HOUSING.

HL Deb 13 November 1919 vol 37 cc257-98

LORD BUCKMASTER rose to ask His Majesty's Government how many houses have been completed under the Housing Act; what has been the average cost of each of such houses; and what is the average rent at which they are let.

The noble and learned Lord said: My Lords, the Question that stands in my name relates only to a small part, but I think your Lordships will agree a very material part, of one of the most important matters at the present moment occupying the public mind. Your Lordships will notice that there is another Question standing on the Paper in the name of Lord Grey which deals with a more extensive aspect of the same subject, and it would probably be for the convenience of the House—I think the noble Earl would find it to his convenience also—if both Lord Grey's Question and mine were taken together in order to avoid two distinct debates upon what really are two Questions on the same subject.

In considering this housing question, I think it would be well to look back and see how it has arisen and why it is so urgent to-day. The question has arisen owing to the grave and serious neglect of every successive Government during the last fifty years. I do not think that any one who has been through some of the mining villages in Scotland and in parts of England can fail to feel that the existence of the dwellings in which we house one of the most important sections of the community is a blot upon our English life. It cannot be forgotten, and it cannot be denied, that during the last fifty years the attention of people in this country has been far too exclusively concentrated upon the acquisition of wealth, and there has not been nearly sufficient attention given to the consideration of those by whose labour the creation of that wealth has been so materially assisted. It ought to have been impossible for people to have allowed colonies to grow up round their works that present the candalous conditions of the houses which were the subject of the Report made by the Scottish Commission upon Housing, to which I called your Lordships' attention on a former occasion.

The evil, as I have said, has been the growth not of one or two but of three generations, and it is hopeless to imagine that any abuse so long continued can by any means whatever be promptly and rapidly remedied. Whether it will take as long to restore a, proper condition of housing as it has taken to destroy it, is a question upon which no man can speak with certainty; at any rate, it is quite certain that those people who have been responsible for leading the country to believe that this evil is capable of swift and immediate remedy have done a very serious mischief. They have inflamed the people's mind with hopes which it will be impossible to realise, and the discontent that will grow when it is found that those hopes are doomed to disappointment may form a very grave and serious factor in the industrial reconstruction of this country which it is the object of all of us, by united effort, to secure and advance.

The housing problem suddenly became notorious at the last Election. A very grave responsibility rests upon the people who then, instead of pointing out, as it was their duty to do, that the condition of the country even after our great victory was so broken and disturbed by the strain of war that great efforts, great sacrifices, and great energy from all were required in order that it may be restored, suggested that there were great schemes by which the difficulties and disadvantages may be removed, that all they had to do was to secure the return to Parliament of a Government which promised to remove them in order that their hopes might be fulfilled. That, I believe, has had not a little to do with the industrial unrest and discontent which has been with us ever since the Armistice was declared, and which will remain with us until some of its more immediate and fundamental causes are removed.

It is now more than twelve months since hostilities ceased. It is approaching twelve months since the Government assumed office. It must be six or seven months since the Housing Bill became law. What I want to know is what has been done, and at what cost, in that interval to satisfy the pledges that were made. My Question puts three simple points—how many houses have in fact been completed; what has it cost to complete them; and what is the average rent at which they are let? More than once, even at the risk of accusations of pessimism, I have called your Lordships' attention to the fact that at the present moment the housing schemes which have been produced under the provisions of the Housing Act are of such a character that, if they are carried out, there will be imposed on this country a permanent annual liability which I have estimated at no less than £20,000,000.

I mentioned, and your Lordships will forgive me for repeating it, as I have had no explanation and no answer to my figures, that in one urban district—the district of Godalming—there was a scheme for building fifty-eight houses which depended on an initial building cost of something under £1,000 a-piece, and there would be imposed either in the form of rates or taxes an annual liability of £57 per house if all the annual charges were properly met. It seems to me that this means the destruction of the whole housing scheme; or, if it does not, it most certainly involves this—not merely that the Government have hastily, and as I think without any proper reflection or foresight, embarked upon a scheme which will involve us in measureless responsibility, but, as every one must know, all private enterprise in building will be permanently destroyed. It will be quite impossible to expect private people to begin building houses in competition with houses which, when they are let at 12s. per week—a five-roomed house —none the less require to be subsidised by the State to the extent of £57 a year.

The figures I gave might be thought exceptional, but the estimate of the county council was for a building price that was in excess of the building price for Godalming. Mr. Woodward, who speaks with authority as a Fellow of the Royal Institute of British Architects, writing to The Times, points out that the figure of £20,000,000 a year, which I put as the average annual burden of the scheme, is under-estimated to the extent of £17,000,000; in his view it cannot be less than £37,000,000 a year. Sir James Carmichael suggests that the average cost of each house would be £707, and Mr. Abbott, Vice-President of the Town-planning Institute, stated that the average cost would be £921—that is, the cost of building the house. This does not include the acquisition of the land, the making of the roads, the sewers, the pavement and the kerb, and all the incidental expenses which every one who has had even the most transitory connection with the development of urban property knows form an enormous item in the general cost of houses when built.

I have no desire to do anything which will hinder the development of this scheme. I am as anxious—I hesitate to say that no one is more anxious, for it sounds a little self-sufficient—as any of your Lordships to see that our people are decently housed. Every man who has ever touched public affairs must realise that you can never built up a great, contented, self-respecting people if you house them under conditions that are a disgrace to your civilisation.

The scheme has to be carried on somehow, but my complaint is that the Government have begun the wrong way. They ought to have attempted to see first how to stimulate production of materials, how to use the unemployed labour in connection with the preparation of all materials required, and, if necessary, for the purpose of constructing the houses. If they had attempted that instead of giving a flat-rate unemployment benefit to people who, while in receipt of it, had no stimulus whatever to try and get work—if they had supplemented and subsidised their wages in developments such as I have suggested, and called upon the unions to help them to build houses for the benefit of those who are their own people—I think very different results would have been accomplished. It may be that I am in ignorance—that the Scheme has progressed more favourably than I fear—and it is for the purpose of ascertaining information, in order that this House and the country may know what has been done and what it is of which we may expect accomplishment, that I have put down the Question which stands in my name.

EARL GREY had the following Notice on the paper—

To call attention to the speech delivered by the Director-General of Housing at the Timber Exchange on 5th November, in which he is reported to have stated—

1. 1. That the Government scheme is in danger of breaking down owing to the excessive cost of building; and
2. 2. That there is no incentive to economy on the part of the local authorities.

The noble Earl said: My Lords, I presume it will be in accordance with the convenience of the House if I deal with my Notice immediately. A whole week has elapsed since The Times reported the Director-General of Housing as having, in a public speech, made the two statements to which I refer. Those statements are so serious that I think I am entitled to assume that, if they had not been correct, the Director-General of Housing would have contradicted them by now. Therefore I think we may fully assume that they represent his considered opinion. As perhaps collateral evidence, I would turn to the answer given by the Minister of Health in another place on the day after that speech was made. When he was asked by an hon. Member almost exactly the same question as Lord Buckmaster has put to the Government, he replied in an answer which gave, not the details asked, but figures of schemes which had been put forward, of houses which had been approved, and then he fortified it by saying that— Detailed information as to the number of houses which have been completed and are fit for immediate occupation is not available, but I am aware of a few cases where houses have been completed and are occupied. That is apparently the sum total that the Department is able to boast of after a whole year's work. Therefore I think that Sir James Carmichael has under-estimated the gravity of the situation when he says that the Government scheme is in danger of breaking down.

It is shown that the Government scheme has broken down hopelessly already. If any justification be needed for drawing your Lordships' attention to that position, I think it lies in the fact that apparently the realisation of this has at last broken through to the Minister of Health himself, and therefore he has found it necessary to enter into new agreements with the building trade, which presumably may be expected to improve the situation. It was only at a late hour last night, when hardly any of your Lordships were left, that we reached the Question which I had put upon the Paper designed to draw from the Government what were the terms of those agreements. I do not know whether the noble Viscount opposite will agree with me, but I think it will really cover the position if we deal only with the first of those agreements. I think that ay criticism which is likely to be directed against the first agreement will equally apply to the second. I may perhaps be wrong, but it looks to me as if the first is the more important of the two agreements.

VISCOUNT PEEL

It is the most important, certainly.

