§ 4.33 p.m.
§ Order of the Day for the Second Reading read.
§ THE POSTMASTER-GENERAL (THE EARL OF LISTOWEL)
My Lords, my noble friend the Leader of the House has apologized for the fact that copies of this Bill were not circulated in time for your Lordships to study it before the Second Reading. I should like to join him in that expression of apology and regret. However, if I try to explain its contents to your Lordships this afternoon, it may be easier for you to make your criticisms at a later stage. This Bill might be described, I think not unfairly, by some of its less-well-disposed critics, as a miscellaneous collection of unrelated items, rather like the contents of a schoolboy's pockets; but there is at least this difference, that it is not a random or haphazard collection. The different items, though they may indeed bear little relation to one another, do serve the common 553 purpose of carrying the Government's housing programme one stage further. When it is passed into law, it will make possible an increase in the number of houses to be erected in the near future. It will speed up the tempo of the building programme, and it will help to keep down the charge for rent by reducing building costs.
Another feature of the Bill, which I hope will commend it to the House, is that most of it is a legacy from the Caretaker and Coalition Governments. My former colleague at the Ministry of Health, Mr Willink, said in another place that he found in this Bill a number of proposals which had been in the minds of both the previous Administrations. Indeed, there is good reason to suppose that the major portion of this Bill was already drafted by the Caretaker Government, whose span of life was too short for the Bill to be introduced into Parliament. If the course of events and the General Election had not taken such an unexpected turn—unexpected, I imagine, to almost all concerned—the noble Lord, Lord Woolton, might well be standing in my place this afternoon to ask for your Lordships' approval of the present Bill.
The Bill falls into four parts, with which I shall deal seriatim. Clauses to 4 of the Bill seek to provide the capital fund required by the Minister of Works to discharge the various functions described in Clause 1 (1). The Minister of Works is being authorized to arrange for the placing of bulk purchase orders for building materials and components. This procedure is not, I hasten to add, an alternative to production agreements, but a means of supplementing such agreements between the Government and industry. The placing of bulk purchase orders was recommended by the noble Lord, Lord Woolton, when he spoke to your Lordships in the last housing debate in this House; and I believe every one shares the view that it is in fact a good way of reducing the cost of these materials and components. The Minister may also arrange for the manufacture of any structural necessities, and if necessary for their distribution to the building firms that will actually use them. Finally—and here I am dealing again with Clause 1 (1) (c)—when called in by local housing authorities, as may easily happen in (to give your Lordships two examples) "blitzed" or 554 rural areas, the Minister may send reinforcements of direct or contract labour to the sites on which they will be required to work on the construction of houses.
Your Lordships are aware that the Minister of Works is responsible for assessing the material requirements of the whole building programme which includes, but of course goes beyond, the housing programme. He must ensure that materials will be available to the extent required and of reasonable prices over the next five years. Let me explain the relationship between the Ministry of Works and the other Government Departments concerned. The Minister of Supply is responsible for the provision of equipment such as baths, cooking and heating stoves and electrical equipment. The President of the Board of Trade is responsible for timber and paint. The Minister of Works, however, still has the over-all responsibility, and the other two Departments will act only at his request. The Ministry of Supply, for example, so far as it places bulk purchase orders or makes production agreements with specific firms, will simply be acting as the purchasing agent for the Ministry of Works.
Noble Lords may not unnaturally object that, as the Minister of Health has so far refused to announce a phased housing programme, it must be difficult for the Minister of Works to arrange for the production of materials and equipment in accordance with any definite or specific programme. The answer is that the Minister of Health has made provisional estimates on which the Minister of Works is acting, and that these estimates are being checked and revised from month to month as the capacity of the building industry develops. The estimates which have been made are necessarily tentative and may well be optimistic. It is not, therefore, as has been said on other occasions in both Houses, in the public interest to announce them, at any rate at this stage. Your Lordships can be assured, however, that the Ministry of Works is working to a definite and detailed programme in estimating the material requirements of the building industry over the next five years.
It is not possible to say now how far it may be necessary for the Ministry of Works to place these bulk purchase orders in order to stimulate the production of the 555 materials needed in large quantities and at reasonable prices. The employment of somewhat unorthodox methods such as bulk purchase orders, manufacture in Royal Ordnance factories, or production agreements, may well prove necessary over a very wide range, particularly of those items of equipment for which the Minister of Supply is responsible. Government machinery is not being used where the trade is equally capable of producing and equally willing to produce the materials needed at prices which the Government could not better; it is being used only when the trade is unable or unwilling to meet the immediate and urgent demand.
To go back to the Bill, reference is made in Clause 1 (1) (b) to arrangements for the Ministry of Works to distribute materials or equipment. The Government will make the greatest possible use of existing channels of distribution, including the builders' merchants. Direct Government arrangements will be made only where the existing machinery of distribution is unable to supply building agencies at a reasonable price. The working capital with which the Treasury, under this Bill, is to provide the Ministry of Works is by Clause 1 (3) not to exceed £100,000,000: and no payments into this Fund are to be made after the end of September, 1950. The intention is that the Fund should be self-supporting, as the Ministry of Works will not, save in the case of factory-made houses mentioned in Clause 3, sell materials or equipment which they have produced or purchased below cost. One hundred million pounds represents, in effect, the maximum overdraft which the Government are guaranteeing. It does not represent net expenditure, and the intention is that at the end of the story the Fund shall show neither profit nor loss. Full accounts will he prepared each year by the Ministry of Works according to directions which will be given by the Treasury, and these accounts will contain a trading account, a profit and loss account and a balance sheet.
Now a word about prefabricated houses which bulk very large in this scheme. As the House is aware, the Government have been experimenting with factory-built houses, as a means of helping out the traditional method of brick building on the site. A number of experimental proto- 556 types have been erected, and the most hopeful of these have been chosen by the Ministry of Works for further development. In October, the Ministry of Health sent a circular to local authorities giving them information about the best methods of prefabrication; and these authorities were asked to say in reply which of these types they would like to order and in what numbers. As yet, the replies received are not by any means complete, but those that have been received show that local authorities are really keen about this method of supplementing their traditional building programmes. The types of prefabricated houses listed in the circular include steel frame houses and concrete houses. The great advantage of the prefabricated houses in present circumstances is, as the House will appreciate, that they can be produced with a minimum of demand on ordinary building labour, which is, of course, in extremely short supply just now. If a good type of pleasant design can be turned out, it may be particularly useful in rural areas where building labour will inevitably be insufficient to meet the immediate housing needs.
The Minister of Health indicated in his speech on the Second Reading of the Bill in another place, that the Government are trying to devise arrangements for giving special assistance in rural areas. I remember that during the discussion on agriculture last week in your Lordships' House, several noble Lords said that they were pleased that the Government had announced their intention of trying to assist in solving the housing problem in the country, to some extent, by putting up prefabricated houses. Paragraph (c) of Clause 1 (1) of the Bill, which provides that one of the purposes for which expenses may be defrayed out of the Building Materials Fund is the provision of houses at the request of a local authority, is particularly directed to the erection of prefabricated houses. If there is insufficient building labour on the spot, it may well be indispensable for the actual erection of the houses to be carried out by the Ministry of Works. Some prefabricated houses, particularly those which emerge from the factory in a more or less complete state, may be rather more expensive than the ordinary traditional brick-built house. Nevertheless, their purchase, by local housing authorities, is often justified. It is therefore provided in Clause 3 of the 557 Bill that the Minister of Health, or, of course, the Secretary of State for Scotland, may, by making payments out of his Vote into the Building Materials and Housing Fund, reduce the cost at which certain prefabricated houses may be sold to local authorities. An example is the Swedish timber house, of which 5,000 have been purchased, 2,500 for erection in England and 2,500 for erection in Scotland.
§ THE EARL OF ROSEBERY
My Lords, may I interrupt the noble Earl for one moment to ask him a question? As I understand it, if money is required for this prefabricated housing in Scotland—extra money, that is—it will be taken from the Scottish Vote. Does that mean that the Scottish Vote will lose that amount of money for other things needed in Scotland?
§ THE EARL OF LISTOWEL
My Lords, I will do my best to answer the noble Earl's question on the spur of the moment. If I should be wrong in what I say now, I will give him the correct reply at a later stage.
§ THE EARL OF ROSEBERY
My Lords, I do not in the least want an answer if the noble Earl is not quite certain of the facts. All I ask, if that is the case, is that the noble Earl should ascertain the information for which I have asked before Thursday.
§ THE EARL. OF LISTOWEL
My Lords, I think that perhaps I can give the correct answer now. My understanding is that it is a subsidy which will be paid by the Treasury to the Ministry of Works or to the Secretary of State for Scotland, for the provision of these temporary houses. It is, therefore, extra money, and this will not mean any reduction in the Votes available for other purposes.
§ THE EARL OF ROSEBERY
My Lords. I did not understand from what the noble Earl had previously said in his speech that this was the fact. If he is correct in what he now says, I shall be quite satisfied. If his statement does not represent the actual facts, I do not think that people in Scotland will be satisfied.
