§ 11.15 a.m.
§ Mr. Julius Silverman (Birmingham, Aston)
I beg to move,That this House is gravely concerned at the continuing increase in the price of urban land especially for the building of houses for private persons and local authorities and for other local authority purposes such as the building of schools and roads and for open spaces, and deplores the grave burdens imposed upon the public and the ratepayer by these increases and the evil effects they produce upon the planning of cities and the economy of the country, and calls upon Her Majesty's Government to introduce urgent measures to deal with this grave problem.The question of land prices has been debated in this House on a number of occasions. The last occasion was in November of last year, but more recently the matter was mentioned in connection with the debate on 4th May on the South-East Study. I make no apology for raising it again in this House. It is a matter of the gravest concern to millions of people in this country.
The effect of the increased prices of land—the rocketing prices of land—is creating the gravest hardship to many 1412 private citizens, and to local authorities. I would refer particularly to the position in the Birmingham area, not that this is merely a constituency problem—it is far above that—but because I am more immediately concerned and more knowledgeable and conscious of the problems that arise in the Birmingham area.
What is the position in connection with land in the Birmingham area at the present time? I have had some recent information and perhaps I may read a passage from a letter which I received from the local authority:On the question of open market housing land sales, of seven recorded transactions during March and April this year, the prices realised vary between £15,000 and £21,000 per acre. This reflects a land value per plot for a town or mews house of about £1,000 with garages provided in batteries at strategic points.That is a house without a garage, of a sort of semi-terraced nature.If the density restrictions preclude town houses the sale figures represent up to £1,500 per house plot and it is surprising that there is really little difference between the price paid for 10,000 square yards at the Maypole which realised £3 15s. per square yard and 64.74 acres at Solihull which sold for £1,055,000 which equates to £16,295 per acre or £3 7s. per square yard.I would make this comment. I shall not quote any specific example because it might be thought to be exceptional. The general figure in the Birmingham area today is £15,000 to £20,000 per acre, which means that every plot of land for a house costs between £1,000 to £1,500 before a single brick is laid. That represents to the private purchaser, buying on a 20-year mortgage, an additional £2 approximately on the rent before he pays for a single brick, or for the rest of the house at all. I need hardly say that this is a very great hardship.
I referred to the Maypole which is on the far outskirts of Birmingham. Solihull is not, of course, in Birmingham and represents a sort of dormitory suburb for what I might call Birmingham commuter country. It will be noticed how the increase of price has spread right into the commuter area. This, of course, has been the position in London for a long time, but now it is also spreading to the provincial cities, and I would particularly draw this to the attention of the Minister because it will have the greatest significance when he comes to consider 1413 again the question of the South-East Study.
It means that these increased prices in London will not only apply to the new towns. They will apply equally to the surrounding areas many miles beyond the new towns. Not only is the house purchaser affected but local authorities are considerably affected also. Great burdens are imposed upon them in connection with the purchase of land for schools, municipal dwellings, roads and open spaces. I shall wish to deal specifically with open spaces at a later stage because, as the Minister knows, this is a problem which has affected Birmingham to a very serious extent. The price of land in the Birmingham area in a period of little more than one year has gone up by 50 per cent. and is still increasing.
We are entitled to ask the Minister, even in the last months of this Parliament, what the Government are going to do to stop this price rocketing proceeding to an unlimited extent. This question affects all ratepayers. They are frequently poor people with modest incomes, and increases in rates obviously affect them. This is an enormous burden upon local authorities and something must be done to limit this increase.
The increased charges for land for new building plus the high rate of interest result in the fact that in almost every locality large increases have had to be placed on the rents of municipal houses. Birmingham, of course, is no exception; the Birmingham Council has had to do precisely the same. This is mainly because of the cost of new building, and there can be no doubt that apart from the high rate of interest and the increased cost of building, the price of land plays a major part in this situation.
I do not want to make too many party political points, but some members of the Conservative Party are probably not unhappy about this situation because when the municipal elections come along they say "Oh, well, here is a profligate council putting up the rates and the rents to the municipal tenants." But one must bear in mind that the responsibility for this situation is largely in the hands of the Government, and the local authorities have little alternative in the matter.
Let us take the other side of the picture. Vast fortunes are being made overnight. I can mention figures. In 1414 some cases £200,000 are, I do not say earned, but simply accumulated, in a matter of two or three years because a person has either been fortunate or has speculated in land. I am referring simply to Birmingham. In London, as we know, the price is somewhere about £40,000 an acre for residential building. I am not discussing commercial building at the moment. No doubt, other hon. Members will mention figures because this is a national problem, although admittedly it affects some areas more seriously than others.
There is another side to the picture. Overnight vast fortunes are being made. There is no guiding light; there is no pay pause such as is reserved for workers, teachers and nurses. There is no restraint or restriction whatsoever. The sky is the limit. In addition, in the vast majority of cases no Income Tax is paid on these accumulated profits. This is creating a great deal of concern and disturbance amongst people generally. The incomes of the worker, the professional man and the nurse are closely scrutinised. They have P.A.Y.E. Every penny of their income is taken into consideration, and all expenses are carefully scrutinised. Indeed, some expenses which seem to be legitimate are not allowed.
This is an outrageous situation. It renders an income restraint policy impossible, and the demoralisation upon the nation is enormous. As has been said on many occasions before, these price increases occur without any service being given to the community whatsoever. Even in the case of Ferranti's, some service was being performed to the community, though the price was grossly excessive, but here there is no service at all. Indeed, in many cases a positive disservice is done to the community. Yet these vast fortunes are allowed to be reaped on this basis. It is bad for the morale and the economy of the country. It helps to produce a state of mind in the nation which assumes that getting something for nothing is the right thing to do. I have been brought up in the old tradition that the reward that an individual gets ought to bear some relation to the service he renders to the community. This may seem an old-fashioned concept but I believe in it just the same.
1415 I was reading a passage in a book about 115 years old—John Stuart Mill's "Principles of Political Economy". He was not a Socialist by any means. He says in this book:Suppose that there is a kind of income which constantly tends to increase, without any exertion or sacrifice on the part of the owners: those owners constituting a class in the community, whom the natural course of things progressively enriches, consistently with complete passiveness on their part. In such a case it would be no violation of the principles on which private property is grounded, if the state should appropriate this increase of wealth, or part of it, as it arises. This would not properly be taking anything from anybody; it would merely be applying an accession of wealth, created by circumstances, to the benefit of society, instead of allowing it to become an unearned appendage to the riches of a particular class. Now this is actually the case with rent. The ordinary progress of a society which increases in wealth is at all times tending to augment the incomes of landlords; to give them both a greater amount and a greater proportion of the wealth of the community, independently of any trouble or outlay incurred by themselves. They grow richer, as it were in their sleep, without working, risking, or economising. What claim have they, on the general principle of social justice, to this accession of riches? In what would they have been wronged if society had, from the beginning, reserved the right of taxing the spontaneous increase of rent, to the highest amount required by financial exigencies?If that was true in those days, it is a hundred times more true today. The only difference is that, instead of relying mainly on rents, the landlords now rely more on capital gains because a rent, however excessive, is taxed while the capital gain is not. In this respect the behaviour of landlords has changed during this century and particularly since the war. How the Minister can justify this I do not know.
All this has a terrific influence on the whole question of planning because it is a disincentive to planning. Local authorities should not have to pay these vast sums for land. There is already a great deal of pressure for higher densities for new building and I have seen some examples of extremely high densities. I fear that this will mean the recreation of the tenement and slum conditions of passed generations. Hon. Members should watch this carefully, because we do not want to regret in 20 years' time some of the densities which are now being allowed and encouraged.
It also results in encroachment of open spaces and the retardation of the 1416 purchase of adequate land for schools, roads and other purposes. It is a thoroughly bad trend. It is anti-social and the Government should take action to stop it developing. I believe that the situation has arisen largely because of Government action—or inaction—in the past 12 years; their failure until recently to plan any number of new towns and industrial development, because this lack of planning has resulted in the present pressure of population in certain areas, with its consequent pressure on land prices.
The Government are also responsible for the demolition of the principle of the 1947 Act, which at any rate sought to obtain for the community some share of the betterment of land values. We have had the 1959 and 1961 Acts, which opened the door wide for land speculators in Birmingham and similar areas with the result that land in the last few years, certainly since 1958, has risen in price five or six times.
§ The Minister of Housing and Local Government and Minister for Welsh Affairs (Sir Keith Joseph)
I have let pass a large number of distortions and inaccuracies—[HON. MEMBERS: "No."]—but the last assertion the hon. Gentleman should prove. Is he saying that the 1959 and 1961 Acts released speculation? What does he mean by that?
§ Mr. Silverman
Of course, they released speculation because they provided that the sale of land to local authorities should be on the basis of free market prices. Does the right hon. Gentleman deny that? Does it not release speculation when one says that the speculator may get the full market value, the racket value, from local authorities?
§ Sir K. Joseph
No. That grossly distorts what happened, although if it was as the hon. Gentleman suggests then why did the Opposition not oppose those Measures?
§ Mr. Silverman
Perhaps the Opposition might have been wiser, instead of dealing with the matter in detail, to have voted root and branch against that legislation. I would have done so. Despite that, we are talking about Government legislation and the Government must accept responsibility for it. We are now seeing the effects of that legislation and I want to know what 1417 the Government intend to do in the face of the present situation. It is not so much a question of recrimination. The right hon. Gentleman should accept that mistakes have been made and that before it is too late the Government should act to correct them. I am asking the Minister not to repent about the errors of the past but to propose what he will do in future.
I turn to the question of open spaces and the main reason I do this is because of the situation which has arisen in Birmingham recently and which is occurring throughout the country. In 1952 Birmingham had in its plan for development a certain number of areas scheduled for open spaces. There were, broadly speaking, apart from parks, about 400 acres for public open spaces and about six times as many for private open spaces. Everybody has, therefore, known since 1952 that this land was restricted in its usage to open space.
Since the passing of the 1959 and 1961 Acts a new situation has arisen, but before dealing with that I want to refer specifically to the question of open spaces in cities. The provision of these is of vital importance, even more important than the green belt, which is, to a large extent, an amenity for the villa dweller in the outer suburbs. While my hon. Friends and I are, broadly speaking, in favour of the green belt, open spaces in cities represent a vital lung and amenity for people living in congested areas.
The 1959 and 1961 Measures, and the way the Minister has administered those Acts, represented a serious encroachment on these open spaces. I will give one or two examples of where this has happened. A 10-acre sports grounds in Gibbins Road, Selly Oak, which belonged to the Birmingham Battery and Metal Co. Ltd., was scheduled as an open space in 1952. Recently the company proposed that the land should cease to be an open space. The Corporation resisted this attempt, under the provisions of those Acts, by resisting a demand for a certificate for what is called "alternative and appropriate development" under the Acts. The local Conservative newspaper, the Birmingham Mail, stated:A 10-acre sports ground in Gibbins Road, Selly Oak, which Birmingham Corporation said recently it could not afford to buy for an open 1418 space, was auctioned as building land today and realised £205,000.This figure is more than double the price the Corporation was asked to pay. The name of the purchaser has not been disclosed.The site includes a pair of semi-detached houses and a sports pavilion.The land was sold by the Birmingham Battery and Metal Co. Ltd., which obtained planning permission for housing development after appealing to the Minister of Housing and Local Government.It was scheduled as an open space in the city's development plan, and Birmingham Corporation had refused permission for it to be developed.Alderman F. L. Price, the Parks Committee Chairman, mentioned the site recently as an example of the problem the city was facing in having to pay housing value for land scheduled as open space.His Committee has now asked the General Purposes Committee to send a deputation to the Minister of Housing to discuss the problem.This means that, under the certificate of alternative development procedure, if the city has to apply a certificate to land which is used as open space, the lowest form of alternative development in price is residential. The cost of commercial development is very much higher. In substance, compensation for open spaces must be given at the residential development price, which is £15,000 to £20,000 an acre.
Another example concerns a large playing field in a school and former orphanage the Sir Josiah Mason's, not far from my constituency. This has been mentioned in the Press. A price of £20,000 an acre was asked of the City Council in order that it might retain this playing field as an open space. I have a number of cases here in which the local authority desired to resist these certificates. In almost every case the Minister, on appeal, has granted the certificate and, moreover, in many cases has given planning permission to build.
I understand that the Birmingham Corporation has asked the Minister to meet a deputation. The right hon. Gentleman has refused. I understand that he says that under the Act the Council or the Minister are not forced to pay compensation or to give planning permission. That may be true. It may be that the Act does not give the owner of the land a vested and built-in right to receive compensation for his land at residential values, but the point is that, 1419 in practice, that is what has happened. The Minister can perhaps say "No", but he has not said "No". We are asking that this matter should be dealt with urgently.
It does not merely affect Birmingham. I have a quotation here from the Evening Standard of 8th January, which says:Enfield Council is fighting a 'disastrous decision' by the Minister of Housing, Sir Keith Joseph, who has ruled that if the council implements a compulsory purchase order on a 12-acre site at Lavender Hill, to keep it as allotments, it must pay for it at housing land rates. This means an estimated £250,000 compared with the £7,500 paid to the Charity Commissioners for the land less than three years ago by a private investment company. Angry councillors last night decided to ask Sir Joseph to receive a deputation in an attempt to get him to reconsider his ruling. Changed planning legislation in 1960 had provided the opportunity taken by the land speculator who had been aided and abetted by the Minister's decision, said Councillor Edward Graham, leader of the Labour majority: 'We protest at the possible effect that this decision of the Minister may have. He has endangered public amenity and outraged public feeling'.This shows that this is a widespread problem, and I ask the Minister what he proposes to do about it. In this case he has not the excuse that to deal with this matter would involve a vast bureaucracy. No land commission or nationalisation of land is involved. All that is wanted is for the Minister to say "No", but the Minister refuses to do that. What is his policy about this? How does he justify these enormous profits made by people who have no expectation or right to them on land scheduled as open space? I hope that the Minister will deal with this matter when he replies to the debate.
It is not my job to put forward a method of solving this whole problem. I have suggested some of the lines which could be followed. I believe that public ownership is largely the answer, but I do not exclude the taxation of land or site values or even some sort of deterrent to the 1947 position. But it is certainly not my job as a back-bencher, and it is not the job of the Opposition, in a debate like this to say what should be done. The Government are still in power, and they will remain in power for the next few months. It is their job to say how this matter will be dealt with and it is the Minister's responsibility to say that this is a serious problem of which he is con- 1420 scious and to put forward the measures which will be taken.
So far we have had nothing. We have had only the Minister's impersonation of the right hon. Member for Wolverhampton, South-West (Mr. Powell) in lauding the price mechanism. I assure the Minister that people suffering because of high land prices are not lauding the price mechanism as though it were a wonderful thing. Why is it necessary to have a Government to deal with our economic affairs at all? Why not leave it to the price mechanism? At any rate, that would be better than matchsticks, I suppose.
I do not deny that I am making party political points. This is a political issue. It is also a very serious human problem and something which is not by any means confined to party politics. Many of the newspapers adopt the same attitude as we on this side adopt, namely, that this is a serious problem and that something must be done about it. They may not all agree with the Labour Party's solution, but they say that this is a grave problem which cannot be left merely in the hands of the land speculator.
The Guardian of 6th May, in a very well-informed article on land speculation and the free market, said this:In 1954 the Conservatives dropped development charges and paid for compulsory purchase the existing use value plus the compensatory claim still pegged at the 1947 price. The 1959 Act abandoned this too. Instead, it created a market situation which has increasingly put local authorities at the mercy of the shrewd speculators. Essentially land now had its market value, which today can mean, even outside London, £250,000 an acre if planned for commercial use, £50,000 an acre for industrial use, £20,000 an acre for residential use. But it has also put local authorities in the position where they are compelled to pay residential value for land which they intend to keep as open space. The market value of land for open space is probably nil, or even less than nothing, but with the introduction of the certificate of alternative development the local authority is forced to pay for open space land the value the land would have if planning permission were given for it to have some other use. In practice, this invariably means at least the residential value. And if the refusal of planning permission has blighted an owner's prospects for his land, the local authority can be compelled to purchase that land, whether it wants it or not, at something like the residential value.… Land use planning can only be just, and can only be seen to be just, if the price of land is controlled, either directly or indirectly. In theory the simplest solution is to nationalise the lot, 1421 but this leaves all the questions of compensation still to be settled. Within the local authorities there is a growing demand for the restoration of the provisions of the 1947 Act with some improvements. Most people directly concerned with the public acquisition of land favour the return of development charges or the imposition of some new taxation on land purchase, to create a fund which would be passed to the local authorities in grants. And the Labour Party, of course, has its plans for a land commission. But whatever the solution to the problem of land speculation—and between now and the General Election it will have to be examined intently—it is already clear that the Conservatives' primitive adoration of the free market has no place in an intelligently planned Britain.Other newspapers, perhaps in not quite as forcible language, have said the same thing—that whatever may be the situation, something has to be done about this.
I ask the Minister whether he disputes the figures that I have given, how the Government view the situation and what they are proposing to do about it. It is true that it is only a few months to the General Election, but this is an urgent problem and the sands of time are running out, and today I call upon the Government for action, and urgent action.
§ Dame Edith Pitt (Birmingham, Edgbaston) rose—
§ Mr. Julian Snow (Lichfield and Tamworth)
On a point of order, Mr. Speaker. I think that that outburst of cheering may have been misinterpreted by you. It was not intended to be unkind to the hon. Lady the Member for Birmingham, Edgbaston (Dame Edith Pitt). We were interested and pleased to know that Faversham had been won by Labour by 4,500 votes.
§ Mr. Speaker
I am enjoying the hon. Gentleman's courteous indulgence in the fashionable practice of giving information, but I fail to discover any point of order in what he raises.
§ 11.49 a.m.
§ Dame Edith Pitt
I am sorry that the outburst of cheering was not for me. I thought that hon. Members were preparing to enjoy a debate across the Floor between two Birmingham Members.
1422 I congratulate the hon. Member for Birmingham, Aston (Mr. J. Silverman) on his good fortune in drawing first place in the Ballot for Private Motions. I am only sorry that between that time and now he took so long to put on the Order Paper his expanded Motion. It appeared only yesterday, and that gave those of us who would like to take part in the debate very little time to try to follow his processes of thought.
I would agree that land prices are high and that they have risen steeply in recent years. But I part company from the hon. Gentleman over some of the figures which he has quoted appertaining to the price of land in Birmingham. From my knowledge of the matter, I think that he has exaggerated his figures. There has certainly not been an increase of anything like five times in the last two or three years as he suggested.
§ Mr. J. Silverman
I did not say that there had been an increase of five times in the last two or three years. I was speaking of what had happened since 1958.
