§ 3.30 p.m.
§ Mr. John Boyd-Carpenter (Kingston-upon-Thames)
It involves a certain effort on the part of hon. Members to turn from that matter which the Prime Minister has so rightly described as a tragedy, and which we have been briefly discussing and return to our consideration of the Government's legislative proposals for the Session as set out in the Gracious Speech. As we are to debate that matter tomorrow, as I understand it, and as I think most hon. Members will feel that we are wise not to try to debate it immediately, I think the House will regard it as right that we should continue today our examination of the contents of the Gracious Speech.
If I may indulge in an Irishism, what is perhaps most significant in the Gracious Speech is what is not in it. There is the significant omission of steel, to which some reference was made in the course of yesterday's debate. There is the extraordinary situation thereby created under which a great industry, vital to the nation's economy, is left under some kind of suspended sentence with those responsible for managing it uncertain as to their future and protected by no better assurance than the Prime Minister's statement that they are unlikely to be penalised for actions taken in good faith.
371 There is the failure, as my right hon. Friend the Member for Altrincham and Sale (Mr. Barber) mentioned yesterday, to make any reference to progress with hospital building, for no doubt the good and sufficient reason that there will be no progress to which to make reference. There is the significant omission of any reference whatever to the Government's intentions to redeem their pledges in respect of cheaper rates of mortgage interest for home buyers, to which the Prime Minister made some reference in the course of Tuesday's debate.
Therefore, as we deal with the mass of Measures, some of them of importance, some of them of relevance, which are contained in the Gracious Speech, I think we ought to have clearly in our minds that these present a very partial picture of any conceivable legislative plan for dealing with the problems of the nation in this day and age.
At the head of the picture of irrele-vancies there is the Land Commission. During business statements from Easter onwards we were promised by the Leader of the House that a White Paper would be presented. It finally appeared well into the Recess. This is all we have on which to debate this matter now. I mean no offence to those who have taken part in the drafting of this document when I say that there can rarely have been a public document on an important matter which conveys less. It is, perhaps, a vivid illustration of the truth of the old advertising slogan that "There is no substitute for wool". We have, none the less, under that disadvantage to debate this White Paper as embodying the only statement that we so far have of what the Government really mean on this matter of the Land Commission and on land.
There seem to be two issues—the levy and the setting up of the Land Commission. I will not take up very much time on the levy because, though I think there are many differences between us on practice, there is probably not so much difference on the general principle that where the value of land is increased as a result of planning permission, and that increased value is realised, the State is entitled to levy a contribution on that increased value. Indeed, the House may recall that the Government come in this 372 matter some six or seven months behind the Opposition, since the Opposition made this point clear as long ago as last March. [Laughter.] I apologise to the House. I agree that to be only seven months ahead of this Government does submit one to criticism.
It is not the principle of the matter that gives rise to difficulty. It is the practical problems. Indeed, the White Paper gives a very wholesome warning when it reminds us that attempts to deal with this matter have been made, beginning in the year 1427. I congratulate the Minister of Land and Natural Resources on having an historian among his rapidly increasing staff.
It is the practical application that poses the problem. It was the practical application that made the Labour Party's last essay in this direction—the Act of 1947—the failure that it was. The lesson to be learned from the ill-starred 1947 Act is the fatal result in these matters of trying to take too much, of being too greedy, because it has the effect, as the 1947 Act demonstrated, that if an effort is made to take too great a share of enhanced value the result is both to discourage people from bringing forward land for development at all, and, just as with Purchase Tax, to inflate the price.
The Minister of Land and Natural Resources did not fully understand me when I put a supplementary question to him last week. He told the House that he hoped to get a revenue of some £80 million a year from the levy. I asked him how much of that would be passed on. All he could say was that it was the intention that this provision should reduce the price of land. Of course that is the intention, but will it be the effect? Has the right hon. Gentleman studied the effect of taxation, because this is taxation, in inflating the price of the commodity to the ultimate consumer? It is not enough for the right hon. Gentleman to say that this is the intention when he produces a Measure which on the face of it is far more likely to inflate the price of land than to diminish it.
If this tax is to be levied, it should not be mixed up with a body indulging in dealings with land. It should be collected by the taxation authorities. If 373 the right hon. Gentleman wants a good practical example of how a tax of this kind can be handled, let him investigate the way in which monopoly value under the Licensing Acts was very efficiently dealt with before the war by the taxation authorities and not by setting up any commission separate from them.
There is a further point which I must put to the right hon. Gentleman. As I have said, there is a very strong case socially and in equity that, where State action increases the value of land—where there is betterment—the State should be entitled to collect some share of that increased value by way of taxation. If the State is so doing, surely what one might call "worsenment" also demands further attention. That is where land is not taken but is affected by State action elsewhere and the value of the citizen's land is diminished. I should have thought that the same principle called for some compensation to be paid to the citizen.
The classic and obvious example is where a flyover on a motorway is built, not on somebody's land with that land being taken and paid for at market value but adjoining somebody's land. The land is left. There are now motor cars travelling on a level with and close to that person's bedroom window. The value of the house is very much diminished. The House may say that that is academic since the Minister of Transport halted the road programme, but we cannot assume that that state of affairs will go on forever. If the right hon. Gentleman thinks that he has an effective method of collecting a tax on betterment—I do not think that his method is effective, but if he thinks it is—surely one of the first charges on the revenue that he hopes to get should be by way of making provision for what I have ventured to call "worsenment".
I am glad that the Minister of Housing and Local Government has decided to do what my right hon. Friend the Leader of the Opposition suggested to him a few days ago and introduce a Measure to deal with slum-clearance compensation. We shall no doubt want to consider the wider issues of compensation. This issue—this is no doubt why the right hon. Gentleman has introduced it—is, as I told him from this Dispatch Box last April, extremely urgent in view of the 374 present provisions running out on 13lh December. This does not prevent us from looking at the wider proposition that, if a levy is to be imposed on betterment, we must look again at damage to land caused by State action not involving actually taking over the land.
There is the further very urgent, point, while I am on this issue, of the effect on what is called "planning blight", of the standstill on the purchase of land by local authorities imposed by the Chancellor of the Exchequer in his statement on 27th July.
The House knows that in every one of our constituencies there are people whose house or plot of land is required by a local authority, which has been marked on the map for some town centre redevelopment scheme or some road scheme and which the local authority is perfectly willing to purchase, but nobody else is willing to buy, and yet the local authority is inhibited from doing that because the Government will not allow it, under the Chancellor's statement, to buy land in advance. There are, therefore, a number of people who are tied to a house or plot of land in which their savings are invested, who are unable to get a local authority, willing to buy, to do so and whose property is totally unsaleable to anybody else. Some steps should be taken to deal with this great hardship.
Then there is the proposed Land Commission with its objectives, so impeccable, to secure an adequate supply of land and to alleviate the burden of the cost of land required for public purposes. I suggest to the House that the Commission itself is wholly unnecessary. It is not required for the purposes of imposing a levy. The levy is a wholly separate concept and could perfectly well be handled by way of taxation. The Commission is a separate and wholly unnecessary body. It is interesting to note from The Times of today that three of the professional bodies, the Royal Institution of Chartered Surveyors, the Chartered Auctioneers' and Estate Agents' Institute, and the Chartered Land Agents' Society, have sent a memorandum to the Minister in which they make exactly the same point as I seek to make.
According to the report in The Times they make it so effectively that I should 375 like to quote it. They say that the working party of the three institutionsdo not see why a Land Commission is necessary. 'Our experience', they say, 'suggests that a sufficient supply of land for essential development does in fact exist within the limits imposed by town planning control and we do not see how a Land Commission could increase the supply.'They also make the very pertinent point that since the White Paper was published the supply of land has shown signs of drying up.
The remedy for the problem of the supply of land is not to be found in the setting up of a Commission. It is to be found, as the professional bodies suggest, in an improvement of the planning system. It is not the supply of land that we are strictly concerned with, but the supply of land with planning permission. The Minister of Housing, by speeding up the planning system, both at the original stage where sub-delegation under small authorities sometimes involves delay, at local authority level, and above all, when an appeal comes to his Department, has it in his power to increase the supply of land—and not just the supply of land but of land with planning permission which is needed for the housing programme.
I am glad to see the professional bodies taking the view that the remedy is to be found there and not in the pretentious concept of a Land Commission. What is the purpose of the Land Commission? Is it to give increased powers of compulsory purchase? The House knows that the local authorities already have considerable powers of compulsory purchase for necessary public purposes, and so have the central Government, the new town corporations and other bodies. This Land Commission will only cut across those powers, and I suggest that it is an unsuitable body to exercise the power because, unlike local authorities, it is not a planning body. It has no planning authority. As I understand, it has to follow the planning permission of the local authorities. This is merely adding a further body with compulsory purchase powers to a system in which the central body and the local bodies already have considerable powers.
The setting up of the Commission involves a new administration, which I 376 suppose ultimately will be a charge on land for the payment of salaries and so on. It involves a further demand on the crucial supply of valuers who, as the Minister knows perfectly well, are already extremely scarce. What is the explanation? I believe that the explanation is frankly political. The Land Commission is intended as a form of creeping land nationalisation, respectfully laid by the right hon. Gentleman at the feet of the hon. Member for Ebbw Vale (Mr. Michael Foot as a small consolation prize. This is confirmed by the hints throughout the White Paper that the Commission will begin on a modest scale and will grow and grow in power as time goes on.
§ Mr. Hector Hughes (Aberdeen, North)
Before the right hon. Gentleman departs from his attack on the setting up of a Land Commission—and he appears to be in favour of these professional bodies doing the work which the Commission would be set up to do—may I ask whether he does not realise that the difference between those two tribunals, if I may so call them, is that the Land Commission will be acting in the public interest while the professional bodies would be acting in their own interests and the interests of their clients?
§ Mr. Boyd-Carpenter
I do not think that the hon. and learned Gentleman has been following me with his usual courteous attention. He and I, as members of the same profession, have, I hope, a respectful regard for the members of other professions. These are professional men advising on a subject on which they happen to be more knowledgeable perhaps than most, qualified as a result of professional work and study. They are not, as the hon. and learned Gentleman seems to think, tribunals. These are bodies of professional men practising in the field. They do not take the place of the Land Commission. I am only suggesting that the House would be singularly ill-advised to ignore the considered views worked out in a working party of those who, with great respect, have more knowledge of this matter than either the hon. and learned Gentleman or myself.
I am sure that the explanation is political. I suggest to the House that there is not the slightest reason for thinking that the Commission will diminish the price of 377 land. How can it? The proposal is that the Commission should pay the market price, and then deduct the levy, and, as the White Paper states specifically, hand over the profits to the Exchequer. How does that reduce the price of land? It is perfectly true that the Commission is empowered to sell land at a price below the price paid for it, but there is no need of a Commission to allow the subsidised resale of publicly owned land. It can be done under existing powers. All that the Commission does is to set up another body, which must be paid for, to buy land at the market price.
We shall listen with interest to the Minister. The view suggested outside the House is that far from reducing the price of land the Commission will send it up and that there is every likelihood that a levy at this level will further inflate the price of land. I said last March that we thought that the levy should be at a moderate level. Anyone with experience of taxation knows that the higher one imposes a charge of this sort on an article which is in popular demand, the more certain it is that the charge will be passed on to the consumer. We have already seen that people contemplating selling land are going to look at the price which they will ask with a different attitude altogether, because they will consider that at a certain date they will have to pay an additional charge. Therefore, this tax, like Purchase Tax, will, at this level, inflate the price further.
The Minister is seeking to mitigate the fear of professional bodies who say that this proposal is already having the effect of drying up the supply of land. In two Parliamentary Answers he has said that no levy was payable on any transaction taking place, or on any development starting, before the appointed day under the Bill. But he also said that if one obtained planning permission during that period that could expose one to a compulsory purchase order after the appointed day. If the right hon. Gentleman thinks that that will encourage people voluntarily to bring forward land for development and to get planning permission for that purpose, he had better reflect again. As I say, it is my information that the mere publication of the White Paper has made land more scarce and therefore will make it more expensive.
378 There are various very curious aspects of this matter. There is the provision that if the Commission transfers land to private citizens, it is likely to do so, not freehold, but what is called somewhat unfortunately Crownhold. As I understand it, the freehold will not be conveyed, but the Minister or the Commission will retain the power to repurchase compulsorily, and in any event when the house built on that land is demolished or redeveloped the land will revert to the Commission. There is a certain happy mad inconsistency about providing that when land is let—because this is what it comes to—on a long lease by the Commission, the landlord shall have the right to repurchase compulsorily whereas in the case of leasehold enfranchisement where a private citizen has granted a lease to a leaseholder it shall be the leaseholder who shall have that right. The right hon. Gentleman, when he handles these two Bills, must be careful to ensure that he gets the right brief in the right position.
That brings me to the question of leasehold enfranchisement, for which I understand the Minister of Land and Natural Resources is also responsible. It was in the Gracious Speech this year. It was in the Gracious Speech last year. It will probably be in the Gracious Speech next year.
§ The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Robert Mellish)
Assuming that we have a Labour Government.
§ Mr. Boyd-Carpenter
I am obliged to the hon. Gentleman. That is a very bold hypothesis indeed. I make it for this purpose and to alleviate the sensibilities of the hon. Gentleman's Minister, who is rather touchy on the matter. It was the Minister of Housing and Local Government who followed up the reference in the Gracious Speech last year by a statement which I should like to recall to him and to the House. He said on 8th December, 1964:The Government have already announced their intention to introduce legislation to enable householders with an original lease of more than 21 years to purchase the reversion of their leasehold interest. By giving this matter priority in their legislative plans they have shown the importance they attach to it." —[OFFICIAL REPORT. 8th December, 1964; Vol. 703, c. 1324.]379 The priority did not appear to work out very satisfactorily. Indeed, the right hon. Gentleman, having said in reply to one of my hon. Friends that he expected to introduce the legislation last Session, then gave an undertaking to leaseholders of leases which had expired that if they were able to remain in the premises after 8th December, 1964, they would get the advantages of his Measure.
I should like to know whether the undertaking about the importance which the Government attach to this matter by giving it priority in their legislative programme still stands.
§ The Minister of Housing and Local Governmen (Mr. Richard Crossman)
Of course it still stands, and it will be honoured in full when the Bill is introduced.
§ Mr. Boyd-Carpenter
No doubt that undertaking is given with the same optimism with which the undertaking that it would be introduced last Session was given. The Bill has been transferred from the right hon. Gentleman to his right hon. Friend—no doubt to give it a better chance and a more dynamic start. It is well perhaps that it has, because the Joint Parliamentary Secretary to the Ministry of Housing and Local Government has expressed views on this subject which may have made it more difficult for him to handle it. What the Joint Parliamentary Secretary said was—I am sorry; I cannot find it at the moment. I will not tantalise the hon. Gentleman too long. The hon. Gentleman said that his hon. Friends had an emotive feeling about this discarded Liberal notion. It is agreeable to find that he will not have to handle the matter now.
A number of other major issues arise and they come into the Minister of Housing's own field—at least I suppose that it is still his own field. The most conspicuous omission in this respect from the Gracious Speech concerns cheaper rates of mortgage interest. I do not need to weary the House by repeating the clear and specific assurances given by the Labour Party of cheaper rates of interest for home buyers. They appear, not in casual speeches or off-the-cuff statements at public meetings, but in considered statements in election addresses of the Prime 380 Minister, the First Secretary of State, the Chancellor of the Exchequer and the Lord President of the Council. The Minister of Housing, being a shrewd hand, was a little more cagey, but his right hon. Friends committed themselves absolutely explicitly to lower mortgage interest rates.
As the House knows, this has been followed by a rise in the rate of mortgage interest to the highest level known for very many years—6¾ per cent. from building societies and ¼ per cent., if one can get it, from local authorities. The Prime Minister mentioned this matter the day before yesterday, but he was very imprecise, and I think that we should not finish today's debate without hearing a good deal more about the Government's intentions and timetable in this matter. The Prime Minister said that we could expect the Government's plansto be laid before the House in this Session and we shall legislate on them at the earliest possible date."—[OFFICIAL REPORT, 9th November, 1965; Vol. 720, c. 47.]Is that, or is it not, a promise to legislate in the matter this Session? Is the fact that this promise does not appear in the Gracious Speech an indication that the legislation will not take place this Session? It is important to know the answer, because not only is this a matter in which the personal honour of Ministers is involved, but because the First Secretary of State went to the Erith by-election and, according to the report in this morning's Daily Express, said:Some clever johnnies may want to ask me, what about mortgage rates? I say, 'brother, don't you worry. This will be done and we shall publish this year our proposals for doing it'.I want to know whether that is true, or whether that was just the First Secretary of State in electioneering mood.
It is important that the Minister should make the Government's position clear on another aspect. He refused to do so when I asked him a Question some months ago. If and when the Government come forward with these proposals, will they be retrospective? Will they relate back to the period of the pledge to cover those who are buying their houses now? If not, this is the best possible discouragement to people to take out a mortgage now if they can get it because 381 they may feel that it would be wise to hang back until a less penal rate of interest would have to be paid. It is important that the right hon. Gentleman should make this clear.
The Government are only too willing to take retrospective action when it penalises the citizen, whether in respect of steel or office development. Let them, therefore, be prepared to take, and to say that they will take, retrospective action, not only when some of the best of our citizens are involved and they can help them, but when their own reputation for abiding by their pledges is very directly involved. I hope that we shall hear more about this matter before the debate is concluded.
I am suspicious of the Government's attitude to this and to the whole problem of home ownership. I remember what the late Aneurin Bevan said in the House on 4th December, 1951:Inside the Labour Party, there has always been argument as to whether we ought to have allowed any private building for sale at all." —[OFFICIAL REPORT, 4th December, 1951; Vol. 494, c. 2256.]If the House wants a more recent statement of the Labour Party's views, let me draw attention to what Councillor Mrs. Denington, Chairman of the Greater London Council Housing Committee and directly involved in this matter, said only a few days ago:What terrifies me is the thought of a property-owning democracy.In the face of that statement, it is not surprising that some of us have some doubt about the Government's sincerity in this matter.
I come now to the Government's housing record. I agree entirely with what the Prime Minister said on Tuesday, when he said that what really matters is the number of houses built. It is true that the population explosion, immigration, higher standards of life and younger marriage have created a greater demand for housing than was expected even a few years ago and that, as a result, despite the heaviest house-building programme in our history, there is still a crying demand for more housing.
The Prime Minister told the House that the Government's performance had been good in this difficult year. Whatever difficulties the Government may have 382 manufactured for themselves in other directions, their inheritance in the housing field was nothing but good. Let me remind the House of the facts. In 1964 we completed 373,000 houses, and we left a programme of 400,000 houses for this year. What is more significant, we left 433,000 houses actually under construction.
If the right hon. Gentleman challenges the practicality of the 400,000 target for this year, let me remind him that his party's election manifesto contained the statement:While we regard 400,000 houses as a reasonable target …But it is not a target they have hit, because the right hon. Gentleman's own Parliamentary Secretary, the hon. Member for Bermondsey (Mr. Mellish), told the House last week that they would miss it by something between 10,000 and 20,000 houses; that only between 380,000 and 390,000 houses would be completed this year. For all the splendid plans for the future, the right hon. Gentleman has failed to achieve even 400,000 houses for this year, which casts considerable doubt on his capacity to plan a programme for 500,000 houses even five years ahead.
On Tuesday, the Prime Minister—and here I would say, if I may, that in the circumstances I fully understand the reason for his absence this afternoon, and we all sympathise with him in it—thought that he was demonstrating his right hon. Friend's proficiency when he stated that at the end of September 23,000 more houses were under construction than at the same period in the previous year. I do not know what the Prime Minister expected because, as I have already told the House, he and his right hon. Friend were bequeathed an expanding programme. What is, perhaps, more interesting is that this figure of 23,000 for end of September, 1965, over end of September, 1964, is less than half the increase for the end of September, 1964, against the end of September, 1963, when the increase was 56,000.
Therefore, the Prime Minister's own figures establish my point that, bequeathed a rising house-building programme, what the right hon. Gentleman has been successful in doing has been in checking its growth—
§ Mr. Frank Allaun (Salford, East)
The right hon. Gentleman has quoted a figure achieved by his Government in the previous year, but that was the election year. Is it not the fact that for the 12 years before that year, the total has been nothing like that, but only something around the 300,000 figure?
§ Mr. Boyd-Carpenter
The hon. Gentleman speaks disparagingly of somewhere around the 300,000 mark, but if he likes to cast his mind back to the beginning of our tenure of power, he will recollect that we were told that our 300,000 target was impossibly high and that we would never achieve it. His own right hon. Friends had never passed two-thirds of that figure.
This check to the development of that building programme is confirmed in a number of ways: by the right hon. Gentleman himself at Blackpool, when he referred to the falling off in the starts of private enterprise houses; by the very grave statement by the Royal Institute of British Architects which referred to the fact that since the Chancellor of the Exchequer's statement of 27th July over £500 million worth of building work had been cancelled or suspended, and that, of that sum, £76 million was housing. That is between 27th July and mid-September. At an average price of £5,000, that represents about 15,000 houses.
The right hon. Gentleman has only to consult his right hon. Friend the Minister of Public Building and Works to learn that the upward housing surge which was bequeathed has been checked by the measures of his Government. That, of course, is having its effect on the building industry. The credit squeeze, the Chancellor of the Exchequer's measures in July, the ban on office building, the ban, by statement, on certain other large buildings, are all having the effect of undermining the confidence of the building industry.
This is a curious industry. It probably employs more people than any other, and it is capable of very great expansion of output if confidence is maintained. If builders and their employees think that they will not work themselves out of a job, that there is another job when the present one is finished, that they have a steady programme forward, they can ex- 384 pand production far more than any planner in Whitehall can believe. There is no doubt that the manufacturers of components, bricks and other ancillary equipment responded magnificently to the exhortations of the Minister of Public Building and Works that, as the housing programme and other building work was to expand, they must increase their capacity. They now have surplus stocks in hand, and accumulating.
On top of that, this Government are now coming forward with further threats of building licensing—further restrictions. They have checked the private-enterprise housing programme, they have failed to achieve the target for total output of houses set by my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph), they are applying licensing, and can hardly be surprising, if an industry that has been trying to co-operate with them and increase its capacity now finds itself left down, if they do not finally get the output we all want to see.
It is the more discouraging when one reflects on the ham-handedness with which these controls are applied. I gave notice to the right hon. Gentleman the President of the Board of Trade that I should this afternoon be mentioning his own action in a matter affecting my own constituency which I think illustrates this general point. It is the case of a firm which had been encouraged by Government action to move from the Greater London area—of which, of course, Kingston is now part—to a new town, Crawley, where it had built, with every help and encouragement from the Government, a warehouse. It desired to build offices adjoining this warehouse, not least because the Government themselves required its existing premises in Kingston for their own purposes. For months following the Government's statement on office building policy it was impossible to get the right hon. Gentleman to deal with applications for a permit. The effect on the company has been disastrous. It cannot have its office adjoining its warehouse and, understandably, feels that it has been let down by the Government.
This is a very good example of the way in which these controls are being administered, and why those in the building industry, and many outside it, are very apprehensive of further extension of controls—
§ Sir Harmar Nicholls (Peterborough)
In the case quoted by my right hon. Friend, did the Minister give reasons for rejection, or announce that it was just general policy not to allow office building? Were there special reasons in my right hon. Friend's constituency why the application should not have been granted?
§ Mr. Boyd-Carpenter
The right hon. Gentleman's objection was to moving the office premises to Crawley—a rather interesting ground for objection because, until recently, it had been the policy of the Government to move their installations —the Paymaster-General's office is a case in point—to that town, and build it up as a counter-magnet to London. Whether the right hon. Gentleman knows about that, it would be indelicate to ask.
I want now to turn to the Minister's dealings with the building societies. He told me the other day that he thought it stupid to ask him to tell the House of Commons what these discussions amounted to. I do not think so. I think that the House is entitled to be informed when a Minister of the Crown, with all the authority that office gives, starts dealing with bodies of this kind.
§ Mr. Crossman
The right hon. Gentleman should not misquote me. I thought that it was stupid for him to ask me to tell him in advance about the discussions. I said that I should report when we had completed the discussions, and I shall be reporting today.
§ Mr. Boyd-Carpenter
I am delighted to know that the right hon. Gentleman will be reporting today, but I disagree entirely that the House of Commons is not entitled to be informed of discussions of this kind so that views may be expressed upon them at a time when they may have some relevance and significance. The right hon. Gentleman knows that perfectly well.
He was much more expansive on this subject at his party's conference in Blackpool, when he made that epic remark, which I noted with pleasure at the time,But now the tide has turned and the time has come to tell the real truth".I do not know what the state of the tide is today, but the right hon. Gentleman did not tell the whole story. No doubt, in the ordinary way, he used a formula agreed with the building societies, but 386 he did not tell the conference or the country that the societies had told him that they saw practical difficulties in his scheme.
§ Mr. Crossman
If the right hon. Gentleman will look at the text of my speech, he will see that I said that there were, in fact, a number of practical difficulties and we had set up a working party to deal with them.
§ Mr. Boyd-Carpenter
That is not what the societies themselves said—I quote from their own document—… the Council has told the Minister that it has some misgivings about the practicability of his scheme ".I have the right hon. Gentleman's speech here, and he did not say that. On the same subject, will he confirm or deny that the building societies subsequently protested about his speech? Does he wish to intervene about that?
§ Mr. Crossman
I have had absolutely no protest from the societies about my speech—none whatever. it may be true that individuals have gone to the right hon. Gentleman, who belongs to a political party which they happen to support; but that is very different.
§ Mr. Boyd-Carpenter
Is the right hon. Gentleman really saying that, in his discussions with the chairman of the council of the Building Societies Association, he received unqualified praise for his speech at Blackpool?