§ THE EARL OF LISTOWEL
If my first statement in this matter differed from what I said just now (I was not aware that it did) I hope that my noble friend will accept what I have just said. Now 558 in regard to Clause 3 I would like to emphasize the fact that quite a number of these prefabricated houses—and I gave the example of the Swedish timber house —are likely to be rather more expensive than the traditional type of house. The object of the Minister of Works is to enable the local authorities to purchase these houses at prices nearer the cost of a comparable traditional house. That is the reason for this subsidy which will bring down the cost of the prefabricated house to something approximate to the cost of a traditional dwelling.
Clause 5 covers the increased cost of the temporary housing programme. The Housing (Temporary Accommodation) Act, 1944, provided a sum of £150,000,000 for the provision of temporary houses. The House will be aware, from the White Paper which has been presented by the Minister of Works to Parliament, that the financial provision in the Act has been very considerably exceeded. Clause 5 of the present Bill provides for an extra £50,000,000, making £200,000,000 in all on the temporary house programme. This will cover approximately 165,000 temporary houses. As the White Paper shows, a good deal of the extra cost was created by the high price of the aluminium houses.
Clause 6 increases the financial assistance that local authorities may give to owner-occupiers, and would be owner-occupiers. Under the Small Dwellings Acquisition Acts and the Housing Act of 1936, local authorities are empowered to make an advance in respect of houses whose market value does not exceed £800 to persons anxious to buy their houses, and also to persons anxious to build a house in which to live. The Act of 1936 further provides that a local authority may undertake to guarantee the payment to a building society of advances made by the society to any of its members. The limit of £800, with the considerable increases of prices since the war, has now ceased to be appropriate, and the Government are anxious to continue to encourage the acquisition of small houses by their occupiers. The Bill, therefore, provides for the limit of £800 to be increased to £1,500. It is intended that this maximum figure should apply to the whole of the United Kingdom, and I shall put down an Amendment, during the Committee stage of the Bill, to make 559 the figures effective in Scotland. I am afraid the necessary words were not added in another place.
At the present time, private developers are allowed to build new houses only with a licence from the local authority, and a licence is granted only subject to certain conditions. These conditions are that the house must not exceed 1,000 superficial feet in area, and its selling price must not exceed £1,200 outside the London area and £1,300 inside the London area. Furthermore, if it is to be rented its maximum rent must be stated in the licence. These restrictions are normally necessary in order to secure that the limited amount of building materials and labour available should be mainly concentrated on the greatest need. It is admitted on all sides that that is represented by houses to be let at low rents within the capacity of the great majority of wage-earning people. This need can best be met by local authorities with Government assistance. A particular point to remember in this connexion is that only local authorities can be expected to let their houses according to the needs of prospective tenants and not in accordance with other considerations. When labour and material become more plentiful, as I am sure everyone hopes will be the case, the Government will be willing to consider allowing the building of larger and more expensive houses and flats by private enterprise.
Clauses 7 and 8 of the Bill are designed to provide that conditions included in licences which limit the selling price or the rent of houses shall be enforced for a period of four years after the passing of the Bill. It is obviously necessary that machinery should exist to enforce these conditions; otherwise a black market might easily develop in houses provided under licence. I think that the point made by the noble Lord, Lord Quibell, was particularly interesting in his connexion. Speaking of his own experience as a builder between the wars he said he had built and sold a house according to the regulation prices and that the owner had resold it at a substantial profit. That is exactly the kind of thing we hope to prevent by this Bill.
When this Bill is passed, only one immediate provision for the housing programme remains to be made, the settlement of the new financial arrange- 560 ments between the Ministry of Health and local authorities. These arrangements are at present being discussed with representatives of the local authorities and a Bill will be introduced into Parliament as soon as possible after Christmas. When noble Lords asked me last month about the housing subsidy I said that discussions would shortly begin. I am glad to be able to say now that those discussions are actually taking place.
Now I hope that what I have said has, shown the House that it is not the intention of the Government to hamper or discourage private enterprise in the building industry. On the contrary, we desire to give the industry the support it needs to carry out its work to the satisfaction of the public under economic conditions which are entirely different to what they were before the war. The entry of the State should prevent the emergence of price rings and other combinations of producers which serve to restrict output and to raise the price paid by the consumer. The State will, in fact, be providing that element of healthy competition which is always directed to the efficient working of industry. What we are asking for is a partnership in this unprecedented housing drive between private firms and public authorities. If the spirit shown to us last week in the speech made by the President of the Federation of British Industries is shared by all concerned in the rehousing of the people, the necessary co-operation will be assured and nothing could do more than such a happy relationship to guarantee the success of this great housing programme. I beg to move the Second Reading of the Bill.
§ Moved, That the Bill be now read 2a.—(The Earl of Listowel.)
§ 4.55 p.m.
§ VISCOUNT SWINTON
My Lords, the very clear and moderate exposition which the Postmaster-General has given to us of this Bill and for which we are sincerely grateful to him, confirms, I am sure, the view I ventured to express on the spur of the moment that it would be more convenient to have the Second Reading debate now, and now that we are informed by the very full account which has been given to us of this Bill. The Bill, as we have seen from its terms and still more from the Postmaster's exposition of it, is not only a mixed Bill but a fairly complicated Bill. What I am not quite clear 561 about is that while I appreciate the need of this House being given ample time for all the discussion which will be necessary on the American Loan Agreement and the consequential legislation, and although this Bill should certainly go through, why is it so urgent at the present moment and why cannot more time be given to it? I say that for this reason. The responsible Minister in another place explained that the powers already existed in his and other Ministries, but quite rightly he was going to Parliament, when he wished to exercise them on a larger scale and to have an extended period, for a confirmatory and extending Bill additional to the powers already possessed, which, as we have learnt today, they are already exercising. He said this:Neither the Ministry of Works nor the Ministry of Supply require any additional statutory powers to enable them to buy and sell building materials and components or, in the case of the Ministry of Works, to arrange for the erection of houses on behalf of local authorities "—that is the other clause the Postmaster-General has referred to—or to set up a distribution scheme. But it would obviously be improper for the Government to embark upon what may develop into very large scale commercial operations "—that is rather different from the language we have just heard—without the express approval of Parliament.In those circumstances I think it would be reasonable to give this House more time.
The Leader of the House has been most helpful in trying to meet us over this complicated kind of legislation. He has done his best to carry out his suggestion that we should always have reasonable notice before a Second Reading is taken and that there should be as nearly as possible a week before we embark on the Committee stage. He has done his best to carry out that undertaking and we have done our best to cooperate. I suggest that it could make no difference to the actions of anyone concerned—they are already making their estimates, although they are not going to convey them to us or the trader—and is it really wise that we should get through the Committee stage of this Bill by next Thursday?
§ VISCOUNT ADDISON
May I interrupt the noble Viscount? I am sure he will 562 not mind. What this Bill does, of course, is to enable the powers to be exercised by providing the necessary money. The Bill provides £00,000,000—that is the point.
§ VISCOUNT SWINTON
No. With great respect, I think the noble Viscount, the Leader of the House, is not quite correct. The power no doubt exists. For instance, it says in one clause: "For £100,000,000 read £150,000,000." But the noble Viscount is not going to tell us that if the Minister of Works, the Minister of Health, the Minister of Supply and the President of the Board of Trade have always had—what the responsible Minister in producing this Bill said—the fullest power to engage in all these operations on a very large commercial scale, that no finance was provided for those operations. The noble Viscount has over-reached himself a little. The financial provision is already there. What we are asked to do is to give some extra financial provision. Perhaps, when he replies, the noble Viscount would confirm from the appropriate quarter what the position is. If he is right, then all his colleagues are engaged in some very curious practices which must be quite improper and for which they will require an indemnifying Act from Parliament. I hope he has not let a whole lot of cats out of the bag by mistake.
It is not altogether easy to express a considered opinion on this Bill. Certainly, we have got to have a Bill—the noble Lord, Lord Woolton, made great contributions to it—as the Postmaster General has said. I have had the privilege of some discussion with him, and I do not think he will dissent from any comments I make upon the Bill. It is not easy to express a considered opinion, first of all because, though no doubt a number of Governments have had a hand in drafting the Bill, it is not altogether clear and, quite frankly, it has not become clearer to me from the explanations given—sometimes conflicting—in another place. I would like to ask two specific questions relating to important matters. As to the £100,000,000 which we are asked to provide in Clause I (3), is that a total, a fixed final sum, or is it a revolving credit? I read it as meaning a revolving credit:The total amount advanced under this section, exclusive of any sums which have been repaid, shall not at any time exceed one hundred million pounds.563 I read that to mean that you can always have £100,000,000 outstanding. If you are repaid £50,000,000, you can draw, if you can get it out of the Chancellor of the Exchequer, another £50,000,000.
