§ Order of the Day for the Second Reading read.
§ THE PAYMASTER-GENERAL (LORD ARNOLD)
My Lords, this Bill is the first step in the Government housing policy. It is a modest measure, but in our opinion a very necessary measure. The effect of the Bill is to retain the subsidy so far as what are known as the Wheatley houses are concerned. The reduction was decided upon by the 201 late Government, and was to have come into operation on the 30th September next. Happily it is not yet in operation, and the effect of this Bill will be to keep the subsidy at its present level. Before proceeding to the details of the measure I think perhaps it would be as well if I reminded your Lordships what is the position in regard to housing subsidies. Apart from the Addison subsidy of 1919, which is now ancient history, the housing subsidies have been of two kinds, which have come to be known, after their authors, as the Chamberlain and Wheatley subsidies. The Acts governing those subsidies are dated 1923 and 1924 respectively. The Chamberlain subsidy dates from 1923, and the Wheatley subsidy from 1924.
I would further call your Lordships' attention to the fact that the Chamberlain subsidy has in the main provided houses for sale, whereas the Wheatley subsidy was definitely intended to encourage the construction of houses to be let. The Chamberlain subsidy was, by the action of the late Government—the same action as governed the whole of these subsidies—to come to an end after September 30 next in England and Wales. It was to remain in force on a reduced scale in Scotland. The present Government concur so far as the Chamberlain subsidy is concerned, and therefore that subsidy will come to an end at the latest on September 30 next, except in Scotland, where it will continue in force at a reduced rate. The position with regard to the Wheatley subsidy is different. The most urgent need is for small houses to let, and the Wheatley subsidy encourages the construction of these houses, and the Government holds that it is its paramount duty to take every reasonable step to help forward the construction of small houses to be let. The Labour Party was strongly opposed to the reduction of the subsidy, which was enacted in December of last year to come into operation after September 30 next. Therefore nobody can be surprised that one of the first acts of the present Government is to reverse engines in this matter, and to retain the subsidy at the existing level.
In order to make clear what has been happening, and will happen, with regard to the Wheatley subsidy, I will venture to give your Lordships a very few figures. This is the subsidy under the Act of 1924. 202 At that time the Wheatley subsidy was to be £9 per house for a period of forty years, except in respect of agricultural houses in agricultural parishes. There the subsidy was to be higher—namely, £12 10s. per house for forty years. It was enacted in the 1924 Act that these subsidies should come up for revision every two years, and therefore the first revision was at the end of 1926, and then the subsidy was reduced from £9 per house to £7 10s. per house for forty years, and in the case of agricultural houses the subsidy was reduced from £12 10s. to fill per house. Then we come to the revision of last December, because that was the next two years' revision. The subsidy was to have been reduced from £7 10s. to £6, and in the case of agricultural houses from £11 to £9 10s. It is with this reduction that the Bill is mainly concerned.
The figures for Scotland are a little different, but I need not refer to them, because I am dealing only with England and Wales. It is with this reduction, which was to have come into force at the end of September next, that this Bill is mainly concerned. The Bill cancels that reduction, and the effect of the Bill will be that the subsidy will not be reduced but will remain at £7 10s., and the agricultural subsidy at £11, as at present. That is the main effect of the Bill, and it is significant that this Bill passed through another place without a Division. I do not say without discussion or criticism, but there was no Division. The fact is that there is an overwhelming case, as I hold, for this Bill. Indeed, when it is remembered that the Wheatley houses are almost entirely constructed by local authorities, and that the local authorities of the country were unanimous in opposition to the reduction of the subsidy, I think it is clear that there is a very strong case for the Bill.
