HOUSING.

HL Deb 04 December 1922 vol 52 cc241-54

LORD ISLINGTON

My Lords, I beg to ask His Majesty's Government if they can state the course of action they propose to take to deal with the housing problem; and whether they can give any information to the House as to the date when their proposals to expedite building will be made public.

I have placed this Question on the Paper in order to elicit, as far as possible, from His Majesty's Government all the information in their possession in regard to schemes that they have in project for meeting the housing problem. I venture to say that the housing problem is hardly second in gravity and urgency to that of unemployment, whilst the two problems have very close relation to each other, as I hope I may be able to show in the course of the brief remarks that I intend to make. The gravity of the housing situation both in town and country to-day cannot be exaggerated. There is a crying need in all the towns, there is equally a crying need in practically all the country districts, for more houses for the accommodation of the people. In addition to that the existing houses in a very large number of instances are terribly, I might add scandalously and indecently, overcrowded. In many instances the houses are quite unfit for human habitation, but, of course, cannot be condemned because in present circumstances there is no other accommodation available.

It is unnecessary for me to take too long in dealing with the social and economic injury caused by this state of affairs to the nation. It is only being intensified every day that it is prolonged. The causes have in many instances been unavoidable owing to the war and, I may add, the almost complete cessation of building for the four or five years prior to the war owing to a particular form of taxation. Therefore, for nearly ten or twelve years only a partial and quite incomplete scheme of building existed, and during the period of the war, I suppose, there was almost complete cessation of the repairing of houses. We know that an attempt was made by the late Government three years ago to deal with this problem. I think if wiser counsels had prevailed at that time the problem might have been more effectively grappled with, and undoubtedly very much less expensively. I think it is generally agreed that the method adopted in the Addison scheme was so extravagant as almost, to make it impossible.

I am not complaining, because, of course, they have only been in office a very short time, but up to now His Majesty's Government have not disclosed any scheme or suggested any policy. With the completion of the contracts under the Addison scheme comparatively little building of a private character will be going on. Mr. Clynes, in the debate in the House of Commons last week on unemployment, and also Mr. Snowden, I think, spoke very strongly and vigorously in regard to the necessity for a widespread and comprehensive housing scheme for the country, but they did not proceed to specify any scheme. I assume that as representing the Labour and Socialist Party they would advocate a national scheme of housing with State ownership, which, if carried out, would really only exaggerate and intensify the evils of the Addison scheme. It would involve a vast irrecoverable expense to the State. I do not know the precise figure, but I believe that the irrecoverable expense to the State involved in the Addison scheme amounts to about £10,000,000 sterling.

The question is what other method is there by which housing operations can be brought into life again? I suggest that there is only one, and that is to adopt such methods as will bring back into active operation as far as possible private enterprise in building to the same extent as it was in operation some ten or eleven years ago. In those days, generally speaking, private enterprise adequately met the demand for houses required in our great centres. The problem was a more difficult one in the country, but it had not reached anything like the very serious stage that it has reached now. I have had the opportunity during the past year, in the course of the work in which I am engaged, of visiting practically all the big centres in England, so that what I am saying to-day is not my own opinion—because that might not be worth anything—but it is the opinion and impression that I have derived from long conversations in those centres with leading people closely versed in this question in connection with the local authorities, Anything I may say, there- fore, may have value as coming from those who have been, as it were, through the fire of this problem during recent years, and have been giving their attention to the best methods by which it could be dealt with.

To show the gravity of the situation I will give three instances that I have had before me within the last month. The City of Birmingham has a waiting list of 14,000 applicants for houses to-day; Leeds has 8,000, and Sheffield the same number; and if you went round to the other great cities you would find a similar situation. Under the old system in Leeds it was found that every year about 3,000 houses had to be built. Private enterprise was able to meet that demand satisfactorily. From the conversations that I have had on the subject I have no doubt that private enterprise will not come back into the active market unless it can do so with the assurance of securing an adequate return for the money that it expends. There is very little building going on now directly by private enterprise. Speaking generally, building firms at present are being employed by the local authorities, and the local authorities are therefore bearing the responsibility, and in many instances are becoming the owners all through the country of this class of property. This process, multiplied indefinitely, will lead to many objections—objections which must be obvious to your Lordships. If there is one thing, so far as I was able to judge from my experiences in the late Election, in regard to which the Conservatives and both wings of the Liberal Party were in entire agreement, as opposed to the Labour Party, it was this question of bringing private enterprise once more to life, with a view to reviving and restoring our old economic system. Therefore, I feel confident that, in advocating that private enterprise should be the instrument of house building and house ownership, I have the agreement of both Parties.

