HL Deb 03 May 1933 vol 87 cc714-8

Order of the Day for the House to be put into Committee read.

Moved, That the House do now resolve itself into Committee.—(Lord Strathcona and Mount Royal.)

On Question, Motion agreed to.

House in Committee accordingly:

[The EARL OF ONSLOW in the Chair.]

Clauses 1 and 2 agreed.

Clause 3:

Power of Department to reimburse part of losses sustained under guarantees to building and other societies.

3.—(1) Where a local authority submit to the Department proposals for guaranteeing, in exercise of the authority's powers under paragraph (b) of subsection (1) of Section seventy-five of the Housing (Scotland) Act, 1925, the repayment to a society of advances made by the society to any of their members for the Purpose of enabling them to build or acquire houses intended to be let to persons of the working classes, if the Department are satisfied that the guarantee extends only to the principal of, and interest on, the amount by which the sum to be advanced by the society exceeds the sum which would normally be advanced by them without any such guarantee, and that the liability of the local authority under the guarantee cannot be greater than two-thirds of that principal and interest, the Department, if they approve the proposals, may, with the consent of the Treasury, undertake to reimburse to the local authority not more than one-half of any loss sustained by thorn under the terms of the guarantee:

Provided that any proposals made to the Department under this section shall—

  1. (a) include such particulars as they may direct as to the number and type of the houses intended to be built or acquired and the approximate size of them measured in superficial feet; and
  2. (b) snake provision for securing that, except in so far as the Department may in any particular case dispense with the requirements of this paragraph,—
    1. (i) the number of such houses in relation to the area occupied or intended to be occupied by and in connection with them will not exceed the rate of twelve to the acre; and
    2. (ii)every such house will he provided with a fixed bath in a bath-room.

THE EARL OF KINNOULL moved to insert at the end of subsection (1): and (c) make provision for securing that in the case of houses to be built a fair-wage clause which complies with the requirements of any Resolution of the House of Commons applicable to contracts of Government Departments, and for the time being in force, is inserted in all contracts or agreements for advances between the society and its members, and in all contracts for the construction of the houses.

The noble Earl said: The object of my Amendment is to put a fair-wage clause into this Bill, and I would like to point out that there is nothing new in doing that. For years all Government and local authority contracts have contained a fair-wage clause. Indeed, the State has insisted for a generation on a fair-wage clause in all contracts. In this very Bill the Secretary of State for Scotland, in Committee in another place, admitted that a fair-wage clause should apply. Mr. Skelton on the 10th of April also admitted it and said: The position will best be maintained by the circular which my right hon. friend proposes to address to local authorities, if and when the Bill passes.

I cannot see for what reason he will not put it into legislation in the Bill. It seems to me most unreasonable. Some employers are good and others are not, and it may well be that in the future some bad employers may refuse to carry out the agreement they have made. If that occurs stoppages will at once ensue, and there is no reason whatever why this Bill should not include a clause as regards wages and other conditions. I know that the Government will riot accept my Amendment, but I hope that possibly your Lordships may do so, and I beg to move.

Amendment moved— Page 4, after line 10, insert the said new paragraph (c).—(The Earl of Kinnoull.)

LORD STRATHCONA AND MOUNT ROYAL

My Lords, I am afraid that the Government are unable to accept this Amendment. As the noble Earl is aware, and as he said, the Secretary of State is in sympathy with the object of the Amendment, and hopes that the Government's fair-wage clause will be observed in all contracts for the erection of houses under Clause 3 of the Bill. The Secretary of State considers that the Amendment which is proposed would be inappropriate to the circumstances under which the guarantee is given under Clause 3. What the clause does is to provide a guarantee to the building societies for a portion of the money which they may lend on houses erected for the purpose of letting them to persons of the working classes. It is not a guarantee of a contract for the building of the houses. It may be pointed out that this is no new form of guarantee. Since 1925 the local authorities have had power to guarantee building society loans without any requirement as to a fair-wage clause. All that the Bill does is to make the State responsible for one-half of any loss which the local authority may incur in respect of the guarantees which they may in future give to building societies in cases where these societies advance money' beyond the sum which they would normally advance.

The introduction of the Amendment might have a hampering effect on the scheme. The main activity of the building societies is to lend money for the erection of houses: they do not themselves build houses. At the best, the loans which the building societies will advance for houses erected under Clause 3 will form only a small part of the whole activities of these societies. It would appear therefore to be unsound legislation to put in a provision with respect to the fair-wage clause in one branch of the societies' activities and to have what must always be the greater part of their activities unaffected by that provision. On the question of the practical difficulties of enforcing the provisions of the Amendment two observations may be made. The first is that to an extent, and possibly to a large extent, the person providing the houses will himself be a builder, using his own staff, and in that event there would be no contract for the erection of the houses. Secondly, it would be a matter of extreme difficulty to verify the observance of the condition in contracts which reed never come near a Government Department, and need not come before a local authority, and are really the private concern of the investor and the builder. To import a restriction of the kind proposed into private business would really be an abuse of the advantage which the State would gain by being is the position of a guarantor to a small extent.

It has never been the practice of Parliament to insist on the insertion of the fair-wage clause in contracts other than those made by local authorities. As I have said, the Secretary of State is anxious to secure the object which the noble Earl has in view and I am authorised to say that he proposes, in the circular to local authorities explaining the provisions of the Bill, to ask them to exercise the best influence that can be exercised to maintain the operation of the fair-wage clause. In the circumstances I hope that the Amendment will not be pressed.

On Question, Amendment negatived.

Clause 3 agreed to.

Remaining clause agreed to.

Bill reported without amendment.