§ Dame Edith Pitt
I am sorry if I misrepresented the hon. Gentleman. I thought that he quoted an increase of five times.
§ Dame Edith Pitt
We must remember that in these densely populated islands land is a very valuable commodity, and that it is the prosperity and expansion through which we have lived in recent years which have led to the tremendous demands for land. The high prices that it now commands arise from the higher standard of living, the development of schools and hospitals and other essential services, the demand for industry and roads, and, most of all, the demand for homes both from those who would be municipal tenants and from potential owner-occupiers.
This is largely a problem of the big city. More than that—I stress this—it is a problem which is not confined to this country. I was interested to read in the May issue of the magazine, European Community, a comment in an article on land prices in Europe. It said:All over Europe the price of building land has spiralled in the past few years.The article went on to give some figures for an average house in a number of 1423 European countries, an average based on an assumption of 650 sq. ft. of floor space, which means the provision of two bedrooms, a living room, a kitchen and a bathroom.
The figures for the purchase of houses of that type were shown as being for Hamburg and Dusseldorf £5,000, Brussels £4,300, Paris £11,000, Rome and Milan £7,000, and Amsterdam £4,300. This gives some indication of the problem of land prices in other countries, because the figures that I have quoted for house purchase in big cities are higher than for comparable property in Birmingham.
As the hon. Gentleman said, the problem is acute in the City of Birmingham. I suggest that it is because of the building prosperity of that city. We have there a very high level of employment, high wages and the highest standard of living that its people have ever known. Because of this people are attracted to the city, and they go there to take advantage of its prosperity, and, of course, they add to the bulge in numbers and to the demand for houses. Birmingham's population has doubled over the last 50 years, and it continues to increase, despite the fact that when the hon. Gentleman and I were members of the Birmingham City Council we passed a pious resolution saying that we would not allow more than 1,100,000 people to live there. We have a very high birth rate in Birmingham, above the national average, and also a marriage rate which is above the national average. Both indicate the prosperity about which I am talking and the confidence of the people there under Conservative administration. The high cost of houses is not preventing young couples from buying—
§ Mr. J. Silverman
The hon. Lady said "under Conservative administration". Birmingham has a Labour Council.
§ Dame Edith Pitt
I was not forgetting that, but the hon. Gentleman based his argument on Government policies and he must not vary it just to suit a particular point.
I was saying that the high cost of houses, which includes the high cost of land, has not prevented young couples from buying their own homes, and there 1424 is still a very strong desire to purchase houses. During the debate on the Queen's Speech, in 1962, I said that the results of a survey which had been conducted amongst young married people to find out their problems indicated that the most important thing to them was housing. That survey also indicated that no less than 84 per cent. of those interviewed wanted to buy their own homes. Some had already succeeded in doing so and the others were taking active steps to bring it about. I am sure now that this is increasingly the case.
I checked with my local sources again last weekend and I am told that young men of 21 and 22 upwards do find the deposit to buy a house and undertake this considerable commitment. I know that reasonably organised young couples can and do buy houses in Birmingham or perhaps in the outside districts where, as is obvious, land is less expensive. Thus, quite a number of our young couples are going to Lichfield or Tam-worth, where there is still an amount of private building going on.
§ Dame Edith Pitt
That is not my information. They are delighted to have something of their own and are confident, especially where both are earning, that they will be able to meet their obligations in future.
The high cost of land has not prevented house building. This, as well as the desire for home ownership, is not confined to Birmingham. That is borne out by the national figures. Whereas in 1951 only 29 per cent. of the houses were owner-occupied, the figure is now 44 per cent.
The Motion calls for urgent measures to be taken by the Government and the hon. Member repeated that today. But he has given no recognition to the achievements of the Government. It is fair to claim that the Conservative Government have achieved the "impossible." We were told by hon. Members opposite when we set our target as 300,000 houses a year that it was impossible of achievement—so we did it. More than that, not only have we stepped up the rate of house building to make more houses available; we have set our target still higher. We planned to build 350,000 a year, 1425 beginning next year, but are already doing it. That target will be achieved this year. Our next target is 400,000 houses. So we have done a great deal to make more houses available, which is part of the answer.
The question of high prices for land is not all one-sided. I believe that it encourages the maximum use of land It encourages greater density—something which the hon. Member objected to. But unless he knows parts of our city that I do not know, the modern development of what are now called "town houses" and which, in the old days, we might have called terraced houses, is very attractive and is making the best use of the land. The people who live in them do not, to my knowledge, find any objection. The high cost of land also encourages the redevelopment of the older areas of cities and I hope that the hon. Gentleman will also confirm it, for he lives in my constituency and must be well aware of the development that is taking place there.
I recognise that the demand for houses continues and will continue to affect land prices, as also the price of land for other uses. The hon. Gentleman talked about open spaces and was critical of the fact that local authorities have to pay as much for land for alternative uses as they do for housing use.
I wonder what the hon. Gentleman would suggest. It seems only fair that, if people own land, they should be able to obtain the market price for it, irrespective of the use for which it is designated. It would be grossly unfair to tell someone that he would get less for his land because it was wanted for an open space or school playground than his neighbour would get for a similar plot because houses were to be built on it. Perhaps hon. Members opposite will tell us what they think is a fair way of treating the owner whose land is to be used for open spaces.
§ Mr. J. Silverman
As the land was scheduled for open space in 1952, it is as open space that it should be compensated. Even so, the price is considerably higher than in 1952. I remind the hon. Lady that the Government have already recognised the difference between certain areas. For instance, if land is scheduled as residential, it may not be used for commercial purposes and, there- 1426 fore, the owner cannot get the market value for commercial use, which would bring him in several times as much money as he will get for residential purposes. There is already that distinction in planning between different kinds of land as reflected in the market price.
§ Dame Edith Pitt
It seems to me that a schedule is not sacrosanct for ever. We might easily have made mistakes in Birmingham, for instance, in designating land for open space. The purpose may have changed. For instance, the sports ground in Selly Oak, to which the hon. Member referred, is no longer needed for that purpose because the employers do not use it sufficiently. It is now available for housing development. This question of fairness between one owner and another is of considerable importance.
There is another thing that we must take into account in considering demand for land in future, particularly land for houses. We have not yet felt the full effect of the bulge in the birth rate in 1946 and 1947. Those born then are coming to marriageable age and young people are marrying earlier these days. This will add to the demand for housing and land.
However much the hon. Member may dislike it, we come back to the old rule of supply and demand. What is the answer to this considerable demand? It must be that more land in large quantities for both municipal and private development must be brought on to the market, and I do not believe that the answer is to be found in the policy of the party opposite. Its proposal for a land commission would inhibit land owners. They would be very reluctant to put their land on the market, knowing that there was to be control in this way and, therefore, compulsory purchase would have to be used to acquire land.
I assume that, first of all, there would have to be legislation to set up the commission and all the necessary machinery. That in itself would be a delay. There would be further long delays in the acquisition of land and there would be created a permanent heaven for lawyers and estate agents. This proposal would mean still less land coming on the market and this would 1427 reduce the rate of building and so drive house prices even higher.
In "Signposts for the Sixties"—which I have read—it is stated that the land commission would help by leasing plots of land to small owner occupiers. I would like to know about this. The inclusion of the owner-occupier in the philosophy of the party opposite is a fairly recent conversion.
I would also like to know how the people who would get the benefit of these small plots of land would be chosen, because if there is only a limited amount of land there must be controls and restrictions. It follows that in respect of persons who have obtained plots and built houses there must be some form of restriction on resale, otherwise we should be putting the privileged persons who have been fortunate enough to obtain plots in possession of something that they can sell at an enhanced price. I would like the Front Bench spokesman opposite to tell us what restrictions there will be on resale if his party's policies are put into effect.
I remember the difficulties that arose when the party opposite was in power from 1945–51—the grave difficulties confronting anyone who wanted to obtain a house, especially one of his own. I want to quote the case of a young man who, at that time, happened to live in the constituency of the hon. Member for Aston—only because he was lodging with his mother. On his return from the Army he bought a plot of land just outside Birmingham, for which he had paid £100. He wanted a home of his own, but could he get a licence to build? He could not. As a result, like everybody else in those days he was forced on to the municipal housing register. Eventually, because he had a family he was given a municipal house, and he may still be there for all I know.
That sort of thing happened in many cases. These people did not want to become municipal tenants, but they had no alternative, because of the policy of the party opposite. I well recollect in those days, when I was on the local council, trying to help and advise people who found the difficulties of buying their own homes almost insuperable. Controls were in existence, and local authorities were allowed to issue one licence only 1428 in respect of every four municipal houses built. The proportion was later reduced to one in ten, and then it stopped entirely. Later, it came back at the rate of one in five.
§ Mr. Albert Evans (Islington, South-West)
The hon. Lady has told us of a person who bought a plot of land for £100 in 1947. Will she refer to the Motion before the House and inform us how much that plot could be sold for today?
§ Dame Edith Pitt
I should think that a plot like that, on the outskirts of Birmingham, would probably be sold for about £700 or £800—and I have been talking of conditions all the way back from 1945 onwards. I made inquiries about the prices that plots of land are fetching both inside and outside Birmingham. Four years ago I bought my own plot for £500.
The policies of the party opposite would force people on to the municipal registers again, and would ignore the changed social pattern which has arisen from the prosperity of our people, and which is expressed in a desire for home ownership. Although "Signposts for the Sixties" refers to "public ownership of building land", and although the hon. Member used the same expression in his speech, we know that that is a polite euphemism for the nationalisation of land. [HON. MEMBERS: "Oh."] That is quite true. Nationalisation has become a horrid word, and a taboo has been put upon it by the party opposite between now and the General Election. But that is what the policy of the party opposite means in respect of land.
Since hon. Members opposite do not agree with what the Government are doing, I am entitled to ask why, under their proposals, the land commission would acquire land in all areas, when, as I have reminded the House, this is a problem of the big cities. Why would they have to set up machinery to acquire land in all parts of the country? It really means that they are most anxious to develop their policy of nationalising the land, and to do so must cover the whole country. This would mean that virtually no freehold plots would be available, and that any sales in future, either of new land or redeveloped land, would never give the owner-occupier the plot of land on which his house stood. That would 1429 involve him in increased charges in the years ahead, because it is also proposed that ground rents should be increased.
This is contrary to the general feeling, especially among young people. It arises from the fact that the party opposite is still stuck with its out-dated theory of nationalisation, and because hon. Members opposite will always have a certain envy of the profit motive. The real answer, as distinct from that advocated by the party opposite, is to bring on to the market large areas of land, so diminishing the demand. With this must go provision for home ownership, to meet the strong demand which exists for it. I recognise that such a policy means going outside the present cities, and that this is not everyone's choice. It means that we must channel small industry to the new towns, in order to make jobs available, and that we must make more attractive the way of life there.
I am grateful to my right hon. Friend for the fact that he has already designated two new towns for Birmingham—Redditch and Dawley—and that he is also arranging for overspill to go to certain existing towns. Redditch is a particularly good choice because it already has a centre, which is so important to the development of a new town, and there is already some industry in the area.
All this underlines the importance of the regional land surveys. I know that one is in hand for the West Midlands area. In emphasising to my right hon. Friend the need to make more land available in order to keep pace with the growing demand, we in the Midlands feel that the Birmingham and Midlands area plan is of great importance. We are crying out for it, and one of the best ways in which my right hon. Friend could give us further help would be to speed up that regional land survey.
§ 12.18 p.m.
§ Mr. Peter Doig (Dundee, West)
The hon. Lady the Member for Birmingham, Edgbaston (Dame Edith Pitt) started by telling us that the reason for high land prices was the country's prosperity, which had been brought about by the Tory Government. But she went on to point out that prices of land were much higher in a number of other European cities. It would seem to follow that, in proportion to those countries, the prosperity 1430 that the Tory Government has brought to us is very much less than it should be. This is obviously a stupid method by which to judge the problem.
Are we to believe that the prosperity of the country should be concentrated in the pockets of a very small number of people, namely, those who can afford to speculate in land? This is exactly what is happening now. People who buy their own houses have to struggle very hard to pay for them. They are not enjoying this so-called prosperity. The prosperity is being enjoyed by those people who have sold land at exhorbitant prices. Only that tiny section of the population which is performing no social service is enjoying real prosperity. Is this the sort of thing that the hon. Lady wants to encourage?
The hon. Lady pointed out that many people are still buying their own homes. Of course they are. Why do they have to buy them? Mainly because they have no hope of getting a house by any other means. It is mainly because fewer and fewer houses are being built by local authorities for renting. I cannot give the figure for Birmingham, but in my constituency only one man in 20 can afford to buy his own home, so that nineteen-twentieths of the workers are being denied the opportunity of getting a house to rent within a reasonable period of time. They are being forced to incur debts which they cannot keep on repaying without sacrificing other things. Indeed, they are having to struggle very hard.
How often do we find that people buy homes because the Tory Government, by their 1957 Rent Act, forced people into the position where they had to buy their own homes? This was because they were no longer secure in the ones that they had. The Rent Act is the main cause of the vast increase in home ownership by the working people. There is no doubt about that.
How has it come about? It has come about because the Government decontrolled all new tenancies after 1957 and thus left young married couples who moved into a rented house at the absolute mercy of the landlord. Their rent could be doubled, and even doubled again at any time, until it was found how much they could be forced to pay. 1431 That is the trouble. Therefore, they are forced against their will to buy houses. However, as nineteen-twentieths of the workers in my constituency and in most of Scotland cannot afford to buy their own houses, they are forced very often into a worse position of having to live with relatives in vastly overcrowded houses.
To crown all, the Government's excuse given for the passing of the Rent Act was that it would produce a profitable means of investment not on existing houses, but on the building of new houses by building speculators. When I asked the Minister of Housing and Local Government how many houses had been built as a result of this by private speculators since 1957, he said that he did not know. We can assume from this that the Government are not even interested in whether that legislation is successful or not. That is a fair assumption.
Therefore, we come back to the question why the Government passed the 1957 Rent Act. I think that we must come to one conclusion, that they wanted to concentrate the prosperity of the country in the pockets of a very small number of people. This they have succeeded in doing. Indeed, they have succeeded beyond their own imagination, because I do not believe that even they realised that a plot of land costing £400 an acre in 1957 would cost £15,000 an acre today.
The number of houses built to rent by local authorities in Scotland is now far less than it was in 1951, the last year of Labour control, yet these houses are what nineteen-twentieths of the population of Scotland depend on in order to have a home of their own. Why? It is because the Government have done everything in their power to make it difficult for people to get what are termed subsidised corporation houses. They have refused to control the price of land, so that local authorities are forced to pay inflated prices for the land on which to build local authority houses.
The Government have also increased interest charges. These have practically doubled since 1951, and this alone makes a difference of £1 a week on an economic rent. The Government have done every- 1432 thing in their power, and have succeeded, to prevent local authorities from building more houses for rent, and, consequently, many young people today are taking on houses for which they cannot afford to pay. They are even having to cut down on food, clothing and holidays because they feel that the buying of a house is a necessity to which, unfortunately, they are to be tied for the next 20 years or so.
§ Dame Edith Pitt
I wonder whether the hon. Gentleman would tell us what action the local authorities in Scotland are taking to obtain economic rents. I agree that many young people either do not want or cannot afford to buy their own homes and prefer to go on the municipal register, but the rents of local authority houses are so low that the existing tenants, many of them elderly and with their children grown up and no longer living at home, still hang on to the houses.
§ Mr. Doig
The local authorities in Scotland are building more houses today in some Labour-controlled areas than were ever built before, in spite of all the obstacles that the Tory Government have put in their way. A Labour Government would remove more of those obstacles, but the present Government have no desire to remove them. This is the crux of the problem.
A worker in Dundee earns, with overtime, between £8 and £12 a week. If he wants a house of his own he has to pay out a minimum of one-third of his gross income. On top of this he has to pay tax, National Insurance, etc. How many people can afford to pay one-third of their income for housing accommodation? Very few indeed. Dundee is not exceptional as far as Scotland is concerned. It may be that people in Birmingham, London and the south-east of England are much better off.
This is another reason why the Government should spread jobs more evenly throughout the country. The point is that this great increase in home ownership, of which the Government are so proud, is, in fact, causing terrible hardship to a very large number of people. Economic rents are being forced up all the time by the actions of the Government.
As I said a little earlier, the difference between the 3½ per cent. charged to local 1433 authorities in 1951 for borrowing money with which to build houses and the 5¾ per cent. charged today—it may be more now; it was 5¾ per cent. when I was a city treasurer until recently—is equivalent to an increase of £1 in rent. That is one item alone. If, on top of this, we have housing charges and the cost of land also increasing tremendously then, quite obviously, the economic rent of even a corporation house will eventually get beyond the means of the ordinary worker.
The councils in Scotland recognise this, and that is why they refuse to fix an economic rent. So the Government try to force them into doing this by withholding some of the subsidy. The Government are using every means at their disposal to produce figures of the number of new houses built which will look good on paper.
§ Mr. Arthur Jones (Northants, South)
Will the hon. Gentleman tell me who makes up the balance of the economic rents? Am I right in saying that it is the ratepayers who are making it up?
§ Mr. Doig
The tenants are ratepayers as well. Someone sells the land and that someone makes a big profit. Unfortunately, that big profit is going to one individual and the cost is being shared by all the ratepayers in the city. Why should we allow the profit to go only to one individual? We say why should not we share the profit—the difference in value which these people have done nothing to secure—between all the ratepayers? That is the difference between the policy of the party opposite and our policy. We think it is wrong that the ratepayers should have to pay while this very small number of people obtain extortionate profits.
We were asked about what should be the market price of open spaces. Obviously, as Labour Party spokesmen have said on many occasions, it should be the existing use value of the land. Until 1953, the Government got the difference between the existing use value 1434 and the development value and it was shared by the whole community. Since 1953, thanks to a Tory Government, this money has gone into the hands of individuals or companies who can afford to speculate in land.
§ Mr. Compton Carr (Barons Court)
Is the hon. Gentleman saying, therefore, that under a land commission organisation prices may rise just as high as they do now, but that would not be a bad thing if any profit went to the State rather than to an individual?
§ Mr. Doig
Yes. I would say that it does not matter whether prices rise or not, if the difference involved is shared among all the people. I remember the time when in Dundee we could buy land for building at 6d. a pole. That could not be done now anywhere in the country, but that is the price which we actually paid for some of the ground for the large building schemes in my constituency.
If we are left with the present system, in which local authorities as well as individuals who wish to own houses can be charged £1,000 for the land on which the house is built—or presumably £2,000 in and around the London area—very few working people can hope to obtain their own houses without skimping on everything else, including holidays. That is the present position. I sincerely support the Motion, therefore, and I hope that the House will do the same.
§ 12.34 p.m.