I particularly ask that because, in another place when the responsible Minister was asked about it, he apparently took a different view. In the Official Report of December 3 last a member in another place asked, on a point of order, whether they could be told whether in this Bill they were discussing one block of £100,000,000. He was told that he had not raised a point of order, but a question. Then he asked whether he could put the question to the Minister. He said:If I may put the question to the Minister, can we be told whether the sum under discussion is one clean block of £100,000,0000, or whether, as has been suggested by the hon. lady, the Member for Blackburn (Mrs. Castle) it is £100,000,000 multiplied by x?Mr. Tomlinson, the Minister of Works, said:It is one block; whether it is clean or not, I do not know.I should have thought that it was not one block; that it was a revolving credit of £100,000,000. We really ought to know when Parliament is voting and we are confirming the appropriation of these sums whether we are debating a block sum or a revolving credit, more particularly as this Bill was extended at the last moment for five years instead of two. If repayments take place—and they will take place if businesslike contracts are made—the expenditure may be enormously greater, multiplied by x' as was stated in another place. We should like to clear that up.
My noble friend Lord Rosebery has drawn my attention to another point. In Clause 3, as the Postmaster-General has explained, the Minister is going to be able to re-sell the houses to local authorities, and he is, or the Treasury is, going to find a substantial difference between the actual cost of supplying a prefabricated house and that of supplying a house of normal material and construction. Where and how is the Minister going to account to Parliament for the amount of these subsidies? Under Clause 2 (5) he is to make and render an account to the Comptroller and Auditor-General—I shall have something to say about that in a minute—of his expenditure under Clause I, but that 564 is the revolving credit or block, whatever it is, of £100,000,000. What I do not see —and it is, perhaps, because I have not read the Bill sufficiently wisely—is whether the Minister is to render an account of what he does under Clause 3 and to show to Parliament how much is the subsidy he is granting to local authorities of the difference in price between prefabrication and normal costs. There are other things which may need to be cleared up in Committee, but I think I have said enough to show that the Bill is not altogether clear, or at any rate, that we are not—and reasonably so—clear upon it.
I find it difficult to pass judgment, because so much depends on how the Bill is going to be administered. Unlimited powers are taken under Clause I, and the Postmaster-General was quite clear about that. There is an unlimited power for purchasing building material and permanent equipment for building. There is the power to make and carry out arrangements for the production and distribution of any such materials and equipment. We all want houses, and we all want them built as cheaply as possible. We all want alternative methods and alternative materials developed and used and encouraged to the greatest possible extent. The right way to do that—and I liked the Postmaster-General's speech on it; it was so different from some other speeches we have heard from members of the Government—is to mobilize and encourage every element and resource which can contribute. These are—and I know he agrees with me—the practical tests by which the Bill and its administration will be judged.
How are the Government going to operate? They will be quite right to finance new prototype houses and to keep a close watch and control upon prices. They will be quite right—and certainly will do so in some cases—to place bulk contracts provided that by placing such contracts economy, speed and standardization, where standardization is right, can be attained and, above all, if you get the best use of existing plant and existing labour in the industry—I was going to use, and will use the exact words which the Postmaster-General used—" by supplementing normal channels, but not superseding them." You do not need to go into manufacture on a vast scale to do that. You may do it—Lord Woolton, I think, originated this—by seeing that 565 the right kind of stuff is ordered and by underwriting the orders firm so that manufacturers will not incur a loss.
But I believe, from all the information I have, that with perhaps one or two exceptions where some supplementation will be necessary, the existing facilities for manufacture, provided the labour comes back, are really ample for the purpose. It has been said, and I do not think it has been seriously challenged, that the existing plant should be sufficient to provide the equipment for something like half a million houses a year. I do not pledge myself to the half million. Suppose it is, 400,000. We have not had the estimate of the housing. It exists, we know that now, but we are not going to have it. At any rate it is nothing like 500,000 in the year. Our modest estimate, which was called "chicken feed" during the General Election, we were told when the Election was over was a purely fictitious target. There really are, I believe, ample facilities.
I do hope the Minister will go forward in the spirit the Postmaster-General has enunciated—not cutting out people. It is very easy to say cheap things about merchants. I think they have been called "parasites." My experience in business is that a merchant who does not fulfil a useful function pretty soon goes out of business. The builders' merchant does not exist as a parasite; he exists because the builder, who really does know something about building, and the manufacturer, who knows something about manufacturing these insides and fitments for houses, have found by experience that he serves a useful function and enables houses to be built more quickly and more cheaply. For heaven's sake, do not try to do too much. In house building—and it is true of so many things—speed is essential. If you get the bits and pieces that are wanted delivered up to time upon the spot—and that has been one of the functions, as I understand it (I am not an expert in this trade) of the builders' merchant—that means you have not men standing idly on the site who have to be paid when they are standing idle. Though he must, of course, get his commission, hi; fee for doing his business, yet it is wise to use him, because you have saved money in getting the goods quickly on to the spot and getting the houses built quickly.
566 If the Government proceed in the way the Postmaster-General has indicated, this Bill may be very valuable; but if the powers are used to cut out experienced manufacturers and distributors, to dissipate labour which is in far too short a supply; if skilled labour and material; are wasted on providing unrequired plant in new or existing Government factories which have been built for some other and quite different purposes, very likely unsuitable in this connexion, then the Bill may do more harm than good. I certainly am not entitled to issue that warning upon the speech delivered by the Postmaster-General, but Ministers do make such different speeches. I think it was a character, well-known to your Lordships, in the Importance of being Ernest, who delighted, if I remember aright, in the ecclesiastical name of Archdeacon Chasuble. The Archdeacon had one sermon which was suitable for all occasions. Ministers, on the other hand, have a series of different speeches which are suitable for the same occasion but when addressing different audiences. I would ask your Lordships just to contrast the admirable speech delivered by the Postmaster-General with this:Let there be no misunderstanding. It is the intention of His Majesty's Government to go into the business, both in the manufacture and in the distribution of building materials and components, in a big way.
§ VISCOUNT SWINTON
I do not believe the noble Viscount heard the excellent speech delivered by the Postmaster-General, I hope he will read it to-morrow and I hope he will profit by it. What is more, I hope he will make the Minister of Works and, still more, the Minister of Health read it. Because could you have two more different classes of speech than these? The one by the noble Earl was admirable, but the other, quite frankly, was the kind of bombastic prospectus upon which I am disinclined to subscribe my money, whether it is issued by a public company or by a Minister of the Crown.
We had rather a unique experience over this Bill—I am coming now to the importance of getting accounts. When the Bill was presented to another place on Second Reading, it was presented as a Bill for two years, and it was said that 567 two years was the right period. If, as might be possible, it was desirable to extend it for more than two years, then the right thing would be to come to Parliament. This is what the Minister said:If it is found that the limit of £100,000,000 is too low, or that further advances after September, 1947, are required, the Government will have to come to Parliament and a convenient opportunity will be presented for reviewing the operations which have taken place.But a very odd thing happened in the few days that elapsed between the Second Reading and the Committee. The Minister was pressed to change his mind, and he did change it. He said: "We are now going to extend the Bill and have it for five years instead of for two." I think I am entitled to say there could hardly have been any other object than this. Certainly the result must be to postpone the Parliamentary review.
What I have said about the review by Parliament, and about everything depending upon the way this Bill is administered, makes it all the more important for Parliament to know what is going on and to know that as soon as possible. What would have been the normal process? When I was a Service Minister, spending enormous sums, one presented most careful Estimates. After all, we have got away from war-time now; we have got back to peace procedure. We have to spend vast sums of money, it is true, but we do want careful accounting and careful Parliamentary control. One would have expected a careful Estimate and a Vote: indeed I cannot see why we should not have one. The Postmaster-General has told us that the Minister of Health and the Minister of Works have their careful estimates already al the amount which is going to be required, not only for one year but for five. Upon that they are going to place these bulk orders and engage in manufacture. If those estimates are ready and are being acted upon in the Department, I really do not see why we should not follow the ordinary Parliamentary procedure and have an Estimate and a Vote presented o Parliament. However, that is not to be done. Under this Bill, Parliament will know nothing until it sees the accounts, which are, your Lordships will see from Clause 2 (5), to be presented by the 30th November after the close of the financial year. If we are to rely upon accounts 568 after the event and to have no estimate before the event, I cannot see, why those accounts should be delayed for eight months after the close of the financial or trading year.
The Minister must have them all the time. This is no case of engaging in difficult operations all over the world; it is an ordinary day-to-day business conducted in this country. Lord Woolton has been referred to in a most complimentary way by the Postmaster-General. Lord Woolton was conducting an even vaster operation during the war, the feeding of the people of this country. His operations extended to many territories, but I should have been very much surprised if he could not have presented his accounts in a month. A man conducting a business in this country entirely with firms in this country, must, if he knows what he is up to and is managing his business properly, have his progress charts, his costs and his contracts, and know week by week exactly where he stands financially. I am perfectly certain that if the Minister were doing his business in a business-like way he could present his accounts within a fortnight or a month of the close of the financial year. The old practice used to be, when presenting accounts to the Comptroller and Auditor General, to present them within three months. The only variation allowed was in the case of Departments conducting business over vast territories, in many continents. There there were difficulties of communication and for that reason a longer period was allowed.
