§ 2.56 p.m.
§ LORD ST. HELENS rose to call attention to the reduction in house building, and to the disappointment caused thereby; and to move for Papers. The noble Lord said: My Lords, in rising to move the Motion which stands in my name on the Order Paper, I am conscious of the fact that we have not in your Lordships' House debated housing for quite a long time. On the other hand, there have been a series of debates on housing in another place, the last of which took place on January 29 this year, and I hope that your Lordships will acquit me of any discourtesy if I do not rehash all the arguments put up in that debate. Masses of facts and figures were given, and I feel that it would be rather tedious repetition simply to churn them all out again, because I am quite certain that those of your Lordships who are interested in the subject will have read the debate in another place.
One of my main reasons for raising this debate is that I believe that lack of housing and bad housing is one of the greatest causes of misery in the country to-day, and I am absolutely certain—I am not very often but I am on this occasion—-that I shall have the full support of the Government Benches opposite, because in the Labour Party Manifesto for the 1966 Election the following phrase occurred:
Bad and inadequate housing is the greatest social evil in Britain to-day.
§ I must confess that since I have had the honour of coming to your Lordships' House I have been very much more out of touch with the housing situation than I was as a Member of the other place. In another place Members normally went to their constituencies every Friday evening for what we used to call our "surgery", and, on an average, of 12 people who came to see me each Friday evening, 9 at least were people who had housing cases. The dreadful thing was that it was almost impossible to help them because of the overall lack of housing accommodation in the borough. Furthermore, one used to go canvassing, and there one saw the deplorable conditions in which human beings lived. I am sure the noble Baroness, Lady Llewelyn-Davies, will agree with what I 228 say. The River Wandle flowed through the borough, and every now and then it overflowed. When that happened, large areas and streets were flooded, not only from above but from below, because the water got into the sewers and pushed water up into the houses, which is quite deplorable. I am sorry that the noble Lord, Lord Fiske, is not in his place, because when he was Chairman of the L.C.C. Housing Committee I remember going to him and asking for his help. I may say that his help was very considerable and prompt, and we were all extremely grateful to him.
On March 27, 1966, at Bradford, the Prime Minister made the following pledge:
Starting from last year's total of 380,000 houses and flats, we shall go on year by year exceeding this total, and reaching by 1970 no less than 500,000 new dwellings.
This is not a lightly given promise It is a pledge. We shall achieve the 500,000 target, and we shall not allow any development, any circumstance, however adverse, to deflect us from our aim.
It is the non-fulfilment by the Government of the Prime Minister's pledge that this debate is really all about.
§ The plain fact is that the electorate, without realising it, have been deceived. One cannot guarantee these things, but in my own personal opinion the pledge given by the Prime Minister was one of the greatest vote-catchers in the whole of the 1966 Election; and, if I may be Party political for a moment, I hope that the electorate at the next Election will remember that pledges given by the Prime Minister do not appear to be worth the paper they are written on. Thousands of young marrieds, thousands of people living in inadequate houses up and down the country, have been cruelly cheated and disappointed. In fact, we are going to miss the target by something like 140,000 houses this year.
§ The reasonable question to ask oneself is, what is the reason for the Government's failure? The reason is not in spite of the Government but because of the Government; for the Government's economic policy overall has militated wholeheartedly against their achieving their pledge. Selective employment tax I put first on the list of iniquities that have prevented the Government from reaching their targets. I am glad that my Party are pledged to abolish the selective 229 employment tax when, in a short time, we are returned to power. The import surcharge, the import deposits scheme, bank rate and betterment levy are all factors that have militated against the Government being able to achieve success in their housing policy.
§ The failure of the pledge and of the Government's economic policies has also affected other solemnly given promises, such as that the price of houses will go down. In fact it is common knowledge that since 1966 the price of houses has soared. It was said that mortgage rates would go down: we all remember Mr. George Brown's pronouncement on the 3 per cent. mortgage rate. Those rates, too, have soared. The late Lord Attlee once said that it is not surprising that the Socialist Party cannot efficiently administer a capitalist policy, because fundamentally they do not believe in capitalism. This may well lie at the root of many of the failures that have occurred.
§ There is also the question of the philosophy of housing, the attitude towards housing demand and the construction industry as a whole. Government policies have taken housing out of the general market function. This is admirable in the short run, but I believe that it will be disastrous in the long run. I shall have a little more to say about that later. Through rent control and massive subsidies housing has been provided at prices well below those normal in a free market. This policy must have inevitable effects. Distortion of the market will always have inevitable effects. The first effect is on private enterprise. Builders and financial supporters of 90 per cent. of pre-war construction have taken less and less interest in housing and construction for letting. Private builders have found themselves no longer in a position to compete with subsidised construction. This has meant not a diminution, but perhaps a less than possible aggregation of the building possibilities of the private market.
§ Another effect of this distortion has been that on the tenant himself. To-day, in many cases, the tenant, because of his cheap and rent-protected accommodation, no longer wishes to build and to become an owner-occupier, even when he can afford it. There has resulted under-occupation of property. This is a very serious thing that is happening in London. When I was in another place one 230 often used to go round canvassing or visiting houses, and one would come to a nice looking house, probably Victorian, and find one elderly couple living there. One would say, "Well, you are all right now. You have a nice house." But the poor housewife, almost in tears, would say, "Oh, but how we wish we could get out of it! It is far too big for me. It is killing me, and my husband cannot get up the stairs." There was, and there is no machinery for such an elderly couple to get out of that house and perhaps into a small council flat. They have a roof over their heads, and therefore they are ineligible for inclusion on the council's housing list. This causes a great deal of hardship, both to the elderly couple and to families crammed into one room who want enlarged accommodation.
Finally, one effect is the occupation of protected or subsidised housing by people who do not really need public help. This we find widespread throughout the country to-day. It is difficult to pin down and difficult to put right, but it is a fact—a concealed fact, something that we shall have to deal with sooner or later. The result of the accumulation of all these factors has been a stagnant and falling housing market. Nor is the outlook for the future particularly encouraging. My noble friend Lord Molson put down a Question for Written Answer. It was answered by the noble Lord, Lord Kennet, yesterday, in these terms:
The nation-wide excess of houses over households in 1973 is expected to be about I million. As Mr. Robinson explained at the time, this surplus will not be evenly spread throughout the country, and I regret that shortage of housing and bad housing must be expected to continue beyond this date in some places."—[OFFICIAL REPORT, 5/5/70, col. 214.]
§ I should like to ask Lord Kennet, on that particular Answer, to what degree, in achieving the I million surplus houses, has slum clearance come into the matter? I do not know the degree of slum clearance, for instance this year. But how much does slum clearance contribute towards the additional 1 million houses in 1973, or how much is planned? (should be grateful if the noble Lord would say a few words about that subject when he comes to reply.
§ My Lords, I want to be brief, but I wish to turn to two other countries in Western Europe, the Federal Republic 231 of Germany and Belgium. The Federal Republic of Germany was faced with the greatest problem as a result of the devastation of its houses. I remember shortly after the end of the war visiting two cities, Hanover and Hamburg. It was one of the most dreadful sights I have ever seen. I see the noble Lord, Lord Kennet, nods agreement. Hanover had been subjected to devastating 1,000-bomber raids, in which the technique of using incendiaries with high explosives was used, I think, for the first time. The result was a fire of incalculable size. So great was it, I was told when I went there shortly afterwards, that fire engines were actually sent from the City of Berlin to help out. What is more, so great was the conflagration that fire engines at the perimeter of the blaze were, with their crews, actually sucked into the middle of the blaze. Your Lordships can imagine the devastation that they were faced with there.
§ Hamburg had a similar experience. When I went there shortly after the war the Germans had started to bulldoze the rubble away. There were no streets; they were merely clearing the way for streets. But so bad had been the destruction and so great the carnage that they had to stop doing it until the thousands of corpses had further decomposed and they were able to tackle the job. During the early years after the war public resources in Germany were spent in housing amounting to well over 50 per cent. of the total investment. As I said earlier, that represented the public side; but the nearer they came to their target the more the public commitments were reduced and withdrawn and the construction was left to the functioning of private enterprise and the market. Certain very definite trends were observable in the German policy: people were encouraged to become home owners; tax relief was most generously given; a widespread system of construction savings banks was introduced; and special mortgage banks were set up to help tenants, As a result, the housing problem of the West German Federal Republic has been solved to-day—in so far as one can ever say that a housing problem has been solved, because when you have built the necessary number of houses you have then to start turning again to slum clearance and modernisation of old houses.232
§ Belgium was rather different. Belgium had relatively a smaller task than that of Germany, but there again the emphasis was on owner occupation. Some five years ago in Belgium no less than 60 per cent. of the total number of houses were owner occupied, and that percentage has increased in the past five years. Private enterprise was stimulated as far as the Government could go by such schemes as a 10 per cent. construction bonus; loans were issued at reduced rates; here again tax relief was generously granted, and a credit system of special mortgage banks was introduced.
§ Although we are discussing housing in Britain, I have mentioned those two countries because, so far as I know, they are the only two countries in the whole of western Europe who have solved their housing problems. They have freed the market in housing; they have abolished rent control; and this they have done through a massive stimulation of the private sector and through generous tax relief schemes. They have done it through a progressive return to a free market and the gradual transference of subsidies from things (that is to say, the very badly needed houses) to people (that is to say, the people who could not afford to pay the economic rent). I believe it to be a cardinal point that a great deal of money is wasted in subsidising things, whereas when money is in short supply, as it always will be, the correct way to give subsidies is to give them to the people who need the money. If your Lordships believe, as I do, that policies are to be judged by results, then I suggest that we have still a great deal to learn from these two European neighbours who have solved their problems post war.
I would conclude with one or two, as I hope, constructive suggestions. First of all, I would commend to your Lordships Mr. Peter Walker's ten points which were set out in Hansard of January 29, 1970, in the last housing debate in another place. I hope and imagine that they will become the basis of Conservative housing policy in the next Administration, and I commend them to your Lordships as being eminently practical. I would also suggest that greater effort be made to co-ordinate public, private and co-operative efforts in the field of housing, and that private
efforts should be immensely stimulated from the position in which they are in to-day. I should like to suggest that a study be devoted to providing greater tax relief to home owners, and building bonuses. I would suggest a Government credit guarantee system; individual aid to family home owners by the assumption of liability for part of the mortgage (as is done in Belgium and was done in Germany), and the promoting of public and private construction savings banks. I should like also to suggest that greater efforts be taken to ensure that social housing accommodation is occupied solely by persons of moderate incomes. About five years ago an article appeared in The Times which said:
The country may well do more building between now and the end of the century than in the whole of its previous history. This target will never be reached by broken pledges and a falling output.
§ My Lords, I beg to move for Papers.
§ 3.15 p.m.
§ THE PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD KENNET)
My Lords, let me first of all congratulate and thank the noble Lord, Lord St. Helens, for much of what he has said was constructive in tone—if I may say so, more constructive than I expected. I think there was a great deal in his speech for a Government of any colour to read, mark and inwardly digest. Of course, my kind remarks cannot possibly extend to the whole of his speech, as he will well understand. I should like to take the opportunity for the rest of the afternoon to mull over some of the points he brought up, and if the House is kind enough to give me leave to speak again at the end of the debate I shall try to answer them then.
