I beg to move, "That the Bill be now read a Second time."
This is a long Bill of 40-odd Clauses and five Schedules—a technical Bill. I shall try my best to keep my remarks as short as is consistent with explaining them. I think it would be for the convenience of the House if I divided my speech into four parts dealing with houses in order of soundness—the first, repairs to sound houses in private ownership; the second, the conversion of and improvements to houses in private ownership; the third, slum clearance. That would deal with the legislative provisions. I think it would then be convenient if I gave the House some idea how Her Majesty's Government propose to make those legislative provisions effective.
Turning first to repairs to sound houses in private ownership—this is in Part II of the Bill—I wish to make it clear that this means those houses which do not require large sums of money spent on current repairs. No one really knows the exact number of houses involved, but I should think it may be of the order of 4 million out of a total of 6 million rent-controlled houses. I should like to emphasise again that we are not primarily concerned with those houses which need an expenditure of hundreds of pounds. Those houses must necessarily be unfit, or alternatively in need of improvement or conversion. We must distinguish between, on the one hand, the repairs to fairly sound houses and, on the other hand, improvements and conversions, where perhaps additional w.c.s are required, or where a large house is converted into flats, and so on.
As regards the four million or so sound houses, the Government's object is to prevent deterioration, and our scheme rests on two principles. First, the rent paid by the family enjoying occupation of the house must be enough to keep its home in good repair. Secondly, the landlord must do the necessary repairs—I repeat that the landlord must do the necessary repairs—if the tenant pays the increased rent.
We must have regard to two proved facts on the cost of repairs as shown by the best professional advice available. First, in 1951 the Royal Institution of Chartered Surveyors, speaking of money spent on repairs in 1939, said:
On the average, the actual expenditure was about equal to or slightly in excess of the relevant statutory deduction.
This was confirmed in 1952 by the Chartered Auctioneers and Estate Agents. The statutory deduction, as hon. Members know, is the deduction made from the gross rateable value to give the net rateable value, on which the rates are paid. That is the first fact, that the money spent on repairs in 1939 was equal to the statutory deduction.
The second fact is this. In 1953 repair work cost three times as much as it did in 1939. The Girdwood Committee proved this in its Report last month. Therefore, our aim is to ensure that houses are continuously kept in good repair, and to do this by allowing an increase of rent providing it is used for keeping the house in repair. Clause18 provides that before the landlord can claim an increase of rent he must prove that he and not the tenant—I repeat, not the tenant—has done repairs to the value of either three times the statutory deduction in the previous 12 months or six times the statutory deduction in the previous three years.
The second thing that is provided in Clause 18 is that the house must be fit for human habitation as defined in Clause 7, as well as in good repair as defined in Clause 40. This Bill has two principal definitions; one is the standard of fitness for human habitation, and the other is good repair. In addition, we also want to deal fairly between tenant and tenant in the same neighbourhood and, perhaps, in the same street. As hon. Members in all parts of the House know, that is not particularly easy because of the wide variations in rent between comparable houses in the same district.
I have an example here. In one short street in Hammersmith—I have chosen Hammersmith as a typical area—there is a row of identical houses. The tenants of two of the houses pay 6s. 9d. a week, while the tenants in three others pay 24s. 7d. a week. Since the tenant who pays the higher rent is already making a greater contribution to repairs than the tenant who pays the lower rent, we have tried in Clause 19 to fix an upper limit beyond which rents cannot rise, so as to do justice between the two sorts of tenants—the one whose rent is already low and the other whose rent is high.
We say in Clause 19 that no matter how much has been spent by the landlord on repairs, the annual rent cannot be raised beyond an amount greater than twice the gross value of the house, that is, for rating purposes. That means that existing low rents are allowed to come up to a reasonable figure so that the cost of repairs can be obtained, but the existing higher rents which already make a greater contribution to the cost of repairs cannot be raised unreasonably because of the upper limit or, what we call in the jargon in the Ministry, the stopper. The intention is to try to give equity between those tenants who live in almost identical houses in the same street, where one person pays a low rent and the other person pays a high rent.
Yes, the gross values for rating purposes are the same but the rents are different. The rents differ widely, and we are trying to deal fairly with those tenants.
May I give an example? These two categories represent 5 million out of 6 million houses. The rents of houses with a gross rateable value of £15 cannot be raised above £30 per annum, or 11s. 6d. a week. The second category consists of houses with a gross rateable value of £25, and the rent in that case cannot be more than £50 per annum, or 19s. 3d. a week. These two categories of 11s. 6d. a week and 19s. 3d. a week cover 5 million houses out of 6 million rent-controlled houses, and in every case they will be the maximum rents allowed. In hundreds of thousands of cases the rents will be lower, but they are the absolute maximum.
We must keep this increase in perspective and proportion. May I give an example of some of the expenditure that has been going on recently? Since we derationed sweets, we have been spending at the rate of £60 million a year more on sweets. That is about £5 per annum per family. Any increase must have some regard to the existing pattern of expenditure.
By "rent" in our proposals we mean exclusive rent, not including rates. Let us look at the procedure proposed in Clause 20. Before obtaining an increase of rent, a landlord has to serve on the tenant a notice of the proposed increase, and he must certify two things—first, that the house is in good repair, and, secondly, that he has spent on the house not less than a specified sum. That notice is delivered four weeks before the increase will take effect.
This is a very important matter. It is really the fundamental part of the Bill, and we would like to know what it means. Can the hon. Gentleman say what in this case is the definition of "good repair"?
It is not in Clause 7 which relates to fitness for human habitation, but is in Clause 40 to which I referred earlier. It is also in the Second Schedule. That is the definition, and that is what the landlord has to certify. Perhaps the right hon. Gentleman would like me to read from Clause 40, line 11, page 30:
'good repair', in relation to any premises, means that having regard to the age, character and locality of the premises they are in good repair both as respects structure and as respects decoration.
I have not finished this point yet. If the hon. Lady will wait until I have finished, I think she will find that I have answered her question.
The landlord serves on the tenant a notice that the house is in good repair and he also certifies that he has spent on repairs not less than a specified sum. The notice is delivered four weeks before the increase can have effect. If the tenant accepts the landlord's view and there is mutual agreement, the increase becomes payable. If the tenant disputes it, which he can do, there are two courses open to him—and this will answer the point raised by the hon. Lady. If he considers that the house is not in good repair, he can, under Clause 21, apply to the local authority for a certificate of disrepair. This right he can exercise either at once or at any later time after he has started to pay the increased rent. In this way he can make sure that the landlord not only puts the house in good repair but keeps it in good repair.
The second dispute may occur if the tenant says to the landlord, "You have not spent this money on the house." That is a question of fact and not a question about the condition of the house. The condition of the house will be decided ultimately by the local authority, if there is a dispute; but the dispute on facts will go to the county court which will actually decide on the facts.
Probably the county court will decide that. If it is a frivolous application, it is wrong that the public should pay. I would say to the hon. and learned Gentleman that that is a Committee point. I have 44 clauses and five Schedules to deal with and I think it not unreasonable that the House should let me get on with my theme. Hon. Members should bring up these points later.
It is suggested from quarters which are very varied indeed—the National Federation of Property Owners as well as the right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan)—that our proposals do not give landlords enough inducement to carry out repairs—
—all landlords enough inducement to carry out repairs. The right hon. Gentleman has called the Bill "A mouldy old turnip." But at the Holborn by-election it was called "A rich harvest for the landlord." That is rather different, but one can understand because the descriptions were given at two different places. I think that the right hon. Gentleman is a greater expert on sour grapes than on mouldy old turnips.
The repairs increase is not intended to apply to those landlords whose property has been so neglected that it now needs hundreds of pounds to be spent on repairs. It would require an intolerable increase of rent to enable those houses to be restored. Our proposals provide an adequate incentive to a large number of landlords and, frankly, there are a large number who have always maintained their houses in good condition but who are now finding the financial strain too great to allow them to do so.
We are trying to give the landlord enough to provide for current repairs—I emphasise the word "current"—and not for the accumulated years of neglect which we have heard so much about from time to time. The increases that we propose to allow will be enough to enable current repair work to be done. This will preserve the landlord's assets, and there lies the incentive. But as well as an incentive there is a penalty. If the landlord neglects the house and it decays, the local authority can take it over. Those are the major provisions of Part II which were dealt with by my right hon. Friend the Minister of Housing and Local Government during the debate on the Address.
I should now like to deal with the minor matters covered by Part II. Under Section 1of the Landlord and Tenant (Rent Control) Act, 1949, a rent tribunal has the power to fix a reasonable rent for controlled premises first let after 1st September, 1939; but the tribunal could only decrease rents, never increase them. That was the idea of the right hon. Gentleman the Member for Ebbw Vale. Such a procedure was grossly unjust. I will try to prove why it was unjust. In 451 cases the 80 rent tribunals fixed a higher rent because they thought it reasonable; but those higher rents, fair and reasonable though the tribunals thought they were, could not come into force because of the 1949 Act.
Clause 30 rectifies this injustice by enabling a tribunal to fix a fair rent, be it higher or lower. Hon. Members opposite support the rent tribunals. We had a short debate recently, and I ask them what could be fairer than allowing a rent they think right to be charged?
Really, if I give way every time an hon. Member wishes to ask a question, I shall go on for too long. I want to be courteous to hon. Members who want to interrupt. I must be courteous to those who want to make contributions out of their knowledge of this subject. [Interruption.] I will certainly give way to the right hon. Gentleman the Member for Lewisham, South (Mr. H. Morrison).
Clauses 33 and 34 deal with premiums. The 1949 Act tightened up the existing prohibition on premiums. There were some leasehold properties acquired by tenants by paying a small premium and a large ground rent. This ground rent, by being more than two-thirds of the rateable value, brought their houses within the Rent Acts. This meant that an innocent tenant could not pass on to a subsequent purchaser any proportion of his premium. This caused untold hardship, especially in the constituency of the hon. Member for Pembroke (Mr. Donnelly). Where the tenant has bought the lease, and it was a low premium and a high rent, he is not able to pass on a proportion of it. Clauses 33 and 34 permit a tenant who has paid a premium on an assignment to him of a lease before the 1949 Act became law to pass on a proportion of that premium when he himself assigns.
Clause 35 makes provision for those lettings where services are provided. In 1939 many landlords provided services such as hot water and central heating. The Rent Acts prevent them from increasing the rents to meet the increased cost of providing the services. As far back as eight years ago, the Ridley Committee recommended that these cases should be given high priority. Clause 35 allows for an increase corresponding to the increase in cost of services. If this increase cannot be decided by mutual agreement, it will be decided by the rent tribunal.
That is true. We are looking into that point. In some cases the landlord, by implication, has been forced by the law to provide the services although that was not expressly stated in the contract. We are going into the matter carefully to see whether we should put down an Amendment during the Committee stage. That is a good point.
I now come to conversion and improvements. Part I of the Bill deals, amongst other things, with those houses which can be made suitable for modern living by conversion or improvement. The Stockton experiment has proved conclusively that many old houses still have a useful life if improvements and repairs are done. At Stockton, Allied Iron Founders Ltd. added bathrooms and internal lavatories to structurally sound Victorian houses. The tenants are highly satisfied and the majority of their neighbours are now pressing for similar improvements for themselves. This was done under the Act passed by the right hon. Gentleman the Member for Ebbw Vale where a contribution of a maximum of £400 or—
The right hon. Gentle man is in a muddle. He has got on to deferred demolition and slum clearance, with which I shall deal later. He has confused old houses which the local authorities will take over and patch—
—with conversions and improvements. I have not yet come to that part of the Bill. If the right hon. Gentleman will contain himself, I shall try to explain the Bill to him. Our object is to modernise old houses. To do that we propose to amend and make more flexible the provisions of the 1949 Act placed on the Statute Book by the right hon. Gentleman the Member for Ebbw Vale. We propose to do this in respect of grants for conversion and improvement.
That Act set up a system of grants by the Exchequer and the local authorities to help owners and local authorities to carry out conversion and improvement. Very little has happened, for two reasons. The first is that few people have known of the grants. We now intend to publicise their existence and to encourage their use. Secondly, the conditions of the grants are too rigid. I agree that there must be conditions where a public grant is made to private persons, but more flexible provisions are needed if we are to convert and improve houses on any scale.
May I give an example which, I think, will help to clear the right hon. Gentleman's mind? The 1949 Act laid down £800 as the maximum expenditure to attract a grant. The result is that if a man proposes to spend £800 he is eligible for a grant of £400. He may not get it, but he is eligible for £400. If he wants to spend £810, then he is not entitled to the grant of £400; he is entitled to nothing at all. What we have done is to alter that to make it more flexible, and we have done that under Clause 13. A sum of over £800 no longer makes a man ineligible for a grant, but the amount of the grant remains the same as before, that is to say, a maximum of £400 or half the cost, whichever is lower. If a man now spends £810 he can still get the grant of £400. The provisions are therefore made more flexible in that respect.
I will give the right hon. Gentleman another example of how we propose to make his Act a little more flexible. His Act—the 1949 Act—restricted the grant to dwellings with an expected life of at least 30 years. Why 30 years? After all, can we condemn the tenants of a house to 20 years without a bathroom? Even the right hon. Member for Leeds, South (Mr. Gaitskell), who said something about bathing a few years ago, would have deemed it necessary to put bathrooms into houses even if their expected life was only 20 years. Under Clause 13 we give the local authority discretion to make grants to houses with a shorter expectation of life than 30 years. I think the right hon. Member for Ebbw Vale will consider that a good thing.
The third way in which we are going to make the position more flexible is in the rent. Local authorities make a rate contribution and should therefore have a voice in fixing the rent.
Before my hon. Friend leaves this point, I wonder if he would answer a question which perhaps affects the countryside more than anything else. It concerns the improvement grant. Does he not agree that it is very important to preserve continuity of building? This new proposal may cause a great many people to hold up their decision to start reconstruction until the Act is passed. That may mean that building will not be continuous. Would he consider whether that part of the Act might not be allowed to come into force with the First Reading of the Bill?
It would need very careful thought to make the proposal retrospective in that way, but we will consider my hon. and gallant Friend's suggestion between now and the Committee stage. It is a Committee point. I see no reason why anyone should stop doing conversions now when they have started. On the other hand, a grant must first be obtained before work can be started. We will take note of my hon. and gallant Friend's suggestion.
The third way is on the fixing of rent. The local authorities make a rate contribution and therefore should have some sort of say in fixing the rent, but some rents have been fixed so low that there has been no incentive to a landlord to apply for the grant. Clause 13 alters the method of fixing rents where improvement grants have been made. Under the 1949 Act the owner could not increase the rent by more than 6 per cent. of his contribution to the capital spent. That has proved to be too low. Clause 13 raises this to 8 per cent.; and 8 per cent. is the percentage which is allowed under the Rents Acts. Clause 32 confers additional and wider powers on local authorities for fixing appropriate rents in these cases.
After all, if the owner gets a grant it does not make it any less necessary for him to receive a sufficient return on the money which he himself must find. Although 8 per cent. is a maximum, my right hon. Friend strongly recommends it to local authorities as being equitable. I hope I have dealt with all the points raised by the right hon. Member for Ebbw Vale. The figure he had in mind had nothing to do with conversion and improvement. It was the Exchequer contribution, or rather I think it capital- ised the Exchequer contribution to a local authority when the authority took over a dilapidated house pending slum clearance in five, 10 or 15 years' time. The Exchequer therefore said to the local authority, "We will give you an annual sum of money for that house for the next 15 years."
Now that the 30 years' time limit has been removed and the period of reconditioning, if it can be made a good house, can be 10 years or more, the one part of the Act is in danger of running into the other; that is to say, rehabilitation and reconditioning may run into each other.
The right hon. Gentleman has this absolutely wrong. He referred to a figure of £140. I do not know whether that is the correct sum of money or not, the correct conversion from an annual rate to the capital charge, because sometimes the right hon. Gentleman's figures are a bit difficult to follow, but in any case the figure to which he refers is for local authorities who are patching houses which have to be lived in for the time being but which later will be pulled down.
The hon. Gentleman has not understood the point. There are two categories. There is the case where a clearance order has been given, where it is not possible to demolish the house at once and where it is reasonable, therefore, that the house should be rehabilitated for some years life—a little more than 10 years. There is the other case, the reconditioning grant. The great difficulty is that if we rehabilitate for little more than 10 years and at the same time make it possible to recondition for as low as 10 or 15 years, the schemes are running into each other.
When he reads the report of the debate the right hon. Gentleman will see that he is wrong. He is confusing the case of a local authority patching a derelict house merely for a short time—not improving and converting, but patching it to make it fit to live in for a short period—with a private enterprise house where the owner can make it better for a longer period. The right hon. Gentle man is completely muddled—
I am sorry; I cannot give way. We hope to improve the administration of these grants as well, because in administering the grants local authorities have a varied record. Some encourage owners, some are lukewarm, some refused to entertain any scheme because they do not like to make grants to which their rates make a contribution, to private landlords. The latter is a mistaken attitude and my right hon. Friend will do all he can to change it. He hopes to persuade local authorities, landlords and tenants that they will all benefit by combining in the use of these powers. The House should remember that if a house is not dealt with by way of improvement and conversion, and if it falls into decay, it will become a matter for the local authority to take it over and do the patching, thus creating the other situation to which the right hon. Member for Ebbw Vale referred.
I should not like local authorities to think we are trying to place all the blame on them for the fact that this Act has not worked. My right hon. Friend is convinced that in the past we in the Ministry have not always dealt with applications as promptly as we might have done. He intends to make sure that the procedure in his Department will give no further grounds for criticism on this ground. We hope local authorities will do the same.
So much for improvement grants. There is another point I want to mention, and it is that under the 1949 Act the local authorities have power not only to make grants but to lend money, and this provision is not widely known. They can lend money to private owners not only for improvements and conversions but also for repairs. They would charge the Public Works Loan Board rate of interest, which is 2⅝ per cent. for five years, 3½ per cent. for 10 to 15 years, or 4 per cent. for over 15 years, plus, if they wish, ¼ per cent. to cover administrative costs. This power they have had for years but it has not been much used, and if the improvements and conversions which my right hon. Friend has in mind are to be done, then local authorities must encourage the use of these loans more in the future than they have done in the past.
There has been another obstacle to these conversions and improvements. In the past it has been found that some landlords were unwilling to carry out conversions, the reason being that the rents of the converted or improved premises had to be fixed by relation to the rent of the premises before conversion. Therefore, if we have two houses, one of which is rent controlled, shall we say, at 6s. per week, and the other—a similar house—is rent controlled at perhaps 26s.a week, whilst it might pay to convert the one let at 26s. it probably would not pay to convert the other, because the new rental has to be related under the Rent Restrictions Acts to the rent of the premises before conversion. Clause 31 alters that and enables rent tribunals to fix a fair rent.
My last words on this part of the Bill are to urge local authorities to do all they can to encourage improvement and conversion. They can set an example by themselves acquiring houses which should be converted into smaller units. Local authorities, knowing whether there are any suitable properties for conversion in their areas, can make an approach to the owners and invite them to submit proposals and might go to the length of helping the owners to frame their own plans if they wish to do so.
Is the hon. Gentleman going to refer to any arrangements that will be made with the local authorities with regard to the possible extension of the sanitary arrangements, or is the whole of that cost to fall on the local authority? Suppose that a local authority or a landlord decides to alter houses similar to those in the Stockton experiment—say, a whole row of houses which never at any time had bathroom accommodation or inside sanitary accommodation. Let us suppose that the sewerage system of that area is such that it will not carry the extra burden of the improvements intended to be made. What allowance to the local authority will be made under the Bill for the expensive alterations which they will have to make to their sewerage system in order to carry the additional sewage resulting from alterations which either private owners or the local authority may have to make?
I see the point which the hon. Lady is making. The contribution to the owner would be a maximum in the case of alterations by improvement or conversion. It would be £400 maximum or half the cost, whichever is the lower, and to that £400 grant the local authority makes a contribution. As for the increased strain which there would be on the sewers, that is entirely another matter, which is not within the scope of this Bill, and it is left to local authorities to make representations to the Ministry in the usual ways when they apply for a grant in this respect.
Frequently, we get deputations from the local authorities asking for increased grants towards sewerage schemes on grounds such as those which the hon. Lady has just mentioned. Obviously, it will cost more money, and it is a point which should be taken into consideration when the grant is being considered and in relation to the particular area concerned.
Now I come to slum clearance under Part I of the Bill. I have dealt with sound houses and their repair and also with conversions and improvements. How do we define unfit houses in Clause 7? The definition in the Housing Act, 1936, was not adequate, and a new definition was inserted in Clause 7 of the Bill which is based on the unanimous recommendation of the Central Housing Advisory Committee, which examined this question in 1946.
The object of the Government, after having tried to define unfit houses to the best of their ability—and to the best of the ability of the Advisory Committee—is now to resume the systematic clearance of unfit houses, as defined in Clause 7, but, because of the magnitude of the task of slum clearance, there must necessarily be areas which will not be cleared for some years to come. We must recognise that, because everything cannot be done at once. The Government propose to deal with the problem in one of three ways.
First, the early clearance of areas which have been scheduled by local authorities for early clearance. These houses will be pulled down and replaced as quickly as possible. The second is eventual but deferred clearance, and this category covers unfit houses in those areas which local authorities propose to clear eventually, but not for, say, five years or more. Since people must live in them in the meantime, they must be patched up. That is the category to which the right hon. Gentleman opposite referred earlier whilst I was dealing with conversions and improvements, and I hope the point is now clear to him. The third category is that of privately-owned unfit houses. Scattered about, there must also be privately-owned unfit houses which must either be pulled down or brought up to the minimum standard defined in Clause 7.
To take early slum clearance first, the first category of unfit houses are those scheduled for early clearance. No one knows how many such houses there are, but all agree that it is a very big task. The National Council of Housing and Town Planning recently suggested that hopelessly unfit houses number about 1 million, and no one would dare to call that an over-statement. Obviously, rebuilding slums on that scale cannot be done overnight. Areas must be surveyed and defined, clearance orders and compulsory purchase orders submitted to the Minister, and the whole statutory machinery of clearance set in motion.
Clause 1 therefore requires local authorities to make proposals for dealing with unfit houses to the Minister within 12 months from this Bill becoming law, and Clause 11 and the First Schedule aim at streamlining, simplifying and making more flexible the statutory machinery for dealing with slum clearance procedure. As an example, the procedure for notifying interested parties is simplified and speeded up.
The second category is that of eventual but deferred slum clearance. The need here is to patch houses which must be lived in for some time to come. The law at present is that houses subjected to slum clearance procedure must be demolished immediately. Clauses 2 and 3 alter that, and will allow an interim stage during which the local authority will acquire the houses and patch them up to a standard which they consider "adequate for the time being." That is a very flexible procedure, and, all the way through the Bill, my right hon. Friend has been striving for flexibility. For example, a local authority will be prepared to spend more money on a house which will be lived in for 12 years than on one which will be lived in for five years, and the local authority proposals for dealing with houses in this way will be included in their submissions to the Minister under Clause 1.
As to grants for patching, the local authority will have to raise two separate loans, the first for the purchase of the house, pay the interest in the usual way and provide for the repayment of capital over a period of years. The second one will be for repair of the house. As the level of the site value is outside the control of the local authority, the Exchequer will therefore make a percentage grant of 50 per cent. of the annual cost of the interest and funding the loan.
Then comes the loan for the repair of the house, and here the cost is within the control of the local authority. Therefore, the Exchequer will make a fixed annual grant of £2 5s. per dwelling for 15 years. The right hon. Gentleman opposite, in an aside just now, asked "Why five years?" Even if the house was pulled down after five years, the grant would still go on for 15 years. This grant is necessarily an estimate, based on available evidence, which is not at the moment quite conclusive. We have based the grant on this evidence but it may turn out to be too low or too high, so we have taken power in the Bill to vary the grant in the light of the circumstances at the time.