Now that is what the Bill does, and I want to come to a few of the arguments that have been used against it. The controversy about this Bill, so far as there is controversy, turns chiefly upon the view which is taken of the effect of the subsidy on prices. The position of the late Government, as stated by Mr. Neville Chamberlain, was that a reduction of the subsidy lowered the price of houses, and therefore to reduce the subsidy was a good thing to do. The price of houses has fallen somewhat during the last few 203 years, and Mr. Neville Chamberlain appears to contend that the fall is due to the reduction of the subsidy in 1927, and perhaps (though this was not very clear) to the intended reduction which was to have come into force on October 1 next. But Mr. Neville Chamberlain, so far as I read his utterances, appears to give no weight to the fact—a very relevant and very important fact—that there has been a considerable general fall in prices during the last few years. I cannot see that referred to in his arguments; he seems to base them upon the fact that there has been a reduction of the subsidy. He does not prove anything; he asserts that it is so. I submit that those who favour reduction in the subsidy put their case too high. It really will not do to argue, as they appear to do, that a fall in prices is due to a reduction of the subsidy, and that that is the only factor of importance which is operating in this matter. It will not do to ignore the general fall in prices which has taken place, and which surely must affect the cost of houses, just as it affects the cost of all other commodities.
What at any rate is certain is that the reduction of the subsidy in 1927 led to a very unhealthy and undesirable state of things. The building industry was dislocated. A very undesirable state of things came about both before the reduction of the subsidy and afterwards. I can prove this with a very few figures. Before the reduction of the subsidy, at the end of September, 1926, when things were going more or less normally, the number of subsidised houses under construction was 102,976. The reduction of the subsidy took place on September 30, and almost at once the number of houses under construction rose considerably, and at any rate great efforts were made to push forward with houses which were already under construction in order to get the advantage of the subsidy before it was reduced on September 30. And whereas, as I have said, in September, 1926, the number of houses under construction was 102,976 it had risen by May, 1927, to 119,005 and actually in the month of September, 1927, there were brought to completion 52,261 houses. Then the crucial date was past. What happened? The number of houses under construction—not being brought to completion—in October, 1927, was 48,212 against somewhere about 100,000 in October of the 204 previous year. And in the whole of 1928 the number of subsidised houses under construction, never reached so high a figure as 60,000 at one time. I think those are very remarkable figures.
The effect on unemployment was equally striking. Take plasterers. In October, 1926, the proportion of unemployed among plasterers was 1.8 per cent.; in October, 1927, it was 7.5 per cent., or about four times as much; in November, 1926, it was 2.9 per cent., and in November, 1927, it went up to 11.4 per cent.; then in December, 1926, it was 4.1 per cent., and it went up to 17.8 per cent. in December, 1927, or rather more than four times as much. That, of course, is a very un desirable state of things. I think it is a clear case of cause and effect. The experience of this cut in the subsidy was a great rush to build before the date when the subsidy terminated, and then after the axe had fallen the ordinary development of building was broken. That is clearly what it came to: great activity before the subsidy was reduced, after wards serious unemployment in the building industry. And history was repeating itself—I do not say to the same extent—this summer in regard to the intended cut in the subsidy next September 30, now fortunately cancelled. The present Government has come in and has reversed this policy, has introduced this Bill, which should rapidly produce, and I believe is producing, a steadier and healthier state of things altogether. There was a great rush prior to the General Election in order to get houses finished so as to get the subsidy before it was reduced next September 30, and every possible device was being used to urge on the completion of houses before that date; and after that date, had it not been for the fact that we now propose to retain the subsidy at its existing level, I have no doubt there would have been a great slump in building, as there was in 1927.
I submit with great confidence that really what is needed in this matter, so far as it can he ensured, is greater continuity and steadiness. Feverish scrambles like those which I have been describing are not good: they are not good for the building trade, they are certainly not good for the workers, and they are not in the interests of good housing. It is the general opinion of local authorities—and these Wheatley houses are nearly 205 all of them built by local authorities—that these violent changes should be avoided, and the Government has received assurances from a very important body representing local authorities that with the passage of this Bill their programmes will be continued without hiatus. I do maintain that the attitude of the Party represented by noble Lords opposite in regard to these housing subsidies is not tenable. We do not agree with this contention about the effect of subsidies on prices, and we hold that the policy of the late Government has been to dislocate the building trade and to reduce most seriously the number of houses being constructed.