So far as I have been able to judge, while all the local authorities are faced with this problem and obliged to go on building where the Addison schemes have come to an end, because they are confronted with such a tremendous problem, they deprecate intensely having to go on becoming to a larger degree every year the owners of this class of property, with all its attendant responsibilities. What is necessary therefore, is to induce the builder to construct houses as an enterprise of his own, as was formerly the case. Builders to-day are holding back in consequence of a general want of confidence. They are feeling, in the first place, uncertain as to what line the Government may take about the Rent Restrictions Act, and especially about the houses that may be erected after the renewal of that Act. They are apprehensive lest the capital that is laid out may not return an adequate interest in rent. And they are also apprehensive, naturally, of whatever future legislation may be passed dealing with housing.

The question is how to induce the builder to come in. You want not only the big builder, who has been the chief instrument of recent years; if you are to deal effectually with this problem you must get back the little builder, with one or two men under him, whom you can multiply by thousands in the country, and who really did the work ten years ago. The workman's house, which only two years ago cost about £1,000, can now be built for about £400 or £450 inclusive. The house costs about £350, and the street drainage and all appurtenances of a house cost the additional £100. That is a very substantial and a remarkable reduction in a very short time, and to that extent the difficulties of the situation have been reduced. It might almost be said that the figure at which a house can be built to-day approximates to the amount at which it could be, done on an economic basis in normal times.

But if you leave it alone now and sit down in complete tranquillity, undoubtedly you will not get the builder in. You must offer him an inducement. There are two ways, I think, in which you can do this. In the first place, the Government could subsidise the builder, say to the extent of 25 per cent. of the cost, so that on a £450 house there would be a State subsidy of £112. There are many objections to this. It would entail a very heavy and a permanent charge upon the State, which, as far as possible, we should endeavour to avoid. It would also be a flat subsidy for all houses, whereas in many instances there would really be no necessity for a subsidy at all.

I therefore approach the alternative scheme, which has been urged upon me by those who, I think, are fully competent to give such advice. It is that the Government should offer a guarantee of the interest on the outlay of the builder for a period of years. I believe this would be a very effective way of inducing the building trade to come back into the market. Central Government; control has, I believe, to a large extent been done away with already, but under this plan you would do away with it altogether. And this control has been very irksome, very embarrassing, and extremely expensive. You would get the lowest cost of building in a locality. I am told by those who are competent to give an opinion that it is about £450, and believe you can get more modest houses even at a lower rate. If the Government invited both large and small builders to erect this class of house, subject, of course, to the by-laws and the approval of the respective municipalities to which the plans would be submitted, and then gave a guarantee of, let us say, for the sake of argument—I do not know whether it would be the proper amount, which is a matter for consultation and consideration—of 5 per cent. for a period of five years upon the outlay on each house, the guarantee on a house costing £450 including the drainage would equal £22 10s. The rent of such a house is about 8s. a week, which, I believe, is the normal rent for that class of house now in most parts of the country, or £20 16s. a year. Then you have to take into calculation the cost of collection, which is quite a modest one where the builder is concerned, and much less where the collector of the municipality is concerned, and the cost of repairs, painting, and so on, which would amount in total to 10 per cent., or £2 1s. 7d. If you deduct that figure from the rent I have mentioned it would leave £18 odd, leaving a payment of £3 15s. 7d. by the Government for five years under the guarantee. I pass over these details as rapidly as possible because figures are so trying, but it may be of use to mention them to show how the scheme works out.

LORD BUCKMASTER

Does that include the rates? Who pays them under this scheme?

LORD ISLINGTON

No, that would not include the rates. It is solely the rent.

LORD BUCKMASTER

But how about the rates?

LORD ISLINGTON

That, of course, would be an additional charge on the occupant, I take it.

LORD BUCKMASTER

On the tenant?

LORD ISLINGTON

On the tenant. I am merely giving you the figures. I do not know whether these houses at 8s. a week are under the compounding system or not, and I cannot answer that question accurately. Perhaps the noble Lord, in his reply, will be able to tell me that, but I rather think that would be exclusive of rates. That is the rent that is being paid now.

LORD BUCKMASTER

Yes.

LORD ISLINGTON

I am only giving the rent that is being paid now for the houses that are being erected. This payment under a guarantee would, of course, only become operative in respect of those houses which were retained in the possession of the builder and were let to tenants. I am informed that the moment the building trade became active and these tremendous arrears were once dealt with by widespread construction, there would be in every town in the country a very large number of these houses that would be bought straight away by the occupant in the early days. They would buy them as they used to do on the instalment system, employing a building society for the purpose. In all those cases the builder would have made his small profit of £10 or £15 upon the transaction, and there would be no necessity for a guarantee.

