§ Motion made, and Question proposed. That this House do now adjourn.—[Mr. Whitelaw.]
§ 11.58 p.m.
§ Mr. Frank Allaun (Salford, East)In this debate, I wish to show that millions of British families are living in tragic housing conditions; that most of these families are dependent upon being able to secure a council house; that since 1954 the local authorities have been forced to halve the number of houses they are building annually; that this is chiefly due to the doubling of interest rates to local authorities; that by contrast loans are being provided by the Government to private profit-seeking firms at considerably lower interest rates; and that the only just course, if the people's welfare really counts, is to restore cheap housing loans at a rate, I would say, of not more than 3¼ per cent.
Today, 5 million families are living in houses which have no baths. That means roughly 15 million people, or one-third of the population. One does not need a great imagination to realise the difficulties of a working-class mother trying to bring up her children properly and well in a house without a bath, and usually also without a hot water supply, and where every drop of hot water has to be heated on the gas stove or on the fire. I know of homes in Salford where children have been seriously scalded as a saucepan was lifted off a gas stove or a fire in an overcrowded kitchen. One can imagine, also, the lot of an industrial worker who comes home from his job and wants to wash his feet. He has to ask his wife to pull the enamel bowl out from under the kitchen cupboard and put the kettle on. This is 1960, the year of automation, of atomic energy and space travel, and these are the conditions which prevail.
There are 2 million families officially registered on the waiting lists for houses, and that means more than 6 million people. I assure the Minister that there are many more families who desperately need houses, but who do not even bother to register because they know that it is hopeless. Then there are the young couples forced to live with their in-laws. I believe that however amiable the 594 families are, two families sharing one kitchen stove are one family too many.
The overcrowding beggars description. In the industrial North, particularly in Lancashire, the typical house is the two up and two down, and the two bedrooms are no bigger than boxrooms, nine or ten feet square. I can take the Economic Secretary to the Treasury to a house in my constituency where sleeping in those two tiny bedrooms are a mother and father and eight children of both sexes aged up to 20 years. This is a typical overcrowding case.
In Manchester, two houses a day fall down or have to be demolished because they are in imminent danger of falling down. These are not my figures, but those of the medical officer of health, Dr. Metcalfe Brown. There are 600 such cases a year in Manchester. The walls are too tired to cope any longer with the strain of bearing the roof. Many of these houses were built 120 years ago in the days of the Industrial Revolution. I know of one case where the roof collapsed on a 79-year-old bedridden widow. Miraculously, she was pulled out uninjured, but it so happened that at the time the roof collapsed the rent collector was at the door. He nipped out just in time, but a few minutes later, when the dust had settled, he nipped back again and collected the rent from another member of the family. I know this because I was there half an hour later, and saw the rent marked off in the rent book.
In Salford five out of ten houses have no bath, and most of these houses have no inside toilat or hot water, either. Many of them are so wet that the wallpaper peels off, and in many cases the children are seldom free from chest or lung troubles. In Glasgow and other Scottish cities the situation is worse. In Glasgow, there are 400,000 people living in one-room or two-room tenements. I am referring not to houses with one or two bedrooms, but to houses with only one room or two rooms. There are 30,000 people living four to a room in Glasgow—and I do not mean four to a bedroom.
Unfortunately, the prospects of these very ill-housed people are worsening. I must stress that they are dependent on getting council houses. They cannot afford to buy their own houses. There 595 are 20 million wage earners in Britain receiving less than £16 a week—not forgetting their dependants—and I seriously suggest that it is very unwise to enter into the liability of buying a house if one is earning less than £16 a week. There has been a drastic cut in the council house building programmes from 235,000 in 1954 to 140,000 in 1958 and to 122,000 last year. In other words, the total has been almost exactly halved. Many councils have been forced to confine themselves purely to rehousing slum clearance tenants. There are also councils which have been forced to stop council house building altogether.
What has caused this? It is chiefly the Government's financial policy. The rate of interest under the Public Works Loan Board in 1951, in the time of the Labour Government, was 3¼ per cent. By January this year it was 5¾ per cent. The fantastic effect of this interest burden is seldom realised. In answer to a Question in November, the Chancellor of the Exchequer told me that by the time a council had paid interest at 5¾ per cent. for sixty years on a typical corporation house costing £1,500 the total would be no less than £5,353—more than three and a half times the original cost. The effect of that on the rent must be obvious.
Last month, there was a further rise of 1 per cent. in the Bank Rate. I believe that in due course, if that increase is maintained—there is talk of it being raised even further—it will eventually affect all other interest rates. After all, presumably that is the purpose of a rise in the Bank rate. Already, there has been an increase of one-eighth of 1 per cent. in the Public Works Loan Board rate.