We shall come to that later. I have given the hon. Gentleman the intention, and any alteration later which may be necessary to give effect to that intention will obviously have to be considered.
If any hon. Member is doubtful of the policy of patching these houses, I would urge him to visit Birmingham, where the city authorities have done exactly what is contemplated in this Bill and the tenants are delighted with what has been done. The houses dealt with in this way in Birmingham are now clean and weatherproof, free from damp, provided with all essential services, an indoor water supply and decent and accessible sanitation. Criticism has been made by hon. Gentlemen here and outside that it is not possible for our provisions to work. The Birmingham experiment proves that these proposals are both sensible and workable.
I have already given way several times. This is a long and complicated Bill, and I do ask hon. Members to let me finish my speech. We know that local authorities are keen to deal with slum clearance because the A.M.C. has arranged for a special conference to discuss the subject as it affects big cities. The Government attach great importance to this conference. It will be held, and my right hon. Friend the Minister of Housing and Local Government will be present. Therefore, the technical questions involved will be kept in view. The Government will not be able to tackle this matter on any other basis than as a team.
The next problem is that of the privately-owned unfit house, scattered houses which can be brought up to the minimum standard of fitness in Clause 7 at reasonable expense or to a higher standard, if possible under Part II of the Bill. Some landlords may go beyond making houses just fit for human habitation and bring them to this higher standard. If they do that, they will qualify for a normal repairs increase. In some cases such repairs may not be possible. For example, if a house has only 4½-inch brick walls very little improvement can be made, no matter how much is spent on it. Such houses cannot really be repaired.
In some cases the landlord may not have the money to carry out the work. Whatever happens to such a house it must still be brought up to the lower standard, that of fitness for human habitation. If the landlord cannot do it, there are powers under Section 10 of the 1936 Housing Act for the local authority to do the work and to recover the cost from the owner. Recovery of these expenses is slow, so in Clause 10 we do what we can to speed up the procedure.
I have dealt with the unfit houses, but there are some important miscellaneous provisions. Clause 9 prescribes a simple code, which is an expansion of the standards of fitness laid down in Clause 7, and applies to lodging houses and houses occupied by more than one family. There is power now to make bye-laws, but in practice that has not proved satisfactory. Our legislation follows one of the recommendations of the Silk in Committee's Report.
Clause 14 gives power to extend the period for which open spaces may be used for temporary houses under the Housing (Temporary Accommodation) Act, 1945. In granting this extension my right hon. Friend does so with reluctance. I must make it clear that he does not regard this Clause as one which should be repeated, but the bungalows are there and he cannot ask local authorities to do the impossible in the way of re-housing the inhabitants of those temporary bungalows. Therefore we provide that the Minister may, by Order, grant further extensions to terminate not later than 1965, provided that there must be a public inquiry if an extension of more than five years is proposed.
Clause 28 frees from rent control all houses belonging to local authorities. This removes a distinction between houses built after 1920, which have never been controlled, and houses privately built before1914 and subsequently acquired by local authorities, which are still controlled. The Clause also removes from control houses built by a development corporation established under the New Towns Act, and houses owned by housing associations which seek no profit and only try to improve housing conditions. I think hon. Members will generally agree that this provision is overdue and will welcome it.
So far I have dealt with our proposals, but I have not dealt at all with the proposals of the Opposition. Firstly, it is not my task to do it. Secondly, it has not made them in detail yet. I gathered from the contribution made in the debate on the Gracious Speech by the right hon. Member for Ebbw Vale that he alleges that we have neglected the repairs of existing houses, and that he does not like our policy. We must conclude that his policy is to allow houses to fall into disrepair.
The right hon. Gentleman has also said that my right hon. Friend had built houses at the expense of repairs. That is what he said in the debate on the Address. He launched that idea much earlier in the year, and this was the end of the campaign. We must be careful on this point.
The right hon. Gentleman launched this campaign earlier in a Question in this House and thus gave us the key to what he was going to do this year. He used some very misleading figures at the commencement of this campaign to prove that we had neglected repairs in order to build new houses. He said:
Is the hon. Gentleman aware that in 1948 we saw the largest number of houses built under the Labour Government. [Interruption.] Hon. Members would be well advised to wait. There was spent on new housing £554·9 million and on repairs to houses £636·4 million, and in 1952 there was spent on new houses £808 million and £663 million on repairs.
The right hon. Gentleman gave those four figures, and he concluded:
Therefore the new houses are at the expense of repairs."—[Official Report, 20th January, 1953; Vol. 510, c. 31.]
The right hon. Gentleman said that the amount spent on repairs in 1948 was £636·4 million-odd. Well, it was not. It was £197 million. The error of the right hon. Gentleman was £439·4 million. I have here the digest from which he quoted and I will give him the copy so that he can verify that what I say is true.
It is not out of order. The right hon. Gentleman has said that the figure was £636·4 million and it was not. It was £197 million, the error being £439·4 million. That is pretty good, even for hon. Gentlemen opposite. If we look at the Monthly Digest of Statistics, Table 87, which I have marked for the right hon. Gentleman, we see that in 1948 the total output of the building industry on repairs, including power stations, factories, shops, docks and harbours was £636·4 million. That was the figure he thought was spent on repairs to houses, but he had got the wrong line. If he looks further down he will find that it says that houses accounted for only £197 million out of that figure. Therefore the right hon. Gentleman got every figure wrong by hundreds of millions of pounds. If the Leader of the Opposition cares to look at it he will see how accurate his right hon. Friend is, and then I am not awfully sure that he will ever make him Chancellor of the Exchequer.
Further, the right hon. Gentleman said that my right hon. Friend spent on new houses in 1952 £808 million, and that we had built 240,000 houses therefore at £3,366 per house. That is not true. The amount spent on new houses in that year was £400 million odd, not £808 million. The right hon. Gentleman's error in this case was only about £400 million. I have come to the conclusion that the right hon. Gentleman reads just enough to keep himself misinformed. If he would like to contradict me on that point I am prepared to give way. Does he stand by those figures, or are they wrong? [Hon. Members: "Answer."] I will give way to the right hon. Gentleman. Those are the figures on which he has based and mounted his latest attack on housing, the latest of a long series. The previous lot have been discredited. I hope that my hon. Friends will bear those figures in mind when they hear about new housing being built at the expense of repairs.
I now come to the question of administration, and I shall try to show the House how the Government propose to carry into effect these legislative proposals. There have been criticisms—and I think they ought to be answered—to the effect that this Measure will be a nice piece of paper on the Statute Book, but cannot be implemented. I shall give three examples, one in regard to repairs, the second in regard to conversion, and the third in regard to slum clearance, on which the Government will take positive action.
First as regards repairs. The Reports of both the Working Party on the Building Industry and the Girdwood Committee of 1948 both agreed that the greatest factor responsible for low productivity in the building industry was the shortage of materials. Our experience in the last two years has shown that by increasing the flow of materials—which has been a good job of work both by my right hon. Friend the Minister of Works and the whole of the building industry—we have been able to get higher productivity, and before introducing this legislation the Government took care to free the material most needed by the repair industry—softwood. Soft wood can now be obtained in the quantity and quality most suitable for the class of work for which it is required. By doing that first of all, the Government feel that they are almost certain to get higher productivity in the repair section.
Secondly, there is the matter of improvement and conversion. The provisions in the 1949 Act are, as I said, comparatively unknown and little used. We intend to make them both known and popular again by applying a method which we have successfully used for the last two years. The House will remember that my right hon. Friend was responsible for making the People's House popular, and, in doing so, he gave credit with characteristic generosity to the right hon. Member for Bishop Auckland (Mr. Dalton) whose original idea it was. Just as he made the idea of the People's House work, he now intends to make the idea of the right hon. Member for Ebbw Vale work.
We believe that the greatest single factor in making the People's House popular was having examples of it built at strategic points in the country, thus letting people see for themselves what it was like, rather than debating the matter and looking at plans and designs. The average man cannot interpret plans and blue prints. In point of fact, when I go round the country it is amazing how the average person cannot judge or assess the size of a room unless there is furniture in it.
I remember going to one place and the mayoress telling me that she would not live in a particular flat because it was too small. But when we went into a similar-sized flat, which was furnished, she said it was the right size. The two flats were precisely the same. In the same way, we intend to show the average man in the street what good results can be achieved by well thought out conversions. Early in 1954, the public, local authorities and hon. Members of this House will be able to inspect actual conversion work designed and carried out by the Government. We shall try to fire the imagination by demonstration instead of exhortation.
I now come to my last point, the question of slum clearance because this is the greatest challenge of all and needs to be tackled by new and unconventional methods. There are many problems, but they bring opportunities in their train. I think that the greatest problem worrying all of us is the present high cost of building. I would say to the building industry that they need not fear working themselves out of a job, but they might price themselves out of a job if prices rise much higher.
It is quite useless to blame any section of the building industry. It is useless to say that the men are slacking or blame them for drinking tea. It is useless to say that the master builders are inefficient, or that the architects have not supplied plans and designs on time. We must try to be constructive in order to lower costs.
We think that slum clearance provides a great and unique opportunity for the building industry to try out what is for them a new form of organisation which may lower costs. Let us look, first, at the existing organisation of the building industry. I shall not weary the House with this, but I passionately believe that an improvement in organisation is an important contribution to lowering costs.
First, there is the architect. He designs, he is independent, and he is insulated from the contractor who produces. He is a professional man with a strict professional code. Secondly, there is the quantity surveyor. He measures quantities and estimates prices. He also is a professional man working independently. Thirdly, there are the specialised subcontractors, each operating independently, and, fourthly, there is the main contractor who finances and organises operations on the site, which again operates independently.
Can this set-up be improved? Surely, like everything else, it can be improved. Could building profit by the experience of other industries? I believe it could. Take, as an example, the shipbuilding industry, which is closely analagous to house building of all sorts. It builds not houses for families, but accommodation for whole communities, and this accommodation has to float on and be propelled through the sea. Therefore, its design and construction problems are even more complicated. It also employs many more trades than the building industry.
What is its organisation? Design, measuring and construction are all combined in one team; all are part of one organisation; all are under the control of one board of directors who lay down policy. They are not dispersed in separate buildings and under independent and separate control. They are a team with one captain, one policy, and, what is important, one reward or incentive. The result is that the designer of a ship is compelled to keep in mind not only the seaworthiness of the ship and its graceful lines, but also the cost of construction. His very future depends on that because he designs as a member of a team whose survival depends on its ability to build better and cheaper than foreign competitors. So he designs for that method of production which gives as many simple repetitive operations as possible.
Not necessarily. It has been done in small firms, and I will send the right hon. Gentleman details.
Payment by results means that the men get more money and the output goes up. That has been proved time and time again.
I am dealing with slum clearance and am saying that one of the things which will help the Government to implement this legislation is an improvement in administrative methods.
We are having talks with the professions and with the industry with a view to seeing whether we can link design and construction together as a team in a new form of organisation. If we can agree on such an experiment and then it fails, then we are no worse off. But if it succeeds, we might have gone a considerable distance towards solving this problem of high costs of rebuilding in the centres of cities.
My right hon. Friend is most grateful to those who have agreed to take part in these discussions. It is not easy to break with tradition, but we hope that the good will and harmony which has characterised earlier approaches to this subject will lead to experiments being made. I realise that it is a controversial subject, but I think that the people in the building industry should have the chance to see whether, even in the slum areas, we cannot do something on the lines of the motor car and aeroplane industries who have similar organisations to that of the shipbuilding industry.
I conclude by saying that this problem of the way people live is an intensely human problem. Far too many people are living in bad conditions which undermine their health and place unfair handicaps on family life. My right hon. Friend has shown that he has administered the new housing drive successfully. We hope to administer these proposals boldly, with imagination and vigour, and, as the proposals in themselves are fair, reasonable and in the national interest, it is with the greatest confidence that my right hon. Friend commends them to the House.
I make no complaint about the length of time that the hon. Member has found it necessary to address the House because, as he says, this is a very complicated matter. I was, however, rather disappointed when he gave us what might be described as a whole series of Committee points and did not address himself to the main policy behind the Bill. It might be, of course, and there would be an excuse for this, that as we have had a debate on the White Paper in which we discussed general principles, perhaps he felt himself exempted from the necessity of unfolding the general principles underlying the Government's proposals. I hope the House will forgive me if, for a moment or two, I take it back to that main policy, because, unless we do understand it, we shall not be able to see these main details properly. I understand the Minister for Housing and Local Government is himself to wind up the debate tomorrow night.
The hon. Member was perfectly correct in saying that, for some time, I have been developing the argument that the new houses which are being built, to some extent are being built at the expense of housing repairs. But why does the hon. Member find it necessary to go back to something I said at the beginning of the year, and to throw a whole lot of quite unintelligible figures across the Floor? As a matter of fact, he need only have gone back a few days. Why does he not take the more recent argument?
In the debate on the White Paper, I gave certain figures of manpower to which the hon. Member has not addressed himself at all. I read them out in the House and I propose to read them again—perhaps he has not heard them. These figures were provided by the Ministry of Works, and it may be that they are wrong —I should not be surprised. They are the Ministry of Works figures and they show the number of workers engaged upon housing repairs from 1945 to 1951. During that time we were engaged on war damage repairs to more than four million houses—four million houses. It is, therefore, quite incorrect to say on the figures that the Labour Government neglected the problem of repairs. On the contrary, we did far more repairs in those five years than will be done in the next five years under these proposals.
We repaired four million houses. And it was as the number of workers engaged on war damage repairs ran down that a pool of labour became available for house building. Can the right hon. Gentleman deny that? Does the Ministry of Works deny it? Does the Ministry of Works deny that a very large number, indeed more than 70,000, workers became available for new house building because war damage repairs had been finished?
I will read the figures again; perhaps the right hon. Gentleman has not heard them. He said that in May, 1947, 251,000 workers were engaged on new housing, and on other housing work, 306,000. Does he deny that? These figures were quoted only a few days ago, yet I have been asked to quarrel with figures given last January. In May, 1949, there were 224,000 workers on new housing, and 298,000 on other house-building work. Does he deny that? In May, 1950, there were 239,000 on new housing and 240,000 on other building work. In other words, as I pointed out in the debate on the White Paper, as repairs to war damaged houses were being finished the workers on new house-building were increased. Is that, therefore, not conclusive evidence that in those four to five years we were, in fact, carrying out a heavier housing repair job than had been done for 20 years?
What the right hon. Gentleman has to face, if he will listen for a moment, is that, in point of fact, he did exactly what he said he was going to do. He "clawed back" workers from housing repairs to new building. Does he deny it? Does he deny that it was his intention to use repair workers on new house building? We Should like to know, because the accusation made against us is that we neglected this problem, and the reason why we were attacked for neglecting it was because we did not bring in legislation to deal with the Rent Restriction Acts. But we were doing something far more important than that—we were repairing the houses.
The hon. and gallant Member has always treated me with such studied discourtesy that I do not propose to give way to him.
The fact is that the conclusion is the opposite to what the hon. Member has stated. We did not find it necessary to bring forward legislation, because the physical resources were not there. The physical resources only became available as war damage repairs were being concluded, and the Minister of Housing and Local Government then had at his disposal a pool of building labour which he could attract into new house building—labour which, on his own showing, ought to have been used on housing repair.
At that time it was necessary that we should proceed with housing repair, so my case is conclusively proved on that point. So far from the Government having undermined my case, it has been confirmed by the facts.
What is the extent of the problem to which we have to address ourselves? There are in this country 4,809,000 families without fixed baths.
On a point of order, Sir. We, on both sides of the House, are here to listen to this debate, and it is becoming absolutely impossible, due to this fellow over there. Can he be either gagged or removed?
There are in this country 711,000 families even sharing a cooking stove. Everyone knows what domestic friction that figure must illumine, and so we have a terrific problem to deal with.
To hon. Members on this side of the House it would seem that we have a tragic situation of this sort which has been accumulating for many years.
It seems to us that there is something wrong with the order of values of a Government when such a situation continues, and is aggravated year by year, and when it is even admitted today that we have to rehabilitate slums which ought to be removed, because we have not the resources—and when I am speaking about resources I mean physical resources. There would seem to be something wrong with a Government who, on the same day as they introduce a Bill of this sort, enable local authorities to issue licences to private persons able to build houses up to 2,500 superficial feet.
That is the order of the humbug behind the Bill. That is the actual significance of the peroration with which the Parliamentary Secretary concluded his speech. At the same time as the Government are pretending that they are to make a great attack on the slum problem, they are making it easier for private builders to build bigger houses—
—if they have the money, will be able to build a house up to 1,500 superficial feet. That is far larger than the People's House. The right hon. Gentleman boasts, and the Parliamentary Secretary has boasted today, that he has reduced the housing standards all over Great Britain. What they are doing is pretending over and over again that they are carrying out the policy started by my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) who followed me at the Ministry of Health.
No such thing. It is perfectly correct that it is the so-called People's House—a significant title for the right hon. Gentleman to select, because "people" are not "persons"—but what the right hon. Gentleman did was practically to compel local authorities to build it. They based the subsidy upon the People's House, so that if a local authority wished to build a larger house, a house up to the previous standard, it could do so only at the expense of the local rates. The result of this pressure was what the Parliamentary Secretary has just described as a "physical demonstration"—as if that was a new phrase. "We will build a house which the local authority can see, because they are so ignorant that they cannot read plans"—as if we had not built a very large number of houses before that they could see!
Now, of course, the right hon. Gentleman is going to build the People's House so that the local authorities may have a look at it. What is the result? The right hon. Gentleman imagines that local authorities build the People's House because they like the look of it. The fact is that local authorities all over the country detest the People's House. Protests against it have been made at town planning conference after town planning conference. What actually happened was that, because the subsidy was based on the lower standard of house, and because the Ministry of Housing and Local Government, through their regional officers, brought pressure to bear on local authorities, by the end of last year 79½ per cent. of the houses in local government tenders were lower standard houses. That is what has been happening.
Therefore it seems to us on this side of the House, and I am certain to people in the country, that there is something seriously wrong with the sense of proportion of a Government which lowers the standard of housing for the vast majority of the workers in the country and raises the standard of housing for those with the longest purses. So I say at once that we consider that the housing policy of the Government is beginning to repeat the pattern of pre-war Tory housing.
The right hon. Gentleman the Minister of Works, in making his statement today, declared that these new big houses could be built without interfering with local government housing. He never told us from where he proposes to get the extra workers. It would seem that there is some curious alchemy about private enterprise so that immediately you set it free, somehow resources never known before make their appearance; that somewhere there exists a secret pool of labour which begins to dash forth immediately the rock of private enterprise is struck.
So my evidence is confirmed by that elementary fact:
Blackpool contractors, the Corporation complains, are on private building and slowing down the municipal housing programme. The Corporation has to advertise, and persuade local firms to tender. Workmen are also going over to private house building and in a year the Corporation has lost half its builders"—
Certainly that has happened in London and it has happened at Blackpool.
Private building has rocketed. Already this year 187 houses have gone up. Another 176 are under construction and licences have been issued for a further 63. During the same period last year 83 were built.
Blackpool's housing committee chairman, Alderman L. Newsome, said today the full impact on the municipal housing programme would be felt next year. He said"—
this is quoted—
'The Ministry is being most awkward about prices and making us cut them. What some of the houses will be like in 10 or 20 years I don't know.'
That is the conclusion of a Conservative chairman of the housing committee.
It must be obvious to any hon. Member with practical experience that if you are to provide housing labour for new forms of housing it can be done only at the expense of other forms of housing, or you must be able to add to the total housing force; or conversely, you must be able to add to the productivity of building labour. That has not been done. On the contrary I venture to say with a full sense of responsibility, that there is no industry in Great Britain where the virtues—such as they are—of private enterprise are given their head to a greater extent and where the industry is so unproductive. The building industry is a classical example of the inefficiency of unrestricted private enterprise. It is a headache to anyone who has anything to do with it—
Little or no headway has been made. Although, as the hon. Member suggested, bonus schemes have been started, and were started a number of years ago, they go very slowly and many of the building firms are unable to operate them, because they are too small and inefficient. So I conclude this part of what I want to say by stating that it is perfectly clear that the housing repair problem has been aggravated by the present Administration, and secondly, the construction of new houses by local authorities is to be cut down by administrative action, and already has been reduced.
I want to say a word or two about the provision for rent increases. We had a discussion on this matter in the debate on the White Paper. I believe that hon. Members in all parts of the House, if they are frank, will agree that most of what they have heard will have confirmed what we said on that occasion. We said that we were convinced that where these proposals contained an element of profitability for the landlord the repairs would be carried out, and that would be where the repairs were comparatively small—that is to say, where the twice-the-gross-rateable-value stopgap does not prevent the landlord from sufficiently increasing the rent—but where expenditure on repairs was substantial repairs would not be made. And remember, the whole of this piece of legislation is supposed to be designed to get houses repaired. It is not supposed to be designed for the landlord; it is not supposed to be designed for the tenant; it is supposed to be designed in order to keep houses in a reasonable condition of repair.
I repeat what I said when the 1949 Housing Bill was before the Committee upstairs. In reply to objections which were raised by some of my hon. Friends—who said that they disagreed with giving public money to private landlords—I said that if there were a valuable social asset in private ownership it was the duty of the State either to make it possible for private owners to keep that social asset in good condition or for the State to do it itself. It is not a responsible Government which leaves pieces of valuable furniture—such as six million to seven million houses—under legislative restrictions which prevent them from being kept in good repair.
Everybody knows that in some European countries, especially in France, the situation has become extremely serious. Owing to legislative enactments—although there are modifications about this, as hon. Members know very well—the legal umbrella over rents has resulted in an appalling deterioration of property. I shall give some figures of the percentage of rents in relation to incomes, in order that we may have some comparative sense of what we are doing here as against other European countries. In Belgium, the rent, as a percentage of family expenditure was 11 per cent, before the war; by 1947, it had fallen to 5·6 per cent., and in the first quarter of 1953 it was 7·8 per cent.
From an investigation made by a party mostly derived from the United States. I met most of them when they were over here. In Denmark, the figure before the war was 15·1 per cent.; in 1947 it was 8·8 per cent., and in 1953 it was 8·1 per cent. In France, before the war, it was 8·1 per cent.; in 1947 it was 1·3 per cent., and in 1953 it was 3·4 per cent. In Western Germany before the war it was 13·1 per cent.; there are no figures for 1947, as hon. Members will realise, and in 1953 it was 9·8 per cent. In Italy, before the war, it was 10per cent.; in 1947 it was 0·5 per cent., and in 1953 it was 1·8 per cent. In the Netherlands, before the war, it was 11·5 per cent.; in 1947 it was 6·7 per cent, and in 1953, it was 5·6 per cent. In Norway, before the war, it was 12·7 per cent.; in 1947 it was 7·2 per cent., and in 1953 it was 7·8 per cent. In Sweden, before the war, it was 11·2 per cent.; in 1947 it was 8·4 per cent., and in 1953 it was 8·2 per cent. In Switzerland, before the war it was 18·8 per cent.; there are no figures for 1947, and in 1953 it was 12·2 per cent. In the United Kingdom, before the war, it was 11·3 per cent.; in 1947 it was 7·6 per cent., and in 1953 it was 7·4per cent.
I apologise to the House for giving that table. Nevertheless, it shows that we are a little above some and a little below other countries on the Continent of Europe, although we must always remember the qualification that these figures do not show the nature of the problem which is dealt with. There is a variation in standards of housing accommodation, and in very many instances the figures for France, and certainly those for Italy, should be qualified by the fact that, as a rule, working-class standards are lower than in Great Britain.
Will my right hon. Friend say whether those figures are average percentages over the whole population? My impression is that for the working-class houses the proportions are very different.
The percentages relate almost entirely to manual workers. The Minister has known of these percentages for some time, as I think he will realise. We discussed them at the Ministry of Health on various occasions. They vary in the case of local authority houses, in respect of which the rents have been something like 10 per cent. We are speaking of rents in relation to family incomes and not in relation to wages. In some instances where the rents relate to wages they are very much higher, especially when there is only one wage earner in the family. I have given these figures in order to try to show the social weight of rent, as it has been expressed as against family income as a whole.