The noble Lord, Lord St. Helens, in his Motion refers to:the reduction in house building, and to the disappointment caused thereby.In a way, I think his Motion is more Party political than was his speech. Let us consider what is the reduction, and who has been disappointed. Because I do not think it has caused much disappointment to all leading members of the Party opposite, some of whom have invited their friends who are in office 234 in local councils to see that in the public sector at least the decline continues.
What reduction are we talking about? The year 1969 was not a good year for housing by recent standards. The total number of houses completed showed a small decline on 1968, which showed, of course, the all-time record figure of over 414,000 houses completed in Great Britain. But the 1969 figures, though they are disappointing, are still better than any figure ever achieved under the Party opposite, if one excepts the year 1964, which was not wholly a Tory year and was, in any case, an election year. Indeed, during our period of office we have built five houses for every four that the Opposition Party built in the comparable period ending in October, 1964. The number of houses completed in the public sector has increased in that period over 40 per cent., and in the private sector by over 12 per cent. The picture is hardly one of strangulation of the private sector, even though the rate of increase has been lower than in the public sector. Not only have there been more houses built, but they were of better quality. Before we took office the quality of houses had been sacrificed to obtain numbers though, as I have already said, lesser numbers than we have been able to achieve with the superior quality.
The Parker Morris Report in 1961 recommended that the typical new dwelling of that time was seriously inadequate in a number of respects, particularly those of space and of heating, and these two standards were made mandatory from January 1, 1969. In 1964 only 33 per cent. of new dwellings met those standards. In 1968 it was 93.1 per cent., and I am proud to say it is now 100 per cent. As for the other standards which are not yet mandatory, only 14 per cent. of dwellings met those in 1964. It was 87 per cent. in 1968. In the private sector also there have been improvements, partly influenced by the National House Builders Registration Council, and partly by the example of the improvements in the public sector. In 1965 the present Government played a major part in strengthening the National House Builders Registration Council, and at the moment all dwellings receiving the Council's certificate have to reach certain standards which approximate to those of Parker Morris. The purchaser of a house with 235 a N.H.B.R.C. certificate obtains a 10-year guarantee against bad workmanship, and at the present time no less than 99 per cent. of new dwellings in the private sector are covered by the scheme. I repeat: more houses of better quality have been built under this Government than were ever built before.
Of course, there is no denying that the past few years have been years of great difficulty from the general economic point of view, from which the house building programme has not been wholly exempt. There has been a dip in the building of new houses during the last year. Of course there has. Who would have expected otherwise? There has been a dip in everybody's housing. What is happening abroad? The noble Lord quoted the examples of Germany and Belgium, but let us take a slightly more detailed look. Let us look at six countries with which we might compare ourselves: the United States, the Soviet Union, France, West Germany, Holland and Sweden. In every one of those there has been a dip in new housing since 1967. In the United States, 1969 was lower than 1968. In the Soviet Union and Holland, both 1968 and 1969 were lower than 1967. In France, 1968 was lower than 1967. In Germany, 1969 was lower than 1968. And in Sweden, 1970 is forecast to be lower than 1969.
We had to get the balance of payments right, and besides that there has been the world-wide phenomenon of high interest rates which is reflected in the figures I have just given the House. One could discuss for a long time why interest rates have been high in recent years. Some would say that it is no more than the result of a general situation of inflation and boom, and that what we see is no more than natural domestic checks introduced in this country or that. Others would relate it more closely to imputed disequilibria in exchange rates. They would notice the high value of the Deutschmark and the constitutional inability of the German Federal Government to use fiscal means to check or deflate their own internal economy. They would notice, also, that the United States abandoned their traditional low interest rate policy, which was of course internationally motivated, in order to check their domestic boom about two years ago. 236 Whatever one said, one might admit that there was an element of unwelcome but unavoidable escalation as nation reacted to the action of nation in this matter of interest rates. At any rate, it was clear enough that, if we were to prevent a possibly disastrous outflow of sterling at that crucial point of our own economic recovery, it was not open to us to refrain from the interest rate increase which all others were finding necessary.
And so to return to housing. Let us therefore not take last year's dip as anything more than the ripple it is. Let us consider the broader picture on house building. The Conservative Governments of the 'fifties achieved an annual average of 297,000 new houses. That figure is for Great Britain, not the United Kingdom. In 1965, 1966, 1967 and 1968, in each of those four years one after the other, the Labour Government set a new record in the history of this country. The peak so far, came in 1968, with 414,000 as against the pre-1964 Tory record of 348,000. That record was in 1954, and not once in the nine years thereafter did the Party opposite achieve a higher rate. They did in 1964, but that was the year in which they ran up an £800 million balance of payments deficit. So they financed their election year housing boom on foreign borrowing. Our figure of 368,000 last year, which was 20,000 better than their pre-1964 record, was financed not on foreign borrowing, but on a balance of payments surplus now running at the rate of about £600 million a year.
Let us look now at the cumulative totals. Towards the end of last year, the two millionth family since the Labour Government came in in 1964 moved into a new house. I should like your Lordships to think for a moment what 2 million houses means—because these noughts are hard to grasp. There are about 2.4 million houses in the whole of Greater London. Put it another way. If you were to take all the houses now standing in the whole of Manchester, Birmingham, Glasgow, Leeds, Liverpool, Bristol, Nottingham, Edinburgh, Sheffield, Coventry and Brighton, that would be just 2 million houses. Look at it another way again. If you take an average family size of four, 2 million houses equals 8 million people, and that is one-seventh of the entire population of these islands.
237 I think that is a fantastic achievement in five years, and to get a measure of the difference between that achievement and what the Tories did in their last five and a half years in office, I ask your Lordships to imagine all the houses now standing in the whole of Manchester and Liverpool. How many people have a Labour Government moved into a new house in five and a half years? About the whole of London. How many more people have a Labour Government moved into new houses in five and a half years than the Tory Government did in their last five and a half years? The whole of Manchester and the whole of Liverpool.
The arrangements under the 1967 Housing Subsidies Act have mitigated the effect of world-wide high interest rates on local authority new construction, but it has not been possible to shield them from the effect which they suffer when having to re-finance existing debt at the prevailing high rates. This has meant that some local authorities, after three or four years of exceptionally large programmes, are meeting difficulties. Some have exaggerated their difficulties in order to cut their programmes for political reasons, but I am not denying the existence of the difficulty.
So what are we doing? My right honourable friend the Minister of Housing has himself written to 20 major authorities which had cut their programmes, and has subsequently held meetings with them, either himself or represented by one of his Parliamentary Secretaries, and those meetings have been followed up by further meetings between officials. At the same time as those meetings have been going on, there has been within the Ministry of Housing and Local Government a major investigation into housing finance. This is a very far-reaching inquiry, and one of its objects is to find ways in which housing authorities with exceptional financial difficulties, which are often those with the greatest housing needs, can be distinguished from those which, whatever the reason, are simply not tackling their problems. In this same connection we are also examining the possibility of setting up a central agency with powers to build, and thus to supplement the efforts of local authorities. That is for the future. But the Government have taken a number of steps to encourage and stimulate building, and I should 238 like to remind your Lordships of what they were.
The foundation of all these measures is the Housing Subsidies Act 1967, which provides for the most generous subsidies ever given in this country and without which it would not have been possible to maintain a public sector building programme at all in the difficult years through which we have passed. I was interested in the suggestion of the noble Lord, Lord St. Helens, that it was in some way the housing subsidies which were to blame for such shortfall in housing as there is. I assure the House that, had it not been for those subsidies, and had it not been for the very great increase in those subsidies, we should not have had half the number of houses built that we now have.
But we have not been confining our attention to the public sector. During the past year there have been two successive increases in the permitted ceiling for local authority mortgage lending: £45 million was announced in 1969, and a further sum of £50 million was announced in March this year. This makes a total of rather over £150 million available for the current financial year. Money is at present flowing into the building societies at a satisfactory rate, and they have benefited from being admitted to the contractual savings scheme, called Save As You Earn. On January 1 this year an Order took effect giving improved terms for the option mortgage scheme. So far, about 335,000 persons have taken advantage of this scheme and, obviously, a great number of them could not have afforded a mortgage without it. As a matter of interest, I may say that in the financial year 1958–69 the average owner-occupier claiming tax relief on his mortgage interest received relief worth £43. The average benefit to a person under the option mortgage scheme was £22, and the average Exchequer subsidy on a council house was £28. This latter figure, by the way, compares with £17 in the financial year 1963–64.
Housing associations are now running at about £17 million a year, compared with £7 million a year only three years ago. At the same time as my right honourable friend announced the increase in local authority mortgage lending he also announced a further allocation of resources to the Housing Corporation to 239 permit them to sponsor at least an extra £20 million worth of cost rent or co-ownership housing schemes in the current year. In the Budget the Chancellor of the Exchequer announced a number of measures which should be of benefit to the building industry, particularly a reduction in the Import Deposit Scheme, which should tend to reduce the price of import timber, and the relaxation of credit restrictions, which should particularly benefit builders. Builders may also welcome the Chancellor's statement that he could now encourage the provision of bridging finance for house purchase. They can welcome, too, the further reduction in the bank rate.
My Lords, that is all about new housing. I turn now to the question of housing improvements. The Housing Act 1969 was a tripod Act. The first of its three legs was market value for owner-occupiers of slums. This is going to speed up slum clearance and free it of certain frustrations and miseries which have accompanied it previously. The second leg was the increase—an increase of no less than two-and-a-half times—in the discretionary improvement grants and the conversion grants. In the old days, when a housing authority was in doubt whether to demolish an old house or to improve it, it all too often needlessly demolished, because the grant system was loaded that way: it was cheaper for the authority to do so. The purpose of the 1969 Act was to equalise the grants as between new development and improvement. The Minister has power to vary the grant rates, and we shall be watching the operation of the Act very closely to see whether even now, with this two-and-a-half-fold increase, we have got the level right.
The third leg of the Act is the creation of the so-called general improvement areas, where the housing authority is to improve everything about an area of housing, not only adding baths and sinks, where they are lacking, but painting up the houses, adding play space, knocking down single unfit houses and rebuilding, adding parking space, planting trees and closing streets to traffic. I could also become lyrical about the concept of the general improvement area, but I will not do so. I will suggest only, instead, that those among your Lordships who are 240 interested should go to Exeter one day and look at a part of that city called Newtown; or one could go to Lancashire and look at a little place called Whit-worth. Newtown, in Exeter, was a drab area of mid-Victorian artisan housing—the sort of stuff we have been knocking down without a thought for the last twenty years. But it was in Newtown that my right honourable friend and the City Council of Exeter agreed jointly to carry out a pilot general improvement area in advance of the Act—and, by the way, what a valuable provision that is, when the Treasury anticipate the wish of Parliament and authorise expenditure of that sort! Newtown, in Exeter, is now really an enchanting place to look at, and I will dare to say that it is to live in, too, though every politician knows that to say that anybody is happy, especially in Election year, is to invite contradiction.
Looking ahead into the next Parliament, I think that the scene will be increasingly dominated by the regional housing situation, and even by the sub-regional housing situations. I gave a Written Answer yesterday—Lord St. Helens has read it out—reaffirming the Government's forecast that by 1973 the excess of houses over households in this country will be no less than one million. But that, of course, is not the whole story. If it were, my Party and this Government, and the Housing Ministers personally, would be in sight of an achievement which would be unique perhaps in the history of the modern world—the purely hypothetical achievement of "solving the housing problem".