§ Mr. Charles Doughty (Surrey, East)
The hon. Member for Dundee, West (Mr. Doig) will forgive me if I do not follow him north of the Border. Except as a visitor, my knowledge of that area is very slight. The hon. Member's speech convinced me of two things. First, that the finances and economics of the housing departments in the parts of Scotland to which he referred are very badly managed, and, secondly, I understand fully now why so many workers from the North come to the South.
I join with my hon. Friend the Member for Birmingham, Edgbaston (Dame Edith Pitt) in her complaint that the content of this Motion was not made known to the House until yesterday morning. Hon. Members who wish to speak to Motions should have full and proper notice of 1435 the content of any Motion which is to be brought before them. Some hon. Members look a little surprised. Naturally, we knew the general nature of the Motion, because that was announced at the time of the Ballot, but the expanded terms of the Motion were not put down until yesterday.
I am entitled to speculate about the reason for this. The hon. Member for Birmingham, Aston (Mr. J. Silverman) is not in the Chamber at the moment. I wonder whether he was told, "Say what you like about the Government and the present position, but do not for one moment give away anything about what the Labour Party proposes to do because, in accordance with our general practice, between now and the General Election we are not disclosing to anybody what we intend to do." I am delighted to see that the hon. Member for Aston has now returned to the Chamber. What I have just said would be entirely in accordance with the present practice. I hope that the country will fully realise that although the members of the Labour Party criticise, they do not say what they intend to do, and that this Motion—
§ Mr. J. Silverman
I am a back-bench Member and it is not my business to state Labour Party policy. I can ask what is the Government's policy. As the hon. and learned Gentleman has mentioned the matter, may I say that on a large number of issues the Labour Party has stated in broad terms—and sometimes very specifically—what it proposes to do. Can the hon. and learned Gentleman name one occasion in the past when the Tory Party has stated what it is proposing to do before an election? In fact, quite the opposite has happened. On two occasions the Tory Party has introduced important legislation—such as the Rent Act, and there was the attempt to make this country a member of the Common Market—without having any mandate.
§ Mr. Doughty
The hon. Member has made a speech rather than asked a question. Before every General Election the Tory Party has always outlined its policy in a handbook and I do not doubt that that will be issued again. As a back-bencher, and a member of the Labour Party who, presumably, receives the Whip, the hon. Member is entitled 1436 to express his views and ask for advice from the Opposition Front Bench—
§ Mr. Doughty
It is no use the hon. Member for Dunbartonshire, East (Mr. Bence) making a silly noise. There is a lot still to be learned and the hon. Member should follow carefully the advice given.
I am interested in this Motion. The hon. Member for Aston may not be aware that in the 1950 General Election, though he was not a candidate, I was a candidate in the Aston Division—not, of course, for the party which he represents.
§ Mr. Doughty
I am proud of the fact that I was not.
I have been back to that division since that time, although not for political reasons. If the hon. Member for Aston cannot see any difference in that division as it is now and as it was then, I can. I was astonished and surprised. Whatever may be the price of land, of bricks or of labour, under the administration of a Conservative Government there has been such a change that it is difficult now to find one's way about. I found it difficult to find the places where I used to canvass and hold my meetings before the 1950 Election. The whole place has been revolutionised—
§ Mr. Doughty
—and when I say that, I refer to the buildings in Victoria Road, Five Ways, or wherever it may be.
§ Mr. J. Silverman
I am not talking of Five Ways or the centre of the city. I have represented the greater part of the Aston Division since 1945. I know what it was like then and I know what it is like now.
§ Mr. Doughty
I do not know whether we are talking of boundary changes. The name of the division in which I fought the election at that time was Aston—
§ Mr. Doughty
If the hon. Member for Dunbartonshire, East wishes to interrupt, I will give way to him.
§ Mr. Doughty
If the hon. Member is called, no doubt he will make his own speech. The division has changed completely since that time—
§ Mr. Doughty
—and that, of course has happened under a Conservative Administration.
I do not deny, nor would anyone else, that building land is expensive. It is expensive anywhere near towns, and that is because of the policy of the present Government which has made the country so prosperous. To take an example, agricultural land is not cheap. That is because it is part of Government policy that there should be agricultural subsidies, which makes farming a more attractive occupation and results in an increase in the price of agricultural land. We encourage people to build, whether they be private builders or corporations, and, naturally, the price of land goes up because the demand is increasing the whole time.
That has not made it any way more difficult to sell a house or to let a house, or for council corporations to build should they desire. If anyone denies that, let him try to find a house for sale. They are sold before the last door or window is put in. That is true of every part of the country, certainly south of the Border. It is true in my constituency, which is a dormitory area for London and one which is most affected by the demand for housing, particularly in the South-East.
Another reason has not been referred to sufficiently. If we take away for green belt purposes, and rightly take away, a large part of the land which could be built on, the price of what is left must increase. I listened carefully to what the hon. Member for Aston said. He said that "broadly speaking" he was in favour of the green belt. I do not want to play with words, but the phrase "broadly speaking" frightened me very much. It gave the impression that, while the green belt should be maintained, certain parts of it could be cut off. "Broadly speaking" means agreement with the principle, but that there have to be many changes. It means that the green belt is to be cut down. If that is Socialist policy—I hope 1438 I am not misrepresenting what the hon. Member said—I assure him that large numbers of people will be terrified by those words.
The green belt is enjoyed by those who live in outer areas, but it is also enjoyed by the majority of Londoners who go out to it at weekends and at other times.
§ Mr. A. Evans rose—
§ Mr. Doughty
I will give way first to the hon. Member for Dunbartonshire, East, who burbles from a seated position, if he wishes to make an interruption.
§ Mr. A. Evans
The hon. and learned Member for Surrey, East, (Mr. Doughty) criticised my hon. Friend the Member for Birmingham, Aston (Mr. J. Silverman) because he said that he would support the green belt, broadly. I understood that the hon. and learned Member was rather afeared that hon. Members on this side of the House might be content to see the green belt eaten into. He was alarmed at that possibility, but he will know that his right hon. Friend the Minister and the Government have from time to time said that to meet the difficulties of housing in the Greater London area it might be necessary in some instances to shape and reshape and take pieces of the green belt. That has been the declared policy of his own Minister. Would he repudiate his right hon. Friend?
§ Mr. Doughty
I refer the hon. Member to the Command Paper of 1952. I agree that in the Lea Valley it might be necessary—[HON. MEMBERS: "Oh."]—because there are special reasons there, but the ordinary green belt in the south-east of the London area will be maintained. I agree that in debates on the Greater London Bill I had occasion to cross swords with the Minister. I therefore do not praise him for the sake of praising him, but he has been most valiant in this fight. I must congratulate him on maintaining the green belt, 1439 particularly the part I know to the southwest of London, but generally to the whole south of London, in view of the pressures on it, which are enormous. The excuses used for eating into it are that it ought never to have been a green belt and that the demand for housing is so great. I am glad that my hon. Friend has always supported the view that the green belt must be maintained.
I think that the words "broadly speaking" have a nasty sound, but I hope the principle will be maintained. Maintaining the green belt is necessary and it is something for which I shall fight to the last ditch in support of whatever Government are in power seeking to maintain it. Maintaining the green belt increases the price of land available for building, but it is nonsense to talk of people who sell land as speculators.
Is a person who sells food a speculator? Is a person who sells furniture a speculator? Because they make a profit, are they doing a disservice to the community? Should they not make a profit, but file a petition in bankruptcy to show their great social prowess? In the areas around London often there is a large old house which probably was built in the nineteenth century. It has large gardens, extending perhaps over three or four acres. It was built at a time when the district was more countrified. When such a house is sold, the land becomes available for closer building. The nineteenth century house is knocked down within 24 hours of the sale. It is astonishing to see the speed at which this is done, but are the builders who take such land speculators? That is nonsense. Quite properly, they buy the house and the gardens and build on the land which then becomes available.
§ Mr. Doughty
I was giving the example of people who sell land on which new houses are built. Generally, they are people who have been living as a family in that house. They would be shocked to hear that the hon. Member referred to them as speculators. Certainly, 1440 the land fetches a high price, but we must maintain a free market in land if we want land for building. It is just that free market which enables the land to be made available. People who can make it available should be encouraged and able to do so. The land becomes available for houses to be built. The answer is that they are built and are not left vacant, but are sold almost before they are finished.
The prosperity of the county under the present Government is increasing all the time and enables people to buy their own houses and live in them contentedly and happily ever after. Hon. Members opposite suggest that people cannot afford to do this, but how many building societies have to foreclose and take possession of houses? We practically never hear of a case where a building society or a council which has advanced money on a mortgage has to retake possession of a house, because people are prosperous enough to maintain their payments.
Should there be a different price for land when a council wants to build a school or something other than housing? No doubt councils want to build for excellent purposes. Should the person selling the land have to sell at a lower price according to the purpose for which it is to be used? That sounds most inequitable and a proposition which would make it difficult for councils to obtain land for building houses.
The hon. Member for Aston—I respectfully use the expression—let the cat out of the bag when he referred to State appropriation. It is there, in the Labour Party's "cat-out-of-the-bag" book—"Signposts for the Sixties". Hon. Members opposite cannot repudiate that. What is more, John Stuart Mill is quoted there, too. That is where the hon. Member got his quotation from. We read:The case for public ownership of building land is not new.Public ownership, State appropriation, nationalisation—they all mean exactly the same thing—
§ Mr. J. Silverman
John Stuart Mill was not in favour of what the hon. and learned Gentleman calls the appropriation or nationalisation of land.
§ Mr. Doughty
Then let me read from the Labour Party's pamphlet:The case for public ownership of building land is not new. It was first made by John Stuart Mill a century ago.The hon. Member evidently has not read this pamphlet. He really must buy it—it is only 6d. He will find that quotation there.
That is exactly what hon. Members opposite intend to do—nationalise all building land. Of course, there would not be any building land to nationalise, because it would all disappear. If any other hon. Member opposite wishes to interrupt, I will gladly give way and then quote from this pamphlet. It states that a land commission would be set up. How many people would there be on its staff? How many surveyors? How many lawyers? Have hon. Members opposite thought that one out? How long would it take to set up the commission, to get the necessary buildings, staff, person in charge—
§ Mr. A. Evans
Perhaps I can give the hon. and learned Gentleman guidance. He must know that his own Minister has recently set up a body to take over control of the new towns as they are completed. That body has a staff in London. What we propose to set up, as shown in that pamphlet, would be something very comparable to the body set up by the Minister of Housing and Local Government.
§ Mr. Doughty
I gave way to the hon. Gentleman because I thought that he intended to answer my question. I am sorry that he has completely failed to do so. The body referred to in the pamphlet has nothing whatever to do with the new towns; its purpose would be to purchase the freehold of land on which building or rebuilding was to be authorised. It would have to be a vast organisation. Where would all the people be found—the surveyors, for instance? Surveyors are busy people just now, although they would perhaps be put out of business by a Labour Government.
As to price—there is no suggestion, of course, of confiscation without the payment of any compensation—we read that it would be based…on its value for its present use, together with an amount sufficient to cover any contingent losses by the owner and to encourage the willing sale of land.1442 What does that mean? It is utter nonsense.
If one wants to put on a price to encourage the willing sale of land, one puts on a price that the land is worth. But if that is done, what is the point of having a land commission at all? And if it is not done, there will be endless arguments, arbitrations and appeals—and in any case there will not be any land available, because it will not get into the hands of the land commission in the lifetime of any of us in this Chamber now. If it does, what will happen? The land will be sublet to individuals to build on—but at what rent? Will the rent indicate the value of the land? If not, someone will be given a privileged position to sell at a profit. Or will there be a covenant against resale? In that case, the person will be tied to the house. I see that there is to be power to alter the ground rent from time to time.
In any case, it puts an end to the owner-occupier, because the first thing that the owner-occupier must own is the land on which his house is built. [HON. MEMBERS: "Oh."] Hon Members may not like it, but that is the truth. There the man is, with the land belonging to the land commission. He only has the house on the land, on which he has to pay rent to the commission all the time. That means we are finished with the owner-occupier although that may be what the party opposite wants—
§ Mr. Doughty
I am very interested in the hon. Member's life history, but the position is that over 40 per cent. of our people are owner-occupiers at the moment, and the number increases all the time. That is what the vast majority of people want. They own the house and the land, and they have the title deeds for the whole lot. Hon. Members opposite may think that that is all wrong, but their proposals would put an end to that completely, would put an 1443 end to the availability of land, and would put an end to the owner-occupier. They may want to see everyone a tenant of the State, or of the local council—and if that is so, let them say so.
Our policy is simply to have a free market in land so that land is available—
§ Sir K. Joseph
I am grateful to my hon. and learned Friend for giving way. I agree with all he says, but in one respect he is doing a slight injustice to the other side which I should like to correct. The Opposition are not seeking to take owner-occupation away from existing owner-occupiers. It is to would-be owner-occupiers in the future that owner-occupation would never come about under a land commission, but leasehold only, with rising rents.
§ Mr. Doughty
I am much obliged to my right hon. Friend—that was exactly what I had in mind. I was aware that hon. Members opposite did not intend to take away the land from under the present house owners, but that future would be owner-occupiers would be affected. Those who in future wanted to build would have to lease the land at varying rents, and rising rents—
§ Dr. Alan Glyn (Clapham)
The difference between the existing leasehold system and that proposed is that there is now a fixed rent—practically never a rising rent—whereas under the proposal of the party opposite there would be a constant rise in ground rent.
§ Mr. Doughty
That is perfectly true—but I hope that my hon. Friend will not encourage hon. Members opposite to interrupt again.
For all these reasons, there is nothing whatever in this Motion—I can assure the hon. Member for Aston on that score. I do not talk of Birmingham—he probably knows present conditions there better than I do—but I know about building land in one of the most expensive parts around London. Land in East Surrey is not cheap, because so many people want to live there, but the figures that the hon. Gentleman suggested for the price of land there are quite incorrect.
One reason why that area is so attractive is that so much of it is green 1444 belt. We are delighted to see people coming out from London at the weekends to enjoy themselves, but that attraction does put up the price of land available for building. When the land does become available for building, it is nearly always one of the old nineteenth-century houses, built when the place was really in the depths of the country, with three or four or more acres around it, that becomes available. Those houses do not fetch these exorbitant prices, although the price is high.
At the same time, every single house built on such land, and an enormous number have been built since 1951, when I became Member for Surrey, East, is sold before it is completed. There is not the slightest difficulty at all in selling the houses. It imposes no hardship on anyone, and it provides a house. If people have not the money to put down, and nearly all of them have not, they obtain mortgages. They can get nearly 100 per cent. from the councils.
I have not had a single letter of complaint that a council or a building society has foreclosed. It would be wrong to say that there has not been a single case, because I do not know everything that happens in regard to every single house in my constituency, but I have not heard of a single case where there has been a foreclosure by a council or a building society. I have not had a single letter of complaint. People are being housed, and well housed, but if the proposals of the party opposite were ever to come anywhere near fruition, the people would cease to be rehoused—though some very strong Socialist principles might be put forward.
§ 1.0 p.m.
§ Mr. Julian Snow (Lichfield and Tamworth)
I have listened to the speech of the hon. and learned Gentleman for Surrey, East (Mr. Doughty) with some degree of fascination, because he seems to be living in a cloud-cuckoo-land of his own. If the area in which he lives is exemplified by what he said, it is a very different part of the country from that which I represent, which is an overspill area in the Midlands. We have our own problems there. Later I propose to reply to a few of the observations made by the hon. Lady the Member for Birmingham, Edgbaston (Dame Edith Pitt).
I do not know where the hon. and learned Gentleman gets the idea that 1445 owner occupation is contrary to the political philosophy of the Labour Party. I ask the hon. and learned Gentleman to remember that in the five years after the war, when people were trying to reestablish their homes in a country which, according to the right hon. Member for Woodford (Sir W. Churchill), was a bankrupt country, our political philosophy was that of priorities. At that time it seemed right to us, as it seems right to me now, that housing should go to those in the greatest need.
In my part of the world a very large proportion of existing owner occupiers do not live on freehold property. They live on leasehold property. I can only think, after the speech of the hon. and learned Gentleman, that he has been rather politically rattled by the news of the result of the Faversham by-election, because this magnificent win demonstrates that the large number of owner occupiers in the constituency, whom the Tory Press day after day said would return a Tory Member, have had sufficient faith in the Labour Party to return a Labour Member with a vastly increased majority.
I do not propose to waste much time on the hon. and learned Gentleman's speech. It was not a very good one. I have heard him make better speeches on subjects about which he knows rather more than he knows about this subject.
I would like now to address a few remarks to the hon. Lady the Member for Edgbaston, who made a much more circumspect speech. She said that the comfort and peace of mind enjoyed by owner occupiers was due to the fact that they lived in their own houses. This is the sort of theory about which I should have thought there would not be much disagreement between the two sides of the House. In reality, how can people who have huge mortgages consider that they are living in their own houses? I have walked round new development areas in my constituency recently to try to assess the attitude of people living in new owner occupied houses, many of which are charming, laid out well, and provide an aesthetic ambience which would create a very equable frame of mind in most people.
The fact is that many people who buy these houses are over reaching themselves financially. This is not their fault. 1446 With the overspill problem in the Midlands, with which the hon. Lady is well aware and on which my hon. Friend the Member for Birmingham, Aston (Mr. J. Silverman) touched, there is a virtual direction of people to leave Birmingham and go to overspill receiving areas. At one time land in the rural areas could be purchased at a reasonable price. That is no longer so because of the tripartite agreement between the Ministry, the Staffordshire County Council, and Birmingham, the Staffordshire County Council in that sense acting on behalf of the overspill receiving local authorities.
This virtual direction of people to the rural areas has had the same result, though to a slightly lesser degree, in increasing land values as has been the case in areas which are not subject to the overspill formula. As the hon. Lady will know, the town maps applying to such places as Tamworth, which she mentioned, and Lichfield provide for certain areas which are unallocated, the so called "white lands". In these areas, which everybody knows must be taken over for residential purposes later, prices for what is at present agricultural land—it is not really being sold as such, of course—are now being demanded well ahead rather on the same lines as the position which is developing in the South-East as a result of the publication of the Study.
In the article from the Guardian quoted by my hon. Friend the Member for Aston there is a reference to the observation by the Minister on 4th May that—Because the Government intended to make use of the accepted 'New Town' procedure in acquiring the land needed to house the expected increase in population in the South-East, this would remove altogether the chance of speculation.At a later date the Minister said that the market value he had in mind was—the market value in general terms for housing.This situation is developing in precisely the same way, not in new towns in the overspill area, but in the overspill area towns which are designated for the receipt of a substantial amount of overspill. In towns like Tamworth and Lichfield people are hanging on to land because they know that the land must go for residential purposes in the long run.