§ Mr. Crossman
I received from the societies no strictures upon my speech at Blackpool. That is what I said.
§ Mr. Boyd-Carpenter
That is very care-, fully not answering the question which I put.[Interruption.] It was because of what the building societies said to him that he altered his tune when he spoke to the International Congress of Building Societies a little later.[Interruption.] He knows that perfectly well, too.
§ Mr. Speaker
Order. I hope that hon. Members will allow the two protagonists to fight it out. Neither needs any help.
§ Mr. Boyd-Carpenter
I am very grateful to you, Mr. Speaker, and I am sure the right hon. Gentleman is grateful too. We look forward with interest to what he will tell us today. This is a matter of great seriousness for the building societies and the country as a whole. These bodies have grown up as bodies to encourage thrift and home ownership. As far as I know, what the right hon. Gentleman has been trying to suggest is that they should become his agents for rationing mortgages and allocations of funds to prospective home purchasers if the total of those seems likely to exceed the total for private enterprise building which the right hon. Gentleman, under his policy, thinks right. He has already committed himself in public to the belief that local authority building should be half the total of building, a complete variation of the proportions of today and of many years past.
If it is the right hon. Gentleman's intention to interfere with the level of private enterprise building, he should realise that the right thing to do is to come out into the open and do it himself, not shelter behind the building societies. This is building licensing by the purse, building licensing through the societies. That is what the right hon. Gentleman is contemplating, and whatever he may tell us about the attitude of the societies, such a policy is wholly wrong. If he wants to license private enterprise building, let him come out into the open and do it.
Has he realised the effect of what he is doing? If he lines up the building societies, and, for that matter, the banks and insurance companies, to ration advances, how are they to do it? How are they to differentiate between one borrower and another? But, apart from that, he will not at all affect the man who can build a house out of his own savings. The right hon. Gentleman's rationing will fall on those who require a mortgage, hurting, like so many of his measures, the young couple and the struggling person who needs a mortgage, while leaving the rich man with capital wholly untouched.
§ Mr. T. W. Urwin (Houghton-le-Spring)
Did the right hon. Gentleman's Government come out into the open when they set about their policy of reducing the number of houses to let some years 388 ago, and did not they heavily increase the financial problems of young people wanting a home who were thereby compelled to undertake mortgages which they could not afford?
§ Mr. Boyd-Carpenter
I am happy to debate the previous Government's record with the hon. Gentleman till the cows come home, but on that point I say only that whatever steps we took we took openly and by ourselves. We did not try to hide behind other bodies.
On this point, the right hon. Gentleman was most indignant when I suggested that certain pressure had been put on the building societies. Has he seen the document which the building societies put out immediately after his Blackpool speech—Circular 1217A they call it— which contains the statement:The alternative to the operation of the voluntary scheme by the builders and the lending institutions would be licensing controls, which Mr. Crossman is anxious to avoid ".Did the building societies think of that for themselves? Does the right hon. Gentleman say that he never had suggested to them the possibility of setting up a national mortgage corporation if they would not co-operate? He ought to tell us a good deal more about this whole matter.
§ Mr. Boyd-Carpenter
The House will listen with interest because this is a matter of the highest concern.
On housing and on land, all the proposals in the Gracious Speech have this one feature in common, that none of them will provide a single additional house. We shall consider and discuss the measures on their merits when they come before us, and we shall seek to analyse the motives for the proposals; but the fact remains that the right hon. Gentleman, inheriting the biggest expansion of housing that this country has seen, has failed to achieve the targets for 1965, and the Gracious Speech contains no proposals whatever which will increase the total provision of housing. That is the cool reality of the matter.
If the right hon. Gentleman persists in his determination to shift the balance from the private enterprise to the local authority sector, he will continue to fail 389 to get the full total of houses which we need. There is a limit to what the local authorities can do. It is a fact that they take some months longer to build. If the faster ship is held back, as in a convoy, by the slower, the progress made by the convoy as a whole will be a great deal slower than it need be.
It is important that people outside should realise that, for all the national plans and all the right hon. Gentleman's grandiloquent speeches, his first year shows nothing but failure, and for the future there is the prospect of a diminishing output of houses. When people outside understand that, they will prefer the expansion of building which they saw under Conservative Governments to a policy of planned stagnation.
§ 4.18 p.m.
§ The Minister of Land and Natural Resources (Mr. Frederick Willey)
The right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) has run true to form. He has been mildly entertaining. If there be any policy opposite on this subject, he has carefully concealed it from us. He has been purely destructive. We are talking about the human problems of housing, building and the rest, but we have had no constructive proposals from him. As for the inheritance to which he referred in his peroration, we inherited, in fact, a shortage of building materials when we took office. That was one problem left to us, but, in spite of it, as the right hon. Gentleman himself concedes, there were 23,000 more houses under construction this September than there was a year ago.
My right hon. Friend the Minister of Housing and Local Government will be speaking later about the building societies. Listening to the speech of the right hon. Member for Kingston-upon-Thames, it struck me that he seemed to have very little experience of how building societies work.
§ Sir Harmar Nicholls
The right hon. Gentleman said that the Government inherited a shortage of materials. Is it not a fact that, led by bricks, the output of material for building houses was at a higher level when they took over than it had been in the past?
§ Mr. Willey
I am glad that I gave way to the hon. Gentleman the Member for Peterborough (Sir Harmar NichoIIs). I knew that sooner or later I would have to do it, and I am glad to have done it now. But I have already dealt with that point, and what I intend to deal with today is the problem of land, because it is essential to housing and building, which is what we have been talking about.
The supply of land on fair terms is essential to what we have been talking about. What we are going to do this Session is introduce a Bill, which right hon. Gentlemen will soon have an opportunity of seeing, to establish a Land Commission with power to acquire land for the community and to recover part of the development value realised in land transactions. We intend also to introduce legislation to reform the leasehold system for residential property in England and Wales, including provision for leasehold enfranchisement. To take those together seems to me to be both logical and right.
What the two Measures will deal with are the long established social inequities which derive from land ownership, and it is basic to any programme of social reform that we get a just relationship between the community and that most basic of all commodities, land. We are therefore legislating to strip away the anomalies that so often blight the proper and reasonable expectation of occupying leaseholders. It seems to us manifestly unjust that householders who have built and fully paid for the houses that they live in should, for reasons which are little more than fortuitous, be obliged to surrender the reversion of the buildings at the expiry of the lease.
What interested me particularly a week or two ago was that when I attended the annual conference of the Town and Country Planning Association, I was told what Mr. John Eccles said about the leasehold system. He is not from the Welsh valleys. He has a very distinguished record and was formerly managing director of the Welwyn Garden City Corporation and chairman of the Hampstead Garden Suburb. Mr. Eccles said thatthe fundamental defect of the leasehold system is … the inequitable principle that at the end of a given lease the land-owner is 391 entitled to assume possession, free of charge, of all buildings and improvements created wholly by and at the cost of the succession of lessees, irrespective of the real residual value of those buildings and improvements. Moreover the principle itself creates a strong incentive to neglect the maintenance of the property during the last few years of the lease, with a direct tendency towards the creation of slum conditions.That is a view that I share, but the interesting thing is that it is a view expressed by someone who has had enormous experience of the leasehold system, in the best sense of the word.
§ Mr. Leslie Hale (Oldham, West)
I understand that my right hon. Friend was referring to the Land Commission Bill when he said that it would be available shortly. Can he give hon. Members any idea when the Bill on leasehold enfranchisement will be available, and can he say whether it will be on the lines of the Ungoed-Thomas-Hale Report with reference to all long leaseholders with a certain term of years to run, and without exceptions to certain landlords?
§ Mr. Willey
I must ask my hon. Friend for Oldham, West (Mr. Hale) to await the Bill. It will be introduced, when we can introduce it, this Session.
§ Mrs. Margaret Thatcher (Finchley)
I understood that part of the function of the debate on the Gracious Address was to elicit information on Bills mentioned in the Address, but we shall not get very much information during the debate if we are not to hear more about the details of leasehold enfranchisement.
§ Mr. Willey
That is not so at all. The purpose of the Gracious Address is to indicate the Measures that we shall be introducing this Session, and the Measure to which the hon. Lady refers is one which will be introduced during the Session.
§ Mr. Willey
No, I will not give way. I really must get on.
I have been asked about the intentions of the Government on leasehold enfranchisement. I have said that we will introduce a Measure this Session, and I am indicating the lines that it will follow.
392 What we are faced with in leasehold is that the Landlord and Tenant Act, 1954, did not go nearly far enough. It succeeded remarkably in achieving two objectives, because it prejudiced both the freeholder and the leaseholder at the same time. It did not tackle the fundamental injustice of the system. I can assure my hon. Friend the Member for Oldham, West, that the Government are determined to deal with the inequities in the system once and for all.
§ Mr. Hale
That is the second time that the right hon. Gentleman has used the expression "once and for all". If it is to be once and for all, presumably it is dealing with all leaseholds with a certain time to run. If he is excluding certain landlords, it certainly is not once and for all, and I doubt whether he will get it through once.
§ Mr. Willey
I have taken note of what my hon. Friend has said. I can assure him that we have paid the fullest regard to the Ungoed-Thomas-Hale Report, but we have to tackle the problem in a more radical sense than they did in their minority Report.
§ Mr. Speaker
Order. It is not in order to appeal to the Chair to persuade the right hon. Gentleman to give way. The right hon. Gentleman has refused to give way, and the hon. Gentleman must be seated.
§ Mr. Willey
Now I turn to the Land Commission. The right hon. Member for Kingston-upon-Thames has opened what is bound to be a prolonged debate. He has had time to study the White Paper, but has has not told us what are the views of the Opposition.
§ Mr. Boyd-Carpenter
I have spent a considerable time doing just that. If the right hon. Gentleman would like me to do it again, although Mr. Speaker will no doubt rebuke me for tedious repetition, briefly I said that there is no disagreement with the levy in principle, and that the Land Commission is wholly unnecessary. Will the right hon. Gentleman deal with that?
§ Mr. Willey
Certainly. But what the right hon. Gentleman has not done is to say what the views of the Opposition are 393 about the problem that we face. In fact, the right hon. Gentleman appears in a new cloak. There has been and continues to be a very stark division between the two Front Benches, though it was obscured for a few minutes two years ago when we had a similar debate on the Address in 1963.
I should like to remind the House of what the right hon. Member for Leeds, North-East (Sir K. Joseph) said in that debate, because it is something with which the right hon. Member for Kingston-upon-Thames has not dealt at all. The right hon. Member for Leeds, North-East, when Minister of Housing said:It is in relation to the bringing of new land into development that the question of betterment becomes really important, for it will entail public expenditure on services and roads to bring it into development, and this expenditure will create an immediate increase in value. It does seem right that that increase should be collected by the public. We do it in the new towns, where the land is bought in advance and, when it is developed, or is ripe for development, is leased or sold at current market value, so that the new town corporation recoups itself for earlier expenditure.Then he added:It is a corollary of regional planning and development that land planned for major development should be bought well in advance by a public authority for disposal to private enterprise or to public enterprise as required, both to control and phase the development and to help in meeting the cost of bringing it into development. We may well have to devise new machinery for the purpose."—[OFFICIAL REPORT, 18th November, 1963; Vol. 684, c 655–6.]That was not impromptu eloquence. In fact, HANSARD records that when hon. Members said "Oh" the right hon. Gentleman commented:I have written this passage out because it is important and I should like to get it right."—[OFFICIAL REPORT, 18th November, 1963; Vol. 684, c. 656.]Now that was a statement refuting what the right hon. Gentleman was saying today. That was an argument for an authority to purchase and provide land in advance of development.
§ Mr. Willey
I have quoted the right hon. Gentleman at length and not out of 394 context. Before the debate was over the right hon. Gentleman had been abandoned. Mr. Geoffrey Rippon wound up the debate and we got no further proposals from the Government nor from the Conservative Party about dealing with the question of development value. It was not, in fact, until March this year that the right hon. Gentleman then said thatit would be reasonable to impose a charge related to the increased value realised for development.But the right hon. Gentleman today— and this is why I complained about his dealing with the White Paper—has not told us what he regards as moderate. He has told us—this is a new conversion— that he at any rate is now converted to the idea that the community is entitled to recoup part of the development value which itself has created.
When the White Paper was published the hon. Gentleman the Member for Gloucestershire, South (Mr. Corfield) said:The difference between What the Conservatives had in mind and the Government's proposal of 40 per cent. levy could perhaps be dismissed as a matter of opinion.How authoritative that judgment was I do not know because it seems to me that he has been dismissed, and I regret to see him sitting now on the back benches.
I am glad to see the hon. Gentleman the Member for Orpington (Mr. Lubbock) here. He expressed views which, I think, he would rather bury now. Certainly I prefer the views expressed by the Liberal conference.
This is the position we face, that—
§ Mr. Eric Lubbock (Orpington)
Just in case there is any doubt about this, my view is still the same as it always has been, that a development levy is quite fair and reasonable, but we shall seek to modify the Land Commission proposals.
§ Mr. Willey
This is what I am dealing with, the relevance of the Land Commission to the question of the levy, but I think I am entitled to know what the right hon. Gentleman means when he himself refers to a moderate level. We have put forward our own proposals about it.
What the right hon. Gentleman cannot avoid, what he has to face up to, is that 395 whilst his own party was in office it took no steps whatsoever to deal with the question of development values and the scandal of land prices. The right hon. Gentleman talked about people being greedy. Well, he should think of some examples which have repeatedly been given in the House, and since we have had to discuss that question of land values our debates have been punctuated by illustrations. We had Sir Frank Markham, whom most of us remember with some affection, who told us that he paid £36,000 for land now worth £1 million. We have had cases like this which did not arouse any interest in the Conservative Party until we took office.
What we have got to do is face the problem and we have to recognise that we in this country accept that there ought to be public control of land use. That we recognise on both sides of the House. What the Opposition have not recognised, what they still do not recognise, is that if one accepts the use of land being determined by the State, by the community, then it follows that that land ought to be provided on fair terms. The objectives which we have set ourselves, therefore, the objectives of the Government on land values areto secure that the right land is available at the right time for the implementation of national, regional and local plans; to secure that a substantial part of the development value created by the community returns to the community and that the burden of the cost of land for essential purposes is reduced.It is this which is at the basis of our proposals for a Land Commission.
The Land Commissionwill be able to buy by agreement any land which they have reason to think may be needed for development.The Commission will have widespread powers to acquire land compulsorily and, as we say in the White Paperwill do so on a basis which will give the owner the value of the land for its current use and an amount sufficient to cover any of his contingent losses plus a further amount— a part of the value arising from the prospects of development—to encourage the willing sale of land for development.That is what we set out to do.
Upon this I would make three qualifications, all of which, I am sure, will have the wholehearted support of the right hon. Gentleman. First, that the Government recognise, and frankly recognise, that it 396 would be administratively impracticable for the Land Commission to buy all the land needed for the start of its operations.
§ Mr. F. V. Corfield (Gloucestershire, South)
Does the right hon. Gentleman imply by that that it is the intention that the Commission will eventually buy all the land to be developed, and if he does, can he explain this to me? As I understand it, the Government have in fact switched from existing use plus to market value minus. If we get to the stage at which we have all the land acquired by the Land Commission, can the right hon. Gentleman tell me how on earth we decide what the market value will be?
§ Mr. Willey
No. What I have said is that if we concede that use is determined by the State, by the community, then it is right that acquisition should be on fair terms. To provide that acquisition should be on fair terms we have the Land Commission, and the basis of the success of land acquisition is that we should give a current use value plus contingencies, plus an amount sufficient to bring the land forward for development.
§ Mr. Corfield
With due respect to the right hon. Gentleman, he is wrong. His own White Paper in paragraph 10 says:The Land Commission themselves, when buying land, will collect the levy … from the price they pay, so that the net payment made to the owner will in effect be the current use value of the land plus a part of its development value. Subject to this"—and this is the crux—the market value basis of compensation for compulsory purchase at present in existence will continue unchanged …Market value is the basis. What I am saying is that if we have disrupted the market by compulsory purchase throughout the area, how do we assess the market value?
§ Mr. Willey
We do not do this at all. What we have to do is to provide that the Commission will buy at existing use value and give a sufficient inducement to bring land into development. As I have said, first, we frankly recognise that it would be administratively impracticable for the Land Commission to buy all the land needed for development at the start of its operations. Secondly, we recognise that, as we are concerned with the 397 supply of land for development and in advance of development, the Commission should not displace any of the present means of acquiring and bringing forward land but should supplement them. Thirdly —I am sure that this is essential if we are to attain an effective, lasting and fair solution—having established the Land Commission, the extension of its operations will be tested in the light of its experience. The proof of the pudding will be in the eating.
Once we accept this approach, clearly we must avoid a two-price system for land. That is why we propose a levy on development values realised on all land transactions, whether public or private. When the Commission buys, it in effect deducts the levy from the price it pays. In all other transactions, the Commission collects the levy.
The general issue—if we isolate for a moment die question of the levy, and I gather that there is now no dispute in principle between us on that—is whether our judgment about the levy is correct or whether the levy is too low or too high. It is about this that we have not heard from the right hon. Gentleman. I would remind those who think it is too low of what we say in the White Paper:The rate of levy can thus be determined independently in the light of the requirements of land for development and the need to recover betterment for the community. It will be prescribed by order at an initial rate of 40 per cent. which in the Government's view is a modest rate leaving ample incentive to owners to offer their land for development. But it is the Government's intention to increase the rate progressively to 45 per cent. and then to 50 per cent. at reasonably short intervals. The question of increasing the rate further will be examined as acquisitions by the Commission, and thus their ability to provide land for development, increase.This treatment of development value, if it is accepted, is itself a justification for the Land Commission if we are concerned about the development and the bringing forward of land for development. This is the consideration that one has to bear in mind if one is concerned about the supply of land. This in itself is an argument for having a Land Commission.
There are, on the other hand, others—possibly including the right hon. Gentleman, although he has been coy and obscure about it—who think that the 398 rate that we are proposing is too high. I do not accept this. I think it is fair. I assure the right hon. Gentleman that I think it must be fair if development is to go ahead smoothly. I think that the balance of opinion has been that the levy we are proposing is fair. I do not always have the pleasure of calling in aid the Financial Times, but this is what it said:Neither the Liberals nor the Conservatives will find it easy to oppose a betterment tax on principle. They may have some criticism to offer of the rates suggested, but 40 per cent. is not high in relation to the long-term gains tax, and the warning that it will rise is plainly intended to get land quickly on to the market.Those who are concerned about the levy being too high are concerned about two things, first, the price—this is the question that the right hon. Gentleman was dealing with—and, second, the supply of land. On price, the right hon. Gentleman has not even the support of the arch-critic of the Commission, Dr. Denman. Dr. Denman said in an article that he wrote for the Daily Telegraph:If prices remain steady a 40 per cent. development deduction could cut back the 1964 land price to the 1959 level—a 30 per cent. reduction—but house costs would drop no more than 3. per cent.He is arguing that if we translate the levy into terms of the price of new houses in London and the South-East, the cost of a new house would be cut by only £200. His argument is that one has to look to the house prices, and if one does that a levy of 40 per cent. will affect house prices by only £200. I do not for a moment accept Dr. Denman's figure, but if there is anything in his argument it is surely an argument for a higher rate of levy.
If we are concerned about price we must be realistic about land prices. The plain fact is that today the landowner whose land is developed is exacting the highest price he can get for his land, and this will not be affected by the levy. Having heard the right hon. Gentleman in particular, we cannot afford to take any risks. It is possible that the levy may be used by some landowners to create an artificial market value prejudicial against a private developer. This, again, is an argument for the Land Commission. If this happens, the Commission must step in to buy at the true market 399 value. The right hon. Gentleman dealt with price and he also mentioned supply, and apart from price, there is also the question of the effect on the supply of land. What do all these statements that are made about supply amount to? They amount to an indictment of the landowners. They imply that if landowners are denied a part of their profits, denied a modest measure, they will withhold their land however much it may be needed for development which is essential to the well-being of the country. I have rather a better opinion of landowners in general than the right hon. Gentleman and some of his hon. Friends seem to have. I am sure that landowners will accept that our proposals are proposals made in moderation.
I should be failing in my duty if I paid no heed at all to the warnings that have been uttered, and uttered in profusion, about the possibility that landowners might withhold their land. I therefore propose that the Land Commission should have adequate powers to ensure that in this eventuality the needs of the community shall prevail and land shall be available not only for development by public authorities but for development privately. I emphasise to the right hon. Gentleman that what I am concerned about mainly here is private development. The Land Commission is really necessary if there is any threat of this kind, because the local authorities have neither the means nor the will to help. We have to ensure that private development, private housing, is not thwarted and frustrated.
So we have a Land Commission with two main powers, a power to buy land, compulsorily if necessary, and a power to impose a levy on development value. The Opposition apparently attack one and not the other because they fail to see, or will not see, the essential relationship between the two, a relationship which works both ways.
Recognising that local government finance is not suited to holding land extensively in advance of development, recognising that unified ownership is needed before comprehensive development can be achieved, and recognising also the powerful case that has been made out by the right hon. Member for Leeds, 400 North-East, we want the Land Commission to be able to buy land in order to ensure that our regional and national planning can be implemented.
But if we are to operate fairly and not disrupt the land market, we need the levy on all transactions in order to avoid the two-price system. Conversely, if we impose the levy on all land transactions, we need compulsory purchase powers in order to ensure that that development is not frustrated by landowners, on account of the levy, withholding their land. The Opposition are deluding themselves if they think that they could introduce a scheme for a levy alone without having a new body similar to the Land Commission and armed with similar powers.
The right hon. Gentleman expressed concern about compulsory powers. We too are concerned about them. What we propose, therefore, is limited powers for the Commission in the first instance and then more extensive powers. But if we examine those limited powers one by one, they establish the case for the Land Commission.
First, the Commission will be able to buy land in order to secure its early development or redevelopment. That is primarily the compulsory power necessary to support the levy. It is the power which must rest with the Land Commission if landowners should refuse to bring land forward for development when it is ripe for development. As I have said, this is designed primarily to help the private developers who would otherwise be frustrated.
§ Mr. A. P. Costain (Folkestone and Hythe)
Will the right hon. Gentleman explain how the new towns got their land if the powers to be given to the Commission are not in existence?
§ Mr. Willey
They got their land in a similar way but as specific instances. We have to deal now with other cases apart from them. It is not only in the new towns where land is required in advance.
The second of the powers is that the Commission will be able to buy land which needs to be acquired for development or redevelopment as a whole. This power the Commission will use when it wants to buy land in advance of need—a role which it will play to an increasing 401 extent as it develops the scope of its activities. Indeed, as I have said, some hon. Members opposite for some time have recognised the need for such powers.
Thirdly, the Commission will be able to buy compulsorily land required by a public authority, possessing compulsory purchase power for the performance of its functions. I do not think that this power is so fundamental but it is not unnecessary. We must recognise that, in many cases, the Commission will be better placed than some local authorities to acquire land. It would be foolish to hamper the programme that local authorities will have to face by not ensuring that they are able to take advantage of the powers to be exercised by the Commission.
Finally, the Commission will have power to buy compulsorily land for disposal to housing associations or local authorities or directly on concessionary terms for private housing. The right hon. Gentleman expressed his concern about price. In fact, we affect the price by taking the levy and in the case of housing we intend to make available more cheaply for private housing land provided by the Commission.
I should have thought that, in each of these cases, the right hon. Gentleman would have conceded that there is a case for the Land Commission to reinforce the levy and to bring land forward for development. I assure him that we intend to proceed by stages practically and pragmatically. It has certainly been a great encouragement for those who have been at work on translating these proposals into legislation that they have been favourably received. For example, the Town and Country Planning Association has given its judgment that the White Paper…lays out a very sound and practical approach to a complicated problem. It should command the widest support because it is workable and it is also fair to landowners and to the public.I conclude by calling in aid Sir Colin Thornton-Kemsley who was a Conservative Member of Parliament for 25 years and who speaks with great authority on the subject. After expressing the hope, which I share, that the Commission will be reasonably and fairly operated, he concludes that it 402could fulfil a task, and create an image, which would ensure its acceptance as a necessary part of our planning machinery ".That is my view. What we are renewing and restoring sensibly is the work of Lord Silkin.
§ Mr. Lubbock
I must have misheard that quotation. What planning functions will the Land Commission have?
§ Mr. Willey
It will not have planning functions but, of course, it will be a necessary part of the planning machinery. Surely the hon. Gentleman would accept that. It is absolutely fundamental. If we provide, by planning, for the determination of land use, it is a corollary that we should provide the instrument to ensure that the land is available, where wanted and on fair terms.
It was the responsibility of the Conservative Party that the free market was restored in land, a situation in which we have suffered the scandal of land prices and the distortion and frustration of planning. It is now our responsibility to ensure that we restore that which Lord Silkin began.
§ 4.58 p.m.
§ Mr. Reginald Eyre (Birmingham, Hall Green)
After eleven months of preparation by the Government, I was surprised to find that the White Paper dealing with the Land Commission consisted of only eight printed pages. When one thinks of the complexity of the land problem and of the thousands of pages that have been written about it, it is astonishing to find that what is described as the solution should be put in three short paragraphs in the document.
The White Paper is more significant for its omissions, for it fails utterly to deal with practical details which are necessary if we are to know how the policy outlined is to be carried into effect. I want to examine the terms of the White Paper entirely from the point of view of would-be home buyers. I believe that this is of tremendous importance because of the kind of society which we on this side of the House want to see developed.
True home ownership has three important aspects. First, it is the only form of tenure under which an individual feels it really worth his while to improve the standards of his home himself. I thought that this was illustrated by the Minister's condemnation of the leasehold 403 system when he claimed that under that system a man had no interest in looking after and maintaining the property as it came towards the end of the lease.