I make this contention at once, and I do not attempt to qualify it. I make a present of it to hon. Members opposite. It is the case that, for political and historical reasons, the rents of residential small property have been governed by legislative control, and that has prevented that property from being properly looked after. No one here denies that. We say, on the other hand—because very much evidence can be given here—that landlords have received from their tenants revenues which were intended to be spent on repairs but which have not been spent on repairs. There is not the slightest shadow of doubt about that. No one in any part of the House would deny that that is the case. Nevertheless, it is a fact that we are faced with a problem which is extremely intractable.
What do the Government propose to do? They have said, "We recognise that fact, but we must, nevetheless, realise that it is politically objectionable to allow rents to rise too high." They have not said it about Scotland. They have been much more ruthless in that case, because they have just slapped on 40 per cent. I am sure that my Scottish colleagues will have something to say about that. One of the reasons which allow them to slap it on in Scotland is that not so many houses have been decontrolled during the inter-war years, and so a percentage increase was easier in Scotland. I can imagine that there have been long discussions inside the Cabinet, because the Property Owners' Protection Society would have much preferred a 40 per cent. increase straight away, but that was impossible, because in England and Wales a large proportion of houses had been decontrolled in the inter-war years. Therefore, the percentage increase would have been entirely inequitable. What the right hon. Gentleman has done is to try to steer the middle course.
We expect it from him because that is his philosophy. He is the author of "The Middle Way." We know what happens to people who stay in the middle of the road. They get run down, and that is exactly what has happened to the right hon. Gentleman in this case, because what he has done is to provide a formula which will get certain houses repaired which are not in a very bad state of disrepair but which will not get houses repaired that are in a bad state of disrepair. In other words—and I submit this as a serious argument to hon. Members opposite—he has not provided legislation to deal with the central problem of the deterioration of millions of houses subject to legislative control.
What the Government have done is to dodge it. What they have done is to run away from it. What they have done is to have the maximum of demagogy with the minimum of physical results. That is what they have done, and that indeed is exactly what is happening, judging from the letters one receives from different parts of the country. I have received a large number of letters from landlords—[Hon. Members: "Oh."]—and almost invariably landlords say to me in these letters, "It is much more sensible, if you are really anxious to save the houses, to make the houses into public property than to leave them to fall into decay in the hands of landlords who are legislatively prohibited from looking after them properly."
That is what has been happening.
Now I wish to make one or two points about the method of rent increase. Our experience has gone to show that, unfortunately, tenants cannot be relied upon to protect themselves. When the 1920 increases were put on, all over the country trades councils secretaries had to get back excess rents that were being charged by landlords. The 1915 standard rent had to be dug out; the rate had to be dug out from the rate books of the local authorities; sums had to be worked out; and there were countless instances where landlords had to pay sums of money on excess rents they had charged. This is the experience of hon. Members on this side of the House. We had the experience of extracting the excess rent from the landlord. Hon. Members opposite had the experience of having the excess extracted from them. So we know rather more about it in that respect than they do.
We know that appeal to the courts is no protection for the tenant. That is why we seriously suggest to the right hon. Gentleman that when we come to Committee, if he wishes to be just—and I am sure he desires to be just—we must say that it is the landlords who ought to have the onus of proving that the rent increase should be made. It seems to me a perfectly reasonable proposition. If the landlord has actually spent the money in the previous three years to the extent that justifies his getting the statutory increase, why should it not be obligatory upon the landlord to obtain a certificate from the sanitary inspector before the increase is made?
That is reasonable. Not in every case, but certainly in a vast number of cases, the landlord is in a much better position to do that than the tenant is to challenge the landlord in a county court. That procedure is hopeless. That procedure, surely, is not seriously intended to protect the tenant. Our experience goes to show that in a vast number of cases the tenant would rather pay the increase than expose himself to having to go to the court, employing the services of a lawyer. A lot of our people still think there is something disreputable about a court. [Hon. Members: "And lawyers."] Well, I was not going to emphasise that point at all. I knew it would be sufficiently present in the minds of hon. Members without my making it directly. But it is a fact that it cannot be regarded as reasonable machinery that a tenant, within a fortnight of receiving a notice from the landlord, then has to set the machinery of the county court in operation to protect himself. That is not seriously intended, surely. Hon. Members cannot defend that, because I warn them, if it is, what will happen.
I thought the right hon. Gentleman was on the question of a certificate of disrepair. He did speak of the difficulty of previous experience and the certificate of disrepair not being enough.
It seems to us, therefore, a simple procedure that if a landlord has spent the money he should go along to the sanitary inspector and prove it, and that the sanitary inspector should then present a certificate, and the landlord should present that certificate to the tenant; and the tenant has the protection.
I am speaking here without any authority, merely thinking aloud, but it seems to me also that it is perfectly just that the tenant, if he disagrees with the sanitary inspector, should be able to appeal against him, not to the court but to the rent tribunal. What is wrong with the rent tribunal? I know that some landlords do not like it. I know the Lord Chief Justice hates it, but, after all, the rent tribunals are institutions of justice. [Hon. Members: "Oh."] They are. They have proved themselves—
—in different parts of the country. That is why the right hon. Gentleman has been sabotaging them. It seems to me perfectly reasonable that, as to the facts of fitness and as to the amount of money spent, the rent tribunal is a perfectly reasonable and accessible institution. What does a county court judge know about this? Really, to invoke a county court judge in these circumstances seems to me to be an extremely cumbersome piece of machinery, and it can only be designed, the intention behind it can only be, to enable the landlords to secure rent increase to which they are not entitled.
I warn hon. Members opposite what will happen. What will happen is that, as soon as this Bill becomes an Act and starts to be operated, all over the country trades councils will establish tenants' protection committees in order to protect tenants against bad landlords and in order to try to make the best of the machinery of the Bill when it has become law. That is the only way. The Government will start the whole process once more of antagonism, agitation, bad blood, without having got the actual physical repairs done to the extent that they require.
The hon. Gentleman said that we had not put forward a proposal, but we have done so. What we have said is that in these conditions, if political parties find it politically unpalatable, as indeed they do, to take this property out of control, to release it and expose it to the ordinary laws of supply and demand, then the Government should take the intelligent and bold step of saying, "This is a capital property which ought to pass into public ownership. It is no longer amenable to the virtues"—if they be virtues—"which are supposed to attach to private economic adventure, and therefore it should be taken into public hands."
All the Opposition can do—it is much more than hon. Members opposite did when they were the Opposition—is to lay down the main principles which we think ought to govern legislation. It is not for us to lay down the details by which the principles should be carried out. I am prepared to go into that in more detail some other time.
The right hon. Gentleman misunderstood my question. I am asking him whether he is advocating the policy which is set out in "Challenge to Britain," which says that the rents will be fixed by local authorities in relation to the rents charged for their other properties.
I meet that challenge at once. We have never suggested that when houses are put into a good state of repair there is no justification at all for charging an increase in rent. We know very well that when houses are made reasonably comfortable, with modern conveniences, tenants are ready to pay a reasonable increase in rent. What we say is that the local authorities could repair these houses and satisfy the tenants, because they would not require an element of profitability over and above the amount for the repairs, and they would deal with houses requiring repair immediately.
I want to put an even more substantial point for the consideration of hon. Members opposite, and I ask them to believe that I am trying to address myself to the question objectively. Every Minister who has handled this problem knows that, taking the country as a whole, we are not very far away from the amount of total accommodation which the nation requires. I could mention areas like Slough and other parts outside London where, because of local circumstances, the total accommodation is still well below what is required, but if we take the country as a whole we find that there is a very great deal of under-occupation.
Sanitary inspectors in instance after instance have made house-to-house surveys, and in the middle-sized towns they have found hundreds of houses occupied by only one person apiece. The nation is in grave danger, unless it is careful, of being stupidly extravagant. If these houses were in the local authority renting pools and voluntary transfers were brought about, a great deal of additional new building would not be required at all. I hope that hon. Members opposite will face this honestly, as we are trying to face it honestly, for it is a serious problem. There are a large number of old people who continue to live in houses which are too big for them, and they would be prepared to move into smaller houses if such transfers could be made.
Let me guard myself by saying that I am not suggesting for a moment that anybody, the nation or local authorities, should have the power of compulsory transfer, for that would be quite unendurable. People are entitled to stay in their own homes for as long as they like. Nevertheless, the right hon. Gentleman knows very well that the Central Housing Advisory Committee has made report after report to local authorities on the use of exchange houses in their housing pools. If these houses were handed over, the local authorities would have a very much wider range of houses upon which to draw, and I am convinced that in the circumstances some additional new building could be avoided.
There would also be another effect, a very important one indeed. When a local authority comes to the problem of reconditioning and slum clearance it always has to consider how far it is going on with that part of its programme because of the interference with new building. There is always a danger that the local authority might postpone slum clearance and reconditioning because it does not want to attract building workers from its new housing estates. On the other hand, if the local authority had all this accommodation available and transfers could be brought about, there would be a much greater tendency on its part to carry out repairs and reconditioning, because it would not then be so frightened of the effect of its plans on the building of new houses.
There is a further point. Local authorities are resenting the fact that they are making some houses empty by transferring the tenants to their own housing estates, and landlords are selling the empty houses at exorbitant figures. It is happening all over the country. Local authorities do not see why their own housing exertions should put large sums of money into the pockets of landlords merely because they happen to be able to enjoy the fact that the tenants of their houses have been taken away by the local authorities.
There is also a point which I am sure hon. Members opposite will expand when they come to speak, and that is that the Rent Restrictions Acts are, in fact, falling into disuse because, under a recent decision in the courts, as the old tenants are dying off, the houses are becoming decontrolled.
It appears to the Opposition to be the logical development not to proceed with legislation of this sort, which is inadequate, clumsy, irritating and ineffective, but rather to apply boldly the policy of allowing local authorities to take over the houses.
I apologise to the House for having spoken for so long. However, there are one or two things that I must say about reconditioning. The Parliamentary Secretary was too disingenous about this. He said that the 1949 Act has never been properly operated. Of course it has not. One of the reasons is to be found in the fact that the1949 Act was never publicised, because most of the newspapers of Great Britain did not want to publicise a Socialist Measure of that sort and concealed it from the people.
I agree—I should like to say one or two kind things—that there may be a case in 1953 for the 8 per cent. increase although there was not in 1949. There is probably justification for allowing an increase in rent from 6 per cent. to 8 per cent. because of the increase in the price of materials in the meantime—[An Hon. Member: "And the increase in the Bank rate."] I must not waste any time going into that. In the circumstances the 8 per cent. figure seems fairly reasonable. However, I do not know why the Parliamentary Secretary should imagine that he will get very much more done by removing the £800 ceiling while leaving the grant at a maximum of £400. Does he think landlords will be more tempted to do reconditioning under those conditions? There is no evidence of that at all.
Take the Stockton-on-Tees case. Here I would put a point to the Parliamentary Secretary which he will come up against when he meets the local authorities. He mentioned the difference between the reconditioning grant and the subsidy for holding slum houses in the local authorities' possession over a period of years—dilapidations as against reconditioning. It is true that there are different financial provisions applying. It is true that in some cases these are private houses and in other cases they are local authority houses; but does the Minister think that the local authorities are going to hold for 10, 15 or 20 years a number of houses under slum clearance orders which will be below the standard of accommodation they allow private landlords under reconditioning?
The right hon. Gentleman is suggesting that local authorities should become slum landlords. If he looks at some of the figures, he will see that in Stockton-on-Tees the reconditioning grant costs £350 per house. In Croydon, I think it is £170 per house, and in Birmingham it is £180. The point which I am making is this. Between Croydon, Stockton-on-Tees and Birmingham there is, therefore, a considerable variation. Local authorities will say: If reconditioning grants are to be paid to private landlords for houses which will not have an extended life of more than 10 or 15 years and if local authorities are to hold slum clearance orders in suspense for 10 or 15 years, they will want to be allowed to spend on those houses the same sum of money as is spent on reconditioning houses. That is reasonable, because why should public money be spent on providing landlords with houses which have a life of only 10 or 15 years when some local authorities have told me that they will have to hold slum clearance orders in some cases for 15 or 20 years?
It seems, therefore, that the right hon. Gentleman has got the figures wrong. The L.C.C. and the Metropolitan Boroughs have suggested that we should base this expenditure on a sum of roughly £200. The right hon. Gentleman should look at the Financial Resolution again, because the Financial Resolution is so narrowly drawn, as to the first part, that it is only possible to give 50 per cent. of the cost of acquisition at the site value, although he can vary the £25s. a year from time to time as he thinks fit. It seems to us—because I understand that the right hon. Gentleman is meeting the representatives of the local authorities early in December—that the least he can do in courtesy is to hold the Financial Resolution over until he has had a chance of meeting them. There is no reason why he should go on with it; it is not essential at this stage of our procedure. It is no use meeting the local authorities if he has already asked Parliament to tie his hands. Therefore, it seems to us on this side of the House that he should reconsider this matter and not proceed with the Financial Resolution until he has had a. chance of meeting the local authorities.
The right hon. Gentleman received from the Prime Minister quite recently a very great tribute. The Prime Minister sent to the electors of Holborn and St. Pancras a message. He said that the Socialists were green with envy at the success of the Minister's housing policy. Well, the electors of Holborn and St. Pancras apparently did not take the same view. They became red with indignation. The same thing is likely to take place in North Paddington. The fact of the matter is that the Government have out lived their mandate. It was always a dubious one and now they have no mandate at all.
I am informed—a little bird has whispered—that the Government propose to send this Bill to Committee upstairs. That is the extent of their confidence in their own Measure. They are hoping to take it upstairs and perhaps bury it secretly, or maybe they hope that by the time we have dealt with it we shall make it into a respectable affair. We shall do our best. I am bound to tell the right hon. Gentleman that his attempt at dealing with this problem has been a lamentable failure and the country is beginning to realise it. By the time this Measure gets on to the Statute Book he will have discovered that the laurel wreath has slipped from his brow.
The right hon. Member for Ebbw Vale (Mr. Bevan) said that this Government had outlived their mandate. In the same speech he asked the Government to withdraw this Bill and to bring in one which would include the nationalisation of all rent-restricted property. I can assure the right hon. Gentleman that that is certainly not in our mandate, and I do not believe that he would really expect us to do anything of the kind.
To my great surprise I found that there were quite a number of things said by the right hon. Gentleman with which I agree. What he said about too large houses in places like London, Birmingham and so forth is only too true. The trouble is that people ask to transfer to smaller houses but there is such competition for the smaller houses that they cannot get them. That is certainly so in London.
Is it not a fact that many of these large houses are owned by private landlords who will not agree to an exchange of houses because they want to sell them for a high profit and cash in while there is a shortage of houses? We find that in Birmingham.
I have found that landlords cannot sell the bigger house at a high price because there is no competition for bigger houses but only for the smaller ones.
What I really want to put before the House is this. I was in 1945 a member of the Ridley Committee which sat for two years at the end of the war. Some of the problems which we are discussing now were very much in our minds then, and we received a great deal of evidence about them.
This matter of the repair of houses is one which, I think, should have been dealt with long ago. It has been neglected really for two reasons. One was mentioned by the right hon. Member for Ebbw Vale, namely, that it is not a vote catcher. It is liable to misrepresentation and every Government up to now have shelved it. The other reason—I give this point to the right hon. Gentleman—is that labour and materials had not been available after the war except for war-damage repairs.
The right hon. Gentleman made play with the fact that when he was responsible for housing, he had done much to repair houses, but I think I am right in saying that in London, Portsmouth and other blitzed cities it was all war-damage repairs. Very little, if anything, was done in places where there had been no war damage.
Oh, no. Four million houses were done that way out of a figure of 6 or 7 million, and we know very well that when the war damage repairs were carried out ordinary repairs and decorations were also carried out.
I am not quarrelling with the right hon. Gentleman about this, but I have never heard of it in towns where there was no war damage. In London we had so much war damage that practically no house was undamaged, and the repairs were carried out. What we are endeavouring to do now is not to repair war-damaged property so much as property which has deteriorated. One reason that we have not been able to deal with this before is that only now have labour and materials become available.
I wanted to say a word or two about the Inter-Departmental Committee on Rent Control, which is the long and official title of the Ridley Committee. It was set up in February, 1943, and reported in April, 1945, so that we worked fairly hard at that time. I am sorry that more of the Ridley Committee's recommendations were not implemented. I have been refreshing my memory and I see that we made no fewer than 47 of them.
It was a strong Committee, consisting of 15 members, including a large number of Members of Parliament, only three of whom have remained in the House. The right hon. Member for Poplar (Mr. Key), on the other side of the House, was one member of the Committee, and my hon. Friends the noble Lady the Member for Hemel Hempstead (Viscountess Davidson) and the Member for Garston (Sir V. Raikes) are the other two who have remained in the House. We also had on the Committee—I am saying this to show that what we were trying to do was considered by people who ought to have known something about it—representatives from the local authorities, and a county court judge. One of the people who helped the Committee most in regard to Scottish housing was a well-known member of the party opposite, George Buchanan.
We were sitting towards the end of the war, before the flying bomb had arrived but after many cities had been seriously blitzed. We were trying to recommend to any postwar Government what they should do about rent-controlled property. We found, firstly, that we were seriously disturbed by the diversity of the controlled rents for identical properties, often in the same street. Almost exactly the evidence that we had was given just now by my hon. Friend the Parliamentary Secretary when he mentioned a street in Hammersmith with entirely different rents for the same sort of houses. We therefore decided that the first thing for any Government to do after the war was to try to get uniformity in order to deal more effectively with the problem of repair and so on, which would then be on a national basis.
We proposed to do that by a system of rent tribunals. The rent tribunals have been set up, but not to the extent that we had hoped when we made our other recommendations. We said, I think, that 198 rent tribunals would be required in England and Wales and about30 in Scotland. To these we envisaged that the tenants should come who thought that their rent was too high, and also those landlords who thought that their rent was too low. We wanted the tribunal to fix a standard rent, which, we thought, should be called the "registered rent," as we also proposed as one of our recommendations that the local authorities should set up and maintain a register of all controlled houses in their areas. I think all Members would agree that if that had been carried out, our task now would have been very much easier. Naturally, it obviously was considered by the Government of 1945, but I was not in Parliament at that time and I gather that it was found unacceptable to them. We felt that this task would not be beyond the rent tribunals, because gradually a standard rent for certain properties in certains parts of a city would become an average and, therefore, large numbers of people would not have to come to the rent tribunal.
It is interesting to recall that we also considered at that time—in 1943 or 1944—a percentage increase for repairs, and we rejected it. We rejected it as we found that the increase in the cost of repairs in 1943 was only between 50 and 75 per cent., and that that increase was exactly the same as in 1920, when the previous percentage increase had been given. We therefore said that the good landlords, we hoped—and by evidence we found—had repaired their houses. We hoped that the bad ones who had not repaired their houses would do so.
This is a most interesting point. Would the hon. Member not agree, however, that as between, say, 1920 and 1922 the cost of repairs fell appreciably to less than half and remained like that until 1939, and that during all that time there had been no rebate whatever for those who should have had their repairs done but never had them done?
That is exactly the point I was trying to make. I said that the good landlords had, we hoped, used their money to keep their houses in repair, and on the whole I think we found that they had done so. The bad ones had not kept their houses in repair, but we saw no reason at that period to have a general percentage increase. I remind the House that at that time—it is only 10 years ago—the cost of repairs was 50 per cent. up. It is now three times the former figure, and therefore that consideration no longer arises. Another of our recommendations was that a certificate of disrepair should enable a tenant to withhold 30 per cent. of his registered rent, which is very much the same idea as is put forward in the Bill.
One of our difficulties then, and one of the difficulties now, arises from the diversity of landlords. We found—we know it is true—that quite a number of people of moderate means had invested their savings in house property within the last 100 years and that many of those properties have now come down to their children. If all landlords were the rich and rapacious capitalists of Left-wing cartoons, the matter would be easier, but as it is—I have found this myself—very many of these people are themselves in need of consideration because of their difficult financial position.
The hon. Member is on an interesting point and one that has been used considerably at various times. Did the Ridley Committee have any estimate before it of the number of people who were affected in the manner that the hon. Member is describing—that is to say, people who were the beneficiaries or descendants of those who formerly owned the houses? This is an important matter. Tremendous propaganda has been made on this point, which I consider to be quite wrong.
We did have evidence, and I will look for it and if it is in the report in detail I will tell the hon. Member. We certainly did have the evidence of one or two of these people, landlords who owned one or two houses. They had been left property because there was an idea that house property was a safe thing. In bygone days men invested their money in it and left it to their sons and daughters. I have had cases like this only recently in my constituency. There was a poor woman who owned two houses and she did not know she owned one of them at all. She was hopeless. Those are the people who have to be considered when we are framing legislation like this, as well as the big landlords, the city companies and such bodies who also own property.
I have had a little experience myself, although I am not a landlord. At the end of the war I was master of one of the City Companies. We had a big block of working-class property in Finsbury. we were extremely good landlords. We used to be very rich but we are not now. We kept the property up-to-date. Unfortunately, we were well in the red in doing so. The rents did not meet the cost of the repairs. Being well-disposed people, we offered the property as a whole to the Finsbury Borough Council. Being sensible people, they refused it and we have still got it. That shows that good landlords are faced with great difficulty.
We would not mind now. There was some difficulty about the bombs dropping in the wrong places. That shows the difficulties in which good landlords find themselves in dealing with this class of property. My right hon. Friend the Minister of Housing and Local Government, speaking in a recent debate, said that we had got to be fair to the tenant and fair to the landlord, but to get the houses repaired should be our main objective. I am using that as a yardstick, and I think the Bill, which of course is subject to amendment in Committee, is as good a scheme as can be devised. Some of the things mentioned by the right hon. Gentleman the Member for Ebbw Vale are well worthy of consideration during the Committee stage.
Almost immediately after the scheme was published the landlords said they would get nothing out of it, that all the money would go in repairs. I am glad they said that, because I think that is what is intended. Also the tenants will get their houses put in order or they will pay no increased rent. In the Committee stage we shall have to look at this side of it, as one thing we do not want is to find somebody with a house in bad repair and because of some technical objection or something of that kind he does not get his house repaired, but has to pay the increased rent. If we can connect—and this is the idea of the Bill—the repairs and the rent, then I think we can be absolutely fair to the tenant.
I do not know whether the next thing I am going to mention really arises on the Second Reading of this Bill. I sometimes wonder whether the smaller subsidised houses have not tended to fall into wrong hands. This is not a generalisation about all these properties, but nowadays those smaller houses with very low rents are the dwellings where we tend to find the more expensive car outside and the more expensive television inside. Were those the tenants for whom the houses were designed? I think that wants looking into, because we all know cases in our constituences of people of the right kind wanting houses. I sometimes wonder whether some of the people in the houses which have low rents could not take a bigger and more expensive house, leaving the one with the smaller rent for those for whom that class of house was really meant.
The right hon. Gentleman the Member for Ebbw Vale gave an example of that just now; and it was that which put this point in my mind. He said that the local authority built a new house and moved a tenant into it, and then the landlord was able to sell the old house which had become vacant because it had become decontrolled. But surely somebody goes into that house, and therefore it does not damage in any way the housing position. What I should like to see would be something to ensure that these rather richer people who could afford a more expensive house, would acquire such a dwelling, and leave for their poorer brethren the smaller, lower-rented house.
We have heard about the Labour plan for the nationalisation—to put it crudely—of controlled houses and the handing of them over to the local authorities. We have been told that such a scheme would benefit the tenant, but the local authorities, being successful landlords, would probably put up the rent to pay for the repairs, as is proposed in this Bill.
A very large proportion of this Bill is based upon the assumption that the tenants would be much better off if they were tenants of the local authorities, for the worse houses are to be handed over to the local authorities.