We know that in 1973 and afterwards there will still be in certain parts of the country a housing shortage, and there will still be bad houses. There are at present, after all, still families trying to bring up children in one rat-ridden room. There are not many, but it is intolerable that there should be any. And it is no comfort to them to inform them that if they went to certain Northern cities they could call at the town hall to-morrow morning, pick up a key and be in a new council house tomorrow night. They stay where they are because that is where their work is; and the long-term detailed solution of our housing problem is inextricably bound up with the problem of the location of employment, region by region, city by city, and even town by town.
241 Speaking personally, my Lords, I believe that this will be the major challenge for the next Labour Government—a challenge which I confidently hope it will be able to meet, with the assistance of Labour town halls up and down the country—and one which it will be able to meet because it is part of the historical fibre of the Labour Party itself to be able to seize hold of a situation and direct the resources of society to improving it. And the historical fibre of the Party of noble Lords opposite is, I think, something rather different.
§ 3.36 p.m.
§ LORD BROOKE OF CUMNOR
My Lords, I hope the noble Lord, Lord Kennet, will take it from me (that I mean nothing personal when I say that in thirty years' Parliamentary experience I have seldom heard more extensive use of selective facts and statistics to support a case which will not stand up. My noble friend Lord St. Helens has been very right in calling the attention of the House both to the shrinkage of house building and to the disappointment inflicted thereby. The noble Lord, Lord Kennet, sought to minimise the shrinkage; he sought to wave away the disappointment; and he devoted a large part of his speech to improvement grants and matters like that which are not mentioned in the Motion at all.
As to disappointment, falling supplies of anything which millions of families want is always a disappointment. This particular disappointment is made more painful because no less a person than the Prime Minister pledged his Party to produce 500,000 houses a year by the year 1970. It is almost inconceivable that the noble Lord, Lord Kennet, in his speech seeking to reply to my noble friend, made no mention whatever of that pledge—no mention whatever. I can see from the noble Lord's speech and from the statistics which he selected that I shall have to take your Lordships through what has really happened in the last 15 to 20 years. As a result of that speech by the Prime Minister in Bradford in 1966, probably a million people or more were swung into giving Labour their votes because they trusted Mr. Wilson's word. Now there is no escape for him or his Government. His word has been broken 242 and the British people have been let down, as my noble friend has so clearly proved.
It is worth while—it would be worth while, even apart from the speech of the noble Lord, Lord Kennet—to run over the housing programmes and performances of years gone by, because only in that way can one see the whole story in perspective. In meeting the housing needs of the ordinary family that wants and longs for a better home, it is the number of new houses built which is at the heart of everything, and no doubt that is why my noble friend made that the heart of his Motion. Without a big and steady building programme one cannot get the elbow room to provide for the growing population of the country and the still faster growing number of separate households, or for meeting all the varied requirements of people with different kinds of housing need, still less for pulling down the houses which have to be pulled down to make room for new roads, new schools and so on, or because those houses are no longer fit to live in.
Where I profoundly agree with the noble Lord, Lord Kennet, is in his description of some of the houses where people are still having to live—and here there is no Party difference between us, though I think in his closing words the noble Lord sought to establish one. I would not for an instant suggest that in the last five or six years the Labour Government could have cleared all the slums which remained in this country in 1964. I made it my business, when I was Minister of Housing, to go about the country and see the type of slum clearance which was going on and was waiting to be done in various towns and cities. As I am sure the noble Lord, Lord Kennet, will confirm, it is not only in the large cities where these appalling conditions can be found. I remember visiting houses in a small, old town where one had to climb up a vertical ladder to get to the bedroom. I confess that I have never seen worse housing conditions in England than in some of the Victorian London houses that I visited; tall houses in multiple occupation. Those seem to me far more degenerating in their effect on those who live in them than the small, box-like structures which we also have to pull down as slums. The noble Lord, Lord Kennet, and I are fully at one, that 243 there will be years and years more of intensive work by Conservative and Labour Governments, by Conservative and Labour local authorities, before the curse of slum houses is lifted from this country.
My Lords, we could not afford to restart the slum clearance campaign until the early 1950s, for the very obvious reason that immediately after the last war new houses were not being built in sufficient quantities. Just as it is not possible to pull down old prisons and rebuild them while the prisons are still overcrowded, so one cannot start pulling down unfit houses until enough new houses are being built into which to transfer the people. One had to build up before one could pull down. It is a fact that the only two great slum clearance drives this country has ever known—the one which began in 1934 and was halted by the Second World War, and the one which began in 1954 and is still going on—were started under Conservative Governments; so my noble friend's Motion goes to the heart of the matter. There are countless fringe aspects of the housing problem which one could discuss for hours and hours, but I am not going to do that because my noble friend is inviting your Lordships to concentrate to-day on the key indicator, the number of new houses completed.
When the Labour Government fell in 1951 houses were going up at the rate of 195,000 a year. The Conservative leaders promised 300,000 a year and within two years fulfilled their promise. Housing was given top priority among the public needs. It is no secret that in those days house building enjoyed a deliberate priority over other objects of public expenditure, such as, for instance, hospital building and road building. That priority could not last for ever, but while it lasted it enabled us to get the houses to re-start pulling down the slums. I must confess that I should have liked to be at the Ministry of Housing in those exciting days when, under Cabinet direction, new house building took precedence over everything. I was less lucky because I became Housing Minister at the point when housing had to take its place among other needed services and it was time for the other services to be given some chance to catch up.
244 Nevertheless, my Lords, though the special priority ended, from 1953 to 1963–11 years inclusive—the Conservative Government saw to it that a steady annual average of 300,000 new houses was kept up. The noble Lord, Lord Kennet, made it fewer than 300,000, doubtless for political reasons, by including the year 1952 in the period over which he took the average. In 1952 we were handicapped by the small number of houses left under construction when the Labour Government fell in October, 1951. Therefore, it was not possible for us to build up to 300,000 by that year; but from 1953 we averaged over 300,000 houses a year.
§ LORD KENNET
My Lords, if the noble Lord will be so good, he will readily concede that we must equally have been helped in 1965 by the splendid number of houses that his friends left under construction when we won the Election in 1964.
§ LORD BROOKE OF CUMNOR
My Lords, I was just coming on to 1965, but first I wanted to correct the noble Lord over 1952. By about the year 1962 it became possible to reassess national needs, and I well remember attending meetings of Ministers about that time when the further forward leap in the house building programme was being planned. This produced a breakthrough to 374,000 new houses completed in 1964. The noble Lord, Lord Kennet, was inclined to reproach the Conservative Government for having done specially well in a pre-Election year. I am not sure whether he is likewise anxious to pat his own Party on the back for having done specially badly in a pre-Election year.
When the Labour Government took over from the Conservatives in October, 1964, they took over about 430,000 houses under construction. I think that is the point that the noble Lord, Lord Kennet, was seeking to make. That was almost double the number under construction which the Conservatives had taken over from Labour when the change of Government occurred in 1951. In other words, my Lords, the Labour Government of 1964, unlike the Conservative Government of 1951, had a flying start which they inherited from their predecessors. At first they used it well. The 245 number of houses completed crept up by about 10,000 a year, on average, from 1964 to 1968; not a large enough increase to fulfil the pledge, but, nevertheless, it was about 10,000 a year on average from 1964 to 1968. Then came the downward crash, and that is the crash to which my noble friend is drawing attention to-day.
Completions in 1969, instead of recording another 10,000 gain, showed a shrinkage of nearly 50,000. I understood the noble Lord, Lord Kennet, to describe that as a "small decline". Later in his speech I think he referred to it as a "ripple". It was in fact the largest shrinkage in house building in any one year that had ever occurred. This shrinkage is doomed to go on. There were 33,000 fewer houses under construction at the end of 1969 than there were at the end of 1968. After five and a half years of Socialist Government, my Lords, there are at this moment fewer houses being built than when the Conservatives went out of power. And this is the Government whose Leader solemnly pledged the building of 500,000 houses in 1970. What did Mr. Wilson say? It is worth repeating, though I think my noble friend Lord St. Helens got it right:This is not a lightly given promise. It is a pledge. We shall achieve the 500,000 target, and we shall not allow any development, any circumstances, however adverse, to deflect us from our aim.That was what Mr. Wilson said, and it won him votes. Your Lordships will remember that Cassandra was a prophetess whose fate it was always to foretell the truth and never to be believed. Mr. Wilson is a kind of inverted Cassandra.
How many houses will be built in 1970? Completions in the first quarter were down by 3,500 compared with 1969. Starts were worse: starts were down by 12,000. Houses under construction at the end of March were 32,000 down compared with the previous March. Will the noble Lord, Lord Kennet, tell us, when he comes to wind up—he promised to answer questions—what his estimate is of the number by which the Government this year will miss their pledged target of 500,000? Will it be by 150,000? Will it be by 160,000, or 170,000? If the Government are only 165,000 down they will have missed the target by a mere 33 per cent.: they will have carried out 246 two-thirds of their pledge; they will be "two-thirds men"—men who achieve two-thirds of what they promise to do.
But if the noble Lord, Lord Kennet, does not like this line of argument, will he give us his estimate of how many fewer houses will be built in this, the sixth, year of Labour Government than were built in the last year of Conservative Government? What would be his figures for that? Does he estimate that it will be 20,000 less? Or 30,000 less? Or 40,000 less? This is information which noble Lords would like to hear from him when he comes to wind up. Whatever happens, we know that at least 150,000 fewer families will have new homes to go into this year than Mr. Wilson led them to expect—150,000! To which city shall we compare that? Half a million people live in 150,000 houses; so a whole city of a half-million population will not have been built as a result of this Government's falling down on their Leader's pledge. No wonder that my noble friend Lord St. Helens has moved to call attention not only to numbers but to disappointment. The Conservative promise of 1951 was swiftly fulfilled; the Labour promise of 1966 has been tragically and blatantly broken. This is the true measure of the difference between the Parties.
My Lords, my estimate is that the average cost of a new house or a flat has gone up by £1,500 under this Government. If that is not the correct figure (it is only my estimate) I hope that the noble Lord, Lord Kennet, will tell us so at the end of the debate. I think that your Lordships would like to know from him the Government's estimate of the rise in house costs since this Government came to power. That, after all, is the severest of the brakes on getting more houses built—that and high interest rates.
The building societies have had to put up their building mortgage interest rates from 6 per cent. to 8½ per cent. under this Government; and from what one reads there seems little prospect of their being able to bring them down this year. We all know what high mortgage interest rates mean to people longing to get a house of their own. There is the disappointment! The Government have promised, too late, to allow local authorities to lend more money this year on mortgages for house purchase—even 247 though what the Government will allow is less than what was lent by the local authorities in the last year of the Conservative Government, when prices were lower. The people who take up these mortgages in 1970 will still have to face the general rise in the price of the houses they have to buy. Can the noble Lord, Lord Kennet, say whether there has yet been any visible effect of the relaxations which his Minister announced two months ago?
Can he say when the Government are going to take selective employment tax off house building? Putting S.E.T. on the house builder must have been one of the cruellest blows ever inflicted by one member of the Government on another. Would the noble Lord care to say whether it is true, as was widely reported at the time, that Mr. Crossman, then Minister of Housing, was not consulted about this until after the Chancellor of the Exchequer had made up his mind? Even had there been nothing else, the extra cost dumped on the building industry by S.E.T. would have ensured that the 500,000 target could not be attained. Sheer shortage of house-room is no longer nation-wide. It is now concentrated in the bigger, older towns and cities, although of course it also exists in areas where very rapid population increase due to industrial development is going on.