The second aspect of home ownership is that it offers real freedom in the way a person develops his home. The third and most important aspect is that it offers the best security of tenure, and is thus the best guarantee of individual liberty against increasingly powerful public authorities. Thus, true home ownership encourages individual responsibility and self-improvement, principles of great importance to the new generation which is strongly attracted by these qualities. The survey conducted in Birmingham about four years ago, showing that no fewer than 84 per cent. of young couples, from all ranges of income and occupation, were emphatically in favour of home ownership, illustrated the tremendous importance of home ownership in these times.
Under the terms of the White Paper, even in its initial stages the Land Commission is to have massive powers of compulsory purchase and it is envisaged that the Commission will be able to dispose of land on concessionary terms for private housing and to local authorities which are prepared to build houses for sale. How will the Minister allocate land for private housing on concessionary terms as the land becomes available? How will he decide which builder is to undertake the development and on what terms?
I want to examine the terms of disposal very carefully, because I believe that would-be home buyers are in danger of being seriously misled about the nature and quality of the ownership to be offered to them. The Minister should therefore say quite clearly what the terms of disposals are to be. In the early days of discussion of the Land Commission, the form of tenure on disposal was confined almost entirely to Crownhold, but in recent times—as in the White Paper—in accordance with the best traditions of psychological warfare, there has been an improvement on this with disarming references to three kinds of disposal.
The first is the most attractive to those who believe in home ownership and is sale by way of freehold.We would wel- 404 come sales of freehold by way of an unencumbered fee simple and I ask the right hon. Gentleman to make it clear whether that is to be the case. The implication of the White Paper is that disposal of land for freehold housing will be very unusual—to judge from the implication of the wording which is specifically used.
§ Mr. Willey
If the hon. Gentleman has come to that conclusion, he is mistaken. This will be a matter for the discretion of the Commission, but where a disposal is made on concessionary terms it will be necessary to provide, as simply as possible, that the person receiving the concession should not immediately take advantage of it.
§ Mr. Eyre
I am very grateful to the right hon. Gentleman. I would have thought that the implication of the wording of paragraph 22 of the White Paper was that sale of land for housing freehold was unlikely, because the word "housing" is not mentioned in the sentence dealing with the disposal of freehold, whereas the final sentence of the paragraph directly refers to the Commission's granting leases for houses.
§ Mr. Willey
I should like to reassure the hon. Gentleman about this. The reference to houses in the last sentence is necessary to clarity, because there has been a reference to leases. The sentence says that if leases are granted,they will normally be very long—say 999 years.I am obliged to the hon. Gentleman for calling attention to this point, but the sentence is added merely to make it quite clear that if leases are granted, they would normally be for very long periods.
§ Mr. Eyre
I am very grateful to the right hon. Gentleman. I must admit that I thought there was great significance in the precise wording about disposal and I will try to explain my reason for that suspicion. If there are to be sales at the unencumbered fee simple, I believe that they will be accompanied by a disadvantage to the owner-occupier, which I will explain in a moment.
The next form of disposal mentioned is that by way of leasehold and it is said that the leases would normally be very long. Quite casually, at the end of the sentence, there is added the phrase:— say 999 years.405 Although the home purchaser would probably welcome a very long term of that kind, I find it extraordinary that such a term should be suggested. The right hon. Gentleman himself referred to the need for public control of land use, and yet the granting of leases of this extraordinary length is one of the ways of surrendering the very principle which I have understood the right hon. Gentleman to be advocating. I would have thought that all the arguments of good estate management were in favour of leases more or less according with the life of the property, and the probable life of housing is regarded as 99 years, which is why so many leases have been granted for that period. If one wanted to be absolutely sure of taking the probable life of the property into account, one would have a lease for, say, 140 years.
On careful consideration, I feel that the reference to 999 years is an imaginative touch of deception, because I take it to mean that in most cases the freehold is not to be available. The reference is therefore to 999 years because it would be difficult for the Minister who is to bring forward legislation to enfranchise certain forms of leasehold homes simultaneously to make it clear that he intends to deal primarily with housing development on a Crownhold basis, with all the disadvantages relating to leaseholds which he had mentioned earlier. The reference to 999 years seems to be a sort of psychological counterblast to the right hon. Gentleman's difficulty in reconciling the two kinds of Bills which he will have to introduce. Leases of this length, which would otherwise be welcome, contradict the principle of community control he advocates.
In paragraph 23 of the White Paper one comes to the real meat of the proposed policy, which is of particular significance to the would-be home owner. This deals with the disposal of private housing, if any—and I must admit that my suspicion is that there will not be much—which will really be affected mainly by way of Crownhold. This, says the White Paper, will be granted… subject to restrictions which will reserve to the Commission all future development value.In addition, provisions for the control of assignments will be added to the Crown- 406 hold, to the form of lease. It is specifically provided in the White Paper that properties will always be valued for reacquisition, that is, for taking back by the Land Commission, subject to these restrictions. It is clear that reacquisition is contemplated, is within the ambit of the Land Commission, and that the properties are to be taken back at a valuation subject to the restrictions which have been imposed.
I would have hoped that the Minister would have given us helpful detail which is not set out in the White Paper and that he would tell us, and all prospective purchasers of properties, precisely what those restrictions will be. They will never understand the nature and quality of the ownership offered until they know what those restrictions are. I have been trying to discover what the basic philosophy and policy of the White Paper is in order to get some clue as to how the practical details will develop. I feel that the vital wording here is… reserve to the Commission all future development value.Assuming that to be so, and assuming the Minister to have a sustained purpose in this respect, I ask him to think of this policy on the lines of all future value coming to the community. And then I ask him to tell us, in pursuance of this logic, that any sales of freehold for private houses must, in those circumstances, be subject to a perpetual rent, charged in the nature of a chief rent, since the future value is to come back to the community. If there is to be any application of paragraph 22 of the White Paper, I would further suggest that in the interests of taking over future value of the land for the purposes of the community, it would be necessary for that rent charged on the freehold, if any, and to be adjustable in amount, according to a formula laid down by the Land Commission. In the light of the logic of the White Paper, I would therefore confidently expect that there must be some kind of annual payment. Any sales of private houses by granting leases for 999 years would, I suggest, be subject to a ground rent, which would be calculated in accordance with a formula laid down by the Land Commission. This would be necessary to effect the purpose and the underlying principles set out in the White 407 Paper of seeing that future values come back and are retained by the community.
The object in both cases would be to deprive the so-called owner, in accordance with the doctrine specifically laid out in the White Paper, of any enhanced value which might accrue to the property as the years pass.
§ Mr. Willey
If I may allay the hon. Gentleman's suspicions. He has asked about philosophy. The purpose of this is to provide land for housing at cheaper than market prices. One can do this in two ways, both of which are dealt with in this paragraph. One can retain the development value, in which the householder probably has not an interest, and so cheapen the cost of the land for housing. One can also provide that the price will be less than the market price. But if one provides for a concessionary disposal, one has to provide a safeguard, so that the person who receives the concession does not immediately take advantage of it. These paragraphs have no more in mind than that.
§ Mr. S. C. Silkin (Dulwich)
It is perfectly plain what is meant. It is perfectly clear that this only operates as and when redevelopment takes place in the future. In other words, if one has a plot of land which at the moment has a single house upon it, and in future that piece of land is going to be redeveloped, through the house being demolished and half a dozen houses or a block of flats being put upon it, or some changing of use to industrial premises, then the enhanced value of the land in those circumstances will accrue to the community, and not from year to year in accordance with the cost of living, as the hon. Member has suggested.
§ Mr. Eyre
I would like to know if the Minister agrees with the statement made by the hon. and learned Gentleman, because I find it difficult to reconcile that statement with the restrictions that 408 are referred to in the White Paper, which have the object of seeing that future value goes to the community, and, which, furthermore, contemplate reacquisition. I would like the Minister to indicate whether he would agree with the hon. and learned Member's interpretation.
§ Mr. Willey
Of course I agree with my hon. and learned Friend. I am sorry to be called on to intervene again because I cannot, for the life of me, see what the hon. Gentleman is worried about. The White Paper is clear enough… restrictions which will reserve to the Commission all future development value.This is something for which we have to make provision.
§ Mr. Eyre
I am sorry to be persistent on this, but it is very important if one is to determine exactly what kind of ownership is to be available under Crownhold. I would have thought that the Minister, since he is going to use Crownhold widely, judging from the public announcements that have been made, would give us details of the new kind of tenure which is to be created.
Quite clearly it is different, it is not freehold, it is not 999 years, which was mentioned in the throw-away line in paragraph 23. It is to be Crownhold and it is to be tied in with this idea of taking future development. I would welcome the Minister making it absolutely clear to us what kind of ownership will be available under Crownhold. There have been many comments, indeed speculations, as to what this form of ownership might be.
§ Mr. Eyre
These have been very widely canvassed in well-known journals. There have been speculations as to how the Socialist purpose of the policy, that is, taking the future development values for the community, is to be effected. The right hon. Gentleman is well aware of this. This is a problem, and all I am seeking to find out is how the purpose will be effected. Before the General Election the Prime Minister described Crownhold houses as:The property of the owner-occupier and his heirs as long as the house stands.409 This is an unknown form of tenure in English land law. It is a new development. It has unusual qualities which are not known to other forms of tenure, and it is necessary that we should speculate on it and find out exactly what Crown-hold will be.
The explanations which I have sought to bring forward accord with the wording of the White Paper. They certainly fit into that important sentence which I regard as determining the basic philosophy and purpose of the Land Commission, namely, that land for housing will be soldsubject to restrictions which will reserve to the Commission all future development value.This is not the same as saying that when the person who owns the house—it having changed hands several times—seeks to sell the property and go off, and the Commission says that with the passage of time it will be necessary to take back this property for redevelopment, the Commission will come along and take it. It is much stronger and deeper in its implications, and therefore I ask the Minister to answer a number of practical question which necessarily arise from this purpose and policy.
First, assuming that concessionary terms are offered for private houses, how will the first purchasers be chosen? I hope that when he replies the Minister will bear in mind the need for social justice to be seen to be done, because I can give him an example of a practical problem in this respect. The Labour-controlled council in Birmingham could be helped by the Minister's answer, because it is wrestling with a similar problem. At Castle Vale on the outskirts of Birmingham, which was formerly Castle Bromwich Aerodrome, 450 houses, which represent a small proportion of the vast Castle Vale estate which is to be developed, are being offered for sale for the corporation in an exercise which is rather like that contemplated by the Land Commission as I understood the Minister to be explaining it. There have been about five applications from would-be purchasers for each house and flat.
The last time this kind of situation arose in Birmingham was about four years ago when a concession was made 410 to the desire of young couples to be home-owners and the corporation allocated 108 houses at Rednal for private purchase. On that occasion nearly 3,000 people applied to buy them. Priority was settled by lottery to decide who was going to be lucky. The method of selection at Castle Vale is not yet known, but does the Minister think that a lottery is a suitable way of dealing with this matter? If he disapproves of it, will he tell us the method by which he will make allocations when he has to deal with a similar practical problem?
This is important, and it affects the Minister of Housing and Local Government who will be faced with a similar difficulty, because, as I understand it, in place of the Socialist doctrine of direct control of private building, he is substituting a requirement that the building societies should limit the total amount of private housing to be developed by the rationing of mortgages over the year. I think that the Minister of Housing and Local Government must explain to us in detail how, and under what system, the building societies will apply that rationing to see that it is done fairly. For example, who will be chosen for the mortgages, and, in particular, will there be a detailed allocation of those mortgages throughout the regions of the country to ensure that there is a regional fairness in their allocation?
Looking ahead, after we have got over the difficulty of the sale to the original purchaser at the concessionary price, and dealing with this concept of the Land Commission granting an unusual kind of tenure with copyhold, if there is to be re-acquisition, and the owner is not going to be permitted to sell his lease of the land, or the house on it, to anyone other than the Commission, which is the only way of avoiding a black market in concessionary priced houses, there must be some restriction. The Government clearly intend to impose some restriction. How is it going to be imposed? I should like to know what it is in practical terms, because, if a house is sold at less than market value, and, for good reasons, the man who buys it wants to move soon after that, he will be able to cash in on the benefit which has been given to him if he has a freely assignable lease. As the Minister would not want that to be the 411 consequence—he would not want the individual to take the benefit—he would impose some kind of restriction to ensure that that did not happen. It has been suggested that the individual will be required to sell the property back to the Land Commission at a fixed price because, according to the Minister's philosophy, the enhanced value of the property must pass to the community and not to the individual. It follows, therefore, that the individual will have to assign the house back to the Commission at the price fixed by the Commission.
In that event, if a man who has taken a house on the outskirts of Birmingham and then has to move to Manchester to take up a new job, wants to sell the house, it will go back to the Commission. If there are a number of applicants for that house on resale by the Commission, how will it be decided who is to be the fortunate purchaser of it? Clearly one cannot allow an individual to get an advantage out of this system. He will, therefore, have to sell back to the Commission, and if the Commission then has to deal with the property, again at a concessionary price, and there are a large number of applicants for the house, how will the Commission decide who is to be favoured? Again, if the house is to be sold back to the Land Commission at a fixed price when the man moves, what incentive will there be for him to improve the property, or even to maintain it in good order?
If the Commission is to control this interest in the community by insisting on this kind of transaction taking place, I suggest that if a man has improved his property and kept it in good order it will be essential to compensate him, but this will mean bringing in valuers and experts, which, in turn, will mean increasing the staff of the Commission and the increasing operation of valuers outside the Commission.
If I am right in saying that, as was set out at one time, there is to be a limitation to the occupier and his heirs, which assumes a restriction and not a right to sell generally in the market, then, if the occupier is a widower without children, and he wishes, on his death, to have the house passed on to his best friend, will this be permitted?
§ Mr. Willey
The hon. Gentleman should not make any of those assumptions. There is no basis for them at all.
§ Mr. Eyre
I have read a great deal about the operation of the Land Commission, and I have looked at its basic principles. The hon. Member for Birmingham, Aston (Mr. Julius Silverman) has the reputation in Birmingham of being knowledgeable in land matters, particularly with regard to Socialist policy. He and I have debated matters of this sort in public, and he has answered questions that I have put to him about the form of ownership that must exist under Crownhold. I found his answers to be not acceptable politically, but to be practical for dealing with the problems of ownership which will arise under the form of Crownhold that is to be granted. However, I am glad to have the Minister's assurance that he is not contemplating this, and I therefore ask him to say how he will see to it that future benefits do in fact come to the community.
1 would have thought that the concept of ownership under Crownhold which I have set out would be unacceptable to the great mass of would-be home owners because it would mean that a new form of unacceptable tenure had been created, and having to hand the property back at a fixed price when a person moved from one district to another would be a deprivation of the real owner's rights of property which exist now.
If this policy were to develop along those lines it would undermine the rights of ownership and would be very much against the principles of freedom and liberty. True ownership increases personal liberty and personal freedom, and interference by a powerful State authority in this way would be very much against its interests and purposes, and its desire to stimulate personal responsibility. It would certainly be rejected by the great mass of the people as a very inferior form of ownership.
If the Minister explains to us today exactly what Crownhold is, and exactly how it will operate—how he will get over the practical difficulties of the allocation of concession-priced houses, and see that the future benefit of land comes back to the community without the imposition 413 of restrictions of the kind that I have mentioned—I shall be very much obliged.
§ Mr. Willey
I am sorry to interrupt so much, but the hon. Member keeps putting rhetorical questions to me. He has raised the question of the difficulty of allocation. This is not a new difficulty. It faces housing associations, corporate groups and local authorities—
§ Mr. Willey
—and private builders. As for concessionary disposal, I made it quite clear that our sole concern is to ensure—and I should like to know whether the hon. Member accepts this as right and proper—that if a concession is made steps should be taken to prevent the person who receives the concession immediately taking advantage of it by disposing of the property.
§ Mr. Eyre
I have looked at the White Paper. The conclusions that I have drawn have been in accord with many articles written in journals and suggesting that there was a development of Socialist policy along these lines. If the Minister can assure us that this is not so, and can define exactly what Crownhold is and how it differs from the forms of lease that I have mentioned, I shall be happy to listen to him.
§ 5.33 p.m.
§ Mr. Dennis Hobden (Brighton, Kemptown)
I want to widen the scope of today's debate, which so far has been concerned mainly with the question of the Land Commission. I welcome the proposals contained in the Gracious Speech because to me they represent a fulfilment of the remaining half of the promises made in the manifesto on which the Labour Party fought the last election, and so take us through practically all the promises made in that Manifesto—the proposals for the Land Commission, which we have already heard about this afternoon; steps to increase the number of teachers; further steps towards comprehensive schools; steps towards wage-related insurance benefits, and pension schemes for teachers' widows. This afternoon I want to deal particularly with three matters. The first concerns public service pensions, the second, rating and the third, housing.
414 Before dealing with these, however, I want to say something about the deferment of the public ownership of the steel industry. Like many of my hon. Friends I believe that the question of public ownership is basic to Socialist faith. I believe, however, that it is equally true that the question of priorities, as laid down by the Prime Minister, is pertinent to the range of the programme that we have set down in the Gracious Speech. I should have the greatest difficulty in getting some of my constituents to accept that the question of the public ownership of the steel industry—which would involve us in long debates lasting for many months—should corne before such subjects as the question of an increase in public service pensions or the reform of the rating system.
§ Mr. James Allason (Hemel Hempstead)
Has it occurred to the hon. Gentleman that the whole matter could be settled in one Second Reading debate?
§ Mr. Hobden
I do not know whether the hon. Member is referring to the nationalisation of the steel industry—
§ Mr. Hobden
In that case, what he has just said is not strictly accurate. If attempts were made to bring the steel industry into public ownership it would involve many days of debate. If he really believes that what he says is true I can only suggest that he passes the message to the Leader of the Opposition and persuades him to avail himself of the offer made by the Prime Minister this week, to the effect that if hon. Members opposite would withdraw their objections to the nationalisation of steel we would bring it forward as we said we would. From the way the Conservatives keep twitting us about the public ownership of steel one would think that they were all disappointed that we are not bringing it forward. They give the impression that they are in favour of the nationalisation Measure being brought forward. I would have thought that in the circumstances, knowing what hon. Members on this side of the House feel about the matter, they would have kept quiet and allowed some of us to get on with our private grief on this issue.
§ Mr. Edward M. Taylor (Glasgow, Cathcart)
I appreciate the hon. Member's difficulty in trying to justify the exclusion of any mention of steel from the Gracious Speech this year. Can he tell us how he managed to explain to his constituents last year the fact that it was in the Gracious Speech?
§ Mr. Hobden
As I have said, my conscience is quite clear. This is a question of priority. I am certain that my constituents would prefer me to do something about increasing public service pensions and reforming the rating system.
I welcome the increases made in recent days in public service pensions, because in July of this year I had the honour to initiate an Adjournment debate in respect of Armed Forces pensioners. Under the rules of the House I was not allowed to deal with the whole subject of Service pensioners, owing to the fact that one group is dealt with by legislation and the other by Order, but I welcome these proposals because they are another demonstration that this Government at least are going along the road to the fulfilment of their election promises.
§ Mr. Anthony Royle (Richmond, Surrey)
Is not the hon. Gentleman aware that before the last election his hon. and learned Friend the Member for Northampton (Mr. Paget) pledged the then Opposition to bring in parity for public service pensions? How can he explain that away to his constituents?
§ Mr. Hobden
I am satisfied that even public service pensioners' organisations understand that in the light of current events and the economic situation that we inherited from the party opposite it is not possible to obtain parity at this stage. Neither would it have been possible for the party opposite to implement parity if they had been returned to power at the last election. I am grateful that these proposals for increases have come forward. I believe that we shall now slowly move towards parity over a number of years.
I have never believed that it was possible to implement parity in one go, in view of the huge financial amount required to introduce the principle, but we should take serious steps to see if we 416 can agree to work towards parity over a certain period. Public service pensioners have been having a very hard time. It may be true, of course, that they have shared in the general increase of benefits given by the Government since they reached office, but I am disappointed most by the fact that there is still no attempt to make the reviews completely automatic.
For instance, I believe it is essential that public service pensioners should not have to continue lobbying their Members of Parliament or sending petitions to the House in order to draw attention to the difficulties they suffer because of inflation. As I said during the Adjournment debate in July, I should like to see the subject of public service pensioners of all kinds taken out of the realm of party politics.
I want to speak today about the reform of the rating system. In the Gracious Speech, it is stated that we are going to:…lessen the injustices of the rating system and to limit the burden of rates.We are not quite certain how these proposals will be worked out in detail, but I welcome them because they represent a long overdue reform. I listened with some amusement when the Leader of the Opposition said that he and his hon. and right hon. Friends would examine with care the proposal to deal with the rates.
This brings up the Conservative record over rating. Revaluation came in about 1962–63 and, in many parts of the country, placed great hardship on many ratepayers. I am obliged to a report in the Brighton Argus of 20th February, 1965, which drew attention to the position in Brighton. The figures I give are for the whole town, although my constituency represents only half of Brighton. After the 1963 revaluation, the average householder in the country paid another 2.9 per cent. in rates, but in Brighton the increase was as high as 9 per cent. Whereas, on average, householders over the whole country paid 48 per cent. of the town's rates, in Brighton the figure was 62 per cent.
Another report in the same newspaper said that after the 1963 revaluation, 5,000 ratepayers in Brighton lodged appeals. In February of this year, 2,300 of those appeals were still outstanding. But 417 the agitation caused by revaluation was not as a result of revaluation itself. The faults in the rating system were already apparent, but the effect of revaluation was to aggravate them, particularly in certain towns and particularly in seaside resorts.
Members of the Opposition have criticised our record since we came to office, but they had ample opportunity to get to grips with the rating system and bring about some relief, particularly to the problems of those on small fixed incomes. The Government of that time set their faces against any consideration of the rating system and flatly refused to do anything about problems which were being brought to their attention by hon. Members on both sides of the House and by members of different constituency parties.
Then, the Minister of Housing, the right hon. Member for Leeds, North East (Sir K. Joseph), was reported, in the Sunday Pictorial of 3rd March, 1963, as saying:I feel I have no evidence that an inquiry could produce the answer here.He went on to say that he wished he could be convinced.
However, the uproar continued throughout the country and, after a while, the Government of the day were forced to bring forward the Rating (Interim Relief) Bill. The Times had some very scathing remarks to make about that Bill. On 26th August, 1964, they described it as "misdirected as well as misconceived", and, on another occasion, they said:It has, however, been impossible to avoid the conclusion that the Government's sudden change of mind about immediate rate relief, its decision to act before the facts on which action should be based have been investigated by the Allen Committee, was prompted by electoral calculations. The resulting Measure is just what might be expected: it is ill-prepared, introduces at least one objectionable principle and threatens to breed as much discontent as it is supposed to remove.When we examine the Rating (Interim Relief) Bill and its effects on Brighton, we can see whether it is true—as the right hon. Member for Leeds, North East, said on 18th December, 1963, when he was Minister of Housing—that it was a Measure to mitigate and cushion hardship.
There were, in Brighton, 1,223 applications for relief by 17th July, 1964. The local authority had dealt with 752 of 418 those applications. A total of 364 were rejected, and, the remaining 388 were given rate relief of less than Is. lld. a week. So much for the statement by the then Minister of Housing that that Act was designed to mitigate and cushion hardship.
All this time, the then Government had plenty of opportunity to deal with all the problems, the suffering and hardship, which revaluation had caused and which had aggravated the problem of the existing rating system. Yet they have been blaming this Government because we have not done in twelve months what they failed to do in 13 years—bring about a complete reform of the rating system. Revaluation merely aggravated a system which was already there.
The rating system had begun to get out of hand for other reasons. In the first place, local authorities had been forced by the then Conservative Government to borrow their money on the open money market at extremely high rates of interest. At the same time, the Government had cancelled the percentage block grants which were a feature of Government grants and replaced them with block grants.
Land prices reached astronomical proportions during that period. I thought what a cheek hon. Members of the Opposition had today when, speaking about the Land Commission, they criticised this Government's attempts to deal with this very thorny problem. At least we have got to grips with the problems and are trying to do something about them.
Another reason for the further aggravation of the rating system was that, with the inflationary increases in wages and salaries, the increases in pensions, further burdens were placed on local ratepayers. One can condemn the Conservative Party because at that time, in 1962, a local conference composed of members of the Conservative Party had turned down an inquiry into the present rating system. However, the increase in agitation eventually meant that the Allen Committee was set up and went into these problems.
I know that the Allen Committee did not report during the period of office of the previous Government, but when we examine the task of the Allen Committee, 419 we can see how we had gone down the slippery slope of rating. We found, from their Report—I will not go into all the figures in the Report—that the higher one's income, the less one pays in rates. A man with an income of £30 a week pays an average of 2 per cent. in rates, while the man in the lower income group of £6 a week—which includes a tremendous number of pensioners—pays as high a proportion as 8 per cent. of his weekly income in rates.
The Gracious Speech shows that we are now at last to get to grips with the problem. As I said, I do not know yet what principles the Minister will apply to the problem, but the Minister of Housing and Local Government is reported in The Guardian of 13th June this year as saying:I am looking very hard to see if we could not get the local authority to have a share of the tax on vehicles.I hope that that idea is no longer on. As the periodical, British Industry, stated on 11th June, 1965, if we introduce that system:The Exchequer will have to be compensated, and unless local authorities are allowed to vary the rate from area to area they might just as well have it distributed in the form of a grant.I have all along believed that the answer to the local rating problem is a form of local Income Tax. I have never necessarily been opposed to the taxation of land values that the Liberal Party has put forward. The Liberal Party has at least made a contribution to the argument in that it has put forward an alternative to the existing system. But I believe that local Income Tax is the best method of getting to grips with the situation because it brings in a great many more people who can make a contribution to local revenue.' It would also be based on the ability to pay. One of the failures of the existing rating system is that it does not take into consideration the ability of the ratepayer to pay the assessment.