Simply because they cannot be repaired. I am talking about good property that could be repaired, and if it is owned by the local authority the rent will go up as under this Bill. So if such houses are handed over to the local authority there will be no difference for the tenant. The local authorities which I know—and I know the London County Council and my own local authority—will charge a reasonable rent which will cover the repairs. [Hon. Members: "No."] Certainly, they will.
That is not operating at all in Birmingham. I happen to live in a slum clearance area, and 12 months ago the Corporation took over my house. It was in a bad state of repair, and they repaired it thoroughly to the extent of a couple of hundred pounds and I did not pay any extra rent.
Local authority houses in London are not rent-controlled. They may be in Birmingham, because one of my hon. Friends tells me that there is a special scheme there, but in London they put up the rents according to the cost of the repairs. We are continually reading about a proposed rent strike and that sort of thing because of rent increases.
In London local authority tenants have not got security of tenure. There is a power of eviction, though, let me add at once, I have seldom, if ever, seen it used and certainly I have never known of it being used harshly. But if these houses are nationalised and handed over, it is my view that the rents will be as high if not higher, than under this Bill, and so the tenant will lose thereby.
I am sorry to keep interrupting, but we are getting a little muddled. Is the hon. Gentleman talking about houses that are being built by the local authority or is he talking about the position under this Bill? If he is talking about the taking over of rent-controlled houses, then at the present time the local authority has no power to raise the rent of rent-controlled houses taken over, because in Birmingham it has taken over 25,000 already without raising the rents.
I believe that if the local authorities took over every rent-controlled house, they would have to treat them in exactly the same way as the tenants in their own houses.
There are instances where the rents have been lower, though in other instances the rents have been higher, because, the principle followed by the local authority invariably is to charge a rent for the house which compares equitably with the rents charged for similar houses in the same district.
I do not see where the advantage to the tenant will come. However, I am afraid I have been longer than I meant to be, but I have given way on one or two occasions.
It is obvious that what the right hon. Gentleman asked for, which is the nationalisation of all the controlled property, is not practical politics for the moment. Meanwhile this Bill is before the House. I believe it is a workable Bill. It is a Bill which will want to be looked at in Committee, and I want to make an appeal to every hon. Member. We all want the houses repaired. I ask every hon. Member to try to make the Bill as workable as he can even if, on the other side of the House, there is a reservation in the minds of hon. Members that if they come to power they will hand over all of this property to the local authorities. On the whole, I think this Bill deals with a difficult problem in a practical way. I wish that the sensible recommendations made after two years' work by the Ridley Committee had been carried out to a greater extent than they have because, if they had been, our task now would have been so much easier.
I had better preface my short speech by declaring my interest—I live in a rented house. It could have been anticipated that the years 1939 to 1945 would have been extremely tumultuous years, and that we should have had many internal disturbances. As a matter of fact, we have passed through these post-war years very calmly indeed. We have not had the great strikes which have occurred in Italy, France, and the United States of America. Indeed, the strike which will take place on Wednesday will be the first official strike that has occurred since 1945.
Since that year the people of this country have borne with great courage the various hardships which they have had to endure owing to the natural scarcities that are bound to occur after a prolonged conflict such as the one which occurred from 1939 to 1945. And from 1945 to 1951 we put through without any great difficulty, and without any strong resistance, a silent revolution which brought the standard of life of the working classes of this island up to a higher level than it had ever been before.
The stability with which we have passed through these dangerous post-war years has been due largely to two things. It has been due, in the first place, to the food subsidies, which kept the cost of living from increasing to the level which it would otherwise have reached. In the second place, it has been due to the operation of the Rent Restrictions Acts. The present Administration has cut the food subsidies considerably and, I presume, will have abolished them altogether within 12 months, when rationing will have ended. Now it is attacking the Rent Acts. So the present Administration is abolishing the two main things upon which the smooth progress of this country has to a large extent depended since 1945.
My right hon. Friend the Member for Ebbw Vale (Mr. Bevan) has said that this Bill will give to the landlord nothing but a "mouldy old turnip." When he said that, I think my right hon. Friend was falling rather below the usual high verbal virtuosity to which we are accustomed from him. I should like to analyse, first, what this Bill does give to the landlord. Let us take the case of a house where the statutory deduction is £9, where the rateable value is, let us say, £27 and the gross value is £36. If the statutory deduction is £9, the landlord is entitled to raise the rent by £18 a year, nearly 7s. a week.
To do that, he has to prove that he has carried out repairs to the extent of £27 in the 12 months preceding the date upon which he gave notice to raise the rent by another £18. So that, for a capital expenditure of £27, the landlord is to get a recurring annual increase in his income of £18. Therefore, unless an hon. Member puts a cross beside my sum, that works out at an interest of 66 per cent. on his investment of £27.
That does not seem to me to be a mouldy old turnip but a very large, a very luscious and a very nutritious turnip; and, of course, he need not even spend the £27 to claim the £18 increase in rent. What is to prevent the landlord going to a jobbing builder who is a friend of his and saying to him, "I have to do £27 worth of repairs. Will you do £10 worth of repairs and send me a receipted bill for £27 and we will share the difference between us?"
The only remedy which the tenant would have against a deceit of that kind—and, remember, we are dealing with the property-owning class, whose ideas of financial honour are not always very high—would be to take the landlord before the county court.
But he would have to prove, first, that the landlord had charged more than he had spent, and he could only do that by taking a case into the county court. As my right hon. Friend the Member for Ebbw Vale has said, tenants would be loth to take cases into the county court, to fee lawyers, and to go through all the trouble of seeing a case conducted on their behalf in the county court.
In the 1920 Act the landlord was allowed to charge a 40 per cent, increase upon the prewar rental, but that increase was really conditional upon the landlord doing the necessary repairs. If the landlord did not do the necessary repairs the tenant could withhold part of the rent until he did so. But how many landlords actually did repairs after the 1920Act? A large number of landlords did not do any at all, and very few tenants had the initiative or the courage to withhold their rent and take advantage of the provisions of that Act.
I think that very few tenants would have sufficient initiative to take a case to the county court if they thought the landlord had not been honest in the declaration of the amount of repairs he had made; and, after all, this £27 worth of repairs would amount in these days to no more than doing up the front door and repairing the garden fence. But it is not only a case of doing £27 worth of repairs—three times the value of the difference between the ratable value and the gross value of the house. The landlord also has to keep the house in a state of continual repair. I understand from the Bill that one of the landlord's obligations is not only to show that he has done repairs to the value of six times the statutory deduction in three years or three times the deduction in the previous 12 months, but, also, that he keeps the house in continual good repair.
If he does not do that, the tenant can ask for a certificate of disrepair from the local authority. If he receives that certificate he can withhold the proposed rent increase until the repairs are carried out. Even then the landlord is entitled to go to the county court and argue that whatever the sanitary inspector's certificate of disrepair might say he has kept the house in a state of proper repair. Again, to get justice, the tenant has to have recourse to the county court, a thing which the great majority of tenants would be very loath to do. It seems to me that the dice are weighted in favour of the landlord in both those instances.
There is also the danger that when this Bill becomes law it may affect the security of tenure of the tenants. I know that nothing is stated in the Bill which in any way affects the security of tenure but an increase of £18 a year, or 7s. a week in rent, for instance, would be a very serious burden upon a man earning £5 to £6 a week or one in the lowest income bracket. There are a good many men earning £6 a week who are living in houses of a gross value of £36 and a rateable value of £27 on which they are paying about £1 a week rent at present. They will be called upon to pay another 7s. a week if this Bill is passed. That increased rent, together with the increase in rates which is now taking place, might render it impossible for a working-class tenant in the lowest income ranges to keep up his payments. In that case the landlord would step in, the tenant would be ejected and the house would be the landlord's property to sell or let again as he pleased.
This Measure, therefore, may very well affect the security of tenure of large numbers of the more poorly paid working-class tenants. In fact, it has been said time and time again in the columns of the "Economist" that a rise in rent is meant to do exactly that. The "Economist" has said on more than one occasion if rent were increased that would go a long way towards solving the housing problem, because people now in certain houses would not be able to afford the increased rent and would have to go to live in rooms. Other people would have to let a portion of their houses to subtenants to pay the increased rents.
It does not seem to me that there is any real ethical justification for this Measure, because many landlords have, in fact, had the cost of the building of the house returned to them many times over in the shape of the annual rent. I am informed that my house cost £450 to build and I have been paying a rent of £52 a year for 20 years. So I have paid in rent already nearly two-and-a-half times what it cost to build the house. There were tenants in the house for some years before I started to rent it, so the original cost of building my house has been paid out in rent probably at least more than three times over. It does not seem to me, therefore, that there is any ethical case for enabling a landlord to raise the rent in order to do necessary repairs. In my case, very few repairs have been done during the 20 years of my tenancy.
It seems to me that this Bill is entirely the wrong way of dealing with what we all admit to be the serious matter of how to get the repairs done to these houses. Obviously, the best way to do it is the way that has been suggested by my right hon. Friend the Member for Ebbw Vale, that is, that all rent restricted houses should be taken over by the local authority and the local authority should do the necessary repairs.
As the hon. Member for Lewisham, North (Sir A. Hudson) said, it is quite true that if all rent restricted houses were taken over by the local authorities and they did the necessary repairs it would be necessary for the local authorities to increase the rents on those houses. But I think that people generally could trust the local authority to be fairer than private owners in the amount of increase imposed and could trust the local authority to do the necessary repairs much; better. The local authority could also' spread the cost of the repairs over a larger-number of years and at an easier rate than would be done by the private owner.
I believe, therefore, that from that point of view it would be more acceptable to most working-class tenants if rent restricted houses were taken over by the local authorities and those authorities did the repairs. I hope that my party will put up very strong resistance to this Measure. If the Committee stage is taken on the Floor of the House I hope that we shall have a series of all-night Sittings. I hope that we shall fight this Measure in Committee, whether on the Floor of the House or in Committee upstairs, line by line and Clause by Clause.
This Measure is a continuation of the policy which has characterised the present Administration ever since it took office, the policy of transferring purchasing power from the lower income groups to the higher income groups. This Measure fits exactly with that policy. That is why I hope we shall oppose it to the utmost. I am certain that hon. Members opposite will find that it will be extremely unpopular in the country because there is nothing which people dislike more than being called upon to pay extra rent, particularly when they think they are to get very little, if anything, for the extra rent they are called upon to pay.
Hon. Members opposite who have spoken so far, the right hon. Member for Ebbw Vale (Mr. Bevan) and the hon. Member for Southampton, Itchen (Mr. Morley), have put forward the policy of the Opposition on this matter. The only point of policy which seems to me is that rent restricted houses should be taken over by the local authorities.
At the end of his speech the hon. Member for Itchen said that this Bill would affect the security of tenure of tenants. May I point out that every local authority which owns houses or flats has the power to give one week's notice to its tenants and, if the tenant objects and takes the local authority to the county court, the judge is obliged to give a decision on the side of the local authority.
That is quite true, but would the hon. Member admit that whatever its political colour the local authority never abuses that power? With some experience of local authorities, I have never known them take a case to court when it was not fully justified.
I fully admit, with my long experience of local government, that I have never known cruelty or harshness shown by a local authority in this matter.
On the other hand, the hon. Member for Itchen said that this Measure affected the security of tenure of tenants. In the event of local authorities taking over a very large number of these houses it would undoubtedly be necessary, to enable them to charge increased rents, to pay for the repairs An interesting point about ownership of houses and flats built since the end of the war—and, incidentally, those built before the war—is that, although they have been kept in very good condition in most cases so far as decorations and outside painting are concerned, nevertheless the price of the repairs has been going up steadily. That applies to both labour and materials. As a consequence, the local authority has found itself with a very great deficiency in its housing accounts.
Although tenants of local authority houses have had good repairs, their rents have been increased to a very high pitch. Over the country there have been increases of rents up to as much as 12s. and 14s. a week. If hon. Members opposite talk about increased rents in regard to private landlords consequent upon this Measure, it is a fair statement to say that the maximum increase of rents permitted is likely to be lower, on the average, than that which local authorities have already put on since 1945.
The hon. and learned Member is saying that this is a condemnation of the scheme. I maintain that if the statement I have made during the last few minutes is read carefully it will be found that it supports the scheme entirely.
The right hon. Member for Ebbw Vale poked fun at what had been done between the wars in regard to repairs. It must be remembered—although I do not wish to bring politics into housing—that it was a Conservative Government which brought the 1936 Housing Act into being. I would remind the House that before the 1914 war there was no legislation to deal with a matter of this kind. The only way in which very poor repairs could be done was under the Public Health Acts and under byelaws for tenement houses. It was under the nuisance provisions of those Acts and byelaws. In 1919, powers were given to local authorities to compel the owner to make his house fit. Although that worked for a time it was necessary for amendments continually to be brought in until, in 1930, the procedure which eventually became Sections 9 and 10 of the 1936 Act came into operation.
My purpose in speaking this evening is principally to draw the attention of the House to the way in which the procedure of Sections 9 and 10 of the 1936 Housing Act operated. No doubt it will be remembered that under Section 9 the local authority was able, and can do so today, to compel the owner to put his house in order. The local authority can compel him to put it in order and, provided it is put into a proper state of repair at reasonable cost, it is approved. But, if the owner fails to do that, under Section 10 the local authority can put the house in order, repair it and charge the owner with the cost, putting the charge on the property and getting the money out of the rent. That is the position today.
I illustrate the effectiveness of that Act before the war in respect of one London borough with which I have been closely associated. It cannot be said that before the war Governments took no action to deal with the repair of houses; they did. Our problem of housing before the war was not that of lack of houses but of slum clearance. Side by side with slum clearance, work under Section 9 was going on throughout the country. In one London borough, in the 10 years from 1929 to 1939, 1,663 houses were inspected for repairs and bringing up to a proper standard. In those cases the owners carried out the requirements of the council to a very high specification, to the number of 1,576 and, in the cases where the council did the work in default of the owners, 87, or 5·2 per cent. of the total. That was a great piece of constructive repair work for the poor quality house.
The hon. Member is absolutely right. I am quoting the case of Kensington and these are official figures which were sent to the right hon. Member for Ebbw Vale when he was Minister of Health in 1950. It was due to a Kensington man who was chairman of the housing committee there, Lord Balfour of Burleigh, who was responsible for obtaining in the Lords the inclusion of the two Sections. While Kensington was exceptional, nevertheless the Section 9 procedure has been worked throughout the whole country, and if it has not been worked it should have been.
What happened after the war, when the same borough was able to go ahead with the same kind of work, was that between 1946and 1950 the number of notices served under that Act was 447, the number of houses repaired by owners was 251 and the council repaired 99, or 22·5 per cent.—an entirely different situation from that which obtained before the war. What was worse, when the district auditor came round to examine the housing accounts he called attention to the £17,000 outstanding, and asked the council to have regard to the general financial position. Since 1950, 154 houses have been examined. Only 33 notices were served owing to the fact that it would have been illegal to serve notices on the remaining number because they could not have been repaired at a reasonable cost.
I have called attention to this aspect of the Act because the law as it stands, which provides a vehicle whereby local authorities can compel owners to do their own repairs or take over the houses the owners of which are recalcitrant and will not do the work, has fallen down. It is impossible today, owing to the increase in the threefold cost of repairs to operate these two Sections—no local authority can operate them.
When the present Minister came into office his first job was to build as many new houses as he could but he discovered, side by side with that aspect of his task, that this deterioration was going on at an increasing and rapid rate. He must have considered what means he could use to stop the rot. The right hon. Member for Ebbw Vale made a genuine attempt, in Sections 15 to 17 of the Housing Act, 1949, to do something to help to stop that rate, but, unfortunately, perhaps for the reason which he gave tonight—he said that it was not advertised well enough—that failed.
My right hon. Friend was faced with a situation that there was a law in existence to get repairs done, either by the owner or by the council, and that it had failed on grounds of finance. Faced with that he has, in the result, produced a Bill which, I think, by all standards shows courage. It is fair, it is just and it puts the first thing first, that is to say, that a great national asset of nearly 6 million houses shall not disappear from the face of Britain. Secondly, it provides that side by side with the rent being increased to the tenant there shall be repair of the property.
As a result of this Bill my right hon. Friend will improve the conditions of the families occupying houses that are in this shocking state. New circumstances have, as I have described, arisen and they have been tackled skilfully in this Bill. My right hon. Friend's mind was not directed to the benefit of the landlord, as is obvious from the Bill and from what has been said by the Parliamentary Secretary, but to the welfare of the tenant.
From my experience and my conversation with many hundreds of people living in the sort of property which is affected by this Bill, I have no doubt—and I am sure that many Members on both sides have no doubt—that provided the houses are brought up to a decent standard of decoration, repair and fitness and made once again into homes, the vast majority of tenants will willingly meet a limited increase in their rents. They will willingly do so because they know perfectly well that if these houses become slums and they are moved and the houses are demolished they will, as a consequence, have to pay two, three or four times the rent which they are paying today.
If, on the other hand, these houses are, under the provisions of the Bill, put into a good state of repair and decoration, so that people can bring up their families in them, and not need new council houses, they will willingly pay. I therefore recommend the Bill very strongly to the House, out of some experience of this kind of thing, as one of the finest Bills ever to be brought forward for the benefit of the home life of the people of this country.
I think we can all agree as to the problem set out in the Government White Paper—that we need more houses, a vast amount of slum clearance and repairs to and modernisation of old houses. What I think was left out in the White Paper was some method whereby we could get the best use of all the existing accommodation. I think we all agree that it is useless to use all our resources in building new houses and letting others go into decay.
We can all agree also, I think, that landlords either cannot or will not do all the necessary repairs under present conditions. The problem is well known, and I think we all agree about it. It is when we come to the solution of that problem that we disagree. I believe that the measures in this Bill are not a solution to the problem and will not solve it.
The first point which we have to consider is whether the landlord will, under the terms of this Bill, do the repairs. Something has already been said about that. There are varying opinions—from those who say that the landlord will make a good thing out of it to those who say that there is no inducement whatever to the landlord. When the White Paper was issued there were various newspaper articles and a great deal of correspondence in many newspapers. I have here a letter which appeared in the "Yorkshire Post" at that time. It is headed, rather significantly, "Will it pay the landlord?"
I think that there is the crux of this matter—Will it pay the landlord? If it will not pay him, I fear that the repairs will not be done. I believe that probably the only inducement to the landlord will be to the good kind of landlord who now does his repairs. The truth is that the Minister cannotassure the House that the repairs will be done under this Bill; he can only hope that they will be done, and that is altogether different. He cannot be certain that the landlord will take advantage of the Bill, and to that extent the whole Bill is a risk as to whether or not it will be carried out.
We do not want a Bill which will enable repairs to be done; we want the repairs actually to be done. I am not yet convinced that this Bill, while it gives the landlords certain opportunities, will get the repairs done. Then there is the question of county court proceedings. I agree with hon. Members who have expressed the opinion that these facilities will not be used to their full extent, because tenants will feel they do not want to have recourse to the courts.
One question about rents has not yet been raised, that is whether the method proposed in the Bill is fair. On page 6 of the White Paper we read:
Recent investigations have shown that tenants are paying very different rents for identical houses in the same street—it may be for adjoining houses; and also that while many rents of essentially sound houses are very low, too low for it to be possible for the landlord to execute repairs out of the rent, others are much higher than had generally been supposed.
While in this Bill there is some attempt to level up the rents when repairs have been done, there is nothing about reducing rents which are already much too high, and I think that is a point we must consider on Committee stage.
We all tend to look at any Bill which comes before Parliament, not only from the point of view of the national interest, but also as to how it will affect our own areas. I represent the City of Leeds and I am wondering how this Bill will help thousands of my constituents who are in dire need of houses. Leeds is notable in two respects with regard to housing. It is notable for bad houses which are a legacy of the 19th Century, and also for the way in which this problem was begun to be tackled before the war. Because of the war we still have thousands of these bad houses.
In my constituency I have the very well known Quarry Hill flats, but on the opposite side of the road there are probably some of the worst houses in the country. There are houses in my constituency which ought to be pulled down, and that is why I, and my local authority, are particularly interested in the proposals in this Bill about slum clearance, and about the taking over of slum property by local authorities.
Let us look at the position in a city such as Leeds. There we have 30,000 people on the council's waiting list. We have 24,000 houses which urgently need to be cleared, and 16,000 of those houses are back-to-back houses built before 1844. Of all the houses in Leeds 32 per cent. are without bathrooms and 31 per cent. without separate lavatories. The occupants have to use one lavatory which is in the street and which serves several households.
Only those who have seen these back-to-back houses know what they are like. They have one door, there is no back door and front door. They have one small bedroom and one small downstairs room which serves as a combined kitchen, living room and bathroom. It is no use the Minister saying to the local authorities, "If you take these houses over they will last for several years." There is little which can be done to houses of this kind in order to make them habitable. It is true that slates may be put on the roofs, and the walls may be repaired, so that the snow and rain does not come in. But, apart from that, no work of modernisation can be done to them. It is no use talking about giving every house a lavatory, because there is no room for lavatories.
By this Bill we are encouraging local authorities to become slum landlords at the same time as we are encouraging them to sell good council houses, and that is not a very good thing to do. My authority feels that this Bill should contain some provision giving greater financial assistance to the very large industrial areas where, in the next few years, a great deal of slum clearance will have to be carried out. It may be said that this cannot be done all at once, and that is perfectly true. But it is also true that in Leeds in the five years before the war over 10,600 slum houses were cleared, and I am sure that if greater financial assistance were provided the local authority could proceed at a much more rapid rate than at present.
My local authority are also concerned because, while this Bill gives power to local authorities to take over slum houses, it does not give them sufficient power to take over other kinds of houses. Why should they take over only slum houses? Why should they take over only the worse houses? As has been said today, our policy is one of giving to local authorities more power to take over not only slum property, but other property as well. We on this side believe that this is the only sure way of getting repairs and conversions carried out.
The hon. Member for Lewisham, North (Sir A. Hudson) asked what was the advantage to local authorities in becoming landlords of fairly good and of average property? I will outline a few of the advantages which are greater than people will get under this Bill. First, we could be sure that the work would be done. Under this Bill we are not sure that repairs and conversions will be carried out. It would not be a gamble. If the local authorities had the power to to the work we may be sure that it would be done. Secondly, the tenant would be protected without having to go to court, as is suggested in this Bill. The third reason, which has been given by my right hon. Friend the Member for Ebbw Vale (Mr. A. Bevan), is that the letting pool would be enlarged and we could thereby make the best use of our houses.
As Members of Parliament we are accustomed to people coming to us and saying that they want houses because they are living in overcrowded conditions. But some constituents say they want to get out of a big house into a smaller house. One man came to me and asked if I could get a house for him and his wife. I asked him, "Are you on the housing list?" He said, "Yes, but they say we are adequately housed." I asked him, "How many are there in your family?" He said, "Only myself and my wife." I asked how many rooms there were in the house and he said, "It is a very old house and very dilapidated, but the total number of rooms is 13."
There are a number of houses of this kind in my constituency, and some are occupied by small families. Others are let at exorbitant rents as furnished rooms. Under the 1949 Act the local authorities took over blocks of these houses in order to convert them into flats. Ever since 1949 we, in Leeds, have been trying to convert such a block of big houses. We started immediately after the passing of the 1949 Act. In fact, I think this was the first scheme of its kind put before my right hon. Friend the Member for Ebbw Vale, and of course we first had to persuade him. He made us adopt a somewhat smaller scheme than we would have liked.
The project took some time, and when we were getting to the point of doing something about it, unfortunately the electors of Leeds decided to elect a Conservative council. That was two years ago. The first thing that the new council did was to scrap the whole scheme. Now the electors of Leeds, in their wisdom, have once more elected a Labour council, and the first thing that council has done is to bring forward this scheme again. But it will take months, possibly 18 months, before work is started upon it, and I appeal to the right hon. Gentleman to do something to speed up the procedure where local authorities wish to take over and convert houses of this kind. We all realise that we are faced with a problem and that a Bill of some kind is needed; but we do not believe that the proposals in this Measure will help us to solve the great housing problem which lies before the country.
