HL Deb 17 July 1963 vol 252 cc202-12

2.57 p.m.

LORD SILKIN rose to call attention to the housing situation with special reference to the high and increasing cost of land for housing and other purposes; and to move for Papers. The noble Lord said: My Lords, I beg to move the Motion standing in my name. In view of the fact that the noble Lord, Lord Hastings, who is to reply to me is not here, perhaps I ought to play out time a little until he arrives, because I should not want him to be absent to-day when I said something really worth while. We do not often have debates on housing, although we did have one about fourteen months ago. On that occasion the noble and learned Viscount who leads the House made the suggestion that we might have more frequent, but perhaps less lengthy, housing debates. The last such debate was rather lengthy; there were 21 speakers.

Little has happened since then, except for the fact that the Government have issued a White Paper on Housing. I should like, in general terms, to say a few words about this White Paper. It is a most interesting document, but it would have been much more interesting had it been published about twelve or thirteen years ago. Coming, as it does, at the end rather than at the beginning of the life of this Parliament, it looks rather like the last will and testament of a man who leaves £1 million to his friends when his estate is in fact insolvent. This White Paper is full of promises as to what is going to be done in the next ten years: what the Government are going to do. In fact a good many of the things that they propose doing could not be done without legislation, and when they are going to introduce this legislation I do not know.

Moreover, good as they are, the ideas are an accumulation of the ideas that have been put forward to the Government from time to time by noble Lords, and not only from this side of the House but from others. I would mention in particular the voice of my old friend Lord Bossom who, in season and out of season, has persistently and consistently advocated the importance of prefabrication. I am glad that at last this idea is recognised, if only on paper. The Government seem to favour the idea; it is almost the first time that we have had an official recognition of the idea. I am glad that the noble Lord, Lord Bossom, is going to speak this afternoon. No doubt he will give us his views on the contents of this White Paper.

There is one other thing I want to say about the White Paper. When we last discussed this subject we had some little argument as to the actual needs. I put forward that we needed 400,000 houses a year. The noble Earl, Lord Jellicoe, was saying that 300,000 was what was required and that the Government had got pretty near building them. Well, the Government have come much nearer to my figure in the present document, because they now say that even 350,000 houses a year would not satisfy the needs, but they see no way by which immediately they can do better than 350,000, or even 300,00. However, we are at least much closer in our estimate as to what are the real needs of housing to-day.

I want to turn now to the question of needs and just what we are doing to satisfy them. The Government seem very satisfied that they are making great progress (the Government themselves do not, of course, build houses) by saying that they have built 300,000 houses a year, but one has to examine this figure very closely to see how far the houses that are going up to-day satisfy the needs of the people who are dealt with in this White Paper. When we come to examine what is going up to-day we find that they fall very far short of satisfying those needs. If we look at the houses which are being put up by private enterprise we find that a substantial number of them in certain places are semi-detached or detached bungalows. Whose needs they satisfy I do not know, but I will assume that if they are at a price which is within the reach of the people about whom we are speaking in this White Paper they do to that extent satisfy the needs. But in fact a very large number of these dwellings that are being put up by private enterprise to-day are not intended for the people whose needs are set out here.

Take the large number of luxury flats and luxury houses which are going up in London and the main towns—the majority of which, incidentally, are available for purchase or letting. They are not even occupied. Although they are counted among the 300,000-odd that are being provided by the Government (as they say), they certainly are not available to meet the needs of the people who are homeless, or living in slums, or the people who are overcrowded, and so on. Or take the flats and houses which are going up at the seaside—any number of them. Any noble Lord who wants to go and live in Brighton, Eastbourne or Bournemouth can have his pick. There are thousands of them available, empty. But they all count in the 300,000, among the number put up by private enterprise. Therefore, I think that there is a case for examining much more closely what we are doing to provide for the needs, and not to mislead ourselves by imagining that if we accumulate all the houses and flats put up by private enterprise to-day we are really, to that extent, making a contribution to meet these needs.

There are a number of other factors which one ought to take into account. Are they being built in the right places? Are they being made available to meet the needs of people who will have to work? I suggest the answer to a large extent is, No. It is not a factor which is taken into account at all. The Government have very little control. Every local authority is allowed—sometimes encouraged, sometimes discouraged—to build houses, and when they are encouraged they are allowed to build ad lib, whether the need in their particular area is great or small. No attempt is made to co-ordinate the housing needs of the country. I think that this can be done only by having some kind of a detailed national programme.

