§ 4.50 p.m.
§ LORD HAWKE rose to ask His Majesty's Government whether they are aware that the decline in output of building trade operatives as compared with before the war is seriously contributing to the very high cost of building. The noble Lord said: My Lords, man's basic needs are food, clothing, fuel and shelter, and when any of these is not available, or is available only at too high a price, the whole community is immediately interested. Twenty years ago the Government would have been interested, but they would have had no responsibility. To-day His Majesty's Government, with their predilection for a planned economy, have an interest, and they also have the responsibility. I always take with a grain of salt the stories one hears that our grandfathers did very much more work than we do; bet I am bound to admit that the stories of our grandfathers' efforts in the bricklaying field are quite phenomenal; and if there is any grain of truth in them it would appear that our grandfather bricklayers did much more work than the present generation. I think some of these stories may be 1247 true, but there would not be much point in material progress if it did not lighten men's labour. At the same time there can be no material progress unless, with the aid of science, man produces steadily more and more. On the whole, science and progress play their part and, in the course of the years, a given effort tends to produce more and more. It does not follow that man always plays his part.
§ It is, then, very serious if it can be shown that in any basic activity output per hour has declined rather than risen over a period. It means that that activity lags behind the rest and is a burden on the whole community—a blot, in fact, on that myth with which the Chancellor of the Exchequer surrounds himself, that we are producing a considerable percentage more than we did before the war. I submit that there is evidence that precisely this has happened in the case of the building industry. The output per man-hour has declined rather than increased, and thus, with the natural tendency to work shorter hours than our fathers, operatives in the building industry are acting as a brake on the whole economy. Ever since the war people have been saying that building operatives have not been turning out so much work as was the case before the war. The position was examined by the Girdwood Committee. They approached the problem from four totally different angles in order to reach a conclusion. First, they took sample man-hour figures derived from the Ministries of Health and Works, builders, local authorities and other sources. Secondly, they took tender prices and analysed them into wages, materials and overheads, and thus arrived at the figure of man-hours that builders reckon when tendering. Thirdly, they took the total man-power in relation to the total number of houses produced in the country. Fourthly, they heard other evidence that the man-power required for house building ranged from an increase over pre-war of 33 per cent. to an incease of 85 per cent. From these four approaches the Committee ultimately decided that 45 per cent. was the correct figure for the increase in man-hours required to-day over the 1938–39 figure.
§ That Report was based on the facts of 1947—a rather bad year I admit. I have tried to find evidence of what is happen- 1248 ing to-day. I have been able to obtain figures from a very large firm, whose name, of course, I am not in a position to mention. For a typical semi-detached house of 876 feet super before the war they reckoned approximately 1,633 man-hours, or 1.86 man-hours per foot super. Perhaps I may add that I have given to the noble Lord who is going to reply all the figures I am going to use, so that he is in no difficulty about the matter. This compares with a pre-war figure of 1.94 man-hours per foot super in the Gird-wood Report—a very small difference. To-day, my contractors reckon that for a slightly larger house of 914 feet super 3,131 man-hours are required, as against the pre-war 1,633. That means 3.43 man-hours per foot super. This compares with 2.95 in 1947 in the Girdwood Report—a larger difference than the pre-war figure I have given. In other words, whereas in these examples the Girdwood Report says that it took 52 per cent. more man-hours in 1947 to produce a square foot of house, in my figure of today it takes 84 per cent. more than before the war. I am not saying that there has necessarily been a deterioration in these two years from 52 per cent. to 84 per cent.; the Girdwood Committee had very widely differing statements made to them. They mentioned that they had witnesses who estimated the figure to be 33½ per cent, and others who estimated it as high as 85 per cent. This was in 1947. I think it is fairly clear evidence that there cannot have been any great improvement since 1947.
This is borne out by other evidence. When the Ministry of Health reviewed the terms of housing subsidies they found they could make no reduction in subsidies. The Report of June 27 states:
The available information indicates that the cost of repairs, maintenance and management will be higher than was originally estimated and that there has been since the date of the last review a slight increase in tender prices for the 950 square feet standard house.