1447 I have received a letter supporting this view from the Town Clerk of the City of Lichfield, in which he says:…it would appear that if a council seeks to acquire land in advance of housing requirements in an unallocated area on the town map—i.e., white land—a Section 17 certificate will be applied for, which may result in the council having to pay for agricultural land at the rate for residential purposes.Prices have run amok for the little plots of land in Lichfield, for instance, which are, for one reason or another, on the market now. I agree that it is hardly relevant to talk about 1939 values, but a 21 acre site which was worth about £6,000 in 1939 has now been given a valuation by the district valuer of £80,000. A three acre site is going at the rate of £2,000 an acre. Another site in Lichfield has gone at the rate of £5,000 an acre. I suggest that, whatever may be the arguments deployed by my hon. Friend the Member for Aston in respect of purely urban development, the position in the overspill receiving areas is just as serious and is the result of direct Government order in the sense of the overspill agreement, which has Government authority.
The hon. and learned Member for Surrey, East, in his hustings speech, seemed to be under the impression that the Labour Party was coy about the question of the public appropriation of land. I am one Member who is not a bit coy about it. I myself am delighted that my Party is putting forward this general policy. The hon. and learned Gentleman said that he objected to such broad terms. At this stage of the election battle it is not the function of any political party to tie down local authorities and Government Departments to precise details. But, in my judgment, the broad principle is good, that land should, as far as is possible, be appropriated for the public wealth and the public good. There is no reason whatever in this for departing from the general principle that local authorities will be enabled to sell land for owner occupancy.
Further, on the question of the cost and the delay in establishing a land commission, this, surely, will be something to be taken in one, two or even three stages. Speaking only for myself, I suggest that the first stage would be to give priority to the requirements of local 1448 authorities, the establishment and the cost of this would, I think, be minimal because there are existing Government agencies which could put through the operation without very much amendment. As to the second and third stages of owner-occupancy and, perhaps, institutional occupancy, I should have thought that the first stage could be completed after about nine months and the second stage, without much difficulty in two years.
What I am anxious to establish right away is that owner-occupancy is a question for individual judgment. It is no part of the philosophy of my party or any self-respecting local authority to deny people the right to have their own houses if they want them. It is up to the individual to decide whether the terms of his employment or the additional expenses involved, for instance, living in an overspill area when his work may be in Birmingham, are something which he can carry. What is the duty of any responsible Government, on the other hand, is to see that land will be available in reasonable quantities at a reasonable price for owner-occupiers.
§ Mr. Doughty
The hon. Gentleman talks about the appropriation of land. I prefer the word "nationalisation", though it means exactly the same. Will the hon. Gentleman say whether he means by that the nationalisation of all land, all building land or all land which might some day become building land, and at what price it should be nationalised?
§ Mr. Snow
The hon. and learned Gentleman prided himself a few minutes ago on having read "Signposts for the Sixties". I wish that he would read it more thoroughly. He should have seen it said there that land which is offered for sale will be on option first for the Government, for the land commission. As to price, it is embodied in the same article that a reasonable profit will be agreed. What is not agreed is that thousands of would-be owner-occupiers should be blackmailed as they are at present into paying prices for houses based on a wholly speculative transferring of land.
In his speech, the hon. and learned Gentleman said that it was nonsense to say that people speculate. This is the classic Conservative argument. I have 1449 made speeches on this subject in my constituency, and the first reaction from the Tories is: what about the rights of the landowners? But the owners of agricultural land never had the land originally for the building of houses. The original function was agriculture in 99 cases out of a 100. So why do they talk about this not being a speculator's paradise? Of course it is. It is the ordinary young men and women who want to raise a family in decent conditions whom we should aim to protect. If the hon. and learned Gentleman wants me to accept the challenge, I do accept it. We are not here to defend the land speculator.
§ 1.14 p.m.
§ Dr. Alan Glyn (Clapham)
This Friday debate has been a departure from our customary non-political discussion, and it has shown the difference between the two parties on their approach to this whole subject. I remind the hon. Member for Lichfield and Tamworth (Mr. Snow) that, in their years of office, the Labour Government achieved their target of 200,000 houses in only one year. This is something which should not be forgotten.
To me, there is very little difference between nationalisation and the purchase of land at anything but the market value. The hon. Member for Lichfield and Tam-worth said that the first priority would be accorded to public authorities which wished to acquire land. Whichever way we look at it, there will have to be set up in this country, according to the plans of the party opposite set out in "Signposts for the Sixties", some very elaborate machinery to achieve the purchase and distribution of land.
The whole House is indebted to the hon. Member for Birmingham, Aston (Mr. J. Silverman) for introducing this subject, because, whatever our views may be, it is one which touches about 42 per cent. of the nation. The rise in the number of house owners has been considerable, about 22 or 25 per cent. in the past few years up to 42 per cent. today. Therefore, the whole subject is of great concern not only to those who now own houses, having regard to possible changes in the value of their existing properties, but to all prospective purchasers in the future.
1450 There is in progress a great increase in population, and the statisticians assure us that we shall have a growing problem, whether we like it or not, which will become of paramount importance in the next 10 or 15 years. According to the statistics, I think, the population of this country will rise by the end of the century to about 80 or 90 million. These are only speculations, of course, but I do not think that anyone on either side will deny that the developing trend of population increase is likely to change our circumstances substantially in the next 15 years.
Looking at the matter quite dispassionately, it seems obvious that a great deal more land will have to be made available for the construction of houses. How this land should be made available, and what price should be paid for it, are questions which raise the fundamental difference between the two sides of the House. Hon. and right hon. Members opposite want the State, through a large and powerful land commission, with all its surveyors and lawyers, to purchase land as it comes on the market. One of the great difficulties in this will be the determination of a fair price.
The hon. Member for Lichfield and Tamworth made the point that many land owners had, in fact, purchased their land as agricultural land. I entirely accept that, but he must remember, and so must his party, that the agricultural price of land in this country is still extremely low. Throughout the Continent it is very much higher. Whether one cares to admit it or not, there are two factors which are pushing up the agricultural price of land. First, there is the increase in prices nationally, the result of inflation. Throughout history, of course, there has always been some degree of inflation. The other factor is that farming in this country is becoming far more prosperous and, therefore, the price of agricultural land is rising, and there is pressure on existing agricultural land.
Both those factors are working to raise the price of land, and it is now extremely difficult to establish anything which could be called the correct value of land other than the market value. A land commission or any other such body, however much it tried, would find it extremely difficult to arrive at a fair price 1451 which would give a figure representing—I do not say that the speculator should have his entire profit—some sort of valuation based on what it was really worth in these days. This is one of the great difficulties which we should face if we endeavoured to proceed by some form of Government purchasing agency.
The price of land for building sites has risen. I am not in favour of a wild increase in prices, but I draw attention to two things which the increase achieves. First, there is no question but that the price of land must to some extent determine the best use to which it is put. I know that my views are not universally accepted throughout the House, but often I have drawn attention to the fact that if we as a nation are to grow, as it is envisaged by the statisticians that we shall grow, we must look at the whole of our housing throughout the country in an entirely different way. We cannot afford to let this small island become a mass of straggling villages, one adjacent to the other. Our whole approach in the next 10 or 15 years to the development of land, leaving aside the price, must be to build with more economical use of space. We must ask ourselves whether we can afford to use the available land, particularly in the South, in the way in which we used it in the 1930s.
Hon. Members will recollect the pattern of ribbon development in the 1930s, with sprawling towns and villages along the main roads. It was for this reason, if I remember correctly—and I know that my hon. Friend the Parliamentary Secretary will correct me if I am wrong—that it was decided that we must have a green belt. To some extent we are faced with exactly the same problem today. How are we to use the available land to the best advantage? My own view has always been that we shall have to look forward to the development of high blocks of flats, using the land adjacent to them for amenity purposes.
There are very few factors in life which have not both advantages and disadvantages. One of the two advantages of expensive land is that it ensures the best use of that land. Secondly, it tends to make people less keen to settling in the South-east of the country, and it is perhaps a factor in stopping over-concentration in the South-East. Hon. Members opposite on many occasions 1452 have expressed the necessity for curtailing the southward movement of the population. I am not defending the high price of land, but I am putting to the House that these are two beneficial factors which the high cost of land may have. They are well worth considering.
Many more people wish to purchase their own houses. I may not agree with everything said by my hon. and learned Friend the Member for Surrey, East (Mr. Doughty) but, whether we like it or not, it is a fact that immediately a house is built, indeed almost before the foundations are laid, somebody wishes to purchase that house. Whether we like it or not, the pressure on housing must to some extent affect the price at which the land is available. There is no doubt that the two economic factors of supply and demand not only determine the price at which the house is built but also determine the price which is attributable to the land factor in the cost of that house. There are economic factors which we should do well to consider.
Reference has been made to the green belt. I am sure that most hon. Members would not deny the advantages which accrue from a green belt around this great city. But I put it to hon. Members that in many cases, as my right hon. Friend has said in the past, there are areas in the green belt which are not suitable for farming. Many of us have seen land of poor quality still being used for farming. It is questionable whether some of those areas are suitable any longer for agricultural purposes. I think that my right hon. Friend's approach to the problem is correct. He is prepared—I hope that he will correct me if I am wrong—in certain cases to round off or straighten up areas which are quite unsuitable for farming.
Hon. Members have perhaps seen only 10 or 15 miles from the city whole areas which are surrounded by houses and other development, in the centre of which is an attempt to continue farming. That is not economic, and in many cases the land is unsuitable. This is the sort of area about which my right hon. Friend is right to say, "This is no longer suitable for the purpose for which it is being used and it can be developed for housing without detracting in any way from the general benefits which accrue from a green belt around our cities".
1453 I hope that the Labour Party will forgive me if I make one reference to their proposals to lease land to prospective purchasers. I feel that this is completely at variance with their whole approach to the leasehold problem. On the one hand they have criticised—quite fairly, in their minds—the whole leasehold tenure system. At the same time, when land has been purchased by the State they intend to re-lease it and, even worse than that, to re-lease it at rents which are not fixed but which are capable of variation. As I said earlier in an intervention in the speech of my hon. and learned Friend the Member for Surrey, East one advantage of the past leasehold system is that in almost every case the lease was at a fixed rent. I think that I am correct in saying that attempts a century ago to attach the leasehold rent to the change in the value of money were frustrated by the courts.
The general pattern of leasehold and feu duty in Scotland is that in exchange for an annual sum which is fixed at the time of the grant, the prospective builder has the land for a period of 99 years. The Labour Party do not say whether they will have a capital charge at the beginning, accompanied by a variable rent, but I feel that they are proposing to extend a system of leasehold tenure which they themselves do not approve.
That is one of the fundamental errors in the argument which they have advanced for this type of ownership. I do not personally wish to see the leasehold system greatly extended, except in certain specified cases where the better preservation of an area is involved, and I hope that in future the people who purchase houses will own the freehold completely. I would even go further and say that I hope that even flats will be owned freehold by the people who live in them.
Mention has been made of the very high rates of interest. They cannot be divorced from the whole of the problem of house purchase. If we are living in a society in which there is keen competition and in which there is a constant pressure on the capital available in the country, we must ask ourselves whether it is possible to have two rates of interest, one for house purchase and one for everything else. Personally I do not believe chat it is possible. The right 1454 way in which the Government should tackle it is the way in which they are tackling it now—by giving 100 per cent. mortgages and helping with purchase.
This is a tremendous problem which perhaps has not occurred very much in Central London, simply and solely because sites are not available in Central London. Almost the only chance we have in Central London of getting sites is through slum clearance, and here the machinery is somewhat different and beyond the scope of the Motion. Alternatively, there is the example mentioned by my hon. and learned Friend the Member for Surrey, East, where one large 19th century house, with four or five acres, provides a chance of developing the site with a large number of individual units. In recent years such sites have not risen very substantially in value. There is one site such as this in my constituency of which I could give chapter and verse. It was purchased for £4,000 some years ago for conversion, and after conversion it still has a value of only between £12,000 and £16,000.
§ Dr. Glyn
The hon. Member should recollect that it is over a number of years and that the house when purchased for £4,000 was in a bad state of repair. The house today by itself would probably fetch £8,000–£9,000. The increase is not 10 or 15 times the original price. When we have premises like this on the market, it is important that the most economic use should be made of the land. I make no apology for saying that I think that my right hon. Friend has some measure of responsibility. Although it is difficult for him to dictate to local authorities exactly what they should do, I feel—and this is no criticism but a suggestion to my right hon. Friend—that perhaps his influence might be used to ensure that these very small sites that come up for development, whether for public or private development—I do not think that we can make any disparity between the two—are used to the maximum advantage.
I know that my right hon. Friend has put pressure on the L.C.C. and that the densities have been increased, but if we are to have these very limited areas of land—I am confining myself here to the very few sites that I have in my own 1455 constituency—we should enforce on the local authority or the L.C.C. or the private developer a code for the maximum and efficient use of that land.
I feel that we have to approach this problem from perhaps a slightly different view. We have to ask ourselves: how many people are we converting into house and home owners and are we making sufficient land available to meet the need of those people to acquire houses? But there is one proviso. There is a limit to which the building industry can be extended, even with all the help which my right hon. Friend has given to the new processes of mechanisation. This is important, because the cost of land is not the only factor in the cost of houses. We are finding that the great mechanical processes which are at last being used in the building industry enable us not only to reduce costs but also to increase the speed of building. Ultimately, we are dependent not only on the availability of land but on the availability of the building industry to meet the requirements of the very heavy commitment which we can foresee in the next 10 or 15 years.
I hope that by employing these methods we shall see a reduction in the cost of houses. Personally, I feel a little worried because many of the methods which we are using to reduce the cost of building are applicable only to very large blocks of flats. Therefore, I feel that there is an even stronger case for us to use the available land for high building which can be carried out quickly and economically not only in the cost of labour but ultimately in the cost to the person who wishes to purchase a flat.
We should look upon the whole of house ownership and the availability of land together and say to ourselves that we have a limited supply of land and that we must use this in high development, using all the mechanical advances which we have which are suitable for that type of high development. We should, therefore, be able to produce large numbers of flats which we could make available—not on the leasehold system suggested by hon. Members opposite but on a freehold system. They should be of 15, 20 or 30 units in blocks and with communal playgrounds and garages, but we should make sure that they do not in the next 20 or 25 years ruin things by a 1456 straggling mass of houses joining one town to the other and once again making the mistake which we shall all live to regret.
§ 1.35 p.m.
§ Mr. Albert Evans (Islington, South-West)
I was very interested in what the hon. Member for Clapham (Dr. Alan Glyn) said about the introduction of new building techniques and I agree with him on that.
I wish, however, to return to the Motion before the House, which was not a Motion upon housing or building techniques, but upon the high cost of land. In so far as the hon. Member dealt with the cost of land, he seemed to put the classic case for doing nothing about it at all, leaving it to the free play of supply and demand. According to what he told us, if the Minister and the Ministry were not in existence and nobody took any action, we should, through the rising price of land, gain the best results. That seemed to me to be what the hon. Member was saying.
The hon. Member said, "We must leave this to the market, to supply and demand, and by doing so we shall get the best results." He had nothing to suggest on how we should face this problem of the rocketing price of land all over the country. He had not a word to say about it. He contented himself by throwing some not fully-informed gibes at the policy that is being put forward by the Labour Party. That is not good enough.
The hon. Member has not faced the Motion. He had nothing constructive to say on how the Government should tackle this problem. We, at any rate, have put forward a policy in an attempt to grapple with it. It is not sufficient for the hon. Member and the Government to content themselves with attacking our proposals and not to make some constructive proposals themselves.
The hon. Member told us that under the scheme put forward by the Labour party we would set up a very large land commission. I noted his words—a "very large" land commission. The hon. Member should have left out the words "very large" and come to the facts. He could have said "enormous" and so have added to the agony of his statement, but the fact is that it will not be a very large land commission. No 1457 Government in their senses sets up a very large body when only a smaller one is required.
§ Dr. Alan Glyn
I am following on what the Labour Government did last time with the £300 million global sum allocated for loss of future development values. It was quite a large commitment, and entailed a great deal of work.
§ Sir K. Joseph
It is true that the proposal has a lot of ambiguity in it. So far as I can understand it, the land commission would involve the purchase and the disposal of at least 100,000 sites a year all over the country. That must involve an enormous bureaucracy.
§ Mr. Evans
The Minister is getting as emotional as his hon. Friend. He says "enormous bureaucracy". That is contrary to the facts as we see them. It is true that this is in the stage of only a written policy statement at present. But the Minister knows from experience that in recent years, through the instrument of the new towns legislation, we have built very large communities.
Probably the most satisfactory feature of our housing programme since the end of the war has been the new towns. They have been created not by building up very large bureaucracies, but through the appointment of small bodies of men who, in their turn, give orders to private contractors and firms who do the work involved.
§ Sir K. Joseph
If we were to take all the existing 21 new towns and aggregate together all their staffs, they would be quite a large number of people—not an enormous number, but quite a large number. Over the 17 or 18 years in which the new towns have been in existence, they would not altogether, I guess, have bought one-fifth of the number of sites that the land commission would, as a minimum, have to buy—all over the country not concentrated as in new towns—each single year against the will of the owner in nearly every case and, having bought, have to dispose again.
§ Mr. Deputy-Speaker (Sir Robert Grimston)
I am sorry, but this is not a Committee stage. I do not know 1458 whether the hon. Member for Islington, South-West (Mr. A. Evans) has given way.
§ Mr. Skeffington
I am only trying to be helpful. Obviously, the Minister is not considering the fact that one of the objectives of the land commission and the tendency, at any rate, in future development will be for far more development to be on a comprehensive basis. Consequently, the number of individual applications is likely to fall. This is a consideration which I hope the right hon. Gentleman will bear in mind when he is bandying his figures about.
§ Mr. Evans
I think that the hon. Member for Clapham will agree that he was unreasonable in his choice of words when referring to our proposals. He can use the words "an enormous bureaucracy" on the hustings and get away with it, but he knows very well that as between people who know something about the internal arrangements of Government Departments, the idea that any Government today would set up an enormous bureaucracy is just political hustings talk. In fact, a land commission would be no more enormous than the commission which the Minister himself set up.
§ Mr. Evans
Yes, I stand by that statement. The Minister may make grunts and noises, but I repeat that the land commission would be a small body of men.
Most of the dealings would not be done by members of the commission. I am sure that existing land agents and such people would be involved to act on behalf of the commission. Do not let the Minister think that we on these benches are doctrinaire academic fools. We are not. The commission that we would set up would work through existing machinery and would use the knowledge and brains of those people who at present deal with land.
§ Dr. Alan Glyn rose—
§ Mr. Evans
I do not think that I had better give way again. The debate is 1459 getting a bit fragmented. I had better draw towards my conclusion.