After eight months these accounts are to be sent to the Comptroller and Auditor-General. It was argued—I think most reasonably—that when those accounts are sent to the Comptroller and Auditor-General they should also be presented to Parliament. I speak here among men who have been Ministers for long periods of time, and I am drawing on my own experience of a great many years as a Minister. It was said, "Of course these accounts cannot be presented to Parliament; they will not have been audited." That is a complete misconception, I submit, of the true function of the Comptroller and Auditor-General. He is not an auditor in the sense of the auditor of a company's accounts. When accounts are sent to him he does not go through all the vouchers as a company auditor does; in so far as that business is 569 undertaken at all by the Comptroller and Auditor-General it is undertaken daring the course of the year by his officers sitting in the Department. The Comptroller and Auditor-General has an entirely different function. When accounts are presented to him his function is a two-fold one. His primary function is to see that Parliamentary authority has not been exceeded; his secondary function is, if he thinks there has been gross extravagance or something improper or scandalous, to draw the attention of Parliament to that particular happening in relation to the business and the accounts of a particular Department. That is his duty; he is not an auditor in the ordinary sense.
I particularly ask the Government to confirm this. When the accounts are presented to Parliament they are presented exactly in the form in which they have been presented by the Department to the Comptroller and Auditor-General. He does not rehash the account; he brings the accounts to Parliament in the form in which the Department have sent them in to him, together with his report and any comments he likes to make upon them. It is quite absurd, I respectfully submit, to say to Parliament, "We could not possibly give you un-audited accounts." If my submission is correct, and I am pretty sure it is, the accounts which are going to come ultimately to Parliament, months and months later, will be in every item exactly the same as t hose which went to the Comptroller and Auditor-General.
There may be further delay. My recollection is that in the days before the war the Comptroller and Auditor-General never got a report out in under four months; usually it was six months at least. I am not blaming him, because he does his work thoroughly. However, with all the extra accounts which will be going into the Comptroller-General it may very well be that it will be more than six months before he presents his report to Parliament. Observe what that means. Although accounts must be ready within a fortnight or a month of the close of the financial year, no account is presented to anybody for eight months. Then there follows whatever delay there must be in the Comptroller and Auditor-General making his report. It certainly will not be less than a year and it may easily be eighteen months or more after the account has closed before Parliament has 570 any knowledge of how this business is being conducted. I respectfully submit that that is not treating Parliament fairly or properly. I suggest in the first place that these accounts should be rendered as soon as conveniently possible, certainly not more than three months after the close of the financial year, and that when they go to the Comptroller and Auditor-General they should also be laid before Parliament.
I make no apology for having dilated on this matter at some length on the Second Reading—we shall no doubt return to it on the Committee stage—but it raises an important question of principle which is very properly raised now. I do hope that in this the Government—I say it again—will follow the line of the Postmaster-General. I see an unfortunate tendency in them to try and do everybody's job. They have quite a big enough job of their own to do without trying to do everybody else's. I will not take an analogy from business; that might be suspect. Let me take an analogy which I think will he accepted in every quarter of the House. A great commander, commanding groups of armies, confines himself to strategy. Certainly our two greatest commanders in this war have carried out the admirable maxim which is, I think, to be found in "Infantry Training," that everybody should have a sufficient knowledge of the general idea to carry out his particular operation. I wish the Government would do that to the trading community. The last thing a great general does is to attempt to take charge of all tactics everywhere all along the line; he leaves that to his subordinates. He does not try to command every division, much less every battalion and every platoon. He frames the broad strategy, and so should the Government. I believe in that partnership. There should be that partnership. The strategy must come from the Government, but the tactics, the action, must come from the commanders in the field, all down the line. If the Government will proceed in that spirit, they will evoke the best in all of us, and get co-operation from all of us in a problem with which we are all equally deeply concerned.
§ 5.30 p.m.
§ LORD LATHAM
My Lords, I should like to say first of all that I welcome this Bill, and -it gives me great pleasure to 571 follow the noble Viscount who has just spoken. Some twenty years ago we exchanged, sometimes with energy, conflicting views when we were contestants for the constituency which the noble Viscount represented in another place for so many years. My view is not that there is no real necessity for pressing on with this Bill, but that it is a thousand pities that this Bill was not put on the Statute Book many many months ago, in order that the extended and comprehensive proposals to resolve as speedily as possible the well-known shortage of materials could have been put into action immediately upon the cessation of hostilities.
The housing problem is one which almost appals those who are concerned with overcoming the famine in accommodation which exists in this country. We have at the London County Council no fewer than 60,000 applications, and they are coming in at the rate of over 1,500 a week. Hundreds are being received at the town halls of the twenty-eight Metropolitan Boroughs. Some of them, of course, will be duplications of those which we are receiving, but the plain fact is obvious: there are hundreds of thousands of persons in London who are suffering in some cases heart-rending distress because of the lack of housing accommodation; and we must, it seems to me, do everything that we can, without regard to any particular interests, to overcome this grave social menace.
I was struck by the circumstance that the noble Viscount, Lord Swinton, devoted most of his remarks not to the substance of the proposals contained in this Bill, but to the alleged absence of financial accountability. I have been for a long time, and I hope that I shall continue to be, one who approves of public accountability, whether in the realm of finance or otherwise; but I must confess that until he presses for a report to Parliament on how the money—alleged by the Minister of Health to be of the order of £2,000,000—was wasted on the Portal House, I hall regard this enthusiasm for Parliamentary accountability as being strangely limited.
There are two matters in this Bill to which I should like to make particular reference. The first is the proposal to purchase in bulk building materials and components. I agree that every agency 572 and every resource must be utilized, but I do not gather from a reading of what took place in another place on this Bill, or indeed from what was said today by the Postmaster-General, that these proposals as regards bulk purchase or as regards Government manufacture or as regards distribution are intended to supplant existing facilities or agencies. They are rather intended to supplement them; and, if the supplementation is needed in a big way, I can find no cause for quarrel that the Minister in another place used those words. If supplementation in a big way is needed, then let the supplementation be in a big way. I was a little surprised, if I may say so, that the noble Viscount. Lord Swinton, should have expressed the view that by and large —I hope I am not misstating what he said—existing manufacturing facilities are adequate to produce the materials for the number of houses which would be constructed.
§ VISCOUNT SWINTON
The number of fitments for the inside of houses; that is what I was dealing with.
§ LORD LATHAM
I beg the noble Viscount's pardon; I had gathered that his remarks applied generally to building materials. It may be—I cannot say—that, limited to fitments, he may be right: but it is the case that generally over the field of building materials there is a grave shortage to be faced.
§ LORD WOLVERTON
It is a shortage of labour, not of workshops, is not it? That is the important point.
§ LORD LATHAM
My own view is that the shortage is not one which arises wholly from the shortage of labour, but that additional manufacturing facilities are needed as well as, it may be, additional labour. I was going on to say that it is estimated that the housing programme, leaving aside all other building, will require nine years' output of bricks on the basis of the pre-war out-turn. The London County Council's first-stage programme, which embraces some 16,000 dwellings, will require 78,000,000 facing bricks, and we know that there is a serious shortage of facing bricks. There is a shortage also, I gather, of light castings, baths, gutters, pipes and many other components. It seems to me that all persons of good will will applaud the Goverment—any Government—going into manufacture, into the bulk purchase, and into a planned and 573 centralized distribution of materials, if by that means we are likely to increase the availability of supplies.
The noble Viscount chided certain persons in their absence about statements which he thought characterized builders merchants as parasites. I should not go as far as that. They may perform a useful function, but it is undeniable that in the past associations of builders' merchants have not served a very pronounced social purpose. On the other hand, their actions have often been definitely anti-social, in that they had maintained prices at levels which were higher than were necessary to show a proper and reasonable return of profit. I can pray in aid of that view, which is widely shared outside, the report of the Central Council for Works and Buildings attached to the Ministry of Works. The Times said on March 15 of this year:The Central Council for Works and Buildings attached to the Ministry of Works reported to the Minister on the grave danger that building costs may be excessive after the war ' because of the activities of price-fixing rings and associations in the industries supplying the materials for housing.I submit that that forms a proper and fair ground of criticism of certain of the actions of these rings and organizations. The matter is not really satisfactorily disposed of in the way in which the noble Viscount sought to dispose of it.