I wish to confine my remarks to Part I of the Bill which deals with deferred demolition. First, I wish to say that all the provisions of this Measure will make a contribution to the high standard of housing which we all want to achieve. It should be emphasised that this piece of legislation is part of a general pattern which includes the powers of existing legislation for the erection of new houses and the town and country planning powers of redevelopment. We should see this Measure as part of the whole picture.
The part of the Bill which deals with deferred demolition merely contemplates patching up and rendering mere tolerable houses which we should all like to see swept away. Many would have been swept away under the pre-war clearance campaign if it had been possible to continue it through the lost years of the war and during the immediate post-war period. But the Bill is realistic. It recognises that we cannot sweep away at once all substandard houses and that, until we can, we ought to make them reasonably habitable for the people who will have to continue to live in them—always keeping our eye on the ultimate goal of redevelopment.
The House knows, because the Minister paid generous tribute to it this afternoon, that Birmingham has undertaken a fairly considerable experiment on these lines. I believe that the Birmingham venture has formed the basis for the present proposals, and I thought that hon. Members might be interested to know how the plan is working out. The order granted to Birmingham under which we acted was dated 1946 and it was confirmed in 1947.
It was applied for by a Conservative-controlled council and operated by a Socialist-controlled council under a Socialist Government. But the plan went back to pre-war days. This power gave to Birmingham the right to acquire compulsorily 30,000 houses in its central redevelopment areas. The powers were sought—and I emphasise this—because Birmingham wished to undertake a major redevelopment scheme. That was the primary purpose.
It was realised that it would not be possible, however desirable, to rehouse at once all the people in those old houses. Nor could the owners, knowing that the houses would sooner or later be demolished, reasonably be expected to find the money necessary to bring them into a reasonable state of repair. In all, about 28,000 houses have been taken over under the scheme and 26,000 are still in use. The remainder have been demolished. The 26,000 have been repaired and improved.
The extent of the repairs—and this perhaps answers some of the questions from hon. Members opposite—has varied with the condition of the property when taken over and the anticipated life which was put on it. Therefore, the amount of money spent has varied. On houses up to an anticipated life of five years Birmingham has spent an average of between £40 and£50 on essential work. Of houses with a longer expectation of life money has been spent on a complete renovation. The average cost is now working out at between £180 and £190. The average rent of these houses is 6s. 5d. a week, as they have remained within the Rent Restrictions Acts. That is a point which I understand will be altered by the provisions of the Bill.
Birmingham did not enjoy any Exchequer assistance either in acquiring the houses or in repairing them. Again, that is something which is envisaged in the Bill and I think it provides the answer to the hon. Lady the Member for Leeds, North-East (Miss Bacon) who asked what financial assistance local authorities could hope to get. One local authority has managed to do this job from its own resources. I hope that the fact that Exchequer assistance—
It covers central areas of the city. It consists largely of slum houses, though there are certain houses in a good condition, a number of factory sites and odd cinemas and shops.
There are 30,000 houses in the original scheme of which 18,000 were back-to-back houses. I was trying to make the point that Birmingham had had no financial assistance as yet—
The hon. Lady insists that this scheme is costing nothing in terms of central Government grant. Is not the whole point that there is grant to come and that the scheme itself consists not merely of slum houses but of other houses and, more important, of commercial properties, which pay considerable sums in corporation revenue? Is not that quite different from the scheme proposed by the Government?
I have already said that Birmingham has received no direct grant for this job. though I have added that there was a certain amount of revenue of which the hon. Member for Small Heath (Mr. Wheeldon) was well aware.
There is a further consideration. Birmingham had the advantage of acquiring these houses under the expedited completion procedure of the Town and Country Planning Act, 1944, which has since been repealed. I understand that the provision is available for development but not for the taking over of housing property. Since Birmingham found that it was of considerable advantage—
I think that I have had my baptism. I should like to be allowed to continue. Since Birmingham found that this procedure effected considerable saving in time and administrative work, it would probably be of value to other local authorities in big, congested areas. It made the job of what we called soling and healing in Birmingham much easier, and I hope that the provision of a similar facility might be considered during the Committee stage.
Finally, the job which Birmingham has done has been worth-while investment, as I am sure hon. Members of all parties will agree. It has improved the lot of people waiting for new houses. I know, because I have been in many of the houses, how much it is appreciated. It has resulted in new hope and encouraged new interest which is to be seen in new curtains, new linoleum and even window-boxes. Also, the main object of redevelopment is taking shape. The first big post-war block of flats to be built on the site of old slum houses is to be opened shortly. For these reasons, I believe that the present proposals can be equally useful and can make the same interim contribution to the ultimate aim of good housing for all.
The whole House will have listened with a great deal of interest to the speech of the hon. Lady the Member for Edgbaston (Miss Pitt) and, in particular, to the information she has given us about the operation of the Birmingham scheme, for that is a matter of considerable interest to all hon. Members. However, she has been a little less than fair to the House as a whole in not giving a little more detail about the other source of revenue which was available to Birmingham and which is certainly not available under the proposals in the Bill.
I speak with all humility in that I do not come from Birmingham, but I understand that fairly considerable revenues have been available to Birmingham because Birmingham was able to take over a wide spread of property, certainly including a very large proportion of slum property, but also including property which brought in very valuable revenue. It was surely because of that that Birmingham was able to carry out very valuable repairs and improvements to slum property. It is, no doubt highly desirable that similar provisions should be made available to other authorities, but the provisions under which Birmingham acted are no longer operative. Unless the hon. Lady and other hon. Members can persuade the Minister to alter his Bill, it will not be possible for other authorities to act in the way that Birmingham acted.
Ought it not to be pointed out that Birmingham receives £1 million from the Rate Equalisation Fund, whereas Newcastle-upon-Tyne and Manchester receive not a penny?
My hon. Friend makes a very valuable contribution. It is a point that I might well have wished to raise in some other regard. The real point here is that if the Minister would make it possible for authorities generally to take over a much wider spread of all kinds of premises, which would enable them to finance proposals of this sort, the Bill would make a good deal more sense than it does at the moment.
It is all very well for the hon. Lady to suggest that it will be easy for local authorities to finance slum clearance schemes of anything like the character of the Birmingham scheme. Far greater financial provision than is made available under the Bill would be required to do that. The hon. Lady has, perhaps unintentionally, rather misled the House, and I hope that hon. Friends of mine will rectify some of the omissions later. I hope the Minister will take note of the powerful plea of his hon. Friend that he should make the necessary alterations in the Bill so that valuable work of that kind can proceed in other cities.
Hon. Members will have observed comments in local authority journals about the provisions for slum clearance. The "Municipal Journal" set out very clearly what a very heavy burden local authorities will have to bear if they enter into shun clearance work on the scale envisaged by the Parliamentary Secretary today. It is ridiculous to expect local authorities to undertake the work unless there is a recasting of the financial provisions. It is ridiculous to expect local authorities to become, in effect, slum landlords for a considerable number of years without providing finance to enable them to do decent work on houses.
We know that repairs of a temporary character, such as those referred to by the hon. Lady when she spoke, cost £40 to £50 on houses which, we hope, will exist for only five years. It has been made clear by the "Municipal Journal" and other journals that even smaller expenditure of that sort cannot be borne under the financial provisions of the Bill. Even if the hon. Lady does not find it possible to oppose the Second Reading, I hope that at later stages she will support Amendments to make it possible for other local authorities to have the advantages which Birmingham had.
I was rather confused by some of the comments made by the Parliamentary Secretary. He made it clear—at least, I thought he did—that Clause 2, which deals with the question of an increase of rents to enable private landlords to carry out repairs and is one of the main features of the Bill, was intended to relate purely to houses which were already in a fairly good state of repair. He said it was not intended that the Clause should deal with houses which were in a bad state of repair. As we went on, it became clear that the only houses to which the provisions would apply would be houses which had been kept in very good repair, in fact houses having no backlog of work and needing only to be kept up to date, houses which landlords have apparently managed to keep in good repair all the time.
What about houses of good quality and of strong construction originally which do not fall into the category of slums and which are worth repairing but have slipped into a bad state? They will not be met under these provisions.
My hon. Friend is a little over-eager. I can guess one or two of the provisions of the Bill to which he may wish to refer. There is undoubtedly provision for the improvement of houses. That does not deal with the type of property about which I am speaking, because we are here concerned with a backlog of repair work. There is also provision for a local authority to step in and do repairs if the landlord fails to do them. We have the old procedure which is so well known to local authorities, unhappily. It seems to benefit few people apart from the lawyers, and I am assured by some of my hon. Friends that it does not even benefit the lawyers very much.
My hon. Friend has not appreciated the point that I wished to make. He says that only houses which are in good repair will be dealt with under the Bill. If he reads the Bill he will discover what is considered to be a house in good repair and a house in bad repair. Under the wording of the Bill itself, the houses to which he refers will not be dealt with.
I was about to come to the point of the vagueness of the definition. We all understand the difficulty of attempting to establish a clear definition of what is good repair and what is not. I hope we shall have a good deal more information on a matter which we shall certainly need to follow up in some detail in Committee in order to see in what way the two definitions as established in this Bill are to be interpreted. As we see at the moment, every local authority will interpret them in its own way, and there will be the widest discrepancies between one part of the country and another. This is another matter which the local authorities have raised in many of their journals.
The real point is that the Parliamentary Secretary, in introducing this Measure, seemed to be proud of the fact that this Bill is fair to the landlord and to the tenant, that it is concerned with actually getting the repairs done and really concentrates upon the houses. It is because we are quite certain that it will not get the repairs done, and that it does not, in fact, concentrate upon the houses, that we object to it so much. Let me clear this point before I proceed.
In the first case, there is a condition applied that the house should be in a good state of repair and in habitable condition, and that, as I have said, is going to be open to a wide variety of definitions. If it is to have any effective purpose, it will certainly require far more sanitary inspectors than we have at the moment. That is one thing that could arise out of it, and I hope that some effective measures are being taken to train the extra sanitary inspectors for this work. [Laughter.] This is no laughing matter. The Parliamentary Secretary knows that it is a matter which has often been seriously discussed, and I hope he will give it some serious attention. He surely knows that it is true that, at the present rate of the recruitment of sanitary inspectors up and down the country, there certainly will not be enough to undertake work of this kind.
In addition to that, it may be said that, even if the definition is somewhat vague and there is a great variation between one part of the country and another about what is a good state of repair, there is the further safeguard for the tenant in that he will be able to challenge the landlord and will be able to get a certificate of disrepair from the council. He will have the further safeguard, not provided under the 1920 Act, of being able to ensure that the landlord has, in fact, spent a specified sum in the preceding year before the application was made. That is the important provision, against which the others are only of a temporary character.
If the hon. Gentleman criticises this provision because of the undue strain it may place on the technical staffs of local authorities, would he not agree that the strain would be much greater if the recommendations of "Challenge to Britain" were carried out?
The strain which will be placed upon local authorities will be very little less than would have been placed upon them by the carrying out of the really constructive proposals for a change of ownership and control of the properties. There is no sense at all in imposing on local authorities all the work and odium of taking over all the worst properties out of which private landlords cannot make any more profit, and not giving them the chance of being able to spread their costs and their work over the whole wider field of properties of varying character of repair. What is absolutely wrong is to impose on them all the dirty work which private landlords, apparently, are not willing to do—all the work that will require the additional staff complained of—and not allow them the opportunity of doing the wide scope of work which they ought to be invited to undertake.
I was pointing out that there is this further safeguard, so far as it is a safeguard, that the landlord has to spend a specified sum of money in the preceding year, and it seems to be accepted that that is an effective safeguard. I suggest that it is not. It is not merely the point that the tenant has only 14 days in which to apply to the county court we object both to the 14 days and to the fact that he has to apply to the county court. Both are highly objectionable. There is a great deal of point in the proposal of my right hon. Friend the Member for Ebbw Vale (Mr. Bevan), and, as far as I could understand him, even one of the Minister's hon. Friends, the hon. Member for Lewisham, North (Sir A. Hudson), also seemed to feel that the rent tribunal ought to be brought more fully into the picture. At least, I feel it ought to be the rent tribunal rather than the county court, but that is not the whole point.
We must remember what is the interest of many of the tenants. Let us look at that factor. Many of the tenants who will be affected will be old age pensioners. More and more, old age pensioners seek the help of the Assistance Board, and the Assistance Board pays their rent. What is going to happen in very many cases is that private landlords will be subsidised by the Assistance Board out of the general public purse. We have had this problem already in other connections. Therefore, some of the tenants will not have as great an interest in checking the actual amounts spent as one would like. Some of the tenants will say, "Well, the Assistance Board will pay the rent," but, in view of the number of cases of that kind that will occur, is the Minister satisfied that the Assistance Board will have full power, as well as the tenant, to make the objection to a rent increase? That is a further reason why, instead of all this bother, these houses should not be in private ownership at all.
Further, when one of my hon. Friends made a suggestion, it was rather laughed at, but he pointed out that, as is perfectly true, very many of the larger landlords and very many of the estate agents either have their own jobbing firms doing their repairs—a very sensible thing—or have firms in very close relationship with them. I will not go as far as my hon. Friend, who suggested that some kind of monkey business might go on, though it is conceivable that, by the close relationship between the estate agent or the landlord and the jobbing firm, the latter might charge less than that shown in the receipt. It is very difficult to check, and I will not say that they will actually do that.
In some cases, I understand, the estate agents have their own jobbing firms, as part of their business, and, in that case, it would not matter in the least to them, when making a charge to their parent company to show that they had spent whatever the figure might have been—whether £18 or £16 and no matter whether any such expenditure had been incurred at all. It would not be illegal; they would merely be charging at a higher rate, and they are entitled to do it. There is nothing wrong about it.
I do not see what sort of protection there would be in this Bill against that sort of action, and I think that this is a further example of the sort of difficulties we get into when we try, because the Minister believes in the middle road, to meet both extremes, and we get objections both from the landlords and the tenants. It is the sort of difficulty we should expect, because of the almost impossible task of giving any real adequate working safeguard that this work will be carried out.
In my belief such work as will be done will be rather on the type of house that is very well maintained already. Only in those cases will it be worth the landlords' while to do the job. If the house is in a bad state of repair, the onus will have to rest upon the local authority to do the work. That is one of the reasons why this scheme will be ineffectual. I have mentioned some of the problems that inevitably arise when we attempt both to give a certain amount of incentive to landlords—which the landlords clearly regard as insufficient—and to avoid such a rise in rents as would cause a real political upheaval.
The Government have made difficulties for themselves in introducing this miserable half-measure, which fails to meet the difficulties of housing in this country, fails to meet the problem of slum clearance—the provisions of the Bill in this respect need recasting—and fails to meet the problem of houses that are in a bad state of repair because the landlords will not repair them. Alternatively, there is every incentive to the worst type of landlord to squeeze money out of tenants, who might not be sufficiently protected in this matter. It will be our duty on this side of the House to resist the Bill and try to prevent its getting a Second Reading, and later to try to add to its provisions in Committee so far as we can; and also to do our best throughout the country to give to tenants the protection which the Bill does not provide.
I am glad to have the opportunity of following the hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop), because I intend to add something to what he has been saying about the chances under this Measure of securing the much-needed rescue work on houses. I shall find it my duty to be somewhat critical of certain provisions of the Bill. For this reason I wish to say at the outset that I welcome very warmly the quite phenomenal progress and success that have been made by Her Majesty's Government in the housing drive, and that have enabled the Government now to turn to the second part of the problem and make plans for the rescue of the older houses and for the resumption of the clearance of slums which was interrupted by the war.
Let me come at once to the point that I want principally to deal with to night, and examine the questions which arise from the rent increases. It cannot be too frequently emphasised that the purpose of this part of the Bill is to save houses by making provision for their repair. We are not bothering about the landlord, and not even bothering about the tenant. What the Government intend to do is to save the houses by providing for their repair. The Parliamentary Secretary said in his opening speech—I took down his words as well as I could, and I think my rendering is substantially accurate—that the proposals give adequate incentive to provide for current repairs. He said that the increases of rent would be sufficient to cover the cost of those current repairs.
I am bound to wonder whether they will. There is evidence to be found in the housing accounts of local authorities of the burden of the cost of repair of houses. I shall not go into a great deal of detail on that point, except to say that, taking the four largest cities in England, the housing accounts show that those authorities are spending, and have spent on an average, more than 60 per cent. of their net rents on repairs and maintenance, whereas the unfortunate private owner has had a statutory allowance against tax of 25 per cent. to cover repairs, insurances, and the other expenses necessary to maintain property in a state of repair.
My hon. Friend the Member for Sparkbrook (Mr. Shurmer)—I always call him "my hon. Friend" because I have a sneaking regard for him. in spite of the fact that I disagree with him—will see that I am not shirking the issue whether the landlord has been able to afford the repairs that have been done. I do not know whether I ought to admit to an interest. My only interest is that I happen to be a member of the profession of chartered surveyors, which has a good deal to do with the repair of houses and that sort of thing.
I have been looking very carefully since the White Paper was produced at a number of reports, which I and other hon. Members have, about the extent to which landlords will be enabled to qualify for the rent increases if the Bill passes to the Statute Book in its present form. Let me give one or two examples, briefly. I saw an analysis of 1,870 flats in London belonging to a company which is nationally known as a good landlord. For obvious reasons I shall not give its name, but everyone will realise that it maintains its property in good order.
I have the figures of this case in detail, and they show that the company finds that even going back five years it can only qualify for rent increases in the case of 925 flats out of the 1,870—rather less than half. We have to go back five years to strike anything like a fair average, and in every one of those 925 cases it can qualify only by going back five years because, during that five years, there has been some extraordinary expenditure. By far the greatest has been in the removal of dry rot, and the second largest has been in structural work to roofs and main walls and work like under-pinning. I could give other examples—some supplied from Portsmouth by my hon. Friend the Member for Langstone (Mr. Stevens), some from the County of Essex and so on.
Many references have been made to the professional body to which I belong, the Royal Institution of Chartered Surveyors, upon whose advice Her Majesty's Government formulated many of their proposals. The Institution has never proposed that there should be a qualifying period in order to secure rent increases. I should like to read one short paragraph from the memorandum on the subject published by this Royal Institution and supported by the Chartered Auctioneers and Estate Agents' Institute and many other professional associations. It says:
It should be a strict principle of the scheme of increasing rents, that the property is kept in a fit state of repair. Accordingly, the precedent of the 1923 Act should again be followed, so that if a tenant considered that the house were not in a reasonable state of repair, he could apply to the local authority for a certificate to that effect. If such a certificate were granted, the tenant would be able to withhold the increase in rent in respect of any subsequent rental period until the necessary repairs were done.
It makes no proposal about a qualifying period.
I think that the Bill would be a better Bill and that more houses would be repaired under it—and that is the important point—if the only test were: Is the house in good repair? If it were not, and were subject to a certificate of the local authority, then the rent increase could not be made. But if the house were in a good state of repair then, in my view, the increase in rent ought to be automatic.
That is something which could easily be discussed between the parties and with the sanitary inspector when he comes to inspect the property.
If my proposal is not acceptable, then I am certain that we ought to look more closely at the statutory allowance. The definition of the statutory allowance was, I think, contained in the Rating and Valuation Act, 1925. It is intended to cover repairs, insurance and other expenses necessary to maintain the hereditament in a state to command the rent.
It is sometimes erroneously presumed that the statutory allowance covers only repairs, whereas in fact it covers insurance and the expenses of management. That means that, in fairness, an addition ought to be allowed to the amount of repairs which are necessary in order to qualify. That addition ought to be the present cost of insurance and of management. If that were done—and I see no reason in logic why it should not—then many more properties would be enabled to qualify. In this connection, I would again emphasise that the object of the Bill is to secure the repair of the houses.
With that in mind, I now turn to another matter, the ceiling in rent increases as proposed by Clause 19 of the Bill. The House will remember that the gross value of the property comes into the matter. Gross values have not been increased since 1935. The last time that there was a revaluation in this country was in respect of the year 1934–35. The Fitzgerald Committee reported some time in the early 1940s—I cannot quite remember when—that gross values varied very much from place to place and area to area, and that in some cases they were as low as half what they should have been.
The "stopper" imposed by Clause 19 is twice the gross value. It will operate, of course, where the rent is high, but it will operate equally where the gross value is low. I think there ought to be an adjustment which might be made in one of two ways. First, there could be a notional gross annual value which ought, I suggest, to be somewhere about 25 per cent. above the present gross value in order to provide for the increase which everyone knows would be made were there to be a revaluation now. Secondly—and this, I must say, I prefer—would be to substitute for twice the gross value as provided for in Clause 19 a new figure of two and a half times the gross value.
An hon. Member spoke about the owners of property who have their own repair squads. I think that in Committee we shall have to look at the point of averaging the cost of repairs. In the case of a person who owns, say, six, 10 or 12 cottages, it may be found that over the past three or five years, or whatever the period may be, he will have paid out a lump sum for painting and a lump sum for roof repairs and so on. It is unlikely that one would find the cost of repairing the roof of, say, "Acacia Villa" specified as £x. One would find that so much was charged for the whole block. We shall have to consider in Committee how we can apply an average figure to the whole block where repairs of that kind have quite genuinely been done. It is very difficult to trace them in respect of each individual property.
I hope that my right hon. Friend will approach the Committee stage with an open mind. He has produced a good Bill, but I think it would be a better Bill if more houses than I fear will do so in its present form could qualify for repairs.
No one would say that the proposals in the Bill are very easy to understand or that the subject is a frightfully simple one which anyone can grasp. Clearly, it is a very complicated and difficult subject, and what hon. Members of all parties must try to do in Committee is to improve the Bill by seeing that more houses are put into a better state of repair as a result of it.
One word about the tenants. I think that hon. Members on both sides of the House would be unfair if they looked at the matter merely from the point of view of the landlords and the Government and not from that of the tenants. What is going to be the effect of the Bill on the tenants of rented properties? I saw an interesting analysis the other day of some 88,000 families—not individuals—on L.C.C. estates. The figures given were complete and authoritative. It was found that even if rents were increased by the amounts proposed in this Bill, the rent and rates combined as paid by those tenants would still represent a lower proportion of wages earned than was the case in 1939.
It is true of real property, as of almost anything else, that a stitch in time saves nine. A loose slate today may very likely mean a ceiling down tomorrow. A broken gutter not attended to at once inevitably leads to rotted timbers. A defective air vent will almost certainly lead to that ubiquitous and horribly expensive distemper, dry rot. Thousands of houses a year have been degenerating into slums. There have been a great many owners who have been only too anxious to hand over their rent-restricted houses to local authorities for nothing.
I have not heard of any local authorities that have been very ready to accept them. They become a liability, impoverishing the owners and vexing the tenants with their lack of repair. I agree with the right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan) when he says that he has not much doubt—and I have not much doubt either—that the average tenant will be only too pleased to pay a little more rent—as I would put it, the equivalent of a packet of cigarettes a week—to enable his rented house to be maintained as it ought to be maintained, and as it would have been maintained if the income had been sufficient.
Some reference has been made to the Birmingham scheme, and I think that there is no doubt whatsoever that that scheme throws a good deal of light upon this Bill, and upon the question of repair of houses. The hon. Lady the Member for Edgbaston (Miss Pitt) has already given certain figures with regard to Birmingham, and I agree that certain of those figures, at any rate, are perfectly correct. One is that it cost, in all, an average of £180 to £190 to repair each of the 28,000 houses which came into the possession of the Corporation of Birmingham. In some cases the expenditure per house has been considerably more—almost £300 per house. But in 85 per cent. of those houses there have had to be substantial capital repairs; in many cases there were new roofs, new floors. new ceilings, new lavatories. In 3,000 cases a new water supply had to be provided. It is quite clear that this does not just represent a certain amount of disrepair which has occurred in the last few years. This is the neglect of a generation.
At least one generation.