In a word, the direct outcome of the policy of reducing the subsidy is that tens of thousands of people who now might be occupying rented houses are not occupying them because they do not exist, whereas they might have existed. That is no over-statement. It is, I hold, a very trenchant argument for this measure. Within reasonable limits the governing consideration in this matter is the production of houses; it is houses we want. Noble Lords opposite appear sometimes to be more occupied with other considerations than the production of houses, and certainly the experience of the last few years and the figures of the number of houses under construction prove that, despite the admitted great need, the late Government did not pay sufficient regard to the importance of maintaining an adequate house-building programme. I do not think I need say more at this stage, beyond emphasising that this is only the first step in the Government's house-building policy. It is a necessary step, but the Bill does not profess to be in any way a large measure. It will keep things moving for the time being. It will give the Government time to turn round. The whole matter of housing and slums is receiving the most earnest and constant attention of the Government, and in due course our plans for housing and slum clearance will be made known. I beg to move that the Bill be read a second time.
§ Moved, That the Bill be now read 2a.—(Lord Arnold.)
THE EARL OF ONSLOW
My Lords, I do not want to raise any complaint against what has occurred because exactly the same thing occurred during the time 206 I had the privilege of sitting on the opposite Bench. This Bill was only brought to your Lordships' House at 9 o'clock last night and copies were not circulated this morning; at least, I did not get one. I think it as well to mention such things when they occur in the hope that possibly on another occasion they will not happen. I do not wish to complain about it; no doubt it could not be helped.
We had a discussion the other day on the business of the House and the noble and learned Lord who leads the House told us that a great many of the Bills which were coming from another place were non-contentious and that some of them were Money Bills. He did not say so, but he seemed to infer that a Money Bill could pass through your Lordships' House without any prolonged consideration or discussion. I do not think that view would be shared by any of your Lordships. If it was the view of the noble and learned Lord I am sure it was not shared by my noble friend Lord Beauchamp, who leads the Liberal Party, because he invariably criticises Money Bills when they come before your Lordships' House. It is, I think, a right and proper practice for those Bills to be discussed, although, of course, the functions of your Lordships' House do not permit such measures to be taken with them in the way of amendment as may be taken in another place. Still, they should be adequately discussed in your Lordships' House.
That is more especially the case when a Money Bill that is before your Lordships happens to be a bad Money Bill. With the very greatest respect to my noble friends opposite I venture to suggest that this is a bad Money Bill. It is a very different Bill from what we were led to expect originally. It is a very much smaller Bill. When, on a somewhat celebrated occasion the Prime Minister, under the auspices of the Secretary of State for Air, flew to attend a Socialist Party meeting at Durham, he used these words in the speech which he addressed to that meeting:—As soon as they got the King's Speech they would introduce a Bill to put back the subsidy for housing which was contained in the 1924 Act.I am told that a different announcement was made in another place. Still, I do not think anybody will deny that that 207 was part of the speech made at Durham by the Prime Minister. So, when we consider the Bill, we see that when the Government come down to realities they are unable to go so far as Mr. MacDonald suggested at Durham, and that all they can do, or dare do, or will do is to propose to leave things in statu quo—to leave things as they are. It is true to say, as the noble Lord said in introducing the Bill, that it is a very modest measure. They are introducing what I may describe as only a small tadpole at present. The noble Lord has promised that they are nurturing another which will grow into a very formidable reptile at some indefinite date. We can only wait and see. But whatever the formidability of the reptile which we shall see introduced by the Government at some indefinite date in the future, it is not going to deal with subsidies. This is the last word of the Government on subsidies. I believe that is the case and it was stated, I think, in another place last night. I am subject to correction, of course, in the reply which the noble Lord will address to the House.
The noble Lord, Lord Arnold, told your Lordships that there was an overwhelming case in favour of this Bill. I venture to think that there is, on the contrary, an overwhelming case against it. It is a mischievous and retrograde measure. It is true, as the noble Lord said, that it will reverse the engine. It will set the clock back; it will not advance it. He told us what were the objects of the Government in the matter of housing. I do not think your Lordships would differ from what he said, that there was an urgent need for plenty of cheap houses. I agree, and we all wish to increase the supply of houses, and of cheap houses. Our objects are the same; our wishes are perhaps the same; but the methods by which we seek to attain those ends are very different indeed. If I understand my noble friend Lord Arnold aright, the contention of the Government is that the reduction of the subsidy does not tend to lower the price, and that the reduction in the subsidy does tend to reduce, the output. Those are the two propositions which I think he put before your Lordships. Let me examine them for a moment. It is a good many years since I first became connected with the Ministry of Health. It was in 1921 that I entered that Department as Parliamentary 208 Secretary. At the same time my noble friend Lord Melchett, then Sir Alfred Mond, entered the Ministry as Minister. I wish he was here to-night because he would put the case much better than I can. I remember that what struck us both at that time was the appalling cost of houses under the Addison scheme.