EARL GREY

The answer given to my question last night was as follows— The principal feature of the first is that representatives of the local authority, the local federated builders, and the housing commissioner meet together and arrive at an agreed price at which houses are to be erected, and that then the number of houses to be built under the arrangement is distributed to the builders in proportion to their resources. It seems to me that the important thing about this agreement is this—Does it contain any new feature which will entitle the Government to hope that a policy which has not been successful in the past will be successful in the future? I have been turning over that answer in my mind since last night, and I am bound to say that I cannot see that we have very much to hope for from the new departure.

There is one direction, however, in which I think there may be some improvement to expect. It does seem to me that the agreement implies that the Ministry of Health is reconciled to greater decentralisation and is prepared to waive the strict application of some of the more irksome specifications, which, while no doubt features of an ideal housing scheme, yet serve to increase very much the cost of houses and impose very considerable delays. If the Ministry of Health can be brought to realise that the troubles which have delayed the whole of this scheme are not only due to difficulties of labour—difficulties which your Lordships will no doubt agree are very great indeed and very serious, and which are unfortunately not all behind us—if they can be brought to realise that labour cannot be accused of being the only source of trouble, then I think we may hope for rather quicker progress in the future.

In this respect it would be instructive to look at what has been achieved during the same time in France. In France materials are no doubt more difficult to obtain than in this country. Labour certainly is scarcer, and transport in the areas to be rebuilt is very much more difficult than it is in England. Yet for every house which we build in this country I believe I am correct in saying that tens of houses have been erected in France in the same time. I think I am entitled to ask why that should be so. The only answer which occurs to me is that it is because the French Government has allowed private enterprise to go its own way unfettered; it has, in fact, said to the individual, "If you elect to live in a house which contains a less amount of cubic feet of air space than the doctors say is the best thing for you, well that is your business." One result is that houses undoubtedly have sprung up in a most remarkable way in the northern part of France. I am not suggesting that we ought to go as far as that. I do not think that would be a good thing, but I do say that there is a middle way which we could reach—half a loaf is still better than no bread. If the Ministry of Health persist in saying that the people must live in palaces, I am afraid that the only result will be that those who are house-less to-day will remain houseless for a long time to come. Therefore I hope most earnestly that the real inner meaning of this new agreement with the builders is an attempt to cover a strategical retreat from an impossible position.

If I might quote an instance of how I think the Ministry of Health have contributed by the action they have taken to increase the delay, I would like to call your Lordships' attention to a paragraph which appeared in the Daily News last week, and which I have not had an opportunity of verifying. It describes the efforts of the Woking Council to proceed with building. According to the reporter of the Daily News the Woking Council had this experience— It appears that Woking's ambition is to get on with its first forty-two houses, as many families are crowded together in rooms. "Plans were completed," said the Councillor, "and every preparation made for proper drainage. As we were about to proceed, an official stepped in and condemned the drainage. So we altered the plans, and thought, we could then go ahead. But no. Along came another official and dis- covered we were going to use 21 oz. of glass. 'It must be 15-oz.,' he said. So we altered the plans again. A third official then made his appearance. 'The rise in the stairs is one inch,' he said. 'It must be only three-quarters.' So we altered the plans again, and just as we were about to submit them we received from the Ministry of Health a 'Set of Model Plans,' which local councils must use if their plans are to be passed. Now these plans were identical with our own before we had three times altered them to suit the officials who had held us up. We should have to restore the drainage which we had originally planned, also the 21 oz. of glass and the I in. rise in the stairs. I have no doubt that is a very exaggerated account; still there is no smoke without fire; and I am satisfied from what I have heard from many sources that, if this is an exaggerated account, may similar hindrances nevertheless do occur up and down the Country through the irritating insistence on small details which cannot really affect the health of the people who are to live in these houses.

May I say one word now about the second statement which I quote from the Director-General's speech, "that there is no incentive to economy on the part of the local authorities?" It is quite impossible to exaggerate the importance of that statement, or, I am afraid, to impugn its accuracy. Therefore the only question that I want to raise in connection with it—I will leave its importance and gravity to speak for itself—is this. If it is true, as I am afraid we must take it to be, how far as a result of that stricture will the Government's policy be amended under the new procedure which has been proposed? Will it be improved, or will it not? With the best will in the world I do not see how any new principle whatever is contained in the so-called new agreement. The normal procedure of all local authorities under this Housing Act, or any other Housing Act under which local authorities have built in the past, has always been to issue tenders and build on contract for fixed sums, the contracts frequently, as now, including clauses which safeguard the builder from rises in wages. That is, I suppose, now a universal feature of all formal contracts. But no local authority has its own building department, and therefore I think that there may be slight rearrangements which I do not quite see at present in the procedure. I do not see, if there was no incentive to economy on the part of local authorities before, where that incentive is to come in now under this new procedure.

I would not have raised this question had I thought that there was no alternative policy which the Government might even still consent to support. I believe that there are alternative policies which would not only produce a larger number of houses than the policy of the Ministry of Health, but which would conduce in a way which the present scheme does not to economy of building. I do not think we ought to concentrate in the present crisis on any one method. I believe we ought to employ any and every method which would contribute to the result desired. There are two methods particularly which ought to be mentioned in criticising the policy of the Government. One is a policy of bounties on the production of houses. That I do not propose to deal with now. I believe that it will be dealt with by other speakers in the course of the debate.

The other policy which I want to mention leads me to say how very much I regret that the offer of the building societies to co-operate with the Government—an offer which I brought to the notice of the Government in the course of the debates when the Housing Bill was discussed in your Lordships' House—has not apparently ever been followed up or acted upon. I firmly believe that that offer was turned down for no good reason except a sentimental reason—or perhaps it would not be quite fair to call it a sentimental reason. It may be that in times past, when prices were less grave than they are now, that, there were very good reasons why the policy of not subsidising private traders should not be departed from, but when you fail to get the houses by any other means I do think we ought to reconsider our position. If the policy of subsidising in the case I am thinking of, through building societies, is going to give us the houses which we have not got at present, I venture to express the hope once more that the offer will again be considered if, as I understand, it is still open, and if building societies are still willing to come in and help the Government. As far as I remember, the offer was a peculiarly favourable one from the point of view of His Majesty's Treasury, because building societies themselves were prepared to finance a share which they had suggested to the Government. Therefore I hope that the noble Lord in his reply will be able to assure us that in exploring the ground further he will once more see whether use can be made of the great building societies.

THE UNDER-SECRETARY OF STATE FOR WAR (VISCOUNT PEEL)

My Lords, I regret that my noble friend Lord Astor, who would naturally represent the Ministry of Health in this House, is not here to deal with this matter. I understand he is usefully employed elsewhere. He is saturated with this subject, is following the matter from day to day, and could deal with it far more fully and satisfactorily than I can expect to do. Indeed, from the point of view of the War Office we are rather in the position of finding some difficulty ourselves in the matter of housing, and therefore we are ourselves sufferers.

The noble and learned Lord who began this discussion raised, I think, a general indictment not only against past Governments but against the general social attitude of this country towards housing, and thus, I think, travelled rather wide of the specific question that he placed upon the Paper. May I say this in criticism of the accuracy of one statement that he made? He told us, I think, that the Act had been passed for some six or seven months. The Act has been passed about three months; it received the Royal Assent, I think, on July 31. A general charge that the working of a very complicated Act of this kind has entirely broken down after it has only been three months in operation is a much more serious and severer charge than it would be if the Act had already been six or seven months in operation.

As regards the first Question that the noble and learned Lord asks about the number of houses completed under the Housing Act, I am afraid I have not got the figures with me. There are no figures, I believe, which I can give to the noble and learned Lord in satisfaction of that particular demand. I should also like to say that we must not only deal with the number of houses actually constructed under the Housing Act. There are, of course, the houses which have been dealt wish under the process of conversion with which the noble and learned Lord is familiar. Some 300 tenements, I think, under this conversion system are already complete, and 140 of them are ready for occupation. As to the second Question—What has been the average cost of such houses as have been completed—I believe that the average cost works out as follows:—The actual building of the house, £710; land, £18; road and sewer work, etc., £45. Those figures, added together, come to £773, and, if to that is added architects' fees, £800 will fully cover the average cost of the houses that have been constructed. Perhaps I may be allowed to say something at a rather later stage as to the third Question, the average rent at which these houses are let.