London, Birmingham, Manchester, Liverpool, Glasgow and a number of the older industrial towns are the crux of the council house building problem now. It is the financial difficulty for these councils which the Government have so far failed to solve; indeed, they have accentuated it. The housing authorities in these places, when they want to press on with new houses and flats, are faced with an unenviable, intractable choice, either having to charge rents for them which will be much too high for many of the people they most want to help or, alternatively, having to throw an unreasonably heavy burden on all their ratepayers to make good the deficits on their housing revenue account.
Of course, there is an escapist way out: to stop building. But I am certain that that would be wrong. Council building by those cities must go on; although 248 I should like to be sure that each housing authority, in making its plans, was working really hard to take the Cullingworth Report to heart. As a former chairman of the housing management sub-committee of the Central Housing Advisory Committee, 20 years ago, long before I became a Minister, may I take the opportunity of expressing my appreciation to Professor Cullingworth and his colleagues for the sub-committee's latest Report. I should like to quote from paragraph 448 of that Report:… local authorities need to have a clearer, deeper and more detailed understanding of the housing situation in their areas. … we no longer have a single 'national' housing problem: we have a large number of local housing problems of great variety. It is therefore essential that local policies be based on a well-informed understanding of the problems of individual areas and the context in which they arise. Our first recommendation is, therefore, that local authorities should take steps to ensure that they are better informed of the housing situation of their areas.I am quite certain that that recommendation is fundamental to the future course of council house building; for council house building is very costly nowadays to public funds. As some needs are progressively met, it becomes more and more necessary to swing council building on to the needs which are still crying out to be met; and that means identifying the particular needs and not continuing to build for general needs blindly.
I know that the Ministry have set on foot a special study of housing finance. Can the noble Lord, Lord Kennet, tell us how that is getting on?—because solving the housing financial problem is obviously, as indeed he admitted, going to have an effect on the number of new council houses that are built. Can he say whether the local authority associations are going to be brought fully into consultation in this study at a stage where there will still be time for their advice to be taken into account in reaching conclusions? So far as public housing is concerned, what has happened so far is that the Government have launched into a more generous—and of course more expensive—form of subsidy than at any time in the past forty years. It has involved all the complications and delays of applying a yardstick to house prices, and it has ended with many housing authorities finding themselves worse placed financially than ever. Now that we have fair rents determined by 249 rent officers and rent assessment committees for privately owned houses and flats, the housing subsidy system in future must take much more account of what these fair rents are in each local authority. Council tenants should be expected to pay these fair rents; and those households that cannot afford to do so should be generously helped by rent rebates. Subsidies from the Exchequer and the rates should be properly tailored to make this policy practicable, and then there could be no more complaints.
As things are, housing authorities which are keen to get ahead to tackle their problems are having their keenness blunted by the truly frightful financial difficulties caused by the present system, and by not being allowed to charge fair rents to tenants who could well afford to pay them. One bad consequence of that is that quantities of council houses which ought to be available for people in pressing housing need are now being permanently occupied by people who, if they were not being needlessly subsidised, could well afford to move off the council estate and buy a house of their own. I know that the Government meant well with what I might call their 4 per cent. subsidy plan, just as they meant well with their option mortgage plan: but neither has worked out as they hoped it would.
Then, after councils had been pressed to experiment with industrialised building, the Ronan Point disaster befell. I am not suggesting that the disaster was in any way the Government's fault, but where they were to blame was in refusing to meet generously the heavy extra cost thrown on the local authorities for strengthening the blocks which they had built under Government recommendation. A number of these are just the authorities which in any event would have found it hardest to balance their housing accounts, and now the Government have ungenerously left them, in addition, to carry half the cost of the extra expenditure falling on them solely because they had taken the Government's advice. I cannot emphasise to the noble Lord too strongly the amount of ill-will which the Government have built up against themselves among the local authorities affected, and indeed in the local authority world generally, through their lack of generosity in assisting those housing authorities 250 which have been heavily hit by these extra costs.
Well, beyond doubt there is going to be a great deal for the next Government to do, to clear up the problem and get the building industry going again, as a new Government showed it could do in 1952. Perhaps it is the present Government's hope that the concessions they announced on March 18 are going to make a big impact on the situation of the building industry and are going to speed up housing starts. I doubt if they will. It is a case of too little and too late, I am afraid. New energies are needed, and new brains. My noble friend's Motion is timely, in calling attention to failure and disappointment. If the Government now seek to run out of their pledge—a pledge which the noble Lord, Lord Kennet, did not deign to mention—by asserting that 500,000 houses a year are not necessary in any way, they must argue that not only with me but with the Estimates Committee of another place, an authoritative all-Party Committee, who reported as recently as last winter that they believed that:A figure of 500,000 houses is the proper target, taking into account all the factors at work in our changing society and having regard to the high levels of housing investment in industrialised communities comparable to our own.What have the Government to say to that?
§ 4.4 p.m.
§ LORD BARNBY
My Lords, to follow my noble friend Lord Brooke of Cum-nor, with his massive experience in Government work and particularly in the field of housing, naturally causes one to review anything one had intended to say. In initiating this debate, my noble friend Lord St. Helens emphasised to us the reduction in house building and the disappointment caused thereby, and his speech itself provided so much ammunition, addressed so trenchantly to the Minister who is to reply for the Government, that we shall indeed look forward to hearing the noble Lord's answer at the end of the debate. We are accustomed to the noble Lord, Lord Kennet, deploying impressive skill in blunting the points of attack and assuaging any uncomfortable position in which Government find themselves. But to-day's performance has been a disappointment because, as my noble friend Lord Brooke 251 of Cumnor has just said, he has failed miserably to reply to the points which my noble friend Lord St. Helens made in opening the debate. I suggest that it is perhaps not entirely his fault.
I cannot refrain from referring to the general who announced that house building should be carried on as a military operation, thereby invoking all the resources of the country, and also to the remarks made by the general—the Prime Minister—in Bradford, my native city, which I had the honour of representing in another place. I seize on those remarks. I feel now that the Minister will fail effectively to defend the Government against the charges made by my noble friend Lord Brooke. Still, we shall see when he comes to reply.
There is no need for me to deal with figures and statistics, because they have been presented adequately enough to emphasise the Opposition's case. But I am going to suggest another angle to the Government's failure to do what they were pledged to do. It is the general atmosphere in which government has been conducted by the Socialist Party. There is this tendency towards étatism, the bureaucracy which cramps, and what is more bureaucratic than the Ministry with which the noble Lord is associated? The well-known slowness of their tempo retards progress, and the house builders themselves know what discouragement they give to private enterprise. It is recognised that the climate which house building requires in order to develop is one of confidence, and that is lacking under a Socialist Government. House builders will not build, the buyers are discouraged from buying and the whole construction machinery gets bogged down by this mass of regulations and procedure.
There is another angle of Government policy which affects the housing situation. The noble Lord may say that I am bringing in an outside matter, but one of the aggravations in the housing situation is the high inflow of avoidable immigration, which puts an additional pressure on housing. The policy of permitting immigration reminds one of what a humbug integration is. Separate development is what the immigrants themselves want. I just introduce that sentence because it 252 supports my view that various Government policies detract from house building. The real difficulty, as was said by my noble friend in opening the debate and as the public as a whole feel, is that there are too many occupiers of council houses with incomes which should disentitle them to State-assisted housing. This produces an inadequacy in the council house pool necessary to assist the mobility required for the industrial organisation for which the Government press so strongly. In those houses there are many who could well afford to pay higher rents. Apart from husbands and wives, there are young men who work and earn high wages. The result is that sitting tenants stay in their houses, and the needy suffer.
In addition to the general atmosphere of Government policy and the lack of confidence, there are the policies of the Government which during their office have created £3,000 million of additional debt, much of it wrong priorities. Within the last few days I read in a newspaper a statement by an experienced, responsible and successful man, the head of a large company, who said:Spiralling wages and prices are not the cause of inflation, but the natural effect of it. Governments create inflation by their fiscal policies and their wasteful expenditure which combine to debase the currency.And under a Socialist Government we have had devaluation.It is not difficult to find some connection between the debasement of the currency and the heavy and grossly inequitable burden of taxation.It is taxation that I want to come to, because that discourages private building. It causes the high rate of interest on money. My noble friend Lord Brooke said that under the Socialist Government it has risen from 6 per cent. to 8½ per cent., and, as he indicated, the price of an average house has gone up from £4,000 to £5,500; costs of building have gone up between 1964 and 1969 by something like 40 to 45 per cent., and in 1970 will have increased by a further 12½ per cent., making 60 per cent. in all, which means that developers, to sell houses at all, will have to sacrifice some of their normal margins.
Local authorities, despite high Government subsidies, have experienced a big decline in the production of houses. I submit that a mandatory national rebate scheme, like the G.L.C. have, should be 253 applied to the whole country. That would probably assist to increase the number of houses. Local authorities might then be able to sell a larger proportion of their houses to the public, giving mortgages of up to 100 per cent. and with adequate Government grants. The building societies have been playing their part. In the first quarter of this year they have granted 106,000 mortgages of a total value of £370 million. They have among those properties some 50,000 new houses and some 70,000 old houses. I conclude by saying that I think there needs to be better co-ordination between the national resources and all other media contributing to the production of houses. I hope that when he comes to reply to the debate the noble Lord, Lord Kennet, will succeed in answering my noble friend Lord Brooke better than we anticipate—better than he did in answering Lord St. Helens's presentation—and in explaining the inadequacy of the Government's housing problem.
§ 4.17 p.m.
§ LORD WYNNE-JONES
My Lords, I think that all Members of this House will be grateful to the noble Lord, Lord St. Helens, for introducing this Motion. I am sure we all agree with him that the matter is serious and, furthermore, that there can be nothing but disappointment in not attaining a target. I feel that the noble Lord may be a little disappointed at what has happened since, because it is obvious that the "knockabout" season has arrived, and that, in consequence, even in this House there have been the hurly-burly and amusing irrelevancies to which we have been listening for some little time.
It is not perhaps unexpected that when an Election season arises one is told that the housing problem is the result of massive immigration of people into the country. I am a little surprised that Welsh nationalism and Scottish nationalism were not blamed for this, because I have no doubt that they play an important part in the problem. I should have thought that cricket, and perhaps the departure of our soccer team for Mexico, might have had something to do with it. In fact, really I am surprised that so little has yet been brought in. Perhaps as the debate goes on we shall have more brought in to explain to us 254 exactly how it is that the Government have failed to deal with this problem.
But the problem is a serious one, and it cannot be dealt with by just good "knock-about" farce. The noble Lord, Lord Brooke, when he ceased his more wild statements at the start of his speech, pointed out that this is really a problem of people and individuals. That is why it is so serious and important to us all. It is the fact that every house that is not built means that three or four people either are not housed or are badly housed. This is something that I am sure must greatly concern us all, because we all want to get more houses.
I believe that the Government have done pretty well, though I am sorry they have not done better. I think the part over which they had absolute control, or fairly good control, until a couple of years ago—that is to say, the municipal building side—has gone ahead pretty well. When one looks at the public sector one finds that the housing in that sector has gone ahead remarkably well in the past five years. I have not the exact figures in front of me, but I think I am right in saying that six years ago 155,000 houses were completed in the public sector. Two years ago, the corresponding total rose to over 200,000; and it is now about 185,000 houses. So there has been a substantial increase over this period, and this shows that the Government have been serious about it.
