nevertheless—

The Question having been proposed after Ten o'Clock, and the debate having continued for half an hour, Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Twenty-eight Minutes to Twelve o'Clock.