§ Order of the Day for the Second Reading read.
THE EARL OF ONSLOW
My Lords, the Bill which I have to present this afternoon contains some of the housing clauses of the Ministry of Health (Miscellaneous Provisions) Bill which last year failed to secure the approval of your Lordships' House. The main provision in the Bill, which I will elaborate in a moment, was not one over which controversy arose. There were two important provisions in the Bill of last year—namely, (1), to facilitate the compulsory hiring of houses, and (2), to prohibit luxury building; and it will be within your recollection that considerable difference of opinion occurred on these points. They do not appear in the present measure, which does away with all prohibition on luxury building. If you will turn to the Memorandum which lies on the Table of the House the financial effect of the provisions involving charges on the rates will be found to be fully explained. The Memorandum was made available in April last. The clauses arc not numbered quite correctly, as Clause 4 should be Clause 3, and Clause 11 should be Clause 9. That is the result of having withdrawn Clause 1 while the Bill was in another place.
The main provision of the Bill is contained in Clause 1, which extends by eighteen months the period during which grants may be made to private builders. The Government are pledged to an extension during which the subsidy shall be payable, and, as far as I can gather, I do not think there is any opposition to the principle. It is agreed on all sides that it is most important to restore private building to the position which it occupied before the war, when no less than 95 per cent. of working class houses were erected by private builders. Now the case is practically the reverse; about 95 per cent. of working class houses are erected by local authorities. The scheme of a subsidy to private builders was first instituted by the Housing (Additional Powers) Act, 1919; but the time provided for in that Act 448 during which the subsidy should be payable has now run out, and, owing to the failure of the Bill of last year to pass through Parliament, no new certificate has been issued since December last, except in the case of plans submitted for houses before December 23. Therefore, owing to the delay in extending the time of the subsidy, private building has suffered on a by no means inconsiderable scale.
It is important, therefore, to get this Bill through Parliament at an early date in order that the industry may proceed again on something like normal lines, and take advantage as much as possible of the fine weather. The extension of the time during which the subsidy is payable does not affect the financial provisions of the Act of 1919. In Clause 2 the aggregate amount is stated as £15,000,000, and that is not exceeded by anything in the Bill which is presented to your Lordships this afternoon. Before leaving this clause I should like to draw your attention to the proviso at the end of subsection (1), which is to the effect that any certificate approving a proposal to construct houses issued before the Bill becomes law shall cease to be valid on July 1, 1921, unless the construction of the houses has commenced before that date.
Perhaps I should explain the object of this proviso. The procedure in granting a subsidy is as follows. When the plans of a house are approved—that is to say, before the house is commenced—a certificate, known as an "A" certificate, is issued to the local authority. When the house is finished the builder obtains what is known as a "B" certificate, to the effect that the house has been properly finished, and when this certificate is produced the Ministry pay the amount which is due. It is known that a number of houses for which "A" certificates have been issued have not been commenced and never will be commenced. In order, therefore, to ascertain the 'real commitments of the Ministry, it is desirable to cancel these dead "A" certificates. This proviso gives the necessary power to do so, which does not exist under the present law or Regulations.
I come to Clause 2. I do not think it is necessary to say more than that it repeals the prohibition of luxury building entirely and completely. I need not dilate on the matter, as it was dealt with exhaustively in a recent debate in your Lordships' House, when the Question was raised by 449 the noble Viscount, Lord Burnham. Coming to the next four clauses, perhaps I should say, in the first instance, that they are identical with clauses contained in the Scottish Act which passed your Lordships' House last year. The object of Clause 3 is to give to local authorities who are carrying out housing schemes outside their own areas certain powers which they can at present exercise only within their areas. I need not labour the point, because in the Memorandum (although it mentions Clause 4) the subject is fully dealt with, but perhaps I should draw attention to the proviso at the end of paragraph (b) of subsection (1). This proviso lays down that in the event of the Treasury having approved that money should be borrowed not only for defraying expenses but also for paying interest on the sums borrowed for the limited terms here prescribed, before any such loan can be launched sanction must be confirmed by Parliament. Thus no loan, the interest of which is payable fron the proceeds of the loan, can be issued without a special Act of Parliament. I should also say that the exercise of the powers conferred by this clause to borrow money, will he restricted to one or two very exceptional cases, and, as I have said already, fur those special cases Acts of Parliament will be necessary before a loan on these conditions can be sanctioned.