The hon. Member for Clapham referred to the drift to the South. He said that the higher the price of land in the South became, the greater would be the deterrent effect against people drifting to the South to live and work. But that can be turned round the other way. It is the drift from other parts of the country to the South-East which assists in pushing up the price of land. That point of the hon. Member's has very little substance in it.
My hon. Friend the Member for Birmingham, Aston (Mr. J. Silverman) mentioned figures of the cost of building land in the outer areas of the City of Birmingham. He told us that he was gathering facts together and one of the facts is, not in isolated cases but as a general average, that the cost of land in the Birmingham area is in the region of £15,000 to £20,000 an acre. That is sizeable enough.
Something should be said about the prices of land in London, because here in London we have the most extreme cases of the rocketing process of land prices. The hon. Member for Clapham, of course, sits for a London constituency—
§ Dr. Alan Glyn
What I said was that I thought that if we have very limited sites some form of pressure on my right hon. Friend is necessary in order to obtain the full advantage from those sites, just as it will be necessary when we get the railway sites.
§ Dr. Alan Glyn
The hon. Member is quite right, but this is a question of densities. What I am challenging is the fact that the existing densities, even as 1460 revised by the London County Council, under pressure from my right hon. Friend the Minister of Housing and Local Government, are not sufficient to meet the needs in many of the areas adjacent to the centre of London.
§ Mr. Evans
I follow, but the point is that the hon. Member sits for a London constituency, and he contented himself with the suggestion that his right hon. Friend should force site owners to build up very high. He told us nothing about the prices of land in London. I should have thought that as a London Member, remembering that the Motion deals with land prices, he would come here armed with some of the facts about the enormous increase in land prices in the London area, with which he is, presumably, concerned.
One can pick up the agenda of any borough council in the London area, or of the London County Council itself, and find case after case where the local authority is obliged to pay enormous sums of money—colossally increased sums of money. When I say "enormous" I am not using it in an emotional way; I am stating a fact. The local authority is obliged to pay enormous sums of money for small parcels of land. I could quote many cases.
There is one case of half an acre being sold for £20,000—£40,000 an acre; there is another case of 2½ acres going for £96,000—£40,000 an acre; and so I could go on, with case after case. Those are not extremely high prices. They represent about the average price prevailing in London, not on main thoroughfares where multiple shop premises or offices would be erected, but the kind of site that we must have if we are to accommodate the people who must live in London because their work is there.
To illustrate that this is an average figure for London, I turn to the survey which was made last year at the request of the Minister. The Minister asked Messrs. Taylor Woodrow, a group of consultants specialising in this kind of work—
§ Mr. Evans
Yes, they know something about building layout, and planning.
The Minister asked them to conduct a pilot study of a large area in Fulham and 1461 to report to him what they proposed for its complete redevelopment, so that some action should be taken, at any rate in that area, to overcome the appalling—I repeat "appalling"—housing conditions that are found in many parts of London today, despite all the efforts which have been made by this and previous Governments. The survey was carried out in an effort to get an idea of what might be done to redevelop a large area over a period of time.
It was found that the area comprised 480 acres and the estimated cost for that acreage was £30 million. That estimate was made by specialists, officers of the L.C.C. I am sure that the Minister will agree that the L.C.C. has greater knowledge and experience of purchasing sites for housing and other purposes than any other authority. We can be sure, therefore, that the people who made that estimate knew what they were talking about. It shows that if the entire acreage would cost £30 million it would be necessary to pay £63,000 per acre, higher than the average.
§ Sir K. Joseph
I follow the hon. Member's argument, but surely he is now referring to the purchase of developed land and not bare land. He is, surely, referring to land which is carrying shops and houses which are not worn out, like slum houses, and which can be bought under the present law and, I suppose, under any law, only at market value.
§ Mr. Evans
—but, as I understand, the £30 million were the estimate for the cost of the land alone; that there would have to be an additional charge for acquiring the premises. From these figures—480 acres for £30 million showing a cost of £63,000 per acre—the Minister will realise that, while I have referred to the average cost being about £40,000 per acre, it is not an extreme statement to say that to acquire Fulham, which is a valuable part of London, would cost about £63,000 per acre.
I will not go into the details of the survey, because that would not be relevant to the debate. I merely remind the right hon. Gentleman that the L.C.C. has rejected it and has asked the Minister 1462 that when he intends to make further surveys he should inform the Council beforehand. I hope that the right hon. Gentleman will not make any more false moves with regard to surveys, and so on, in London without first making the appropriate approaches.
To rebuild at a density of 250 persons per acre means that the L.C.C. must work at a cost per unit of accommodation—to use that horrible phrase—of £1,000 for the land alone. When the L.C.C. erects blocks of flats in London—some high, others more conventional, but all extremely good—the cost of the land for each flat, even if the block has 10 or 12 storeys, is about £1,000, which represents £1 a week in the rent of each flat.
§ Sir K. Joseph indicated dissent.
§ Sir K. Joseph
I am grateful to the hon. Member for giving way and I am intervening so often because I am being rather provoked into doing so. I apologise to the House.
There are two points to be considered here. The first is that, from the point of view of housing, these figures must be taken into account along with the subsidy. The second is that there is a real danger of increasing and exacerbating the movement south, if the privilege exists of living in the centre of cities, very close to one's work, at bargain prices. I hope that the hon. Member will deal with that point.
§ Mr. Evans
—I urge him to remember that this capital of our country would not tick over—it would be filthy and virtually uninhabitable—if it were not for the tens of thousands of workers who clean the streets, keep the sewers open and perform the many other vital tasks, including manning our railways and markets.
§ Mr. Evans
If rents soar so high because of the outrageous price of land, then whichever party is in power will have to come to the rescue of local authorities. It is nonsensical to even begin to contemplate a man earning £15 a week paying £6 a week rent. It is impossible for that to be done and for him to bring up his children in healthy conditions. There is no question of privilege in people living in London. Many of them must live here, even if their rents are extortionate.
§ Dr. Alan Glyn
I agree with the hon. Member and, as he rightly says, there must always exist a hard core of people who must live within a certain distance of the centre, including the people who work in this House and another place. He has enumerated some of them and I hope he realises that they are the very people for whom some provision must be made by way of subsidised housing. However, let the others, who do not need to live so close to the centre, realise that it is, as my right hon. Friend said, an advantage for them to do so.
§ Mr. Evans
I intend to deal with the question of subsidised houses, although subsidies do not overcome the problem of enormously increasing land prices. I must, first, ask the Minister to say what records he has in his Department showing the trends in land prices in London and elsewhere in recent years. Does the right hon. Gentleman have this information?
§ Mr. Evans
I ask because the annual reports produced by his Department whisper not a word about this troublesome and increasingly difficult problem of following the trends in land prices. Surely the Ministry's records should contain a considerable amount of information about the trends and increases in land prices and the consequent burden placed on local authorities. We are 1464 entitled to receive factual information from the Ministry. I have given my figures to the right hon. Gentleman, as did my hon. Friend the Member for Aston.
The hon. Member for Clapham said that authorities were being obliged to build very high. We all know that the expensive sites subsidy is limited; that buildings which are not above four storeys do not receive the subsidy beyond a certain figure, £5,000 per acre, I believe. There is a limit to the expensive site subsidy which is bound up with the height of the building. In view of the facts—and the Minister cannot escape them—he must, if he is to be realistic about housing workers who must be here, look again at the expensive site subsidy. Rising land prices will force him to look again at the subsidy if he is earnest about tackling the problem of housing people in the London area.
In conclusion, I emphasise the theme with which my hon. Friend the Member for Aston ended his speech. What does the Minister propose to do about this? We are not here today to debate the policies of the two parties which will be presented soon to the electorate. We have been waiting many months. We are not here today to make the speeches that we will make in the country in due course. We are here to discuss the urgent, pressing and obvious problem of rising urban land prices. Following the excellent speech of my hon. Friend the Member for Aston, I ask the Minister, with humility, what action he proposes to take to deal with this increasing problem of rising land prices in urban areas.
§ 2.2 p.m.
§ Mr. John Hollingworth (Birmingham, All Saints)
More than two hours ago we started this debate in Birmingham. We have travelled an interesting course around the country in discussing various aspects of the problem. I should like to return to the situation in the city which I am glad to represent in this House.
First, I should like to correct something which was said earlier today. I am very proud of my constituents, whatever their political affiliations. I am depressed to know that my hon. Friend the Member for Birmingham, Edgbaston (Dame Edith Pitt) claimed the hon. Member for Birmingham, Aston (Mr. J. Silverman) as one of her constituents. He 1465 is not; he is one of mine. I want to put that right for the sake of the record. It is important that we should have pride in our constituents, even if the hon. Member for Aston will not let me have a poster site in his house for the next election.
I wish to say a few words in this debate not only to attempt to counterbalance the purely local arguments which have been put forward but also because my constituency suffers severely from a shortage of suitable housing accommodation. Since I first came here five years ago, I have been concerned with housing. Hon. Members on both sides will appreciate that I take a very deep and sincere interest in this matter.
We all know that the price of building land is a problem. We talk of a shortage of building land. But there is not so much a shortage of land as a shortage of homes for people to live in. I am reminded of those days a few years ago when if one purchased a new motor car it was possible, because of a serious shortage, to obtain a premium on the price of that motor car as soon as one took delivery. But by virtue of increased production this premium disappeared very quickly. I hope and feel sure that by virtue of the Government's policies we shall see such a substantial increase in the house building rate that before very long the situation with which we are concerned today will not be as relevant as it may be at present.
It is probably true to say that, although land prices are high, it depends largely where the land is and for what purpose it can be used. Land north of Birmingham, in Sutton Coldfield, was sold not many weeks ago at £5,000 an acre. I am not suggesting that this is a good comparison. It was sold at £5,000 an acre because the planning permission involved only just over one house per acre. In my constituency there is a substantial amount of prime land available for development which, through compulsory purchase, has cost the local authority, at a guess, only about £200 an acre. By all means make political capital out of the issue, but let us press on as fast as possible with the drive to increase the number of houses available for letting and sale.
I firmly hold the view that one of the major problems that we face in the 1466 City of Birmingham in land availability is that the local authority tends to dominate the market. About 40 per cent. of the freehold of the City of Birmingham is owned by the local authority. It seems inevitable to me that if it continues at its present rate of compulsory purchase and then does very little with the land, the price of the remaining prime building land will increase. I lay the blame for the situation in the City of Birmingham very largely on the shoulders of the local authority. I think that it has failed dismally in this connection, and I shall quote I hope relatively suitable figures in a few moments.
§ Mr. Merlyn Rees (Leeds, South)
I am following the hon. Gentleman's argument closely. He stated that 40 per cent. of the freehold land in the City of Birmingham was owned by the local authority and then he said that it was doing very little with it. In order that we can follow the next part of his argument, may I ask him whether he is suggesting that 40 per cent. of Birmingham has been bought by the local authority and that the land is lying idle with nothing on it?
§ Mr. Hollingworth
I must make it perfectly clear that this is through compulsory purchase. The local authority, in almost all cases, is hatching the properties with a view to their having a life of about 15 years prior to redevelopment. But the fact remains that the biggest single landlord in Birmingham is the local authority.
§ Mr. G. W. Reynolds (Islington, North)
The hon. Member appears to be criticising the Birmingham Council for the terrific patching operation which it has carried out. Does he realise that it was as a result of the experience in Birmingham and the good work done there by the City Council that the Treasury Bench introduced a special subsidy for this kind of work to encourage others to do the same?
§ Mr. Hollingworth
My complaint is that it has carried this too far. It has taken over much more property in Birmingham than it can adequately deal with. My constant constituency complaint is what in practice would be termed bad management if the local authority were a private landlord.
§ Mr. J. Silverman
Does the hon. Member dispute that all this was done under the 1954 Act and that, where the Corporation has taken over, repairs are being done for tenants who for years never had any repairs done?
§ Mr. Hollingworth
The repairs were of very poor quality with inadequate supervision. But the fact is that the rate of slum clearance in Birmingham is extremely low. I would wish to see some other organisation playing a part in this matter.
One has only to consider the problem in the Castle Bromwich area. For four years about 300 acres of land have not been touched by the local authorities. We want a much more vigorous approach to this problem in Birmingham before it will be solved.
As I indicated at the beginning of my speech, I lay emphasis upon the free market and upon the fact that if we continue to increase our house building rate, as we have been doing over the last two years in particular, we shall soon see the benefit of this free market, producing a surfeit of accommodation just as today there is a surfeit of accommodation in certain higher-priced houses. If one wants to buy a house or to rent a flat over a certain figure in the City of Birmingham, it is very easy for one to do so. One can argue with the vendor, because within this particular frame competition has produced a free market. I am sure that if we continue with enthusiasm slum clearance and the provision of new accommodation through housing associations, housing societies and private developers, the situation will soon right itself. The fact of the matter is that land prices are high only because of the demand for property. There is a scarcity of homes—
§ Mr. Walter Monslow (Barrow-in-Furness)
There is cost involved in it. I could give the hon. Gentleman many examples. I give one of land which cost £42,600 and is now worth £1.7 million. Is there any moral justification for this sort of thing?
§ Mr. Hollingworth
The land has increased in price because of the value to the developer through the shortage. If we create a market condition in relation to house sales whereby the developer is confident that he cannot obtain the 1468 high prices that he obtained in previous years, he will not be prepared to bid prices such as the hon. Member mentioned. The only answer is to produce more homes. None of the policies projected by hon. Members opposite—
§ Mr. C. Pannell
The hon. Member said that we get an appreciation in the price of land because of the need, but he has not dealt with the point about who gets the increased social value. That is the question he must answer. Who will get the profits from the increased social value? Presumably the hon. Member thinks they ought to go to the developer. The hon. Member had a majority of only 20 votes at the last election. If he tries to put this argument over in his constituency he will be out to a Faversham figure.
§ Mr. Hollingworth
If I put over in my constituency the suggestion that the Labour Party policy is illustrated by the policy of municipalisation in Birmingham, I shall probably win. There is no more unpopular landlord in the West Midlands than the Birmingham City authority.
I have taken considerable interest in the housing association movement. It may not necessarily be completely relevant but I should like to say a word about the function of these organisations in future. I am sure that there is a gap in our housing need between the accommodation provided by the private developer and that provided by the local authority, and I hope that, whatever the cost of land may be, the housing association movement will be given an opportunity to play an increasingly important part in the redevelopment of our large cities. This is a difficult matter, but I come back again to the point that it is a matter of shortage.
§ Mr. J. Silverman
The hon. Gentleman has referred to the new self-help housing societies. I am sure he is aware of letters in the Birmingham Press from members of these societies in which it is said that because of the fantastic prices which are being charged for land their task becomes almost impossible.
§ Mr. Hollingworth
Their biggest complaint has been against the price of the leases offered to them by the local authority. But we are digressing a little. When I referred to the prospects 1469 here, I was referring to the prospects of the cost-rent associations.
I am concerned only with the provision of accommodation of the right size and at the right price for my constituents. I feel that the policy enacted at present by the Government and my right hon. Friend is correct, and I wish them godspeed and all success in their activities.
§ 2.15 p.m.
§ Mr. John Mackie (Enfield, East)
I congratulate my hon. Friend the Member for Birmingham, Aston (Mr. J. Silverman) on raising this subject. I agree that he had no need to apologise for raising it again, because it is a very important subject and affects everybody in the country. Also, it will affect people for a long time. We forget that the effects of mortgages and the high price of land will continue for such a long time that they will affect families for years to come unless something is done about them. My hon. Friend was right to ask the Minister what he proposes to do about them.
I wish to refer to the question of allotment land in my constituency, about which I have often crossed swords with the Minister. The right hon. Gentleman replied to an Adjournment debate on this subject complete with aerial photographs and everything else, and said that nobody could say that the land could not be used for housing. I emphasise what my hon. Friend said, that the Minister could refuse to allow the land to be bought at such a price. He has such power. The Minister emphasised that he was only carrying out the law; but he has power to say "yes" or "no", and he continually says "yes".
It is purely and simply a matter of speculation in this case. The land was bought for £7,500 after five applications to use it for housing had been turned down. The company concerned bought the land purely as a speculation. It was not a question of buying, holding and then selling the land. It was a speculation on the basis of the chance that the Minister would say "yes". The point is that the Minister has the power to stop this sort of thing if he wishes.
When my hon. Friend said that the Minister had released the speculators, the Minister was annoyed and jumped up and tried to correct the impression. I 1470 remember a debate when the Minister made an announcement about releasing a lot of land in the Lea Valley from the green belt, and I told him that the speculators would be rubbing their hands next morning. That was so. The Minister said that the development would be planned, but various pieces of land are coming on the market and the speculators are tearing up and down the valley buying the bits and pieces, hoping that, ultimately, they will make a killing from it. To say that this is not speculation on a very big scale is wishful thinking. One hon. Member opposite asked for a definition of a speculator and said that everyone who bought and sold anything was not necessarily a speculator. I agree. But those to whom I have been referring are speculators, and there is any amount of this sort of thing going on.
Several hon. Members have said that the market price of land is what should be paid for it. But who creates the market price? A bridge was built across the Tamar at Plymouth, by public funds, and the land there now is worth two or three times what it was to the people who own it. Speculators are active there. Does the House really think that those people ought to get the increased value of the land as a result of the public building of the bridge? The same thing is happening at the end of the Forth Bridge, in Edinburgh. This is what we oppose completely—speculators getting the benefit of value created through means provided by the public.
I can give an amusing example in relation to agricultural land. A hunt was troubled through having too many people coming for 150 miles with their horses behind Bentleys and decided that its membership was too big, and it made a stipulation that a person must own land in the county before he could belong to the hunt. The value of agricultural land in that county jumped £120 per acre overnight. It is not quite the same thing, but it shows what creates value in land today.
Another aspect is that of the mortgages. The hon. and learned Member for Surrey, East (Mr. Doughty) is sure that mortgages are not foreclosed and that there is no burden on mortgagees. I do not know his constituency, but I am always receiving 1471 appeals from people who are worrying about their mortgages. They take these mortgages on when they enjoy a good joint income, forgetting all the things that can happen in marriage—children, for instance. The number of people who buy houses far in excess of what they can afford is amazing. It is ridiculous to say that it is a good thing that people tie these things round their necks.
The hon. and learned Member also said that if we started to control or nationalise land to keep prices for Housing down to reasonable levels, the land would disappear. Where to? Of course the land will not disappear. It will still be there and if we need it we will get it in the way we want to get it. I remember the hon. Member for Wimbledon (Sir C. Black) and I having an argument on this subject. The hon. Member instanced the case of a church which owned a piece of land, used for nothing. When the price of land rose, the church sold the land. The hon. Member said that it would not have done so if the price had not been high. My comment on that was that if this land was suitable earlier for housing that church should not have been allowed to retain it. Let us be sensible about this. The land is there and cannot disappear.