I know that the question of local Income Tax brings its own problems. A problem in my constituency is that a tremendously high proportion of the population commutes to London. There would have to be some system of repaying to the local authority money assessed on a payroll in, say, London.I 420 do not think that that is exactly practicable, although I do not believe that any of the difficulties are insurmountable.
As I understand it, we are to transfer to the Exchequer a large amount of the existing local expenditure. There is something to be said for that. By transferring it to the national Exchequer the amount will be paid by the taxpayers, and there are 24 million taxpayers as against 15 million ratepayers. So we shall be going some way towards payment based on the ability to pay, and shall be spreading it out over a greater number of people.
Let us look at what the Conservative Party says about this question in its manifesto or propaganda booklet, "Putting Britain Right Ahead". On page 16 under the heading "Fresh Approach"—incidentally, it is not a fresh approach—it says that part of the burden of rates should be transferred to the Exchequer, and hardship arising from rates should be relieved by a system which will take account of the problems of people with low incomes, particularly old people. That statement is extremely vague. One wonders whether the Conservatives are speaking about taking some of the cost of local education away from the ratepayers and putting it on to the taxpayers.
I do not want to rub this in to the right hon. Member for Wolverhampton, South-West (Mr. Powell). In recent weeks he has had to put up with a tremendous amount of criticism of the viewpoint which he holds, on which he varies from his party. It was reported in the Press this morning that he was in trouble yesterday with his party over his views. In The Times of 3rd February he was reported as saying about the question of removing a large proportion of the cost of education from the rates:This is a heresy I want to repudiate—and I hope the Conservative Party will repudiate".It does not look as though in its policy leaflet the Conservative Party has supported that statement.
I am anxious that something should be done about rates as soon as possible. My constituency has a large proportion of old-age pensioners and people on small fixed incomes. It also has a very large number of self-builders who have spent two or three years building their own 421 houses under the guidance of professional people after their working day. Some of them have extremely limited incomes, and some have been terribly hit by the rates levied on their new properties. One scheme finished last week after two or three years' work, and it was found that the rates assessed on the new properties would be as high as £2 a week. Many of those people have seriously to consider whether they can accept the load of the mortgage and the rates in order to obtain the accommodation they need so badly.
I now switch from rates to housing, because a speech was made yesterday about subsidised council tenants and some sneering remarks were made about the statement by the Minister of Housing and Local Government that he is to have another look at subsidies. We were told that this was another threat to home ownership. Earlier this year a Question was answered about who was getting subsidy, whether it was the council house tenant or the person who was buying his own property. Some very interesting figures were given. We found that the mortgage interest relief in 1964–65 for the average house purchaser was £31.1 per year, whereas the council house tenant who was fortunate enough to have both a rate subsidy and an Exchequer subsidy had a total subsidy on average of £26.6 a year, which is considerably less than the so-called subsidy for those buying their own houses. So it will be seen that one section of the population is getting unfair treatment in comparison with another. This appears to be another instance of the Conservative Party wanting to turn half the people against the other half.
I was concerned about some of the remarks made by the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) about housing. He maintained that the Conservative Party had a good housing record. However, it is well known that that record is among the worst in the civilised world. Germany has been regularly building twice as many dwellings as we have since the end of the war, and the U.S.S.R. has also been building many more.
I also wonder about some of the promises that the Opposition accuse the newly-elected Labour Government of breaking. They seem to want their arguments both ways. In the constituency 422 in which I live there was a conference in October at which the Conservatives were in full attendance. Every lamp-post had a photograph of the new Leader of the Opposition suitably ringed around with a blue halo. There were other posters in the town, and also full page advertisements in the local evening newspaper which I understand cost £130 a time. They were accusing us of breaking our promises, one of them being that fewer houses were being built. The Conservatives want it both ways. If more houses are built it is because of the Tory inheritance, but if the situation is vice versa we are breaking our promises.
One need only consider the situation in Brighton to prove that the Conservatives' housing record has not been a good one. Using the basis which the Conservative Party demands, in 1952, the year after the Labour Government had left office— and had left the plans ready for houses to be built—Brighton achieved its highest rate of council house completions. A total of 750 council house dwellings were completed. In 1964, after 13 years of Conservative affluence, the figure of completions was 91. This is a remarkable indictment of Conservative policy on council house building.
Many hon. Members opposite sneer at us because we intend to alter the ratio of private and council house building. After the Milner Holland Report, after their long years in office and after the shortage of rented accommodation, the Conservatives have the cheek to complain because we intend to alter the proportion as between council and private house building.
I welcome the Labour Party's policy on council housing and the altered ratio between private and council house building. I am sure that this will result in a tremendous upsurge of council house property being made available to rent. This subject is extremely relevant to my constituency and I am sure that my constituents will welcome my having made these remarks on their behalf.
§ 6.2 p.m.
§ Mr. F. V. Corfield (Gloucestershire, South)
I hope that the hon. Member for Brighton, Kemptown (Mr. Hobden) will forgive me if I do not comment on his remarks in detail. I have a number of other subjects to deal with, although I 423 am tempted to correct him on much of his history about the rating system. I will content myself with making a small bet with him, if he is a betting man, that he will not get a local Income Tax system out of his Government.
I can safely advise the hon. Gentleman—and I am sure that the Minister will agree with this in his heart of hearts, if he will not do so publicly—that the problem of rates, with all its implications affecting the independence of local authorities, is probably one of the most tricky and difficult that even his right hon. Friend has had on his plate. I would therefore advise the hon. Member for Kemptown not to be too sure that he will find the easy solution which he expects his right hon. Friend to produce.
I had not intended to go into great detail on the Land Commission White Paper. I am afraid that I had assumed, perhaps wrongly, that the words used in paragraph 14:…powers will be made available to the Commission in their entirety only on a date to be fixed by the Ministers and they will not do this until their proposals have been approved by the House …implied that we would have a full day's debate on the White Paper before a Bill was introduced. I hope that that is true. However, in view of the way the debate has gone today, that may not be the case, and I hope that the Minister will enlighten us on this subject.
I come immediately to the question of compensation. As I read the relevant paragraphs of the White Paper, it is clear that compensation is to be based on the existing code of compensation, which is market value, and that the levy will no doubt be worked out on the difference between the existing use value and the development value, and be deducted from the market value. Therefore, the ascertainment of the market value is crucial to the exercise.
Bearing this in mind, my question has still not been answered. The Minister does not appear to understand the position, and if his White Paper means anything, he must tell me what will happen if in a particular area the great bulk of the land coming forward for development is acquired compulsorily by the Commission—in which case there will be no market; so how can one ascertain the 424 market value? This is the important point.
My impression at the end of the Minister's speech was that he had left confusion worst confounded. I would be the first to admit that this is a vague White Paper and that it is silent on many important details, but I at least was convinced that I understood fairly well what was in it. However, I am now faced with the alternative that either I do not understand it or that the Minister does not. The mere fact that I am on the back benches while he is on the front does not appear to be conclusive in his favour. There are occasions when in individual cases U.D.Is. are sometimes legitimate and desirable.
§ Mr. S. C. Silkin
Further to the hon. Gentleman's remarks about market value, is he suggesting that while the Commission will acquire land and will in many cases dispose of it to private developers —so that, ultimately, it will find its way into the hands of private people who will pay money for it—none the less there will be no market at all? Surely there must be a market at the end of the day, and surely it is perfectly consistent with ordinary principles that exist today that one works back from that ultimate market price.
§ Mr. Corfield
The hon. and learned Gentleman knows enough about the law to know that we do not buy and sell land as such but interests in land. As I understand it, the interest to be sold by the Commission will be different from the interest which it has bought. That raises difficulties in assessing the market value of the interests to be purchased.
The next point which the House should remember is that the whole Land Commission idea was being sold before and during the election, primarily on the basis that it would offer lower prices to the householder. It is interesting to read paragraph 7 of the White Paper and to find that the two main objectives set out are stated to be:(1) to secure that the right land is available at the right time for the implementation of national, regional and local plans;and:(2) to secure that a substantial part of the development value created by the community returns to the community and that the burden of the cost of land for essential purposes is reduced.425 I will come to that in a moment. But, it should be remembered that the only provisions in the White Paper which refer to anything which could produce a reduction in the price of land are the concessionary provisions in paragraphs 23 and 24. Before dealing with those, there are some general points which I must make. The background information in the first part of the White Paper states, in paragraph 3:The main recommendations of the Uthwatt Committee were implemented by the Labour Government in the Town and Country Planning Act 1947 …That is not true. The Uthwatt Committee made recommendations by which the development value, or "betterment", was to be assessed in two different ways, according to whether it was developed or undeveloped land. In discussing the developed land system, which was based on a species of site valuation, the Committee was at pains to say that on no account should one assess the total tax on the increase of the site value at more than 75 per cent. because it was essential to leave an incentive to the landowner to improve his property and so on.
When, however, the Government came to apply;:he development charge system, which was recommended by the Uthwatt Committee only for undeveloped and not for developed land, and the Government of the day applied it throughout the country, they insisted upon ignoring the arguments with regard to the 75 per cent.: they insisted upon 100 per cent. They did this because they were advised by their valuers that any figure under 100 per cent. would result in the tax gradually becoming incorporated in the price and leading to a quicker rise in the price of land than would otherwise happen. That was the reason. That was why Lord Silkin accepted that advice.
What the Government must answer is why, having accepted that advice and insisted on 100 per cent. in 1947, they now think that a 40 per cent. levy can have any effect upon the price of land other than to raise the price. I happen for a long time to have held the view that this is something that we should tax, but I have not tried to delude my constituents into believing that it would bring down the price of land, because a tax on any commodity invariably puts prices up.
426 Another matter which is of some interest arises from paragraph 5 of the White Paper. The Government refer to the 1953 Act and the 1954 Act and say that a two-tier system was thereby created. That is only a half truth. What happened was that the 100 per cent. development charge itself created the two-tier system, because, at least in relation to the purchase of agricultural land for building, no farmer in his senses would sell a bit of his land for building unless he got more for it than the agricultural value.
I can tell the House a story to illustrate that. I happened at one time to farm a farm which was entirely surrounded by the married quarters of a Royal Air Force camp. On more than one occasion I came back to find that my cows had been driven on to the concrete yard during the afternoon because the good ladies considered that they made rather a mess of the field in which their children wanted to play. I assure hon. Members that cows do not make a lot of milk on concrete. Therefore, any farmer or landowner who is prepared to have that kind of thing on his boundary and to sell land for that purpose will clearly demand something over and above the existing use value.
The result was that developers had to give landowners a sweetener, so to speak, over and above existing use value and to pay the full development charge on top. A two-tier system thus developed right from the start. It is true that the abolition of the development charge of 1953 consolidated the position, but it did not start then.
§ Mr. Julius Silverman
Surely, the two-tier system means one tier for land for public authorities and one tier for the private buyer. Is it not correct that the 1954–1959 Acts demolished the system in two stages and that between those years there was a two-tier system?
§ Mr. Corfield
But there was a two-tier system before that. When land was required prior to that for public acquisition and was acquired on a basis of compensation related to existing use value, it fetched a lower value than it would have obtained in the open market, where the vendor received a sweetener, as I have explained; otherwise he would not have parted with it.
427 There is another point which fascinates me. I am sorry that the Joint Parliamentary Secretary to the Ministry of Housing and Local Government—to whom, for the purposes of distinction, I will refer as the hon. Member for Widnes (Mr. MacColl)—has left the Chamber, because I see that the Government are now convinced that a two-tier system is wrong. My contribution in so far as I made one to the 1959 Act was to abolish the two-tier system. In speech after speech, I made it clear that the question of taxing the development value was another matter. There is, however, no case whatever for a system by which somebody who happens to have land which is acquired by a local authority gets for it only about half the price that he would have obtained in the open market, and, what is much more important, as sometimes happens, half the price he gave for it.
I am delighted to see that the Government accept that the two-tier system is wrong. I recall that the hon. Member for Widnes shouted at me at the end of the debate in the last Parliament that I was the nigger in the woodpile because I did quite a lot to get rid of the two-tier system. However, conversions sometimes surprise even the most optimistic of us.
Let me look for a moment at the concessionary rates in paragraphs 23 and 24 of the White Paper. As my hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre) has rightly said, this represents a difficult problem of selecting the people who are to get the concession. It was pointless for whoever it was on the benches opposite to get up and say that this happens already. It does indeed, but it does not follow that it is beneficial to extend it more widely over the community. The hon. Member gave examples of the way in which this had been done in areas in and around his constituency.
I am very much reminded of a delegation which I received when Parliamentary Secretary from the town of Slough, where a lot of angry young women had been specifically told by the housing manager that they had no hope of ever getting anywhere near the top of the housing list unless they had at least three children. That means that the much more responsible couple who decide not to start a family until they have a house always go to the bottom of the queue. 428 If that is a sensible procedure in a country which is suffering from over- rather than under-population, I cannot think that it has any purpose which is in line with any intents expressed by the Government.
§ Mr. Manuel
Is not the hon. Member inflating all this far too much? What a local authority does in the instance which he has quoted is to say that families with three children, who are already on the housing list and have their children, have to be rehoused before those with smaller families.
§ Mr. Corfield
I agree. I do not blame the authority. I do not think that it could do anything about it. It has to accept that some people's housing need is greater. What I am complaining of is that if this procedure is extended over a wider field of practically every owner-occupier—or what will be a substitute for what we now know as an owner-occupier—we will have a situation in which the much more deserving citizen who deliberately refrains from starting a family until he can provide a home is always at the bottom of every queue. This is thoroughly undesirable.
Let me pass to one or two of the other problems arising from these concessionary rates. As one of my hon. Friends has pointed out, the corollary of a concession is that there must be some control over subsequent assignment, otherwise the first purchaser merely puts in his pocket the difference in price between market value and the concession instead of it accruing to the community, as the words of the White Paper have it. It is important that at the time when the occupier—I hesitate to call him the owner-occupier, because he will have a very different status to the owner-occupier as we know him today, though for this purpose I will refer to him as the owner-occupier—enters into occupation he should know what will happen to him when he moves—if, for example, he has to move to take up another job. I understand from the White Paper that either he surrenders his Crownhold interest, in which case the Crown Commission buys back the value of the concession, or the Crown Commission can agree that he passes it on to a named nominee, presumably at a market price less the value of the concession. What it is essential to know 429 is how the concession will be valued at that time of assignment.
If it is valued at its value when originally created, it is true that any subsequent increase in value will have accrued to the community. The unfortunate owner-occupier, however, will be left to carry the whole burden of any increase in values or any inflationary effect which has occurred meanwhile. Therefore, if he has to purchase precisely the same type of accommodation elsewhere in the country, he must do so at a very enhanced price over and above what he gets on realisation of his Crownhold interest. If, on the other hand, the concession is valued as at the date of the actual assignment, the vendor would get the whole benefit and nothing would accrue to the community, which, we are told, is the main object of the exercise. It is important that we should know this.
Following on from this, it is also of the utmost importance that we know how one is supposed to value a Crown-hold interest at all, because the time will come when they will begin to run out. We all know that in the early years of a long lease the price of the freehold or the price of the long leasehold is precisely the same, separated only by capitalisation of any ground rent attached to the leasehold. As one gets towards the end of the leasehold the essential thing is to know how long it will run.
In the case of Crownhold this is wholly indeterminate, because the only thing that determines the end of the Crownhold lease will be somebody in the Crown Commission saying that it is time that the property was redeveloped. That will be the determination. Anybody faced with the task of valuing the Crownhold, because, for instance, a road is to go through it or because it is nearing the end of its life, will have an almost impossible problem. I hope that the Joint Parliamentary Secretary to the Ministry of Land and Natural Resources, who is perhaps the only Member opposite who begins to understand this, will tell us, either in this debate or at some other time, how he expects that valuation to be done. This may appear to be a matter which will only affect future generations. Even so, have we any right to clutter up the Statute Book with these insoluble problems?
430 I am sure that the Joint Parliamentary Secretary will know of houses built since the war which have already had to be demolished to make way for developments which nobody could have foreseen at the time that the houses were built. It is very likely that some houses built under Crownhold in the next few years will be in the way of developments in twenty years' time which nobody can now foresee. Therefore, it will not be a problem which will be entirely confined to the far distant future.
I very much hope that we shall have a full debate on the Land Commission. There are many other matters which I should like to raise. At a more technical meeting over the weekend I endeavoured to discuss the problems that it raises. I regret to say that I found it wholly impossible to do so in under an hour. I shall not inflict such a speech on the House today, but I hope that there will be an opportunity for some of the answers to be given.
I want to raise two other questions this afternoon which do not appear in the Gracious Speech. The first is very much the concern—I hope the personal concern—of the Minister of Housing and Local Government. I refer to his proposals for introducing safeguards for purchasers of houses which turn out to have been jerry-built. I am particularly concerned about this, because inevitably when one comes across a case on one's own doorstep it brings home to one the very serious results that this can have for the unfortunate people concerned. I do not claim that this happens very often, but it is no consolation to victims of this misfortune that it does not happen very often.
A small terrace of three houses was built on top of an old quarry. The quarry was marked on the Ordnance Survey maps. The older residents in the area remember the quarry being worked. They even remember the builder taking part in filling it up. Nevertheless, the houses were built on top of it. No provision was made, either by the local authority or by the builder, by which the foundations were either piled or rafted. This was about five years ago.
Today these houses are completely split asunder. In the daylight one can see 431 through the cracks. I did not have a pencil with me, but I have no doubt that I could have put a pencil through from one side of the wall to the other. The middle house had cracks right down each side of the window. I should think that with the next wind the window will fall out. In one house the side posts carrying the main lintel across the front door were so splayed outwards that the lintel was held on by a fraction of an inch, with an enormous weight above it. I should have thought it was extremely dangerous.
What I am particularly perturbed about is that, when the owners had a private survey carried out, involving boring holes and looking at the foundations, it was found, not only that there had been no special provision because of the quarry, but that the requirements of the byelaws in regard to foundations had not been carried out. I think I am right in saying that the minimum requirement in the byelaws is 11 in. of concrete. I think these foundations were 8 in. or may be 7 in. Again, the byelaws specify cavity walls. On putting one's finger through the cracks one found that in many cases there was no cavity at all.
This raises the question whether, when a house like this has been passed for byelaw purposes by a local authority, the local authority ought not to have some liability. When all is said and done, had there been no inspection for byelaw purposes and this had been known by purchasers, they would have been put on their guard. I know that they are wrong in law, but they inevitably accept that, if a house is passed on an inspection for byelaw purposes, there is a degree of guarantee that the house is soundly built. This gives them a false sense of security.
This proposition should at least be thought about. I know that there are endless difficulties. I am not underestimating the Minister's difficulties in introducing a form of liability, but surely there ought to be some penalty on a local authority which neglects its duty in this regard. I know that the National House Builders Registration Council has made great improvements to its scheme. I welcome this. But it is extremely unlikely that this scheme can cover every builder throughout the country immediately. Houses will be built by unregis- 432 tered builders. The proposition that a wretched purchaser should be told, "If you buy from an unregistered builder, it is your own fault. You take your own risk ", implies that in every area there is a choice between registered and unregistered builders. It is very unlikely that there will be such a choice in every area. I do not believe that there always will be such a choice. Whether builders join the N.H.B.R.C. scheme or not, I hope that the Minister will introduce legislation to insist on a warranty running with the house against these major structural defects.
§ Mr. Crossman
I am interested in what the hon. Gentleman is advocating. Does he not feel that, before we move to legislation—I am certainly prepared to consider it—we ought to try to persuade the building societies and the building industry to move together on this and at least to have an arrangement under which no mortgages are granted by building societies except in respect of houses subject to certificate from the N.H.B.R.C.? Once this was done, it would enormously increase both the number of builders who join the Council and the number of houses which receive the Council's certificate. This is the direction in which my mind has been moving, to seek for a self-disciplining of the industry and the building societies before we talk about legislation, which I agree with the hon. Gentleman is the last resort, if voluntary methods fail.
§ Mr. Corfield
I appreciate that. I would certainly not in normal circumstances press the right hon. Gentleman or any hon. Member opposite to introduce compulsion if it was thought that this could be done voluntarily, but the Minister must bear in mind that if legislation were introduced purely in connection with warranty of the basic structure, to cope with cases where houses break their back—I have quoted the case of these three terrace houses—it could operate at once and any house completed and sold after the passing of the Act would have such a warranty. Under the N.H.B.R.C. system, this cannot happen unless the builder joined the scheme sufficiently far ahead for the house to have undergone inspection.
§ Mr. Crossman
A decision by the Building Societies Association to introduce such a procedure would take no 433 longer than legislation and would, in its good sense, if one believes in the principle of self-regulation, be a more satisfactory solution.
§ Mr. Corfield
I appreciate that a decision by the Building Societies Association would meet the point. We may have to consider, however, what would happen to houses nearing completion and which could not be covered by such a scheme. Clearly the nation cannot afford for such houses to be scrapped. They must be used. We may have to consider some other means of financing their purchase while at the same time giving safeguards.
§ Mr. Costain
Does not my hon. Friend remember that last Session one of my hon. Friend's introduced a Bill to cover this point? Did not we have an assurance from the Government that if my hon. Friend would withdraw his Bill they would introduce legislation?
§ Mr. Corfield
It was certainly agreed to discuss the matter with one of my hon. Friends and myself. We discussed it with the Parliamentary Secretary, and I would not accuse the Minister of any breach of faith in this matter.
Another matter on which I want to dwell arises again from something not in the Queen's Speech but which involves the proposed Housing (Slum Clearance) Bill. As I understand the proposals, whereas the existing provisions resulting from the 1957 Act give a guaranteed period of 10 years, provided that the house was bought before the introduction of the Act, for either beneficial occupation or full compensation, the right hon. Gentleman has now made it a period of 15 years. I would not cavil at that, and, in fact, I think that I am probably the author of the idea, but I make a suggestion to the right hon. Gentleman, taking the long-term view, and I am sure that he will agree that the present proposed provision is temporary in that it covers only the next five years.
I ask the right hon. Gentleman to look at this problem. Section 4 of the Housing 434 Act, 1957. lays down the criteria whereby one decides whether a house is fit or unfit. It is possible to condemn a house which is in no way a menace to health but, when all is said and done, it is danger to health which has always been the basis for condemnation and also the justification for acquiring on site value only. The basis is that a house which is a danger to health is not in a sense a marketable house and is only bricks and mortar. I have always accepted this. I do not think that one should have a basis of compensation above site value for a real slum, but as we move to the clearance of areas of higher standards I believe that we should have an absolute assurance before a house is valued at site value for compensation that it really is such that it is a danger to health.
I suggest that the permanent way in which we should try to tackle this problem is to try to get a definition—if necessary an ad hoc definition from a medical officer—of what is danger to health and have compensation for the value of the house less what it costs to put right any defect which causes it to be damaging to health. It is about time that we had that definition and that there should be provision whereby following the similar provisions of Parts I and II of the Housing Act there could be application to the county court to determine whether the house can be put right at a reasonable price. I do not think that the present is a satisfactory way of determining something which can be immensely important to the individual, namely, that the determination whether or not the house is a danger to health should be the decision, in theory of the Minister, in practice of his inspector and that that decision should be final.
Had I not been encouraged to stray from my original lines of thought by the Minister of Land and Natural Resources, I had hoped to entertain the House with remarks about the ombudsman, but I think that my time has run out and I will spare the House that unfortunate experience. I hope, however, that when we come to discuss the Parliamentary Commissioner it will be realised by hon. Members how greatly this appointment may undermine the position of hon. Members in their constituency capacity in righting wrongs.
435 I have always taken the view that it is right to go into these questions in great detail and to assess for oneself whether there is a prima facie case. In many of these cases where one has a complaint and allegations of injustice, the complaint arises from misunderstanding. Where I have been convinced that that is what has happened I have gone into the explanation very thoroughly. But where I have been convinced that that is not the case and I have approached the Department I have always been satisfied that the traditions of the Civil Service are such that civil servants are immensely jealous of their reputation and one always has a thorough investigation. But one will never get any further if the complaint concerns a local authority or a nationalised industry where the answer comes back that there is no Ministerial responsiblity.
This is the major weakness. A second weakness is that, however conscientious one may be, if one turns down a constituent's complaint under an ombudsman system there will always be another hon. Member who will say, "What, Mr. Snooks will not do this! I will do it" and eventually we shall all be forced to become the post office to the Parliamentary Commissioner. This will be a great tragedy. It is hard work but a most rewarding work for hon. Members to investigate constituents' complaints. It is one of the vital links in our capacity as constituency Members as opposed to being general Members of Parliament. I hope that the House will consider this matter before rushing forward too eagerly to take steps which will undermine the "jurisdiction "of a Member in his relationship both to his constituents and to the House.
§ Mr. Speaker
Order. Before I call the next Speaker, I must point out that every back-bench speech so far has been over half an hour long and every half-hour speech precludes someone else from having the opportunity to catch my eye. I hope that hon. Members will be fair to each other.
§ 6.37 p.m.
§ Mr. R. W. Brown (Shoreditch and Finsbury)
I shall be as brief as I can, Mr. Speaker, in accordance with your Ruling.
436 The right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) said that he was twelve months in advance in his thinking on the points which he was making, but one would have thought from what he said that he was twelve years late in coming round to these thoughts. The whole point of the Opposition argument today and previously is that we have been in Government for twelve months and, therefore, we should have solved all the problems which the Opposition failed to be seized of for 13 years. I have heard in the debate figures bandied about on housing and rating. It is about time that we heard the correct figures. The right hon. Gentleman made the point that taxation inflates the price of land. That is perfectly true, but I draw the attention of the House to the fact that inflation has been going on for a long time and my right hon. Friend is now faced with a situation which has been allowed to come about over the years.
The hon. Member for Gloucestershire, South (Mr. Corfield) mentioned, though not with that purpose, legislation passed in 1959 which has actually helped to bring about this situation.