The first thing I should like to say is this—here I am speaking quite tentatively, and for myself; this is not a matter which I have discussed in any detail with my Party, and I am not putting forward Labour policy. This has a bearing on the extent to which all the housing activity which is taking place to-day is really meeting the needs of our people. I consider that we ought to look at the housing problem from a national point of view, so as to ensure that houses go up in those areas where they are really needed, and not in other areas. This of course will involve regionalisation and eventually—and I am speaking only of a programme; I am not speaking of who carries out the programme—I should have no objection to local authorities, or groups of local authorities, carrying out a defined programme.

It may also mean (and here again I speak purely tentatively) that so long as there is a great shortage of housing for those who really need it, and so long as our housing resources are scarce—as they are, because even the Government are admitting that they cannot meet the needs in this White Paper—we might consider the possibility of having something equivalent to an industrial development certificate for those who want to put up houses. As the House knows, the noble Lord, Lord Molson, is very well aware of the origin of the industrial development certificate. It is contained in Section 14 of the Town and Country Planning Act, 1947, and it was introduced immediately after the war with a view to controlling the amount of industrial development which would take place, to ensure that it would take place in the right areas and to the right extent, and to ensure that it would be of the right type.

There is something to be said for having an equivalent of that system in regard to the building of substantial numbers of private dwellings so as to ensure that when a man acquires a house, or even possibly acquires a house for a second time when he already has one, he should not be doing it at the expense of somebody who has none at all. I put that forward, and, as I say, I have not worked it out. I feel that it may well help in meeting the situation. If we are really serious in trying to meet our housing needs, we have to ensure that the building resources of to-day are used to the best advantage and used directly to meet our needs.

I have referred to location and the type of house, and I want to say a word about standards. So far the net result of the Government's activities in the direction of standards has been to lower them. They have reduced the superficial areas of houses from what they were by about 100 square feet per house. The result is that to-day we are getting a far less satisfactory dwelling than we were getting some years ago. On the other hand, about a year ago there was a Report of a sub-committee of the Central Housing Advisory Committee presided over by Sir Parker Morris. His Commit- tee laid down standards of housing below which they felt we should never fall, and these standards are substantially above anything that is being built by local authorities to-day. They provide for a minimum of 1,000 feet in superficial area; for every dwelling to have a garage, as well as (where it is a family dwelling) facilities for storing a motor bicycle; for some form of central heating, and so on.

I think that your Lordships will agree that these houses, which are intended to last for possibly up to 100 years, should be such that we shall not feel, perhaps in 20 years' time, that they are below the standard which will then be regarded as acceptable, as many of the houses built before the war are today. Moreover, if we assume that in the next 20 years or so we are going substantially to raise the standard of living in this country, then obviously one factor in the standard of living—and I would say, apart from food, perhaps, the most important factor—is the standard of housing. I feel most strongly that we should not permit the kind of house which is at present being built by many local authorities, and which we know will be out of date within one generation, at the most. So we must also have regard to that factor.

There is one other factor which we must take into consideration, and that is the question of price. I believe—and I hope the noble Lord, Lord Bossom, will be able to confirm it—that once one has got well into production on prefabrication we ought to be able to produce houses at a far lower price than is possible to-day. To-day the cost of our housing is rising so as to make it quite impossible for the ordinary average working man to acquire a home of his own, or even to rent a house at an economic rent. I believe that the average earnings to-day are about £15 16s. per week. If you assume that a person can pay about a third of his earnings, that works out at five guineas a week. Noble Lords will know that, if you have to pay an economic rent, you cannot get accommodation for that sum, including rates. You just cannot get it; it is unobtainable. I am not blaming anybody for that: it is entirely due to the cost of building and the cost of land—and I want to come to the cost of land in a moment.

So the fact is that it is impossible to provide the average person, the person with the average income, with a house which he can either rent at an economic rent or buy. Because if he is going to buy it the annual repayments, even over a period of 30 years, would involve him in a payment of at least five guineas a week. However you encourage building societies to lend money, they have got to get their money back; and, on the present rate of interest, the repayments must work out at over £20 a month. So we must get the cost of housing down, and I hope that one way will be to reduce the cost of building, either by means of prefabrication or by other means.

I think it is no secret—and most of us who have had experience of building will agree: I am not putting it extravagantly—that we are not getting a fair output to-day from the average builder. The output is possibly 50 per cent. of what could be achieved. I think I mentioned on the last occasion when I spoke here that it had been stated, on very high authority in the building industry, that the difference in output between the least efficient builder and the most efficient was something in the proportion of three to one. But then the most efficient builders are not engaged on building working-class housing, or even housing for the lower middle classes. That is the trouble. The person who is engaged in providing those is much nearer to the lower category than the top category; therefore we are not really getting the maximum amount of output. That is a problem which we must face.