I want to ask the Minister to take note of the correspondence he is having with Enfield Borough Council. It is pertinent to the debate. It concerns the question of interest rates and the price of land, and there is a third point which I will mention later. I will give two figures to illustrate the comparison. In 1946–47 Enfield Council bought 20.5 acres of land for £23,661. The interest rate at that time was 2½ per cent.—or £687—per annum. The total cost over the loan sanction period was £54,944. In 1962–63, it bought three-quarters of an acre for £13,630 at an interest rate of 5¾ per cent. per annum. The total cost is £63,420. That is what has happened during the last 12 or 15 years and illustrates what my hon. Friend the Member for Aston has said. Enfield Council is very worried about the price of land and the interest rates, which are holding up its programme.
1472 The third aspect of this is evictions. The correspondence between the council and the Minister includes figures showing that creeping decontrol is growing much faster than he will admit. I hope that the right hon. Gentleman will pay particular attention to these three points, about which the council has written to him. I emphasise that we want to know what the Government intend to do in this situation, about which people of all parties are worried, as the quotations from the Guardian and other newspapers have shown. Irrespective of their short term left, the Government should not sit tight and do nothing in this appalling situation.
§ 2.25 p.m.
§ Mr. Victor Goodhew (St. Albans)
Hon. Members opposite have put up a very good smokescreen of figures which are well known to this House—a smokescreen calculated to mislead the public into believing that this Government or any other, by taking urgent action tomorrow, could suddenly stop and reverse the trend of rising prices during recent years. They must know that this cannot be done and that they have no ideas for altering the situation.
Indeed, they have been very reluctant to deploy any of their own ideas today. Those that have been quoted have been quoted by some of my hon. Friends from "Signposts to the Sixties". The hon. Member for Birmingham, Aston (Mr. J. Silverman) seemed to be harking back to the Town and Country Planning Act, 1947, which put building land into a straitjacket and resulted in a hopeless situation.
§ Mr. J. Silverman
I said that I believed in public ownership as a solution which, broadly speaking, is the solution supported by my party. I do not exclude alternative and ancillary solutions, but in the main, I believe that the only real solution is public ownership.
§ Mr. Goodhew
I said that the hon. Gentleman seemed to be harking back to the 1947 Act, but I was going on to say that he was in favour of nationalisation and I am glad to have had that admission from the hon. Member.
What hon. Members opposite do not do, in holding such a belief, is to face the problem that this would bring about. They have not told us how nationalisation would produce land at cheaper 1473 prices for building. Let us imagine their famous land commission, ready to acquire every site that could be developed or redeveloped.
§ Mr. A. Evans
The hon. Gentleman is misquoting our policy. He should know that the land would be brought into public ownership as it became ripe for development.
§ Mr. Goodhew
That is just what I thought I said—that the party opposite would have the commission set up in readiness to grab any plot of land ripe for development or redevelopment.
§ Mr. Goodhew
Hon. Members opposite do not face the complications of the position they would create.
§ Mr. Charles Loughlin (Gloucestershire, West): rose—
§ Mr. Goodhew
Others want to speak. The hon. Member has constantly interrupted.
We must have answers about the position which would be created by hon. Members opposite. They talk about a fair market price, but that is of no use, for the free market would no longer exist. On what evidence would a fair market value be adduced? If they were to pay a lower level of compensation, who would get the benefit of the land being purchased more cheaply? This would surely swell the profits of the commission. If it were passed on to the lessees, a privileged class would be created, receiving building land at reduced prices.
The Government would find themselves having to control these lessees. At what point would they be controlled? If these developers took leases to build houses, would the ground rents be controlled? If so, would occupation rents be controlled? If a lessee had a controlled ground rent, giving him something that could be let at a high occupation rent, how would he be prevented from making that into private profit? That, surely, is what hon. Members opposite want to stop. Is there any question of having these leases falling in from time to time?
These are all very important questions and the public are entitled to answers. I hope that we shall get them today.
1474 We have heard broad principles expressed by hon. Members opposite, but nothing definite. Those who are likely to want new houses in the future are entitled to know what position will be created by hon. Members opposite.
My own view of what would happen is that the idea of being faced by this sort of complication, and this vast bureacracy of the land commission deciding what sort of term leases should have, whether or not they should be assigned, and so on, would be so restrictive that it would drive more and more people to bid for the old freehold houses that existed, thus having the reverse effect of that which hon. Members opposite want, by pushing up the prices of existing property. There would be a rigged market for the new form of leasehold property, but the old type of freehold property would be bid for to a much greater extent by people who did not want to be restricted by the bureaucracy envisaged in the land commission.
We should find ourselves with a situation which was the exact reverse of what hon. Members opposite say they want. We should have soaring prices in the freehold market. They should answer the questions that we are putting to them today. We have had much vague talk, with huge sums being bandied about to frighten the electorate, and designed to make it appear that everything is going badly now and that, overnight, the Labour Party would make everything good. But the only real scheme the party opposite has put forward is that of the land commission. It is putting that forward merely because of its bizarre desire for the national ownership of land, purely as an instrument of party policy. This cannot produce the results that are required.
Will the hon. Member for Hayes and Harlington (Mr. Skeffington), who is to speak for the Opposition, tell us in what way his party's policy will bring down prices?
§ Mr. Reynolds
The hon. Member has referred to all the machinery that would be required. Obviously, something would have to be done. But the impression that we derive front his argument is that such a system would be undesirable if it were operated by a land commission or by local authorities although it is already being operated by private landlords. Why does he object to this being done by 1475 public bodies, but not by private landlords?
§ Mr. Goodhew
The answer is that in this case we are talking about a rigged market, in which natural free forces are not to be allowed freedom of play. This would alter the whole concept.
§ 2.34 p.m.
§ Mr. Arthur Skeffington (Hayes and Harlington)
If the hon. Member for St. Albans (Mr. Goodhew) is interested in some of the technical details of the scheme outlined in "Signposts for the Sixties" showing how it would operate he should pay a visit to one of our new towns, where he can see how property is acquired, how it is leased, and where it goes at the end of the term. The answers are crystal clear. I expect the Minister knows them, although we may not get them from him today. If the hon. Gentleman wants any further enlightenment he might care to read the article that I wrote in the Investors' Chronicle on 6th March. This will give him further details, and should set his mind at rest.
I congratulate my hon. Friend the Member for Birmingham, Aston (Mr. J. Silverman), not only for the impressive speech that he made but also for giving us another opportunity to consider what is perhaps the most important of all the domestic issues confronting the nation. Every major development, of any kind, is to some degree dependent upon the availability and price of land. This is especially so in respect of the provision of homes, schools, factories, and amenities—an ever-increasing need in modern society, and in the preservation of a proper balance between town and country.
The solutions to all these problems depend largely on the amount of land available and the price at which it can be bought. My hon. Friend has done a great service in bringing the problem before the House and drawing attention—which is the primary duty of the Opposition at this stage—to the inadequacies of the social policy of the Government in respect of speculation and land prices.
Until recently, far from attempting to make any kind of defence of their policy the Government have gloried in the fact 1476 that they have restored a free market. That has been their proud claim. The Tories say that they have given back to the people the freedom to be charged the maximum speculator's price for the land they require. There has been some modification of this proud boast, but there has been no general retraction of the idea that the restoration in the 1959 Act of a free market for land purchases in general was a good thing.
No one can be dogmatic about this, but I believe that the restoration of a free market for the speculators in land which is to be purchased for all types of development, whether by public or private bodies, may be shown to have been one of the greatest disservices done to the community when the history of the second half of the twentieth century is written. This is not only because it is a morally and economcially unjustified payment to the landowner who has done nothing to contribute to the increasing value of the land, but also because it has distorted and twisted development at a number of points, for which the community will pay very dearly in the years to come. I shall give one or two examples as I proceed.
This problem has caused great concern to many people, especially those who concern themselves with social problems involved although they may not themselves be victims. Indeed, there is now widespread concern among many organs of public opinion, newspapers and journals, that something is seriously wrong with land policy. The only persons who seem to be utterly complacent about it are the Minister and some of his reactionary friends—and some of them are in the House today.
Even the Economist on 16th May said that the Conservatives' system,has replaced the old scandals of harsh treatment for those caught by compulsory purchase orders with the opposite scandal of some expensive and unjustified bonanzas. In extreme cases the Conservatives' system has undermined the whole idea of planned control.That was said by the Economist on 16th May, and it draws attention to the other curious feature which we constantly opposed in Committee when we were discussing the 1959 Act, namely, the elaborate system of compensation which the local authority must pay when 1477 potential development has been prevented by it,without, however, the obvious corollary of collecting betterment from people whose property has been made more valuable by the action of a public authority.There is no provision in the 1961 Act which in any way adjusts the balance. The advantage is always with the landowner.
There is now very widespread concern, and the matter has been further highlighted by the South-East Study. We are faced with the practical possibilities of having to provide land at astronomical prices for 3½ million people even if 1 million people, according to the Minister, can be rehoused in expanded towns, the land for which will be purchased at a slightly lower price than the rest. On 20th March we had the Minister's own rash and unjustified statement, which contained no ambiguity. He said that he believed that his system, by which public agencies acquired land in the new towns,…will remove altogether the chance of speculation…"—[OFFICIAL REPORT, 20th March,1964; Vol. 691, c. 1938.]This has been too much for many sensible bodies to swallow. I am not talking about political bodies but about those which try to focus their minds on the problem.
Even The Times, on the following day, in an article headed "The Pot of Gold"—a phrase which it borrowed from my hon. Friend the Member for Fulham (Mr. M. Stewart), who is extremely sorry that he cannot be here, because he would have very much enjoyed the debate—after analysing the Minister's statement says that two-thirds of the population of the South-East would have to pay the top speculator's price. Even in expanded towns the price to be paid will be the market price for the land not as agricultural land but as building land. It would be worth £5,000 an acre whereas, as agricultural land, it would be worth £250 an acre. So The Times certainly was not prepared to accept the Minister's assurance that there would be no speculation whatsoever. Neither are we and nor does it appear from the message just received are the people of Faversham who are right in the middle of this area.
My hon. Friend the Member for Aston referred to the remarkable 1478 leading article in the Guardian of Wednesday, 6th May. I want to quote two points from it. I think that pinpoints the position the Government have now reached. It said:Sir Keith Joseph, for the Government, has steadily retreated from his avowed position as a planner and has now been revealed as being no less unashamedly a believer in the virtue of the free market in land than Mr. Enoch Powell himself.Then, further on, the article said:The truth is that the Conservatives have simply been playing at planning…it is already clear that the Conservatives' primitive adoration of the free market has no place in an intelligently planned Britain.I say with respect to the Minister and to those who have taken part in the debate today that this is a matter that cannot be laughed off or merely avoided by asking the Labour Party what it is going to do about land. I shall say something about our plan, although I do not want to shuffle the debate away from the Minister and his record on the present position. The fact is that serious, responsible public organisations are deeply concerned and are quite unsatisfied with the explanation which the Minister has so far given in the matter about the Government's attitude to land speculation in the South-East and elsewhere.
I want now to pass to the effect of the rise in land prices on development and to its consequent distortion.
I want to quote from a source which I sometimes believe must be the Minister's private adviser, Mr. D. R. Denman. He has recently had a series of articles in the Daily Telegraph in which one could sum up the matter by saying that the land speculation is so difficult one cannot do anything about it. Nevertheless, in the Investors' Chronicle on 11th October last he illustrated the fantastic rise in the value of land due to Government policy. Taking 1939 with an index of 100 per acre, by 1959 that figure had become 792, nearly an eight-fold increase between 1939 and 1959. Between 1959 and mid-1963, which is apparently the last figure available, that 792 index figure had become 1,615, in other words a doubling again of the index figure, an increase on 1939 of over 16 times or in value of land per acre, if we allow the £ to be depreciated by three-quarters, 1479 since 1939 a real increase in value of no less than 400 per cent.
This rise in value is utterly unjustified on economic or moral grounds. I am very glad to quote Mr. Denman because I believe that the source which he quotes in the article cannot be challenged. Such increases are affecting public and private development in all sorts of extremely undesirable ways. I will quote, if I may, an example from my own constituency. Mr. Denman in another article said:The increase in land values has only made a 27 per cent. increase in the cost of houses.Even that is pretty shocking. In my own constituency, however, 2¼ acres of land which the council very much wanted to buy—we have more than 2,000 families on the waiting list—was sold on the speculators' market at just under £80,000. The district valuer's price was £25,000 an acre. That was bad enough, but, of course, a price of nearly £80,000 for 2¼ acres meant that the local authority could not look at it. For example, a bungalow for an old-age couple would have cost in rent £3 2s. 1d. a week, which is two-thirds of an old-age couple's combined pension. If the house had been bought on mortgage the weekly repayment would have been £5 4s. 9d., so that the wage earner would have to earn more than £20 a week in order to qualify for a mortgage from most of the building societies.
For ordinary moderate income development this site was out, not because it was not suitable or because people did not want to live there but because the land exploiter could stand out for the price, which he ultimately got.
We now see that the actual number of mortgages is beginning to fall. This is masked by the fact that the total amount is greater because each house costs more, but if we look at the figures for 1963 we see how the average mortgage repayment, according to the Building Societies' Bulletin in that period has increased. In 1959 the average monthly mortgage repayment was £14 and the average wage per week was £13 5s. By 1963, because of higher prices, in which land prices had undoubtedly played a significant part, based on Mr. Denman's calculations, that figure had gone up from £14 per month to £21 per month. Average earnings, on the other 1480 hand, have only gone up from £13 5s. to £16 5s. Therefore, it is quite clear that some people who qualified in 1959 for a mortgage no longer qualify. If the Minister has any doubts about this and looks at the Registrar-General's report and compares 1959 with 1962 he will find that there are 59,000 fewer mortgages.
Only a few weeks ago I could show the Minister a line of houses in the London Road, Maidstone, which had been empty for more than six months because the price was too high and the people available to buy them could not qualify for a mortgage. This has meant, as I said earlier in my reference to the twisting and distorting development, that we are getting a good deal of either unnecessary development or less urgent development than buildings for those in need or who are in poor housing conditions.
I have referred to what happened when councils cannot themselves build, but one has only to look at the Estates Gazette or any other similar journal to see what luxury kind of development is being repeated all the time. Nower Hill House, in Pinner, Middlesex, with 10 acres of land was bought recently by the London and County Real Estate Company for a figure of £200,000. This land is not going to be used for those in housing need for rent or purchase. It is intended for building houses on quarter acre plots which will sell for from £15,000 to £20,000 each.
There were 23 acres of land at Shenfield, Essex, which were bought by Link Homes Ltd. for £235,000. Four or five houses will be built to the acre to sell at £10,000 each, a quarter of which price will be accounted for by the land itself. The Minister knows of the decision which he gave and to which I have referred on three or four occasions in the House but to which I have never had an answer in respect of Trottiscliffe, one of the last unspoiled escarpments of the North Downs where the Minister has allowed luxury development, not for any local housing need but for upper and middle income group communities. This development will meet no real housing need and will place more strain on an already overburdened transport system.
As I say, there should be more land for essential development such as school building and slum replacement. A good 1481 deal of the development going on is of a kind which ought to have less priority than is accorded to it, but which gets it now solely because it is profitable.
I referred earlier to the compensation proposals in the 1959 Act which mean not only that where a local authority has to buy, t must pay the full speculator's price, but also that if a local authority, following what it believes to be a right planning policy, is courageous enough to resist development, the ratepayers are also called on to pay exorbitant sums. The Financial Times is worried about this. An article appeared on 19th May. I will not read it—the content is much the same as in the Economist—but it produced an interesting letter which came from a Mr. Barry, of Angmering-on-Sea, Sussex.
He tells the story of three-quarters of an acre of ground bought in the late 1920s which had been stagnant at least until 1947 when it was made part of the green belt. It cost approximately £2,000 with compensation for non-development amounting to approximately £3,500. Subsequently some people who live there thought that this small plot would make an admirable village green. They approached the owner with an offer of a further £1,000 in order to convert it into a village green. But they were just too late. By that time the 1959 Act—that glorious piece of private enterprise legislation—was on the Statute Book. Overnight, their offer of £1,000 was brushed aside by an immediate offer of £8,000 with planning permission for eight houses. The villagers appealed against this decision and the Minister at that time—I do not know whether it was the right hon. Gentleman—upheld them, but he indicated that the compensation to be paid would be valued as if eight houses had been placed on this ground which had been stagnant all these years. It was never anybodys intention to actually build houses there. The result was that the district valuer put a price tag on the ground of £15,000. As a result of this system, and the additional compensation provisions in the 1959 Act, of which the Minister is so proud, this three-quarters of an acre of ground cost the ratepayers £15,000!
I have gone into that matter in some detail because it is symbolic of what is happening all over the country where 1482 councils are trying to maintain decent amenities. This type of compensation has been partly responsible for the development of office building in London. Of course the L.C.C. could, in my view—if it had some other financial basis—have long ago refused much of this additional expansion; but its calculations were that under its existing financial liabilities under the Town and Country Planning Acts it would have to pay about £10 a sq. ft. for every foot that was vetoed for development. No wonder planning machinery in many parts of the country is under a strain. This has been recognised even by the Minister, and a Committee I as been set up to investigate, but it is a sorry and sad state of affairs.
There is another amenity aspect which I think is of the greatest importance and about which the Government have done absolutely nothing until recently. I do not think that there will be any question that the coastline of most of Britain has been one of the finest of our natural possessions. We have had one of the most beautiful coastlines in the world. I say "have had" because the beauty is rapidly disappearing. On 14th April, 1963, the Sunday Times published an article headed, "The Rape of the Coastline". It showed on a map that of the coast from west of Portsmouth to east of Hastings there were only 15 miles not built up in some way or other. With the exception of the Isle of Wight and Beachy Head, taking the coastline from Whitstable to Swanage, site after site has either been spoilt or is on the verge of being spoilt. The article in the Sunday Times stated:…no longer a series of individual towns and villages but continuous suburban sprawl. Slum shacks nestle against £25,000 houses, strange stilt-borne settlements seeming more appropriate to a Java swamp overflow on to the beaches, bungalows edge daringly to the cliffs' edges, and caravans settle with the discipline and monotony of tombstones.That, I am afraid, is only too adequate a description of very much of what is happening to this once beautiful coast.
I know that recently the Minister issued a Circular—about 10 years too late—asking the local authorities to do only what they ought to be doing, look after their coastline. The National Trust is becoming very alarmed about the 2,750 miles of coastline of England and Wales. It has written off 1,900 miles as being 1483 beyond redemption and is trying to do what the Government should have done years ago by raising a fund to safeguard access to the cliffs and beaches and to preserve some of the beauty which should be our heritage and of which we should all be proud.