I think it might be convenient if I gave to your Lordships some idea of the way in which work has proceeded under the Housing Act during the last few months. Hardly any difficulty has been met with as regards sites. Sites have been submitted for approval sufficient for something like 400,000 houses. The sites actually approved up to the present moment have ben 230,000. The land also, through good will on the part of owners and through the assistance received from district valuers of the Inland Revenue Department, has been acquired on the whole economically. Therefore the first step towards housing, the acquisition of the sites, is proceeding, I think, quite satisfactorily.

The next point is the lay-out of these sites for building, and I am informed that there also matters are going along fairly rapidly, and there has been no very great difficulty. As regards the plans for the houses, your Lordships will readily realise that the plans have to be scrutinised very carefully. I have no knowledge of the particular case cited by my noble friend, the Woking case, but it is quite clear that in the exercise of the responsibility of the Department for keeping down expenditure anything like unnecessary and expensive detail has to be dealt with firmly.

THE MARQUESS OF SALISBURY

Can my noble friend say whether the scrutiny takes place by the local Commissioner, or in London.

VISCOUNT PEEL

I believe that the work is largely done by the local Housing Commissioners. The number of house plans which have been approved is 40,000, but that number is really far larger than might be supposed, because in many cases regular type plans have been used, and those can be repeated in the future. Therefore the work of approving plans, if the houses are built upon certain approved types, can go on in the future very rapidly.

The great difficulty comes when tenders are invited by the local anthority. There is a good deal of tenderness on the part of builders in tendering at all. The large builders do not find this class of work very profitable, and they prefer to use their resources as far as they can in other work —factory and shop extension, and work of that kind. A large percentage, I think something like 60 per cent, of the building trades is employed actually on repair work and different classes of work, such as places of amusement, factory and shop extensions of different kinds all over the country, and this, of course, militates a good deal against their anxiety to take part in these housing schemes. For instance, some time ago the number of bricklayers under one of the housing schemes dropped from 160 to forty-two in one week, owing to the fact that rather more attractive and higher paid work was offered to them in the particular locality. The smaller builders, I understand, are very largely unacquainted with the difficulties of bills of quantities and specifications, and the result is that prices are very much put up, largely because many of those who tender do not really very much care whether they get the tenders accepted or not, and further because they are very a apprehensive, and naturally apprehensive, of a large increment in the price of labour and also of material. At the present time, therefore, it is very difficult to regard a large number of the tenders that have been put forward as in any sense competitive. This, of course, has a very serious effect upon the local authorities, who are rather alarmed at the cost, and it makes it very necessary to scrutinise carefully the tenders that have been received. This, again, leads to delay, discussion, and bargaining.

But the other very serious difficulty to which allusion has been made is, of course, the shortage of labour. The building trade recruited very largely during the war for the Army, and it suffered heavily in personnel. Not only that, but many persons who were in the building trade have come back from the war and drifted into other trades from which they are rather unwilling to return. It is extremely important that some steps should be taken to remedy this shortage, and it is to be hoped that the trade unions will see the necessity in the interests of their own class of affording facilities for this being done, and for the increase of those who could be employed in the building trades.

Another difficulty which is being encountered is that of finance. Some local authorities are finding difficulty in raising their loans; a still larger number are afraid that they will have difficulty in raising loans—which, perhaps, amounts to the same thing. At the present moment, as I think was stated during the course of the debates on the Housing Bill, local authorities with a rateable value of less than £2200,000 a year can borrow from the Public Works Loans Commissioners, so there is no particular difficulty about their obtaining money. The big authorities, again, are familiar with the raising of loans, and do not find any great difficulty. It is the intermediate authorities who are troubled in the matter of finance, and I understand that a Committee has recently been appointed by the Chancellor of the Exchequer which is prepared to give guidance and advice to local authorities on this very difficult point. Then as regards rents, there is some apprehension on the part of local authorities, especially the district councils, who are afraid that they may not be able to obtain when the time comes proper economic rents, and that therefore they may get into some difficulty in 1927 when the whole matter is reconsidered and when the subsidy from the Government is finally fixed. The Government policy on that point is, of course, perfectly clear. It is to aim as an ideal at obtaining an economic rent; and this policy received from your Lordships great support during the discussions on the Housing Bill.

The regulations which are based upon the Statute provide that the subsidy, both at the present time and when the final subsidy is fixed in 1927, shall be such as will limit the burden on the local authorities to the Id. rate. At the same time the regulations provide that the Exchequer itself shall be protected from extravagant and uneconomic action on the part of the local authorities. For instance, the regulations provide that the Minister may make deductions from the subsidy if it is likely to be increased by the insufficiency of the rents charged by the local authorities. The ideal which is to be attained is that the rent which will be fixed in 1927 shall be the rent which could be obtained for a house built at that date on the assumption that at that date the cost of building will have reached a normal post-war level. As regard the fixing of the rents, I have to add that the question of the initial rents and what should be charged in agricultural districts is being considered by a special committee under the chairmanship of Mr. Henry Hobhouse.

THE MARQUESS OF SALISBURY

Initial? That is not the 1927 rate?

VISCOUNT PEEL

No; you cannot judge of that until you know what the cost of building will be at that time. Now as to any action that the Government may be proposing to take to meet the present difficulties. First of all, I think it is fair to state that the Government have been perfectly frank during these months on the position and as to the difficulties with which they have been met. The White Paper which is published every week is laid before Parliament showing the exact state of progress under the Act. The Government have not shut out any suggestions from any quarter; they have been only too ready and anxious to receive suggestions from those who are competent to give them advice. Yesterday I detailed certain new suggestions which had been made, upon which my noble friend Lord Grey commented in the course of his speech. I think he has somewhat misunderstood those. proposals. They were not meant in any sense to supersede the normal working of the Act, and they were no more than supplementary to the provision of houses in other ways. Then I think my noble friend also rather complained that the building contractors, and so on, were not taken sufficiently into the confidence of the Government. This particular scheme on which my noble friend commented was actually in accordance with the suggestion of the Building Re-settlement Committee of the Joint Industrial Council of the Building Trades; so that the proposal imposed from above on the building trades is one which actually comes from them; and as it comes from them, and as they may be assumed to know their own business, I think, perhaps, there is some likelihood that this may prove more fruitful than the rather melancholy prognostications which my noble friend seemed to suggest.

EARL GREY

I think my noble friend has misunderstood me. I said that the fruitfulness or otherwise of these scheme depended on the degree with which the Ministry of Health is prepared to relax its insistence on minute specifications.

VISCOUNT PEEL

That may have been one of the grounds; but I think the arrangement made under this sort of triple alliance of the Housing Commissioners, of the local authorities, and of the federated building trades—a friendly arrangement of that kind—is likely to obviate some of the minor difficulties to which my noble friend alludes. I come now to the different forms of construction and to the use of different materials, which I think bear on the suggested rigidity of the action o the Ministry of Health. They are doing their best to encourage different forms of construction and the use of different materials in order to produce economy and rapidity of construction. Judging by some of the quotations received from firms who deal with these particular methods of construction, it is to be hoped that houses will be produced more cheaply than has been the case before. I have in my hand a copy of a paper called Housing, issued by the Ministry of Health. I cannot trouble your Lordships with all the details because they are extremely complicated—the various improved construction methods and varieties of material which are set out and which have been suggested by different building firms. At any rate, all these have been approved, and if they can be made use of — as is hoped will be the case—they will lead to more rapid and economic construction. But, in addition to the points I have mentioned, I should like to say that further schemes are being considered by the Ministry of Health, which schemes will in due course, no doubt, bear fruit.

There are two points to which I must also refer, points raised in the question of my noble friend in regard to some statements made by the Director-General of Housing at the Timber Exchange on November 5, in which he is reported to have made certain statements as set out in a newspaper. I think that your Lordships, as members of public assemblies, realise that there is a considerable tiresomeness in prolixity, but there is, perhaps, even more danger in condensation; and these observations as set out here are so condensed as to give a wholly false impression of the speech made by the Director-General. There is a further point to be remembered—namely, that the speaker generally addresses himself both to the audience and to the particular issue before him, and I dare say if the Director-General of Housing had known that his observations were to be carefully scrutinised in your Lordships' House he would have made those necessary limitations and definitions which skilled and practised speakers make almost unconsciously.

The first point I should like to note is this—that the speech was delivered to the Timber Trade Federation and the object with which it was delivered was to urge the Federation to assist housing in every way by reducing the cost of timber. Naturally, the speaker pointed out that unless there were these reductions there was a great danger that the housing schemes of the Government would fail. I cannot imagine that any of your Lordships who might have been urging on the production of housing, would have made any other speech. As to the perversion of the context by which my noble friend suggests it almost amounted to a statement that the schemes were failing because of the high prices of materials, that is a construction which, I think, is really quite unfair to place upon the statements made to the Timber Exchange.