Let us suppose that the rate is raised eventually by 1 per cent. In the case of a typical corporation multi-storey flat—unfortunately, flats are much more expensive than houses—costing £2,390, this will add another 8s. 6d. per week to the interest charges. This is in addition to a 21s. 3d. rise in interest charges on such a flat since 1951
Also, most types of subsidy have been removed. There are certain houses, such as slum clearance replacements, which still retain the subsidy but the general housing subsidy has been removed. The 596 result is twofold. First, the rents of council houses are soaring. Secondly, the number of council houses being built has been halved. Consequently, the local authorities are becoming extremely unpopular.
There is widespread discontent in the cities and towns of our country. In the county boroughs, in particular, the local authorities are mostly Labour-controlled and they are being made scapegoats for the financial policy which is the responsibility of the Government. It is quite natural for tenants to hit at the people who are imposing the rent increases, which are the local authorities, but they are being forced to do this by the Conservative Government's policy in Westminster.
What should be done? I am sure that there should be a vast increase in the council house building programme. It should at least be restored to what it was in 1954, which is 235,000 houses a year. To do this there must be a reduction of interest rates. This means a Government subsidy unless and until the Government's financial policy is such that it reduces all interest rates. In addition, I believe that the Government should provide cheap housing loans to local authorities to provide mortgages up to 100 per cent. for those citizens who can afford to buy their own houses, although I repeat they are a minority.
How much would this cost? Here again, we have had the Answer of the Chancellor. I asked him how much it would cost to reduce from 5¾ per cent. to 3¼ per cent. the interest rate under the Public Works Loan Board on the number of houses built last year— 122,000—and his reply was quite precise—£6 million per annum. If I may so, £6 million per annum is a relatively small item compared with £45 million a year given by the Chancellor in his last Budget to Surtax payers in tax relief, or the £260 million a year given in subsidies to farmers or the £1,600 million a year spent on armaments.
I want to show in sharp contrast that the loans to private firms are granted on much more favourable terms. Here is a very different picture. The Government are lending £50 million to Colvilles and there are even bigger sums to similar firms, for instance, to Richard Thomas and Baldwin's. On 25th February, I asked 597 what rate of interest was being charged on these loans and what rate of interest was being charged on loans under the Public Works Loan Board to local authorities for housing. The Minister said that the Answer to the first part of my Question was 6 per cent., but he refused to answer the second part. He still refused to answer when pressed by my right hon. Friend the Member for Huyton (Mr. H. Wilson) and he even refused to give an assurance that the rate would ever be revealed.
This is money being provided by the public, and Parliament and the public are entitled to know what rate of interest is being charged to these firms, particularly since ordinary shareholders are to receive increased dividends as a result of these low interest loans.
Secondly—and this is not generally known—no interest at all is to be paid by Colvilles until the plant has reached the stage at which it is producing steel. On that basis, local authorities should not pay interest until they have completed building their houses and the houses are tenanted.
Thirdly, although the Minister has denied us all knowledge of what rate is to be charged to these private firms, I am fairly confident that it is well below 6 per cent., and I challenge the Economic Secretary to deny that. Lastly, the hon. Gentleman cannot claim that the higher interest rate for housing loans is due to any lack of security. "As safe as houses" is an old saying in this country and I do not think that we can have any better security than that.
I protest against this blatant discrimination against public enterprise and. what is more, enterprise to alleviate the most serious social problem in Britain.
§ 12.17 a.m.
§ The Economic Secretary to the Treasury (Mr. Anthony Barber)I am grateful to the hon. Member for Salford, East (Mr. Frank Allaun) for raising this important topic, because he has given me an opportunity to remove some of the misconceptions which seem to exist about the extent and nature of Government loans. I want, first, to speak about the scale of assistance to private industry, because some hon. Members opposite seem to be under the impression that the Government are indiscriminately hand- 598 ing out loans to private industry; and that is far from the truth.
The Government offer financial assistance to private companies only in exceptional circumstances and where the public interest justifies it. The most obvious example, with which the hon. Member will be familiar, is assistance to relieve high unemployment. Whenever we provide that assistance, it is always in accordance with Parliamentary authority and given only after most careful examination of all relevant factors. From October, 1951, until the end of last year —virtually the whole of the period of the Conservative Government to date— the total of loans to private industry amounted to £83 million.
Over the same period, the combined total of Government loans to provide capital for the nationalised industries and loans made by the Public Works Loan Board to local authorities amounted to very nearly £4,000 million. In other words, the total of loans to private industry during that period amounted to only slightly more than 2 per cent. of the loans to nationalised industries and local authorities through the Public Works Loan Board. I hope that those figures will help to put the matter into its proper perspective.
I want now to refer to the important subject of the nature and variety of the loans which the Government make. Those loans range from large advances made to provide capital for the nationalised industries down to very small loans such as those made to crofters in Scotland for houses and buildings. Obviously, we have to cater for a wide variety of needs between those extremes. I will mention only a few examples. Loans to local authorities, which the hon. Gentleman has mentioned; loans for overseas development projects; loans made under the Distribution of Industry Acts; loans to building societies; and the loans which are to be made to the two steel companies, to which I will refer presently.