I now turn to Clause 4. It has been inserted in order to secure county councils against loss. Under the Act of 1919 a county council may raise money to finance the housing schemes of local authorities, and, in order to safeguard the councils, it is desired to take power to prescribe the conditions upon which the local authorities may borrow that money from the county councils. Clause 5 is inserted merely to enable the Government to vary from time to time the rate of interest prescribed by certain housing Statutes. The rates which were laid down therein are no longer in correspondence with the present value of money. Clause 6 deals similarly with public utility societies. At present they are limited to a maximum rate of 6 per cent., and this is insufficient to obtain the necessary money for the development of their schemes. Clause 7 enables the Treasury to make advances for the development of garden cities by authorising them to borrow money from the Public Works Loan Commissioners. In many cases garden city associations are not registered under the Provident and Friendly Societies 450 Act, and technically, therefore, they are not public utility societies, so that at present they cannot obtain loans from the Public Works Loan Commissioners.
Clause 8 relates only to London. In London there are two housing authorities, the London County Council and the Metropolitan borough councils. So far as the Government are concerned, the County Council arc the housing authority dealt with, but it is clear that the Metropolitan borough councils should be controlled by some Regulations in the same way as other housing authorities, and this clause enables the Ministry to make the necessary Regulations. Clauses 9 and 10 are dealt with in the Memorandum. Local authorities can now borrow half the proceeds of the sale of National Savings Certificates sold in their areas. Consequently they are directly interested in the work of local savings committees, and have tire power to contribute to local expenses. These local expenses are very small; indeed, it is not thought that they will exceed £10,000 a year for the whole country. Clause 10 regulates the application of the Bill to Ireland. Clause 11 is the usual formal clause; and the Schedule makes the necessary repeals to carry out the provisions of the present Bill. I beg to move that the Bill be now read a second time.
§ Moved, that the Bill be now read 2ª—(The Earl of Ondow.)
§ THE MARQUESS OF SALISBURY
My Lords, I am quite certain that there will be no wish in any part of your Lordships' House unduly to delay the passage of this Bill. The noble Earl said that in consequence of the action of your Lordships' House last year a certain amount of postponement of building had taken place. I do not think that any responsibility for that result lies at the door of the majority of your Lordships' House. On the occasion to which the noble Earl refers, we had to consider a very different Bill from that which he is now submitting for your Lordships' acceptance. It contained several clauses of a highly controversial character, and, notwithstanding the urgent suggestion of noble Lords sitting in an independent position in the House, the Government were not willing to postpone the controversial clauses. The consequence was that they lost their Bill. I do not wish to rake up tire embers of former quarrels, but only to enter a caveat that we 451 cannot in any sense accept, on behalf of the majority of your Lordships' House, any responsibility for what occurred.
I am sure that the Government are well advised in introducing on the present occasion a Bill dealing with the finance of housing and with practically nothing else, and, on the whole, dealing with it in a non-controversial manner. Before I say a word or two upon the finance of housing, I should like to make an observation about one clause in the Bill which the noble Earl mentioned in a single sentence; I mean the Irish clause. I do not propose to suggest that the Irish clause should be struck out, but I think that before the House parts with the Bill the Government ought to be asked to explain why we are called upon to pass a Housing Act for Ireland after the passage of the Government of Ireland Act last year. It may be said, and I believe it was said in another place, that the Irish clauses are designed only to complete the system of housing provision which has already been made for the other two members of the United Kingdom, and that as there is already a Scottish Act on these lines, and we are now engaged in passing an English Bill, an Irish Bill is a necessary complement. That may be so, but I shall await the explanation of the Government upon that point.