As to the second statement—that there is no incentive to economy on the part of the local authorities—to what specific I point was that observation addressed? It was addressed to this point, that the I main burden in the initial stages of securing that these houses are economical falls upon the central authorities either directly or through their Housing Commissioners, and the Director-General wished to suggest to the timber trade that everybody—the timber trade, the local authorities and others—should co-operate to reduce expenses as much as possible in order that the full weight of bringing economy to bear should not rest mainly or only in this initial stage upon the central authority. My noble friend interprets that as if it were a general statement that there is no incentive to local authorities to act with economy. The curious thing is that almost the opposite is the case.

One of the dangers and difficulties in the way of building these houses is that the local authorities are afraid that too much economy will be forced upon them, and that thus they will suffer because the subsidy may be reduced on the ground that the rents are insufficiently high. So that you have dangers on both sides. You must not alarm local authorities by suggesting that their subsidies will be reduced if they do not fix the rents sufficiently high. The Director-General, of course, had no intention whatever of applying the observations to this stage of the building of houses; indeed, if he had, his observa- tions obviously would have been absurd, because everybody knows—your Lordships are familiar with the provisions of the Act and know quite well—that if the local authorities do not exercise sufficient care in the management and administration of the houses their subsidies will be reduced and the penny rate will not be the sole amount which they will have to pay to make both ends meet. I think my noble friend can dismiss any anxiety as to the observations that are made by the Director-General. They have been taken out of their context and applied more generally and more widely than, and in a different sense from, that in which they were expressed at that meeting.

LORD ISLINGTON

My Lords, I am very glad that the two noble Lords opposite have given your Lordships' House an opportunity to discuss the housing question. Although the attendance here would hardly suggest it, I think I am not exaggerating when I say that it is the dominating problem of the hour in our domestic affairs. Every week I hear—and I have no doubt your Lordships hear as well—that the social and economic evils which flow from a dearth of houses are becoming increasingly pronounced. My noble friend who has just replied to the various Questions that have been put to him by noble Lords opposite has, with his accustomed ability and lucidity, dealt with the official aspects of the matter and, with accustomed adroitness, skated over the more difficult aspects which have been put forward by the noble Lord opposite and to which I will allude in a moment.

From various centres one hears, week by week, pitiful accounts of hardship and suffering on the part of families quite capable of paying substantial rent for a house who, on account of the dearth of houses, are unable to obtain anything in the nature of a decent dwelling. Several of our centres now have had to appeal to the poor-law guardians to intervene and, in a most makeshift manner, introduce accommodation for those who are unable to obtain it otherwise. From an examination into this problem there appears to be a very wide difference in demand. In some localities the demand for houses is comparatively slight, whilst in other it is alarming and, as I have said, it is causing very grievous distress.

I should like, if I may for a few minutes, to dwell on the causes of the shortage of houses, because I believe that from the causes may be deduced certain remedies which would mitigate those evils to no small extent if they were adopted but which, as I understand, have not seriously been adopted by the Ministry of Health. The first obvious reason for the shortage is the almost complete cessation—the necessarily almost complete cessation—of house-building during the five years of the war; but it is not merely since the year 1914 that there has been a cessation of building, especially of private enterprise in building. It dates from an earlier period than that—the year 1909. It dates, I venture to say, from the coming into operation of the Land Taxes imposed by the Budget of that year, especially the Undeveloped Land Tax. I think it is universally recognised by all those who have examined the subject that, whatever the merits of that tax may have been or may be to-day, it has succeeded in producing an almost complete cessation of building. That is not all. In the same year when that Budget with the Land Taxes was introduced Mr. Burns carried his Housing Act which was put into operation in the country. This did a great deal, and has done so in the succeeding years, to stimulate demolition and closing orders. It has gone a long way towards materially increasing the available house accommodation throughout the country, and undoubtedly—and we all naturally applaud the fact—it had the effect of removing large centres of disease and houses in an insanitary condition; therefore, of course, I do not say this by any way of comment, but with this reservation, that the Act, while it stimulated demolition and closing orders, made quite an inadequate attempt to avoid the necessity of making closing orders on the part of local authorities. It did not introduce any provision to enforce structural repairs to those houses which were in a dilapidated or insanitary condition.

I lay stress on sanitary condition, sanitary defect, as compared with structural defect. Attention under the Act has been almost exclusively confined to sanitary defects, and nothing has been done to enforce structural repairs, where they could have been carried out, to dilapidated houses. The result is—I may say without exaggeration, as I have been informed by those competent to give the information—that there are hundreds of houses, perhaps thousands, in our urban and rural districts which have been condemned as unfit and are unoccupied to-day, but which, if structural repairs had been undertaken at the time, would to-day have been occupied and have afforded comfortable homes for families throughout the country. The method by which this operation has been carried out has been through the instrumentality of the sanitary inspector under the local authority. It is not the business of a sanitary inspector, neither has he the experience nor the training, to attempt to deal with anything in the nature of structural repairs.

It is much to be deplored that the Ministry of Health have not in the past two years called the Royal Institute of Architects to aid them in securing the skilled assistance in the different localities of architects to deal with these numerous houses that are in a dilapidated condition. I am given to understand that had such assistance been invoked it would have been readily responded to, and as the Institute are in close touch with all the architects throughout the country, committees could have been formed in the different districts, skilled advice given, and many houses which are not tenanted or are tenanted under very defective conditions might have been placed in a state of repair. This would have been of considerable assistance in mitigating the evil, though it would not have gone a very serious way towards meeting the great problem of the shortage of houses.

I am sorry that my noble friend was not able to give the number of houses which have been completed. I have heard of two houses which have been finished in the town of Wolverhampton, but from a perusal of the public Press these are the only two as a result of all the stream of correspondence and the torrent of forms which have been sent down to different local authorities.

VISCOUNT PEEL

I hope my noble friend will not assume that the two houses he has seen are the only houses that have been built.

LORD ISLINGTON

Those are the only two I have seen. I am sorry the noble Viscount was unable to give us the figures showing the number which have been completed. What I feel is this, that the Government two years ago, when they saw this great crisis was coming, might have exercised rather greater foresight in finding out those localities where the trouble was going to be most acute. There is no doubt that in some districts in this country to-day the dearth of houses is acute in the extreme, and I should have thought that, with a certain amount of foresight, steps might have been taken effectually to find out where the shortage would be most acute. If these steps had been taken provision might have been made of a more emergency character, and healthy and comfortable dwellings, although of a temporary character, have been provided and furnished a roof for families during the coming winter.

The two really important points which ought to have been placed in the forefront of the consideration of this problem are—first, that the demand in certain of these localities, when discovered, was immediate and should be met and complied with before the winter months arrived; secondly, that it was obvious from the start, with all the conditions prevailing, that a fully standardised permanent house could not possibly be erected which could ever be occupied upon an economic basis, either now or at any time in the indefinite future. How could an elaborate house, with all its health provisions, its conditions of permanent structure and its provisions for efficient drainage, be erected with prices as they stand at the present time? Every condition and element of the building trade to-day is in an absolutely abnormal state, and it is bound to be so, not only now but for many years to come.

Where should we have been in the years 1914 and 1915 if methods like those which are being employed by the Ministry of Health to-day had been employed to accommodate ourArmy and the troops which came form all parts of our Empire to these shores? I venture to say that the shortage of houses in some of our important districts to-day may be regarded in just the same light—an emergency shortage of accommodation—as in 1914 when accommodation had to be arranged for the troops, and that the same methods should have been employed to meet the emergency this year, and the immediate succeeding years, as were employed in 1914. No doubt it would shock the susceptibilities of those in official circles to say that, now the war is over, it would be proper to erect in any part of the country houses of a temporary character, but I think it would be much better if the class of house which accommodated with comfort the troops during the past five years were now available for families who are practically roofless in many of our thickly-populated centres. Had this been done the Government and the municipalities would not be faced to-clay with the impossible and insoluble economic problem which now confronts them.

My noble friend, as I say, skated very lightly over the real question which confronts us to-day, and which will confront us with more acuteness in a few years time—namely, that two-thirds of the expenditure on these houses will be a dead-weight debt upon the State or the municipality, or equally divided upon both. We are told by the Minister of Health that in a few years time, when normal conditions are restored, the rents of these houses can be raised to a sufficient height to pay for interest and sinking fund upon this inflated sum.