Another indirect pointer to housing costs was given by the recent statement of the Chancellor of the Exchequer on the capital cuts. The Chancellor, in announcing that there would be a £35,000,000 cut in housing, said this would mean a reduction of 25,000 houses. This indicates a price of £1,400 per house. So I submit that there is no evidence that the position has improved in any material manner since 1947; and it, the figures from my
contractor were taken at their face value they would point to a very alarming deterioration.
§ Now how does this affect the costs, and what sort of figure has been added to the cost of a typical house to cover this figure of lower output per man-hour of labour? The Girdwood Report reckons that the cost of the additional man-hours rendered necessary by this decline in productivity is £126. I give that lowest figure because that is the figure I found in their tables. I find sundry references in the text to a higher figure, but I have given the lowest one on a typical house. It is £126, based on a typical house of 1,029 feet super. In other words, if the men produced the same output per man-hour as they did before the war, the house would cost £126 less. The figure from my contractor on the basis of a slightly smaller house works out at £189.
§ What is the effect on rents? According to the Girdwood Report, to amortise £1 over sixty years at 3 per cent. costs 8.65d. So, on the Girdwood basis, £126 over-cost of the house means 1s. 9d. a week on the rent. On my contractor's basis, the increase would be 2s. 7½d. on the rent. Those are the figures which some people in this country are paying to-day because the productivity per man-hour is considerably less in the building industry than it was before the war. Both of those are substantial sums. One must also remember that normally, spread over industry, one expects an increase in productivity of something in the neighbourhood of 2 per cent. every year. In the light of this fact, a drop of the magnitude I have portrayed becomes additionally serious. We should be getting an increase in productivity of up to 20 per cent., and we are getting a decline of a very much greater magnitude.
§ I am not going to attempt to dwell on the causes—those were set out in great detail in the Girdwood Report—but I am surprised to find that one of the causes, at any rate, which leaps to my eye was not mentioned at all; namely, the fact that once upon a time the British working man went to his work with a belly full of at least a quarter of a pound of fat bacon. To-day, he probably goes to his work with a shredded wheat biscuit, or something like that inside him. The Minister of Food is 1250 very touchy on these matters, and I suppose it had to be kept out of the Gird-wood Report; but I cannot help feeling that that is a considerable factor in the lack of output by the heavier workers, leading also to those innumerable breaks for cigarettes and tea which are the feature of our countryside to-day. If there is no improvement, the burden on the community will steadily increase, as more and more of our building has been performed at this uneconomic and expensive rate of man-hours. It is factors like these, just as the price of fuel and transport, which have an inevitable, ultimate effect on the cost of living. I hope His Majesty's Government will be able to let us know whether they see any sign of improve merit and can indicate what, if anything, they are doing to alter this trend and alleviate a situation which is one of great seriousness.
§ 5.5 p.m.
§ LORD WOLVERTON
My Lords, I rise in support of my noble friend Lord Hawke who has just delivered a most able speech. I too have spoken from time to time in this House on housing, for it is a matter in which I take a tremendous interest Therefore, I crave the indulgence of your Lordships for a few moments in order to support my noble friend. When I read this Gird-wood Report last year, like many other people I was most perturbed to see that productivity was falling. It can be said on all sides of the House that good housing for the country is one of the most important social improvements to be desired. I should like now to quote a few figures in support of my noble friend Lord Hawke, and my contention about the worry caused by this scaling down of productivity. I have taken my figures entirely from official sources, and I will go through them slowly. I have not been able to supply them to the noble Lord who is to reply, but as the noble Lord, Lord Quibell, will to-morrow be raising this subject again, perhaps if the noble Lord cannot answer to-night he will be able to answer then.