A very big factor, though I do not want to exaggerate it, is the immense rise in the price of land recently. There was quoted in the Press only a few days ago a statement made by the Clerk to the Hampshire County Council at the Annual Conference of the Royal Institution of Chartered Surveyors, in which he referred to a case which had occurred in his own area of a person who had bought 150 acres of land for £10,000 six years ago. The local authority had then provided a drainage scheme and made it suitable for building, and had given planning consent for the erection of houses on that site. To-day, the Clerk said, the value of that land, or the price at which it can be sold, has gone up from £10,000 to £500,000. Somebody is going to pay for the cost of that land, and it will be the unfortunate tenants. I do not know what is the permitted density on 150 acres, but a little arithmetic will show that it means a substantial amount for each house, and the tenant has got to pay for that, as well as for the increased cost of building. The Sunday Express last Sunday referred to the fact that building costs have gone up in the last six months by something like 7 per cent.; and they were not talking about building land.

I could quote example after example of the rising cost of land over the past few years, but I do not want to weary the House; and every noble Lord who takes the slightest interest in this matter will be able to provide examples of his own. But the plain fact is that, if you take agricultural land which is worth £150 to £175 an acre, and then provide the necessary services to it at the public expense, and you give the owner of that land (who did nothing at all to that land himself) planning permission you straight away increase the value of that land from, say, £150 to £175 an acre to £3,000 or £4,000 an acre. And if it happens to be in an area where housing or other forms of building are desirable, it might even go up to £10,000 or £15,000 an acre. In other words, it is possible that, through no effort on the part of the owner, only through the activities of the community, the value of that land might go up a hundredfold. Every noble Lord knows that I am not exaggerating, and that these are not special cases; that this is quite a normal experience. Wherever planning permission is given and services are there, up goes the value of the land dramatically.

Now this planning permission is, of course, purely fortuitous. There may be, over an area of half a mile, a dozen planning applications for two of which planning permission might be granted, the remainder not. They will not all get them. It is this fortunate few whose land rises so much in value, and the remainder stays as ordinary agricultural land. I would submit that this increased value ought to go, at least in substantial part, to the community, and not to the individual. When we discussed this question before, and when it was discussed in another place, it was suggested that this was something that was inevitable; that this increase in the value of land was the result of something in the nature of a law, following the Ten Commandments—that it was as inevitable as that; that it was the law of supply and demand. Land was scarce; very much needed by the community; therefore, its price automatically went up, and there was nothing that could be done about it, and certainly nothing that the Government proposed to do about it.

As some noble Lords know, we made an attempt in the 1947 Act to do something about it: to secure these values for the community, and to pay the owner compensation for loss of development rights. I am prepared to admit that we were perhaps a little greedy and tried to charge too much for development value; but, in principle, we were right in the 1947 Act. It was right to take for the community the value of the betterment in land; and it would have been perfectly reasonable if the Government had said that they would charge, not 100 per cent. of the increased value but a substantial part of it. That could have been done. There was never any suggestion that it was not workable, only that the amount of the development charge was too high. Instead of amending the provisions of the 1947 Act, these financial provisions were entirely abandoned and, under a later Act, the 1959 Town and Country Planning Act, the whole thing was left open to the market price. That in fact meant the law of supply and demand—and in a state of affairs where there is a shortage of land there is no limit to the height to which the market price can rise.

We on this side of the House have put forward proposals for dealing with this situation, and I think these proposals are perfectly well known. We would set up a Land Commission which would have the right to acquire all land which is about to be developed; that is, land in respect of which planning permission has been given. We would pay a fair price for that land, but not an exorbitant price, and we should be prepared to lease it to the people who want to develop it at a fair rent and under fair conditions having regard to the price that was paid for the land. Nothing could be more reasonable than that. If noble Lords have any criticism of the scheme, by all means let us hear it, but let us discuss it, I would suggest, on an objective basis as one method—and I think a fair method—of dealing with this problem which noble Lords opposite admit exists but which they say cannot be solved. They say it is inevitable; that it is one of the results of the law of supply and demand. I should hope that possibly, as one of the outcomes of this debate, we might have a serious discussion as to what we are going to do about this admitted problem of the high and increasing cost of land, which is doing so much to frustrate our efforts.