VISCOUNT PEEL

I do not know what inflated sum my noble friend alludes to. Of course, the economic rent will be based upon what it will cost to build at that time, not what the houses cost at the time when they were built.

LORD ISLINGTON

I do not use the word "inflated" in any offensive spirit, but it is inevitable that the building of houses of high standing when abnormal conditions are prevailing does produce an inflated expenditure, and if that expenditure in six or seven years time is to be met by a rent which will be adequate to pay interest and sinking fund, it will entail, of course, a rent far in excess of that which obtains to-day.

VISCOUNT PEEL

I do not think I made myself clear to my noble friend, because the rent in 1927 is not to be based upon the cost of the house as now built but upon the cost in 1927 of building a house of that type, it being hoped that by that time some sort of after-war conditions may be arrived at.

LORD ISLINGTON

So that the difference between what would be the expenditure then and the expenditure now will have to be regarded as a dead-weight debt on the State?

VISCOUNT PEEL

Less the penny rate on the municipality.

LORD ISLINGTON

I think that is all the more an argument in favour of what I am venturing to suggest, which is that it would have been much better for the Ministry of Health to have obtained, as far as they could, accurate information as to those districts where the crisis was really acute, where there was such a dearth of houses that grievious suffering would ensue and dislocation of industry, and in those centres go straight to work and build houses on exactly the same lines as those which were built in order to accommodate the troops in 1914–15. If that had been done I think we should have had houses built by now, on the eve of the winter, and those houses if properly looked after would last a long time, and would, I believe, cost the State very much less than the cost which is entailed by this elaborate and indiscriminate building of houses during an abnormal period such as we are now passing through. I have ventured to put forward this point, and I do so in no hostile spirit, because I realise that the problem is one of the utmost difficulty; but I do feel this, that whilst affording accommodation where accommodation is really necessary, every precaution should be taken, in these difficult years when you have this extremely expensive method of building, only to build houses of an expensive character during that period where they are absolutely necessary.

I would suggest with all respect to the Government that in considering this problem—because, after all, it is so difficult a one that there is very excuse for making changes and fresh departures as time proceeds—they should really apply themselves to the suggestion which I ventured to indicate at the commencement of my remarks—namely, that they should put in order and make habitable all those houses which are untenanted throughout the country, and do it upon a thoroughly architectural and scientific method; also that they should derive information from those districts where the crisis is really acute; and that, instead of merely consoling these unfortunate people by asking them to look at elaborate plans, they should really set to work and get them houses erected with the same expedition as houses were erected in 1914.

THE MARQUESS OF SALISBURY

My Lords, I desire to speak on the housing question with great sympathy for the Government. They are faced by a very great difficulty. We all recognise it, and I am not disposed on every ground to find very great fault with the Government, because I recognise that at any rate the Minister of Health is not responsible for the great rise in the cost of materials and labour. I think it probable that many of us—I speak for myself and others—would have made different proposals for the solution of the housing question when we had to make proposals, if we had realised what would be the exigencies of price at the present time. I make that preliminary observation in order to assure my noble friend, the noble Viscount, that I do not want to find too much fault with the Government in the few observations that I propose to make. At the same time I do not think there is any useful purpose to be gained in trying to explain away the great urgency of the difficulty at the present moment.

I think that that inevitable optimism with which my noble friend always approaches the difficulties in which the Departments he defends are placed was almost excessive on the present occasion. The difficulty is really of the most urgent character, and it is particularly hard upon my noble friend that he should have been faced by Lord Grey with the actual observations of the Director-General of Housing. These cannot be quite explained away. The Director-General of Housing definitely said that "it must be frankly admitted that the supply of houses by the local anthorities has been very disappointing," and he said in another part of his speech that there was "a risk that the Government housing scheme would be killed unless prices could be kept within reasonable limits." That, by a. Government official, is a most formidable statement, and it only confirms what is really in the experience of us all. There is reluctance on the part of local authorities—a very great reluctance. Why is there a reluctance? I wish my noble friend had been able to reply to the questions which were put to him by the noble and learned Lord who sits behind me. Those questions were upon the Paper, and they were quite clear. He was asked, first of all, what was the number of houses which had been completed, and he was not able to answer that question. He was asked, in the second place, what rents were charged for these houses. I think it was probably by inadvertence that my noble friend did not say anything about rents.

VISCOUNT PEEL

I think I said a good deal about rents.

THE MARQUESS OF SALISBURY

Not bearing on that point.

VISCOUNT PEEL

I said that I would deal later, and I did deal later, with the question of rents, though I could not answer specifically the question as to the average rents.

THE MARQUESS OF SALISBURY

We do not worry about average rents; any rent would have done for us if we could have got some information. There was a blank ignorance on the part of the Department. The noble Viscount is not a member of the Department himself, and I am sure that if he were he would have been perhaps in a better position. There was a blank ignorance on the part of the Government as represented in your Lordships' House both as to the number of houses completed and as to the rents charged for them. Let us come down to figures for a moment. I happen to know the cost of the houses which are going to be built—I ought not to say that, but rather are designed to be built—in the locality where I live. They are going to work out, when everything is included, at £1,000 a cottage. What is the economic rent for a house built for £1,000? Shall we say 25s. a week or something of that kind? That would be the present economic rent. I do not know whether my noble friend thinks that in Hatfield he is likely to get a rent of 25s. a week. I do not think so, or anything resembling it.

What is going to happen in 1927? In 1927 the Government will insist, before they relieve local authorities, upon the economic administration of the house property, and a part of that economic administration is that there should be an economic rent charged. In interrupting my noble friend who has just sat down, the noble Viscount (Viscount Peel) explained what he meant by economic rent. It would be based upon the then price of a house of a similar kind. A figure was used by my noble friend Lord Islington just now which I accept. On that basis the £1,000 house to which I have referred will have to earn a rent of 16s. 6d. a week before the local authority receives any Government subsidy—or any sufficient Government subsidy—after the year 1927. Does my noble friend think that the authorities in Hatfield will be able to get a rent of 16s. 6d. a week? If he does not, where is the difference going to come from? I invite the Government's attention to this in no spirit of adverse criticism, because I am going to make some little suggestion to the Government before I sit down. But what is going to happen if the rent of 16s. 6d. cannot be obtained? The difference has to come out of the rates. That was not perceived at first, as my noble friend very justly said. The Act has only been in operation three months, and it was not perceived that there was a tremendous contingent liability on the rates. That being the case, can the Government be surprised if there is reluctance on the part of local authorities?

VISCOUNT PEEL

I am very sorry to interrupt, but why does the noble Marquess insist on the term "a liability on the rates"? The noble Marquess is familiar with the Act, and he knows that a penny rate was to be the limit, and anything above that would fall on the Exchequer unless the authorities consider there has been some lack of economy in administration or in some other respect, and that therefore the subsidy ought to be reduced to a certain amount.

THE MARQUESS OF SALISBURY

No doubt it is my own fault, but I thought I was sufficiently explicit. The Government subsidy will only be granted to a local authority who administers this cottage property on economic principles. The economic principle is set out in the rules. The rents to be charged after the 31st day of March, 1927, should be sufficient to cover, in addition to the expense of maintenance, the interest which would have been payable on the capital cost of the building of the houses if they had been built after that date. So that if 16s. 6d. is that figure, and the local authority cannot obtain 16s. 6d., I want to know where the difference is coming from. The Government will only pay the subsidy if the local authority obtains the economic rent, and I am suggesting to your Lordships and the Government that there is no chance of the local authority being able to obtain the economic rent. Therefore there is a tremendous contingent liability upon the rates. Of course, if my noble friend were to get up and say now that the Government would be much more liberal than this rule indicates, and that they would go much beyond that limit if cause could be shown, it might restore confidence amongst local authorities; but what those authorities at present seem to think is that owing to the cost of the houses—the cost of the very expensive type of house that they are called upon to build—they will not be able to earn the economic rent, and therefore that the ratepayers will have to make good the difference.