The noble Lord said that there are a great many factors which tend to increase the cost of houses and I would not controvert that statement for a moment. There are also a great many factors which tend to lower the cost of houses, such as the fall in the price of building materials, which he mentioned. But experience and experiment have shown that the subsidy is one of the factors in the cost of building houses. Let me go very shortly through the figures. In July, 1921, just after the time when Sir Alfred Mond and I entered the Ministry, the price of houses under the Addison scheme was £695. I want to state my case perfectly fairly. The price had fallen to a certain extent. It had been £717. Then it rose to £875, and it was at the very high figure of £695 in July, 1921. After that the subsidy was no longer made payable and the result was that the price fell very rapidly and in December, 1922, was down to £346 per house. The next step was the Act of 1923 which gave a subsidy of I think it was £75 per house. That was followed by a rise, and the price went up from £346 to £386. That was the figure at which it stood in January, 1924, when the Government to which the noble Lord opposite belonged came into Office. Then there came the Wheatley Act subsidy which this Bill seeks to continue. The subsidy under that Act was, as the noble Lord has stated, considerably more than that under the Act of 1923. What was the result? The price went up again with a bound by £52 per house, and then it went on more gradually until it reached £451. There it stayed until December, 1926. Then the late Government made the announcement that the reduction of the subsidy would be undertaken and that it would take place in October, 1927. Down came the price from £451 to £339 eventually. That was the lowest price reached; that is to say, there was a reduction in the price of £112 per house.
209 From that short summary it is clear, I think, that whatever factors there might be in reducing or increasing the price of houses, one constant factor has existed all through, and the price has regularly risen and fallen as the subsidy rose or fell. There has been that difference always. I contend that if you want cheap houses—houses that the poorest members of the community can afford to pay for—the way to get them has been shown by a reduction of the subsidy. By doing this the last Government reduced the price of houses to £339. That is cheaper than houses have ever been since the War.
I come now to the second proposition, that reduction of the subsidy reduces output. What evidence is there of that? My noble friend Lord Arnold relied on a comparison of the figures of 1927. I do not think he mentioned any other year. Let us go a little more deeply into that. I think I shall be able to show to your Lordships that 1927 was a wholly abnormal year. Let us take the other six years, the figures for which I have before me. The output in 1927 was 212,000 houses built. In 1925 and 1926 the output was respectively 95,000 and 131,000. In 1924 it was only 34,000. Then we come to 1928. I am speaking of State-assisted houses now, and urn giving figures which were given in another place, and I do not think they are subject to contradiction. In 1928 there were 101,000 houses built and the estimate for this year, according to the Ministry of Health, is about 120,000, or 20 per cent. more than were built last year. The average, if you take the six years together, from 1924 to 1929 (estimated), is about 110,000 houses a year. If you take out, as I think it might be fair to take out, the 34,000 built in 1924, you get an average output of 130,000 houses during the course of the five years.
But we must not forget that these figures deal only with assisted houses; there must be considered also those which were built without any subsidy—houses built entirely by private enterprise. In the year 1928, there were no fewer than 65,000 of such houses built, which raised the total from 101,001 to 166,000, or, to be perfectly accurate, to 166,415 altogether in 1928. If you add the estimated number of State-assisted houses for this year, 1929–120,000—and the same proportion 210 is maintained of non-assisted houses we ought to get a total this year of something like 200,000 houses. Even granting the fact that increased subsidy means more houses, may there not be this danger, that you will have to put too high prices upon your houses, and you will reach a price which makes it difficult for those for whom the houses are mainly intended, for the poorer members of the community, to pay the rent? That seems to me the great difficulty—that you tend to increase the price of the houses by increasing the subsidy. I maintain that that will occur and has occurred by increases of the subsidy.