The Rent Act, 1920, provided a safeguard similar to the one contained in this Bill. It gave a 40 per cent. increase, including 25 per cent. for repairs at what was then an inflated building cost, and this inflated value provided adequate funds for landlords to do repairs if they were so minded. But have they done the repairs? Well, Birmingham provides the answer in the 25,000 to 26,000 houses which have been taken over in this deplorable state of neglect. And Birmingham calculates that there are at least another 25,000 to 26,000 houses in the same category. The Birmingham council has tackled the job. Here let me correct the hon. Lady the Member for Edgbaston on one point. When the resolution was before the council in December, 1945, the Conservative Party in the council had already lost its majority. I assure the House that that is correct. I remember it very well because it was just after I had left the council myself. However, the council tackled the job.
In thousands of cases these repairs have been done, and the consequence is that probably 100,000 people have had their lives rendered at any rate tolerable in houses which, though far from perfect, are at any rate in reasonable repair and watertight. Surely that whole history proves conclusively that landlords and private enterprise cannot be relied upon to do the repairs and that if we want the job to be done we should let the local authorities take over the houses.
It is not only in those houses that that applies, because there is no doubt that in Birmingham, and in many other cities, houses, apart from this slum type dilapidated house, are now in the process of dilapidation and have been not merely since the war but since well before the war. Slums are being made every day, and the landlords either cannot or will not, or at any rate do not, tackle the job.
The answer is quite a simple one—let the local authority take it over.
The Parliamentary Secretary, in an intervention a few moments ago, asked: Why burden the local authorities with this? Believe me, they are quite willing to undertake the burden. Otherwise, they are still going to have the burden of chasing the landlords to see that the job is done. If we are not going to give them this double burden of one person doing the job and another chasing him to see that it is done, let the control and management be under one authority. I think the lesson of the history of Birmingham is quite clear. Local authority ownership is the answer.
I have dealt with one safeguard; let me turn now to another. Everybody knows that the provisions of the 1920 Act, so far as they concern the obtaining of the sanitary inspector's certificate, have been a complete fiasco. I do not know whether the Minister has figures of how many of these certificates are issued from year to year, but let me give him just one recent experience. Recently I was speaking to a constituent who had made a representation to the sanitary inspector in Birmingham as far back as March. There is a gap between the roof and the wall of the house, and he wanted something to be done about it. I have written to the sanitary inspector myself, but, as recently as last Friday, after a period of about seven months, nothing has been done. It is absurd to imagine that these problems could be tackled by the present staffs of local authorities. If people go to the sanitary inspector for a certificate, they will find that innumerable other houses are in the queue before them.
Consider the other safeguard of the Act, which is quite worthless: the question of the amount which is paid by the landlord. Even supposing that the landlord pays what amounts to the allowance for one year's repair, why should he be allowed simply to pay the repairs for one year—that is the statutory allowance—irrespective of whether he pays a single penny for the next 10 years afterwards.
That is a point I have already dealt with. It has proved a fiasco from 1920, and why on earth should it be a success today?
All that the landlord does at present is this. He does not have to produce any accounts. He makes a declaration to the tenant and says, "I say that the house is in a good state of repair. I say that I have spent so much money." Once the landlord has said that, the tenant must challenge it: he must either go to the local authority—I have dealt with that—or he can go to the county court and risk the chance of having costs awarded against him, with, as he thinks, little prospect of success, quite irrespective of the possibility of false bills being produced. Obviously, the tenant is in an extremely weak position to challenge the landlord and he would hesitate to do so. Again, if tenants did go to court, the county courts would be cluttered up with these cases for the next four or five years.
How does the hon. Member reconcile the argument which he has just made with the argument already adduced from his side of the House that a better alternative would be for the landlord to go to get permission to put his rent up? That would mean at least 20 times as many applications as under the Bill.
That may be so, in which case the landlord would have to wait for his increase; I have no objection to that. The plain fact is that the history of the last 30 years has shown that the Bill will not produce the goods by way of repair. It will put money into the pockets of a large number of landlords, but it will give no satisfaction to the tenants.
What is proposed in the Bill is substantially different from the Birmingham scheme. It is different in three major respects. The first is that what was taken over in Birmingham was a balanced area of property. Between one-third and one-half of the value of the property taken over comprised a factory, business premises, cinemas and public houses. Undoubtedly, to a substantial extent this helped to meet the deficit which otherwise would be incurred on the remaining property.
Secondly, it is true that the current account in Birmingham is now balancing, but that is the account of the central areas department, which does not deal with the whole scheme as a clearance scheme but deals simply with the current management of the houses as they are at present. Eventually, it is hoped, of course, that as clearance proceeds, these properties will rank for Government grant. Even so, before that happens it is probable that the local authorities in Birmingham may incur a deficit amounting to a 4d. or, perhaps, even a 6d. rate. Personally, I think that that price is good value for providing comfortable dwellings for the 100,000 citizens, although I think that the Government, and not the local authority, ought to meet this burden.
Another factor is that under the 1944 Act Birmingham carried out its operations for the area as an area of bad development. Under the 1936 Act, the provisions are entirely different. Even in Birmingham, with its rapid and expeditious procedure under the Act, it took from the resolution of December, 1945, until June, 1947, before the scheme was adopted. With all the delays of the cumbersome, long-winded 1936 Act, it would take many years before a clearance area of this size could ever come into operation. If the Minister is sincere about his intention to get these areas developed rapidly and the problem of slums dealt with soon, for heaven's sake let him abandon the procedure of the 1936 Act, because it will be years before anything is done under it.
There is another aspect also in which Birmingham is different. Birmingham took over a whole area with 30,000 houses. How many of these would have come under the provisions of this Act is doubtful, because, as I understand it, the properties for which demolition can be deferred under this Act are properties for which an individual representation could be made under the 1936 Act. It is far different from taking over a whole clearance area with some slum houses suitable for demolition, as marked blue in the old plans, or marked red, for which compensation had to be paid and which were considered habitable. We cannot say just what the Government provisions mean. They are far different from these—
Yes, but it is a question of the houses to which they refer when a clearance area has been determined. Clause 3 says:
In any case where a local authority would be required, apart from this section, to make a demolition order in respect of a house in pursuance of a notice….
No, it simply explains Clause 2. I hope the Minister can explain the Bill further, but as I understand it, this power of acquisition for deferred demolition applies only in the case of a house about which individual representation can be made. This Birmingham scheme is quite different from the scheme propounded by the Minister, and, as my hon. Friend the Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) has already said, I only hope that the Minister is prepared to adopt the provisions of the Birmingham scheme, and if he does I am sure he will find a great deal of support for it on this side of the House.
There is one further point which I ought to mention, and this is really my final point. This Bill makes considerable modifications in the Rent Acts, but generally does not deal with a problem which is now beginning to be a major problem. My right hon. Friend the Member for Ebbw Vale (Mr. Bevan) referred to this matter briefly in his speech. The Rent Acts are beginning to die. Once there is one succession after the first statutory tenant, the tenant ceases to be protected and can be turned out. He is turned out in very many cases, and the landlord then sells the house at a profit in some cases of several hundreds of pounds.
Many tragic cases have come to my notice, and my hon. Friends can also tell of instances where families have lived in houses for the whole of their lives and then suddenly they find they are without protection, are turned out, and the houses are sold. At the present time this is not a widespread problem, but with the effluxtion of time it will become a major problem. Perhaps within the next five or 10 years it is going to be a problem affecting hundreds of thousands and may be millions of citizens of this country. This Bill does not deal with that real problem, and for that reason I say it is completely unsatisfactory.
If this Bill has good parts, like the curate's egg they are few and far between. As a whole it will not do the job that it is intended to do, and it is certainly not going to do anything for the vast majority of tenants who live in dilapidated houses.
One hesitates to intervene in a debate devoted so largely to Birmingham, but if I might give an example from another county, that of Lancashire, I think it will bring this debate back to earth. Before doing so, may I express my surprise at the fact that both in this debate and in the debate which we had on the White Paper only one Member has so far declared any interest in the sense that he lived in a rented house and, therefore, was in danger of having his rent raised. I myself have to declare an interest in the matter in that I live in a rent-restricted dwelling and therefore am in danger, if I vote for the Second Reading of this Bill, of doing myself an injury.
At the same time, for some reason which I do not follow, a number of bodies under Clause 28 are being exempted from the restrictions of the Rent Acts which they otherwise endure as landlords, presumably on the grounds that they are non-profit making. Well, my landlord is ostensibly non-profit making, as the hon. Member for Edge Hill (Mr. A. J. Irvine) knows. My landlords are the Benchers of Lincolns Inn. They may be his landlord as well, in one capacity or another. But what profits they make or where they go, none of us know. At any rate, in theory and in law they are non-profit making. I hope that nobody will have the temerity to include them in Clause 28 during the Committee stage because my rent would go up even further than it is likely to do under the Bill as it stands.
I follow what the hon. Gentleman says, but I think he does my profession an injustice and, indeed, his intelligence an injustice. Perhaps he will consult his hon. Friend the Member for Lincoln (Mr. de Freitas) who knows as much about it, if not more, than I do. I wish to give the House an example of a case which I had at my surgery on Saturday, if I may, because so far we have had sweeping remarks about how the landlords have done this, how some of the landlords may put in fraudulent bills, and so forth, and it is time that be brought this debate back to concrete examples. I hope the House will be patient with me because this is a serious example.
Mrs. Brennand is a constituent of mine who lives on a small farm of about 20 acres of very poor land where she makes a living to support herself and her three boys aged 11, nine and three. Her husband is bedridden. She tends the chickens and the animals and somehow or other, out of that small and barren holding, survives. Her brother-in-law was a fighter pilot in the war and owned three houses, "two up and two down," in a neighbouring borough and in his will he left those houses to her in trust for her children.
The standard rents of those houses are not particularly big and they are not particularly small. I think they are 9s. each. Out of that 9s. hitherto she has been obliged to pay all the repairs and it comes nowhere near the cost of those annual repairs. If she had known a little bit more about the law, or had received better advice, she would have disclaimed those houses on behalf of the children as soon as she possibly could after she read the will. Of course she did not do that. She thought that the houses were a nice little nest egg for her sons when they came of age.
To keep those houses going since the death of her brother-in-law Mrs. Brennand has spent out of the profits of her small farm in all £250, and she has drawn not a penny of profit by way of rent. I do not believe that is an exceptional situation but a fairly typical one. It may be said that she was foolish to do it, but she did what she conceived to be her duty. She came to me and said, "I cannot spend any more. I have asked the neighbouring borough corporation to take them off my hands and they will not do it. I would give those houses away if I could because, by the time the boys are 21 and might get some advantage from them, the houses will have fallen down because I cannot spend more than £250. I am ruined by them. What am I to do?"
I ask hon. Members opposite to bear that kind of situation in mind and to say what is to be done to save those three houses.
The local authority will not have them. She has offered those houses to the local authority and it will not take them. This Bill will help her case. She will be entitled to raise the rent, on a rough reckoning, by something like 3s. 6d. a week. I cannot get from her the amount of the difference between the gross ratable value and the net ratable value because those are big words beyond her comprehension. But she considers that with an extra 3s. 6d. or 4s. a week on each house she will be able to tread water.
She is not expecting any profit, indeed she would not be entitled to it because she holds the property in trust for her boys. She hopes, however, that as a result of this Bill she will be able to keep the houses in trust for her boys until they are 21 years of age. Hon. Members opposite must have some alternative which is not in the distant future on some grand scale of the local authorities taking over all houses, because as the hon. Member for Erdington (Mr. J. Silverman) said, the local authorities have not the staff—
Presumably they will have their extra staff there and in their housing departments and all round if they are to be universal landlords for millions of houses. Even if it is right as an ultimate objective for the local authority to take over the property which I do not think it is, hon. Members opposite must realise that that cannot happen now. It will take a long time for that to come about. I think that the party opposite admit that in their literature.
No doubt. I dare say that many years ago some very wicked man made a lot of money out of them, but the point now is the situation presented to Mrs. Brennan, the local authority and the boys of how these houses are to be saved within the next few years. By raising these rents there seems to be a chance—I do not say a certainty—of saving them. That is what we all want to see done. I have quoted this case because I do not think it untypical.
If, as the hon. Member says, these boys are aged 11 years, nine years and three years and the houses are subject to a trust, how can the lady offer them to the local authority except subject to the trust?
I hope that the hon. Member will take it from me that she can prove to the court that the trustee property is of no value and that if she is challenged on the matter she is entitled to give the property away, because it is for the benefit of the trust that property of negative value should no longer remain in the trust.
The provision in this Bill is the only thing to be done to save these houses now. I should mention one of the consequences of raising these rents to the modest extent that we suggest. These houses are in the possession, as to two of them, of single persons and those single persons have had the chance of other accommodation but have refused to go. As hon. Members know, the proof that the landlord has to show of alternative accommodation is very high and very difficult. Mrs. Brennand has not been able to give them the alternative accommodation which, for the benefit of the community, they really ought to have secured.
I believe the hon. Lady the Member for Leeds, North-East (Miss Bacon) and others said that it is a bad thing for single persons to hang on to houses. Those single persons will now be more disposed to try to find accommodation suitable for single persons. I suggest that is another social consequence of the proposals of my right hon. Friend.
I am sorry that this Bill is not more comprehensive. I can appreciate that we have to wait until the national valuation is accomplished and rating valuations are more uniform over the country before making a proper attack on the generally capricious nature of rents. At present, some are too high and some are too low. It is a matter of chance whether one has let a house, sometimes for charitable purposes, at a very low rent or has wrung a high rent out of a person some years ago. I do not think anyone would support the amazing discrepancies that exist. But I do not think it fair to ask any Government to tackle that matter until the new national rating valuation system is in force. This Bill really is a stop gap.
At the same time, we should be thinking now of what sort of amendment to the principal Acts we wish to see when it happens and it will not be too far delayed. Already in this Bill there are some provisions amending the Rent Act which by no means directly bear on the central problem of repairs. For example, in Clause 31 the rules relating to apportionment for conversion will be repealed or considerably amended. The object is to provide more units of accommodation. But is my right hon. Friend quite sure he will not go too far in that respect? Will there not be an overwhelming desire by a landlord when he gets possession of a house with a low standard rent, to convert and thus get an economic rent for both parts—even though it is a house not suitable for conversion—because the rewards for conversion will be very great? It will be possible to fix new standard rents for separate parts and in a house which, for capricious reasons, has a low standard rent, it is in danger of being cut in two, even when it should not be cut in two. I ask my right hon. Friend to look at that matter.
More important than a small point like that—although it may become a big point as when one tinkers with these Acts small points tend to grow large in time—is the whole system of control. At the moment we have in this country no less than four different systems for leasehold control. We have the Rent Act control where the right to possession is automatic and where the rent is fixed and arbitrary in the sense that it is fixed by an initial letting which may, for all sorts of curious reasons, be either too high or too low. For business premises under the Landlord and Tenant Act we have a fixity of possession which is discretionary in the court and a rent which can be increased in the discretion of the court.
In agricultural leasehold holdings we have a tenure which is extremely chancy, depending on whether one gets in the notice to quit within three months of the death of the tenant and also on whether the agricultural tenant remembers to serve a counter notice. That leads to all sorts of abuses because landlords, if so minded, can serve hundreds of notices to quit in the hope that a tenant farmer will be mucking out the shippon and forget to serve a counter-notice for one of them. Then he can be evicted. On the other hand, there is provision for arbitration on the rent at the minimum of three years.
Finally, there is the system of control for furnished dwellings—the fourth system—under which the security of tenure is very slight, but where the rental is not fixed or capricious but can be varied by the rent tribunal. There are four different systems. Although the circumstances are different, they have grown up purely as a matter of history without having really been thought out in a coherent system. What we are trying to do, I think we cannot hope to do much more, is merely to tinker with this rather baroque structure—putting another little knob or accretion on it and not streamlining it in the way it should be streamlined.
I submit there are really no alternatives to this suggestion. The right hon. Member for Ebbw Vale (Mr. Bevan), who made the opening Opposition speech, said, if I may say so without presumption, some very wise things. Among them was his statement that while there is a system of private enterprise in this field of landlord and tenant the landlord must be given something. He maintains that we are not giving the landlord enough, but he said that the landlord must be given something. That is the brain box of the skull working.
The next Opposition speech was from the hon. Member for Itchen (Mr. Morley), who had declared his interest in being a tenant, and who said that we were giving the landlords much too much. That was the false jaw working. So we have got the fake of the brainbox, which is sound, though rather old fashioned, fixed rather precariously on to the false jaw, which does not fit it at all.
The hon. Gentleman has followed my analogy. I ask the House to break up this fake and expose it as quickly as the fluoroscope has exposed the fake of the Piltdown Man. The truth is that both so far as the time factor is concerned and also so far as the money factor is concerned, the Opposition solution is no solution.
Very hard things have been said from the other side of the House about landlords as a class. There are good and bad landlords, but let this be said: when hon. Members opposite have been canvassing at such lengths the possibility of frauds, let them bear in mind that there are innumerable landlords who have been preserving their property at their own expense for a long time and who will go on preserving it at their own expense in the future, though not to the same extent as the result of this Bill.
So long as we leave this property in private hands the community is getting the benefit out of the altruism of landlords—[Laughter.]—out of the altruism of those landlords, who are very many, who think that property should be preserved because they have a care for property for its own sake. If hon. Members opposite have never met such landlords, they have not moved very widely.
This debate has been noteworthy for some remarkable admissions from hon. Members opposite, if for nothing else. With charming candour and perfect accuracy the hon. Member for Darwen (Mr. Fletcher-Cooke) started off his speech by telling us that this was a Bill to injure the tenant, and with that much we quite agree. The hon. Baronet the Member for Lewisham, North (Sir A. Hudson) told us that any good landlord would wish, and it would be to his advantage, to hand over his property to the local authority. Again I entirely agree. I also agree with the corollary to that statement, that the only landlords who would wish to keep rent-controlled property are bad landlords, and those who intend to continue to be bad landlords.
I say frankly that I am not, in a doctrinaire way, in favour of nationalisation. I regard nationalisation as an economic device. Any modern society must, generally speaking, have the power of direction, but where possible management should reside elsewhere. But where we have a socially necessary service and function, and where we make it impossible for the private individual to do the job—and by rent restriction we make that impossible whether we pass this Bill or not—then we must take on the job and do it for the private individual. That is the position with regard to this problem.
The hon. Member for Dulwich (Mr. Robert Jenkins) made an observation which seemed to me to be most pertinent. He said that local authorities, starting off with property in perfect repair, have, because of the increased cost of repairs, had to put up their rents more than is authorised in this Bill. If such a local authority, with an organisation capable of checking the estimates and bills of jobbers; with scope to obtain a sequence of work, and starting off with houses in repair, finds repair costs considerably more than the increases which are allowed, what inducement is there for a landlord, starting off with houses out of repair, to try to catch up in a race in which he is never a starter?
This is quite an absurd and a useless proposal. We heard from the hon. Member for Darwen a pathetic story of a landlord whose property in, I think, five years cost £250 for repairs. If the repairs cost £1 a week what use is a 3s. 6d. increase? That is the sort of position—
Well, if we get only half of what it cost, what is the use of the 3s. 6d.? This is of no service for houses in need of repair. I would refer hon. Members to a letter from the Bursar of New College, Oxford. The college owns a lot of property and is a good landlord. The Bursar points out that, even allowing for the increase permitted under this Bill, it would take nine years' rent to thatch one cottage.
Let us admit that I did not read the follow-up in "The Times." Let us take it that, with the permitted increases, the re-thatching of a cottage would absorb three years' rent. But, whether it is nine years or three years, the overwhelming weight of the thing makes it obvious. Where the need is great these proposals are nonsense. It is for that reason that we oppose this Bill. It will not do the job. In fact, it will do mischief. It will not result in more repairs, but in less.
Of course we recognise the nature of the need. Indeed both when my own party was in office and since the Tory Party have been in office, I have been pressing this need upon successive Governments. The need has been aggravated by the policy of the present Government. Unfortunately—and this applies all through—the Government by letting the Tory Party conference get out of control, were bullied into launching upon a 300,000 house building programme, which has been thoroughly mischievous in its consequences.
There has been no substantial increase in the building force in the skilled grades. It is a most difficult force to expand. There has been some increase in productivity. Even in a not very quickly advancing industry we learn something by experience. There has been some increase in productivity, but the main increase in the building of new houses has come at the expense of other building. It has come from schools and from industrial building, and now the licences are removed to get an incentive because the programme is getting behind. But, as the figures for employment show, it has come overwhelmingly from repairs.
When they finished the war damage repairs the people ought to have been moved to deal with the other back-log. They were diverted to this housing programme. Of course, the case for the 300,000 houses was that we did more than that before the war in 1938. That is true. On three occasions we have had building booms—in the '90s, the late '30s and the '50s. The building boom is not a symptom of health but of disease in an economy. Each time we have had a building boom, first we have had a heavy slump. That has pushed wages right down and that has got costs down. It has also broken the confidence of the investor in industrial investments so that he will put his money only in bricks and mortar, and the conditions of the slump have made bricks and mortar cheap.
When those factors have arisen we have had a building boom. We have had one three times in the last 100 years. To proceed to impose this symptom of disease—which is what it is—upon a healthy economy already over-extended and fully employed was a piece of economic lunacy. It is that from which, in a large measure, we are now suffering, and which this Bill is designed to meet.
Of course, it will do nothing of the sort. Assuming that there is on an average a two-year back-log on repairs, if the Bill worked it would create an immediate new demand to the level of £250 million. That demand is to be suddenly imposed on an already over-extended building industry. I ask hon. Members opposite to consider their own experience. Do any hon. Members here know anywhere where one can get an estimate from a jobbing builder?
If the hon. Gentleman knows one, he is lucky. In most districts the jobbing builder will say, "Well, I might be able to come to you next month. I can tell you roughly what it will cost, but I will put in a bill afterwards." The jobbing builder is so over-employed that that is the way he can treat his customers. The attitude all over the country towards this sort of repair work is "There is a waiting list. Take what price I choose to give."
It is now suggested that on top of the present demand shall be added a further demand of £250 million. That would be the position if the Bill worked. The result would be no more repairs, because there is nothing in the Bill to increase repair capacity, except in so far as the jobbers begin to bribe the craftsmen away from the building of new houses. The Bill can only result in introducing corruption which will throw into chaos all the labour forces engaged upon new building.
It will also mean a vast increase in prices, because when a lot more money is provided without increasing capacity, that is the only thing that happens. However, I do not think we need be pessimistic enough to imagine that the Bill will work, with the dismal prospect of its throwing everything into confusion. The Bill will not work. It will just tick over a little. The effect will be to transfer such repair capacity as there is from the houses which need it most to the houses which need it least. Where the cost of repairs to qualify for increased rent is small, that is where repairs are needed least and it is thus worth while to get the increase.
The hon. Member for Angus, North and Mearns (Mr. Thornton-Kemsley) told us about a large landlord only a very small proportion of whose houses would qualify for the increase because, although they were all in wonderful condition, the necessary amounts had not been spent on them within the qualifying period. The hon. Member may cheer up. I have no doubt that those concerned will soon put that right. They will put on an extra coat of paint. From what the hon. Member told us, that will be unnecessary, but none the less it will qualify the houses for the increase in rents. That will be happening everywhere. Every house which does not need repairs will have another coat of paint put on it and will thus qualify for the increase. Consequently, all the repair capacity will be transferred from where it is needed to where it is not needed.
With regard to improvements, does anybody think that 8 per cent. is an attractive return on an investment in respect of something which will have such a very short life and such a very high depreciation as the improvement of a house? Of course not. Where the purpose is to provide for a tenant we shall not get the improvement, because 8 per cent. is not so very much more attractive than 6 per cent. We shall get the improvement where there is prospect of a capital appreciation; that is, where the house is vacant or will become vacant and it is possible to get someone to pay half the price for something which will be sold to someone else at the whole price, for that becomes a proposition which is worth while. Again, we shall be diverting our improvements—
Perhaps the hon. and learned Gentleman has forgotten that the 1949 Act, which was passed by his right hon. Friend, includes a provision, not repealed in this Bill, which prevents a person who has carried out the improvement from disposing of the house in the way he suggested?