I suggest that it is of the very first importance that the cost of these houses should be reduced. The noble and learned Lord on the Woolsack knows as much about housing as any man in your Lordships' House, because he was principally in charge of the Bill which passed. I say that if the Government scheme breaks down—and none of us can shut our eyes to the fact, with whatever good will we approach it, that the Government scheme may through the enormous weight of cost break down—there will be no chance whatever of building the houses which are required upon reasonable terms on the conditions which the Act imposes as administered by a Government Department. That being so, we must find something else. We cannot leave the people unhoused. What else can we have? I am not going to say positively that the Government scheme has broken down—it may be that it will not break down—but I say that there is great danger of its breaking down, and in that event we must fall back upon private enterprise. I am certain that is the ultimate result, and that private enterprise will be far more economical than the administration of the present Act in a great variety of ways.

In the first place, if a private individual —whether he is a landowner or one who is sometimes spoken of in a tone of scorn quite unfairly as a speculative builder—comes to build, he will take care to keep the standard of his house within proper limits. I do not say that he ought to be allowed to build below a certain standard, but he will certainly keep the cost down as much as he can. You will never get a Government Department to do that. I made an inquiry a short time ago (I am not sure whether the rules have been made since then) and I was told this—I hope your Lordships will forgive me for being a trifle egotistic—that the dimensions of accommodation which the Government stipulated for in houses were so much greater than my own best cottages which I have recently built that it would add by itself 20 per cent. to the cost. This may have been altered by some modification in the regulations of the Department since that information was given to me, but I have very good reason to know it was true at that time, because the architect who was being employed by the local authority to build these cottages to Government requirements was the same architect who had built my best cottages, and therefore he could speak with absolute authority, and he said that these cottages, built according to the minimum which the Government would allow, were so much larger than my best cottages that that by itself added 20 per cent. to the cost. That is the first thing which shows how uneconomical is building by a public authority. They have no reasonable perspective in the matter of size in cottage building. I hope your Lordships will notice that I have not said that my cottages are very good cottages, but I hope your Lordships will believe it all the same.

There was a very interesting point in the speech of the noble Viscount just now. He said that one of the difficulties of getting building done was that the small builders are so stupid that they do not understand Government specifications.

VISCOUNT PEEL

I did not use the word "stupid"—say, rather, unaccustomed to the complexities.

THE MARQUESS OF SALISBURY

The noble Viscount must forgive me if I put a little gloss on his words sometimes. Small builders are so unaccustomed to the complexities that they cannot understand Government specifications. It is quite true. The result is that they are obsessed by a feeling that they may make a mistake, and that the result may be very costly to them. They consequently protect themselves by demanding a far higher price than they otherwise would do. I know this is the case, because I have seen it in operation under my own eyes. I built a certain type of cottage for a certain figure before this particular crisis, but when the local authority asked the same builder to build similar cottages he asked them a higher price. I sent for him and said, "How comes it that you charge this price to me, and a much higher price to the local authority?" He said, "Well, if I made the least mistake the local authority are so precise in the administration of their duties that I might be called upon to pull down a whole wall and rebuild it. That kind of thing involves a great risk to us small builders, and we have to protect ourselves by asking a much higher price." In other words, under the system of private enterprise small mistakes are looked over, treated of relatively no importance, because there is a system of give-and-take and elasticity which enables a builder who knows you to rely upon your treating him on reasonable terms; consequently he asks you only a reasonable price. That is another reason why building by a public authority is always much more expensive than building by private enterprise.

Lastly, there is this point, that when it comes to asking for the rent you will find that the private owner is able to ask for a much more reasonably high rent than a local authority will ever venture to do. The local authority is subject to so much pressure, from various methods of applying pressure under a representative system, that it is not able to insist upon a reasonably fair rent with the same confidence which private enterprise would have. Therefore, if the Government scheme breaks down their only resource will be to fall back upon private enterprise, and if they would say to private enterprise "We will give you either a moderate subsidy or (better still) we will let you have a loan upon extremely low terms," they would save money. It would be cheaper than their own scheme, and they would get the houses, which I doubt whether they will do under their own scheme. The houses would, of course, be up to a certain standard and if they would give to the private builder such a pecuniary advantage—say the equivalent, either in a subsidy or the interest on a loan, of £120 or £150 a house —they would save money for the Exchequer. The houses would spring up in all directions. I venture respectfully to suggest that plan to the Government.

I know it is rather shocking to suggest that the taxpayers' money should be given to private individuals. I certainly do not think it would be very unreasonable to give it to the working class themselves to build their own homes, considering our present feeling. But surely even the broader proposition which I submit, if it can be shown that it is really much more effective and more economical, ought not to be rejected, merely on the ground that it is unprecedented. If the Government would go into the market and say that for everybody who produced a working class house between certain limits of standard they would pay a flat rate of £120 or £150, or its equivalent in the cheapness of the loan, they would get the houses, and it would not throw anything like the same burden upon the Exchequer as the system of making good the difference between what the houses are going to cost now and what they will be worth in seven years' time.

The Government have an opportunity of considering the matter because, owing to the delay which has taken place, I suppose there can be no building for the next couple of months. The moment the frost begins it is almost impossible to build, unless the Government build houses of pisé de terre, as they have been recommended to do in certain quarters, and therefore they have got an opportunity. No doubt they will completely reconsider their housing policy. I venture to submit to them that, when they next have the opportunity of speaking in your Lordships' House, they will not try to minimise the extent of the housing crisis and the difficulty in which they stand, but that they will be prepared to come before your Lordships with substantial proposals for remedying it.

LORD DOWNHAM

My Lords, as the President of the Local Government Board who was probably more than any one else responsible for inducing the Government and, perhaps, Parliament to adopt a policy—not this policy—of partnership between the State and the local authorities in meeting a deficit on housing, I should like to add a few remarks to those which have been made in this debate. Although I may criticise His Majesty's Government and the policy which they are adopting, I can assure my noble friend who has defended His Majesty's Government on this occasion that my sympathies are very deep with all those who have to solve this enormously difficult problem, and that if this policy of the Government has failed—and it has failed in my opinion—there is no other policy at present which has been constructed to take its place.

My noble friend who defended this policy is one of the most dexterous and ingenious of all debaters, but I think that he himself felt that on this occasion he was placed in a more difficult position than, perhaps, he has ever occupied before. The policy has been a failure, and we had better acknowledge it at once in order that we may seek a new policy. For nearly twelve months this policy has been tried—the policy did not depend on the Housing Act—and my noble friend could not get up to-day and say that he could point even to one dozen houses that had been completed under this policy in any part of the country.

Let me say at once that I know something about London, and I know that not one house has been completed yet under this policy, and that not one house will be completed under this policy by Christmas next. I would not say that this alone was sufficient to prove that the policy was a failure. Where I say the policy is a failure is that it is now proved, on my noble friend's showing, that the average cost of these houses is going to be £800 at the very least, and that we go on to prove that the annual deficit on these houses is going to be, on the average, at least £50 a year. My noble friend who has just sat down and who so ably spoke, as he always does, on housing, gave away his case by saying that in order to obtain a remunerative rent on a £1,000 house you would have to charge 26s. Let me inform my noble friend that I am dealing with these cases every week and that I have constantly to use this figure of a £1,000 house, and in order to obtain an economic rent on a £1,000 house you must charge, not 26s. a week, but 43s. 6d. a week; and that on an £800 house you must charge an economic rent of 35s. a week. I will not take the £1,000 house, although I should like to inform the noble Marquess of these figures. Here in London we are building houses on the Old Oak estate close to Paddington, and they are being erected at a cost of £1,013 for a five-roomed house, and £832 for a four-roomed house. We will leave out the odd £13 and call it a £1,000 house. On such a house, in order to get an economic rent, we must charge 43s. 6d.

THE MARQUESS OF SALISBURY

What percentage do you take?

LORD DOWNHAM

5½ per cent. for interest on the loan, and 3½ per cent. for the sinking fund.

THE MARQUESS OF SALISBURY

I think that is rather high.

LORD DOWNHAM

It has been very carefully worked out. However, if my noble friend likes to put his sinking fund a little lower he will still find that his figure of 26s. is inaccurate. But do not let us push the case too far; let us take it that my noble friend is right. He himself stated that the average cost of every house that is going to be built under the Government policy is to be £800—as I think it will be. The average rent to be charged for each house costing £800, in order to get an economic rent, is 35s. Is it likely that on an average we are going to get a rent of more than 15s.? I have tried to make my figures as simple as possible and rather against myself than otherwise, and that rent leaves an annual deficit in round figures of (let us say) £50 on each house. That is, that this policy to build 200,000 houses—which is the very minimum number of houses required—and to let those houses at a rent which the working man is able to pay (they are supposed to be built for the working classes) will cost this country £10,000,000 every year. If we take it at an average of five persons to each house, it will cost £10,000,000 a year to house 1,000,000 people. The Minister of Health has again and again stated that the minimum requirements of the nation are 500,000 houses. Instead, therefore, of £10,000,000 a year the Government policy is going to land the taxpayers and ratepayers in this country in £25,000,000 a year to build 500,000 houses.