Take another point. Is not 200,000 houses per annum all told a very respectable figure, especially when the price is as low as £339 for the smallest house? It is difficult to say, but generally speaking, I think it is admitted that the average wastage—shall I put it?—of houses is about 100,000 houses a year. That is to say, you want every year, without providing any additional houses for the population, 100,000 houses to repair the wastage, to replace old houses and so forth, and if you have double that number it is not so very unsatisfactory. We should like to see more houses provided which will be within the means of the people who want thorn. If you pass this Bill, and of course your Lordships will pass it—I am not going to ask you not to do so—is there any real evidence that the supply of houses is going to be increased by the maintenance of the subsidy? Why should local authorities reduce building if the subsidy is reduced? The reason for reduced building would be that the cost of the houses was increased. By the reduction of the subsidy the cost of houses has not been increased but reduced by £112. Of that £112, £74 10s. is a clear gain to the local authority. I think £25 is the amount of the subsidy, and £12 10s. is the local authority's contribution. There remains, therefore, £74 10s. Why should the local authority, when they can get houses so cheaply, let down their output? I do not think that question has ever been adequately answered. The policy of the late Government was to maintain a high rate of building and at the same time to reduce the cost of building to the lowest point in order that the houses might be readily acceptable to the poorest members of the population. That policy of my right hon. 211 friend Mr. Neville Chamberlain and the late Government was, I maintain, eminently successful. The present Government do not agree with that. They say: "We will do better with a new policy," and they propose to change the policy of the late Government. All I can say is that the decision upon that is in the future. We shall see who was right. In the future we shall know whether our policy was right or whether the present Government are right in their policy. With that final observation I leave the matter to your Lordships' decision.
THE LORD BISHOP OF SOUTH-WARK
My Lords, I can join with the noble Earl who has just sat down in paying a tribute to the magnificent work which was done by the late Minister of Health in providing new houses, but there was one point in his policy in which I think he was mistaken and that is the very point which we are considering to-night—namely, the reduction of the subsidy. I know that there are many noble Lords, like the noble Earl opposite who has just spoken, who believe that a reduction in the amount of the subsidy is naturally followed by a reduction in the cost, and it is impossible to deny the fact that the two have gone side by side and that the figure has dropped from £450 to £339 per house. But I think it must be borne in mind that £50 of that reduction is due to the fact that the houses now building are of a rather smaller size, and also—and I think this answer goes more to the root of the matter—that when you have a subsidy local authorities put out a large number of orders. Where there are a large number of orders there is no necessity for the builders and contractors to reduce their prices, for they know that there is work waiting for them. When, however, the subsidy is reduced there comes the element of uncertainty in building. Local authorities do not push forward orders in anything like the same number, and the builders who before found themselves over occupied now have to compete one with another, and in competing they reduce the charges which they put in their tenders for the houses.
That, I think, is another interpretation which may be quite rightly and fairly given to the fact that the reduction in price has accompanied the reduction 212 in subsidies; but it does not follow that if there was another reduction in subsidy there would be an equivalent reduction in price. There are many experts who believe that under conditions existing at present the price has reached rock bottom, and that it is unreasonable to expect, unless there is a change in the rate of interest or the method of production that the cost will become lower. But if there is doubt as to how far we can fairly associate the reduction of cost with the reduction of the subsidy, I think there is no doubt whatever that with the reduction of the subsidy there has been a reduction in the number of houses built. I find that I am about to use some of the figures which were used by the noble Earl, but I think that I shall put upon them a somewhat different interpretation and I shall possibly give them in a slightly different order.
In 1924 there were 36,000 subsidised houses built; in 1925 the number went up to 92,000: in 1926 it rose again to 131,000; and in 1927, the abnormal year when the reduction of the subsidy was in sight, the number rose to 212,000. Last year the number of completed houses—I am taking September as the end of the year—dropped to 101,000. This year is, of course, once more an abnormal year, since the subsidy was to come to an end, and the same kind of conditions ought to apply as applied in 1927. But, instead of finding 212,000 houses approaching completion, we are told that in September there will probably be only 120,000. I think those figures show quite plainly that when you reduce the subsidy the number of houses built is also reduced.