Obviously, one would have wished that there had been no decrease at all. The decrease in the public sector over the past two years has not been very large, but even a small decrease is serious. This has undoubtedly come about because of the financial problems with which the country has been faced over the past few years. One hopes—in fact one must demand—that the Government will proceed as quickly as possible to reverse this trend and go back to the previous increase that was taking place.
When we come down to the whole question of housing, we must realise that the really serious part of our housing problem concerns big cities and the poorest section of the population. This is true not only of this country, but of every country. In the United States—the wealthiest country in the world—they have this problem probably to a greater extent than we have in this country. 255 While I was in the United States I was interested in looking at this, so far as I could. I happened to be staying on the edge of Harlem, in New York City. Harlem, as your Lordships will know, is the place where practically all the Negro people, the coloured people and the immigrants live.
If one goes into Harlem to-day one sees a whole area of the City, densely populated, with practically 100 per cent. Negro and coloured people; and one sees all the decay. There are houses which are not being looked after; no new houses are being built. Some new housing developments are being started on the borders of Harlem, but not in Harlem itself. There, practically nothing is being done. This is because in the United States there has never been a policy of public responsibility for ordinary residential accommodation. Public funds go on fine buildings; they have built some marvellous blocks of offices, some wonderful buildings for administration and some splendid university buildings. But when it comes to residential blocks very little is being done with the aid of public funds. Most of the housing is financed by private funds, and it is utterly uneconomic for private funds to be used for low-cost buildings. It is a complete fallacy to imagine that private funds can be used for low-cost building. The cost of building is such, and the cost of maintenance is such, that it is impossible without heavy subsidies from the State to put up buildings in the hearts of cities for the ordinary medium-income or poor person to live in.
If you go at the present time into any American big city you find that the heart has decayed because the Americans cannot afford to put up in the hearts of their cities the buildings in which people may live, and one finds that all the fine buildings that were there have now become slums. Then there comes in a Governor who is disgusted by all this, as Rockefeller was in New York State. He tore down the centre of Albany, and to-day in Albany, the capital of New York State, you will find magnificent new buildings, like the Rockefeller Hall, going up. But you find that there are virtually no houses in which private people may live. The centre of Albany has become a devastating slum, right at the heart of the greatest State in the United States. Last 256 December I stayed at one of the two remaining hotels in Albany, and I was warned that I should on no account go out of that hotel at night—it was too dangerous.
This is happening, my Lords, simply because there is no way of keeping the centre of a city like that going. Thank heavens! we have had in this country for many years, under all types of Government, a public building policy which enables us to continue to put up low-cost building. I do not want to make an electioneering speech, but I would seriously warn noble Lords on the Benches opposite that if they change that policy they will do the worst conceivable damage to the future of this country.
§ LORD BROOKE OF CUMNOR
My Lords, can the noble Lord explain why he is expecting a change? I pointed out in my speech that the two great slum clearance drives in this country's history were both started by Conservative Governments.
§ LORD WYNNE-JONES
I admit that the noble Lord has said that, and I know that he means it. There are statements that are made by members of his Party which seem to indicate that they want to throw building on to the market. The phrase has been used, "throwing building on to the market". Even the noble Lord, Lord St. Helens, used this phrase to-day and referred to market forces. I suggest that market forces cannot possibly control public building and give us an effective means of putting up houses for the ordinary poor people. It cannot be done. That is the point that I was making. I freely admit that the noble Lord is not committed to such a policy, but there are members of his Party who are—or, at least, talk as if they are. Perhaps one should not refer to Mr. Enoch Powell as a member of his Party.
§ LORD WYNNE-JONES
If one moves on to the problems which have been so clearly set out in the United States, one sees how careful we have to be about the housing programme. I have a report of a speech made by Mr. Albert Walsh, Chairman of the New York City Housing Authority. At the outset he said this:The question, 'Is public housing heading for a fiscal crisis?' must have been framed 257 solely for the sake of rhetoric. Let there be no doubt about it, public housing is not heading for a fiscal crisis, it is already in it. The only question is, 'What will be done about it?'He goes on to give some very interesting figures to show the problem. I think it is important that we should see what the nature of this problem is. Although these figures refer to New York City, I have little doubt that, in basic outline, the problem is exactly the same in this country.
In the year 1952, in the low-cost housing in New York, the average income of a tenant was 2,500 dollars, and the rent charged was 37½ dollars a month. The operating expenses for the apartment were 31.4 dollars a month, and so there was a profit of a little over 5 dollars a month. In 1957, the income of the tenant had risen. The rent had gone up to 47¾ dollars a month, and the operating costs had gone up to 44.3 dollars a month. In 1967, the income of the tenant was up to 4,127 dollars—a rise of 65 per cent. in the income from 1952—but the rent had gone up to 64.4 dollars, a rise of 71.6 per cent., whereas operating costs had gone up to 70.8 dollars, which was a rise of 126 per cent. In other words, the operating costs had outrun the rent, and yet the rent had gone up more rapidly than the person's income.
Here, my Lords, is the problem—and it arises just as clearly in our big cities as in New York. One finds a strange anomaly. If one looks at the rise in incomes one finds that it is the poor people whose income rises least rapidly. This we must bear in mind. The figures come out from New York City that the tenant's income (this is an average tenant in this low-cost housing) over the years from 1952 to 1967 had gone up from 2,500 to 4,127 dollars. In the same time, the income of the caretaker of the apartments concerned had risen from 2,600 to 5,300 dollars. In other words, the caretaker's income had gone up somewhat more rapidly than the average income of the tenant. When we come to the maintenance man, we find that his income had gone up from 3,100 to 8,200 dollars—a sensationally different change. When we come to the housing assistant, we see that his income had gone up from 3,300 to 8,100 dollars. One sees that 258 the better off you are, the more rapidly your income goes up. This comes out very clearly in America. It is equally true in this country, for all that those of us who are better off may say. The rich get richer and the poor get poorer. This has been going on and still goes on.
My Lords, without a national policy, without a policy of public housing, and without giving priority to public housing, we shall never cope with this problem of dealing with housing for poor people. Although I regret the slowness of development, and although I am sorry that the Government have not done better, I would say to them, "You have done pretty well, but we expect you to do a great deal better."
§ 4.33 p.m.
§ LORD WOLVERTON
My Lords, I am very glad that the noble Lord, Lord St. Helens, put this important Motion down in your Lordships' House to-day, because it is many years since we had a housing debate in this House and it is very apt we should have one to-day. The debate has been on a very high level. I was glad to hear the noble Lord who was speaking for the Government say that Her Majesty's Government were going to introduce a financial study into why they failed to reach their target of 500,000 houses. That is very important, but I am going to try to put before your Lordships some of the reasons why I think they have not been able to reach the target of 500,000 houses.
I received yesterday a table of annuities, which I will hand to the Minister, prepared by the Newmarket Urban District Council, where I live, on annuity payments of 9 per cent. for borrowing limits against weekly income. This is illuminating. A man earning £16 a week—and I take that as an average low wage—amid borrow over 30 years from the local authority £1,981; over 25 years, £1,897 and over 20 years £1,767. I made careful inquiries and found that two-bedroomed bungalows built to-day in a rural area of Newmarket (an area where they are no longer building) cost £2,500 to £2,700, plus £650 for land and fees, making a total of £3,150. I refer to accommodation being built in rural areas for old people, to try to induce them to move out of bigger houses so that those houses might: be used for young people. 259 So we can see that people earning £16, unless they can buy a second-hand house, are quite out of the market as regards being able to borrow to buy their own house.
If we take those earning £20—I took £16 because a stableman in Newmarket earns a basic wage of £16 to-day—we find that a person with that wage can borrow £2,477 over 30 years, £2,372 over 25 years, and £2,208 over 20 years. Let us then take those earning £25. I believe that this is about the average wage in East Anglia. People with that wage can borrow £3,096 over 30 years, £2,964 over 25 years, and £2,760 over 20 years. If we go up to £30, which some factories of course are paying although it is well above the average for East Anglia, we find that someone with that wage can borrow £3,715 over 30 years, £3,557 over 25 years, and £3,300 over 20 years. So one must earn something like £30 a week before one can borrow to buy a bungalow costing about £3,350.
I went to one or two private enterprise estates and found that the lowest figure was £3,600 for a two-bedroomed bungalow on one estate, and about £3,900 on another. If one wants anything really decent in the way of a house with three bedrooms it is necessary to pay just over £4,000. That is one of the reasons why we are confronted with these extremely high interest rates. We are confronted to-day with the question of why the Government are not doing better. I was handed a circular sent out on May 1 by the Ministry of Housing and Local Government, on rates of interest on loans to local authorities by the Public Works Loan Commissioners. It gave these figures: loans for not more than 5 years, 8⅛ to 8¼ per cent. interest; for 10 years 8⅝ to 9⅜ per cent.; and for 25 years 9¼ to 9⅜ per cent. My experience on local government is that many local governments take the risk and borrow short and lend long, and it is not good policy; but if they are borrowing long and lending long they have to pay Her Majesty's Government's local loans boards 9¼ per cent. for 25 years.
The noble Lord, Lord Kennet, said that some local authorities, especially those which are Conservative controlled, perhaps were not pulling their weight in 260 building enough public housing and were not being co-operative with Her Majesty's Government. That is not right, my Lords, The problem is this—and I have spoken to town clerks on this matter in the last few days when preparing to speak in this debate. They told me in all sincerity that the more houses their councils build today the more they get into debt because of the enormously high building costs. Therefore, rather than have to put the rates up, which are so high and going up every year, they are slowing down on building.
The urban council where I live have a very good record in the amount of building of public housing since the war, but for the moment they have closed that down completely. They are going to replace some old bungalows, but they do not think it fair to be continually putting up the rents to the existing tenants because year by year they have to keep the housing revenue account in balance. If the account gets out of balance they have two alternatives, as the noble Lord, Lord Brooke of Cumnor, said: they have either to put the deficiency on to the rates or to put up the rents. They have chosen to slow down building, which I think is regrettable. But I am sure that the noble Lord, Lord Kennet, knows this problem, and perhaps when he replies he may be able to tell us about it, and also tell us what they should do to try to get some of the interest rates down. We shall not get the houses built so long as these enormous interest rates persist.
There are also enormously increased capital costs. I went to see a builder yesterday to get some information in preparation for this debate, and I asked him what is the average basic wage paid in a town to a tradesman per week. I asked him how much it cost him to send out that tradesman to work, before taking account of any profit. The figures he gave me are illuminating figures, although they are probably well known to your Lordships. He told me that the average wage is between £18 and £20 per week but that by the time the firm send a tradesman out to work it costs them, without their profit, anything between £30 and £33 per week. There is S.E.T. to pay, the National Insurance stamp, the holiday money, and so on. So it is extremely expensive.
261 The same builder also told me that he thought that labour on the site represented probably 60 per cent. of the total cost, the materials representing about 40 per cent. We all know that, on the materials side, the manufacturers get back their S.E.T. after three months. The builders do not get that S.E.T. back, and that is one of the things which has caused this enormous increase in the cost of housing. I am quite certain that my noble friend Lord Brooke is right when he says that in the last six years under the Socialist Government the costs have risen by between £1,200 and £1,500 per house. I think that when our Government left office the figure was something about £2,500, whereas to-day it is a matter of £3,800 to £4,000.