§ Mr. Corfield
The hon. Member must not confuse cause and effect. It does not follow that because prices have risen since 1959, which was precisely the time when we experienced an enormously increased demand for houses, that this was the result of legislation passed at that time.
§ Mr. Brown
I thank the hon. Gentleman for coming in, but I am not dealing with the housing side yet. At the moment, I am talking about land.
Prior to the Act, the valuation of land was based on a number of factors. One was its existing use value and another consideration was whether or not it was a charity. A number of items determined the value of land and the price paid for it. After the 1959 Act that basis of valuation was wiped out and it was 437 made retrospective to 1958, which complicated the whole thing even more.
The effect in my own area was that we could have paid £6,000 an acre in 1955, under the previous legislation, but after 1958 and in the ensuing years up to and including 1965 we have had to pay something like £25,000 an acre for exactly the same land. That is the inflation which has to be curbed, and it shows how prices are going up. That is the problem that local authorities are experiencing and which the hon. Gentleman and I have talked about at such length.
§ Mr. Brown
Perhaps I might be allowed to deploy my argument a little more fully. Some of my hon. Friends wanted to come in during the course of the hon. Gentleman's speech and he was not very co-operative.
The situation facing local authorities today results from the action of the previous Administration which assisted the increase in costs and did nothing to ameliorate them. Therefore, my right hon. Friend is faced today with the task of having to take action on it, which we said in 1964 we would do. What I rather resent is that hon. Gentlemen opposite are now giving the impression that they agree that it is a right and proper thing to do and that it is a problem which has arisen in the last 12 months. The hon. Member for Gloucestershire, South knows quite well that it has been going on for many years, and many of us have worn ourselves out trying to explain what the trouble is.
My right hon. Friend is now going to deal with the problem, though not as something which is new. He has the courage to take it into his hands and do something about it.
§ Mr. Corfield
Perhaps the hon. Gentleman would do me the honour of reading some of my very old speeches, where I put forward the idea that I believed that a tax was quite legitimate. In so far as his local authority was buying land cheaper, there was an element of confiscation, because so often it involved buying land at a price less than that which the unfortunate people had paid for it in good faith. If there is to be subsidisa- 438 tion, it should be by the State all round, out of taxation.
§ Mr. Speaker
I hope that when hon. Members intervene during the course of other hon. Members' speeches they will not themselves make second speeches.
§ Mr. Brown
What the hon. Gentleman says is not in confirmation of the facts. In a previous speech in the House, I referred to a particular piece of land which had changed hands at £12,000. The owner never got on to it, because we applied a compulsory purchase order to stop it. It took two and a half years to go through the hon. Gentleman's Department, and during that time the land was lying fallow because he would not get on with the job. By the time our compulsory purchase order was confirmed, we had to pay £29,000 for it, and there was neither stick nor stone put on the land. That is what the hon. Gentleman has to understand, and that is only a typical example, and there are many of them. I have experienced a string of them, as the hon. Gentleman knows quite well.
Turning to the point about houses, from 1955 to 1965 it is interesting to note the inflation and how it has gone on. Do not let us think that the high prices started only 12 months ago. In my own area, in 1955, houses were worh £1,400 to £1,700. At the end of the previous Administration's period in office in 1964 those very same houses were fetching £4,500. Not a thing has happened to those houses. They are exactly the same. When the right hon. Member for Kings-ton-upon-Thames (Mr. Boyd-Carpenter) talks about poor young couples who are trying to find places to live in, it was that that tripled values. When they came to me in my local authority pleading for help, I told them just what the right hon. Gentleman said. I told them to go to a building society to see if they would help. But they had to be earning £25 or £30 a week before they could provide collateral for a loan and, as a result, these young people could not get anywhere.
The fact is that prices went on rising, and what I get so angry about is that we were explaining all the way along the line that that was happening.
§ Mr. Boyd-Carpenter
Perhaps the hon. Gentleman would explain to me how and 439 why he thinks that the proposals to set up a Land Commission plus a levy of between 40 and 50 per cent. will reduce prices?
§ Mr. Brown
Perhaps the right hon. Gentleman will permit me to deploy the arguments that I want to advance, including my argument in favour of the Land Commission, otherwise Mr. Speaker will rebuke me for exceeding his rules.
The right hon. Gentleman gave the impression that it has all happened in 12 months, but he knew all about it, as did his right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) and, before him, the noble Lord, Lord Hill, and before him, his right hon. Friend the Member for Hampstead (Mr. Brooke). I saw all of them so frequently that eventually they became personal friends of mine and we exchanged information. I gave them the information, but none of them did a thing about it.
The Milner Holland Report came as no surprise, because I have given evidence to something like five different commissions. When the previous Minister of Housing said to me, "Wait until Milner Holland reports and we will then understand it", I said,"I have given information to Milner Holland, just as I have to other inquiries." It was the same information, so we knew what the result would be. These problems have been in existence for a long time, and right hon. and hon. Gentlemen opposite must face the situation.
I want at least to take up the point about the house building figures. The hon. Gentleman knows quite well the arguments that I had with his Department under the previous Administration about the building of homes. The right hon. Gentleman the Member for Hampstead will remember the fights that I have had with him over his refusal of our compulsory purchase order because we had no land. It was not that we were not building. We wanted to build more. He kept us back because he wanted to increase private building in our area and keep local authority building down, knowing quite well that we had a housing list which never fell below 6,500 families. He did that quite deliberately.
We built those houses eventually, and our programme was as good as any 440 authority's in London or in England and Wales per head of our population, and we built them in spite of the Government. In spite of the policies of the present Opposition Front Bench, we went on building. They tried to stop us getting money, they tried to stop us getting loan sanction. They tried everything they could to stop us, but we built those houses in spite of their efforts. In 1958 we built a block of 403 flats, which is our monument. When the Minister of the day tried to stop us we said, "No. We go on." It cost us a great deal of money and resulted in a huge capital debt, but, in spite of that, we went ahead.
A lot has been said about the housing record of the previous Administration, but I have yet to see a government-built house. The local authorities build houses. When the right hon. Gentleman says that building is going down, let me inform him that my own local authority's programme has gone up 112 per cent. this year, and that is to continue for the next seven years. My right hon. Friend is encouraging us to do that, and to try to advance the argument that we are not going to get the houses this year or in future years is nonsense.
I wanted also to talk about slums and the argument about the definition of slums. I hope that this will be a point my right hon. Friend will take. I have been arguing for years that the definition of slums should include more properties than it does, because there are places which I would declare to be slums and would have declared years ago to be slums but for the fact that they cannot be so declared because they do not satisfy the criteria demanded by the Act. They are disgraceful places. I do not know what the hon. Gentleman means when he talks about whether or not health is affected. Perhaps he was using the argument he used when he was Parliamentary Secretary. I could understand his using it then because of the definition. Indeed, nobody could accept a definition such as, would they attract a medical certificate? One could drive a coach and horses through so wide a definition as that. He knows the problem very well, and he knows that there were areas which ought to have been declared slums but which could not be declared slums, and that we had to take them in as twilight areas in ordinary development and have had to 441 pay far loo much for them. They were really rubbish and the ratepayers had to pay for it.
This, quite naturally, brings me to the rates. It is made very clear in the Queen's Speech that my right hon. Friend is going to try to help the ratepayers by lifting the burden of rates from them. There is one thing I should like him to bear in mind, if he would, and it affects my own constituency which is in juxtaposition to the City. Under the revaluation in 1963, due to the technique of ensuring that there should be no sharp difference in valuation on one side and the other of a local area boundary, people living in my area but adjacent to the City are now paying a tremendous price in rates because the rateable values are in excess of what they ought to be, and they are excessive because they were influenced so much by the City. They not only pay extra rates on those high rateable values but at the same time they have to pay a higher water rate. There is very clear evidence that for comparable properties at opposite ends of the constituency there is something like a 50 per cent. difference in valuations. This is quite wrong an inequitable, and I would urge my right hon. Friend to have regard to this when he sets out to lessen the injustices of the rating system. I hope that, besides taking account of rates in the financial sense, he will look at rating with the idea of seeing whether he can conceivably find a way of determining a rateable value which is fair and just.
Finally, I would ask him to consider, in helping local authorities to save money, to look at the problem of road closing. This may seem a minor issue, but it becomes quite large when one realises what happens. At the moment any road closing is mainly done under the town and Country Plannnig Act, and yet it comes under the Minister of Transport, so that at any time one has first of all to get permission for the area to come under compulsory purchase arrangements, then one has to get the compulsory purchase order, then one has to obtain planning consent, and one cannot even start the work of getting the road closing done till after planning consent is received— and this goes to the Ministry of Transport. From that point on it is quite indeterminate how long it will take, but ex- 442 perience shows that it will take seven months at least before a reply is obtained. Of course, if there is an objection it goes to a public inquiry, so it could conceivably go on much longer, for probably two years or more. Even taking a seven months' time it means, for instance, running right into a contract period for the work to be started on the site before we have actually got the order for closing the road. We have had a lot of experience of very near misses in starting the work on the site without an order to close the road. I would urge my right hon. Friend to see if he himself could deal with the whole of the problem since the initiation of the work comes under the Town and Country Planning Act which he has to operate.
To keep within the limits you have suggested, Mr. Speaker, I shall conclude now by welcoming the Gracious Speech. I think it shows a term's work which is in the best interests of the people, and I am quite sure that it will commend itself to everybody, and if we achieve it, as I am sure we shall, it will show the interest of our Government in the people's needs.
§ 6.55 p.m.
§ Mr. Arthur Jones (Northants, South)
I followed the hon. Member for Shore-ditch and Finsbury (Mr. R. W. Brown) with great interest. I can tell from what he said that he has had immense experience with housing, and I can well understand the clashes he will have had from time to time over the tremendous housing problem in his part of London. I take it that he still serves on a local authority in that area.
The hon. Member has given me an introduction to that housing question with which I wish to deal, and that is the question of housing subsidies and the degree to which housing subsidies are tied up with rate fund contributions made by many local authorities through housing revenue accounts. I think there is widespread concern that housing subsidies are not getting to the people for whom they were really intended. I welcome the reference in the Gracious Speech to the review which is to take place of housing subsidies, and it is with that in view that I wish to try to show some of the anomalies of which I am sure all of us 443 on both sides of the House are aware. I wish to relate the suggestion which the Government are making on rate subsidies to the question of housing subsidies because it seems from what is being said on the question of rate subsidies that these will be selective and go to those in need—needy families—to help with their rates, rather than as assistance right across the board such as, in the main, we see with housing subsidies at present.
It is in the knowledge of all of us that the Exchequer subsidy first of all is applied to the housing revenue accounts and that tenants fortunate enough to be in council housing enjoy that subsidy and in very many cases as well a second subsidy which is found as a rate fund contribution by the local authority. If these two matters are not to be dealt with as one problem as a whole, then we are going to find the extraordinary situation of ratepayers who are not in local authority housing having to be helped partially because of the rate fund contribution which is being made on their behalf to tenants of council properties.
The incidence of this rate fund assistance to housing revenue accounts is really very substantial indeed. Although I am an advocate of independence for the local authorities in the way they raise their money and, to a substantial extent, to the way in which they direct it, of course they have authority without limit to direct rateborne subsidy into housing revenue accounts, and there are examples—and I think the Minister cannot deny this—where the matter is being abused.
I have a list here which shows a substantial number of authorities who make these contributions. Birmingham, for example, makes a contribution of nearly £1.2 million from the rate fund into the housing account, a rate fund product of l0d.
Liverpool makes no rate fund contribution, but the adjoining authority of Bootle makes a contribution of no less than 1s. 7d. from the rate fund to the housing revenue account. I do not know Liverpool and Bootle well, but they are closely adjoining county borough authorities and I should have thought that each had the same type of problem. Why is there this great difference in the management of the two housing accounts. One 444 might take also the position at Salford, where a contribution of more than £292,000, or a Is. 4d. rate, is made, and that at Bermondsey—I am sorry that the hon. Member for Bermondsey (Mr. Mellish), the Joint Parliamentary Secretary, is not here; I had hoped to make the remark in his presence—where a l0d. rate is contributed.
The sum total of all this is that whereas the Exchequer subsidy for housing is about £60 million—I take my figures from the booklet issued by the muncipal treasurers, figures for 1963–64; I have every reason to believe that they have substantially increased in the last three years—the rate subsidy totals £20 million, a third as much as the Exchequer subsidy.
§ Mr. Crossman
Has the hon. Gentleman been able to analyse how much of this is done by boroughs in the great conurbations and how much outside? Are these instances mostly from the great conurbations?
§ Mr. Jones
I think that the right hon. Gentleman is correct. I have an analysis of the figures. The percentage of rate fund contribution to the total revenue of the housing account is 5.8 for county boroughs in the country as a whole. In the Metropolitan boroughs and the City the percentage is 20.7. So the highest proportion is in London and not in the conurbations. There is a very clear contrast of management. I emphasised this in the contrast between Liverpool and Bootle. For the whole of the London County Council there was a 13.5 per cent. rate-borne contribution to the housing revenue account. The contribution drops substantially for the smaller authorities —non-county boroughs 4T, urban district councils 3.7 and rural district councils 2.5.
We all recognise—this is the point that I made to the hon. Member for Shoreditch and Finsbury—that there are great problems in the conurbations and particularly in London. There is widespread concern about the rate fund subsidy and the extent of housing subsidies as a whole. The Government may say that the rate fund subsidy must continue, but what will they do to ensure that the subsidies go to those who need them? This concern is widely expressed in the country and is recognised by us all.
445 I do not want to draw the elementary comparison that one does when driving through housing estates, and so on, but we all know from experience the dreadful circumstances of substantial subsidies going to people who do not need them, many of whom would prefer to be without them. If we water down the subsidies, Exchequer or rate fund, by spreading them across the majority of housing tenants, that prevents us helping to a far greater degree those who are in most need. There may be a substantial case to be made for some limit being placed on local authorities in order to make housing funds available out of the rate fund.
There are rate rebate schemes and differential rent schemes to ensure more equality in the distribution of housing subsidies. I do not think it is an unfair comment that Socialist-controlled authorities have resisted these schemes. I cannot think why. The Greater London Council is the most recent convert to this principle. I do not know whether at County Hall it has been the triumph of reason over prejudice or sanity over stupidity, or recognition of the cold hard facts of local government finance in the past 12 months. This will be known to the Minister. The fact that local authorities have had to pay so dearly for so long for their housing finance—the rate has been quoted to the House—has led almost every housing authority to run into the red on its housing revenue account. Many authorities started with a very healthy balance last year, but many are having to put up their rents twice in the current financial year. This is evidence of the situation into which housing revenue accounts are getting because of the difficulties that the Government ran into—some of their own making —in regard to high interest charges.
§ Mr. R. W. Brown
Perhaps I might set the hon. Gentleman's mind at rest. The deficit of my local authority has been growing since 1952. We were building throughout the whole time that the Conservative Government were in power, from 1952 to 1964, and the deficit grew from £50,000 to £50 million when I left the authority, and it is continuing to rise at the rate of £250,000 a year.
§ Mr. Jones
I am in no position to question the soundness of the management of the housing revenue account to 446 which the hon. Gentleman refers, but he will know the content of the Report of the Working Party on local authority housing finance. It contains substantial evidence that housing rents have been kept artificially low.
§ Mr. Jones
In the circumstances "sometimes" is indeed a concession from the hon. Member. According to the Report the evidence is widespread throughout the country. The recommendation of that ministerial document was that the only sensible method which had come to light was that rents should be related to the gross value and that they should be 0.9 or 1 times the gross value. This would have clone away with the necessity for housing subsidies altogether, whether Exchequer or rate fund, and then the Government could, if they wished, have applied both to the relief of really needy tenants instead of having "across the board" subsidies, which I grant both the previous Government and the present Government have accepted.
§ Mr. Crossman
The hon. Gentleman mentioned Bermondsey just now. Is he really telling me that Bermondsey could build houses today by the simple device of fixing the rent by his formula and raising the money out of that? Is he really saying that there would have to be no subsidy from the Government or the rates if that formula were applied?
§ Mr. Jones
I am quoting from the Report of the Working Party, and my comment was made in the context of the point raised by the hon. Member for Shoreditch and Finsbury, that a certain housing revenue account had been running into the red since the early fifties. If throughout the country—not merely in the case of a single authority such as Bermondsey—housing rents were related to 0.9 times gross values, there would be adequate revenue without Exchequer and rate fund subsidies. This is the recommendation of the Working Party.
I now turn to the position that rules in Southwark, for example. I have been dealing with Bermondsey. I understand that Southwark and Bermondsey are now together under the new arrangements in London. Bermondsey has a rate fund contribution of £190,000, Camberwell a contribution of £481,000 and Southwark a 447 contribution of £81,000. The whole district will need a rate fund contribution to cover its debt for the current year— and debts must be covered each year— of no less than a 2s. Id. rate. Here again is confirmation of the difficulties in which housing authorities have found themselves during the past twelve months.
§ Mr. Jones
Now the right hon. Gentleman is referring to the Exchequer subsidy. I am not. I am referring to the 2s. Id. rate subsidy. The Exchequer subsidy is £60 million. The rate fund subsidy is £20 million.
The great constituent of the housing revenue account is rents. The fact is not that so many people need housing subsidies but that there should be a better relationship between rents, Exchequer subsidy and the rate fund contribution to the housing revenue account. The Government must turn their attention shortly to seeing that Exchequer and rate fund subsidies go to those who need them.
It has been said that the Minister is proposing an increase of 50 per cent. in housing subsidies. Indeed, the figure of 100 per cent. has been heard. I have no idea what the ultimate figure will be. But is the right hon. Gentleman satisfied that, over the country as a whole, an increase of subsidy of that sort is required? Do we not, in fact, need to see a much more enlightened approach to the whole question of housing subsidies?
I am sure that it was mainly Socialist-controlled housing authorities which refused to implement rent rebate schemes, but they have been forced into doing it in the past year, however, and the degree to which they have been forced into it is evidenced in the so-called "blazing row" which followed Southwark council's decision to introduce a rent rebate scheme. This led to the resignation of the leader of the Socialist member of the council. The Joint Parliamentary Secretary to the Ministry of Housing and Local Government, who is not present, was at that meeting and questioned the council's desire to go ahead with rent increases. He asked the council to delay the implementation of the rent increases until the 448 Government's White Paper on housing and interest rates was published.
It will be a matter of great interest to see the proposals which will follow the mention in the Gracious Speech. We have been promised more council houses and more subsidies to more people and the suspicion is that the Government's aim is to ensure that there are more Socialists.
§ 7.15 p.m.
§ Mr. T. W. Urwin (Houghton-le-Spring)
I have no intention of following the hon. Member for Northamptonshire, South (Mr. Arthur Jones) in his intricate arguments. However, I got the impression that he was somewhat befogged by his material. I want to address myself to remarks made by the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), who said that people outside should know that the Government have failed in housing compared with the continuous progress of the Conservative Government. That is a wild statement for anyone to make about any policy after one year of a Government, whether Labour or any other.
The right hon. Gentleman also said that, during their period of office, the Conservatives consistently increased housing output. A glance at the early 1960s contradicts that. In 1961, the total was 303,000 houses; in 1962, it was 314,000, and in 1963, it was 308,000. That was a backward step rather than progress towards the ultimate objective of 400,000 houses a year. But in 1964, in one of the most blatant pieces of electioneering propaganda that could possibly be found, the total increased to 383,00.
The Conservative approach to housing while in Government has always been the unplanned way. There is direct evidence in their record of lack of planning. It is a significant and further indictment of their policy that, in an almost indecent attempt to achieve the target in 1964, brick stockpiles were drastically reduced. In 1963 there were 236 million bricks in reserve. By the end of 1964, because of the sudden and remarkable impetus in housing by the Conservative Government, the stockpiles had diminished to less than half that quantity. "Unplanned" is the appropriate word to use about their attitude both to the construction industry and to housing.
449 By contrast, my right hon. Friend the Minister of Public Building and Works, almost immediately on taking office, undertook discussions with the brick manufacturers and received assurances from them that about £25 million would be invested in 1965 in the industry, that the estimated production would increase considerably and that, by the end of 1968, they would achieve approximately a 20 pei cent. increase in order to meet the additional demands placed by the Government upon the material supply industries as well as the construction industry for housing and other buildings.
Whatever we politicians may say, and whatever the statisticians and lawyers may say, about rating and other aspects of housing, there are occasions when we should consider the other problems which are involved. I am particularly concerned about the constitution of the construction industry and the necessity to harness its full resources if we are to succeed in fulfilling our responsibilities to the people who sent us here. The resources of the industry are by no means as fully used as they might be.
Building maintenance is one example. In all sections of maintenance, including housing, the cost to the country is £900 million per annum. This section of the industry employs 600,000 men, or 40 per cent. of the total labour force available to the industry. My right hon. Friend the Minister of Public Building and Works has drawn attention to the need to investigate this section of the industry and I am pleased to hear that he is to set up a committee to do so. There is no doubt that if we are to do everything we ought to be doing, this kind of thing will have to be examined very closely. If we could achieve only a 5 per cent, saving in maintenance we would release very valuable resources of manpower, capital and materials for the provision of new houses.
I want also to consider the structure of the building industry. It is very easy for people, who are sometimes, unfortunately, adventurers, to enter the industry. They merely have to satisfy the Company Acts and can then enter the industry, often without knowledge or ability. This is often a gamble, what is sometimes called a business gamble, but there are 450 often disastrous social results, not least to the people in the industry.
In this context I want to refer to a specific example in the new town of Peterlee. I apologise to my right hon. Friend the Member for Easington (Mr. Shinwell), who represents that area, for raising this matter in his absence, but he is fully aware of the circumstances of this case. A relatively small firm came into the new town and, by some means or other, received huge contracts for the provision of houses. Within two years it had gone into liquidation, leaving behind liabilities of about £500,000. This is a fantastic story which seems to come out of fiction, but it is fact. The most unfortunate people, apart from the new town corporation, were several hundred building workers who, under the stamp system, were left without holiday pay for the ensuing year and who have not yet been reimbursed. This is just one of the largest defaults in the construction industry, but it is to be hoped that it is an example which will not be repeated. However, there are many minor examples of this kind. The rate of bankruptcies in the construction industry is the highest for any industry and that in itself is a severe criticism of the ridiculously easy way in which entry into the industry can be effected.
I want now to deal with the industry's competency and ability to meet the target of 400,000 houses a year now and, according to the National Plan, 500,000 houses a year by 1970. There are as many as 85,000 employers in the industry, but 80 per cent. of them employ only one to 10 operatives. These are very small firms indeed. Only 2 per cent. of all the firms employ 50 per cent. of all the operatives. While many of them are involved in maintenance, a simple calculation shows that 400,000 houses to be built by 85,000 contractors is an average of one contractor building just over four houses a year. Even in the United States, which is not the best example of construction industry organisation, there is a higher ratio, 15 houses per contractor.
There are 20,000 employers who are so small that they cannot contribute to the industrial training levy because they employ fewer than five men, or have an annual wage bill of less than £5,000. I must confess that I personally know that many of these small firms are extremely 451 efficient, but one is not entitled to suggest that all of them are as efficient as they should be. They do not keep pace with modern developments in the industry. They do not have the facilities to recruit and, more important, to train apprentices. Those which recruit and attempt to train do not have the resources of skilled craftsmen necessary to provide the training. The consumers' interests alone demand that builders should employ first-class craftsmen.
All this leads to more waste of very valuable financial resources on administration. When there is splintering of this sort, repetitive expenditure is incurred far too frequently. There are many firms throughout the industry to whom I am pleased and proud to pay tribute, but the present situation nevertheless needs much more investigation than it appears to have had.
Among these many firms there are some dealing in labour-only subcontracting exclusively. These are perhaps the worse offenders. Not only do they fail to pay their contributions to the industrial training board but too often they have, and take, the opportunity to evade their responsibility for stamping insurance cards. This leads to perhaps the most pernicious system in the whole of the industry.
I am sorry to say that it is a system encouraged by employers and operatives alike. Bands of men gang together and travel from job to job, having no responsibility to anybody. The situation encourages deplorable practices, even to a form of blackmail when there is such a high demand for labour that industrial agreements are superseded by private bargaining between operatives and employers. Employers often find themselves conceding wages or bonuses far in excess of trade union agreements. This is not to the advantage or benefit of the employer or the industry generally, and certainly not of the consumer, because in the final analysis the consumer inevitably suffers. This system operates largely, if not entirely, in the private sector of the industry where it is easy—much easier than it should be—for these people to get away with shoddy workmanship, because in the private sector there is not the kind of supervision which is to be found in the public sector.
452 The hon. Member for Gloucestershire, South (Mr. Corfield) referred to the issue of a certificate of habitation by the local authority. He was talking about an instance which happened some time ago, I presume, not a current one. He said that fissures had appeared in the wall, but that the local authority issued a certificate of habitation. Under existing legislation the local authority has no other responsibility. It has to provide a certificate saying that the byelaws have been complied with. No matter how disgusted they feel about inferior buildings, and as a member of a local authority I know that this often happens, they have no right to interfere and to withhold the certificate because of any structural defect.
The "labour only" system is another unfortunate travesty. Many firms either by choice, but more often because of the circumstances prevailing, are driven to implement this system. This means that they are only giving their name to the particular project. It is so easy for them to evade their responsibility.