Even the white cliffs of Dover are not sacred. Twenty-four years ago they were a symbol of Britain's defiance. Though they triumphed then, they are likely to fall now before the speculator. Application has been made to build on the white cliffs. It is true that so far only one slope is involved. But we know what will happen. If one slope is developed, it will not be long before the rest goes as well. I hope that even at this late stage even this Minister—though I am not too optimistic after his performance over Trottiscliffe—will see that the white cliffs of Dover will not disappear as so many things have done.
The right hon. Gentleman is a capable and expert debater. I do not want him to be able to shuffle off too much of the responsibility for the present state of affairs and lack of policy by merely putting questions about the Labour Party's scheme—
§ Mr. Skeffington
This Motion happens to criticise the Government as is the duty of the Opposition in the House of Commons. The hon. and learned Member for Kensington, South (Mr. Roots) has not been a Member of this House for very long. Perhaps when he has been here a little longer he will understand the conventions of this place a little better.
But about the Labour Party's scheme, I have no hesitation in saying that if the Minister is prepared at any time to take the record of the Conservative Government in relation to land speculation and spoliation and debate it with the alternative proposals of the Labour Party, either in this House or outside, there are dozens of us who would be extremely pleased to take him on. But we must have the two things debated together. We are not going to have responsibility for his Department switched on to what are our proposals.
1484 I wish to say something about the misrepresentation which has occurred in relation to our scheme. The Minister, and certainly his supporters, talked at one time about a breakdown of the land commission because it would be swamped with applications. There would be so many applications that the machinery would break down. In the next breath, and in the same speech, the right hon. Gentleman said that land would be held back and the applications would not be made. We cannot have both arguments at the same time. We cannot argue that the machine will break down because of the number of applications, and also say that there will be no applications. I doubt whether the Minister knew anything about the number of applications until recently.
When I made inquiries from his Department in 1962 I was told that this was the first year that the Department was keeping a record of the planning applications made in England and Wales. They have been published for the year 1962 and far from being 500,000—the total number which is sometimes referred to—the total number for England and Wales is fewer than 400,000. Of that, a large number would never reach the land commission because they do not involve change or significant development. Of the 330,000 involving change, about 4,000 relate to petrol stations and 51,000 to the provision of domestic garages. When the total number of significant development changes is divided among 10 different regions it is apparent that the number of applications would be small indeed, and no one need have fears about administrative difficulties.
I put another point to those who are really interested in an alternative proposition. One purpose of the Land Commission, as we freely said in "Signposts for the Sixties," is not only to bring justice and fairness between citizen and citizen in the purchase of land, but to do what every technical expert says is essential in this crowded island—to make development comprehensive and so get rid of the need for thousands of applications. That can be done by having a common buyer which is able to buy up land.
The number of applications would be liable sharply to fall. I hope that the Minister's Committee which is looking at 1485 planning, and that certainly a Labour Government, will look at the extraordinary position whereby an applicant now can go through all the planning stages, turned down at a public inquiry and then, almost the next day, the developer can put in an almost identical application. That is causing officials to lose untold time and is really clogging up the machinery.
At the same time the commission will ask local authorities to review all their developable areas and programme them—as far as possible—into comprehensive development areas. Then we should be doing what ought to be done, so all the experts say, considering in urban development the profitable and the unprofitable parts, the commercial and shop development with the amenity and house building development. Now, because of financial difficulties, many local authorities hand over the profitable part of city development to development companies. With a comprehensive area development there could be a proper balance. I could quote many authorities who say that this must be done if we are to make an approach to the Buchanan solution in relation to road traffic. This is a way in which the land commission could facilitate matters.
The Opposition in this matter has the instruments for at long last breaking through the feudal difficulties about land ownership and at the same time employing modern techniques for planning sensibly and fairly in this highly-populated island. The first thing we have to do is to make certain that broad designations of land use on a regional basis. Matters such as overspill, new towns, industrial development and green belts are all reflections of national policy to a degree. I am not now speaking of detailed planning applications, which should still be done on a local authority basis, but it would help local authorities enormously if in the first place they could know what the broad designations of land use were to be in their regions. Then we should not be placed in an impossible position such as that in which Labour Manchester has been fighting Conservative Cheshire about overspill for the last 20 years. An inquiry on this subject in December was attended by representatives from no fewer than 24 local authorities. There must be a broad designation on a regional basis.
1486 The Minister fails to provide machinery for this sort of operation. He has pinned his faith pathetically to the new local authorities which the Boundary Commission has established with so much unhappiness and upheaval. Most of these are far too small for the job of overall land planning use. The first thing to do is to plan on a broad basis for regional land use. Then local authorities in development areas will be able to bring forward schemes for comprehensive development and the land commission can buy them, not at fancy prices but at fair prices. In order to get the work done, to help the smaller local authorities which have not the skilled staff a national construction corporation, which, unlike the Government's national building agency would have real teeth, could provide planners, architects and traffic experts to get on with the job. These are some of the instruments to deal with the overcrowded conditions of this island.
Mussolini once referred to Italy as, "Our narrow and overcrowded peninsula." We are a narrow and overcrowded island. We can never solve this problem of balance unless we use all the skill we have in the planning of land use. I noticed that my hon. Friend quoted John Stuart Mill. To keep in the same tradition, I quote the economist, Alfred Marshall. He said:From the economic and from the ethical point of view land must everywhere always be classed as a thing by itself.That is the answer to all who think it is perfectly fair that because people possess land they should be able to hold the community to ransom. I take the view also expressed by Oliver Goldsmith, writing about landlords at the time:Ill fares the land, to hast'ning ills a prey, Where wealth accumulates, and men decay;That is precisely what is happening at the moment. We have the vast, untapped profits of greedy exploiters, aided by a complacent Government. We are determined to end that state of affairs. I believe that the instruments which I have outlined show the way in which that can be done.
May I say, in passing, that I am not opposed to those who say, "Surely you can catch some of the betterment, some of this unearned wealth." I am not opposed to that, but it is not the solution. It is rather like treating the patient 1487 with dropsy by getting rid of the surplus liquid and saying, "There is no swelling now." One has not cured the disease. We must cure the disease. I do not mind taking some of the wealth, but merely to take the wealth afterwards does not prevent the distortion which ought not to arise in the first place.
I believe that Faversham this afternoon has given the answer on this point. It is right in the heart of the South-East, it is familiar with the land problem and it has had all the new owner-occupiers about whom some hon. Members opposite are concerned. But it believes that we cannot justify the exploitation by a few people of the limited supply of land, and I believe that it gave the answer in a very graphic way this afternoon.
§ 3.7 p.m.
§ The Minister of Housing and Local Government and Minister for Welsh Affairs (Sir Keith Joseph)
There is one thing anyway, which the hon. Member for Hayes and Harlington (Mr. Skeffington) said with which I wholeheartedly agree, and it is that serious, responsible public bodies are worried about land prices, especially in relation to the cost of housing. I will go further and say that the public is certainly worried about it.
As the Minister mainly concerned, I therefore welcome the chance given to me and the House by the initiative of the hon. Member for Birmingham, Aston (Mr. J. Silverman) of debating this subject. What I shall try to do is to consider the present position, and its difficulties, and to compare it with the likely position if we were to adopt an alternative approach. I know that the House understands that no line of policy can ever produce only advantages, without producing some disadvantages. We have had a debate today which has almost entirely concentrated on the disadvantages of the present position. I shall try to bring out some of the advantages, and some of the disadvantages of the alternatives, as well as their advantages, so that the House and, I hope, the country can more nearly judge the relative benefits.
The Government believe that, on balance, no alternative approach to land prices would be sure to reduce the price of land and the houses built on it. That is an assertion which I shall now seek 1488 to prove. First, contrary to the underlying assumption of nearly all speeches in the debate, I do not believe that land prices control house prices. In fact, I believe that it is the other way round—that the price at which houses are sold in general controls the price at which the land is sold. The price at which houses are sold, of course, arises from the play of the market. That is true. It is a consequence of the supply of houses and the supply of money and confidence in the pockets and minds respectively of those purchasing houses.
§ Mr. Emlyn Hooson (Montgomery) rose—
§ Mr. Hooson
That is a distinction without a difference. The value of the land rises because of the use to which it can be put. All these things are interrelated.
§ Sir K. Joseph
I shall cover this point as I go on. I do not accept that it is a distinction without a difference. I believe that it has a profound influence on what we are trying to tackle. If it is true that the developer who buys land thinks first of what he can sell the houses for that he proposes to build on that land, and then deducts the minimum profit, or the bracket of profit, that he hopes for or would, as a minimum, accept and the probable cost of building the houses and of providing the necessary services, he will be left with a figure that he can afford, whilst still selling his house and making the minimum profit he looks for, to pay for the residuary price of the land.
The fact is that the high prosperity of the country in general and the high demand for houses that follows from the remaining shortage, particularly in the big cities, together with the rising population and the younger age of marriage, all increase the price which the buying public is willing to pay for houses. My hon. Friend the Member for Birmingham, Edgbaston (Dame Edith Pitt), in her excellent speech, stressed these factors quite correctly.
Let us consider the rise in the price of land and then the rise in the price of houses built on the land. Let me take two adjacent sites, each developed 1489 with similar houses to the same density. On one site the land was bought and developed, say, six years ago, and the other was bought and developed this year. In the case of the former site, compared with the latter site, the price of the land may have risen by, let us say, 200 per cent. That is roughly in line with what hon. Members opposite have said, that the price of land in some cases has doubled and trebled in the last five or six years.
Let us therefore assume that the second site has increased in cost by 200 per cent. On the evidence of hon. Members who have spoken, the price of houses has probably risen, not by 200 per cent., but by something under 30 per cent. This seems to me to show that it is the price of the house that controls the price of the land and not the other way round.
What can explain the fact, hon. Members may ask, that in the latter case the developer, while still selling his house for only one-third more, can pay treble the price for the land? There can be a number of reasons, either individually or in combination. He may be taking a lesser profit. He may—let me admit this—be building a smaller house or a less good house, or there may be a combination of those two things. I am eliminating the question of getting a higher density, because in the example I took both sites had the same density allowed. The point I am making is that the price at which the developer sells the house controls what he can afford to pay for the land and will still be set at the figure which he thinks the customer will pay.
The fact which the House has to bear in mind—this has not been brought out by hon. Members opposite—is that, despite the rise in the price of houses, which reflects the steeper rise in the price of land, there are more houses now under construction for owner-occupation than in any year since the war. There are more houses in total under construction than at any time since the war. If the House and the country really want to check the rise in the prices of housing land, it would be necessary to check the rise in the price of houses. If we are to check the rise in the price of houses, we must look for a lessening demand for houses.
How could we hope to get a lesser demand for houses? There is one good 1490 way, which everybody wants, namely, to saturate the market, to build so many houses that the shortage comes to an end. There is one bad way of lessening the demand for houses, and that is when people have not got the money to pay for them. Nobody wants that. So the Government's policy is to build more houses as fast as possible so as to hasten the day when the market is saturated. I very much agree with my hon. Friend the Member for Clapham (Dr. Alan Glyn), who stressed this approach.
Housing completions this year, as the House knows, will be between 360,000 and 370,000. I do not know where the hon. Member for Hayes and Harlington got the ground for his assertion about a falling number of mortgages. My information does not validate what he said. We have every reason to think that there were many more mortgages in 1963 than there were in 1962.
Once we have achieved the target for this year of a number of completions over 350,000—I have already said that we shall do so—then our target, of course, is to be 400,000 completions a year. To achieve this, we shall need to increase the supply of land, and this is why the various regional studies, to which my hon. Friend the Member for Clapham and others so rightly referred, are extremely relevant. The South-East Study is published, and discussions with the local authorities concerned are now going on. The North-West Study and the East Midlands Study are in hand, and I take the point made by my hon. Friend the Member for Edgbaston that the sooner they can be published the better.
Our policy, therefore, is to abate the rise in land prices as quickly as possible by building enough houses to end the shortage which, in a state of prosperity such as we have today, causes the rise in land prices.
§ Mr. A. Evans
Has the Minister any information as to the location of these houses which are being built in greater numbers? Does his information confirm the belief that houses are being built more and more where the price of land is within the compass of the purchaser and less and less where the price of land is high, and does this movement coincide with a need for houses in particular places?
§ Sir K. Joseph
I can reassure the hon. Gentleman. The rise in numbers of houses built is particularly steep in all areas of greatest housing need except in the very special circumstances within London, where we are beginning to reach the end of available land, and, as the South-East Study shows, we shall have more and more to build further new towns and expanded towns to provide decent housing for Londoners.
§ Mr. A. Evans rose—
§ Sir K. Joseph
No; the programmes in and for places like Liverpool and Manchester and for other urban centres are rising fast, although, because of the exhaustion of land, much of the building has to be done in expanded towns or new towns—but, of course, to serve the crowded urban areas.
These extra houses will be built and are being built by local authorities, for owner-occupation and for housing societies. I congratulate my hon. Friend the Member for Birmingham, All Saints (Mr. Hollingworth), who has done more than most of us to help the housing problems of the people by himself helping to start several housing associations in the area where he lives.
The price which, in these conditions, private enterprise is willing to pay for land does, of course, set the level of prices which local authorities have to pay. This is the main gravamen of the charge, it seems to me, which hon. and right hon. Members opposite are putting. It is true that the situation was different up to 1959. There was the two-level system of prices. The private individual selling his land to a private individual got the market price. The private individual selling to a public authority with compulsory purchase powers in reserve, or in use, got the existing use value for his land plus any remaining claim on the 1947 Act £300 million fund.
In 1959, the Town and Country Planning Act introduced by the present Government abolished the two-price system. But I do not think that the 1492 House would wish it otherwise. On 29th January this year, speaking of the two-price system, the hon. Member for Fulham (Mr. M. Stewart), said thatit was not a tenable position and not equitable as between one person and another."—[OFFICIAL REPORT, 29th January, 1964, Vol. 688, c. 475.]So the hon. Member for Lichfield and Tamworth (Mr. Snow) is disagreeing, perfectly legitimately, of course, with his hon. Friend the Member for Fulham.
This particular move to bring to an end the two-price system was not opposed by the Opposition. But it is true, to give them credit, that the Opposition at the same time blamed us for destroying the development-charge system. It was against that background that they did not oppose our removal of the two-price level, but I notice that they are not so enamoured of the development-charge system that they are returning to it now in their present policy—
§ Mr. James MacColl (Widnes)
The right hon. Gentleman's history is not quite accurate. We thought in 1954 that the creation of a two-price system was utterly crazy. We said so, not in 1959 but in 1954. Because of that, when 1959 came along, we did not oppose the Second Reading of that Bill. We recognised that the Government had got into a mess, and had to get out of it. Our attitude, therefore, was perfectly consistent. We opposed the abolition of development charges, because no provision was made for dealing with betterment—that was, I think, in 1952. We opposed the 1954 Act. We did not oppose the Second Reading of the 1959 Measure only because the Government had got themselves into such a hideous mess.
§ Sir K. Joseph
I was leading up to the present position—[HON. MEMBERS: "Oh."] Well, the hon. Member for Widnes (Mr. MacColl) has put it on record, as he wanted to do. He has corrected me—marginally—and it is on the record, as was his purpose. I am getting on with the main subject.
Once the law had been changed and public authorities had to pay the market price for land, it became necessary to provide for the case where the land bought by a local authority was being bought for a purpose that had no market value, such as public open space or 1493 schools. The procedure is, as the House will know, that either the vendor or the acquiring authority can apply to the local planning authority for a certificate. The applicant sets out the range of alternative uses for which he thinks the land might be used if it were not being acquired by the acquiring authority, and the local planning authority can either say that the land can be used for one of those alternative uses—in which case that use will control the compensation paid for it—or it can give a nil certificate, in which case the vendor has an appeal to the Minister. Each case is obviously considered on its merits.
In opening the debate, the hon. Member for Aston said that if land were ever zoned for public open space it should always be bought at public open space value, which is very low, regardless of the rights of the individual who might have owned it, or who might have bought it in good faith on quite different assumptions. I think that the hon. Member will reflect, when he reads the remarks of his hon. Friend the Member for Fulham, that this would not really be fair as between individual and individual.
In considering each case on merits, it is the job of the Minister, as laid down by Parliament, to consider what the practical alternative expectations of a land owner might be, taking into account the condition and contents of that particular piece of land. I readily agree that in the centre of towns the clear assumption would be that the land would be developed for some purpose, but in the outer rings of towns, and particularly in the country, land that is zoned for public open space will very often get a nil certificate of alternative use, and I want to deal in particular with the impact on Birmingham, which was the gist of the speech made by the hon. Member for Aston.
I agree, of course, as I am sure the House will agree, that Birmingham has need for more open space, but I think that the House will also agree that it is only reasonable that land in the centre of Birmingham taken for open space is bound to cost more than land in the outer ring and in the suburbs. The figures given by the hon. Member were true, on average, of the inner ring of Birmingham, but I have equally recent 1494 details showing that they are not at all true of the outer parts of Birmingham.
I have here four examples, all occurring within the last 13 months, of land comprising, in total, 48 acres, acquired by Birmingham—for public open space purposes—where, because a nil certificate has been given the average price per acre was £3,400. I do not deny the hon. Gentleman's point that in the centre of Birmingham the average figure would be four or five times that amount, but I am pointing out to the House and to the hon. Member that in the outer parts of Birmingham the average price is very much lower. I have dates, sites, and full details to validate the claim I make.
Let me make the case at its most severe. Birmingham has said to me that if it were to have to acquire all the 400 acres that it does not already own, and that it might want for public open space, it might have to pay on certain assumptions, as much as £6 million for that land. Six million pounds is the capital sum and in terms of annual charge to service the capital sum would work out at something like £380,000 a year.
§ Sir K. Joseph
All I want to say is that, although these figures are enormous, they come down to an absolutely minimal charge on the ratepayers. I will explain why.
First, the acquisition of public open space by a public authority is taken into account as relevant expenditure for the calculation of general grant. The general grant, on national average, is meeting about 56 per cent. of local authority relevant expenditure. Nationally, therefore, half only of the cost is left to the ratepayers. The proportion in each town will vary according to whether its share of total open space bought is the same as its share of the total general grant.
Assuming that the national average, or something near it, were to apply to Birmingham, about half of the £380,000 would fall on Birmingham ratepayers. A 1d. rate product in Birmingham is about £200,000, so that the burden on the rates of Birmingham, even if the £6 million cost were true, of the buying of the public open space it wants, would be between a 1d. and a 2d. rate, say 1495 1½d. rate, rising to this figure over the years. I am taking into account, in saying 1½d., that Birmingham would get a lesser share of the general grant for public open space than the national average. I am loading the figures against myself.