With those few words, I hope that Her Majesty's Government will be able to tell us something about what they propose to do in regard to this problem, because it is a serious matter. They will not get the houses unless they look seriously at the financial provisions which are prevailing to-day.
§ 4.43 p.m.
§ LORD GRIDLEY
My Lords, I am grateful to my noble friend Lord St. Helens for initiating the debate on this Motion to-day. The subject is one of human concern and one which should exercise the best attention of every Member of your Lordships' House. It is customary, my Lords, to state an interest. I am a director of a building society and also of a development company. Having listened to the noble Lord, Lord Kennet, my noble friend Lord Brooke put some pertinent questions to the Minister, and I hope Lord Kennet will be able to answer them. I had of course prepared my speech, which would have included some of the points which my noble friend Lord Brooke made, but as your Lordships have heard a certain amount of repetition of them it is not my intention to repeat them. It is my opinion that if one quotes a mass of statistics it is possible to blind oneself to some of the cogent reasons for the difficulties with which the housing industry is faced to-day.
If there are certain figures which would be of value in a consideration of this problem. I consider them to be these. The building industry, like any other 262 industry in the country, must take full recognition of the economic facts with which it is faced. Quoting, as I am, from the housing statistics, which form an official document put out by Her Majesty's Government, I believe there can be no argument that in the first three months of 1964 (that is to say, under a Conservative Government) 100,000 houses were started. But in the last four years under the Labour Government, and again taking first quarter figures, one finds that the number of houses started in 1967 under the present Government was 107,000. That figure was up by some 3,000, but it declined to 90,000 in1968 and to 75,895 in 1969, and for the first quarter of this year it is down to 58,653. I put that point for the con sideration of your Lordships, because anyone in the industry who has the responsibility of financing any building project is influenced by the economic factors and I cannot see how it will be possible for the Government to get the 500,000 houses which were promised (and this has been mentioned by my noble friend Lord Brooke) by the Prime Minister in an election speech, for which I could quote chapter and verse, Hansard, and so on, but which has been quoted by other noble Lords.
As to the 500,000 houses, there was a debate in another place in November, 1969 [Hansard, col. 853], in which, while the Minister of Housing and Local Government admitted that in 1969 the number of houses completed would probably be some 365,000, he went on to say:We expect this figure to be approximately the same for the following year"—that is, for this year of 1970. So whatever the Minister may say, or however he may skate around the facts, there is that admission on the part of the Government that they have failed in an election pledge.
My Lords, what has brought about this state of affairs, and what can be done, if one wants to be constructive—and I am endeavouring to be constructive—in the situation facing us? I have already stated that the number of houses started for the first quarter of this year is down to 58,000. Take transport costs, which of course affect the industry. The tax paid per gallon of petrol has risen by 1s. 9d. since the present Government. 263 came into office. High interest rates for the past few years have greatly increased the cost to builders of maintaining adequate stocks of materials. It is calculated that the incidence of the selective employment tax on the construction industry, including the sum paid by builders' merchants, is £200 million per annum, or 5 per cent. of the total turnover of the industry. The betterment levy charged by the Land Commission is another factor. Could the Minister give us some information to-night about the cost of the Land Commission and how much land has been made available by that Commission? May we have some information as to how the Land Commission is functioning? The betterment levy has increased the building industry's costs. The combined effect of the betterment levy and the corporation tax means that building companies are subject to double taxation.
What can be done? My noble friend Lord St. Helens made some constructive proposals. He mentioned the ten points which were put forward by the Opposition in another place on January 29. Ten proposals were submitted to the Government for consideration. I have mentioned only three and I would ask whether the Government cannot at this stage make a reappraisal of the building industry, so that building firms may be included in the priority class for loans from banks. Secondly, I ask the Government to consider whether it is not possible to take advantage of the selective employment tax rebate, and for the Land Commission and the betterment levy to be abolished. My Lords, to conclude, this is a human problem. Whatever Government are in power, if they fail with their housing policy the homeless can only be in deep despair for it denies to the young their hope of obtaining a property in which to live. And as the months go by the chance of some of these people being adequately housed seems to be fading into the distance.
§ 4.51 p.m.
§ LORD GARNSWORTHY
My Lords, a number of previous speakers have expressed thanks to the noble Lord, Lord St. Helens, for tabling this Motion this afternoon. May I add my thanks to him for reading from the Labour Party's 264 Manifesto at the last Election; I only wish he had read more. I certainly have no complaint if we are reminded of the targets set and the distance we have to travel before we achieve them all. The noble Lord, Lord Brooke, was very critical of the figures used by my noble friend, Lord Kennet, when he spoke earlier in the debate. It seemed to me that Lord Kennet is as adept in using figures as is the noble Lord, Lord Brooke—and that is some tribute!—but I think he uses them in a better cause.
My noble friend, Lord Kennet, made one point that I think is a very significant one. He used some very simple figures that I regard as being of outstanding importance. He drew attention to the fact that for every four houses built by the last Administration in their last five years the Labour Government has secured five, an improvement of 25 per cent. If the record of the previous Administration was acceptable—and I gathered that the noble Lord, Lord Brooke, thought it was—then the record of this Government is good. My noble friend, Lord Kennet, gave reasons why there has been a fall from the record achievement set by a Labour Government. I think the point needs emphasising that the record figure in the field of housing production has been set by this Government, and we are discussing to-day a fall from that very high figure. I believe that the reasons he advanced would have been reasons that would have had to be accepted if the Party opposite had been in power. May I say that I am very glad that they are not in power, because in the light of one's experience throughout one's life I doubt very much whether they would have dealt with the situation in the way that this Government have done.
My Lords, I began my working life in the building industry. At that time there was a housing shortage, and there was a very substantial problem of unemployment. The shortage of housing was less on the surface than it would have been if we had had full employment. Those were the days not of under-occupancy, to which the noble Lord, Lord St. Helens, referred; they were the days of love on the dole, when married couples were glad indeed if they could get a single room to live in. I am not ashamed that the Labour Government in five years have 265 built five houses for every four the Conservatives did in their last five years of office.
The noble Lord, Lord St. Helens, spoke on the subject of under-occupancy. Possibly he knows the publication I have in mind; certainly the noble Lord, Lord Brooke, quoted from it. He will find there that a considerable amount of attention has been given and a good deal of advice is being given as to how under-occupancy might be dealt with and how transfers of tenancies might be arranged, not merely between local authorities but between local authorities and people living in privately owned dwellings. It is not without significance that under the last Administration the production of local authority houses fell in quantity quite drastically. That Government also reduced the standards of housing for local authorities—I think that that particular reduction in the standards of building enabled them to boost unit production in the way we have been told. I am by no means ashamed that under this Labour Government the production of local authority housing has gone up by some 40 per cent. I am certainly proud that the standard of building is being improved and that we are returning to the concept of amenities that ought to be provided by local authorities to the ideals enunciated by Aneurin Bevan when he was Minister of Health immediately after the last war.
There are other reasons why I think people have reason to be grateful to this Government for what they have done in the field of housing. I do not think we can discuss this problem of housing solely in terms of what is being provided; we have to see it in the general context of what is being done to enable people to live in houses in which they have grown old and the things that have been done to help people to live in homes of their own if they give up a larger dwelling and go into a smaller one. Let us not forget what has been done by way of supplementary benefits, because never has so much been done to enable people to live in their own homes as by this Government. Let us not forget what has been done in the field of rate rebates. In the year 1968–9 nearly one million people in England and Wales received a rate rebate equivalent to £16 or over, a substantial help to people living on their 266 own and with very limited income. These things have helped people to continue to live in their own homes. If they had not had them they would have had to move out, and the housing situation might have appeared to be not as difficult as it is at the present time.
We all, I think, support the idea of home ownership—I would qualify that remark by saying, where people want it and where people can afford it. As I see it, the great difference between the Party opposite and us on these Benches is that they would use the force of circumstance to drive people to purchase, whereas we on this side regard housing as a social service. That is why we attach so much importance to local authority production. I know a large number of people who want to get married and a large number of people who have got married. These young people face a serious challenge when they contemplate buying a house; and I live in an area where they are almost forced to consider buying if they are going to get a dwelling of their own. If they are going to buy a home at the prices asked in the area where I live, they have to reach an understanding that they are both going to continue at work and are going to put off indefinitely having a family. It is indeed a serious challenge. For so many of them the only real hope of getting a house or a fiat of their own is if the local authority is able to offer them one.
As everybody in this House knows, prices for houses offered for sale are high. It seems to me that nearly every person who puts up a house for sale expects to make a profit on it. I find this a most worrying aspect in the field of home ownership. Houses that I recall being built for sale at £400 are fetching £5,000 in the market to-day, and every time a house changes hands there seems to be an expectation on the part of the seller that he is going to be better off. People do not seem to appreciate what they are doing. They complain that they have to do this because of an inflationary situation. It seems to me that they themselves are helping to create substantial inflationary pressure.
On the question of buying a house to sell for profit, I cannot for the life of me understand the substantial difference 267 in the price of houses offered for sale in different parts of the country. My noble friend Lord Lindgren has told me of the price of houses at Welwyn Garden City where he lives. Houses there are £1,500 cheaper than in the area where I live. This is not because of the extra cost of land or extra labour costs. Here there is a considerable element of scarcity value.
§ LORD LINDGREN
My Lords, if I may interrupt my noble friend, I would point out that this situation is due largely to the fact that Welwyn Garden City is a New Town and the whole thing is organised by a development corporation.
§ LORD GARNSWORTHY
My Lords, I appreciate what my noble friend says. But this situation arises not merely in Welwyn Garden City but in many other places as well. I take his point, and I appreciate that what he is saying is that possibly we could get a solution to this problem if the methods used in Welwyn Garden City were employed on a greater scale. In regard to private development, I think that probably I am not alone in the real concern that I feel, in that I wonder what some of the estates being built by private enterprise are going to look like in twenty years' time. I am really worried. I know that if they were erected by a local authority they would be referred to as "rabbit hutches". Recently I was looking at a house that I needed to provide for somebody working in an establishment with which I am concerned. I was appalled at what was being asked for so little, and the thought came to me, "What is this place going to look like in twenty years' time?". I accept that it is a unit of accommodation. But I feel that we cannot be too careful about the type of development that is permitted to take place.
We on this side have claimed that in the last five years new records have been set with regard to the number of houses completed. We should be wrong to be complacent about what we have done in the light of what has been indicated. I do not know about complacency, but I listened with great care to what was said from the Front Bench opposite and it seems to me that complacency with regard to the last five years of the previous 268 Administration could be detected in what was said.
I end by saying, indeed by repeating, what I said earlier: that from the years 1964 to 1965 we achieved an increase of 25 per cent, in the production of building units of accommodation. I join with my noble friend Lord Wynne-Jones in saying that there is no cause for satisfaction, no cause for great congratulation. We regret that we have not been able to improve on that record immediately. Indeed, we must make up our minds and be quite certain that we are going to return to increased production and create greater records than ever before in the period of Labour Government which I am perfectly satisfied will continue for some years ahead.
§ 5.5 p.m.
