The hon. Member for Rutherglen (Mr. Gregor Mackenzie) put before us again the problem with which we all have sympathy—that of the housing shortage and the areas where slums still remain. The last Government, as have this Government, bent most of their efforts to trying to find, in a full employment economy, a way of dealing with the problem much more quickly. But the hon. Gentleman went wrong in trying to tie up that sort of argument with the Bill. It has nothing to do with it. His speech, which was a good one in terms of the problems we are all trying to face, was largely irrelevant to this Bill.
The hon. Member for Manchester, Cheetham (Mr. Harold Lever) made a similar mistake. I always like to hear his speeches, for he is one of the best House of Commons practitioners. He knows when to be demagogic and he knows when to have a sane approach, and tonight was one of his sane approach nights and his argument was worth examination. He said that this was a very timely Bill but that its effect would be marginal and we should not bother much about it. He said that the wider issues raised by the Opposition were just propaganda stuff and that we should treat the Bill for what it was worth, a sensible, practical, reasonable approach to a problem hitting us particularly hard at the moment. Then he went on to mention all our great problems—balance of payments, general financial stability, how to maintain our industrial pre-eminence—and suggested that this sane, rather insignificant and not very important Bill would be the answer to all that. One could see the contradic- tion in an otherwise able speech. He said that the Bill would not affect the building and construction industry very much and that the margin which had been set was sensible.
What he does not understand and what the Minister does not understand and where the Government are at fault in this respect is that, marginal and small though the Bill's practical effect may be relative to many other issues, it will have an effect on the confidence of the building industry as a whole and that effect will run all down the line. One section of the industry cannot be separated from the other on the view that 80 per cent. will go gaily on with all the speed and vigour we want while the other 20 per cent. can be siphoned off to some sort of special control. Things do not happen like that.
If the building industry feels, as it does, that the Labour Party, which has always been predisposed to licensing, is using the Bill as a first step in that direction, it will lose confidence. The hon. Lady the Member for Wolverhampton, North-East (Mrs. Renée Short) frankly welcomed the Bill because it contained Socialist principles. As a Socialist Member of Parliament and proud of it, she welcomed the Bill. She is wrong, and her wrongness can sometimes do damage, but she was right to say that the Bill contains Socialism. Of course the building industry recognises that, and it is that fear which is undermining confidence and doing so at a time when we cannot afford to have this great section of the economy lacking confidence.
The Government should be the last people who should introduce such a Measure. Because of their pronouncements over the last 14 years, in addition to what they did when they were last in power, right hon. Gentlemen opposite have come to be associated with a sympathy for physical controls. Although people are told that this is only a small Bill and will not last for very long, they know from their past experience that if a group of men are doing something which they regard as moral and uplifting, the chances are that what they are doing will become permanent and will grow. The hon. Member for Cheetham was on a good point when he wondered what our approach was as an alternative.
The approach which we ought to adopt is not to rely on physical controls such as these, but to use the power of persuasion and leadership, short of controls, which the Government can use. I was in the Ministry of Works for two and a half years before it had its new title and I know of its various advisory committees and of the Ministry's contacts with leading representatives of the industry in all its sections and I know that the Ministry has a great power of persuasion. The Minister already knows from his advisory committees and the collaboration and guidance of experts that he gets the co-operation of the leading firms of architects and surveyors and others who voluntarily are only too delighted to give him guidance and the benefit of their experience. This help has not been used to the full.
Ministers know more than hon. Members in opposition can hope to know about the figures and trends and the Minister may believe that the issue has gone past the point where persuasion could put matters right. Even if that is true, it is a grievous mistake for a Labour Government to make such legislation permanent. It could have been renewed every year. If it is permanent, it will be a demoralising general outlook on the economy in the months ahead, for the Government are giving the impression through the Bill that things are so bad and will remain bad for so long that they have to take these permanent powers to deal with the situation.