This only I will say, that this Bill is going to cost money to the taxpayer. It is a Bill for the provision of certain financial assistance for housing. How much more money are we going to give to Ireland until we know exactly how we stand with respect to that country? We must not forget that at the present moment Ireland is throwing a tremendous burden upon the British taxpayer. At least I imagine so. Who is going to pay for all the troops in Ireland now? Who is going to pay the enormous expense which the rebellion in Ireland is costing? I think that before Parliament is asked to vote more money to Ireland, some sort of profit and loss account ought to be presented to your Lordships. We ought to be told whether, in existing circumstances, the Irish services are entitled to the relief which we cheerfully grant to Scotland, and which we cheerfully grant to England, because they are loyal members of the United Kingdom, but which we do not cheerfully grant to Ireland until we are quite certain that they are as obedient to the King and the authorities of this Realm as we are ourselves.
452 I pass from that, because I do not want to make a controversial speech, but only to enter a caveat, so that the Government may give us their defence for the Irish clause when a proper opportunity arises. I should, however, like to say a word or two upon the economics, if I may so describe them, of cottage building. There are three directions in which economies may be made, and it is vital that economies should be made. The time has gone by when this country, as a very rich country, could afford luxuries in the way of expenditure. We are bound to scrutinize, so far as your Lordships are allowed to scrutinize, with the greatest care, any extra expenditure proposed to be thrown upon the taxpayers, and therefore we desire, at every stage, to ask His Majesty's Government how far they are able to promote economies in matters for which we agree to Bills voting money.
As I have said, there are three directions in which economies can be produced in building—in labour, in materials, and in design. In labour the Government have a scheme of what is called "dilution" in the building trade. I never thought the word a very good one. What is really intended is to make the most of skilled labour. In an ordinary cottage you do not require much skilled labour. You do not want, for example, more than one bricklayer—perhaps not even one; certainly not more than one—and the rest of the work can be done with unskilled labour, so far as the brickwork is concerned. Perhaps "unskilled" is too strong a word, but at any rate not "highly skilled."
What is true of bricklaying is true also of the other two trades concerned. The Government have a scheme for the dilution of building labour and I think we are entitled to some information as to how far this scheme has gone, and what success the Government have met with in their very laudable efforts. I do not criticise what the Government are doing in this matter—it is very much to be praised—but I think it will be interesting to the House to know what success has waited upon their efforts. Then T do not at all despair of economies in materials. I happen to belong to a Committee which is investigating the matter at this moment. I do not think that great economies are going to be made, but small improvements we may hope for, and I am sure that the Government will 453 welcome any small improvement of the kind of which I am speaking. I mean in the kind of material used for building, whether bricks or concrete. I saw that a very hopeful experiment was made with chalk lately, and I think in suitable circumstances that might prove an economy. In roofing, too, considerable economy may be made. I should be very glad if the Government would give us any information they can as to how far their efforts in the direction of economy in regard to materials have met with success.
Then I come to design. In design I do not think that much economy is to be made, because in the matter of accommodation provided we have probably found out all there is to be found out as regards economy of design. Where economy is to be made is in the amount of accommodation. There is no doubt that in the early days of the housing crisis the standard of accommodation was in some cases put much too high. I mean too high for the necessities of those who are going to occupy the houses, and much too high for the public purse. I know that under the recent administration of the Ministry of Health a good deal of improvement in this respect has been made. I do not mean merely by the present Minister of Health, because I think it is only fair to say that before he left the office of Minister of Health Dr. Addison had made considerable charges in the standard of accommodation which was stipulated for by the Ministry of Health. I doubt, however, whether even now the Ministry has gone far enough. I think probably, considering the condition of the public finances and the real requirements of the case, the standard might be still further reduced without serious injury to the cause of housing.
It is probably true that this extravagant building has taken place almost entirely in that part of the housing provision which is made by the municipal authorities. It is those authorities who have allowed themselves to be betrayed, as I think, into far too extravagant building. I welcome this Bill because it is an extension of the other branch of housing provision, namely, the subvention of private enterprise. This Bill is designed, I think, almost entirely—the noble Earl will correct me if I am wrong—to promote private enterprise, and I think the Government are wise. The less municipal building and the more private enterprise in the future, the better for all con- 454 corned—better for the trade, better for the occupier, and much better for the public purse. I hope that will continue.