Let me go a little further in that connexion, and deal with not only builders' merchants and their organizations, but others engaged in or for the building and constructional trades. On May 15 of this year there was read in another place a letter which contained this passage:I do not know of a material used in housing of which the selling price of manufacture is not controlled by a' combine, ring or other selling arrangement, and, generally speaking, its distribution as well. My personal view is that in too many cases the selling price has no proper relation to the cost of production. If there are not too big profits, then there are too many.Who wrote that letter? Not some hag-ridden doctrinaire, to use Mr. Winston Churchill's pleasant phrasing, not a Marxist, but Sir George Burt, the head of the well-known contracting firm of Mowlem. He has been Chairman of the Burt Committee, he is still Chairman, and he has clone some very excellent work, on behalf of the nation, as Chairman of that Committee. I submit that that is evidence 574 that there are grounds for the Government taking steps, as they propose to do, to secure that the nation is not held up to ransom because of the shortage of houses at the present time.
As regards bulk purchase, the London County Council have practised it since 1936 over a fairly large range of housing components, with satisfaction, with economy and with speed. It gives, at all events, a run of production, which is absolutely essential if costs are to be reduced and. wastage of overheads and time is to be avoided. It makes, also for standardization, and if I may say so—and I say this in no minatory sense—there is probably no trade in this country in which there is greater need for standardization than the building trade. It is fantastic the number of various types of things which are made to serve the same common purpose, and which could be made, on a standardized basis. Therefore, I take the view that the proposals for bulk purchase are eminently desirable.
Then we come to the proposal for the Government themselves to manufacture, to supplement normal supplies. That again should make for standardization and for continuity of production; and, if that be the case, it should result in cheapening the article. It should result, also, in speedier production. Moreover, if it is wisely administered, the Government would have, as the result of their own manufacture, a real basis of test for the prices which arc' being charged outside. We all know how difficult it is to prescribe prices and to control them, but from the Government activity in production there should emerge certain standards of tests which can be applied to the prices which are being charged by outside producers. The Leader of the House will remember—it may well have happened during the time that he was Minister of Munitions in the First World War—that certain machine guns were costing the country, at one time, £22 each. The manufacturers averred that in view of their costs of production, no reduction could be made. The Government went into the production of machine guns, and they got the price down ultimately, I think, to £6 per gun, and were able then to talk to the manufacturers outside.
§ LORD WOOLTON
There has been the other side, of course. The noble 575 Lord will agree that in the past there have been occasions when the Government have been more expensive than the private trader.
§ LORD LATHAM
That may well be the case, and it should be the occasion for inquiry. With regard to distribution —I hope my noble friend Lord Quibell, who is not here, will take no objection to this—I think by common consent that, hitherto, maybe from the very nature of the trade, the building industry has been lacking in organization. I cannot find evidence that the interposition of builders' merchants generally leads to the required materials or components being at the site when they are wanted. As Mr. Coppock, who is a national official of the Building Operatives Union, has said on many occasions, one of the great difficulties of the building industry is that there is no organization at the point of production—that is the site where the building actually takes place. That is very largely clue to the absence of planned distribution of materials, of components, and of fittings. If, by the Government entering into the field of distribution, it can secure planned distribution, it can avoid holdups, bottle-necks and delays. And I believe that that can be done with the cooperation of the trade. I, therefore, think that in those respects this Bill is wholly admirable.
I had expected that the noble Viscount, Lord Swinton, would have made some reference to the proposals in the Bill dealing with the definitions arid the penalties in connexion with the licensing of private builders to build houses. Whether criticism of these proposals is to come later I cannot, of course, conjecture. But I do think that it would be well to state the case, so far as I know it, with regard to the contribution which private industry can make to the solution of our housing difficulties. My submission is that, in the field where houses are most needed—namely, houses to let for the low income groups—private enterprise cannot make any substantial contribution. Private enterprise did not make any such contribution between the wars. It is correct that private enterprise built a very large number of houses, but most of them were for sale. Few of them were to let.
Now, if I may, at the risk of wearying your Lordships, quote one or two figures, 576 it will help to elucidate the position with regard to the contribution of private enterprise between the wars. According to the Ridley Report of 1937, on the Rent Restriction Acts, as regards Class C houses—and those are the houses needed mainly for the working classes; they have a rateable value in London of £20 or under, and in the rest of England and Wales of £13 or under—private enterprise built of that class of houses between 1919 and March, 1937, 550,000. Of that total 150,000 to 200,000 were found to be let in 1937.
But there is nothing to say that they were built to let or that when they were first available for occupation they could be rented. They had come into the field of rented houses in most cases after they had been built, arising from personal circumstances of the owners, and the like. During a similar period the local authorities of this country built 950,000 C Class houses, houses roughly of that type, for the working-classes and almost all of them were to let. In 1924, in order to stimulate private enterprise to build houses to let, a subsidy was introduced, a rate subsidy and a State subsidy, for forty years for each house built to let by private enterprise. In the ten years between 1924 and 1934, when the subsidy provision came to an end, in the whole of the County of London no more than 24 houses were built to let by private enterprise. In the whole of Greater London, an area embracing a population of over 8,500,000, the total built in ten years, notwithstanding the rate and tax subsidy for forty years, was no more than 415, and in the County of London itself in the twenty years between 1919 and 1939 housing associations, who also are subsidized through the local authorities, built no more than 4,000 houses to let.
It is clear then, it is inescapable, that if we are to solve, as we must, the problem of providing the smaller houses to let, if we are to clear the slums and abate overcrowding, the main agency must be the local authorities, aided and supported by the Government. It is the case that in present economic and financial conditions—price levels, wages levels and other considerations such as transport costs—you cannot build houses to let at rents within the means of those who need them, and show a profit. Indeed, you cannot build them without showing a loss, sometimes a very substantial loss, 577 which at present is borne generally speaking as to two-thirds by the State and as to one-third by the rates. I am hoping that there may be some favourable adjustment of that in favour of the rates later on. Therefore, it is no criticism to say that this is the job of local authorities. No one expects private builders to go into this market knowing that on every house they will make a loss. It is not their function.
Let us be perfectly candid about it. It is a statement of fact that private enterprise cannot make any substantial contribution to the solution of this serious and grave problem and therefore it must be done by the local authorities. I, as one not unacquainted with the problems of housing, the human problems and the distressing stories, am encouraged to know that the Government are planning over five years in the manner envisaged by this Bill to secure that we overcome difficulties and delays owing to the shortage of materials. The position is so serious that, in housebuilding, all considerations except those for the public weal must be pushed aside and we must do everything to solve this problem in the speediest possible way.
§ 5.56 p.m.
§ LORD SOULBURY
My Lords, the noble Lord who has just sat down said at the commencement of his speech that he wished this Bill had been introduced many months ago. I imagine that the general public wish that he and his friends had introduced the necessary labour many months ago and I think that if action had been taken last summer the housing situation would have been much more advanced to-day. The noble Lord says that there is a shortage of building material; in view of the shortage of labour that may well be the case. It would have been interesting if he could have given us some figures on that subject and shown us where the shortage of materials is. He has referred to bricks.
§ LORD SOULBURY
That is so, but the shortage of bricks is due largely to the shortage of labour. Surely the twenty ordnance factories to be re-adapted by 578 this Bill will not be employed in making bricks but in making castings, baths, sinks and so forth. I should like to know what the actual shortage is, because, beyond vague allegations, no figures have been given. I do not propose to follow the noble Lord's reference to builders' rings; I understand he was doing his best to counteract the statement made by the Postmaster-General. I think it is unprofitable to engage in a wrangle as to who builds best and who builds most. Every agency should be called in to assist in a housing crisis like this and I think it would be perfectly possible to explain many of the disparities in figures. In one case it may be that the local authorities got a subsidy and that the private builder did not. But I think we should do all in our power to produce houses.
I should like to say a word about the explanation of the noble Viscount at the commencement of these proceedings as regards the ludicrously short time which your Lordships had to study this Bill. The Bill which preceded this, the Statutory Orders (Special Procedure) Bill, was introduced on Friday, was in your Lordships' hands on the following Monday and received a Second Reading on the following Thursday. At that time my noble friend Lord Cranborne made his protest and the noble Viscount opposite made arrangements for an extended period between then and the Committee stage and the Committee stage was treated as the occasion for the Second Reading. Well and good. On that occasion, I ventured to express my opinion as to the unwisdom of unduly accelerating Parliamentary procedure. I said I thought the value of Parliamentary debates would be greatly diminished by precipitancy. I have no particular reason to be satisfied with the sequel. This Bill was introduced, I gather, last Friday. For reasons which, I understand, the noble Viscount is not responsible, it did not reach your Lordships' hands until this morning. Yesterday afternoon I tried to get a copy. There is a delay, for which the noble Viscount is not responsible, of 24 hours compared with the previous Bill. Instead of there being a Second Reading on Thursday next—which would have been short enough—we have it to-day. Twenty-four hours have been lost by somebody outside, but the noble Viscount has deprived us of forty-eight. Presumably, 579 this is a legitimate loss of time within which to study this important Bill.