It can be shown that, as compared with a subsidy to the local authority, where the local authority becomes the owner, this arrangement is a far preferable one. In the case of a local authority the cost would be £6 as against the £3 that I have mentioned. In addition, the subsidy to the local authority would be permanent in character, whilst this guarantee, which in certain cases would develop into a subsidy, need only be temporary in character for five years or so. I may be asked in what way this guarantee for five years would make a greater appeal to the builder than the subsidy of £112. It may be that the subsidy would appeal most to the builder; on the other hand, you have these two points to take into consideration. These small builders must be in a position to borrow money in order to erect houses, in most cases as they have had to do hitherto, and the small builder could raise money with the security of the guarantee. Secondly, as I have shown, a very large proportion of the houses, especially in the early years, would be bought by the occupants through building societies. If such a scheme as this could be devised—and the questions of what the rate of interest and the period are to be are questions for investigation by experts—I think it may be assumed that you need no longer rely on the big contractor, but would get the small man to come in as well.

I put this scheme forward tentatively, and I ask the Government to give it their careful examination as one which is well worthy of it, along with the other schemes they are now considering. I do it, finally, for this very important reason as well. If you could once get the small builder back to work there would be a very appreciable improvement in the problem of unemployment. There are to-day 119,000 people in the building trade out of work, costing the country £260,000 a month or £3,120,000 a year. If you could get the building trade back into the market and erecting these houses, you would not only affect the whole of those who are directly connected with the trade but you would bring into active operation all those collateral trades which are concerned in the supply of fixtures and fittings for houses, and that would have a very appreciable effect upon the unemployment problem.

I understand that a sum of no less than £10,000,000 has been spent in a year in benefit to the unemployed in the building trade alone, and it seems to be a most absurd and disastrous anomaly that this vast sum of money should be almost thrown away on people who are not working whilst the work in which those people would be properly engaged is so seriously and urgently needed in the country to-day. Assuming that 100,000 houses were built on a guarantee system, and that the whole of those houses came under a guarantee of £3 odd or £4—we will call it £4—it would cost the State £400,000 a year. Compare that with the sum of £3,120,000 which has been spent in a year without a house being built by the people who are the recipients of that vast sum. In the scheme for the relief of unemployment which was put forward by the Minister of Labour last week I note that under the Trade Facilities Act a very large sum has been alloted—I think it is another £25,000,000. I would suggest that the housing schemes that are to be projected would necessarily come under that fund, and that if anything of this character were devised in future that fund could be well and usefully employed for the purpose.

As I said before, it is nothing short of pathetic that all these masses of men in the building trade are unemployed whilst there is this terrible and really menacing scarcity of houses and bad housing conditions in the country to-day. It is not only that houses ought to be erected, but you must go to work actively and clear out a great many of the slum areas which are not fit for human habitation. This question stands only second to that of unemployment in the country to-day, both as an urgent one and as one which, if it is allowed to continue, will become quite menacing. I venture, therefore, in raising this Question, to ask His Majesty's Government if they will give us all the information that they can as to the scheme, and more especially I would very respectfully suggest to them, if they have not the scheme which I put before them under their consideration, that they should incorporate it with those that they are inquiring into at present.

LORD BUCKMASTER

My Lords, I do not propose to occupy your time for very long this evening. I greatly regret that the noble Lord's Question has not been put down on a day when it might have been the subject of a very full and elaborate debate, because there is no doubt that the Question is one of the gravest possible consequence, and the noble Lord has done service in calling the attention of this House to it at the earliest possible moment. It was only yesterday that I received a circular which had at its foot the names of the Archbishop of Canterbury and the Archbishop of York, and they stated that in a very large number of homes in this country moral training was an impossibility. I cannot imagine a graver statement made over more responsible signatures than that. There is no doubt, too, that it is not exaggerated. The housing conditions of our people in the big towns are such that they really baffle description.

LORD ISLINGTON

And in the country districts.

LORD BUCKMASTER

I do not know so much about the country districts, but I do know about the big towns. Lately I was in the big towns, and the housing conditions there are such as baffle description. The rents demanded are exorbitant, and the conditions of life are such that not only is moral training impossible but in many cases moral behaviour is impossible, and our police courts and criminal courts bear testimony to the most terrible character of the results of this defect. I know it is unreasonable to ask the Government to tell us at once what its plans may be, and do not propose to insist on any such thing.

