300,000 Houses a Year
By ENOCH POWELL, M.P.
TO the question, "Can we build 300,000 houses a year ? " the answer is, " Yes, of course ; and if we wanted to build 600,000 a year, we could do that, too." The questioner's irritation at this reply is unreasonable. The fault was his for not expressing conditions which he intended to imply. But before we help him by making some of those conditions explicit, there is point in the answer even as it stands. In those old far-off days when the Tories raised the cry, "We want eight and we won't wait," nobody was scandalised because they did not proceed to show exactly whence the steel for eight more Dreadnoughts was to come, or whence the shipyard labour, or what precise adjustments would be made to the Budget in consequence. It was taken for granted—and rightly—that, if the Government meant to have those ships, then, of course, they could build them. And they did.
But let us be helpful and attach some conditions to the question. "Can we build 300,000 houses a year without sacrificing any essential element in our standard of living or our social services ? " The answer is still, "Yes, of course" ; and the proof lies in the actual happenings of the last few months. Two limitations upon our pro- duction of houses have been asserted : the supply of timber and the capital investment programme (which expresses in financial terms the supply of all relevant factors in production, of which labour is the most important).
First, then, is it true that we could not afford to buy any more softwood, especially because in the alleged present state of European supplies it would mean a dollar purchase and the consequent sacrifice of even more essential imports ? The softwood for another 100,000 houses would cost from a dollar source at current prices not more than about £10 million. Well, on November 20th the Government announced that they were going to import coal. Most, If not all of this, will come from America, and even if we only import as little as the Minister of Fuel and Power then indicated it will cost well over £10 million in dollars ; yet everyone treated it as a triviality, not seriously affecting our import pattern—and no ;wonder, as it represents under 2 per cent, of our dollar imports.
Is there more truth in the contention that the "capital investment programme" is so tight and accurate that the investment of an extra “50 million in houses would throw this £1,786 million plan into disastrous and irretrievable confusion ? Well, on August 4th the Government announced that in the three years following they intended to spend up to £420 million more a year on defence pro- duction. It is true that at the time this was qualified by the state- ment that American assistance would be necessary ; but since July, without any such assurance, £450-million-worth of orders have been authorised, and on November 2nd Mr. Gaitskell defined the extra £420 million as "the maximum possible on the assumption that our economic recovery would be maintained." There is nothing here about sacrificing essential elements in the standard of living or the social services.
There are, then, two possible deductions. Either 100,000 extra houses under the conditions imposed had been possible until re- armament started in July and coal had to be iinported from America —and any Labour spokesman is welcome to embrace that horn of the dilemma if he likes it—or else they are still possible, and an economy which without major catastrophe can digest £10-million. of-dollar coal and £420 million of defence production can equally digest £10-million-of-dollar timber and £150 million of housing.
But perhaps this is too easy. Let us make the question really difficult. "Can we build 300,000 houses a year with our present building industry and without appreciable effect on other types of construction?" For the third time, I answer: "Yes, of course " ; but on this occasion I am going to call as witness Mr. Coppock, General Secretary of the National Federation of Building Trades Operatives. He told the Labour Party Conference at Margate in October that "300,000 houses per year is within the capacity of the industry." He added that the method was by "relaxation of control of capital expenditure," or, as he put it more bluntly at Leeds a fortnight earlier, by "bringing Government control of the building industry to an end." Very true, Mr. Coppock ; spoken like a practical builder, which you are.
Let us take the two points separately, capacity and method. As for capacity, here is an industry of which the empleyed size is something like 100,000 men larger than in the five years before 1939. It is producing little more than half the number ,of houses ; and though the statistics to make a comparison do not exist for other types of work, he would be a bold man who asserted that more repair and more construction of a non-domestic character are being done now than before 1939. One common fallacy is to allege that today's houses are larger than before the war. In fact, though the council houses were somewhat smaller, the majority of pre-war output was of houses larger than council type. Another fallacy is to refer to output in the 1920s, whereas, in fact; it was not until well into the 1930s that the building industry attained the size at which it has now stood for over three years.
Then as to method. Here simplicity is truth. The house- building industry, that section of the building industry which is constituted to build and maintain houses, is at present prevented from building more houses by the licensing system. As Mr. Bevan put it in the last housing debate: "A licence is not only a per- mission ; it is a prohibition. It is not only an assurance that one person can do one thing ; it is a denial to somebody else to do something else." Now, at present the vast majority of building firms of all sizes are under-occupied, their output limited not by their physical and planning capacity but by the flow of materials and the flow of licences or contracts, both of which are determined by Whitehall.
This simple policy of letting the builder build, which Mr. Coppock shares with the Conservative manifesto This is the Road, has to encounter three phobias, produced by the atmosphere of Socialism in 'which we have lived and breathed for five-and-a-half years.
Phobia one. "Fat more houses would be started than there were materials to complete." Not by private builders dependent for a profit upon keeping their labour force fully and steadily employed. Not when the building-materials industry is geared direct to the producers and importers on one hand and the building industry on the other. Of course, the commencement rate of houses and the appropriate flow of materials will work up to 300,000 (or more) per year only gradually and smoothly, and full output at the finishing end would take at least two. years to attain from the word " go " Phobia Iwo. "Everybody will stop building council houses in order to build privately." At the height of the speculative building boom of the 1930s local authorities never had any difficulty in letting contracts for 100,000 council houses a year, and could have let more ; the only difference was that they got contracts at prices forced down by competition in the private sector.
Phobia three. "Prices will rocket in a rush to get the new licence- free houses." In other words, if you increase the supply, the price goes up—not very good economics! If licensing were removed, (1) the price of second-hand houses would tumble down ; (2) people who could afford more than the current price of a licence-built house (about £2,000) would either get better value by buying an old house or would hold off till the following happened: (3) the building societies wouldn't finance the purchase of houses at tem- porary fancy prices ; and (4) the building industry would soon have to bring prices below present levels in order to find a market.
One more question, which was perhaps the real meaning of the original one: "Can we build 300,000 houses a year and still keep Socialist planning and control ? " This time the answer is No.
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