I turn to the Gracious Speech. At the top of page 3 it says:In implementing the National Plan My Government will extend the range of the Economic Development Committees and encourage British industry to achieve greater competitive efficiency by reorganisation, the more general use of advanced technology, and better use of manpower.The Amalgamated Union of Building Trade Workers, of which I am a member, recently asked the Prime Minister to set up a Royal Commission to inquire into the construction industry. I can think of no better example, and no better ground upon which the Commission could work in order to ensure greater efficiency in the construction industry, especially bearing in mind their responsibility towards the housing drive. Despite adverse comments that one hears from time to time from the Opposition benches about restrictive practices, I am sure that it would be a pleasure to Members to hear that this industry, with all its difficulties, differences and inhibitions, placed upon it by varying circumstances, achieved an 8 per cent. increase in production in 1964. This is despite the fact that no increase was possible in the third quarter because of bad weather conditions. No doubt technological development will produce 453 better methods of building to ensure continuity of employment during the bad winter months. The industry has proved its adaptability to change but is yet apprehensive of it because of the intensification of industrialised building, despite the assurances that have been given that this industrialisation will only increase by a maximum of 20 per cent. in the next 20 years.
I remember some time ago, during Question Time, the hon. Member for Folkestone and Hythe (Mr. A. P. Costain) said that we must get away from traditional building. This is not true. It is inherent in our housing policy and it ought to be remembered by all concerned. We have to use, and we ought to be considering the fullest possible use of, the resources available in the construction industry. While both sides of the industry accept the fact that the programmes must be supplemented by industrialised building, we can never do without the quantity building which can be provided by traditional means. The industry has accepted my right hon. Friend's appointment of Mr. Lederer, I understand from the hon. Member's firm, to assist in planning the industrialisation. There ought not to be any cosseting of system building. There is a danger in the setting up of the consortium so far established in different parts of the country that this might happen, to the detriment of traditional building.
Both sections of the industry must be fully competitive with each other, as must one system compete against another. I suggest finally that if the problems, or even some of the problems, to which I have referred within the construction industry can be successfully resolved, together with the humanising of the industry, then this Government will be well on the way to achieving a target of 500,000 houses a year—and this will be a stepping stone to much greater productivity in the future.
§ 7.35 p.m.
§ Mr. William Roots (Kensington, South)
There must be many of us who on hearing that the Minister would be one of the opening speakers in the debate hoped to have a further elaboration of how he and his colleagues have confidence in the Land Commission and a fuller explanation of the provisions of the contents of the White Paper. All 454 of us must have been struck by the fact that his lack of confidence in the provisions of the White Paper were matched by what appeared to be his lack of knowledge and interest in them. I am very surprised that after that speech he has not been a little more generous in his time and shown a greater interest in this debate.
I think that the probable answer is that he may have been confounded by the opening passages of his own White Paper which seeks to support the case for a Land Commission by saying that it is backed by centuries of failure. We are then referred to the 1947 Act. Admittedly the provisions were different, but these stem from it, and one's only comment on that is that Lord Silkin, who was, I seem to recollect, a protagonist of the Act, was later quick to admit that the particular provisions of the value of development charge had proved a total failure and must be repealed. There is also reference to the powers of the Central Land Board. Those of us with experience of their exercise of that power remember well that it turned out to be inept but also that it was bitterly resented by local authorities, and by members of the public, because it was ineptly used.
The final thing which is brought in, and it is so often brought in, is the Uthwatt Report. One often wonders how many people who refer to that Report have read it. What is never referred to is that there was a minority report by the one member who had practical experience of land dealings, namely, the President of the Estate Agents Institute. He said there and then that however good the scheme was technically, and I think it was technically good, it would not work, and he proved to be right. It took something like ten years to prove him right, but he was so proved.
The two objectives of the White Paper are said to be to secure the right land at the right time for implementing national, regional and local plans. On the face of it, that is simply a sweeping condemnation of both central and local authorities. Local authorities make the development plans. They make development plans with a programme map and they have compulsory powers. A programme map, as anyone who has experience of these cases knows, is overrun time and again. It is not a problem to get people 455 to bring forward land in accordance with the development plan. The fact is that they are seeking to bring it forward in advance and they are having to appeal to the Minister, first of all, to get the land permitted for development in advance of the programme map and, secondly, to get more land released for development. This has been the real problem and is the problem—the release of land for development.
That, basically, stems from the need to amend and extend the development plan. To attempt to cure the alleged incompetence of one Ministry and a number of local authorities by setting up a fresh Ministry is surely a poor way of setting about it. I had hoped that the Minister would explain the cases he has in mind in which a local authority, or the Minister, who has default powers, cannot act, and therefore there must be some other body. If there be some small gap so that it cannot be mended by giving extended powers to an authority, at least one would have expected the Minister to give some explanation of why a new Ministry had to be set up.
It is also relevant to ask how he will judge what is the right land and what is the right time. For example, why should he know better than the people of Burnley what land should be brought forward, unless, of course, he is to have a complete duplication of staff and information throughout the country? As far as I can see on any evidence that I had ever heard—and the Minister has not been generous enough to give us any further information—the local authorities are as good judges as anybody of what land is needed in their areas and when it is needed. If there is any doubt about it, the Minister responsible for town and country planning can amend their Plans, but from the point of view of acquiring land for their own purposes there is no need for a further Ministry.
When one considers this question of acquiring land and the powers of overriding a local authority, one would also like an explanation of what is the position as between one individual and another. In thousands of cases, which have always been welcomed by whichever party was in Government, people have sought to think ahead in terms of redevelopment if they owned parcels of 456 land, and they have acquired them. Now we have a provision which will inhibit them from doing that to a large extent because they will find that when they are ready to develop somebody will go round to the back door of the Treasury and say, "Acquire X's land for me". Having built up his scheme, a man may find that his land is taken away from him and disposed of to somebody else. To my knowledge this is a real danger which, quite rightly, is worrying people who are interested in redevelopment, particularly in the development areas.
I had hoped that the Minister would give us some explanation of the kind of procedure envisaged when such an operation is going to take place. One hopes that he will allow a public inquiry to take place. Presumably he will ensure that he will hear and take into account the views of people who own land and who want to redevelop it, for, on the proposals which he has put forward, the land may well be taken from such a person and sold to someone else. This is a real problem, and neither the Minister's speech nor the White Paper give any kind of indication that it has been considered.
The next objective, apparently, is to secure a substantial part of the development for the community. At the moment the operation of all land development is subject to Corporation Tax, or, alternatively, Income Tax, Surtax and Capital Gains Tax. Clearly, if a levy is imposed, at least one of those sums will be reduced as it will have been paid already. In other words, if a man has paid a levy, it will not be possible to get as much out of him if he has to pay Capital Gains Tax, or Income Tax, or Corporation Tax on it.
I would have liked to have challenged the Minister to show how any increase in revenue will result from the setting up of the Land Commission. I do not believe that there will be a penny increase in revenue which would otherwise have been acquired. In other words, I would like the Minister to show what revenue will be achieved simply by the setting up of the Land Commission. This is a point on which the House is entitled to some information, and I would have thought that the Minister would have given it at the outset.
457 The next objective is the reduction in the cost of land required for essential purposes. The only examples given are land for local authority housing and housing associations. One wonders how this will help in terms of providing land for urban authorities. If the Land Commission is, in effect, going to provide a hidden subsidy in the sense that it will provide the land at a reduced price, or at a low price, I find it hard to believe that the Treasury will not want to make a reduction in what is in effect a subsidy, because the Land Commission will have had to buy the land at market value and it will have deducted the levy which would have occurred in any event. If the Land Commission gives it away, it is giving away national money, in the same way as a subsidy. I think that urban authorities would be misleading themselves if they felt that they were going to get it both ways. On the short experience that I have had in this House, I do not see the Treasury doing that.
§ Mr. Mellish
The hon. and learned Gentleman is associated with one of the London boroughs where the cost of land is a tremendous deterrent to house building. He is associated with the Royal Borough of Chelsea and Kensington, which I think I am right in saying is being asked to pay about £200,000 an acre for land for housing purposes. This was put to me by the local authority, and I was asked, "What can you do to help us to acquire more land cheaply for housing purposes?". The hon. and learned Gentleman has been very negative in saying what the Government are trying to do. Will he give us some positive ideas about what he thinks should be done to help his local authority to get land at a price at which it can build houses?
§ Mr. Roots
The hon. Gentleman was very careful not to take the House into his confidence and say what answer he gave to the borough council. If he told the borough council that the land would be given to it by the Land Commission and that it would not have its housing subsidy reduced, he ought to tell the House so, but he knows as well as I do that he said nothing of the sort. If the borough is given its land it will be delighted, but the fact of the matter is that it is far better to give a subsidy to 458 those who need it, and if one gives overall reductions one tends to give them without regard to individuals. I do not care in which way the Minister gives it. I notice that he was very careful not to say what he promised the borough council, and, unless it has had an assurance from the Ministry, the council would be very unwise to think that it will get housing land for nothing and not get its subsidy reduced. I would be only too ready to sit down if the hon. Gentleman was prepared to give that assurance.
There is nothing in the White Paper about assistance for the private estate developer. I am pleased that housing associations are to get help, but I consider that there are many people who want to build and buy their own houses who may be equally deserving of assistance. As far as I can see from the White Paper there is no suggestion that that would happen.
Again, in respect of urban areas, in cases where persons are buying slum land or developed land which is zoned for housing, I would have liked the Minister to tell us where the levies will come from. If a person is buying slum land and helping the local authority by doing so, it seems to me that no levy will be chargeable. Not only will the Land Commission not get a levy but, according to the Minister, it will give the land away free. That is the sort of Valhalla on which we should get some information from the Minister.
Similarly, if a person buys commercial or industrial land for open space no levy may be payable on it, but the local authority will still want to buy it for a non-profitable purpose. If the suggestions and hints which have been given are in any way intended the Minister should have told us that in the White Paper.
The White Paper gives no explanation of the position in the case where a local authority wants to buy voluntarily— where it has land for housing offered to it. As I understand it, if it buys voluntarily it will not get a bonanza from the Land Commission, although a levy will be payable. Why should not a local authority buy voluntarily? As it stands the scheme is an absolute discouragement to do that. Local authorities will lose by it, and as a result we shall have a proliferation of compulsory purchases. 459 That situation is envisaged, because it appears that the procedure will be cooked to speed things up, presumably so that people will not have sufficient time to object.
The Land Commission must first be staffed, and if it is really to know what is best for Bootle it must have a staff stretching from Bootle down to Cornwall. Presumably it will have to have valuers, and if it attempts to use the present district valuers' system I would point out that in Kensington—and there are many other constituencies in the same position—7,000 rating appeals are outstanding. It will have to have a separate valuation staff of a highly skilled nature, and our experience of the working of the 1947 Act shows that the achievement of development values, which are to some extent problematical, is very difficult. No explanation has been given about that, and about the situation where the local authority will be over-ridden and the Commission will say, "You did not buy; we shall buy". A good deal of information is needed on that aspect.
I cannot help feeling that a body which is to have the positively dictatorial powers that this body is to have should have some kind of elected background. We are handing over power entirely to a body which, it is true, will operate within the general instructions of the Ministry, but I cannot believe that it is right in this country and in this age to hand over powers of this nature to an appointed body of this kind.
As for compulsory purchases, the White Paper says that the Commission will have the same powers as a Government Department, but very few Government Departments indulge in extensive compulsory purchase. That raises the problem of the establishment of an inspectorate. Is this to be the inspectorate of the Ministry of Land, which does not exist at the moment? The Ministry of Housing cannot get enough inspectors. A separate inspectorate will have to be built up by the Ministry to hear cases operating within the Ministry's scheme. This is the most blatant case of judge and jury. This is the kind of thing which the Franks Committee—as announced in the newspapers the other day—criticised in the case of electricity undertakings.
460 If this system is to be put into effect we shall have completely to revise our present inspectorate system—and I would not object to that—because it is quite inappropriate to cases where the purchaser is so closely connected with the Ministry responsible.
I will not repeat at length the comments of my hon. Friend the Member for Gloucestershire, South (Mr. Corfield), because it became quite apparent that the Minister has not appreciated at which prices purchases would be taking place. If this system is really carried out the Land Commission will become virtually the only buyer, and in terms of land for development it may become the only seller.
I could not understand the Minister's being unsure whether the sales would be at market price or at current use price. Unless they are at market price I do not see how he will be able to arrive at a 40 per cent. or 50 per cent. levy. That he should be at a loss to be able to deal with that point seems to me absolutely incomprehensible, because it is fundamental to the whole consideration of the matter. He has taken a year of gestation, and now there is nothing. I cannot help feeling that from what we have heard today neither side of the House can have any confidence in the scheme for the Land Commission as set out in the White Paper.
§ 7.57 p.m.
§ Mr. Kenneth Lomas (Huddersfield, West)
I am grateful for having caught your eye, Mr. Deputy Speaker. I feel like an adventurous young man who has been sitting here for two and a half days waiting to catch the eye of a virtuous maiden, and who now having received the nod proceeds to take advantage of it. I hasten to assure the House that the only advantage that I intend to take is slightly to widen the scope of the debate, for reasons that will become obvious. I also assure the House that I shall speak for only 15 minutes. If I am still on my feet when that time has elapsed and somebody asks me to give way I shall resume my place.
We have had a detailed discussion of the question of the Land Commission— a discussion which could easily have been left until we had the Bill before us and until we could have seen what was in it 461 and what was intended by it. A cardinal principle is involved here. In my view, if profit is made out of land it should accrue to the nation and not to the individual. That is the main reason why, in my opinion, I support a Measure that ensures that any increase in the value of land should benefit the nation and not those individuals who tend to live on the fat of the land, and have been doing so for many years.
I have great sympathy with hon. Members on both sides of the House who have advocated measures being brought forward to provide lower mortgage interest rates for couples desiring to purchase their own homes. This must be done. Young people today want houses, and in most cases want houses of their own. The Labour Government and Labour Party endorse this aim. I hope that some measures will be brought into force in the near future to make this possible. At the same time we must bear in mind the urgent need for council house building.
In Huddersfield I was amazed to find that in 1963 the local authority built only 24 council houses, while over 300 houses were built by private builders during that period. Again, 31 per cent. of all the houses in the Borough of Huddersfield have no baths. This compares with a national figure of 25 per cent. No fewer than 21 per cent. of all the houses in the borough have no inside toilet, which is also far in excess of the national figure. It is more than obvious that, in a situation like this, there must be Governmental control and direction to ensure that council houses are built for the people living in these terrible twilight areas, and at reasonable rent.
There are a tremendous number of immigrants in Huddersfield, but the difficulties now manifesting themselves are partially aggravated by the appalling housing conditions which are a result of 13 years of Conservative rule nationally and 13 years of Conservative-Liberal alliance at local council level. Sooner or later, this Government must be aware of the fact—I am sure that they are— that people who live in areas like this with these terrible problems must be helped as much as possible. This is why I welcome, as my constituents and, I am sure, the nation will, the fact that the Government are determined to boost the 462 housing programme until we have at least 500,000 houses a year by 1970.
At the same time, there is an obvious need for leasehold reform and rating reform. These are long overdue and something must be done about them. The injustices of the rating system are apparent for all to see, but I should seriously like the Government to consider not only transferring teachers' salaries from the responsibility of the local authority to the national Exchequer but also transferring the cost of, say, ambulances, which are a national service. We have a National Health Service and ambulances should be provided out of the national revenue. There is a case even for asking whether the finance of the police should not be transferred from the local to the central Government. Something has to be done. There are many other matters which should be considered so as to find a way in which we can ease the tremendous burden on the rate system.
As I indicated earlier, I want to depart from the subject of this debate to other aspects of the Gracious Speech. This is for several reasons, the first being that far too much attention has been paid on both sides of the House to matters which are not in the Speech, rather than to matters which are. Everyone seems to be much more concerned with what is not in it than with what is—
§ Mr. Lomas
I have not mentioned steel, but I intend to do so because some of my colleagues and I were sponsors of an Amendment to the Gracious Speech which, I suppose, for all kinds of reasons, will not be called. In fairness to the 50-odd Members who signed the Amendment last night, it is only fitting that it should be made clear that our view on steel is quite simple. We believe, as the Prime Minister indicated in his opening speech on the Address, that the public ownership of steel is essential to our economy; we believe that: it is vital to the well-being of the nation, but we take the attitude that we are practical realistic politicians. We realise that there is truth in the maxim that "politics is the art of the possible ", and it is especially so at the moment.
There seems little point in clogging up the Parliamentary machine for four months when there are still many obvious Measures, as outlined in the Speech,which 463 need to be put into effect. If as many of the best authorities in the world say—I know this because they all sit in this House, or so I am told—it would take three or four years before steel nationalisation became an effective reality and even if we passed it in this Session, then, when the next election comes, we shall find ourselves having it all over again and everything will be in the melting pot once more.
Let us attend to the social reforms, the necessary legislation, the long overdue reforms, which were neglected for 13 years by the other side of the House. Let us get them out of the way and then go to the country and say, "Steel nationalisation is one of the many factors which we intend to bring into being for the benefit of the nation and the benefit of all our people, including even the Conservative Party and its supporters in the long run". My view on the matter is reinforced by my experience over a Private Member's Bill which I introduced—the most innocent, innocuous Bill which could ever have been presented to the House. There was not a controversial comma, full stop or word in it—[An HON. MEMBER: "Tell us about it."] I would tell hon. Members about it but for the fact that I am timing myself very strictly and I have only 10 minutes left.
I presented that Bill, which was so innocent, to the House at the end of November last year, and it was July of this year before it received the Royal Assent. It took the best part of nine months for the most innocent Bill in the world to become law.
We must now recognise that there is a question of priorities in considering steel. We hon. Members who signed the Amendment to the Gracious Speech— pledging ourselves to the realisation that it was essential to have the public ownership of steel at the earliest opportunity—realised that, in terms of sheer practical politics, it must wait until we have, as we shall have after the next election, a majority sufficient to guarantee us a full term of four or five years in office. It is realistic to say, "I have lost a battle this Session because I want to win the war in the long run." Those are the tactics adopted by the military as well as by politicians.
464 I wish to draw the attention of the House to what I consider to be another important omission and something which is truly vital to the country and the people who work in it. The Gracious Speech includes this passage:My Government is studying with the medical profession ways of improving the family doctor service and will introduce the necessary legislation.How I wish that it also said that they would introduce an occupational health service. Tremendous cries go up from hon. Members on the other side of the House—sometimes from those on this side—reminding the Government constantly that, in any one year, we lose 2½ to 3 million working days through strikes, but what they forget is that 20 million working days are lost through injuries and 300 million through sickness of all kinds.
It would be a good thing if we tackled the problem of industrial injuries at source and made sure that machines were protected and that every large firm had its safety and welfare officer. We should see that all employers are covered by the Factory Acts. It is not right that people in the public service, and those who work for local authorities and in the National Health Service, should not be covered by the Factory Acts. How ridiculous it is that if a man is building a bridge he is covered, but if he is mending a road he is not. If one works in a hospital and serves meal in the staff canteen, one is covered, but if one works in the patients' canteen, one is not.
These are complete anomalies and I suggest that the time has come when the Government should consider how best they could extend the Factory Acts to cover all sections of the community and introduce an occupational health service which would be of benefit to the nation and to the people in industry. This is one of the ways in which we can hope to create the climate in which it will be possible for a prices and incomes policy to become a living reality.
We must, first of all, make sure that people working on the shop floor or elsewhere are working in decent conditions and in a decent environment. It must be clearly understood that if we are to plan our economy—whether or not to do this seems to have been a big argument in the House during the twelve 465 months that I have been here—this inevitably means that we must plan inside that economy in terms of prices, wages and everything else. A free enterprise society as advocated by the right hon. Member for Wolverhampton, South-West (Mr. Powell) is jungle law. We are a civilised community living without the jungle. I do not want to get involved in the tremendous struggle which results when the free play of the market determines what should be the price of a particular commodity and what wage an individual should get.
That is quite wrong, and I speak as a trade unionist of 28 years' experience when I say that, equally, some of those who argue for the maintenance of the individual bargaining system are wrong. They tend to forget those who are on fixed incomes or pensions and those whose wages and salaries are negotiated nationally and regionally. I want to see a planned incomes growth throughout the whole economy. But we must make it apparent to everyone that we believe in this form of justice. I believe that the present Government will demonstrate to the individual who works in industry or elsewhere that they intend to attack the unholy trinity of capitalism—rents, interest and profits—which have exceeded wages and salaries year after year ever since the war. This ought to be dealt with.
We must go into the question of unofficial strikes, not by condemning them but by doing something about them, and particularly by improving communications in industry, because the breakdown of communications is the cause of unofficial strikes in the great majority of cases. This is why I should like to see the Minister considering the possibility of introducing in the future, perhaps by legislation, joint consultative committees and joint production committees in the bigger industries, so that the workers know the whys and wherefores of what is going on. All these things would help considerably to ensure that we have a climate in which to plan our economy and move forward.
I welcome the Gracious Speech and the many great reforms contained in it. We are entitled to ask the Conservative Party what it would leave out of it and what it would put in it. The Conservatives speak 466 about reduced taxation, but what expenditure would they cut to make these reductions possible? They have not answered these questions, and they should be compelled to answer them.
We on this side of the House believe that we have a job to try to ensure that not just one particular section of the community has the benefit of legislation but the whole community. This is what we try to do. This is the second Gracious Speech in this Parliament and one more step along the road which I believe can take us to a better kind of society. Our course is charted and known. We are moving slowly along it, and by a series of five-year plans we shall reach the goal we seek. We shall eventually create the better Britain and that is what we want.
I have been speaking for 15 minutes, and I will sit down, grateful to the House for having listened to me. I would assure the House, however, that in the next Parliament if I am still here—and I know that I shall be—I shall be among those who will urge that we should introduce steel nationalisation at the earliest opportunity, but in the meantime let us get on with the job of building a better and happier Britain.
§ 8.14 p.m.
§ Mr. A. P. Costain (Folkestone and Hythe)
First of all I would declare that I am a builder and on the Council of the Association of Land and Property Owners. In view of the suggestion by Mr. Speaker that we should have short speeches, I will not follow the hon. Member for Huddersfield, West (Mr. Lomas) in looking for the virtuous maiden on the Front Bench. I have been looking, and I have not seen one. [HON. MEMBERS: "Oh."] The hon. Member said that he had been in his seat for two and a half days, which was I feel an illusion. His speech was interesting in that he forgot that he was speaking to his own Front Bench.
This has been an extraordinary debate. In his reply to my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), the Minister said that my right hon. Friend had been in his usual good form. I wish that I could say the same about the Minister, but I have never heard him quite so incoherent. In fact, when he left the Chamber I wondered whether he was feeling well.
467 A further regret lies in the fact that except for a short time there has been no representation here of the Liberal Party. This is an issue, the Land Commission in particular, which will be hotly contested. We have already seen this afternoon the extraordinary revolt over leasehold reform when the hon. Member for Oldham, West (Mr. Hale) was brave enough, as he always is, to say that he would not let it go through unless he could agree with it. Had the Liberal Party been here they would have had an opportunity to take up the challenge, and we could have discovered whether the Government would then have done another steel trick or would have faced the country.
I want to deal as quickly as possible with the main points of the debate, the first of which concerns the land levy, which has been discussed at some length. I wish that the Minister of Housing had opened the debate and had told us what he intended to do about building societies, which is a vital issue in the house building programme, and that the Minister for Land and Natural Resources had concluded the debate, because many questions about the Land Commission and the levy have been asked which the Minister ought to answer. There is a great deal of confusion on this issue.
Basically, the land levy is an extension of the Capital Gains Tax, at 40 per cent. instead of 30 per cent. Why cannot this be collected in the same way as the Capital Gains Tax? What will the position be if we have two valuations, as we may —one by the Inland Revenue for probate duty for a particular piece of land and one by the Land Commission, although where they can get the staff to value we do not know. Who will rule on which is the correct valuation? This is a departure from the fundamental justice of British taxation—although many people realise that British taxation is not equity. Under this proposal people can be compelled to pay taxes before they have realised their profits. This argument is known to the Minister, and I will not develop it.
In the White Paper they referred to the fact that the money received in respect of development will be exempt from long-term capital gains. One is suspicious about such an ambiguous document. 468 Have they deliberately mentioned long-term gains so as to exclude short-term gains? Is this a trick so that they can charge at 26s. in the £ any increase in value—because they can do that without the individual having any say in the matter? A man can buy a piece of land genuinely to hold it. Under the Finance Act he is liable to the Profits Tax and Surtax. On top of that he is liable to the 40 per cent. levy, which makes 26s. in the £. Will the Minister refute this argument? The Minister must be aware of the pieces of land which are being withdrawn at auctions because people do not know what the taxation position is likely to be.
We have been asked what is the Conservative Party's attitude to a capital levy. My right hon. Friend made that clear. I will give my own views. We must divide this question of land into two issues. In this connection, I remind the House that the definition of "land" in the 1962 Act includes virtually anything, including cathedrals, churches and so on. Thus a piece of virgin land might, if planning permission is given, fetch an extremely high price and I appreciate why, in equity, a levy of perhaps 30 per cent. should be charged, for the individual concerned has not done anything to increase the value of that land. However, a farmer farming a similar piece of land next door will not be very pleased to find that his land is worth, say, £200 an acre while the piece next door, with planning permission, may be worth £400 an acre or more.
All this does not reduce the price of land. Do not let us kid ourselves into thinking that, in equity, we have some wonderful formula which will reduce the price of land and make more land available. I know of no tax—and I ask the Minister to correct me if I am wrong— which, as a result of being placed on an article, has resulted in a price reduction. Despite that, we hear all this poppycock about the Government's proposals being designed to produce more land and at the same time reduce its price. I defy the Minister to give an example of where this has happened or will happen. The simple answer is that it will not happen and cannot happen.
What we are discussing is really nationalisation by the back door—a very big back door—and that is why I regret 469 that hon. Members of the Liberal Party are not present. Do they realise just what this is all about? Are they aware of the monopoly interest which could be absorbed? The White Paper is "slowly, softly, catchee monkey"—in other words, is designed to take over land where the Minister thinks fit. What a wonderful expression. How can anyone tell what a Minister thinks? How can any appeal or form of arbitration work on that basis?