It goes on? Then, we shall be just where we are now, and we shall have no better use of this Bill than we had of the 1949 Act. The whole thing is nonsense without value: that is what it amounts to. This is a complete face-saving Measure which amounts to nothing.
If we are to spend public money in order to get houses repaired—and, in any form, and however we deal with it, that is what is going to happen—surely it is important that we should have some control of the use to which the houses are put? That is something which this Bill does not provide in any way at all. At present, the privately-owned and let houses in this country are appallingly under-occupied, partly because rent control has produced a rigidity of tenure in that the tenant has a vested interest in staying in the house—and it is a vested interest which he cannot part with—partly because the sole interest of the landlord is to get the house empty, because it is only when he gets it empty that he can sell it at a profit, and partly because older people are better off and can go on staying in a house when their families have gone. None the less, the combination of all these facts and the rigidity of tenure means that the privately-owned and let house, on the average, is terribly under-occupied.
Throughout the country, I think the figure is now between 3·2 and 3·3 people per house. That ought to be enough. The trouble is with the distribution. In Northampton, I made as pot survey of this problem. The municipally-owned houses had an average population of nearly five persons, but the privately-owned and let houses had an average population of less than two persons, and, if we make a similar survey throughout the country, I believe we shall get very similar figures.
In a circular, the Minister pointed out how important it was to provide for proper utilisation of houses by exchanges. We can only do that if we are in a position to control the houses, because, as the circular pointed out, we cannot get exchanges among privately-owned houses. By having a management whose interest it was to fill the houses, instead of one whose interest it is to empty the houses, we should go a tremendous way towards solving the whole housing problem without building another house. Equally, it is the only way in which we can get the repairs done. It is no use simply providing more money without providing more capacity to do the repairs.
The people who have the capacity and who control the capacity are the local authorities. They are building the new houses, and if the repairs are to be done they have to be taken off them. There has to be an organised and planned transfer of labour and capacity from new building to the repair programme. There has to be a planned programme of going through the town and getting the repairs done. Only the local authority, who controls the new building and the old, can provide for that orderly transfer or can make the capacity necessary for the repairs available to the repairs. Nobody else can do it.
It is for that reason that the solution that we have put forward, not for the first time today—I put it forward when we were in Government three years ago—is the only solution that can deal with this problem. The local authority is the only body of people with the means to deal with it. It has its housing management organisation and can recruit to that organisation the staff of private estate agents, who would be without employment if the houses were taken over by the local authority. The people are there. There are means to check, and to get out estimates which are simply not available from the jobbing builder.
It will take a certain time to shake down; but the Government's plan will simply not work at all. It will simply cause chaos and mischief. Surely it is better to solve the problem, which is very real, by the only way of doing it. I am not attacking landlords. They have had a hard time of it, but the job of the landlord has been made impossible, and nothing in the Bill makes it possible. Nobodys pretends it does. When we make the job of the landlord impossible we are socially responsible if we do not take over that job and do it ourselves.
The hon. and learned Member for Northampton (Mr. Paget) has added an important trait to the picture of the Opposition's alternative policy with which we have been presented during the debate. He not only made it clear that rent-controlled houses must be taken over by local authorities and by them be repaired but at the same time he envisaged a reduction, while that process was going on, in the output of new houses. He proved that it must be so on his own hypothesis. It is most important that that point should have been made explicitly and I hope that it will receive due publicity.
There are only two alternatives before the House and the country. No hon. Member in debate has sought to argue that the situation is satisfactory as it is and that no Bill at all ought to have been brought in. The only alternative in the field to the approach of my right hon. Friend, which is to help the landlords to put their own properties in repair and to improve them, is the view that the property should be taken over on behalf of the State and managed, improved and kept in repair by the State. Those are the two broad alternatives between which we and the country have to make our choice.
My hon. Friend the Member for Darwen (Mr. Fletcher-Cooke) showed that in the short term the Opposition's proposals would bring assistance even more slowly than has been alleged against the proposal of my right hon. Friend, that the task of taking over about 7,000,000 rent-controlled houses could be achieved only in stages, and slowly, and could not even be begun for a considerable time to come; so that, instead of a partial but at any rate immediate remedy, which will be progressive, the Opposition's alternative is, in fact, a form of deferment. He showed that in the short-term—over the next few years—the Opposition's alternative is no practical alternative at all.
I, on the other hand, want to consider the proposition which the party opposite have put before is from the long-term point of view because I think that it is open to even more serious criticism when we consider what would be its impact upon living conditions in this country for years and generations to come. In doing so, I want to quote the expression of this policy which was given to the House in the debate on the Address by the right hon. Member for Ebbw Vale (Mr. Bevan), because he very clearly and fearlessly set out the presumptions upon which this policy rests. He said:
It is not possible adequately to house the lower income groups of modern society by allowing houses to remain an ordinary commodity to be bought and sold. This is the centre of the problem.
He then went on to say:
If we make the proposal sufficiently profitable to the landlord, it is unendurable to the tenant. On the other hand, if we try to improve the situation of the tenant too much, it is insufficiently stimulating to the landlord. So we are locked between those two factors because we have not faced the fact that property of this sort can no longer be regarded as a normal commodity like any other commodity. It is a social service and has to be treated like one."—[Official Report, 4th November, 1953; Vol. 520, c. 235–37.]
The right hon. Gentleman's contention is that the provision of rented houses as such must be a social service, because private enterprise, unsubsidised, cannot provide rented accommodation at rents which people can reasonably be expected
to pay. From that conclusion, that housing must be taken out of the field of commercial enterprise and put into the field of the social services, the right hon. Gentleman arrives at the fact that houses for rent must become the property of local authorities.
I am going to devote most of my speech to dealing with that precise question, because that is the basis of the right hon. Gentleman's argument and really the basis of the alternative being put to us by the party opposite, namely, that one cannot—not only today but in the foreseeable future—provide rented accommodation except by means of a subsidy. The whole theory stands or falls with that assertion, and with its consequences.
I would first observe that comparatively recent experience contradicts the assertion. In the 2½ years before the outbreak of war in 1939, one-third of the houses which were built in this country by private enterprise were built to let. In case any hon. Member should think that those were luxury flats, I would remind the House that one cannot build and let 80,000 luxury flats year in and year out, which is the number involved, and secondly, that the majority of them were rated at under £13 gross in the provinces or £20 gross in Greater London.
I will refer the hon. Member to the Pole Report "Private Enterprise Housing, "H.M. Stationery Office, 1944, paragraphs 32 and 33, where he will find the facts, in so many terms, as I have just stated them. There it is stated that
of 110,000 houses built for letting between 1st October, 1937, and 31st March, 1939"—
that is in 18 months—
that is, over half—
were of a rateable value not exceeding £13, or £20 in Greater London.
That is exactly what I said.
But in order to form an opinion of the capability of the private enterprise building industry in that period, we need not restrict ourselves to the houses that were built to let. Of the other two-thirds of the houses that were built, half were being built for sale through the building societies to weekly wage earners. Actually, the percentage was 48, and that percentage had been steadily rising for some years previously, though as long before as 1932 it was as high as 37 per cent. That means that the weekly payment represented by interest and repayment of debt was comparable, for a large section of the weekly wage earning population, with the rents which they were paying for the accommodation which they had previously occupied. I do not say the rents were the same but they were comparable, taking into account the improvement in conditions which the change involved.
In reality, therefore, something like two-thirds of the output which the private enterprise building industry, in that last period before the war, was turning out was comparable with the rental accommodation available at that time, and it was being done on an expanding scale, without subsidy. There we have a historical instance, in the not-very-distant past, where the underlying assumption of the Opposition's case is disproved by what was going on.
Yes, but only in the period immediately after the war. I have heard the right hon. Gentleman quote that passage many times in this House. But I am going to put both that quotation, and the facts from before the war to which I have referred, into a wider, historical context, from which we can, I believe, learn a lot. Although the private enterprise building industry, by the later 1930s, was once again in the position which it had occupied in the 1900s and the 1890s, when, albeit at a much lower standard, it was already providing, without subsidy, rental accommodation in large quantities, there had been a considerable intervening period when that was far from the truth.
This is what had happened. During the First World War two factors suddenly came into play. First, there was a sudden fall in the value of money, coupled with a Rent Restriction Act which tied rents—that is, the price of the existing stock of houses—to a historical and not to a real money value. The other factor was that there had been a rise in the standard of house which was expected, and even, so far as local authority housing was concerned, prescribed, and this was accompanied not by a rise in the efficiency of the building industry, which would have floated it but by a fall in its efficiency as compared with pre-1914. Those two factors together opened an enormous gap between the price of the new annual product of houses and the price of the existing stock of houses.
A house differs in an important economic respect from nearly every other item of human consumption in that it lasts very much longer. It is a consequence of the durability of a house as an item of consumption that the size of the existing stock is always enormous in proportion to the annual output. Even under the present rate of output of new houses, the new production of houses per annum is only something over 2 per cent. of the existing stock. Therefore, the price a which the existing stock is offered—that is, roughly speaking, rent—has an enormous influence upon production. It has an enormous influence on the building industry.
It will, therefore, readily be seen that these two factors, which were suddenly introduced over the period of the First World War, had a catastrophic effect upon the new output of houses, mirrored in this great gap which opened between the price of the existing article—existing restricted rents—and the price of the new article, the cost of building.
In the years which followed, in the later 1920s and the earlier 1930s, both those tendencies were reversed. There was a steady and very marked rise in the value of money, which of itself tended to close this disastrous gap. In the second place, equally important, there was a steady improvement in the efficiency of the building industry until, in the earlier 1930s, it had attained a level of efficiency superior to that before the first war. It was these two factors together which narrowed the gap and made it possible in those years for something to happen which the Opposition assume never can happen, or certainly never could happen again: that is, that the building industry can build houses to rent or, in weekly or monthly instalments, to sell, at prices which can reasonably be expected to be paid by the majority of those who need them.
We have—and it will easily be recognised—witnessed the same process during the Second World War and its aftermath. There has again been a tremendous fall in the value of money, accompanied by a pegging of rent to the historical value, and there has been a fall in the efficiency of the building industry, which the Gird-wood Committee estimated in 1947 to be 31 per cent. below pre-war.
That is what the Gird-wood Committee said. The figure was back to 20 per cent, in 1949 and was still at 20 per cent. in 1951. At the same time, we are, quite rightly, expecting and desiring still better standards than those of the houses built in the inter-war years.
We now have two alternatives before us at this stage. It is in the light of those facts as well as more immediate considerations that we must decide between my right hon. Friend's proposals and the policy of the Opposition.
Has the hon. Member not forgotten one factor when he draws his parallel? There has not been a very heavy slump, and it is the heavy slump that always precedes the building boom.
If the hon. and learned Member takes the Girdwood Committee's first Report and studies the graphs in the appendices of the output of houses in the inter-war years, and if he takes any other index that he likes of industrial production or employment, he will find that there is no relation between the two. I recommend that experiment to him.
In the light of that background, we have to consider whether the right step to take at this stage is to subsidise the repairing and improvement of all existing accommodation through the local authorities, as well as subsidising—this was the right hon. Gentleman's policy
when he was in office—nearly the whole new output of houses, or whether we will take the course which is implied in the Bill. Miss Marian Bowley, who is a valued historian but not one who is disposed to take a favourable view of anything connected with the Conservative Party, in writing in her book "Housing and the State," of the experience of the late 1930s and in describing just that period in which private enterprise was building at competitive prices, says:
The tendency for private enterprise to concentrate more and more on building the smaller houses in the years just before this war indicates that the impetus to migrate from old to new houses was wearing out among the better-off families.
That is a back-handed way of saying that the building industry in those years was being obliged and was able, because of its increasing efficiency, to reach out and meet wider and wider circles of economic demand, which meant that it was becoming able to tap the rent-restricted field, the weekly wage earners, and bring more and more of them into new post-war accommodation.
The condition of the efficiency of the building industry is that it should both have a market as the prize of greater efficiency and that it should be obliged to go out to get that market under pain of failure. That is a condition which the proposal of the Opposition would destroy. They propose that the building industry in future should be substantially working everywhere under contract for subsidy—in repair, in improvement and in new construction. It is the view of the party opposite that the building industry should work by contract for subsidy. That is the absolutely classic prescription for destroying the efficiency of an industry, and for depriving it of the incentive and of the opportunity to improve.
The Bill which my right hon. Friend has put before the House will work in the opposite direction. It will tend to narrow the gap between new costs and old rents, because the value of the old houses, both those repaired and those improved, will be reflected in rents which have a relationship to modern costs and modern prices. But I believe there is another way in which this Bill is going to open a new era in the efficiency of the building industry. If the slum clearance element of this Bill is to be successful, then I believe that my right hon. Friend will find that it involves a redistribution of the housing subsidies. I believe we are going to find that we shall have to concentrate subsidies more and more upon the supreme purpose of slum clearance. When we do that, we shall find that the building industry in other sectors has got the opportunity and the spur to that greater efficiency which alone will give it the markets which it needs.
Housing is no different from any other sphere of human need in that in the long run we can only have improvements at the price of greater efficiency. It is because in the long run this Bill will lead to a greater efficiency in the provision of homes for our people that I welcome it with enthusiasm.
The hon. Member for Wolverhampton, South-West (Mr. Powell) has made a closely reasoned case on the Bill before us from the Conservative point of view. I hope to make a similarly reasoned case from the working-class point of view, for working-class people are those mostly affected by the Bill. The hon. Member for Darwen (Mr. Fletcher-Cooke) made a significant admission. He said that this Bill was only tinkering with the problem. That is the key to an understanding of the situation.
I came home from Germany in 1919 and found myself involved in deep controversy on this problem. I did not think for one moment that after our people had given their all in another world war of such magnitude that a Bill would be resurrected and that we should find ourselves in the same conditions as existed between the two world wars. Therefore, I cannot adopt the complacent approach to this problem of some hon. Members.
Our people in general, and the organised working-class in particular, do not fear the Conservatives when they are carrying out their traditional policy of attacking the working-class. They fear the Conservatives most when they are posing as the friends of the people. Their propaganda is most insidious, their policy is most sinister, when they are posing as friends of the people. That is how all real Labour men should approach this problem, and that is why this Bill must be subject to a searching analysis from this side of the House.
Lord Beaverbrook is a very able man. He is shrewd and a good judge of men. No man could build up a circulation of millions unless that description applied to him. There is one man he has failed to buy and that man is still serving this House very well. Lord Beaverbrook, however, was a great admirer of the Minister responsible for the introduction of this Bill, and that is Why we on this side of the House must look upon it with more suspicion than ever.
We also are acting under instructions, and there ought to be complete unanimity on this side of the House with regard to our approach to this Bill. The executive of the Labour Party and the executives of affiliated organisations, which we are all supposed to be serving, have laid it down quite clearly that their approach to this problem is the one that I am now taking. The City Council of Stoke-on-Trent is composed of men and women well-informed on matters of this kind. They are on record as being strongly opposed to this Bill. My agent—I prefer to say our agent—is one of the best-informed men in this country on the problems concerned in this Bill. He also is strongly opposed to this Bill.
It is some time since there was so much interest in the country in a House of Commons matter as there is in this Bill. I am receiving letters from all over the country asking me and others to address meetings on the problems raised by this Bill. The smile will be taken off the Minister's face before he has finished with this Bill. The title of the Bill should be changed to "An Investment Trust Charter" or "Subsidies for Property Investors."
It is because of the criminal neglect of hon. Members opposite and those associated with them for generations that we are faced with these problems in the mid-20th Century. These problems arise because the people who have done the work in this country have never been adequately housed, and they arise because the private landlords, after having been allowed to increase rents by 40 per cent. 30 years ago, have hardly spent a penny on the houes which they own. They arise because anything was good enough for the working class until they began to organise themselves and assert their rights. I believe that what I have said has put the problems now before us in their correct perspective.
I assure the Minister that there is great concern among responsible finance officials of the municipalities which will be mostly affected by this Bill. I refer in the main to the large cities and great industrial centres. I ask the Minister to undertake to consult people in the chief cities and industrial centres before the Committee stage of the Bill. By their past neglect the owners of the pre-1920 houses have forfeited all right to the title deeds of those houses. They have betrayed the trust which the country has placed in them.
When we have fought two world wars to save our country the time has arrived when housing should be made a social service and taken out of the hands of those who have betrayed the people. We welcome the slum clearance proposals, provided that more satisfactory arrangements are made at the minimum of cost. We shall have constructive proposals to that effect to make on the Committee stage of the Bill.
We have heard a great deal for years about the effects of inflation, but we have hardly heard a word about the effects of deflation. It was in 1920 that this 40 per cent. increase for the landlord was granted. In 1922 I was married. Within a few weeks—[Laughter.] It is all very well to laugh. There are great lessons to be learned. My life is a tragedy which is the responsibility of same hon. Members who are making a joke of my observations. It is because of the uncertainty produced by some people that an air of tragedy hangs over areas of the kind which I and some of my hon. Friends represent. I only quote my own case because it is a concrete example. I was about to say that within a few weeks of my getting married we lost 25s. a week of our earnings. Let hon. Members opposite joke and laugh about that. Within a few more months we lost another 5s. 6d. a week for a period of six months.
The most highly skilled men in this country, who think as much of their wives and their children—if conditions allow them to have the children they desire—as anyone thinks of his wife and children, were in those days engaged in unsheltered trades. While many hon. and right hon. Members, including people in high places, were improving their status and living, the most highly skilled workers were subject to reductions in wages. Superimposed on those reductions were the 1931 cuts. Yet, during the whole of that time rents remained the same. Therefore, there will be bitterness throughout the country when this Measure begins to operate. The smiling and laughing will go from the faces of hon. Members opposite then because, as my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) has said, the trades councils are already meeting. They know the dangers and the class issues which arise out of the Bill of this kind.
During the whole of that period from 1922, when we were locked out for months through no fault of our own, until now that 40 per cent. remained. In the main, hardly a penny has been spent on the houses in which our people are living. Will any hon. Member in any part of the House, who disagrees with what I am saying stand up and justify this Bill against that background? Who in the main were in the unsheltered trades? They were the men who are now called upon to increase output, to increase production and to save the country—miners, engineers, cotton workers and pottery workers. They are the men and women who are now saving this country, and other people are living on them because these workers are producing the exports. The Government will be playing with fire if they are again to ask our people to be a party to the effects of this Bill.
At the beginning of the last war, in order to avoid the effects of the spiral of inflation, we agreed at the request of Sir Kingsley Wood, Mr. Ernest Bevin and, later, Sir John Anderson, not to demand increases in wages if the cost of living was stabilised. Sir Kingsley Wood, in particular, began this policy with the introduction of food control and food subsidies. Now the war is over, the cost of living is increasing. We are robbed of the food subsidies and, under this Bill, rents will go up. I would not dare to lift my head in public again if I did not speak as I am speaking this evening. If this Bill goes through in its present form the poorest people will be the hardest hit. They have known to their cost what support they get when issues of this kind arise.
If officials in a number of municipalities have worked out the effects correctly, this Bill will mean that almost all the houses subject to control under the 1920 Rent Restrictions Act in the city of Stoke-on-Trent will be within the range of the full maximum permitted increase. I shall be glad if the Minister will correct me tomorrow night if I am wrong. The Bill will mean an increase in the weekly rent of the poorest house of 5s. 5d. a week. This is how the calculation is made: gross value £18, rateable value £11, statutory deduction £7; maximum permitted rent £36; maximum weekly rent 13s. 9d. Therefore, the maximum permitted increase under this Bill in its present form will be 5s. 5d. per week.
If that calculation is correct it shows the seriousness of the issues with which we are dealing. When the Minister presented his White Paper my instinct told me that this Bill would result in a lawyers' paradise. Now that we have had time to reflect, does any hon. Member doubt that? If they do the working class outside do not doubt it for they remember only too well their terrible experience under workmen's compensation legislation and the story of "Who was it who was hit by the brick?"
Who will decide the standard of fitness of houses? Who will decide on the question of decoration? We already find a contradiction if we have read the Bill correctly. The White Paper states, in paragraph 38, on page 9:
Her Majesty's Government intend that a landlord will be permitted to claim a repairs increase only if the house is in good general repair as respects both structure and decoration.
Can we be told where that is reflected in the Bill?
Can we be told where it is suggested in the Bill that the standard of fitness will be determined by the amount of decoration done inside the house? We remember, for example, the former coalowners' ideas when people's homes suffered from subsidence. We remember the legal quibbling which took place over the right to compensation. We remember the days of the criminal poor law. All that experience will be resurrected when this Bill becomes an Act of Parliament and begins to operate.
We have fought in two world wars to save our country. I, with millions of the working class, thought that we had finished with this kind of tinkering legislation. We have saved our country and it is time the country saved the people who are living in conditions of this kind through no fault of their own. This is a further attack on the working class, wrapped up in a cleverly prepared Bill to deceive the people.
There will be enough lawyers to deal with this Bill and operate it, there is no doubt about that, and where they are not to be found there will be smooth-tongued legal bullies who will be found to operate it. Also, as is now the case in respect of factory inspectors, there will not be enough sanitary inspectors. I wish to ask the Minister how he thinks he will operate this Bill when it becomes an Act with the present staff of sanitary inspectors. I charge the Minister with knowing that there are not sufficient sanitary inspectors in this country to operate the Bill.
The issues raised in the Bill will find expression in ill-will which has not been prevalent since the end of the last war. Thousands of old age pensioners, for example, now receive a supplementary pension. Their needs will be further increased by the rent increase of 5s. 5d. per week. The State will pay this increased rent to the investment property owners or the investment trusts. We have now reached the situation where we have been legally robbed of the subsidies on our food—which were put on in lieu of advances in wages—in order that this Government can subsidise the investment property owners.
Thousands of old age pensioners who do not at present qualify for the supplementary pension will qualify because of the rent increases proposed under this Bill, and consequently the State will pay out millions to subsidise property owners and investment trusts. The same will apply in the case of the sick, the injured and the unemployed. We understand that houses decontrolled under the Rent Act of 1923 and registered under the Acts of 1933 and 1938 have already had rent increases up to the maximum permitted and that there will be no further increase. If that be the case we should like the. Minister to say so definitely tomorrow night.
It is logical that the tenant should be entitled to a lump sum repayment and a reduction in rent if repairs and redecoration have not been carried out. In thousands of cases not one penny has been spent on repairs—
My hon. Friend says, "millions," and I accept that. I am asking if the Minister will consider Amendments on Committee stage with the object of providing for the paying out of a rebate and for rent reductions where it can be proved that the landlord has not spent the 40 per cent. increase on repairs.
In every large industrial area auctioneers are busy advertising and selling for investment property built from 60 to 100 years ago. Speculation is taking place, for at last an incentive is provided. In our view investment trusts should no longer be able to obtain a penny from owning any house. Reference is often made to an Englishman's home being his castle, and it is time some of these castles were put into a fit state of repair. The landlords have forfeited their right to own property. It is they who owe millions to the people and not the people who are indebted to them.
Hon. Members opposite will have to make up their minds upon which leg they wish to stand in opposing this Bill. The hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) called the Bill an investment trust charter. The hon. and learned Member for Northampton (Mr. Paget) took the view that the permitted increases in rent proposed under the Bill were chicken feed and would be insufficient to meet the requirements. Both these views cannot be correct.
My own view is that the Bill is long overdue. It is quite impossible to perpetuate conditions under which local authorities are allowed to increase rents to keep pace with the increased cost of repairs and maintenance, while private landlords are prohibited from doing the same by the operation of the Rent Restrictions Acts. Of course the Bill will not be very popular. It required considerable political courage to bring it forward. That, no doubt, is one reason why hon. Gentlemen opposite during their six years of office did not take an opportunity to introduce a similar Measure.