Notwithstanding all that has been done upon a splendid scale by the late Government, we have to bear in mind that so far the problem of the slums has not been touched. That problem cannot be touched until you have a sufficient number of houses, let at low rents, to which the people who are now living in the slums can move. The people living in the slums have not, to any large extent, moved out from them, partly because the rent of the new houses is too high—I shall come back to that in a moment—and partly because the new houses are too far from their ordinary places of occupation. Let me give one illustration. There is one of these new districts which 213 I know well. When building started in it three or four years ago quite a number of people came to it from the slums. I was in that district only a few days ago and I made very careful inquiries as to how many people now in that district had actually come from the slums. I was told that practically all those who had once come from the slums had moved back again, not because they disliked their new houses, not because they disliked their new surroundings, but because they could not afford the rent and they could not day by day undertake the expense and the loss of time of the journey to and from their work. We shall never deal with the slum problem adequately unless new houses in very large numbers and at a low rent are erected at a reasonable distance from the work in which these people are engaged.
Now I turn to the problem of rent. I think it is generally recognised by all housing experts that the ideal standard house for a man and his family is one with three bedrooms and a superficial area of 750 square feet. Such a house, under present conditions, cannot cost less than £400, and in that I am including the £50 usually estimated for land and drainage. If you are to build a house at that price, how are you going to bring the rent within reasonable reach of the man in the slum whom you desire to see occupy it? Many of these men can afford only 11s. a week. You cannot possibly reduce the rent to that amount unless you have a subsidy. No practical suggestion has been advanced as to how you are to reduce the cost of building under present conditions so as to enable a man to pay a rent of 11s. a week. A subsidy now is inevitable unless house-building for these poorer people is to stop. There are many of these people—I am thinking of unskilled labourers with families—who cannot afford more, than 7s. 6d. a week. The noble Earl who has just spoken said that he hoped that this was the last word in subsidies. I wish I could say that I thought that it was going to be the last word in subsidies, but I am quite convinced that you will never be able to supply decent houses for these poorer people unless later on you increase the subsidy so as to make it possible for them to go to a house for which they can pay a rent of 7s. 6d. a week.
214 I am not arguing that this subsidy should be at a level rate, so that everyone dwelling in these houses should share in it, but I believe that, if the problem is to be solved, you will be driven back upon a policy of giving special rent allowances for children to those who are living in these houses. I know that there are a number of economic and other objections that can be rightly urged against that policy, but the alternative is to allow these people to continue living in the slums without any hope of redress or change. I know that any scheme for dealing with the slums will cost large sums of money. That is quite inevitable. But when you realise the kind of condition under which people are living in those slums you will feel that almost any expenditure is worth while.
I do not know if any of your Lordships have seen the survey which was issued quite recently by what is called the Westminster Survey Group, dealing with the housing conditions in the Metropolitan Borough of Southwark. That survey was carefully carried out by competent and experienced investigators, and they describe a state of things which is nothing less than horrible. In street after street they found people living in conditions of darkness, dampness, and overcrowding, and in houses in which there was vermin. Sometimes a man and his wife and children were living in basements which have long ago been condemned as unfit for habitation. They quote the fact that the Medical Officer of Health for Southwark said that in one year there were ten thousand houses in Southwark alone that were not in a state reasonably fit in all respects for human habitation. When we are brought into personal contact with conditions like this, we feel that it is worth almost any subsidy to try to remove them. I feel it most unjust to blame the authorities of a poor borough like Southwark for the present conditions of affairs. The matter is far too large for any borough, or any medical officer of health or any individual to deal with. It is a problem which must be dealt with by the nation as a whole. I am glad that the Government have decided not to reduce the present subsidy. The measure before us is extremely simple. It simply means that the subsidy now existing is to be continued. It will give the Government time to prepare their plans for a measure 215 dealing with the slums which, I hope, will be both comprehensive and courageous.