I would like to point out that the plan of the noble Lord, which certainly merits consideration, is one that has a defect, and for that reason I ventured to interpose whilst he was speaking. It clearly must be taken into account, if you let a house at £26 a year rateable value—and that house is somewhere normally about £20that in many places the rates are 26s. in the £;in other words, you have another £20 a year to provide from somewhere, and so far from the State having to guarantee £3 a year, it will have to guarantee something like £20 or £23 in respect of each house, because it is ridiculous to ask a labourer to get into a house at 8s. a week, and put on to him another 8s. a week for rates. He simply cannot do it. Therefore, it is clear that in some way, and to sonic extent, the public credit, which is involved in this matter, has got to be pledged in order to redeem the country from the present disgrace, as I regard it, of our housing conditions. I agree thoroughly with what the noble Lord said. The public credit must be so used that it does not cripple, but on the other hand encourages, private enterprise. I agree also that the best way to encourage it is to encourage the small man as well as the large. By this means, and this means only, can you get effective competition which, of course, is what you desire to encourage and promote.

Let me say one word further. It is not merely a question of the construction of new houses that matters. I was in a very large district of London the other day where I was told that the people were extremely interested, as they well might be, in the housing question. I asked my informant: "What spare land have you in the whole of this area on which you can build?" He said: "There is none." Then I said: "It is impossible for you to improve your housing conditions here without pulling down the places as they now exist." He replied: "Yes." The places, as they now exist, were places which originally had been houses let, I suppose, to people at about £60 or £70 a year; they are now occupied, room by room, with a swarming mass of people. To rebuild that space is something that no small owner can possibly undertake. It would have to be done on a big scale. I am certain that it would have to be done with the assistance of public credit.

Further, I hope that people will not be misled into thinking that you can solve this question by increasing and cheapening your means of transit. It really cannot be done, because the moment comes when you cannot possibly take your people in and out in time to enable them to be at their work. I think that moment has been reached. It is possible that you may hurry up your trains, and you may extend your services, but the great mass of your people will always lie somewhere within four miles radius of Charing Cross, and that area is at this moment so congested that unless you can rebuild the houses, as they now stand, on a much larger scale than at present obtains, you will never be able to house decently and honestly the people who must live in these areas in order to gain their livelihood.

I merely interposed for the purpose of assuring the Government that. I do not intend to criticise hastily anything that they propose, and that I recognise thoroughly the gravity of the task that they have before them. I would entreat them to deal with the problem courageously, and not to fear that the country will fail to support them if they ask for reasonable terms in taking up what, after all, is one of the greatest public needs of the time.

THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF HEALTH (THE EARL OF ONSLOW)

My Lords, the Question which the noble Lord has put to me to-day resolves itself into two parts—namely, the subject of house building, and the subject of the clearance of slum areas. With your Lordships' permission I will deal at once with the first part of the Question. I may perhaps briefly explain, and it will be within your Lordships' recollection, that the late Government undertook two schemes of financial assistance. The first of these was the one to which the noble Lord referred, assistance to local authorities. I need not dwell on the details of that scheme. As the noble Lord pointed out, it was of a very expensive character, and it was found necessary to limit the number of houses which were to be provided under that scheme to 176,000. Then came the scheme of assistance to private persons which came to an end last June. Under that scheme 39,145 houses were constructed. In addition to these, there were 3,056 dwellings provided by converting army huts and hostels into dwelling-houses. The total number of houses which to a certain degree have been financed by Government grant, amounts therefore to 218,201.

The present position of the schemes is as follows. The 39,145 houses built by private persons with the aid of a subsidy have been finished, as also have the 3,056 houses of the other kind to which I referred. Of the 176,000 houses which have been sanctioned under the scheme of assistance to local authorities 145,771 are complete, and of the remainder work is proceeding on 18,547 houses. 11,382 houses have not yet been commenced. Therefore, there remain under construction, or about to be constructed, a total of 30,229 houses. I may, perhaps, observe that that figure approximates to the normal number of houses which were built in a year in prewar days. I think it is obvious that in no case could a continuation of the present scheme, under which the liability of the local authorities is fixed at a penny rate while the Government contribution is unlimited, be contemplated. Already this scheme has involved us in a charge of £9,000,000 a year for many years, and local authorities only find a sum of about £800,000 a year. Your Lordships will agree that it is impossible to continue this scheme.