Also, in the speeches by hon. Gentlemen opposite there have been a good many attacks upon the wicked landlords. Perhaps one might expect that from them. I wonder whether all the hard things which have been said about the landlords of rent-restricted houses are justified. The truth is that there are good and bad landlords. For that matter, there are good and bad tenants. Neither the landlord nor the tenant is specially endowed with a double dose of original sin.
The test of the Bill is simple. How many houses will be kept in good repair under the operation of its various Clauses which, without the Bill, would not be kept in repair at all? That is the simple test. My only criticism is whether sufficient account has been taken of the special difficulties of owners of low-rented and low-rated property in rural areas. Here perhaps I should disclose a personal interest to the extent that I am an owner of agricultural cottage property, though the permitted increase under the Bill is so small as to be almost infinitesimal in my own case.
There are many agricultural cottages with a gross ratable value of £6 or £5 or, in some instances, as low as £3. They may be old but a considerable proportion are structurally sound. The cost of maintenance, and structural repairs where necessary, is a good deal higher, by and large, than the cost of repairs and maintenance and structural improvement to higher-rented and higher-rated urban property. The permitted rent increase will not anywhere near bridge the gap. Indeed the permitted increase in the rent is less than the increase in the wage element in the cost of repairs during the last 18 months.
If owners of this low-rated and low-rented rural house property have been unable in the past to keep their property in good repair, equally they will be unable to do so under the Bill as drafted. I wish to give one or two simple examples which I took some trouble to obtain. They are only rough figures but, within limits, they are accurate. Let us take a cottage of a gross ratable value of between £3 and £6 on which the statutory deduction for repairs is £2. Therefore, the permitted increase—the rent—is £4, which is about Is. 7d. per week. That cottage is rent-restricted today at 4s. so, under the Bill, it could carry a rent of 5s. 7d.
Among the necessary repairs are two new window frames which cost about £6, and a new oven which will cost about £12. As a result of damage done by a gale, which is a frequent occurrence, the chimney stack needs rebuilding. That will cost £10. If any scaffolding is necessary that will cost another £8. For the purpose of argument, we will also suppose that about 20 tiles need to be replaced as a result of the gale. That will cost another £2. All this work adds up to £38. The annual rent of that cottage, with the permitted increase under the Bill, comes to £14 10s.
I think the House will see quite easily that, in fact, the cost of these very minor but none the less essential repairs swallows nearly three years' rent. If we take an operation like thatching, which may cost £70, or painting, which may cost £20, it is quite easy to work out how many years' rent would be absorbed by that kind of repair and maintenance work. I hardly think that what was said by the. right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan) about the element of profitability comes into the matter in the case of these low rated and low rented agricultural properties.
Next, I want to say a word about the conditions to be fulfilled in order to be able to apply for an increase in rent. I quite understand the theory, which I think is right. The theory is that, in order to be allowed to charge an increase in rent, one must prove that one spent a substantial amount upon repairs and maintenance either during the past year or in the previous three years. In the former case, one has to prove that one spent three times the amount of the statutory deduction, and, in the case of the three years, one has to prove that one spent six times that amount.
Either or both of these conditions are essential qualifications for being able to charge an increase in rent, but I find them somewhat at variance with Paragraph 26 of the White Paper entitled "Houses—The Next Step." The relevant words read as follows:
Many rents are now plainly insufficient, and indeed have been for years past, to enable
the landlord to pay out of the rent what is needed for keeping the house in good condition.
If that means anything—and it could not be put more clearly—it means that, for years past, owners of property of that kind have been denied the wherewithal to keep their property in repair, but, meantime, it insists that, in order to make a claim for rent increase, one must have spent or be prepared to spend on the property a sum which, as the White Paper shows, could not conceivably have been received out of the rent. I therefore think that these two provisions taken together are contradictory.
The Chartered Auctioneers and Estate Agents, in their report and memorandum, suggested that, for the purpose of arriving at the right sort of basic rent for low rated and low rented agricultural properties, there should be an assumed minimum gross rateable value of £14. I think that is probably too high for a certain type of rural property, but on the other hand I am not quite sure that the assumed minimum in the Bill is not a little too low, and I wonder if, between now and the Committee stage, my right hon. Friend will not think a little more about this particular problem.
Lastly, I want to say a word about the improvement grants. These are very welcome, though I do not think that, by themselves, they will necessarily do the trick. What is required—and I feel that my right hon. Friend will agree with me—in order to enable the improvement grants to fulfil the purpose for which they are designed, is a great deal more co operation from the local authorities. The grants under the 1949 Act, brought in by the party opposite, went unspent in many cases, because they were permissive, as indeed they must be. We must give the local authority discretion whether or not in a particular case to approve or to withhold the grants. At the same time, all local authorities did not make the best use of the provisions of that Act.
There were three reasons for the defect. One was that some local authorities failed to understand that the conditions of the grant under the 1949 Act were so framed that the benefit went solely to the tenant, and, for some extraordinary reason, they refused to entertain any applications for grant. Secondly, other local authorities were very loth to administer the grants because they were frightened of the burden on the rates. Yet the annual cost of £400 represents only £7 10s. 5d. per year to the local authorities. The third reason related to the standard requirements as to the fitness of a house to qualify for grant, and in many instances they were so rigidly interpreted that many deserving cases were turned down.
Of course, conditions vary enormously from area to area throughout the country, but I hope my right hon. Friend will do his best to remove some of the misunderstandings still present in the minds of many local authorities. I hope he will impress upon local authorities that the grants are intended to make a real contribution to improved housing, that it is the tenant who is to benefit and that local authorities must not be too rigid in imposing a standard of conditions which is totally inapplicable in certain areas.
I have stressed these points deliberately, because I hope that during subsequent discussions on the Bill we shall not concentrate wholly upon the higher-rented and higher-rated urban properties at the expense of the agricultural areas.
I should like, first, to address a word to the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith). I hope he will understand that if I disagree with some of his comments I do not for a moment doubt the sincerity of his views. I did not have the experience which he had before the war, but in the 20s I spent a number of years as a poor man's lawyer in the slums of Leeds, where I interviewed a great many tenants and learned much about their problems. If I hold views different from those of the hon. Member for Stoke-on-Trent, South it is not through any bias in favour of the landlords.
In assessing the merits and demerits of the Bill one has to consider the alternatives, and it is consideration of the alternatives which leads me to be more sympathetic towards the Bill than I might otherwise be. It has already been pointed out that no one seriously contends that we should leave things as they are, for the consequences are all too clear. They are, in particular, abundantly clear in the North of England.
I do not want to start an argument as to whether the situation is worse in the North of England than elsewhere, but I was interested in an article in the "Manchester Guardian" on 19th November, 1953, which made a comparison between the Midlands and the South and the North of England. It said:
In the towns and cities born of the Industrial Revolution…the situation is vastly different. It is here that the real problem of conservation lies—the problem not only of hundreds of thousands of irredeemable slums that cannot be replaced for many years, but of millions of dilapidated houses that are becoming irredeemable faster than new houses can be built.
None of us doubts the seriousness of the deterioration of these houses, but the question is what policy we are to adopt. I am in disagreement with the policy which has been put forward by the Socialist Opposition. I do not doubt that the Opposition hold their views sincerely, but in view of the cost involved and the administrative difficulties, I think it is quite unrealistic to suggest that all rent-restricted properties should be handed over to local authorities.
It is no solution to say that that could be done gradually as local authorities find themselves able to cope with the task, for then it might well take 50 years. If it were to be an immediate policy, it would involve a vast increase in administrative costs. Incidentally, I believe that the cost of repairs as well as administration would be greater if carried out by a local authority instead of by an individual landlord.
Therefore, by a process of elimination, one has to find a policy which is a combination of creating greater activity on the part of local authorities and giving greater encouragement to private landlords. Accordingly, I do not think that the issue before us today should be considered from the point of view of whether or not the Bill is fundamentally wrong, but from the point of view of to what extent it will work and to what extent it is fair to all parties—the community, the landlord and the tenant. In attempting to answer the question "Will it work?" a distinction has to be made between the small owner and the large owner. By the "small" owner I mean the owner of a few houses—generally less than half a dozen—and by the "large" owner I mean the property-owning investment company and the owner of large blocks of houses.
The latter are more likely to make use of this Measure because they have greater facilities for raising capital. They can go to the banks. I do not criticise the banks. I have a very high opinion of both the courtesy and the efficiency of our banks, but I think there is an element of truth in the saying that a bank is an institution which lends money to those who can prove that they do not need it.
Large owners will pay more regard to the capital appreciation that will follow as a result of a general increase in rent. Smaller owners will be in greater difficulties. It will be a serious problem for them to raise the necessary capital, sometimes a considerable sum. For example, repairs to a roof can be very expensive, and it may take many years for them to pay off that amount out of increased rents. There will be very real difficulty in raising the money.
The problem is further complicated by variations in rating assessments. As the Minister knows in connection with the inequitable distribution—I will not ask him to accept that description—of equalisation grants, there are wide differences, not because of variations in amenities or differences in site, but because in some areas rating has been on a lower basis. We shall find that some owners are disqualified not because the rents were high, but because the assessments are exceptionally low.
The threefold problem is high cost of repairs, the difficulty of raising capital, and variations in rating. There is no simple solution. I wish there was. We have to tackle the problem in a variety of different ways. Amendment of the Housing Act, 1949, will help, but that of course deals only with improvements and not with repairs. I am speaking very hurriedly in order to allow time for the hon. Gentleman who is to follow me.
Has the Minister given consideration to making greater use of loans? I see no other adequate solution to cover the gap between those properties where the landlords will be able to finance the necessary repairs and those properties which come within the category that should be taken over by local authorities.
There is an intermediate class, and I think those in it might be dealt with by local authority loans. I doubt whether existing legislation is adequate, and I would put forward one suggestion. There seem to be three considerations which are relevant. One is the need for keeping as many houses as possible in repair. The next is to avoid overburdening local authorities with too many houses to manage. The third is, out of fairness to the community, the need for ensuring that landlords do not make a capital profit out of grants or loans provided by the community.
I suggest that we consider the precedent in the Housing Act, 1952. The Minister will remember that in Section 3 (3) there is a provision whereby the local authority has an option. In that case it is only for five years. I contended at the time that five years was not long enough. It might be practicable, where loans are made, to impose a condition that there should be an option given to the local authority, that is to say that the owner should be precluded from selling without first offering the property to the local authority at the value prior to the carrying out of the repairs, and that condition should continue until the loan is paid off.
I should have liked to speak on the subject of building costs and mobility, but I intend to keep my promise to be brief. However, I wish to say a few words on the subject of notices. I do not feel happy about the provisions in the Second Schedule. Is it really necessary that the notice should be only for a period of 14 days? A tenant may be away on holiday for 14 days. It does not seem right that the period should be so short. I am speaking of the amounts which have to be stated in the declaration by the landlord; I am not referring to Clause 21, but to the Second Schedule.
So far as notices are concerned, I would prefer the landlord to be required to get the necessary certificate. I can see the administrative difficulties involved, but I would rather it were that way round. But if the provision is to be as proposed in the Bill, then it is most important that the tenant should be given all the necessary information as to his rights in the notice which is served upon him. He should be told, not only what are his rights, but also the address of the place to which he should go if he is not satisfied.
I referred at the beginning of my brief comments to the days when I was a poor man's lawyer. Very few tenants who came to see me knew where to go to inquire about the matter, and I do not think that any of them could understand the calculations. If the landlord is to serve a notice on the tenant, then the tenant should be informed not only of his rights, but where he should go if he objects.
The right hon. Member for Ebbw Vale (Mr. Bevan) used the word "demagogy." For anyone with an aptitude for demagogy—which I certainly have not—it would not be difficult to make out a case condemning this Bill on the ground that it was harsh and unjust and would put money into the pockets of the landlords. It would also not be difficult to condemn it on the ground that it does nothing for the landlord. But it would require rather more ingenuity to condemn it for doing both these things at the same time.
I do not think either of those condemnations serves any useful purpose in the solving of this very difficult problem, and because it is so urgent a problem, and because I have been unable to find any satisfactory alternative, I think that the proper course to adopt is to give this Bill a Second Reading.
May I say to the hon. Member for Huddersfield, West (Mr. Wade) that if he thinks that the Labour Party's policy is what he calls "unrealistic," we, on the other hand, cannot forget the 100 years of housing history in this country and the pain and suffering which millions of people with whom we are vitally concerned went through during that time. It would be ridiculous to ask us to forget it.
The hon. Member for Wolverhampton, South-West (Mr. Powell) is, unfortunately, not in his place. I wanted to make one comment in reply to what he said about the productivity of the building trade worker. A great deal of stress is laid on this point both in the trade Press and in the daily Press. I do not believe that what is said about his productivity is true.
I gave evidence before the Girdwood Committee which proved that, so far as the L.C.C. output was concerned, it was up to pre-war standards and that we were building a better and bigger house. Surely the answer to anybody who still thinks that some blame attaches to the building worker is the fact disclosed in the Housing Report which is published regularly by the Government. The last Housing Report shows that since the end of the war, in addition to all the millions of man-hours which have been spent on war damage repairs, we have, in fact, found homes for 1,938,000 families in this country.
No other country in the world has done better. Proof of that can be found in all the reports published by the United Nations and from the reports of inquiries in America, which, we are so often told, is the place where the workmen produce more than they do in Britain. By and large, that is not true, and it certainly is not true as far as housing is concerned.
I have been listening all day to the debate hoping that somebody on the Government side would give the real reason for introducing the Bill. Nobody disputes the urgent necessity for an extensive repairs programme for the country's houses. The question of the people who should be blamed for that necessity is quite another matter, but that there is a terriffic lag of repairs to be made good there is no doubt.
The Bill says, in effect, that the repairs cannot be done unless the owners are given an increase in rent. But it then illogically says that if the men or the companies who own the houses—and who, it is said, cannot do the repairs, because they are not getting sufficient rents—will first spend the money which they have not got, they will be allowed to charge an increase in rent.
That seems to me to be completely illogical, and I have a good deal of sympathy with the pleas of the Property Owners' Federation, which, according to "The Times" a day or two ago, has written to the Minister and told him that if the Bill is unamended it will be unworkable, and that in any case it is unacceptable to the property owners. The Federation, apparently, believes that when the Bill becomes an Act it will break, down. I have a good deal of sympathy with that point of view.
The Bill, which, it is said, provides facilities for the repair of houses, does nothing whatever for the four million owner-occupiers. It does very little for the local authorities, who are ultimately to take over all the slum property, the near-slum and the dilapidated property. It does, however, provide some slight State subsidy where the local authority takes over this task, and I agree that it is necessary that the local authorities should take over this vital work.
I cannot understand how anybody on the Government benches can expect the Bill to work when one remembers what happened after 1920. Some of us are young enough to remember that. We remember the 40 per cent. increase in rent. We remember that 25 per cent. of it was to be used for repairs, and we remember how very few houses were repaired with that money, particularly in this great conurbation called London. That was one reason why we had to have such violent agitation about the slum conditions in London.
I am not the only one to hold these views. I want to quote the most influential local newspaper in South London, a paper which has its finger on the pulse of events all over South London. It is the "South London Press," which, incidentally, is not a Labour paper but, if anything, is more Tory than anything else.
On 3rd November, in an editorial, it said:
Companies owning blocks of houses and tenements in South London are paying more than they did before the war, even when the lower value of money is taken into account….In 1920, when building costs were high, 40 per cent. was added to 1914 rents and a quarter of the money was supposed to be spent on repairs. It was not, and when building costs fell from about £1 a square foot to about 9s., the rents did not fall.
The rents remained high. No account was taken of the fall in costs, and the tenant continued to pay.
So far as I can see there is no guarantee whatever in this Bill that if it works—and apparently the Property Owners' Federation doubts very much whether it will work—and increased rents amounting to anything from 4s. 7d. to 15s. per week have to be paid on the houses, that those houses will be kept in repair any more than the houses covered by the1920 Act were kept in repair. Indeed, I am begin- ning to think that the property owners' slogan must be "No extra profits, no repairs."
There have been few references to the Clause dealing with slums and dilapidated houses, but it must be remembered that this Clause will inevitably cast a heavy burden on the finances of all local housing authorities, a burden which, without Treasury aid or without reform of local government finances, they will not be able to carry.
Some indication of the extent of this added burden was given a day or two ago in the "Builder," which speaks for the building industry as such, when it said:
It seems clear that in some of the industrial towns of the north, the local council will have to take over and repair a very large number of houses.
Then it goes on to give a list. In Salford a quarter of the houses will have to be taken over, in Manchester 68,000 houses, in Sheffield 19,000, and in Leeds, which has already been referred to in this debate, 20,000.
The same thing could be said of every large and small town in this country, not to mention some of our slum areas, too. I say that to throw a burden of that kind on the local authorities without giving them much more adequate relief from the Treasury or a reform of local government finance is rather unfair.
In London the position is, if anything, even more difficult. It is estimated by the people whose job it is to advise us that the L.C.C. slum clearance programme, which is a joint one with the 28 boroughs in London, will cost at least £5 million for land and £25 million for rehousing. When we come to deal with the dilapidated and near-slum houses referred to in this Bill and the probable cost which will have to be borne if they are to be repaired, it is quite obvious that the problem becomes almost back-breaking.
There are in London, I am told, about 200,000 houses which were built before 1870. Everyone of these will qualify either as dilapidated houses or as near-slum houses. A spot estimate that I have seen for dealing with half of these houses shows that the net burden on London rates will be more than £500,00d a year.
On that basis no local authority can afford to take on this job without additional assistance in some way, and it is not to be wondered at that they are asking for more grants and that fierce discussions are going on between the Minister's advisers and the advisers of the local authorities. I suggest that the abolition of the Derating Acts and the rating of site values to give some local authorities new sources of income also become practical politics.
I hope that when meeting the local authorities the Minister will be a little more forthcoming in regard to the subsidies which the State is to give to local authorities who try to operate their portion of the Measure. I have a suspicion that the right hon. Gentleman is sympathetic to further consideration of this matter, and I hope that we shall get further discussion before the Money Resolution is passed.
To return to the general assumption of this Bill, it is that the property owners cannot afford to do the repairs. Yet nobody has attempted to prove that they can do them, although a lot of people have talked about the increased cost of repair work. The explanation of that is largely the tremendous increase in the prices of building materials, about which, incidentally, there have been inquiries by the Monopolies Commission, which has issued reports proving quite clearly that there are rings and restrictive practices by the suppliers of building materials. However, no effort has so far been made by the Government to bring in some kind of control and a reduction in prices.
Nevertheless the reports of companies owning properties in this country which are published in the "Stock Exchange Year Book" every year, disclose not that they are hard-up for money but that their dividends have risen year by year since the end of the war. I want to give the House and the country a few of the facts, because if we are to ask tenants to pay more rent in order that the cost of repairs may be met, we ought to know what profits are being made by the companies to which these houses belong.
Many of them are companies which hon. Members on the Government benches grace as directors. I shall give the names—the names of the companies. Take Town Investments Ltd.—
The first one I want to refer to is Town Investments Ltd. which has freehold and leasehold properties in London and other large towns. Their dividends have risen from 8 per cent. before the war to 10, 12 and 15 per cent. since the war.
Then there is the Associated London Properties Ltd. which own a number of leasehold and freehold properties in London and which, incidentally, I discovered have their own direct labour department—
No. [Hon. Members: "Oh!"] Hon. Gentlemen need not get excited. They can check all this up in the "Stock Exchange Year Book"—they are all there. The Associated London Properties own the building firm of Barlow and Roberts. Their dividends have risen from 4 per cent. in 1939 to 6¾ per cent. in 1951, and all the dividends were tax free.
I say that it would be unfair to ask the weekly tenants of properties which they own to pay any increase in rent, because they have obviously been making enough money to meet the cost of repairs.
Let me give another example. The Bell London and Provincial Properties Ltd. have 1,814 flats, 42 shops, 182 garages and 1,311 dwelling-houses in London and other large towns. Their dividends have risen from 6 per cent. in 1938 to 11 per cent. in 1945, 12 per cent. in 1946–48 and 11 per cent. again in 1949–50. In addition they have paid off arrears of preference dividends which had accumulated between 1939 and 1944. Companies do not do that except when they have profits to share out.
The hon. Member really must get his facts right. He does not know what he is talking about.
Another example is the London County Freehold and Leasehold Properties Limited which has 8,600 flats of which 1,000 are in London. That company again have a direct labour department, called Property Utilities Company Ltd. Its dividends have risen from 7½ per cent. to 8½ per cent. and 9 per cent., and finally to 10 per cent. in 1951–52. These facts do not indicate any poverty on the part of property owners. Brixton Estate Limited have seven acres of working-class properties in Brixton and leasehold properties in and around London. They have also raised their dividends since 1941 from 8 per cent. to 28 per cent. with bonuses in 1951. There is no doubt about theirs being rent-controlled properties. In addition, they have a repairs reserves fund of over £19,000. These figures display no inability to meet the cost of repairs if they are prepared to do so. Let me quote another case about which the hon. Member for Lewisham, North (Sir A. Hudson) cannot quarrel.
Artisans and General Properties Limited have paid a regular 6 per cent. and 5½ per cent. since the end of the war. They have a general reserve of £205,000 and a repairs reserve of over £200,000. Here, at any rate, are two instances which even the hon. Member for Lewisham, North, whom I expected to interrupt me, cannot deny are working-class properties. Neither case justifies this Bill as a means of getting repairs carried out. If there were time I could quote many other instances, showing profits of 10 per cent., 12 per cent., 15 per cent. and 17½ per cent. paid last year by companies owning flats and leasehold houses in and around London.
I say, therefore, that this Bill should be opposed because no case is made out for a rent increase to meet the cost of repairs, which is the central point of the Bill. Other points in it are mere additions about which most people are generally agreed. I hope that the House will now recognise that owners have not changed their nature. They did not go in for a wild repairs campaign in 1920 and I do not think that they will go in for a wild repairs campaign in 1953. Some have got their houses into repair, but they are shining lights in the darkness of greedy landlordism; most have been neglecting their jobs. Otherwise there is no case for giving the increase which the Bill proposes.
I happen to be a member of a housing trust. If the non-profit-making housing trusts of this country had been able to make half the average profits of which I have been talking—none of them has—they would have been able to reduce their rents rather than to increase them. This type of housing organisation is fully entitled to help, and I am glad to see that the Bill makes some attempt to help them. But, to most people, the comparison between the way in which they do their job, keep their properties in repair and modernise them—as most are vigorously doing—and still make their accounts balance year by year, makes some of the company returns one sees in the Stock Exchange Year Book and the financial Press look very bad. I hope that every encouragement and assistance will be given to the associations acting under the housing trust law.
We have had 100 years housing legislation in this country. The first Housing Act was passed about 1853. Such Measures were introduced into this House because of bad housing conditions and because landlordism failed to do its job. Each time as new Bills were introduced they had to be made more stringent and more had to be passed over to the public authorities by way of building, managing and repairing working-class property. This Bill denies the historic fact contained in that legislation. Instead of bringing the local authority fully into control, it says that the local authority shall have all the houses on which there are losses, but all those on which there might be a little profit will be left to private enterprise. We are against that and say, quite frankly, that all rented property in this country ought to be under the ownership and control and management of local authorities.
I go further and say that all properties in the areas where housing is bad ought to be brought under the control of local authorities—a big extension of the Birmingham proposition—so that local authorities and the ratepayers they represent will not have to bear all the burdens they have in these days of a terrific charge on the rates. Some of the profits on the better type of property might come into the pool to help relieve the burden on the ordinary ratepayer.
I cannot imagine any enthusiasm for that kind of policy on the Government benches, but someone asked what was our policy. If we get a chance—as we shall after the next General Election—we shall try to do that. In the meantime, we are faced with a Bill which, whilst ostensibly designed to get repairs done, will in fact give the landlord—particularly the large landlord—an increase in rent which will spread over many years with no guarantee whatever that repairs will be maintained. Therefore, I say this House should reject the Bill.