§ LORD ARNOLD
My Lords, the right rev. Prelate, by his intervention in the debate, has very much lessened the task that will devolve upon me in endeavouring to say something in reply to the observations of the noble Earl opposite. I very much appreciate the speech of the right rev. Prelate. As your Lordships are aware, he takes a very deep, consistent and persistent interest in this matter of housing, particularly the housing of the very poorest, of whom he has so many in his diocese, and I am sure that I express the opinion of all your Lordships in saying that we always listen to him on this matter, as on other matters, with great advantage. I wish to say a very few words. I do not want to make debating points against the noble Earl who, if I may be allowed to say so, made an extremely interesting speech, which I have endeavoured to follow as closely as I could. He used a great many figures, as is perhaps inevitable in this matter. Let me take one or two of his points. He complained that the Bill was not circulated. I do not know how that happened.
§ LORD ARNOLD
It ought not to have been so. I am sorry that it was so, and I will make inquiries. In regard to the general position it is true, of course, that there is a congestion of business this week, but what I may describe as more or less an agreement was come to about the course of business. When the noble and learned Lord said that Bills were more or less non-contentious, the noble Marquess the leader of the Opposition called attention to this Bill as an important Bill. Therefore, that point was not lost sight of in the general discussion. I found it a little difficult to follow the adjectives of the noble Earl, having regard to what happened in another place. He first said the Bill was a bad Bill and then, warming to his subject, that it was a mischievous Bill. Yet this Bill to which he applies these adjectives was not divided against by his Party elsewhere, and was not very seriously opposed; so I think he rather overstated the position. Despite 216 these rather alarming adjectives he said a little later that the Bill was a very modest Bill and all it did was to leave things as they are. I submit that the noble Earl cannot have it both ways.
The right rev. Prelate proved quite clearly that the subsidy had increased the production of houses over a course of years and that the reduction of the subsidy has decreased the production of houses. I think that is not now a matter of controversy; it is a matter of statistical fact. That is one reason why the Government in view of the urgent need of small houses feel that this Bill is a right Bill. I do not want to make this a point against the noble Earl, but if the subsidy is so harmful—I do not think that is putting it too high in view of what he said—may I ask why the late Government did not take steps to bring it to a speedy end? I would like to put before your Lordships a few figures on the relationship between subsidy and prices. The noble Earl gave some figures, so we shall not quarrel about where I begin. I admit that in these matters of statistical comparison as between prices and subsidies a good deal may depend upon where you begin and where you end. Some years ago, of course, there were abnormal influences at work. The noble Earl said with some show of triumph that owing, as I understood the argument, to the action taken by the late Government prices are lower than they have been since the War. In reference to that I would suggest that the price of nearly everything else is lower.
§ LORD ARNOLD
Prices have come down, as we all know. He said that in December, 1922, the price of the non-parlour house was £346. That I believe is correct. In the first quarter of this year it was £339, and of that £339 the capitalised value of the subsidy was estimated to be £187. That brings it down to the figure of £152. If there were no subsidy could you construct a house for £152? Of course you could do nothing of the sort. I think it is perfectly clear that if you are going to produce houses at a price which will enable them to be rented by the poorer classes of the community—and they are the people who are 217 most concerned—you must keep the subsidy in being. The right rev. Prelate referred to this vital matter of rent and these figures mean that the actual charge so far as interest and sinking fund are concerned is only £152 because the rest is subsidy. I am not going into five places of decimals, but broadly what I have said is true. Then again, it is well-known that conditions which obtain in England differ from conditions which obtain in Scotland. The subsidy was reduced in England, but it was not reduced to the same extent in Scotland. According to the noble Earl prices in Scotland ought to have remained the same, but they have come down.
§ LORD ARNOLD
I do not say that prices came down to the same extent, but prices did come down to some extent, proving clearly that the effect of the subsidy in these matters can be greatly exaggerated. I do not think I need go into further figures. No doubt this is a matter which could be argued backwards and forwards for a considerable time, but I think the main points from both sides have been put, and I feel myself—although perhaps I am not quite unprejudiced—that the balance of argument is strongly in favour of the continuance of the subsidy. That is what this Bill secures and I hope your Lordships will assent to its being read a second time.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.