§ LORD TEVIOT
My Lords, I should like to join with other noble Lords in thanking my noble friend Lord St. Helens for introducing this extremely important debate. It is true that there has not been a housing debate in this House for some years. There was mention the other day of a debate in another place, but that concerned building construction and not the narrower confines of housing which we have before us to-day. We are concerned at the decreasing rate at which housing is being produced. After the Election promises—or should I say premises?—of 500,000 houses per annum (this point has been well "flogged" this afternoon, but it is still worth while repeating) I would suggest that this is playing with figures for purely political ends. There is surely no one on either side of the House who is not deeply disappointed at the current decline in housing production performance, and who is not conscious that there remains a huge national need for the provision of adequate housing. Perhaps, in terms of explanation or political excuse, there is a confusion between demand and need. Need is a fundamental, an absolute, thing, whereas demand argues the capacity to pay. There can surely be no doubt as to the dimensions of housing need. It is in relation to the capacity to pay that the problem arises.
Noble Lords opposite can scarcely contest the validity of associating means with need. Or need I add, in the hushed tones of the stage prompter, the prefix "From each" in order to make my point clear? But in the housing field this 269 basic philosophy has been lost sight of. We are subsidising the property and not the individual, and in so doing are assisting cases which do not need assistance and causing deprivation to those who do. The anachronism of the means test of forty years ago as compared with the criterion of tax liability to-day is enough, merely by touching upon the point, to indicate that there is to-day the potential mechanism for assessing, on a fair, equitable and declared basis, the extent to which society should and could provide subsidy to those in need, and none to those who do not, and by this means secure a fair distribution of national incomes and prosperity. What I am suggesting is that in housing there is waste—waste in terms of subsidy where none is needed, and waste in terms of complex and unnecessarily tedious procedures. If we could get our priorities and incentives right, such waste could be substantially eliminated, with benefit accruing to all.
The drop in housing production, of course, combines the private and public sectors. Under a Labour Administration the emphasis is placed deliberately upon the public sector rather than on the private sector. Consequently I propose to deal, in the terms of this Motion, mainly with the public sector, because of its topicality and relevance. Therefore it suffices to say, in relation to the private sector, that the decline in production and the immense increase in mortgage rates do no more than accurately reflect the reduction in ability to save. Insufficient saving, or capital formation, arises directly from the abstraction of potential savings from the people in terms of unnecessary and excessive taxation to support bureaucracy. We need not look further than the statistics of growth of direct and indirect taxation since 1964, coupled with political bias towards the public sector, to find our explanation for the drop in output in the private sector. The noble Lord, Lord Kennet, mentioned the figures of 40 per cent. and 12 per cent.
Let us, therefore, come to the public sector. We have several basic facts with which to deal. Municipal housing was conceived with two basic objectives: one, to provide subsidised rental housing for the needy; two, to secure a mobility of the nation's labour resource so that people could move to the places where 270 the demand for their services existed. On both these counts public housing policy has failed. The most needy section of the community does not live in council housing because, in too large a number of cases, it cannot afford so to do. In parenthesis, let us remember that only about 40 per cent. of local authorities operate rent-rebate schemes. Second, there is a huge disincentive to the occupier of a low-rental house to move to another area, because he is unlikely to secure the equivalent benefit elsewhere and because the State will support his remaining where he is, and possibly doing nothing, under more advantageous terms to him than would apply if he moved. This is an example, if you like, of the waste to which I have referred earlier.
Let me go further. I am personally aware of instances of the same house, or the same house type, being let in various parts of the country, at rents varying from £2 17s. to £4 15s. per week. The houses have been built at the same time, at roughly comparable construction costs. The difference in rentals lies solely in the size of the rate subsidy, which is regulated by the individual authority, in addition to Exchequer subsidy, and greatly depends upon the size of the authority's inter-war council housing stock. This creates a disequilibrium which is undesirable and yet which seems to be an intrinsic and inexplicable element of public housing policy.
Let us now move on to housing standards and construction costs. Housing standards are now in accordance with what are technically referred to as "redefined Parker Morris standards". I do not propose, in the time at my disposal, to discourse upon the validity of these standards in terms of national income equations. They are good standards, and certainly should be achieved if economically possible. Construction costs are influenced by what is known as the "Ministry Cost Yardstick". I believe that the introduction of the Housing Cost Yardstick (will it become the "Metrestick" on January 1, 1971?) is one of the most constructive moves that this Government have made; and it was also initiated by the previous Administration. However, I am staggered that, having introduced the Cost Yardstick in 1967, having reviewed and increased it 271 two years later by 4 per cent., there should have been decreed, on April 15 last, a 6 per cent. increase over the figures established only twelve months earlier.
Building contractors are now required to work under fixed price tenders covering periods of up to two years from the signing of contracts. They are required to guess and to assess increases in their costs over these periods. And, let us remember, there is often a period of four to six months—which I must say is rather a conservative estimate—from the date of tender to the signing of contracts and the commencement of the fixed price term. I suggest that in permitting the wages explosion with which the nation is confronted the Government are guilty of a breach of faith with an industry which is the most intensive employer of labour of all industries in relation to the value of the end product.
The building industry needs, above all else, stability. In other words, the expectation that, year by year, the demands made upon it will not fluctuate beyond certain reasonable limits. The Government have encouraged the industry into investment, into planning, and into expectations which have not been realised. Moreover, in the public housing sector, more and more of the contract award responsibility has been placed with larger groups, such as New Town Corporations, who have by their sheer size made procedures more and more complex—a point that has been mentioned—and pre-contract delays more tedious and protracted. There is enormous scope for speeding up these procedures and also for making better use of techniques which have survived and proved themselves in recent years.
So-called building systems have served their apprenticeship. Some have survived and fulfilled expectations. That is to say, they can be used to build houses more cheaply than by traditional methods, and far more quickly because there are certain techniques which are not influenced by the weather—which, with to-day's interest rate levels, is desperately important—and also can provide the means of securing much higher earnings for the operatives engaged, although making less demand upon national labour resources as a whole.
272 To conclude, we suffer from a declining production of housing. I believe that the building industry is well capable—and has the desire—of coping with the desired rate of output. Moreover, I believe that careful examination of mortgage insurance principles and financing of house building as operated in Canada by the Central Mortgage and Housing Corporation, and the principles of graduated mortgage subsidy as applied, for example, in France, would be immensely valuable to our economy and our housing need. What is needed is a recognition, if you like, of greater emphasis upon home ownership and graduated subsidy eligibility towards that end; and, in addition, a bold policy towards reality in rental policy on public housing already built. Given acceptance of these realities, the proper incentives must follow. Then it will be possible for us to utilise to the full the resources of our building industry, and to secure an adequate flow of completed houses where they are required and at prices which yield the utmost value for money for the community.
§ 5.17 p.m.
§ LORD MILVERTON
My Lords, I rise to make a brief intervention in this debate in order to emphasise some of the points which might have been made by my noble friend Lord Ilford, had he not been prevented from being present at this debate. I thought that perhaps it might be a good thing not so much to attack, say, the policy of one Party or another in this debate, but to look at some of the reasons why housing policy has not recently been successful in achieving its ends. The Association of Municipal Corporations has, over the years, developed some strong views on the housing problems; problems which have presented undeniable but somewhat intractable difficulties in solution. There is still a need, for instance, for a new approach to housing finance, and local authorities can make valuable contributions from their knowledge and experience. I have no right to assume that the Government will not welcome such assistance, but it would be a relief to the Association if they could be given an authoritative assurance to that effect.
§ LORD KENNET
My Lords, I wonder whether the noble Lord will allow me 273 to ask a question? The noble Lord said that it would be a relief to the "Association" if the Government were to do something. I may have missed part of what he said, because I am not quite sure what Association the noble Lord is referring to.
§ LORD MILVERTON
My Lords, I was speaking of the relief which I thought the Association might feel if they had an assurance from the Government that in all their actions in respect of a subject of this kind in which their knowledge and experience was immense, they would always give them an opportunity of taking part in their decisions.
§ LORD KENNET
My Lords, I am sorry, but I must hear it from the lips of the noble Lord himself. Which Association?
§ LORD MILVERTON
The Association of Municipal Corporations. I understood that the noble Lord had heard of it. It is actually the only Association which one is likely to refer to as "the Association" in this context.
Some authorities, especially those with large slum clearance programmes and where building costs are high, are faced with the problem that they cannot press ahead with their housing programmes without incurring a heavy rate burden or charging high rents. Unfortunately, many of those authorities are also the ones affected by the implications of, for instance, the Ronan Point disaster, and the financial burden upon those authorities has been made even heavier. That is why the Association of Municipal Corporations has expressed so much concern about the size of the Government grant towards the cost of strengthening system-built blocks of flats. It was as a result of the Government's policy that local authorities undertook industrialised methods of building in the first place, and the Association has been urging that the Government should recognise their responsibilities, and the consequential burden upon individual authorities, by making a grant far higher than the 50 per cent. at which the rate has now been settled by the Minister.
Admittedly, 50 per cent. is an appreciated improvement on the 40 per cent. originally offered. There seems to be 274 little prospect of a further increase in the Ronan Point grant, although the Association—do I have to repeat the Association of Municipal Corporations every time I mention it?
§ LORD KENNET
My Lords, it is quite enough if the noble Lord mentions the name of the Association once.
§ LORD MILVERTON
—although the Association of Municipal Corporations considers that nothing less than 75 per cent. could be considered as a reasonable settlement. If no progress can be made on the level of the grant, perhaps the Government will be persuaded to give a higher grant in exceptional cases; for example, Salford and Newham. An assurance on this point would, of course, be welcomed. Moreover, the grant arrangements are currently limited to buildings exceeding six storeys in height. In some cases, however, it has been found necessary to strengthen buildings under that height, and it is hoped to persuade the Minister to pay a similar grant of 50 per cent. on special application for assistance from individual authorities.
The financial burden falling upon authorities over housing finance generally underlines the inappropriate nature of the current restrictions by Government upon rent increases. For example, the consent of the Government is still required for any increase exceeding an average of 7s. 6d. a week, or a maximum increase of 10s. a week. Within those limits there has been, since the beginning of this year, a form of voluntary restraint agreed upon by the aforesaid Association on behalf of its members. But the Association regards this as a transitional arrangement, and expects the Government to fulfil their declared wish to revert as soon as possible to the traditional position, whereby the fixing of council house rents is entirely a matter for local discretion.
Another matter mentioned in the Report of the Estimates Committee is the question of the housing cost yardstick, which has now been increased by an average of about 5¼ per cent. There are, I understand, continuing consultations on the actual structure of this yardstick, which at present tends to discriminate against low density development and small-unit accommodation. The Association's view is that the basic idea of a 275 yardstick is good and carries advantages, as well as difficulties which are probably laregly due to its inflexibility. The statutory obligations of the local authority are clearly to make reasonable charges for rent and to balance the housing revenue account. To the extent that income does not meet expenditure, the balance must come out of the rates.
Housing costs have been seriously affected by the incidence of high interest rates and the use of industrialised building methods, while the Government expectation is that housing authorities should use the subsidies primarily to assist those tenants in the greatest need. But if subsidies are redistributed to pay for the rebates to tenants who cannot afford a standard rent, then the rent of those tenants not eligible for rebate will normally have to be increased.