On the last occasion we were told that the object of the Statutory Orders (Special Procedure) Bill was to simplify and to expedite Parliamentary procedure. One almost comes to the conclusion that the Government's idea of simplification and expedition is to reduce Parliamentary discussion to the barest possible minimum; just to preserve the impression but to destroy the reality of Parliamentary debate. One can imagine that we shall soon have coming to us from another place Bills on a conveyor belt passing in front of the noble Viscount for his inspection and going off the assembly lines behind the Woolsack. That is not an impression which I hope the noble Viscount will give any currency to, but I would ask him to let us have a further explanation of what appears to be a furious and unseemly haste.
What is the urgent need for this Bill? There is an urgent need for housing. No one could dispute that, and no need could be more urgent; but why is the need for this Bill so urgent? My noble friend Lord Swinton pointed out to your Lordships that the Government, as their spokesmen in another place have stated, have all the necessary powers to do everything required under this Bill, but, very properly, this being a Bill so large in degree and different in kind from previous Bills—I am paraphrasing what I think he meant—the Government decide to come specially to Parliament for approval to be expressed. Well and good. But, assuming that, as the result of the noble Viscount giving us more time—as I hope he will—and supposing this Bill were not disposed of until after the Recess, until the end of January or February, in what way is the Government's programme under this Bill delayed? In what way is it damaged? Or, if the Bill were accelerated and passed by Christmas, as the noble Viscount hopes perhaps it will be, in what way is the Government's programme accelerated? They have the powers and, presumably, their plans are in the making. I am not impressed by the almost unseemly haste with which these proceedings have been rushed on to this House. Between now and February next the Government can do everything necessary.
580 Let me take the example of the Royal Ordnance factories which are to be brought into play as the result of this Bill to manufacture housing equipment. They are to be re-adapted, and, I imagine, that will take at least a year. There are dies, jigs and tools to be manufactured. Labour will have to be retained or trained. The Government ought to be doing that now, irrespective of this Bill, and probably are. There is no need, in my judgment, to sacrifice legitimate Parliamentary discussion in order to get this Bill on the Statute Book by Christmas. I do not think it will make a pin's worth of difference whether it is there by Christmas or February. The Minister of Works quoted with approval the statement made by his predecessor last May when dealing with the manufacture of prefabricated houses. He said:In the case of one or more of the most promising types, instructions to proceed with production will be given forthwith. It is proposed that the production of these prefabricated permanent houses should be financed by advances from the Consolidated Fund. The necessary legislation will be introduced as soon as possible after the Recess.The Minister of that day did not feel himself embarrassed by the absence of legislation and, so far as I know, neither here nor in another place did they find it necessary to rush Bills through in such circumstances.
§ LORD SOULBURY
I am quoting from the Minister of Works in another place on May 17, 1945. My noble friend Lord Swinton referred to the last-minute extension of time made in this Bill, from 1947 to 1950, when Parliament will have an opportunity of making a survey. I am sure my noble friends here—and I mention noble Lords opposite—when they read this financial memorandum, now that the amount of advances outstanding at any time is not to exceed £1,00,000,000 and the power is to cease after November, 1947, will realize, as the Minister of Works pointed out in a speech in another place, that that would be a convenient opportunity for Parliament to make another survey, which is one of the most important functions of Parliament. What is the reason for the second thoughts, for this sudden inspiration—which is certainly not from above? The Minister said 1947 was 581 too early, Why is it too early for Parliament to make a survey in two years' time? It really looks as if it is simply a design for another five-year period to match the five-year period in the Supplies and Services (Transitional Powers) Bill.
I do not know whether noble Lords opposite or their Party regard the figure 5 as a sacred number, but one is inclined to think that it has the more mundane advantage of avoiding Parliamentary criticism for five years and for postponing any effective survey by Parliament until after the next General Election. I hope, in view of what I have said to the noble Viscount and his friends, that they might, even at this late hour, reconsider the matter and see if they cannot, as good Parliamentarians, do their best to restore to Parliament its power to survey a great project of this kind at reasonably short intervals.
The next point I want to make to noble Lords opposite is one already touched upon by my noble friend Lord Swinton. He pointed out that, in the Bill as it stands, the accounts do not reach the Auditor-General until November 30, eight months after the end of the financial year. In another place in reference to an Amendment that June should be substituted for November, it was pointed out by the Minister of Works that November was now accepted as the date for all civil Departments. That may be, but I should like to draw your Lordships' attention to a very authoritative statement made by a great Treasury official, Sir Thomas Heath, who was a Joint Permanent Secretary to the Treasury in the last war period, in a book where he says:The Appropriation Accounts ought to be rendered within three months of the end of the financial year. As, however, much of the public expenditure is incurred abroad, a margin of time is allowed. Accordingly, the following November 30 in the case of Civil Votes and December 31 in the case of Votes for the Army, Navy and Air Force, is fixed as the date on or before which the various Appropriation Accounts for the year ending March 31 must without exception be rendered to the Comptroller and Auditor-General.Your Lordships will notice that the extension in time was allowed because much of the public expenditure was incurred abroad. In consequence, that practice has grown up. But the Minister of Works, in another place, pointed out that no expenditure from the £100,000,000 was, in his contemplation, to be made abroad.
582 It was, as we might expect, all to be internal purchase, whether by bulk purchase or otherwise. For that reason I think the Government might be pressed to restore the old practice of the three-monthly period in respect of this project, when the reason for extending it by eight months no longer exists.
I would also like to press this point. This is an exceptionally large undertaking. I do not think in peace-time there is any record of a Government having entered into trading and commercial operations comparable in size to this. They have "gone in big," and the facilities Parliament has for making adequate and sufficiently speedy investigations of transactions of this magnitude frankly do not exist in a satisfactory form. In my judgment, no real machinery for presenting accounts of this magnitude before Parliament exists. In any event, apart from that consideration, I am sure that we should like the noble Viscount to tell us a little more clearly what will be the form of these accounts. I mention that because in another place the Minister of Works, when asked about that point, said this:These accounts will probably contain a trading account, a profit and loss account, and a balance sheet in normal commercial form.I hope that before the Second Reading is concluded the noble Viscount will convert that probability into a certainty. It will be distinctly reassuring to my noble friends here if he will do so. If he will not, we shall have to see what we can do at a further stage. But I very much hope, in view of the statement by the Minister of Works, that this Government will definitely say what the accounts will contain and that they will be those items which I have mentioned.
It was well said in another place that this is a technical rather than a political Bill, and that is how I myself prefer to regard it. Without passing judgment one way or the other on the advisability of undertaking a project of this great magnitude, I think one can say that one fervently hopes it will be a success. But it will be much more of a success, I think, and much more satisfying to the public generally, if they feel assured that Parliament is getting a reasonable opportunity to examine the progress of this transaction from time to time, and that the fullest and most informative accounts are placed before it, so that the general 583 public may be satisfied that the best use is being made of this very large sum of public money and that the Government are carrying on this important work not only by State operation but in healthy and generous co-operation with private enterprise.
§ 6.15 p.m.
My Lords, I did not really intend making any remarks this afternoon, and as I had such a little time to think of what I am going to say, I am afraid it will appear rather a disconnected "mixed grill." I feel very strongly on the matter of housing, however, and there are one or two points which have been raised by your Lordships on which I am not quite clear. First may I come to the remarks made by the noble Lord, Lord Latham? He will forgive me if I am under a wrong impression and will put me right, but I understood him to say, amongst other things, that the bricks required were equivalent to a nine years' supply. Is that correct? Well, the cost of a brick, or what produces a brick, is dependent almost entirely upon labour. That was not stressed. Not only have you the labour in the brick works, but there is an enormous amount of coal required involving labour in your pits. There are all sorts of other contending claims on the raw materials. It may be that it is an unlucky thing to pick on a brick, but I cannot see the application to an ordnance factory, or anything of that sort.
It is an established fact that the cost of building—and after all, cost is one of the recognized ways of measuring building; you can measure it by cubic footage, by ground floor space, or by cost—is 90 per cent. labour, either direct labour or labour in the component parts. Therefore I maintain that anybody who does not work from the labour angle first is dealing with only 10 per cent. of the problem. I think that applies here, and if you measure a house in any other way it would apply even more—if you compare it on an area basis, for instance. However, that is beside the point.
The noble Lord, Lord Latham, also referred to what I may call site disorganization. Your Lordships know exactly what he said: I cannot quote his words and I do not wish to say anything which was not said. Speaking from experience, however, I may say that the 584 first thing that happened when, after considerable delay, we could get any drawings or information out of the Government Departments, was that we were harried by the next post to produce our target programme and all other details necessary. That sometimes happened before we had even got the drawings from the Government Department. I cannot conceive that many builders would remain in business long if they did not work along the normal standard lines, which are very highly organized. There is no one better than the private builder at his own job. So, from my own experience, I cannot agree with what was said. Of course, I know my experience is limited.