My Lords, I am afraid my remarks have been a little discursive, but I had not felt that I could sit down and prepare a speech, and I hope I shall be forgiven. I hope also that I have been able to put before the House one or two ideas which are worthy of further discussion. My first suggestion is the possibility, during the shortage, which I hope may not last too long, of exercising some kind of control (perhaps that is an ugly word; let me say "regulation") to ensure that housing is provided only or primarily for those who need houses, and that those who want a second or a third home should have to take their place in the queue. I hope that that proposal might be considered as well. My Lords, I beg to move for Papers.

3.26 p.m.


My Lords, I think we should be very grateful to the noble Lord, Lord Silkin, on this occasion, as on past occasions, for raising the question of housing, and for the very fair and helpful way in which he has dealt with this matter. Your Lordships' House does not indulge in personal references, but I am sure that we all admire the courageous way in which the noble Lord, Lord Silkin, has continued to do his duty notwithstanding the great sorrow which he has recently suffered.

My Lords, this is a gigantic subject, and there are several aspects of it, all of which are important, but I think that there are a few points of a factual nature upon which there may be some general agreement. In the first place, the population of the country has increased, is increasing and is likely to go on increasing. The birth rate has increased; people live to a greater age; and there is an increase in immigration, notwithstanding the fact that this has been partially restricted. A large expansion of house building is necessary if the country is to meet three demands: first of all, the demand of the rising population; secondly, the demand to reduce overcrowding; and, thirdly, that to replace houses which, in non-technical language, may be described as obsolete. In order to meet these various requirements, at least 7 million new houses will have to be built in the next twenty years. This means that, on average, 350,000 new houses should be built each year. There is nothing final or pedantic about this figure: it is intended only as a reasonable estimate, and is subject to variation.

Then there is the most important subject of the cost of building. Let us face up to this question without any quarrels. This covers, broadly, the cost of land, the cost of materials and labour, and also the availability of labour and materials in each particular district. The cost of building, like the size of our population, has increased, is increasing and, I am sorry to say, is likely to go on increasing even further. However, the point which to my mind lies at the root of the matter is what we may call the drift to the South. There is no definition of that expression but, broadly speaking, it means the enormous demand for dwellings in and about London and south of an imaginary line drawn from London to Bristol. As I have said on previous occasions, at the present rate of growth, by the year 1970, there will be one continuous street from Charing Cross to Reading, and a similar state of projection north and south and east of Charing Cross. But what makes me sad is this: no one troubles about such an undesirable prospect, or is really worried about it in any way. Various remedies are mentioned from time to time in a general way, such as increasing density, building upon land which is not really required as Green Belt, and a variety of similar matters which, in my opinion, hardly touch upon the problem at all.

What is to be done about this gigantic problem? There are numerous remedies. Let us concentrate upon a few suggestions. In my view, the first essential is to construct a dozen new towns with ultimate populations of around 100,000 but none within 50 miles of Charing Cross or south of the imaginary line drawn from Charing Cross to Bristol. This cannot, of course, be done in a day, but it is reasonably practical within twenty years. It involves the location of industry in and near the proposed new towns. The Board of Trade exercise control over the location of new industry by means of industrial development certificates, and they, of course, will play a large part in this new scheme which I suggest. I myself think that this is a matter that the Government could well discuss with the big cities and towns in the Midlands and North of England. There is, of course, plenty of room in other parts of Great Britain—but, to put, it bluntly, do you want to go there?

I think I know Scotland as well as anybody. I was once stationed at Budden Camp near Dundee. Have any of your Lordships ever been stationed there? When I said to a man that I was stationed there he said to me, "It is a wonder you didn't take to drink." I replied, "It is no wonder at all: there is nothing there to drink." And so it is from another place called Pitlochry to Braemar in the centre of Perthshire. You could place a million people around there; and, so long as I am not one of those million, I would have no objection. You could also place a million people near Loch Ness and let them watch the monster; but do you really want to spend your life doing that; or to suggest that other people should go and live there?

Let us face it, everybody now wants to come South. The result of this is to create an enormous demand for land for building purposes in the South; and what effect that has upon land prices is within the knowledge of your Lordships. In order that land prices may be equalised; in fact, in order that prices may come down, I suggest that this drift to the South is the crux of the whole matter. Housing difficulties will be materially lessened only with the Government taking strong action to reduce this drift. This is quite off the record, but I think what we want in the country is a land dictator; and, as Horatio Bottomley used to say in the days of his effervescence, "It is only modesty that precludes me from mentioning a certain name".