Now I come to the Motion. The House is asked to express grave concern about the effect of the rising price of land. There would, indeed, be need for grave concern if the price of land were such that the building industry were not fully employed because people could not afford to buy the housing that the building industry were building. But this is not true. The building industry is fully employed, more houses are under construction than at any time since the war, and, as hon. Members all agree, most of them are bought before they are completed.
Then the House is asked to call upon the Government to introduce urgent measures. There are two separate issues here and they are inter-related. The first issue is to reduce the price of land, and the second is to take part of the price for the community—betterment. But it is no good, as the hon. Member for Hayes and Harlington rightly said in his peroration, except for open spaces and schools, reducing the price of land unless the price for houses on the land is also reduced.
If we reduce the price of land and do nothing about the price of houses, it simply means that the profit of the developer will go up by the amount we reduce the price of land, so the objectives indicated by the Motion are to reduce the price of land and the houses on it and/or to secure betterment out of the price paid for the land.
I say again, as I have said before, that no Government can be indifferent to these objectives, but they must be weighed against the other objectives of the Government. What are our main objectives? They are to increase the supply of houses as rapidly as possible to bring to an end the shortage on which the rising price of land is based. While we may deplore some features of the present situation, we must surely, before we choose to jump into another situation, examine the alternative advantages and disadvantages, 1496 otherwise we might be jumping out of the frying pan of rising land prices into the fire of a smaller number of houses built each year, which would be much more serious.
If, in an attempt to reduce land prices, land is sought well below market value, it must be agreed on both sides that the voluntary supply of land will dry up. Land will not disappear—that is a shorthand which is used—but the voluntary offering and the voluntary sale of land for development would come to an end, or would be substantially reduced, if that land could only be bought and sold at well below the market value. This would involve, if we could keep up the present pace of building, compulsory purchase orders for all, and the over-full employment of all professional men concerned in the country to which my hon. Friend the Member for Edgbaston referred.
Even success in lowering land prices would not necessarily have any effect on house prices. One developer here and there might pass on the benefit of lower land prices to some of his tenants or buyers, but that would only enable that first privileged class of people to sell or dispose of the assets at market value and pocket the profit. To translate lower land prices, if they were obtained, into lower house prices would involve a system of controls unacceptable and unworkable.
The hon. Member for Hayes and Harlington rightly guessed that I would make a quotation from Mr. Denman. What he said yesterday in the Daily Telegraph was:Any attempt…to fix occupation rents at less than market price or to prohibit assignments would jeopardise house building and redevelopment, create a privileged class of short duration leaseholders and set up a policing inspectorate approaching totalitarian proportions.If the prices were kept low by totalitarian methods, there would be no betterment to collect for the public. The concept of betterment allows for market values to be taxed to divert the profits made by the vendor to the community.
In considering betterment there is much truth in the diagnosis, which I commend, by Alan Day in his article called "The Land Boom and the Community," in last month's issue of the Westminster Bank Quarterly. He makes a distinction between the price to the 1497 purchaser, which he suggests should be left to the market, with subsidies to enable housing and other services to be provided, and, on the other hand, the sale price to the vendor which he suggests could be tapped to secure betterment.
Without agreeing with every word that he says, let me quote page 6 of Mr. Day's article:…the essential distinction which has to be made in discussing land prices is that between the price which should be paid by the developer and that which should be received by the person owning the property prior to development. The general rule is that the former"—that is the developer—should pay the full market price.…He goes on to say that the alternative is a complicated system of allocation and rationing.
Let me take the second part of his analysis, because he says that while the purchaser should pay the full market value, the vendor should have his proceeds of sale tapped by some system of taxation to provide betterment for the community. Here I should say, although the House does not seem to be very much aware of it, that many land transactions are already caught to a lesser or greater extent by taxation at the present moment. I am not exaggerating this. Some land transactions escape tax altogether, but a number of them are caught to a greater or lesser degree.
If we were to consider increasing the element of taxation on land sales so as to secure some betterment for the community, we would have to balance the advantages and disadvantages of carrying taxation further than at the moment. Assuming the level of taxation were to be such as not to dry up the voluntary supply of land, there would then be the advantage that some betterment would accrue to the community and enable help by way of subsidy to be higher.
On the other hand, there is the risk, which I must ask the House to take seriously, that part or all the tax, in areas of high demand, would simply be added to the land prices. The end result of that effort to reduce land prices would simply be to risk an increase in land prices themselves. There would certainly not, in the areas of high demand, be a reduction. There might 1498 not everywhere be an increase, but if a tax were chosen as an instrument by which to reduce land prices, I do not believe it would be effective.
I have been amazed today, and many members of the public will feel the same, that no hon. Member opposite has produced the next panacea which is usually produced at meetings I attend and in correspondence I receive: site value taxation. I do not presume today to deal comprehensively with this subject. It has been dealt with at considerable length by Mr. Trustram Eve in two recent issues of the Estates Gazette. One of the great difficulties in imposing a tax on land which has not been developed is that, by the law we want to keep, land cannot be developed if it does not have planning permission.
It would not be reasonable to say to people, "We intend to tax you so as to stimulate you into developing your land to the full, even if you cannot get planning permission to develop it". If one said, "We will assume an arbitrary amount of land as having received planning permission, whether or not it has it", one would come up against the problem that even if the owner wanted to develop, he might not be able to do so in conditions of full building employment, such as exist today. He might not be able to get builders to develop the land. This shows that the site value tax has a great number of difficulties, only a couple of which I have picked out. I accept that many people think that one or another variant, and there are many, of site value taxation might be relevant, at least for consideration.
Having locked at taxation and rating of site values, I turn now to the chosen instrument of the Opposition, the land commission.
I agree with every word of the effective criticism made by my hon. and learned Friend the Member for Surrey, East (Mr. Doughty). He is not alone in his criticism of the commission. Nor is Mr. Denman, formidable arguer though he is.
I would remind the hon. Member for Hayes and Harlington that the article from which he quoted, in the Economist of 16th May, called the land commission a "potentially disastrous scheme". Mr. Alan Day, in the Westminster Bank Quarterly, spoke of the scheme as 1499 "amazingly vague" and said that it would be likely to lead to a much worse freezing up of the land market than in 1947 and 1954. Possibly the most damning criticism of it came in Socialist Commentary of September, 1961, which described the idea as "extraordinarily vague" and considered that the method proposed would lead to prolonged bargaining and delays, that it would stimulate the maximum resistance at the moment of purchase and prolong political controversy almost indefinitely. Certainly, the scheme contains a great deal of ambiguity.
§ Mr. William Howie (Luton)
Will the Minister go on to tell us what the Socialist Commentary suggested should be done in place of the land commission?
§ Sir K. Joseph
The main point to remember is that the party opposite has not adopted the ideas of Socialist Commentary. One of the first ambiguities is at what price the land commission would buy land; how much below the market value. The impression that has been given in articles and speeches is that the land would be bought very much below market value. If so, this would be bound to dry up the voluntary offering of land for development and would lead to a massive use of compulsory purchase; that is, if the present rate of building of all sorts were to continue.
I was interested to note in the debate on the Enfield site that the hon. Member for Fulham did not speak so confidently of buying the land at far below market value. He was more cautious and said that purchase by the land commission would mean that the developer would not be paid quite as much as at present, but he went on later, when he spoke in the person of a developer, in a sort of monologue, to contemplate the alternatives. He said:…if the market value of something is 40 times what I paid four years ago and the State says that I cannot have quite all that because there are public needs to be considered…".—[OFFICIAL REPORT, 29th Jan., 1964; Vol. 688, c. 483.]That suggests that it would be bought just below market value.
Let us consider the case, as in Enfield, of a market value 30 to 40 times the earlier cost of the land. Hon. Members 1500 opposite seek to give the impression that if the land commission were in operation that land would be bought by the commission not at 30 times the earlier price, but at only five or six times that price. From reading the speech of the hon. Member for Fulham in that Adjournment debate one gets the impression that land might be bought at 25 or 26 times the earlier price. Hon. Members opposite would profess just the same outrage if land were bought at 25 or 26 times the price as they would if it were bought at 30 times the price.
There is, therefore, some doubt from the hon. Member's own speeches about the price at which the land commission would buy. But of this there can be no doubt. If the land were bought at a price far below the market value, the voluntary supply of land would dry up. It would be compulsory purchase for almost every site. If it were bought just below the market value, it is virtually irrelevant.
I come now to the point of the hon. Member for Hayes and Harlington about who will do the development. Either the people who now do the development will be allowed to continue to do it under the land commission administration or, if they will not do it because their land will be bought at confiscatory prices, public agencies would have to do the development, or it would not be done. In either case a massive bureaucracy is bound to be involved.
Let us consider the alternatives. The hon. Member for Hayes and Harlington rightly quoted from the statistics of planning applications in 1962. He said that the total number of planning decisions was just under 400,000. Either the present people who do the development authorised by the planning decision will be allowed to continue to do it, or there will be a need for somebody else to do it. If every planning application has to go through the land commission procedure, the land concerned bought and then, after bargaining, negotiation or tender, disposed of—that is, two major transactions for each bit of land involved in these 400,000 sites—a vast bureaucracy will be needed. "Enormous" is not an adequate word to describe it.
I meet the point of the hon. Member for Hayes and Harlington that obviously not all these 400,000 bits of land will come within the purview of the land 1501 commission. There are 150,000 planning decisions a year for housing alone which means, we must presume, 150,000 bits of land. Let us presume, generously, that half of them are for individual plots for individual owners which the land commission does not have in mind to cover. That would still leave 75,000 parcels of land a year for housing alone which would go through the land commission machine.
Then there are all the others—offices, industrial premises, shops and restaurants. I therefore took as a modest figure a quarter of the total parcels of land a year—100,000—passing through the land commission's purchasing and disposal machinery. This would drain the professional manpower of this country in the relevant skills if it were not to involve delays gravely prejudicial to our housing and other programme.
I say with all responsibility that if the Opposition contemplate the land commission doing all that they say it would do, the scale would inevitably involve an enormous bureaucracy. The picture drawn by the hon. Member for Hayes and Harlington is one of centralisation run mad. With most of the development intitiatives taken by the land commission—because, as the hon. Member says, it will all be comprehensive development since the individual owners would either be frightened off or the delays in dealing with their applications would be so terrible—he adds to the awful picture by telling us that most construction would be done by a national construction agency. I cannot imagine a better recipe for holding up the rapidly accelerating programme on all social fronts which the Government are carrying out.
There is ambiguity about how the land commission would dispose of the land. Would it be done at market value, as now, or would there be some system of rationing, allocation and control at bargain prices? The benefit of the bargain could not be passed on without a network of controls. So either the land is disposed of at the market value or there is a cat's cradle of restriction. There will be no more freehold if the land commission comes into operation except in respect of individual sites already owned by individual owner-occupiers. All the mass of would-be owner-occupiers would 1502 be forced into leasehold tenure with rising ground rents every few years, a very different picture from the objective of most would-be owner-occupiers.
To put this bedraggled and battered nonsense in the forefront of their housing policy is, as Mr. Denman says, very like a hoax. I prefer to call it a confidence trick. It is the sort of thing which, if done by a commercial firm in its advertising, would provoke an outcry of sanctimonious rage from hon. Members opposite.
Our policy is to continue to build more and more houses and so bring to an end the shortage which is the main cause, in a prosperous society, of rising prices. As part of this we are revising housing subsidies.
The Labour Party's housing policy has had two main themes—a specially cheap interest rate for housing and a land commission. The specially cheap interest rate for housing has now been disowned officially by the right hon. Member for Huyton (Mr. H. Wilson) in his letter of 7th April, 1964, to the Chairman of the Building Societies Association. It cannot be long before the land commission, too, is withdrawn as unworkable.
This is a cricketing week. The score card for the opening batsmen in the Labour Party's housing team should, I believe, read like this: cheap interest rate—[HON. MEMBERS: "Faversham."] Faversham surely shows a steadily improving trend in favour of the Government. [HON. MEMBERS: "Oh."] I was trying to read the score card for the Labour Party's housing policy as well as the score card for Faversham. The score card should read: cheap interest rate for housing, bowled. Harold Wilson; land commission out by a method not known to Wisden caught by the Economist, run out by Mr. Denman, stumped by Mr. Alan Day, and bowled by Socialist Commentary and many others—
The Motion asks the House to express grave concern and to call for urgent measures to deal with the grave problem of land prices, which are certainly a matter of public concern, but it is important to understand that they reflect the shortage of houses in a generally prosperous society. The way to bring the rise in prices to an end is to end the housing shortage. This we are doing as rapidly as possible.
1503 Meanwhile, the methods proposed by the Labour Party to reduce the price of land would reduce the flow of land for development and thus delay the housing programme and so actually add to the price of land which it was the object of the policy to reduce. I hope that in the light of all these positive arguments in favour of a proper policy for increasing the number of houses, and the negative arguments about the ineffectiveness of the alternatives, the House will reject the Motion.
§ 3.48 p.m.
§ Mr. J. Silverman
In the few moments at my disposal I should like to tell the Minister that in his speech he has put up a substantial smokescreen in the hope, I suppose, to use cricketing terms, again, of bad light stopping play. Certainly, it was done with the idea of obscuring the issues.
Charges have been put to the Government today. Very many hardships have been pointed out. We have asked what the Government intend to do about this, and we have heard many ingenious reasons from the Minister why the Government are to do nothing.
The land commission, taxing of site values and betterment—all are dismissed, and the gravaman of the reply is, "We are living in the best of all possible worlds, there is nothing to be done, and there is nothing that we intend to do about it." No amount of distortion of the Labour Party's plans can remove the fact that the real substance of the Government's answer today is that they will do nothing about this situation.
I did not raise the question of Labour's plans, because I did not want to allow the Government to use a smokescreen. It is their job to deal with this problem. They are in office. I wanted to know what they were prepared to do. The Minister said that reducing the price of land for house building would only mean that the builder would make more profit. I can do no better in this respect than quote what the Guardian said in commenting on our debate of 4th May on the South-Eastern Study. It said:…Sir Keith abandoned both his lines of defence and resorted instead to an attack on bureaucracy….1504 He has done the same today. The Guardian said that he was…confessing, in effect, that the Conservatives could not, and would not, curb land speculation.He said the same today. The Guardian added:He even said—and there has been no more naked admission that Conservative rule is a profiteer's paradise—that if land prices somehow were controlled, the builders would simply reap huge profits.I do not need to add to that comment.
The right hon. Gentleman's reply today was contradictory. First, he said that the price of houses was decided not by the price of land, but by the law of supply and demand. Then he said that if, somehow, the price of land were controlled, that would result in a reduction in the amount of land available for housing, and that, somehow or other, house building land would disappear. Where would it disappear to? What would these gentlemen do with this land if they could not build on it? The fact is that it is nonsense to say that it would disappear. Land is a physical fact. It cannot disappear.
It stands to reason that, if the price of land were reduced, demand would be greater, but, at the same time, it should not affect adversely the number of houses built. I will deal with some of these matters as they relate to Birmingham. For the Minister to deal with land for open spaces does not require a land commission or any legislation dealing with site values or betterment. It might need some amendment of the Land Compensation Act, 1961, but probably not even that.
All it needs, when there are applications for an alternative development plan, is for the Minister to say, "No". But the right hon. Gentleman does not say "No". Thus we have the case in Enfield quoted by my hon. Friend the Member for Enfield, East (Mr. Mackie) and the other cases in Birmingham. The right hon. Gentleman mentioned figures for Birmingham. I will quote more, but I do not want to name the sites which are still under negotiation.
On the outskirts of the city is a site which was priced at £1,000 at existing use value. A certificate for alternative terms—residential—was issued for 60 habitable rooms per acre. The price 1505 rose to £80,000. I have already mentioned the sports field, not in the centre of Birmingham, that was eventually sold for £205,000. There are a number of figures like that. It is true that in many cases these still do not yet reach the high price levels of residential land. At the same time, they are still too high and there is, moreover, no doubt that land speculators will become aware of the position of prices faced by local authorities and that Birmingham will have to pay their prices.
The Minister mentioned the sum of £6 million. He thinks that it is quite all right if this debt hangs as a millstone round the neck of the corporation, because it will cost only a few coppers in interest charges on the rates. He says that Government will meet half of that—I have not worked out whether or not that is correct—but that means that the excessive profits earned by the speculators will be borne not entirely by the ratepayers but also by the taxpayers. I cannot see that that is much more justification for dealing with the existence of this situation in this way.
But it does not end with the sum of £6 million. That figure concerns only public open space. For example, very little of the green belt is public open space. In respect of private open space in Birmingham, the figure is many times £6 million. I understand that the amount involved—I do not suggest that it will fall on the corporation this year, or next year—could be no less than £39 million, if it were possible for all the people concerned either to insist on development values or on the corporation buying.
§ Sir K. Joseph
I hope that the hon. Member will not give currency to that figure, because, as I have tried to explain, land outside the centres of big cities is most unlikely to receive alternative use certificates of residential value, and that is the assumption on which he is basing his huge figure.
§ Mr. Silverman
But I have already shown that there are many cases in which the Minister himself, on appeal, has given that right in respect of land on the outskirts of Birmingham. The Minister's reply is most unsatisfactory. He has offered no solution whatsoever. He has 1506 simply put forward a number of ingenious arguments to try to justify the present situation. He is either not conscious of or does not care about the hardships which are being inflicted upon many people, day by day, in this situation. Clearly, he does not care about the burden upon local authorities and private house purchasers, or the burden in respect of open spaces, and the effect upon planning. His answer is completely negative. He says that there is nothing to be done; the price mechanism is wonderful, and we are living in the best of all possible worlds. He talks about the number of houses built, but I would point out that notwithstanding the housing target which is the aim for this year, the Birmingham register still contains 40,000 houseless families—and a similar situation applies in other cities.
Owner-occupation covers all sorts of houses, and not merely new ones. It covers old houses, and some slum houses which have been bought by more people. But the new houses which are built for sale today are beyond the pockets of the majority of the population. That is why, even though the target has been increased in recent years, the problem of the housing shortage in large cities remains, and will continue so long as the land problem is not solved. I am sorry that I have not been able to get a more positive reply from the Minister.
§ 3.59 p.m.
§ Mr. William Roots (Kensington, South)
Those of us who listened to the opening speech of the hon. Member for Birmingham, Aston (Mr. J. Silverman) were probably impressed by his apparent sincerity and his anxiety over the situation, but he failed to recognise and deal with the cause of the increase of which he complains.
The hon. Member appears to think that it is due to the activities of speculators, but in terms of land that is not so. The speculator may make a profit, but the final price of land depends on what the developer and, in the next term, the purchaser, will pay for it. We should not blame the speculator. He is quite beside the point in fixing the general market value—
§ It being Four o'clock, the debate stood adjourned.