There is another question upon which I should like some reassurance, and that is the Portal house. At the time that was under consideration I was doing other things, so I have no experience of it, but I understood that a lot of money was spent on tooling the country and that the country was tooled. Then, for reasons, I was told, concerned with the Ardennes push—which is a thing you can hardly cater for in a housing programme —there was no steel available. Is that the case? Because certainly I did not get that idea from the remarks which the noble Lord' let fall.
Another matter which left me rather unsatisfied was the remarks about houses to let, produced by private enterprise. I think I am right in saying that in the two and a half years before the war 150,000 of those houses became available and acted as a roof on a hired basis for a chap living inside, although whether those houses were built to let or not is a point upon which I will not argue as I do not know the answer. Who built it and for what purpose does not, I think, matter in the slightest. The only thing I would say is that the houses built by the local authority were built at a large cost to the taxpayer, whereas these 150,000 houses were built at no cost to the taxpayer.
There are a few remarks I have to make which, are, I am afraid, rather disjointed. If I may say so, the Postmaster-General made a very excellent speech. The first thing upon which I have a slight quarrel with him is this rather unfortunate—anyway, I find it unfortunate—manner in which Ministers 585 refer to the ancestry of various Bills, rather on the lines (though I am quite sure the Postmaster-General did not intend this) of "You Back-Bench fellows had better look out or you will be treading on the toes of the fellows sitting on the Front Bench." Then on the question of Estimates I cannot see why, if you have made up estimates, you should keep them as dark secrets running around Government circles. I cannot see why you should not allow private enterprise, if you arc going to employ it to the fullest, to share the secret. Who is the enemy?
Builders and builders' merchants are the normal channels of the industry. I entirely agree with the noble Lord, Lord Latham, about price rings; they are very reprehensible things and everything should be done to-stop them, provided you do not say, "You are no good; you are out of business." That does not help anybody. I entirely agree that it is necessary to stop those people from profiteering. I think there is one way in which builders' merchants can help far better than any Government-controlled organization, and I speak from experience, because I was engaged on temporary housing at Connel Ferry not very long ago. When a Government Department starts supplying stuff you are suddenly and without any warning dished out with two or three lorryloads of units for temporary houses. They suddenly arrive; nobody knows they are coming. That happened in my case. The units which arrived were in some cases broken to an extent of 25 per cent. That is due to the attitude, "Whose house is this? Oh, the Government's, is it? Well, they have got plenty of money. Chuck it over there." Not only is it chucked over there, but Bill has to come along and chuck it somewhere else because it happens to be lying where Joe is going to dig a hole. You can say that is bad organization and bad supervision. I entirely agree, but that organization and supervision is the kind you will get in Government organizations. No one cared. Why should they? They could not get the sack. It was a nuisance having to put houses up in an unpleasant place on a wet day.
I am only speaking of local experience, but if you multiply local experience by 586 ten, a hundred or whatever number you like, you get a picture of the detail which builds up the whole, and it is getting the detail right that has an enormous bearing on the whole. A builders' merchant regulates his stock according to what he thinks he is going to be able to sell; in other words, he stocks against demand. With all due respect to anyone in His Majesty's Government, builders' merchants have by far the greatest experience of what and when things arc required for building. Some of these units for houses are interchangeable, and if you break one or two panels it does not matter very much. But some of the corner posts and things like that are not interchangeable. If you break those things you can put up the whole of the house except, for example, the doorpost. What happens then? You have got to write a letter to the Government and say how awfully sorry you are, but Bill has backed a lorry on to it and broken it and can you have another one. After six months you will, probably get another one, together with a rocket for breaking the first one. If you are dealing with a builders' merchant he has two of those things because he knows he is dealing with silly idiots who break things; but you will never get anybody who is interested in red tape to take that view. They will say "One building has so many doors, so many windows, etc. You are building so many houses, we will give you the number required, plus a couple for luck." They will never cater for the idiot. It is much more expensive to do the jobs with red tape round it, having Government Departments asking "Why is this?" and "Why is that?" You can deal far more satisfactorily with the question by using the builders' merchant.
There is one local point on which I should be glad of an answer. I hope due regard has been paid to condensation in concrete houses in Scotland. In these concrete houses and in the Uni-seco house condensation was very bad, even after we had considerably altered the design of the houses, after we had put them up, which caused expense and trouble. We could only get the dockyard labour to live in those houses after we had put in an additional stove in order to try to dry them out and warm them up. I hope that point has been taken up with regard to Scotland because it would be a very bad thing to put up a lot of temporary houses and find that nobody will live in 587 them. I have lived in those houses and I can assure you that condensation is a real trouble in a wet part of the world like the west coast of Scotland.
I would like to draw attention to a remark by the Postmaster-General. I think I am right in saying he said that discussions on the subsidy of the local authorities were taking place now.
§ THE EARL OF LISTOWEL
I said discussions about subsidies were taking place with the local authorities; I did not say discussions on the subsidy of the local authorities were taking place now.
I would like to say that nine months ago the two main bodies representing private enterprise builders came forward to the Government with a firm offer as to the terms on which they would be prepared to build. They were prepared to undertake building with a subsidy of 50 per cent of the difference between prices now and pre-war prices, that subsidy being cut down by the whole amounts by which costs fell, as they fell. That was nine months ago and we do not seem to have heard very much about it. As far as I understand it, they are not even being encouraged now by this subsidy. I may be wrong, but that is the impression I get.
I must again emphasize the importance of a target. I speak very feelingly about targets, because I know that if you produce a target it is used as a stick with which to beat you. I know that, because I have suffered from it. But unless you have a target, so that everybody knows what is being aimed at, you cannot co-ordinate your programme for parts or anything else on a time basis, which you must do. You know what the possible theoretical target is, because it is an ascertained fact that before the war it was possible to build one house per man per year. If you know the labour available, which the Government must know, you can work out a theoretically possible target on that basis which will land you fairly close to the mark. The reduction in man-hours to produce and erect a temporary house is not large. If, therefore, you produce a target on that basis, coupled with labour, and you then 'beat it, everybody will say that you have done well.
So far as I can see, remembering that the Government always made us produce 588 a target, it is nothing but pure cowardice on their part not to do so. Moreover, it is very detrimental to the whole effort, because nobody knows what you are aiming at, and you give no confidence to private enterprise, which must know what you are trying to do. I think that a target is essential to the associated industries, because if you have bulk purchase and the storage which that necessitates, how arc you going to regulate things so as not to get many thousands more door-knobs, say, than you want? How do you know that you have not too much labour in one branch of industry which could be better employed in some other branch? Without a co-ordinated programme, you do not know where you are. Private enterprise has to do these things in putting up buildings.
In the early days of the war we built these ordnance factories, which are equivalent to a thousand buildings, with all their engineering works and the rest of it. My own firm put up one which was producing shells in nine months, and that was done also by other private enterprise firms, so that they know what is necessary to get the job done. That makes me anxious when I hear of all these things going on which seem extremely experimental and carry no conviction to someone who has had to wrestle with the problem on normal lines. I do not wish to criticize for the sake of criticism, but because, like everybody else, I have this matter at heart.
Between the wars, houses were going up, at least in the latter part of the period, at the rate of about 300,000 a year. The materials for those houses were produced at that rate quite adequately in those days. There was no shortage of materials; you ordered what you wanted and got it. That capacity is still in the country, and, if you manned it with necessary labour on a double-shift basis—it was working single-shift before—you could erect, therefore, something like 600,000 houses a year. Good luck to any Government that produces that number of houses! Bulk purchase introduces the question of storage. If you are going to store you have to divert building labour to build these stores or to alter other buildings, and so you have to take away a good deal of labour which should be putting up houses. It is much better to co-ordinate your programme and to make use all over the country of the builders' merchants, who 589 all have storage for small amounts, rather than store in a certain place and scatter the materials about afterwards. Many of them will get broken in the process, because they belong to the Government. Stuff that belongs to the Government is fair game for everybody. We all feel that way when handling Government property; it is very reprehensible, but it is a fact.
I should like to enlarge on a point which I think was raised by the noble Viscount, Lord Swinton. Instead of bulk-purchasing in the first instance, it seems far better to guarantee any surplus, bulk-purchasing the surplus if you like, because then you have only to store the small amount that is riot going to be used. I think that that is called underwriting it, and I understand it means guaranteeing to purchase any excess output that any of these manufacturers can make. That is obviously very sound. It is far better to buy a little bit at the end rather than try to manage the enormous volume at the beginning.
Then there is the question of using ordnance factories. I happen to have been a sub-agent in the construction of one of these factories, and liaison officer with the Ministry of Works in regard to another, and I have an intimate knowledge of two others. I cannot imagine anything less suitable than these factories for the manufacture of component parts. You could not design a building worse for mass-production purposes. These buildings were designed for isolated production, in small units, of highly explosive material, and were dispersed because of the risk of bombing, and so on. Everything in these factories is wheeled from one building to another in a wheelbarrow. If you are going to convert these factories you are going to use building labour which should be putting up houses.