I am not ashamed to say what I am now going to tell your Lordships. As the author of this policy of sharing the deficit —I will speak about that presently—between the taxpayers and the ratepayers, I am going to say that, if I had realised at the time when I persuaded the Government to adopt that policy that there would be anything like this amount of deficit on these houses, I would never have put my hand to the various memoranda which I penned on this subject. I was permitted to go up and down the country when I was President of the Local Government Board —beginning with a speech at Manchester and ending with a speech at Birmingham or at Sheffield, I forget which—and to inform the people that His Majesty's Government was willing, in order to start the housing policy, to share with the local authorities the deficit. I was authorised to mention only three columns of figures—2s. a week, 2s. 6d. a week, or 3s. a week as the maximum. What is the deficit on 3s. a week?

It is £8 a year on a house. What is that deficit on 200,000 houses? It is £1,600,000 a year. Is any noble Lord going to say that, for the purpose of starting a policy of that kind for building the first 200,000 houses—I always christened it an emergency policy—he would object to this country finding £1,600,000 in order to house 1,000,000 people by building 200,000 houses? I never heard any member of the House of Commons get up and object to it when it was put in that way.

I say that the policy turned out to be an absolutely different policy; an impossible policy, a most unsound policy. Directly it was found that there was going to be a deficit on these houses of £50 a year instead of £8 a year it made the whole difference. Why did it turn out that these houses were to be so expensive? Why did we receive no warning when we initiated this policy that materials were going to be of such excessive cost and that labour was going to demand very much more than labour had ever before demanded? All I can say is that we did not receive the information. The Minister for Reconstruction—he is now the Minister of Health—who was responsible then for giving information to His Majesty's Government as to the possibility of obtaining labour and materials, did not warn the Government that there would be any difficulty either as regards material or labour, that there would be any excessive cost of this kind. So far as incentives to economy on the part of local authorities were concerned, when His Majesty's Government altered the policy for which I was responsible—when they tore up that policy and informed the local authorities that when they had spent a penny rate the Government and the taxpayer would find the whole of the deficit—they removed one of the greatest incentives to economy which existed for the local authorities.

The policy which I was authorised to initiate, and which I preached all over the country, was that the local authorities themselves would be responsible for 25 per cent. of the deficit. If it amounted to a penny rate, it is quite true, the Local Government Board was to be permitted to limit their 25 per cent. to a penny rate, but directly you limited the expenditure of the local authority to a penny rate you took away from them all incentive to exercise economy. It is obvious that under this policy any great town may say, "Directly we have spent our penny rate we can call upon the Government to build any number of houses and to advance the whole of the deficit that falls upon those houses." The only safeguard, as my noble friend says, is that if the local authority should let these houses at rents very much below that for which they could let them if they were bent on economy, His Majesty's Government might possibly step in and say, "We shall reduce your subsidy by such and such an amount."

Will my noble friend say that the rent I have named to-day, 15s. a week, is a rent much below that which ought to be obtained from the working classes for houses of this character? I think not. And if 15s. a week is a rent which the local authority ought to exact, it still leaves His Majesty's Government with a deficit of at least £1 a week which has to be met by the Exchequer and the taxpayers of the country. I say that this policy has broken down; that this country, with all the charges that have to be faced at the present time, cannot meet this enormous expend ture.

What ought to be done? What do I suggest? If I had been still at the Local Government Board when I found that, instead of contemplating a deficit of a maximum of £8 a year on each house, I should have to contemplate one of £50 or more on each house, I would have summoned the local authorities and the builders and the trade unions, and particularly the trade unions connected with building. I would have had a great conference of all those authorities and I would have pointed out to the working men themselves that if they were to adopt a policy of laying far too few bricks, or of exacting far too high wages, or of building for fewer hours than there were accustomed to build, they would only raise the price of houses against themselves. I would have boldly pointed out to them that it is not for the rich that we are building these houses but for the working classes themselves, and that if they succeeded in making the houses so expensive that the economic rent must be 43s. 6d. or even 35s. per week, the local authority would be tempted, and very naturally tempted, to let those houses, not to the working classes but to returned civil servants, to shop keepers and all kinds of people who are able to pay something more nearly approaching the economic rent than is represented by the 15s. which the working classes might be able to pay.

Every local authority which builds these houses with such a heavy deficit upon them will be faced with this problem. On the one hand they will be called upon to let the houses to the working classes. On the other hand, there will be a number of people, suffering from high prices and grievous taxation, who are poor compared with the position they occupied before, and who will say to the local authority, "These are very nice houses; there are labour-saving appliances in these houses; they are charming little abodes, not quite what we should have occupied before the war perhaps, but we shall be only too delighted now if we can make them our homes." I say there will be a real difficulty in the minds of the local authorities as to whether they ought to let these houses to the working classes who are prepared to pay only 15s. a week, or to those other citizens, with rates and taxes to meet, who will pay 25s. towards the rent of those houses.

It would be far better for the Government to recognise that their policy has gone a very long way at all events towards breaking down, and that it is too expensive for the country to adopt. It would be better to call together all those who are sincerely interested (and who is not?) in this great question of housing the local authorities, the private builders and the leaders of the trade unions—not for one of that sort of conference which is not a conference at all but is merely addressed by two or three Cabinet Ministers and then disperses with a vote of thanks to the gentleman who presides, but for a real conference in which opinions should be completely outspoken on the subject, and where each shall contribute something towards the solution of the problem. Then, perhaps, we may be able to formulate a more practical policy, one less expensive to the State and more satisfactory to us all.

It is not in order to praise myself that I say the present policy has broken down. When the policy was launched of a partnership between the State and the local authorities it was only part of a larger policy. I always so described it, and as I went up and down the country conferring with the great local authorities—sometimes in as many as four counties such as Dorset, Cornwall, Devon, and Wiltshire on a single tour—I used to hear many things that greatly affected my judgment. I recollect hearing in the county of Dorset that the great fault of the houses there was that there were only two bedrooms, which often opened into one another. The landlord was frequently not a rich person—it is a mistake to think that all landlords are rich people—and I was told that if the landlord could get an advance of £100 he would be able structurally to alter the cottage, to add another bedroom and a few more conveniences for washing and matters of that kind, and make it most habitable and convenient.

When I left the Local Government Board I was busy developing that branch of the policy. I took advice from many people. I regret that the Government have done nothing towards it. I believe, as my noble friend below me said, that one of the most valuable things we can do, both in town and country, is to look at our cottages and our workmen's dwellings and see whether, with the expenditure of £100 or even £200, we could not make them thoroughly habitable for the next twenty or thirty years. That is a far more economical policy than building houses at £1,000 each. I was also busy in seeing whether I could not get private builders to do something. I believe there are many private builders who have estates on their hands, already partly laid out for building, with arrangements made for drainage and matters of that kind; but there has been an unwholesome fear that you might, if you employed private builders to develop these estates, put some State money by way of profit into their pockets. I think that is rather an exaggerated fear. By employing the private builder, particularly where you have estates in process of development, to build houses for the working classes we might ensure to them quite a good house, not perhaps up to the standard laid down by the various circulars, but a better house than was built before the war. We could also ensure that the profit the builder might get was not excessive, not more than a contractor is likely to make who builds for the Government or for the local authorities. I will say no more except to emphasise this, that the policy which is being adopted as the sole policy is an expensive policy, and the sooner the Government realise it and call a common conference of those who are interested in this question and who are capable of helping them to a solution, the better.

THE LORD CHANCELLOR (LORD BIRKENHEAD)

My Lords, the practice in your Lordships' House of hanging a debate which assumes a character of first class importance upon one or two very limited Questions has its conveniences. It also has very great disadvantages. It would, I think, have been much more convenient to-night if the Motion, which has elicited the kind of speech to which your Lordships have just listened, had been I down in such terms as "to call attention to the complete failure of the Government's building policy and to move a Resolution." The adoption of that course would have ensured at least one thing. It would have ensured that a member of the Government, or members of the Government, would have been present who knew not only that the question was being asked as to the cost and as to the rent, which suggested the trend of thought in the mind of the questioner without giving any indication of the scale upon which the criticisms were to be developed here to-night, but that the whole policy was to be discussed.