This is a fundamental issue for the building industry, for the Minister has the power to take over the only real raw material which the industry has. We hear a lot about the shortage of raw materials in the industry, but how many people realise that the industry's main raw material is land and the way the industry gets hold of it? I recall many years ago an old trade union friend telling me, "There is no need ever to nationalise the building industry and pay out you contractors. We can absorb you by placing contracts with direct labour." If he had only known that this applies to land—that it is taking over by the back door.
We then come to the wonderful new term "Crownhold". Reference has already been made to this and I will merely say that it is amazing that a Gracious Speech should, on the one hand, introduce Crownhold as a form of leasehold, and, a few sentences later, abolish leasehold. This is most extraordinary.
Several points have been made about the new Crownhold system and I fear that the Minister did not give the right answer. I hope that he will reread his remarks in HANSARD because this whole matter will greatly affect the future of copyhold. Indeed, the position would appear to be the opposite to what I understood the Minister to say. This wonderful business of copyhold will, I understand, give special priority for land to be used by builders. How on earth will one select which builder should have the land? If a builder serves on a local authority, presumably he is prohibited from using the land in view of his prior interest. Who will decide who will have the copyhold?
The next thing we are told in the White Paper about copyhold is that there will be restrictions. One can only assume 470 that the person who takes the copyhold will have a price restriction placed on his investment, so that a house built on the land will be restricted from the price point of view. If that is so, for how long will that apply? Will it be for 999 years? If not, for how long?
§ Mr. Gordon Oakes (Bolton, West)
Before the hon. Gentleman proceeds, when he refers to "copyhold" is he intending to mean "Crownhold"?
§ Mr. Costain
I am grateful to the hon. Gentleman for correcting me. I did, of course, mean Crownhold.
Let us consider the case of two houses built on adjoining sites, one freehold and the other Crownhold. The two houses are built and we can assume that one will be sold, because of the Crownhold, for less—say, £500 less—than the other, meaning that one will be sold for £2,500 and the other for £3,000. Thus, the man who got the Crownhold house has an advantage at that point. The Minister rightly pointed out that that advantage should not be perpetuated and that a quick profit should not result.
Accepting that, let us say that both men live in their respective houses for 20 years. At the end of that period, with the present rate of inflation, the £3,000 house will probably be worth £5,000. The chap who has lived for 20 years in the Crownhold house, although the value of his property will have gone up from a replacement point of view, will not be allowed to sell it for more than he is permitted under his restricted covenant. Is this not creating a new class of tenant?
In any case, under these circumstances one cannot have mobility. I will not go into this matter in detail now, except to say that mobility of staff and labour is of prime importance to Britain these days. One of the difficulties of obtaining mobility has been the shortage of housing accommodation. Rent controls have prevented houses from being built to rent in sufficient quantities. Only the other night the Minister of Housing and Local Government admitted that the days of the private landlord were more or less over. The right hon. Gentleman does not see any future in building by the private landlord. I do not altogether agree, but it would seem that one is left with council houses, owner-occupied houses and Crownhold owner-occupiers.
471 in these circumstances, one must consider how to achieve mobility. Someone living in a council house may want to move from X to Y. Naturally local authorities will not accept new names on their housing lists if those lists are already long. However, if a person wishing to move happens to advertise in a local paper in area Y and someone living there happens to want to move to area X, the transfer might take place. This is all a sort of lottery, a sporting chance.
However, the man who owns his own freehold house has complete mobility because he can sell it and replace it in another area. Hon. Gentlemen opposite seem always to think that there is something rather wicked about someone being able to obtain a house for cash or on a mortgage and be able to sell and buy elsewhere. Why are they so keen to boast about the increased building of council houses? They must admit that a council house takes twice as long to build as a private enterprise house. [HON. MEMBERS: "No."] The statistics prove it. I am sorry that the Minister of Public Building and Works is not present, because there are statistics in his Department—there certainly were when I was a P.P.S.—which show the difference in time. The Prime Minister proved this the other day.
I do not know who gave the Prime Minister his brief, but he made the statement that the Labour Party was doing very well because it had 25,000 more houses under construction than at the same time a year ago. My right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) has pointed out that the proper comparison is between the number of houses under construction between September, 1963, and September, 1964, and the number under construction from 1964 to 1965. This gives the extraordinary result that 56,000 more were under construction in the former period. When the Prime Minister let the cat out of the bag, he proved beyond doubt—I defy anyone to contradict this—that the switch to council houses has slowed down the housing programme.
Let me give the figures. The number of houses started in 1965 as compared with 1964 shows a drop of 20,000 in the private sector. Let us see how many nouses this great new Government have 472 decided to start when they claim that they have 23,000 more under construction. From January to September, 1964, the total was 317,365. For the same period of 1965, however, the figure was 298,987. That number fewer houses are being started, yet the Prime Minister boasts that his Government are doing well because there are 23,000 more in the pipeline. The reason why they are in the pipeline is that they take longer to build. Here is the proof from the Prime Minister himself. Let the Socialist Party realise what they are doing by adopting their policy to get more council houses built. Cannot they appreciate that when private enterprise houses are built, more houses are made available?
§ Mr. R. W. Brown
Suppose that my local authority employs the Costain Group to build on a site for the council. Does the hon. Member suggest that if the same firm builds elsewhere for private enterprise it will deliberately go slow on the council work but speed up on the private enterprise work?
§ Mr. Costain
I am delighted to be asked that question, which is easy to answer. I am talking of speculative housing. The hon. Member is a great authority on local authority housing. When building material is short, the man who builds for himself will substitute. If a private builder finds himself short of plasterboard he looks round for a substitute. He does not want to waste time, because he knows that he will not get paid until the house is finished. He does not want to pay interest on £2,000 unnecessarily.
It is not so, however, with a local authority, which plays about with the ratepayers' money. There is no encouragement for a local authority to find substitutes for plasterboard. The private builder who builds a speculative house knows that in, say, an 800 feet super house he requires 102 yards of plasterboard, which will cost him £x. Rather than pay interest on capital of £2,000 unnecessarily, he offers to pay double the £X that the plasterboard would cost simply to save interest payments. That is why council houses take longer to build. This is not appreciated by hon. Members opposite. There is no mystique in this. It is sheer common sense.
473 My final subject is building licences. I am sorry that the hon. Member for Houghton-le-Spring (Mr. Urwin) is not present. It is fortunate for him that I was not called immediately after him, because I should have been delighted to discuss the success of the building industry with him. When the hon. Member talked about 80,000 builders and the large builders, it was rather like talking about the big motor car manufacturers and the small local garage. Nobody would regard comparison between, say, the British Motor Corporation and the small garage as a fair or equal one.
The hon. Member made the important point, which is not often appreciated except by people in the building industry, that 40 per cent. of its effort is devoted to maintenance. The time after time I have said that it is not the effort which is involved in building luxury offices that restricts building. It is the maintenance effort that does most to restrict house building.
We are now to have an extraordinary licensing machine set up which, the Minister tells us, will account for 500 jobs and a great new organisation costing £180 million a year. That is not what the architects say; they are practical people. They tell us that their research shows that it will cost £548 million. This is where the trouble starts and this is where, when we get back to power, we will inherit another vacuum in the same way as we did with road transport licensing. The statistics show that architects are getting rid of their staff.
One of the problems of the building industry is that plans are not drawn up sufficiently far ahead to facilitate starts. The reason why the Americans have quicker and cheaper buildings, even on higher rates of pay, is because the job is planned out—not Socialist planning but real blueprint planning. The contractor can go on the job, see what he has to do and do it.
What hon. Members opposite do, however, is to close their ranks politically and then produce their own version of planning and put the architect behind them. The architect is powerless to proceed. The party opposite has, however, repented somewhat by creating an organisation to grant temporary licences. So the light is beginning to dawn, but it is dawning 474 very slowly. The country is desperately short of houses. We shall get houses by encouraging production, not by introducing licences and controls.
§ 8.39 p.m.
§ Mr. Archie Manuel (Central Ayrshire)
I am very pleased indeed that, after sitting here for so long, I am at last getting into the debate at the tail end. I hope that the hon. Member for Folkestone and Hythe (Mr. Costain) will forgive me if I do not follow him in detail, although I shall refer to some of the points he made. It appeared to me as if he was dealing with the White Paper on the Land Commission as if this were the debate on the Second Reading of the Bill. I look forward with intense interest to the hon. Gentleman's advocacy on behalf of the Property Owners' Association and the Master Builders' Association in the debate on the Second Reading of that Bill, but I hope that the hon. Gentleman will spare some thought for how the provisions of the Bill will affect his constituents. That consideration should have some bearing on his work in the House.
§ Mr. Costain
Is the hon. Gentleman suggesting that in anything I said I was neglecting my constituency? I think that the hon. Gentleman should withdraw that remark.
§ Mr. Manuel
I did not say so, Mr. Deputy Speaker. I was only referring to the statement the hon. Gentleman made at the beginning of his speech that he was a member of the Master Builders' Association and of the Property Owners' Association. The hon. Gentleman said that. The words are not mine. Therefore, I naturally thought he was acting on their behalf. If I have done him any injustice, of course I apologise.
I very much welcome the Measures foreshadowed in the Gracious Speech, particularly those which will have a beneficial effect on the production of homes. I instance as the very highest priority in this connection the Bill to establish the Land Commission; secondly, the legislation to introduce a new system of Exchequer subsidy for local authority housing, and, thirdly, the legislation to be introduced to lessen the injustices of the rating system and to limit the burden of rates.
475 I welcome in particular the White Paper on the Land Commission, paragraph 7 of which says this:In the Government's viewthis has not been mentioned by hon. Members opposite in their references to the White Paper—it is wrong that planning decisions which are public decisions about land use should so often result in the realising of unearned increments by the owners of land to which they apply, and that desirable development should be frustrated by owners withholding their tend in the hope of higher prices. The two main objectives of the Government's land policy are, therefore: —I wish there were time for me to read paragraph 13, which deals with the power of acquisition and which will give teeth to the preceding paragraph and ensure that it is carried out.
- (1) to secure that the right land is available at the right time for the implementation of national, regional and local plans;
- (2) to secure that a substantial part of the development value created by the community returns to the community and that the burden of the cost of land for essential purposes is reduced."
I regard the performances of the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) with a great deal of relish. Today I think he surpassed himself. I am delighted to welcome the right hon. Gentleman back into the Chamber. I am paying him a very high tribute indeed. I am telling the House of the relish with which through the years I have enjoyed his performances at the Dispatch Box. Today he stands a little further from it than he used to, but he still attains that high performance in speeches which, in the final analysis, when they are dissected, do not mean much, but the right hon. Gentleman can talk on, and on and on. The right hon. Gentleman obviously does not change his speeches from those he made years ago.
The right hon. Gentleman told us in the early part of his speech today that he was not against the principle of a levy. He said that it was generally accepted. There were some glowers behind him when he said that, but he said it as Official Opposition spokesman. It should be remembered that the Conservative Government in the 1953 Act abolished the levy or development charge. They made such an unholy mess of it 476 that in haste they brought in an Act in 1954 which established the two-price system. It was so inequitable that the Tories had to admit it and they brought in the 1959 Act in which they returned to the dream of all Tories—the market value, the most that one can get in the market at the best time for selling. I wonder how the right hon. Member for Kingston-upon-Thames can swallow all this and still be full of confidence. He changes his coat so often in connection with these land value matters.
I know too well from a fairly long local authority experience of land prices in Ayrshire how local authorities have been handicapped over the years by high land prices. I think of developments which I took great pride in bringing into being, and I remember how we brought electricity, gas, sewerage and water supplies to the edge of agricultural land, that land, which had been paying no rates, jumped in value and then, when we wanted to carry out further housing developments, we had to pay through the nose for it. The owner-occupiers also had to pay for the added value when they already had paid for the cost of providing the services and social amenities which had enhanced that value.
This has been the experience not only of that burgh but the experience throughout the country. This is why my right hon. Friend has produced the White Paper and is dealing with the land question. I shall be eternally grateful to him for these steps which he is taking. I am certain that he will make a success of this. The injustice is so apparent that no right-thinking Christian can tolerate the delay in the provision of houses and homes caused by local authorities being held up to ransom by owners after land has been increased in value by the spending of public money.
The 1959 Act was the natural outcome of Tory deliberations and I hope that we shall reverse all that. The right hon. Member for Kingston-upon-Thames said that private builders would not be allowed the same freedom to build houses under a Labour Government as they had enjoyed when hon. Members opposite were in power. This is very foolish talk. It does not matter to me whether the private builder is building local authority houses or building for owner-occupation. In the 477 main, local authority houses are constructed by private builders, and the private builder, seemingly, is committing a heinous crime if he builds a local authority house. But I cannot separate them. No matter where the houses may be, as long as we keep the firms that are providing them constantly employed in producing houses in the quantities needed by local authorities for their housing lists and in the quantities needed for owner-occupation, we are doing all right. The essential thing is to keep the industry fully employed. One would think that the local authorities were using some different method in their building, but, of course, they do not build. It is the private builder who builds, the same person who builds houses for owner-occupation. I hope that that will be more firmly understood in future.
I want to tell the right hon. Gentleman that in these debates he is also speaking for Scotland on behalf of the Opposition, and I would advise him to do a little more research. Despite all the incentives down through the years, our difficulty in Scotland has been to get private developers to build houses for owner-occupation. I am pleased to say that we are now putting on a little spurt, and some advance is taking place. If it had not been for the building of local authority houses during all the 13 years of the Tory Government, the building industry would have died in Scotland. There would have been no work for them at all.
§ Mr. Manuel
An average of about 4,000 houses a year in a total production of 28,000 will not do. We did not build, in spite of all the incentives that we were offered. The hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) says, "Rubbish", but he knows quite well that it is no use dealing with such a serious matter in that flippant way. If one studies the September return of the Scottish housing position and compares it with the position back to 1956 [Interruption.]If you have it, you cannot be reading it.
§ Mr. Manuel
I am very sorry, Mr. Deputy Speaker. I had quite forgotten 478 that you were there. My remark was an aside directed to the hon. Member for Cathcart. I apologise.
It will be realised from the latest housing return which I am referring to now that the number of houses under construction is leaping ahead under the present Government. Obviously we do not want to claim credit for the rather low figure of houses started last year when the previous Administration was in power, but in the three quarters of this year, taking all the houses being built, we have the following figures. In the first quarter, there were 45,350. In the second quarter, there were 47,678. In the third quarter, there were 50,554, which is an all time record. I hope that the hon. Member for Cathcart will put that in his pipe and smoke it.
§ Mr. Edward M. Taylor
The hon. Gentleman said that Scotland had a figure of round about 42,000 in the first quarter. Does he recall that in July, 1964, there were 48,000 under construction, and does he appreciate that after one full year of Labour rule there will be less houses built this year than the 37,000 that were built last year?
§ Mr. Manuel
Oh, no. The right hon. Gentleman the Member for Kingston-upon-Thames is saying "Hear, hear", but he does not know the position. I know the figures full well. I am not talking about approvals, I am talking about houses under construction. I did not say 43,000 in the first quarter. I said 45,000. Then in the September quarter there was an all-time record of 50,554. I said it was an all-time record and it certainly is an all-time record.
I feel I have spoken long enough. Mr. Speaker made an appeal earlier on. I am sorry it was not obeyed, but I shall try to comply with it, and I wish only to add that I am tremendously bucked up by the provisions of the Gracious Speech and I am particularly pleased with those having an impact on the production of houses, and I wish my right hon. Friend every success in his endeavours in this great field which will amply repay in health and many other ways all the efforts he is putting into it.
§ 8.55 p.m.
§ Mrs. Margaret Thatcher (Finchley)
I do not wish to get embroiled in this debate on Scottish matters. They are not normally the subject of debates at which I am frequently an attender. It had been today a lively debate, albeit attended by comparatively few Members, a debate in which hon. Members on each side have been trying to convince others that theirs was the right course to pursue.
I start with some comments on the White Paper on the Land Commission. I am sorry the Minister of Land and Natural Resources is not back yet to hear them. I would say at the outset that had I sat on that side of the House for nearly 12 months and had had to prepare a White Paper I would have been very ashamed indeed if I had had to present such a sketchy one as this, and even more ashamed if, having come down to the House to debate it, I had not been able to give more details on things which need to be explained or not been able to give more answers to questions asked. I hope the Minister of Housing and Local Government in his winding-up speech will give us answers to many of the questions we have asked.
I wish to refer to a number of points and to put a number of questions. It is quite clear that the whole idea of a Land Commission and a land levy arose because of the high price of land. Indeed, today a large number of hon. Members have dwelt upon the high price of land. However, the Land Commission and capital levy will do nothing to reduce the price of land. What they really do is to get the Government in as well on some of the spoils. This is, of course, a classic example of if you cannot beat something you join it. The question is whether the part of the spoils which the Government will take will also be added on to the price of land. It is ironic indeed that the mischief which the measures set out to cure is the high price of land but that the remedy which is proposed will undoubtedlv result in an even higher price for land being paid.
I do not know that anyone or any organisation seriously contests this except right hon. Gentlemen on the Front Bench who, I understand, were shaking their heads vigorously at one moment when we suggested the levy would put 480 up the price of land. If the right hon. Gentleman believes that it will put up the price of land I withdraw the remark, but I understand that he thought it would not. Certainly the Minister of Land and Natural Resources thinks it would not put up the price of land. Nevertheless, the House Builder believes it will put up the price of land. An article in the Local Government Chronicle believes the levy will put up the price of land. The National Federation of Building Trades Employers believes the levy will put up the price of land. The journal of the Rating and Valuation Association also provides articles which believes likewise.
Let us be quite clear, therefore, that although many of us can make an interesting debating speech any time upon the evils of the high price of land, this Government are not proposing a remedy for those evils, but proposing only to take a share in the spoils.
I turn for a moment to the justification for the levy. It has been variously described, and on occasions rather speciously described. It is said that there should be a justification for a development levy where the development value is created by the community and consequently, the reasoning runs, the value should return to the community. It is almost becoming known as the "betterment" theory, that if a betterment in value is created by the community the value should return to the community. This would have various strange logical conclusions. Surely the betterment value in a Premium Bond from £1 to £25,000 can be created only by other members of the community buying Premium Bonds? Where else would the prize money come from? It is not proposed in any way to tax this enormous increase in value, which is far higher than any percentage increase on any land transaction.
I prefer the interpretation given by my hon. Friend the Member for Gloucestershire, South (Mr. Corfield), who said quite openly, "A levy will put up the price of land, but we believe that it is justified on other grounds." Where there has been a very great accretion in value, then throughout centuries of government there has been a Treasury which will very shortly get its fingers into the till. One says, therefore, that if there is a great increase in actual value, there is a source 481 which sooner or later will become liable to tax. This is the sort of theory which does not get one into anything like so much trouble as a kind of "betterment by the community" theory.
It has been suggested in some quarters that a levy should be payable because a betterment would arise from the grant of planning permission. If that were the only betterment doctrine, I could understand that as well, because the grant of planning permission concentrates the potential of land on one particular plot, and it would, therefore, give rise to a substantial potential increase in value. But that is not the only occasion upon which the White Paper is proposing to impose a development levy. There are occasions—
§ Notice taken that 40 Members were not present;
§ House counted, and, 40 Members being present—
§ Mrs. Thatcher
I note that an hon. Member of the Liberal Party, which has been almost totally absent except for one attempt to interrupt my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) at the beginning, comes in only to remark that other hon. Members are not present in sufficient numbers.
I was saying that the levy is payable not only on the grant of planning permission but purely on a straight increase in value. This is apparent from paragraph 26, which gives an example of agricultural land worth £300, sold for £1,000 without planning permission, but with the hope that it might get planning permission if it has been zoned within a plan. If this land is sold without planning permission for £1,000, there will be a development charge on the £700 and a levy of 40 per cent. will be payable. That would seem to be not so much an example of betterment by the community but just a straight increase in value, and it is the increase in value which attracts tax.
Therefore, I would put my personal belief in a levy not upon a rather sophisticated theory of betterment value but upon the view that this is something that has increased so rapidly that it would be proper to take a part of it in tax for the Revenue.
482 One thing upon which the White Paper is very quiet is the inter-action of the levy with Capital Gains Tax. It is vital to know how the levy will dovetail with the Capital Gains Tax. The White Paper makes only one reference to it.
Let us consider the extent to which increases in land value are already taxed under existing law. They are taxed to a very considerable extent without any need for a special extra tax of this kind. For example, builders, estate developers and land dealers who purchase land and develop it are subject to tax on their profits—Corporation Tax if a company and, in so far as these profits are distributed, to Income Tax at the standard rate. If a person deals in land he is taxed at the full personal rate. Thus, ordinary dealings in land are and always have been caught under the ordinary taxation legislation. They are already liable to very heavy tax because the standard rate of tax is high and the proposed rate of Corporation Tax is fairly high.
Since the Budget, landowners who dispose of their land at an increased value over and above that which they paid for it, or over and above the value on Budget Day, also have to pay a Capital Gains Tax of 30 per cent. if a person or possibly up to 40 per cent.—if taxation should go that high—if a company. The vast majority of increases in land value are therefore already taxable. There are very few which are not. The only ones that are not, I believe, and which will be caught by the new proposals, are cases where the land does not change ownership but which is taxed when it is developed by the owner for the purposes of his business or his own farm.
So if the moral which has given rise to the need for the White Paper is that increases in land values should be taxed, they are already taxed very heavily. It is said that the gross yield from the levy will be £80 million a year. That figure is gross. How much do we have to deduct from the gross to get the net figure? Obviously, what would have been levied by Capital Gains Tax would have to be deducted, that is, the great majority of the increases in value, as the Capital Gains Tax is already very high and, with Corporation Tax, may be as high as the 483 development levy. There would also have to be deducted the enormous expense of running a fresh new big machine which would have to extend up and down the country to assess values and to know which land to acquire compulsorily.
I doubt very much whether there will be a very large increase in revenue, if any. It might be found that the administrative costs of running the machine will more than mop up any development levy which comes in and which would not otherwise have come in in the form of Capital Gains Tax. We are going to a bureaucrat's paradise in order to do something which can already be done under the existing Revenue law, and is already done to a considerable extent.
It used to be said that a tax should be certain in its incidence, cheap to collect, and simple. This is certainly not certain in its incidence, as I shall show shortly, because of the enormous gaps in the White Paper. It certainly will not be cheap to collect, because there is to be set up a whole new machine especially to collect a tax most of which would have been collected otherwise. It certainly is not a simple tax in any way.
I deal now with those cases which under the White Paper would attract a levy and would not be liable to Capital Gains Tax. No one has dealt with them yet, except my hon. Friend the Member for Folkestone and Hythe (Mr. Costain). They become apparent from the paragraphs in the White Paper which deal with examples of how the levy would work. It is said in paragraph 26 that a development levy would be payable when realised by a transaction or by development.
A development levy might be payable if a manufacturer had around his factory a large area of land upon which he wished to put an extension to his factory. In order to do that he would have to apply for planning permission and possibly an I.D.C. When he put up the building he would have developed the land. The development would probably be a "material development". It would be required to extend his business and, in certain cases, to modernise his business. It would rank as development attracting a development levy. Thus, under the White Paper a manufacturer who modernised or expanded would not only 484 have to finance the modernisation or expansion but pay a levy because he had expanded. That seems to be very silly. Indeed, it seems to be nonsense.
One could get a similar position with farming land on which a farmer wanted to build cottages for his farm workers. He would apply for planning permission and then not only have to finance the cottages, itself a big enough requirement, but have to find the money to pay a levy because he had provided cottages. That is no recommendation for the kind of levy which the White Paper proposes.
I do not know whether the right hon. Gentleman will think that such developments should be exempted from the levy. If they are not exempted, the Treasury will probably have to recommend changes in the Finance Acts because, if a levy has to be paid, the next thing will be to increase capital allowances to negative the effect of the levy. One will have put on a charge which manufacturers have to finance and then one will have to amend taxation provisions on the capital allowances in order to nullify the effect of the levy which one has put on. I have dwelt on this because I think it is an important and significant point. This is the only kind of case, as far as I can make out, of a development which is caught by the White Paper which would not be caught by Capital Gains Tax.
It looks as if right hon. Gentlemen are not particularly au fait with this situation. This is the kind of thing which I would have gone into thoroughly before I dared to come to this House, and I would have expected anyone who comes here with a proposal to put on a tax to have gone into it thoroughly. If the right hon. Gentleman has not, he does not know his job. I feel very strongly about this. There should be a whole section in the White Paper explaining the inter-action of the Capital Gains Tax, long-term and short-term. An example has already been given of how, if one has the short term Capital Gains Tax and development levy, one will get taxes up to 26s. in the £. This, too, is nonsense. Before I leave the taxation part of what I have to say, I want to point out that difficult as it is to arrive at a hypothetical value at any time —and we know that it is very difficult from the arguments we have had on Capital Gains Tax and the arguments 485 raised sometimes on Estate Duty valuation—it is even more difficult to have to apportion that value between a liability for a levy and a liability for a capital gain. When one has arrived at the increase in value which is taxable one has to apportion that increase between the amount attributable to increased development value and the amount attributable to the increased underlying use value.
This is going to be one of the most complicated sums ever. Is it really worth having a Land Commission? Is it worth having this kind of levy when the whole thing could have been done much more simply, and is done much more simply, by plain, straight Capital Gains Tax? If one thinks that the Capital Gains Tax is not enough on land transactions, which is clearly what hon. and right hon. Gentlemen do think, then it would surely have been simpler to have a differential rate for land transactions. But I very much doubt the wisdom of setting up a very complicated machine to bring in the tax which must be difficult to collect, assess and must be very uncertain.
The other points about the White Paper upon which there is all too little information is when the levy is to apply. It is said in paragraph 25 that it is payable at the time of development. Is that when the development starts or when it is completed? We do not know, and I hope that the right hon. Gentleman will know.