I will take two periods in this year, the periods to the end of March and to the end of October. I think noble Lords opposite will agree that those two dates represent respectively the end of the building season starting in the autumn or late summer and probably finishing by 1251 March, and that which starts again late in March and lasts to the end of October or the beginning of November. In the official Housing Return of March 31 for England and Wales, the figure for Great Britain is that 20,160 permanent houses were produced by all agencies—that is, local authorities, private builders, housing associations and Government Departments. At the end of October, the corresponding figure was only 16,433 houses—a drop of 3,727 houses. If I may, I want to look for a moment at the labour position. At page 29, table 9, of the Housing Return for March, your Lordships will see the figures. For the construction of permanent houses and the preparation of sites approximately 217,700 men were employed. By the end of September of this year—that is the last figure published—the number was 222,900 men. So 5,200 more men were employed on erecting 3,727 fewer houses. I think that is a grave matter. Those figures are from the official return.
There is another matter that I want to mention. A great deal has been said by His Majesty's Government lately on the timber situation. I have been trying to find out why it is that there is this reduced productivity. We have been told that the timber position is critical. If your Lordships take the Housing Return for September 30, 1949, and look at the timber stocks for the end of two periods, you will see that for 1948 the amount of softwood timber imported for all uses and allocated between various Departments was 878,028 cubic feet. That is for the whole year 1948. For nine months of this year, imports were 793,417 cubic feet, or only about 70,000 cubic feet less in nine months. This year, on those figures, the timber position has not deteriorated greatly, and productivity of housing has gone down. In supporting my noble friend, I hope that His Majesty's Government may be able to give us some information of what has happened.
§ 5.10 p.m.
My Lords, I wish to intervene in this debate for only a short time. It will be appreciated that the approach to this case is entirely from the non-Party angle. And to the Question asked by the noble Lord, Lord Hawke, I hope an answer will be given by His Majesty's Government that will 1252 give encouragement to us all to do what we can to correct these defects in the problem of productivity. I do not think there is any need for me to enlarge on the overwhelming importance of the building industry or the need for housing in this country. It has become commonplace to all of us who are interested in the matter. It is as important to-day as it has been ever since the end of the war, that the number of houses should increase faster than has already been the case.
The Report of the Committee to which allusion has been made deals, of course, as has already been indicated, with the specific point raised to-day by Lord Hawke. I see that in the summary of their Report the Committee state that the main contributory causes of the loss of productivity in house building, besides shortages of material, were:the shortage of labour; the effects upon the quality of labour of the war,and no doubt akin to that was the remark of Lord Hawke in regard to the effect of the food problem upon those who are engaged in this industry, andthe serious overloading of the building industry due to a larger volume of building work of all kinds being put in hand after the war than could be undertaken efficiently with the building resources available.Then in the next paragraph is a reference to "the lack of individual effort." As the Committee point out:Until the problem of personal effort is solved also, output cannot be satisfactory and loss of productivity is inevitable. It is a problem that has to be resolved by every individual in the industry, whether employer or operative. The removal of the pre-war fear of unemployment has emphasised the need for more positive incentives, for rewards rather than penalties, and for new methods of encouraging efficiency. Good personnel management in the industry and the provision of proper working conditions and welfare facilities for building workers have assumed a new importance to-day.My Lords, I think that when we have a Report of this importance emphasising this particular point, it is as well that we should bring this matter up in your Lordships' House with a view to ascertaining what views His Majesty's Government hold as to the means of doing something to alleviate the difficulty. The Committee say in another part of the Report:We have indicated some of the causes of the decline in productivity, but we would make it clear that a serious factor has been the lack of individual effort. Until this problem of personal effort is solved, output cannot be satisfactory and loss of productivity is inevitable. 1253 Fundamentally it is a problem that has to be resolved by every individual in the industry, whether employer or operative.In rising to support my noble friend in the Question he has asked, and in the effort to try and get this matter dealt with on somewhat different lines than perhaps has hitherto been the case, I earnestly hope that His Majesty's Government will be able to throw some light upon this subject.
§ 5.15 p.m.