The Association deplored, and still deplores, the Government's legislative action to enable Ministers to control council house rents. It called in question a long-established relationship, by bringing central control once more into a field of activity which has traditionally and rightly been regarded as a matter for local discretion and decision. Furthermore, in regard to house mortgages it is to be hoped that national economic circumstances will ultimately permit the abandonment of any limit, leaving local authorities free with unfettered discretion to assist with house purchase as a proper adjunct to their general housing powers. I understand that a special Working Party set up by the Ministry of Housing and Local Government, on which local authority associations are represented, is now engaged in a study of the problems surrounding rent allowances paid to those in receipt of supplementary benefits.
May I mention two further points? The type of new housing development which has to be undertaken is becoming increasingly more difficult and involved. In many areas vacant land is simply not available. The emphasis is on acquisition of slum properties, clearance, infilling and so forth, all of which takes more time and tends to slow down the rate of progress.
Lastly, my Lords, one has to remember, too, that the housing programme should not be judged solely on the completion 276 of new dwellings. There is now increased emphasis on improvement and the rehabilitation of areas which would otherwise fall into decay. This is part of the Government's own policy as now embodied in the last Housing Act; and the work involved does not produce the same demonstrable results in terms of new completions. It is nevertheless of vital importance; and it is also of vital importance to remember this in considering numbers. In short, we have had from the Government a mixture of words about their intentions and a singular lack of competent, practical management which has dwarfed their achievement. That is why the situation cries aloud for a change in management.
§ 5.31 p.m.
§ LORD KENNET
My Lords, I shall not detain your Lordships long but, with the leave of the House, I should like to pick as many as I can of the points that have been made; and perhaps if there are any left over which are obviously crying out for an answer and I am unable to give it now, I shall be able to write to the Peer concerned later.
The noble Lord, Lord St. Helens, in introducing the Motion, told the story of the difficulties of the elderly couple in the big Victorian house who wanted to get into a council house. I think the point was largely answered by my noble friend Lord Garnsworthy, and I have little to add to what he said, except simply to remind the House that the Cullingworth Report says—and I am now quoting from the Report:Rather less than half of the local authorities in our sample inquiry do not normally accept applications from owner-occupiers, though a few of these make exceptions in the case of elderly people. This is difficult to justify.My Lords, I entirely agree with that statement. The Ministry are constantly urging local authorities to provide accommodation for elderly people, and deplore the unwillingness of some authorities to consider those who are already house-owners just for that reason. So I am with the noble Lord in that; and we do what we can.
The noble Lord also asked me about slum clearance, and he particularly asked whether the figure of one million national excess of houses over households in 1973 took account of slum clearance rates. I 277 will not detain the House by giving the annual figures, but let us take a rough sample. When the Labour Government took over, slum clearance was running at about 60,000 to 61,000 dwellings a year. It is now running at about 70,000 a year, and the forecast national surplus to which I have just referred of course takes account of the anticipated continued rate of slum clearance.
I turn now to the remarks of the noble Lord, Lord Brooke. Much of what he said, I think, he will not expect me to reply to because in my view, at any rate, I replied to it in advance.
§ LORD BROOKE OF CUMNOR
My Lords, I should not expect the noble Lord to reply to a great deal of what I said, because there is no possible reply.
§ LORD KENNET
TO which I would only add that I did not expect the noble Lord to reply to a great deal of what I said because there is no possible reply; and indeed he did not, although he had the advantage of speaking immediately after me. But there are some things that I should like to reply to, because they were constructive and helpful, though some were erroneous, and perhaps I can correct him about them.
On the question of the average price increase of a house being built for sale since the Labour Government came in, I think, if I remember aright, he gave the figure of £1,500. Perhaps we should compare the figure for 1965 (because I know that he is very sensible of the marginal benefits conferred upon this Government by the hangover of activities by the last Government), with the figure for 1969, which is the last full year for which we have figures. I quote the prices furnished by the building societies of the average price of new dwellings, including land, which are mortgaged by private owners; I suppose that is as good a price to take as any. The increase there has not been £1,500, but £1,051.
§ LORD BARNBY
My Lords, could the noble Lord say at this stage whether it is correct that the S.E.T. alone has added £125 to the cost of an average house to-day?
§ LORD KENNET
My Lords, I could not, at the drop of a hat, confirm or deny that figure. It is obvious that it has added something. As the noble Lord will 278 know, Professor Reddaway's inquiry into the effects of S.E.T. has not yet covered housing; and for an up-to-date figure I should like notice and time to inquire.
The noble Lord, Lord Brooke, inquired about the progress of the housing finance review, which I mentioned. I do not think I should say more about that than I said before. He also asked me to make various forecasts about the housing position during the rest of this year, 1970.
§ LORD BROOKE OF CUMNOR
My Lords, before the noble Lord leaves the housing finance review, may I say that I asked whether the local authority associations were going to be associated with it before it reached the stage when final conclusions were becoming crystallised.
§ LORD KENNET
I beg the noble Lord's pardon. He did indeed ask that; and so, of course, did Lord Milverton at a later stage. The answer is, "Yes", but I think one wants to understand what a review is. A review is simply internal consideration of realities and of possibilities for the development of future policy. The next stage must be a choice by the Government of what they think will be the best future policy. That stage has not yet been reached. When it is, and before any such Governmental choice is carried into effect, then of course there will be the fullest possible consultations, as there always are, between the Government and not only the Association of Municipal Corporations but also the three or four associations which represent other types of housing authorities.
There was one passage in the speech of the noble Lord, Lord Brooke, which I fundamentally welcome and as to which we are entirely at one. If I remember aright, he was speaking of the difficulties in which housing authorities sometimes find themselves, in this era of high-interest rates and rising prices, in providing enough council houses. He said, speaking of those authorities, "There is an escapist way out, and that is to stop building." "But I am certain", said Lord Brooke, "that that would be wrong". My Lords, so am I, and I am very glad indeed to have it from the noble Lord himself, sitting opposite, that he is certain that that would be wrong. Because there have been certain speeches made by his colleagues who sit on the Front Bench in the House 279 of Commons—not in the House, but in the country—which have raised the suspicion, at any rate in my mind, that they were not always sure that that would be wrong. Of course, we would agree that there are local authorities who are taking that way out: the only question is whether or not it is wrong.
§ LORD BROOKE OF CUMNOR
My Lords, I am sorry to interrupt so often, but this is important. I think it is entirely proper for a Minister of Housing and Local Government from time to time to remind local authorities, regardless of their political colour, of their duty to build more houses. I had to do that to both Conservative-controlled and Labour-controlled councils from time to time.
§ LORD KENNET
I would not dissent from that, my Lords.
My noble friend Lord Wynne-Jones gave the House, I thought, a most valuable reminder of what might happen if we did not pursue the policies we are pursuing, by describing the situation in the United States. In my view, he very accurately laid his finger on the reason why that situation has arisen—that is to say, the lack of public money. Their system does not provide public finance for low-cost housing, as they call it, to the same extent as ours does, and that is why they are in trouble in their cities. I note that voices are to be heard among the Party opposite (Lord St. Helens himself said something of the sort to-day, and my noble friend quoted Mr. Enoch Powell as having repeatedly said it) saying that the role of public finance should be reduced or even terminated in this matter, and that we should free the market. I notice, however, that the reaction of the new Federal Administration in the United States to this all too well known situation was not the same. Their reaction was immediately to send someone to this country to ask how we did it, and how we have managed to avoid the extreme urban decay which they have incurred. I had the great pleasure of taking Secretary Romney myself around one of our New Towns—an example of public enterprise and public money if ever there was one—and I explained how I thought that we had succeeded in doing all that we 280 have done. What the American Administration will make of it in the long run we must wait and see.
The noble Lord, Lord Gridley, asked that various things should be done. He will not be surprised that I am not able to promise to do all of them, but particularly he mentioned that it would be a good thing if building firms were included in the priority claims in the matter of loans. I hope that in that context what I was able to say in my opening remarks about bridging finance in the housing field will be of interest to him. The noble Lord, Lord Teviot, if I understood him aright, said that the costs of house building are influenced by the Ministry cost yardstick. I wish it were so. If it were, then all we Should have to do would be to lower the yardstick and the cost would then go down. But that, unfortunately, is not the effect. What the yardstick influences is the amount of money spent on a given house on which the local authority may draw an Exchequer grant. It simply says that if you apply this or that yardstick you get the grant; if you go 10 per cent. over you may do so but you will not get the grant on the 10 per cent.; and if you go beyond that you will get no grant at all.
The noble Lord, Lord Milverton, spoke with some feeling about council rents. I hope that he will excuse me if I do not follow him in that matter because I rather think that it is outside the terms of the Motion. The housing finance review question and consultations I have already dealt with. The noble Lord concluded by saying that the housing programme ought not to be judged solely on the new completions rate and that it ought also to be judged by the improvements rate. Coming from a man of his great experience and authority in this matter I think that that is an important opinion. I was very interested to hear it and I am certain that it will become true in the future. I think it is already true to some extent, and I will say no more about that.
In conclusion, I would remind the House of some of the things that were thrown at me and would suggest that some noble Lords may have forgotten them. I would remind the House that I have not sought to deny that the number of completions of new houses was lower last year than the year before. I have not sought to claim that it will go up again 281 this year to the same level at which it was the year before last, in 1968. What I have tried to do is to explain why it happened and to put that in proportion. I have tried to explain about the international phenomenon of high-interest rates. Nobody has taken me up on that. Nobody has said that I was wrong, and nobody has said that although I was right the Government ought to have been able to do something about it. No suggestion has been made of steps which the Government could have taken in order to bring it about that this country, alone of the countries like ours, should be able to maintain an ever-rising rate of new housing completions in the economic climate of the last two or three years. On that defensive note—and I make no apology for that, since I was rather aggressive before—I conclude.
§ LORD BROOKE OF CUMNOR
My Lords, the noble Lord has been very courteous in answering questions. Before he sits down, would he answer my one remaining question? By how much does he estimate that completions in 1970 will fall short of the 500,000?
§ LORD KENNET
My Lords, it is a rash Housing Minister who gives estimates of completions at this time of the year, as I think the noble Lord knows better than I. I am not sure whether he used to give completion forecasts in early May. I should be reluctant to do it. I go no further than to say that I think the completion rate this year will be comparable to that of last year.
§ 5.45 p.m.
§ LORD ST. HELENS
My Lords, in exercising my right to wind up, very briefly, I would express the hope that your Lordships, like myself, have found this an interesting and constructive debate. I should like to thank the noble Lord, Lord Kennet, for the kind remarks with which he started—or at any rate for the absence of unkindness, which is always very acceptable. I must say to him that I have seldom felt as sorry for anybody in my Parliamentary life as I felt for him when he took the most frightful "bashing" from my noble friend Lord Brooke. He was not greatly helped out by the fact that only two Members from his own side saw fit to support him in the debate.
§ LORD GARNSWORTHY
My Lords, perhaps the noble Lord will allow me to inform him that we on this side had so much confidence in the case stated by the noble Lord, Lord Kennet, that there was no need for further support.
§ LORD ST. HELENS
That is a very good try. May I say how much I personally welcomed the contribution by the noble Lord, Lord Garnsworthy, as a practical builder? We on this side who initiated the debate wished it to centre on the Prime Minister's pledge at Bradford of 500,000 houses a year by 1970. The most outstanding fact of this debate has been the deafening silence from the other side. There has been no mention of the pledge. They have tried to obscure it by a mass of statistics, not always entirely relevant to the original statistics raised from these Benches. However, I should like to thank all noble Lords who have taken part in this debate and beg leave to withdraw my Motion for Papers.
§ Motion for Papers, by leave, withdrawn.