A point has been raised relating to the powers of the Commission to acquire land, almost any land ultimately, for development by compulsory purchase, and to acquire land in advance of use. My hon. and learned Friend the Member for Kensington, South (Mr. Roots) inquired particularly how the powers of the Commission and the view which it took upon how land needed for development would interact with the views of the local planning authority. At the moment the local planning authorities, of whom I understand there are approximately 215, have powers to acquire land compul-sorily. If the Commission is to have more extensive powers to acquire land, then it obviously has to take a view about future development needs. Whether that view will be the same as the local authority, we do not know. But it will have to make an assessment, and it seems that if the Land Commission provisions 486 go through they will, sooner or later, result in very considerable changes in who is the planning authority. As things are at the moment, it would seem that there could be a considerable conflict between a view about future development needs taken by the Land Commission and the view taken by the local planning authority.
The Minister of Land and Natural Resources quoted a speech by my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) and, I think, attempted to quote it in support of the idea of a Land Commission. One of the things which my right hon. Friend condemned in almost every speech that he made on this subject was the very idea of a Land Commission. The fact that at some time or other he proposed new machinery, or thought that new machinery might be necessary for compulsory acquisition in certain circumstances, should not be taken in any way to mean that he supported the idea of a Land Commission. He most certainly did not.
Another point of interest in the White Paper is this hybrid child of Crownhold. Some would call it perhaps by a rather less flattering term. I still do not know quite what it means from the Minister's explanation, and I would like to know whether it will apply only to housing or whether it will apply to land leased for other development purposes.
I must refer to the contents of paragraph 20. This seems to me to be a very dangerous paragraph indeed, as does paragraph 19. The latter attempts to vest land quickly in the Commission by a vesting declaration. In other words, if the Land Commission is going to acquire something compulsorily it wants to do it quickly and then be able to pass the land on, and may be able to do so before the compensation has been calculated. The land may well have been passed on to another purchaser and the evidence required for the calculation of compensation destroyed before that compensation has been decided. This seems to me to be quite wrong.
Paragraph 20 says that the Bill will enable the Ministerto invoke temporarily … some modification of the requirements relating to the services of notices and the holding of inquiries into objections.487 This seems to me designed to cut down the rights of the individual, or to try to get something through before he has had time to object.
I leave for a moment the White Paper on the Land Commission. I hope that the right hon. Gentleman will give us some of these answers tonight, or will undertake to write to us and give us some of the answers, particularly about the Capital Gains Tax and the way it interacts.
I turn from that for a moment to various other problems which have been raised. On the question of leasehold enfranchisement, the right hon. Gentleman made a statement on 8th December last year, but he did not tell people what they really need to know, and he has not told us yet. I hope that he will do so. From the wording of the Gracious Speech there seems to be considerable modification now in the intention to grant leasehold enfranchisement. From the former Gracious Speech it would seem that everyone would have been entitled to leasehold enfranchisement, but now the emphasis is put, not on enfranchisement, but on reform of leasehold. This seems to be different.
What people really want to know is how much they will have to pay or how much they will get, and under what circumstances. Undoubtedly the majority of interest has been evinced in this by people who want to purchase the freehold reversion. They want to know how much they will have to pay under the Bill, and it will not be an easy formula to decide, because obviously it will depend on the amount of ground rent payable, and when that amount was fixed.
The other point they really want to know is whether, if the lease is held by a charity, or by the Crown, or by the Church Commissioners, they will also have the opportunity to purchase it. At the moment Ministerial announcements with regard to residential property seem to imply that the leasehold system is rather wicked except when it is created by the Crown. Obviously people want to know whether everyone who holds a lease for residential property will be entitled to purchase the reversion, and roughly for how much.
488 I turn for a moment to a number of comments which have been made about the future of the building industry. Undoubtedly there is a good deal of uncertainty at the moment, and for a Government who said that they did not believe in stop-go this Government have created an extraordinary amount of stop —perhaps more than any other Government. As my right hon. Friend said in his opening speech, already, in one quarter, between July and September, about £546 million worth of work has been withdrawn from architects' offices, and the licensing system which the Minister of Public Building and Works announced will apply to £180 million worth of work each year.
The very worst thing for any industry is uncertainty about the future. The one thing that an industry must do is to plan the continuity of work in the coming year. This is needed in any industry. I am not in the building industry, although my husband supplies certain goods to it so I may be said to have an interest in it by marriage. But we all need to plan for continuity, and this is the one thing that cannot be done at the moment. Many firms are having to stand off their most highly skilled architects. They want to know how long the building licensing system will last, and when they can expect to take those people on again.
Finally—and I must point out that my time has been artifically cut down by the unconstructive intervention of the Liberal Party—I hope that the right hon. Gentleman will be able to give us a few more details about his system of relief for those who are suffering hardship because of the rates and, in particular, can he say whether the amount of rates of which he will relieve those people will be borne either by other ratepayers or by taxpayers. I hope that the right hon. Gentleman will answer the points that have been raised.
§ 9.27 p.m.
The Minister of Housing and Local Government (Mr. Richard Grossman)
Many questions have been asked, and I shall try to deal shortly with most of those which were fired at me at the end of her speech by the hon. Member for Finchley (Mrs. Thatcher). First, I will deal with the question of rate rebates. They will not be borne mostly by the 489 ratepapers; they will be borne largely by the taxpayers—otherwise they would not be rebates but a mere shifting of impositions from one body of ratepayers to another.
Many interesting questions have been raised concerning the Land Commission. I apologise for my right hon. Friend's absence. Unfortunately, he felt very ill while making his speech and retired to bed immediately afterwards, which has made it difficult for me to prepare adequate replies to the extremely detailed and skilled questioning to which we were subjected on this matter. I have taken careful note of the questions and I can answer one or two of them.
First, on the question of the interaction of these proposals with the Finance Bill. Much of this will be dealt with in special Clauses in next year's Finance Bill. Crownhold, applies only to houses and to no other form of development. On one matter which interested me the hon. Lady is quite right—the creation of the Land Commission will affect the whole planning system. It will influence local planning and national planning, and I should not exclude the possibility that once again Ministries in Whitehall will be subject to further revision and readjustment. Such things have happened before in the history of Whitehall, and it will be quite right in this case, because the new Commission will have an enormous effect on planning.
I have been listening to the debate, and I find myself in disagreement with the hon. Lady as to its nature. She said that it was a vivacious debate. I thought that it was very quiet. Ever since the Recess I have been waiting for the frustrated hon. Members of the Conservative Party to accept the chance of massing themselves for this debate, waiting to pit their indignant fury at us, but we never had much of it from them. Where are they? [An HON. MEMBER: "Where are yours? "] A Government of our sort do not need much protection by back benchers. We need them at Erith.
I want to put it to hon. Gentlemen opposite that it is very striking how little passion was engendered in the debate, apart from that very remarkable passage in the speech of the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) in which he challenged me 490 on the whole of my housing policy and, in particular, on my conversations with the builders and the building societies. I intend to give him a very full answer later on this and, in that answer, I shall also answer the hon. Lady the Member for Finchley, in part, on the subject of land and our land policy. I want to concentrate on what we do between now and the appointed day, which are very important issues, too, and not so much on the detailed questions of the Land Commission.
In order to deal with that, I want to say as simply as I can, first of all, so as to get it clear what we have been trying to do this last year, that we have been planning for a very considerable expansion of the housing programme, an expansion which was not contemplated by our predecessors—[HON. MEMBERS:" Oh."] As a matter of fact, I was looking at the last statement I could find of official Conservative policy made in this House. It was made by my predecessor as Minister of Housing, the right hon. Member for Leeds, North-East (Sir K. Joseph). In that speech, he defined the Government's policy at the time in the following words:… the Government are looking to increasing the productivity in the building industry and are basing all their plans during the following five years "—up to 1969, the same as ours—on reaching … a level of 400,000 houses a year.The following month, the then Prime Minister, the present right hon. Member for Kinross and West Perthshire (Sir Alec Douglas Home) made almost the same statement, when he said, in his rather individual style:We shall read 400,000 houses in the next five years and we shall be able to sustain that."—[OFFCIAL REPORT, 12th November, 1963; Vol. 684, c. 40.]It is quite clear—and, I think, perfectly sensible—that the Conservative Party said to themselves, "400.000 houses are about the quantity which this country can expect to carry as an annual production without special measures." I am very well aware that to increase that amount from 400,000 to 500,000 a year without taking special measures might lead us to inflation and to an overheating of the building industry, the dangers of which we know very well.
491 Therefore, we were well aware that if we are to go beyond what the Conservative Party believe to be possible and which they gave themselves as their target—the maintenance of 400,000 houses a year—we could do it only with three things: more careful advance planning, a number of extremely unpopular Government decisions, some of which we have taken this year, and, third and perhaps most important, the active cooperation of the building societies and the building industry and their confidence in the plan.
These were the three things, therefore, which we had to achieve during the first year. I want to say something about each. First of all, the planning. How does one plan to reach the rate of 500,000 houses a year by 1969? First of all, one has to make sure that the resources and the labour are available, and to persuade one's colleagues—or the Cabinet has to decide—that that amount of resources will be made available for housing. This decision is bound to affect other forms of building. We also have to make sure of our building materials. We hear a great deal now about surplus building materials and how we have switched and transformed a shortage of building materials into a surplus. I took the trouble to ask my right hon. Friend the Minister of Public Building and Works what the exact situation in the brick industry is now—
§ Mr. Crossman
He does know. He always knows these things when I want him to give me the figures.
We all know that plasterboard is still in desperately short supply and that there is a great shortage of skilled labour in many parts of the country, but one thing we heard about was the surplus of bricks, which I find amounts to 16 days' supply. That is a good deal less than the average which we had in this month in 1962 and 1963, but rather more than we had when we took over, when it was three and a half days' supply. To start complaining of a surplus when there is 16 days' supply seems to me the kind of propaganda which even an amateur, one-year Opposition should really cease to make—
§ Mr. Crossman
I turn now from the materials which are still in short supply to labour. It is true, as our National Plan showed, that if we are to achieve a rate of 500,000 houses a year, we shall have to be able to increase the amount of labour available to the housing industry. We can get it only by increased productivity per man. This we reckon on. I believe it is possible and I shall have something to say later on about the introduction of system building. Whatever the disadvantages may be, if we really want to increase production of houses, then an increasing element in house building must be system building—if only because there is a chronic shortage of skilled labour— and the need to get more per man out of the industry, even if, in the short run— at the beginning—it costs a little more to do so and it takes some time to get the prices down. We therefore had the problem of materials and labour.
The second item, apart from planning, was Government initiative. Unpopular decisions had to be taken. It was clear to me that if we were to have 500,000 houses a year, which was 100,000 more than the previous Government ever dreamed of getting or ever thought it was possible to get under a private enterprise system—[HON. MEMBERS: "Oh."] Well, if they thought it could be done, why did they not do it? Why did they say that they wanted only 400,000 houses a year? The reason is that to achieve 500,000 houses a year one must curb less essential demand. This is why we have the office ban and the control of office building and why we have the control of commercial building.
If we are to do this job of making housing top priority, we must take the necessary steps to pare down the less essential building. That is why, apart from the office ban and the control of commercial building, we have the control of public building, which is my responsibility and that of other Ministers. We had to cut back on many of our favourite swimming pool projects and town hall projects. We found on taking office that there was a spending spree and that there had been encouragement of spending before the election; local authorities had been given a sense of freedom in their capital investment programmes which they 493 do not have today. Now they have been told that housing is top priority and that they cannot have their swimming pools except as No. 2 or No. 3 priority. They have been told that houses, hospitals, schools and industrial buildings matter. They have been given a clear sense of priority and have been told which is No. 1, which is No. 2 and which is No. 3. This is why there has been restriction in respect of offices and commercial premises and restriction in the public sector, too.
I know that it has been unpopular. I know that the introduction of a straightforward ban at the beginning was difficult. We are already devising some more flexible controls which we want to introduce more and more on less essential work. It is a difficult job when we are preparing to bring that house building rate in this country up to 500,000 a year.
My next problem was to obtain the co-operation and confidence of the private sector. I had to persuade people like the hon. Member for Folkestone and Hythe (Mr. Costain), who made such a long speech, and his brother, and other distinguished builders, that they could with confidence co-operate with us, even though we had used these unpopular controls on less essential building. I had to persuade them to work with us in achieving this record output for housing. This is what we have been busy doing, and this is what J want to tell the House about in replying to the debate.
The right hon. Gentleman waxed indignant in his speech about these talks. He asked what my aim was. It was clearly a threefold aim. I wanted to discuss, first of all, the possibility of achieving this total, with all these measures of negative control and positive initiative combined. As was pointed out to me, there are two major problems. The first is finance and the second is land. These were the crucial problems which we had to tackle in order to get this increased production. I had to agree a balance between houses for sale and houses to let, and I had to remove the obstacles which stand in the way of the private sector fully achieving the aims for owner-occupation. I had to see that the local authorities could fulfil the target in the public sector. Those are my jobs.
I should have thought that it was clear that the need for these talks had 494 been illustrated by the history of the 'fifties. Under the Tories, the total amount of housing did go up year by year, from 1952 onwards. However, it went up in a lopsided way. Whereas building in the private sector increased year by year—I will not give the figures because I detailed them in the debate on the Milner Holland Report—building in the public sector dwindled. We did not get the expansion, the swelling of owner-occupied private house building and public building together but a corresponding dwindling of building in the public sector. Without giving a great number of statistics, suffice to say that for every year between 1954 and 1962 one sector swelled while the other decreased, until we reached the very low public sector building, with a figure of 119,000 in 1961.
Did that happen because the need had decreased? Did it happen because there was less need of rented accommodation? On the contrary. During the same period the quantity of rented housing steadily sunk. As the result of the Rent Act, landlords lost confidence in the profitability of rented accommodation and, as they lost more and more confidence, they sold out. As a result, 1 million rented houses disappeared from the scene. Between 1951 and 1964 there was a net loss of 500,000 rented houses, not luxury-type rented accommodation but accommodation which the working class could afford.
Faced with that decline in the quantity of privately rented houses, the Government answered by cutting year by year the amount of publicly rented housing available, until—and I wish to do justice to the party opposite—in 1962 there came a sudden upspurt, but it went lower and lower. It was 124,000 in 1962, although in 1964, election year, it rose to 156,000.
I had to ask myself, looking at these figures of public and private building, whether they made any sense in terms of social need. I concluded that they made none at all. I agree that the number of owner occupied houses was required, but it was obvious that far more rented houses were also required. It was, therefore, obvious that both sides of the programme should have been expanded side by side to fulfil the social need.
495 I should have thought that hon. Gentlemen opposite would realise that a Minister of Housing and Local Government faced with this problem would want to get the two sides, private and public building, together, to work together, to strike a balance of need and to try to co-operate in achieving a planned, steady expansion of both sectors of the economy. That is what I have been trying to do.
I have been surprised—I will not say disappointed, although I have been a little disappointed—at the reaction of hon. Gentlemen opposite. Perhaps I should not use the word "surprised". In any case, I have found the reaction of hon. Gentlemen opposite slightly distasteful. It almost looks as if they did not want these talks to succeed. I certainly would not wish to make the allegation that they were trying to bitch the talks. I would not like to say that—[Laughter]—although I am tempted to.
I am tempted to say that hon. Ladies and hon. Gentlemen opposite said to themselves, "I do hope that they will not succeed". In this connection, it might be helpful if I quote something from their party conference. After I had told my party conference that I was hopeful, that I had set up a working party with the building societies and that it was seeking to work out a form of collaboration between them and me, one right hon. Gentleman opposite said:Do not let him try to use these great building societies to try to do his dirty work for him.A few weeks later the Leader of the Opposition talked about the "great housing scandal" while the Pope or, should I say, the Savonarola, was saying something else. What about this quotation:Enoch Powell hit out with shock warnings of …homes' rationing… blackmarket… curbing mortgages …These things were said by hon. Gentlemen opposite who, they tell us, believe in co-operation between the building societies, the building industry and the Government. It was a strange way of showing their enthusiasm.
I will only say at this stage that they underestimated the common sense of the builders and the building societies, who do not listen to politicians unless they are in some measure acting with responsibility and reality. The building societies 496 and the builders are, of course, suspicious of Socialists. They have grave suspicion, but they also look at Governments as Governments and say to themselves, "What is this Government up to? Are they trying to increase building? Are they seriously out to get 500,000 houses a year? If they are, we will not turn down straight away the object of cooperating with them in achieving that aim."
I can, therefore, reveal to the House that this morning, at mid-day, we issued to the Press the full text of the communique which, no doubt, hon. Members have already read in the evening papers; but since it may have been squeezed out by news from overseas, I had better summarise the communique for the benefit of those who have not seen it.
We have now reached agreement between ourselves and the building societies and representatives of the builders. I will not read the whole thing, because it was issued as a Press release this morning and it is available. It states, however, thatThe decision was taken at a meeting at the Ministry this morning. All present welcomed the Government's intention to increase the total production of houses to 500,000 a year. The representatives of the building societies and the builders recognised the advantages of forward planning"—unlike hon. Members opposite; planning means deciding how much to do and doing it—but they stressed that the confidence of private house builders, particularly in relation to the supply of land, would need to be strengthened if this target was to be achieved.That is a perfectly reasonable thing to say.The Ministers accepted this, and said that as a main object of the plan they were hoping, with the assistance of building societies and building organisations, to give confidence to all concerned in house building. It was agreed that an immediate study should be made of the problems of land supply and planning permission",on which I will say a few words later.The Ministers explained why it was necessary to plan not only the total house building programme but also its broad division between houses built by public authorities to rent and houses built by private developers for sale. The Ministers hoped that public authorities would be producing somewhere near 250,000 houses in the United Kingdom in 1970—as they believed could be done with the aid of the new subsidy arrangements to be introduced shortly. The Ministers did not however see a public sector output of this size as a permanent feature of housing policy.497While not accepting any particular figure, the building societies and the builders did not disagree that, over the next few years, there was need for a rising public programme to deal with the slums and urban renewal and to meet the needs of the great cities for more rented houses; though they urged that targets should be flexible and subject to a tolerance which they thought, as far as the private sector was concerned, should be perhaps 10 per cent. either way.The Ministers accepted the need for flexibility, and said that they were anxious that the forward building programme, and the broad balance between public and private sectors, should be kept under regular review by all the interests concerned. In that way targets could be adjusted as might prove to be desirable. The building societies and builders welcomed this.All parties agreed to join in a working party to examine the resources available to sustain a housing programme rising to half a million, and particularly the availability of land and money; and also to make arrangements for the regular review of progress.
§ Mr. Boyd-Carpenter
May I ask, in view of the right hon. Gentleman's agreeable personal references a moment or two age, whether there was any undertaking on behalf of the building societies to withhold advances where the granting of those advances would take the number of houses built in the private sector during a year above the figure fixed by the Minister?
§ Mr. Crossman
I have read exactly what the communique" says. It says what it says. The right hon. Gentleman can see it. The building societies and I are in discussion. We have two working parties, one on finance and the other on land. We all understand that if we are to avoid the crisis of last spring, we need to have a reasonably planned programme. I know that the right hon. Gentleman is disappointed by the communique and by the fact that the building societies are prepared to work with us in trying to expand the programme in this way.
I do not for one moment suggest that the building societies or the builders are in complete agreement with me and my theories, or even that they accept everything I say or my policies. What I do say is that they are prepared and ready now to work with us to get the programme through and to get the programme up in this way. They have accepted the need for the kind of programme that we have. They have pointed out—
§ Mr. Crossman
The right hon. Gentleman asked me a number of things and made a number of grave allegations, to which I intend to reply
§ Mr. Speaker
Order. If the Minister refuses to give way to the right hon. Gentleman, the right hon. Gentleman must sit down.
§ Mr. Boyd-Carpenter
On a point of order. Is it not contrary to the custom of the House for a right hon. Gentleman winding up at the end of a debate not to give way to the right hon. Gentleman who opened the debate?
§ Mr. Crossman
I notice that the right hon. Gentleman did not ask whether it is in order to say, "Sit down if you have got the guts to do so ", because that was unworthy of the right hon. Gentleman, even in a whisper.
§ Mr. Crossman
This is what happens when gentlemen lose in a game.
I want now to deal with the main issue which the right hon. Gentleman raised and which the builders raised with me, which is the problem of the size of the public sector. We have decided that we must bring up the public sector to a level of 250,000 houses a year. This will bring it somewhere near the private sector in this period. We have done this for this reason. The social need for picking up the backlog of ten years of neglect has now been overwhelmingly proved.[Laughter.] Hon. Members who laugh at that should read the Milner Holland Report. It was perfectly reasonable, both of the right hon. Gentleman and of the builders, to say to me, "Is it your aim here to switch and to say that you believe in council house building? We believe in owner occupiers. You want to have a competition or strife between the one and the other". Indeed, the right hon. Gentleman almost said this in his speech. He quoted out of context that phrase of the 499 Chairman of the Greater London Council Housing Committee.
I would reply to the right hon. Gentleman in this way. That is very old fashioned. Speaking as a politician, if I go to a council estate—I represent a good many—I should be very stupid to believe that they all voted Labour. It would be equally silly to believe that all owner-occupiers voted Tory. It would be absolute insanity for any Minister of Housing to be ideologically in favour of one or the other. It would be equally insane for a Tory to be pledged to be in favour of owner-occupation against council house building, because the two things are essentially different and they are different needs.
It is my view—I said this the other day to the International Congress of Building Societies—that in the long term, as society grows more affluent, more and more people will want to own and occupy their own houses. This is a very natural thing to do. If so, they will be harking back to the early days of the trade union movement, when people owned their own houses so as to get out of the landlord's power and be able to be independent trade unionists and not be under the threat of eviction from landlords. There is nothing improper in wanting to own one's own house. Many people behind me do so. It is a great mistake for anyone in the House to try to divide owner-occupiers from council house tenants.
We must recognise the need. We have a pent up demand for owner-occupation. We have an overwhelming social need for rented houses in the great conurbations. I want to be quite clear. I am giving every priority in our housing programme on the public side to the great conurbations. I had deliberately told people that that is where rented housing must be concentrated, because that is where the need is desperately proved.
I want to give a little evidence of this. As to the London programme, with which my hon. Friend the Member for Ber-mondsey (Mr. Mellish) has been concerned, we have brought it up from what it was in the four-year programme 1961–64, which was the very period of Rachmanism and the very period of the Milner Holland Report, when they built 70,000 houses in four years. We are 500 going to build 125,000 houses in the next four years in London. We are not content. We know that everyone of those rented houses is desperately required.
One hon. Gentleman talked bitterly about the rate subsidies. I will tell him something. Unless the State subsidy goes up to some 70 per cent. of the cost of the house in London, land being at the price it is, the ratepayer has to foot the bill. It is either a State subsidy or a rate subsidy, or no housing. That is the fact in the London conurbation. This particular hon. Gentleman said that they were pouring it out from the rates. That is true. I am trying to rearrange the subsidies in London to have this special case of London's costs considered to enable London to build the houses it desperately requires.
I move on to figures outside London. In Birmingham in 1961–64 9,300 houses was the figure. In 1965–68, the figure will be 27,000 houses. This is because there is a great area of slums in the centre of Birmingham and we are building a great satellite town outside to get them out of the slums. The Liverpool figures are 8,600–18,800, and I need not say anything about Liverpool slums, Manchester 13,900–18.000, Leeds 8,000 —11,700 and Sheffield 7,200—14,500.
These are the areas we want to deal with. These are the social standards. This is where the whole drive will have to be concentrated. I say to the builders, and hon. Members opposite who reflect the opinion of builders, that if they feel that a council house building programme of 250,000 houses a year is in danger of removing their clients then, heaven knows, they under-estimate the crisis in London, Sheffield or Manchester, and it is a mean thing to hold a programme down for fear of clients being taken away.
We are prepared and we shall announce that in the course of the Session to broaden the basis of owner-occupation, and we are fulfilling our pledge to the owner-occupier in the way in which we shall enable more working people than ever before to be owner-occupiers. I believe that they have the right to be owner-occupiers. In travelling round Britain I have been profoundly impressed by the fact that even obsolescent old houses are now being bought for 501 owner-occupation because of the passion for owner-occupation. We have had a special study made in Rochdale where we have found that 60 per cent. of houses there which used to be landlord-owned are now owner-occupied, well-preserved and well-maintained, £50 a year being paid out to improve them. This is a passion which keeps old houses from becoming obsolescent. We ought to help it in every possible way. Local authorities gave the mortgages for them, not the building societies. I am trying to encourage the building societies to spread their work into that area as well.
I want to give improvement grants, but I do not want them given for the individual houses alone because if one lives in that kind of area it is the area that matters. What one wants is pavements, street lighting, and the dreary dust-heap at the other end turned into an adventure park for children, but at the momen: there are no grants for local authorities for environmental improvements. We have three experimental areas which we are working at carefully now. I do not want to launch legislation too soon because we want to be sure how to do this. We want to know not merely how to build magnificent new blocks of flats but how to save old areas and give people there their share of life. Our Rent Act will not exactly encourage people to stay in the 502 landlord game. There is going to be a spread of owner-occupation. I do not believe that the private landlord has any future in building houses. I believe that the future is with the owner-occupier on the one side and the council housing and the housing associations on the other. It seems to me that these are the realities, and it is on the basis of these realities that we have been working out our policies in the first year.
The right hon. Member for Kingston-upon-Thames made some fun about our record in the first year. I admit that we have built only a few more houses this year than the Tories built last year. We ought to have done better than that. We shall do better next year, but we have been busy this year planning the first national housing plan. We are having the courage to put the controls on, and we are trying, I think successfully, to persuade the builders and the building societies that we are a Government who want to expand housing and who are determined to do a short-term job of urgently increasing rented accommodation while satisfying the long-term demand for the occupation and ownership of one's own home, which is the right of every Englishman.
§ Debate adjourned.[Mr. Gourlay.]
§ Debate to be resumed Tomorrow.