§ THE PARLIAMENTARY SECRETARY, MINISTRY OF WORKS (LORD MORRISON)
My Lords, there is a general opinion in the outside world that life in your Lordships' House is dull. Often my friends in the outside world comment upon that and think it must be a very dull life in here. I do not find it so. Life here is full of surprises, and ore of the surprises is that until an hour or two ago I thought I was here to answer what appeared to my innocent mind to be a perfectly simple Question which appeared on the Order Paper—namely,To ask His Majesty's Government whether they are aware that the decline in output of building trade operatives as compared with before the war is seriously contributing to the very high cost of building.That looks fairly easy, and I thought the noble Lord would get up and ask that Question and I would answer it in a word of one syllable, and that would be that. Instead of which (I am not blaming anybody except myself for being so innocent) we have had three noble Lords getting up and making three very interesting and informative speeches on the subject, and, so far as I know (I may not have been sufficiently attentive). I doubt whether the Question has yet been asked which I am now going to attempt to answer.
I would like to say at the outset that an hour or two ago the noble Lord, Lord Hawke, was good enough to give me a copy of the figures he was going to quote. I am obliged to him for doing so. I am sorry I was not able to follow the figures given by the noble Lord, Lord Wolverton, as closely as I would wish, or with sufficient closeness to be able to give him a satisfactory or even a partially satisfactory answer. But I would point out that what occurred to me while he was speaking was that he did not perhaps recognise that his figures of houses produced relate to houses completed, and 1254 the labour force employed does not necessarily bear any relation to the houses completed, but only to the numbers under construction. However, perhaps when I have had an opportunity of reading the noble Lord's remarks I shall be able to write to him and give him a more effective answer.
The first comment that I would make upon the speeches of the noble Lord and his two colleagues this afternoon is, that they apparently convey an impression of putting all the blame for an unsatisfactory state of affairs on the operatives in the building trade.
§ LORD MORRISON
I said "apparently convey an impression." but I am perfectly sure that none of the noble Lords desires that to be so. If we take this particular item by itself, as distinct from other problems in the building trade, it is apt to give that impression. The output of building trade operatives is only one of a number of factors governing the cost of building. The increases in cost are due to a greater extent to rises in the cost of materials and wage rates, than to any decline in output. The noble Lord, Lord Hawke, made some comment upon the Report of the Girdwood Committee. May I comment upon it from my point of view? As the noble Lord said, the Girdwood Committee reported in 1948; but, as he will readily admit, the Report really referred to conditions which were prevalent in 1947.
§ LORD MORRISON
They reported then on the position as they found it in 1947. They gave six main contributory causes of lower productivity, and the period covered by their Report was, as I say, mainly 1947. The six main causes that they gave in the Report were: first, the shortages of materials; secondly, the shortage of labour; and thirdly, the effects upon the quality of labour of the war-time system of "cost-plus" contracting and of payment by results, the greater attractiveness of other industries, and an increase in the average age of building operatives. The fourth reason was a serious overloading of the building industry, due to a larger volume of building work of all kinds being put in hand after the war than could be undertaken 1255 efficiently with the building resources available. This overloading has been the fundamental cause of the shortages of materials and labour for house construction. The fifth reason was the lack of individual effort, and the sixth the bad weather of early 1947.
May I point out that of these six reasons which the Committee gave, three have largely disappeared—the shortage of materials (I am not saying that has entirely disappeared, but it has to a large extent), the shortage of labour, and the over-loading of the building industry. Yet another one, the last one, the bad weather of early 1947, was, of course, a transitory factor. Therefore, we are left with only two reasons given by the Girdwood Committee in their Report for the present low output of the industry. I take it that noble Lords who have spoken accept the analysis as mainly correct—namely, the effects upon the quality of labour of the war, the war-time systems of "cost-plus" contracting and of payment by results, the greater attractiveness of other industries, the increase in the average age of building operatives, and lack of individual effort. The last reason is the one which the noble Lord has been specially emphasising. I am pleased to be able to tell him that the building industry—as perhaps he knows—has, by joint agreement, permitted the payment of incentives for the last two years, and the question of the future arrangements governing the payment of incentives is now due to be reviewed by the industry. I thought that the noble Lord's calculations appeared to be aimed at supporting the contention that the number of man-hours required per foot super have increased since the Girdwood Committee reported on the position in 1947.