There is no doubt that the financial provision of the Principal Act under which the district council could not lose more than a penny rate has been a very extravagant provision. They very soon got beyond the penny rate, and when they had once crossed the Rubicon it did not matter a straw to the district council how high the expenditure was, so long as they got the sanction of the Ministry, 'because the expense would fall, not upon the ratepayer in the first instance, but upon the taxpayer. And so the provision tended to extravagant building. I think it very important that it should be realised what the ultimate liability of this expenditure, is going to be, and I propose to address a. question to the Government on this point.
Your Lordships will remember that the present state of things continues till the year 1927. That is to say, no extraordinary burden will fall upon the ratepayer beyond the penny rate until the year 1927. When that fateful year arrives the Government will have to reconsider the financial relations between the Treasury and the rating authorities; and if they consider that the local authority—the rating authority—is not charging a reasonable rent for its houses and there is, in consequence, a loss, then the burden will fall, not, upon the taxpayer, but upon the ratepayer. That, of course, is not an unfair provision. If the local authority does not administer its affairs properly and charge a reasonable rent, and the result a loss, it is not unfair that the burden- should fall upon the ratepayers whom the local authority represents.
But the doubt which remains as to how exactly the Ministry will interpret the Act, and their powers under the Act, in 1927 is a very objectionable feature in the law. An ambiguity of that kind does not tend to economy, because local authorities gamble upon the Ministry taking a favourable view when the critical moment comes, and, therefore, probably do not see that the rents are as high as they ought to he from an economic point of view. What, I think, is really required is that the Government should make up their mind what would be an economic rent proportionately to be charged for these houses when the fateful year 1927 arrives; because if the district councils are allowed at present to charge a manifestly insufficient rent, 455 then there will be a tremendous lot of friction in 1927.
If, on the other hand, the Ministry of Health tell the local authority now, at the very beginning, what they consider to be a reasonable rent in the circumstances then the occupiers would know their fate from the first, it would not be necessary to have this sudden rise of rent in the year 1927, and there would not be all the friction that is likely to result from it. I would ask the Government, therefore, through the noble Earl, seriously to consider this question of what the economic rent is to be. It must have some reference to the cost of the house. I am sorry to say many cottages have been built at enormous figures—amounting to as much as £1,000 apiece—up and down the country. What would the Government consider to be a reasonable rent for a £1,000 cottage?
I turn now to private enterprise. There much more economical building has taken place, and I think your Lordships and the country would be interested to know how cheaply a reasonable and efficient cottage can be built, according to the returns which the Government now have in their possession. I was recently engaged, I am sorry to say, in building a cottage, and I think I managed to build it for between £600 and £700. It was in a very remote rural district, where the necessary standard was not very high. The Ministry of Health informed me that, if the necessary adjustments had been made so as to suit an area where the full accommodation would be required, the cost of my cottage would have come out at something like £830 or £840. I am glad to say that the Minister went on to say that my figures were extravagantly large, and that he has received tenders much below that figure. I should be very glad to know what those tenders were, and how much below that figure. What we really want to get at, and what the country ought to know, is what can a cottage be built at.
I am sure there is no sinister intention on the part of the Government, but there does not appear to me to be any reason why these things should be kept secret. If a cottage can be built for £750, and the Government know it, let the noble Earl tell your Lordships and the country that that is the ease, and, if he can hold out hopes that cost will go still lower, let him say that, too; for it will be an immense relief to those interested in the housing problem up and down the country if it 456 turns out to be the fact that good cottages, effectively fulfilling the requirements of the case, can be built for £800, or £700, or perhaps I certainly look forward to a time, not so far distant, when that may be the case. If houses can be built for £700 or £600 then we are within reasonable distance of a time when we shall once more arrive at an economic basis for the housing question. Think what that means. If we can only get it down to some figure of that kind, with the point at which wages stand now, rents can be charged not unreasonably which might give an economic return upon building.
I am sure the noble Lord will believe me when I say I do not ask him to answer these questions now. Some of them are very technical, and, had I wished him to answer them to-day, I should certainly have given him notice of all these points. But I sincerely hope that, if he is kind enough to make a note of them before the Bill leaves your Lordships altogether, he may take the House into the full confidence of the Ministry of Health and tell us exactly what the state of things is, what hopes they have and, if possible, reassure us that we may be within sight once more of an economic basis for the solution of the housing question.
§ On Question, Bill read 2ª, and committed to a Committee of the Whole House.