It seems to me that you have not considered the fundamental problem, which is labour. You are playing with 10 per cent of the problem, and by doing so aggravating the labour position of the other 90 per cent. The only thing that does not come under that, and that is not available in this country, is timber. That is almost: the only material which is not available in the ground in this country if you have the labour to win it. I would say in conclusion that it seems a great pity that the Government do not remember some of the very good proverbs which we 590 learnt in our childhood days, such as "Take care of the pennies and the pounds will look after themselves." If they will take care of the labour the houses will come.
§ 6.38 p.m.
§ VISCOUNT ADDISON
; My Lords, I am sure that every member of your Lordships' House will have been entertained by the speech to which we have just listened, with its many first-hand and some painful recollections of difficulties in connexion with housing. I am very glad that I was not there to share in some of them! But, while the noble Viscount has my fullest sympathy, and while on other matters his comments were cogent and material to the Bill, these other episodes happened long before the present Government came into existence, and I do not recognize any close relationship between them and the Bill.
The noble Lord, Lord Soulbury, addressed us almost with tears in his eyes when he spoke of the inconsiderate way in which I am trying to coerce him to use Parliamentary time. I recognize the difficulties of the situation as much as any member of the House, and I am glad to do whatever is humanly possible to overcome them. But I cannot help commenting on the fact that, whilst the noble Lord spent ten minutes or more complaining about the unreasonableness of the Minister in not giving him time enough to discuss the Bill, he used the time in fact to discuss something quite different. I suggest with all humility that he was rather missing an opportunity. It would have been more instructive and more to the point, I think, if he had turned his criticism on to the Bill, instead of complaining at such length that he had not got time to criticize it. That did not seem to me to fit in somehow. However, I quite recognize that every reasonable arrangement that could be devised should be made for giving as much time as we can to this. But time is, after all, of material importance, and, indeed, I think that the quotation which the noble Lord, unfortunately, gave only reinforces my point. He gave a quotation from a statement by a Minister which—after an interruption which I did not like making—turned out to have been made in May last. The Minister, in the passage quoted, indicated the urgency of dealing with this matter in this way after the Recess. I would point out to the noble Lord that 591 this statement was made in May, and now, here we are to-day, after the Recess. It has been a rather longer Recess, -perhaps, than he anticipated at that time, and it has been occupied with different interests. But if this matter was urgent in May, then a fortiori it must be urgent in December. So I do not think that that particular quotation does much to help.
§ LORD SOULBURY
My Lords, if I may be pardoned for interrupting, may I say that the point is surely this: the Minister did not need to wait for legislation, he could go ahead straight away and wait for legislation to come after? He could spend money—and that is the matter about which, I think, the noble Viscount has some fear—and he could go straight ahead. He could go straight ahead without legislation or the provision of money, and have his legislation when we have had time to give the matter proper consideration.
§ VISCOUNT ADDISON
The noble Lord is a very experienced member of Parliament, but I must say that it is new to me, as one who was with him for several years in another place, that Ministers should be encouraged to go ahead and spend lots of money and that subsequently they might expect to be whitewashed by Parliament for what they had done. That does not seem to me to fit in the argument at all, for the noble Lord has contended, in a large part of his speech, that there should be a precise method of accounting. What he has just advocated suggests a method of accounting of which I can only say that if there could be a sloppy method that would be one.
And now, if I may, I will answer the noble Lord in my own way, with regard to the matter of urgency. Certainly, it was urgent in May and it ought to have been done in May. These powers should have been exercised and the money should have been obtained to enable them to be exercised. And, as a matter of fact, the statement that I made was precise and correct. The point of this Bill is that it provides the money to enable the Minister to exercise his powers. That is the point, and it is because we want these powers to be exercised with proper Parliamentary authority that the Bill is urgent, and the provision of the money for the purposes of the Bill is urgent, 592 accordingly. I do not think that it is necessary for me to add anything to what my noble friend Lord Latham said in emphasizing the point of urgency, and, I am sure, it would be unnecessary to repeat what he said. It is exceedingly urgent that the Ministers concerned should be able to get on and do the things which this Bill authorizes them to do.
I notice that in the comments which have been made by the noble Viscount who opened this discussion, and by others, the desirability of Ministers being able to do this in order to reinforce, or—to use the word which has been used—to supplement our Housing Acts has not been challenged. There is no doubt as to the urgency. I am sorry that there is not more time left before we adjourn, and if I can do anything which would appeal to the noble Viscount opposite to meet his convenience, I shall be very glad to do what is reasonably possible. But I must stress the fact that it is urgent to get this Bill through. If we do not get it through now, it will mean that six weeks will elapse before Ministers can really begin to get on with the job. And, I repeat, if it was urgent in May, then, certainly, it is urgent now, and should not be delayed for another six weeks. It really is very urgent that the Minister should be able to exercise these powers.
I have been appealed to with regard to what my noble friend Lord Latham said as to the wisdom of certain proposals. I have heard animadversions, at different times against those who then dealt in building materials, against rings, light castings associations and organizations of that kind. As a matter of fact twenty—six years ago I myself appointed a Committee on Trusts, the purpose of which was to inquire into the operations of such concerns. The revelations which emerged concerning the operations of some of these combines were not at all savoury—to put it no higher than that—and I am very glad that this present Government are going to be able to do something about it.
Certainly it is true that in the last war no one could tell me what an 18-pounder shell case cost to make. It seemed, for some reason, impossible to find out what it actually cost. We were perfectly willing to pay a good profit. Indeed, I remember in one generous and expansive moment promising a profit of 20 per cent if I could be told what these things 593 actually cost. But the information was never forthcoming. Then we started making the shell cases ourselves. The price which we had been paying for them averaged about 215, each. We found that we could make them perfectly well, and profitably, for 105 6d. each, in the Government factories. The result of that was that it became possible, in other places, somehow or other, to make them for less than one guinea, and the price was reduced by agreement to 125, 6d. That, and other items, meant an immense reduction in the national expenditure. Sometimes, I quite agree, Government efforts are expensive; I am not going to say that they are not. But if you find out where they are more expensive than they should be you ought to take steps to correct them. So far as the procedure and the methods which have been outlined are concerned, I am quite sure that if we are going to control costs of building, or to achieve any sort of reduction, then operations of this kind arc certainly necessary.
May I now come to one or two points of criticism which were made by the noble Viscount opposite? One was in respect of his inquiry about accounting for the costs incurred in Clause 3. I can give him a complete and satisfactory reply on that. The accounts relate to the Building Materials Fund. The previous clause, Clause 2, shows how the accounts of the Building Materials Fund are to be dealt with, but in Clause 3 there will be an additional safeguard. The subsidies under Clause 3 will appear both in the appropriation accounts of the Health Department as well as in the accounts of the Building Materials and Housing Fund.
§ VISCOUNT ADDISON
I quite agree, but this was a point of inquiry. There is in that way a kind of double-barrelled check oh the expenses incurred. The noble Lord, Lord Soulbury, as well as the noble Viscount, made a point about presenting the accounts. I was not very impressed by that because both the noble Lords have been Ministers, as I have for many years, and we know that the accounts go to the Auditor-General before they are revealed to Parliament. That has been the practice for a great many 594 years That is the practice in this Bill; it is exactly what it has always been.
§ VISCOUNT ADDISON
Oh, indeed, yes! The accounts for munitions went into hundreds of millions and I was cross-examined for days in the Public Accounts Committee before ever the accounts came to the House of Commons, because that was the procedure. The Comptroller and Auditor-General makes his investigation for the information and benefit of Parliament. That is the ordinary procedure and it is the procedure in this Bill.
Now I come to the important question which the noble Viscount asked me about this £100,000,000. The answer is yes; it would be a revolving fund in the sense in which he has used the term because payments would be made into the account from time to time as well as drafts being made upon it. It would, so to speak, be a maximum overdraft of £100,000,000 so that the total volume of the transactions carried out would be very much more. I think that is the answer to the question which the noble Lord has addressed to me on that matter. I did not quite get the point of the quotation, which I think suggested by inference some flamboyancy on the part of the Minister who said that the Government was going into business in a big way. Well, it is a big way. I do not see why I should apologize on that account; it is a big job that we are tackling.
§ VISCOUNT SWINTON
The contrast lies between the noble Lord who opened and the noble Lord who is going to be responsible for this administration, and who stated that he was not going to purchase but to manufacture in a big way. The House was quite clear when I made the speech.
§ VISCOUNT ADDISON
I accept it if the noble Viscount insists. I do not challenge him on that but I do not think that the speech he read was particularly provocative. I think that that was the point of his quotation. I know that my noble friend the Postmaster-General is a master of the art of friendly presentation and I am very glad that he is. It is one of the reasons why I asked him to present this Bill. But we want to bring in everybody who can help on the right terms.
595 Of course we do. I think myself that the discussion we have now had shows that the noble Lords opposite, notwithstanding the short time they have had, have made exceedingly good use of it, and I hope that will enable us to complete the Second Reading.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.