I would have thought that from the public relations and psychological point of view this was the last thing which the Government would have wanted to do. They have produced this "phoney" alibi about the inheritance which they are supposed to have taken on and they should have used it if it gives them any joy—even though it is not true. But if they say, "This great Labour Government will not get out of the great morass we have inherited and the problems will go on and so we have to have these permanent powers", they will undermine confidence in the industry, particularly when the Government are supported by a party with a predilection for controls and licensing which they have been threatening for so long.
The Minister said that 90 per cent. of the industry would be exempt from any interference from the Bill. However, that is only in theory. The figures may show that only 10 per cent. of the industry will be affected, but the effect on confidence will spread well beyond that 10 per cent. The Government have made it difficult for the industry to believe their protestations that there is no ideology behind the Bill by the way in which they have moved on the subject of alterations.
When the Minister produced his Bill, he said that alterations to buildings would be among the exemptions. But this afternoon he said that it had been found so difficult precisely to define alterations that his original statement had had to go by the board and that alterations exceeding the limit of £100,000 would have to come within the licensing provisions. It is sad that he should have made his first statement, because his change of mind adds to the feeling that the Bill is a creeping approach to full control.
His reaction to my intervention on this subject was not helpful. He said that any alterations exceeding £100,000 which had been started would not be included, but that alterations starting from today would come under the restrictions. I asked him whether he would exempt projects already in the hands of the architects, projects which would be fairly well advanced. It is a fact that a big part of the expenses of a project are in the planning, architectural and quantity surveyor stage and I asked the Minister to exempt projects which could be shown to be in that stage. His answer showed a lack of knowledge of the industry, for he said that it was a known fact that many projects which got on the drawing board at the architectural stage were not proceeded with. Of course that is perfectly true, but if they are not going to be proceeded with they would not need to have to ask for permission and get the licence. But it is those which are on the drawing board and are far advanced and which will be proceeded with that I would like to ask the Minister, even at this late hour, to include in the exemptions. Unless he does I do not think that it can be true, as the right hon. Gentleman said, that he is moving away from stop-go. It means that he is sounding the bugle for a full-time retreat so far as building is concerned.
What is the point of this permanent control of licences? What are we out to achieve? Is it more housing, because in order to make a good propagandist speech several hon. Members on the Government side have rather suggested that this is going to be the magic wand that will allow all building power to be turned to housing, thus enabling them to say in their constituencies that their support for the Bill has brought extra housing? Anyone who knows the industry knows that the projects which will be affected under this Bill are carried out by firms that have hardly anything to do with the provision of houses. It is quite a different type of labour, with quite different materials, and I doubt whether it will have any effect at all.
I want to argue the point that one cannot separate any section of the building industry from the overall success of the industry. If the things which we are wanting to restrict are successful, then, by and large, housing is successful. I have figures here giving the money spent on housing over the years 1962–3–4. This has gone up from £293 million to £323 million, to £424 million for public authority housing. Private enterprise housing has gone up from £445 million to £461 million to £571 million. Taking these figures together, housing has gone up from £738 million in 1962 to £784 million in 1963 and to £995 million in 1964. At the same time as that has been going on we have seen the spending by public authorities, private enterprise and industrial and miscellaneous building go up from £708 million in 1962 to £764 million in 1964. One could go down the lists of work carried out and it will be found that where the industry overall is being successful, then the housing section—and this applies to schools, too—is successful.
In support of this argument I bring in the architects. They had a survey made within their profession, and they say that the effect is likely to mean that there will be a fall-off of £546 million in the work which would have gone through their offices and eventually come to fruition. From their investigation 30 per cent. of the work abandoned relates to housing and out of the £546 million, £76 million represents housing, £66 million represents private owners and developments, and £10 million represents public housing. I am producing this as evidence in support of my view that one cannot use the surgery of cutting off one section of the industry and expect the other section to move at the same pace as before. Once confidence is undermined then the opportunities of the building industry to provide things we need are also undermined.