Our object, as has been stated in another place, is to get back as quickly as we can to private enterprise. Your Lordships will not deny that some form of State assistance towards the solution of this problem was necessary during the years immediately following the war, but now when things are becoming more normal it is obvious that we should get back to pre-war practice as soon as we can. The noble Lord has referred to this point, and to the work done by municipalities. Before the war the great bulk of houses in this country was provided by private enterprise, but a certain number were provided by municipalities—the proportion was about 95 per cent. to 5 per cent.—and this is what we are aiming at now.

It is encouraging to observe that the cost of building has fallen considerably. In some places, perhaps, it has not reached the economic level, but it is approaching it. When I first went to the Ministry of Health in 1921 the cost on an average of a parlour house was £891. By the end of last September this had fallen to £399; that is the average price now throughout the country. It is a little lower than the figure of £450 mentioned by the noble Lord. It has been worked out by the Ministry, and I think he will find it is the correct average price for the whole of the country. For a three-roomed house the average price is just under £300—£297. It shows that there has been a considerable fall in the cost of building, and in order to take advantage of this reduction a considerable number of local authorities and industrial undertakings are now completing working class houses without ally financial assistance from the State. About 15,000 houses are contemplated under these schemes. There are now actually under construction by local authorities, without assistance from the State, between 2,000 and 3,000 houses.

The noble Lord has asked me what the intentions of the Government are in this matter. Both he and the noble and learned Lord said that they would not insist upon any definite answer at the moment, and I am sure your Lordships will agree that it is impossible for the Government, which has only recently been formed, to announce a definite policy on a subject so important. I should like to say, however, that the whole subject is under the most careful consideration and examination. So long as the Government makes grants and subsidies to the building trade, or to any other trade, it checks private enterprise, and is bound to do so. So long as Government schemes which are subsidised hold the field private enterprise will be overshadowed. Now that the subsidy is coming to an end—there are only 30,000 houses to be completed—there are distinct signs that private enterprise is coming forward again.

There are many schemes for the assistance of housing outside a direct subsidy. For example, there is the extension of the existing provisions under which private builders can borrow money at a reasonable rate of interest, and also the interesting scheme outlined by the noble Lord in asking his Question. Every scheme will be most carefully considered. We intend to consider the whole question from the beginning, but we do not pledge ourselves to grant any further State assistance, although we do not exclude the possibility of such assistance being temporarily necessary.

Let me say one word about slum clearances. One must admit that it is the primary duty of owners to maintain their houses in a habitable condition, but, as we know, during the last century, and before, a state of affairs has arisen in some of the great cities and crowded areas which has allowed slums to grow up, and it is impossible for any but local authorities to effect a clearance. The reason is obvious. An area, say, of three of four acres, a slum area, belonging to one owner, has been let on a long lease, relet and sublet on leases of varying lengths and conditions, and unless you have compulsory powers it is impossible to get hold of the property, clear the site and rebuild upon it.

The late Government allocated a sum of £200,000 a year towards meeting the cost of local authorities in carrying out such schemes, and it is the intention of the present Government to continue this grant. Advantage was taken of this scheme of the late Government by a number of the larger authorities, Manchester, Liverpool, Sheffield, Nottingham and many others, and in London the London County Council are proposing a very comprehensive scheme for dealing with slum areas. The execution of their programme will, I am told, involve an annual loss of about £100,000 a year, and the Government has agreed to contribute up to £50,000 to meet that loss. The Ministry of health has very drastic statutory powers in the matter of shim areas which it can put into execution for this purpose. It is the intention of the Ministry to exercise these powers, and continue the policy of the late Government in assisting local authorities. Under the Act of 1919 the acquisition of these areas has become a great deal cheaper because the compensation now is to be the value of the cleared area without reckoning the houses.

For the reasons I have given we feel that the business of house construction should, generally speaking, be the province of private enterprise; the clearance of shuns is the province, or should be the province, of local authorities. As the noble Lord pointed out, house building and shun clearances are largely interdependent, though perhaps not quite so much as he indicated. To clear any slum you must have a place where you can put a portion of the population that is to be cleared out, and having got a small portion out of the area you can then clear the slum in blocks and move them to the houses which have been rebuilt. I think that from what I have said noble Lords will have gathered that it is the intention of the Government to go into the matter of housing immediately, to examine the whole question and to reconsider it with minuteness and in every detail. I may add that a Cabinet Committee has just been appointed to carry out this work, and as soon as possible, when the matter has been carefully examined and reconsidered, we hope to make a further announcement on this subject to your Lordships or in another place.

LORD ISLINGTON

I am much obliged to the noble Earl for his ample answer.