With that wide variety it is impossible to apply rule of thumb methods in determining the terms, and, in particular, the rate of interest. Different considerations apply in different cases, and I feel that it is right to stress to the hon. Gentleman that the rate of interest is only one of the considerations which have to be taken into account. There are many other 599 factors. For example, the security which is offered and the time and method of payment must be taken into consideration, and so must the purpose for which the loan is being made.
If the Government wish to encourage industry to do something in the general economic interest which it would not otherwise do in its own interest, some inducement must be offered. If hon. Gentlemen opposite take the view, as they seem to do from the sort of Questions they pose at Question Time, that the rate of interest in respect of loans to private companies ought to be higher despite the fact that the rate of interest may constitute an important inducement to those companies to do something in the public interest, then they must recognise the consequence of their approach.
The consequence is very simple to understand. For example, the desired object of expanding an industry in an area of high unemployment may not be achieved. I am bound to ask whether that is what hon. Gentlemen opposite want.
The hon. Member for Salford, East raised, in particular, the question of Col-villes, and, in general, the question of the disclosure of the interest rates. Most transactions involving loans to private industry have been made by the Treasury under the Distribution of Industry Acts on the advice of the Development Areas Treasury Advisory Committee. Since the D.A.T.A.C. arrangements were instituted in 1945 it has invariably been the practice, under successive Governments, both Labour and Conservative, to treat all applications as made in confidence and not to disclose any details of the application made or of the assistance given.
Consequently, there is nothing new or sinister in withholding from the House details of the rates of interest charged on loans made to private industry on the advice of D.A.T.A.C. That has always been the practice, and I am sure that it is right, because the rate of interest is only one of many factors which the Advisory Committee has to take into account. It would be wrong, and in some cases might prejudice the security of the loan, if details of the borrower's private business became public knowledge. 600 Unless full details of this kind are given it is not possible to demonstrate the reasons which prompted the Committee to recommend a particular rate of interest.
A year ago the Government informed the House of the arrangements to lend a considerable sum of money to Col-villes. A general outline was given to the House of the terms and conditions attaching to the loan. No one can say, as I pointed out in reply to the hon. Gentleman, and the right hon. Member for Huyton (Mr. H. Wilson) the other day, what the rate of interest will be until the money is advanced, but the formula for determining the rate is clear enough. As I explained the other day, the rate which Colvilles will pay on each instalment of the loan will have regard to the cost of borrowing by the Government for a similar period at the date when the money is advanced.
In practice, that means that the loan to Colvilles will attract the same rate of interest as a loan made at that time to a nationalised industry for a similar period. As I pointed out, as no instalments of the loan have been advanced, I cannot, with the best will in the world, say how much Colvilles will have to pay. If the instalments on this loan were all drawn tomorrow—or, as it is now past midnight, perhaps I ought to say "today"—on the analogy of what nationalised industry would pay, the rate of interest would be 5½ per cent. When the hon. Member raised this topic a short time ago he said that it was well under 6 per cent. Today, it would be 5½ per cent. He suggested that no interest would be paid until production had begun, but I think he has misunderstood the position in that respect. There is no question of the interest being waived. At the option of the company it may be postponed, but interest will be charged on the outstanding sums even in respect of deferred interest. It is simply a matter of postponement, and nothing more.
I want to say a word about the rates charged on loans made by the Public Works Loan Board to local authorities. As the hon. Member knows, these loans are made on a quite different principle, which was explained by my right hon. Friend some time ago, in the debate on the Radcliffe Report. The hon. Member suggested that we acted precipitately in 601 January, when the Public Works Loan Board raised the rate of interest. In fact, some of the rates had for some time lagged behind the normal local authority market rate, and we had to take account of this, as well as of more recent movements, and we did decide to change the rates.
But I can assure the hon. Member that the action we took did not reflect any change in policy and, as he pointed out, the increase in the rate for loans for sixty years—which is the normal term for local authority borrowing for housing purposes —was no more than one-eighth of 1 per cent. I do not agree that this is jeopardising house building; in fact, almost exactly 100,000 local authority houses were completed in 1959, and in my view the number which will be completed in 1960 will exceed 100,000.
The hon. Member devoted a considerable amount of his speech to general housing matters. I cannot deal with them in the short time available. I would 602 merely say that I would have thought it was quite clear that the record of this government is, at any rate, very much better than the record of the Labour Government. In 1959, 249,000 houses were built in England and Wales. That is considerably more than were built in any year under the Labour Government. As for Salford, all I can say is that in the six years from 1952 to 1957 more than twice as many houses were built in Salford as in the years from 1946 to 1951. Taking the most recent two-year period—1958–59 —Salford built 900 houses, which is far more than was built in any other two-year period since the war.
That is all I have to say except—
§ The Question having been proposed after Ten o'clock on Wednesday evening and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
§ Adjourned at twenty-eight minutes past Twelve o'clock.