I do not think that the Minister believes that this restriction will reflect automatically an amazing increase in housing, such as some of his hon. Friends have tried to persuade the House will happen. Do we wish to see the balance of trade held? Under the Bill, only about 500 projects amounting to £180 million are envisaged. This is about 6 per cent. of the total building output. Is it worth demoralising the whole industry, is it worth risking an industry which has a great contribution to make to our industrial health and buoyancy for this small amount of 6 per cent. or 7 per cent.?
This is not just a member of the Opposition chiding a Government. I do not want to take up the time of the House, but one could quote the considered views of the architects, the surveyors and the building industry who have said, after having circularised their members and received replies from 50 per cent to 55 per cent. of their members, that this Bill is likely to affect the overall confidence of the industry. Why do it this way? We have all the planning powers we need if we want to prevent office building or the building of bingo halls. I cannot quite understand the attitude about hotels because there is nothing very attractive in terms of profitability about hotels. It may be that people want to get into the bingo game and things of that sort because it is another licence to print money. I do not know. But I do know that there is no licence to print money when one builds an hotel. I know that the risks and the economics in the hotel business are such that it is not easy money which is being earned. The only places where one wants to build hotels is in the busy areas, where foreign buyers are coming in, where executives meet and need servicing and looked after. I have a company building a couple of hotels in the Midlands. It is going all right but I have a feeling that the money could have been invested to much better effect, in terms of a very quick profit that might come out of it. We did this in the Midlands because there are foreign buyers and people coming in who have to be looked after and they form a good or bad opinion of this country from the sort of service they receive.
Under this Bill the very places where we want to build hotels we cannot. The places where they will have the most beneficial effect upon the country are not open to us. I hope that when this Measure gets to Committee we shall have one or two more exemptions taking into account the overall effect which it is going to have. My final word is on the supply of raw materials for the industry. It is here where this lack of confidence, which is the basis of my real objection to this Bill applies. One sees the logic in the argument of the hon. Member for Cheetham. The theory is all right if one disregards all the surrounding effects on the general morale. It is these effects which I believe will do very great damage.
I do not say this from instinct or feeling only. The Parliamentary Secretary is occupying a seat which I once occupied. One of my first jobs was to deal with the shortage of bricks problem. I went round the country trying to persuade brickyards to build extra kilns to meet the extra demand for housing projects and other things which he had in mind. I remember the brick manufacturers saying that they wanted to help and to build the kilns and extend their output in the way that we wanted, but that it meant a lot of money had to be invested. They said they had had so much experience of receiving encouragement from the Government composed of hon. Gentlemen opposite—and we were at fault in the early stages too—to spend the extra money and get themselves into debt to make this great contribution, and finding the minute they spent the money and got into production in order to get a return on the investment, the damper was put down again and all their efforts were lost.
That is the sort of thing which they remember and which makes them reluctant to accept the suggestion that it will be all right in the end. I beg the Minister to bear in mind that unless he can mitigate this lack of confidence in the building industry and among the suppliers of the raw materials he will not get the wholehearted support of the people who supply the materials, not because they would withhold their efforts out of malice, but because, from past experience, once they get the idea that they will not have this sustained support—and this is the sort of Bill which gives the impression that they will not get that support—they cannot put everything into it.
Small though this Bill may be, I believe that it will add to the feeling of defeatism now running through the industry and the suppliers of raw material. What it will achieve, even if we accept the argument put forward by the Minister, bears no relation to the damage which it can do. Unless the Government pay attention to the actions which they take and the way that they take them and the lead-in to the actions, they will not only put themselves in trouble—that does not matter much; they are expendable and can be replaced by something better—but they will put the country in trouble.
I therefore beg the Government, even now, because of the ideological feeling which surrounds this matter—the words of the hon. Lady the Member for Wolverhampton, North-East—and the feeling of the industry because of the past record and pronouncements of the Labour Party, to add to the exemptions and to do their best to ensure that the power is taken for only a limited period and is not permanent. I trust that they will use the power of persuasion and influence which Ministers still have before they turn themselves into a millstone which may drown us all.