The attack, repeated I think four times by the noble Lord who has just sat down, is, in plain language, that the whole housing proposals of the Government, as contained in the Act which I had the duty of carrying through this House, have completely broken down. I should certainly have desired, if that had been down as the subject of a substantive debate, that it should have taken place with a larger number of your Lordships present; and undoubtedly there would have been a larger number present had the nature of the attack been made clear. I should also have desired (and I am sure my noble friend who replied on behalf of the Government to the limited case made would in that event have taken care) to have been fortified by every kind of inquiry and every fragment of available information in order to deal with the kind of speech s which have been made to-night. We are not so equipped, and in the few observations that I shall make I ask your Lordships' indulgence if I am not able to deal with every specific point that has been raised.

Speaking for myself, if at any future time your. Lordships would wish to raise the whole matter upon a Notice that that course is to be adopted, I would certainly equip myself to discuss the whole subject—and I know my noble friend would do so —in order that we might exhaustively con- sider whether this policy has broken down, and, if it has broken down, what alternative course should be proposed. The noble and learned Lord who asked the first Question, with that sombre satisfaction with which he always dwells on the defects of the Government, made, I think, no constructive suggestions at all. Other speakers have offered suggestions upon which I will make a few observations.

I miss in the speeches, taken as a whole, a realisation of a fact which is at once elemental and fundamental—and that is that something prodigious has to be done, something upon a prodigious scale, and done now. For five years there has been no building at all in this country; for five years the whole manhood and enterprise of the country have been diverted into other channels. There was an immense shortage of houses in this country before August, 1914. I and the noble Marquess, and certainly many of the same Party, were constantly pressing on the Government of that day the fact that the number of houses in this country was becoming alarmingly insufficient. I remember well the speeches with which Mr. John Burns, then President of the Local Government Board, used to assure the House of Commons that there was no shortage at all.

Five years have passed since then, and the claims of the working classes are no longer so easily satisfied in the matter of house accommodation as they were. I think they are abundantly right in setting before themselves a higher standard. We find at this moment a greater need for building upon a large scale than we have ever had before, and the increases in the cost of labour and every raw material are such as have never been know before in the whole history of the world. These problems are not chargeable—at any rate, not all can be made the subject-matter of an indictment—against the Government. If any other Government was in power many of these problems would be the same. Lord Downham will forgive me, but he sometimes gives me the impression—quite baseless—that he really thinks that all wisdom, experience, and sanity walked out of the Local Government Board the same day as he did. I can assure him there are a few sane men who remain, and that many of the subjects that he proposed have been carefully explored by the same people with whom he acted when lie was there.

My noble friend did, I think, less than justice to the extent and gravity of the problem. He told your Lordships that he was father of the partnership between local authorities and the State, but he does not pretend that he foresaw he immense increase in the cost of building materials. He does not inform your Lordships that he foresaw the immense increases which would have to be conceded in the wages of labour, and, as far as I understand him, he very candidly made it plain that he is taken as much by surprise by these increases as His Majesty's Government. I welcome greatly the observation of the noble Marquess when he said that the Government had been extremely unfortunate in this matter. They are unfortunate in this sense, that even the most experienced persons in these matters, like the noble Lord, public servants and expert witnesses, all failed to anticipate that the Armistice and the months that followed would be marked by increases upon this scale in the remuneration of labour and the cost of material.

Here and now we are in this position, and we have to deal with it. When the noble Lord says that the Act is a failure, certain observations have to be made upon it. Let me begin by saying that when the Government is convinced that the Act has proved a failure, and that other courses must necessarily be adopted, I shall come to your Lordships and candidly say so, and it will be said equally candidly in another place; because we are certainly not going to run the terrible risks, in the condition of this country, of leaving this problem undealt with. By some means or other it will have to be dealt with. If our scheme is a bad one another must be found, and found at once. Therefore, if I do not agree that the scheme has broken down it is because I am wholly unconvinced at this moment that it has.

May I remind my noble friend of one circumstance? He said that the attempt to carry out this policy did not begin with the Act. I do not agree. It is true that circulars were sent to local authorities before the Bill became an Act, inviting and suggesting their co-operation; but to circularise reluctant local authorities is quite a different thing from applying compulsory statutory powers to them; and the whole condition which I ventured to suggest, and which your Lordships assented to, was that we might be armed with these compulsory statutory powers, and I deny that you can apply any connection between a period when you possess such powers and a period when you do not possess them.

I must in this connection remind my noble friend of what happened when the Bill was in Committee, when he sat in his present seat and moved an Amendment to Section 1 of the Act. I was attempting to convince your Lordships then, as now, that the problem was one of the most urgent and pressing character and admitted of no delay. What did we provide in the Bill? It shall be the duty of every local authority…to consider the needs of their area with respect to the provision of houses for the working classes, and within three months after the passing of this Act…to prepare and submit to the Local Government Board a scheme. If they failed to do so, various consequences followed. Three months was the minimum period, and it was conceded in debate that any shorter period would have been intolerable. But my noble friend moved an Amendment and supported it with arguments, and, as I said at the time, suggested with a good deal of heat that the period should be not three months but six months. When your Lordships took a view adverse to his Amendment he renewed it even on the Report stage, but in a more moderate form, and proposed that the period should be four months instead of three. Had either of those proposals been adopted we should even now have to wait some months before local authorities were obliged to submit plans. Yet a month before that he conies here and. says our policy has broken down and that the Act has failed. He might at least have considered that, before he presses upon us enquiries as to how many houses we have built, and says "Are a dozen houses built?" Certainly, although I do not know the precise number, I am sure if it comforts him at all he had much better talk about hundreds than dozens. The point I am making is this, that to establish this as a ground for criticising the Government, at a date when he would not even have allowed us to obtain proposals from the local authorities if he had had his way, is surely to carry the practice of criticism rather far.

Let me deal with the specific suggestions which have been made. As soon as we were agreed that something had to be done the conclusion followed irresistibly that the economic loss had to be faced by somebody. Either houses have to be built or they have not. We are all agreed that they have to be built, and they can only be built under existing circumstances at an economic loss. Who is to meet that loss? It can only be met either by the State in one form or another, or by the local authorities in one form or; and I do not think that my noble friend or anybody else would suggest that upon a large scale it would be possible to go to the local authorities and ask them to bear the loss. Therefore in one form or another we must face the fact that, at any rate for some period, this economic loss must be borne by the Exchequer; and it becomes no longer relevant to point out that it is a large economic loss, unless we are prepared to argue that the houses ought not to be built or could be built upon a scale and in a manner which would reduce the loss. Nobody has attempted to make that case to-night, and we are therefore left to face the alternative.

There is a course which has been recommended for consideration by the noble Marquess, and that is the granting of subsidies to private builders. We are continuing to explore every alternative course on the realisation of the expense of carrying out the Act, and it is the fact that the very course recommended by the noble Marquess has actually been under consideration, or at all events was on the agenda for discussion, in the present week. We do not want to deceive ourselves upon this fact. It is a question how we can reduce the economic loss. There is much to be said for the view that if you can enlist the private builder and call into being the undoubted advantages which private enterprise as opposed to municipal or State under-undertakings affords, undoubtedly some economies would follow. Nevertheless I think your Lordships will in justice admit that in the urgency which the problem required it would not have been possible to leave the whole thing to the chance that the private builder might respond to the terms offered to him. If we had left ourselves without the powers which this Act gives we should have been entirely helpless the moment we began to enter into negotiations with the private builders. In other words, the existence of compulsory powers was indispensable to any suitable arrangement with the private builder.

I hope that in any future discussions we shall all of us make up our minds to co-operate in making useful and helpful suggestions in the criticial and terrible position in which the country finds itself to-day. I am sure that I did not detect any real desire to do anything else to-night, but when we recur to this subject much fuller information will undoubtedly be available as to the progress which either has been made or is reasonably to be anticipated; and I assure your Lordships of one thing, and that is that the utmost candour will be shown, because help will be needed from every source from which help is proper. With the exhibition of such candour as I promise on the part of the Government, and with the contribution of such experience and knowledge as your Lordships possess, dark and difficult as the situation is I would be very unwilling to be supposed to be one of those who regard it as desperate.