It the noble Lord will allow me to correct him, I would point out that I specifically said that I was not saying that. I said that from my own figures it seemed that there had not been any great improvement at any rate.
§ LORD MORRISON
If I may put it another way, I gather that the noble Lord would welcome some information that improvement was afoot. I can only say immediately that such evidence as the Government have on this matter does not appear to bear out the noble Lord's pessimistic fears—if I may so describe them.
§ VISCOUNT SWINTON
May I ask the noble Lord if this is statistical information which he is giving? If it is, it is extremely satisfactory. The Girdwood Report was very detailed, and contained statistical evidence based on the returns of different firms and Ministries. When the noble Lord says that the evidence available to the Government does show some improvement, is that based on figures?
§ LORD MORRISON
Yes, it is based on figures. I was going on to amplify them. Before doing so, I would like to say that so far as Lord Hawke's point is concerned, the difficulty in which it places me arises from the fact that he quotes a person whom he calls "his contractor." I do not know who his contractor is. I do not know where the place is of which he is talking. I do not know when the house to which he refers was built, the size of the contract of which it formed part, the nature and the organisation of the contractor, the part of the country in which the house was built, the type of house, or whether any scheme of incentives was in force. All these factors would affect materially not only the cost of a house, but also the man-hours involved. Therefore, it is difficult for me to accept without question figures on a selected special case. What the noble Lord has quoted is a case which may have exceptional and unusual features of which I am quite unaware.
I think it only right for me to say for the purposes of the record that I do not claim that my contractor is necessarily typical. I merely said that it looked as if he confirms that the position is at least as the Girdwood Report puts it. If the noble Lord can tell us that the position has improved as compared with that shown by the Gird-wood Report, we shall be very happy to hear it.
§ LORD MORRISON
My answer to that is that the figures given by the noble Lord, Lord Hawke, are at one extreme, and the Government's information is that there are figures at the other extreme. The figures given by the noble Lord in repect of the present-day house appear to indicate that his contractor is building a house considerably smaller than the general average—914 feet super as compared with the Girdwood average of 1,029 feet super. Further, this small 1257 house is taking a number of man-hours which is larger than the average number of man-hours which has been disclosed to the Ministry of Works in a recent survey. This survey suggests that the number of man-hours involved has not increased recently, and that where incentive schemes are in force man-hours have probably shown some decrease. It was recently announced by the chairman of the London County Council Housing Committee that as a result of the incentive arrangements in force on the L.C.C. housing, output had increased by 45 per cent. against the previous level for L.C.C. housing, and that labour costs had at the same time been materially reduced. I ask your Lordships to note that the figure of 45 per cent. which I have just given is for the London County Council's housing to-day as compared with its housing output in 1947, and not as compared with housing generally throughout the country.
This improvement is probably higher than the general run of experience in the country as a whole, but there is evidence from a number of sources to suggest that over the last two years there has been a significant rise in productivity. This is reflected both in terms of the shorter length of time now being taken to build a house and in terms of the increased amount of materials which are now being used on housing by about the same labour force. The size of houses has hardly changed over the last year or so, and, at the same time, tender prices have remained reasonably steady. This has been achieved in spite of increases in labour costs and in materials since 1947. This shows that the cost per foot super cannot have increased.
At the commencement of my speech I made some perhaps irrelevant remarks about the difficulty I was in. If this matter had been dealt with by Question and Answer instead of being debated, the answer which I should have given to the noble Lord's question would have been this—and I will conclude by giving it as a summary of what I have just said. The output of building trades operatives is only one of a number of factors governing the cost of building, the increase in which is due to rises in the cost 1258 of materials and in wage rates more than to any decline in output. The question of output in the building industry is very much the concern of His Majesty's Government, who are gratified to find that recent estimates show a consistent upward trend. I hope that that may reasonably satisfy the noble Lord who put the Question.