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Did we tell that to the bondholders? Surely we are as much pledged to provide houses as we are to provide interest for those who found the funds for War Savings Certificates and War Loans. When, a few weeks ago, it was suggested from these benches that economy might be effected by cutting down the rate of interest which was being paid on War Stock, a tremendous howl went up from the economists on the other side, and I agree with them. [HON. MEMBERS: "Oh!"] But I ask that the same fairness and justice of treatment in redeeming promises which it is desired to give to those who invested in War Stock, in response to pledges given to them, shall be given in respect of the promises to the men who went overseas, and who were told that when they came back they should not suffer, that houses fit for heroes should be found for them, and that, in the words, already quoted by the hon. Member who spoke last, of Lord Long, who was then at the Local Government Board, it would be a disgrace and a scandal if we allowed those men to come back from the waterlogged trenches to hovels not equal to pigsties. Those are the promises which were given by the Prime Minister and by the Minister of Health who preceded the right hon. Gentleman who now sits on that bench, and we insist that it is as necessary to fulfil those promises as it is to fulfil the promises to the bondholders and those who hold War Stock.

Why cannot we afford it? The Geddes Report goes into figures, and suggests that, because we are spending £10,000,000 a year on the schemes that we have already in hand, we must cry, "Halt!" and cut down; and this Report the Government have adopted so far as their administration is concerned. I should like, however, to examine some of these figures, because I venture to suggest that even this Business Committee of skilled financiers have been at fault as to the fundamental facts upon which they base the whole of their arguments. They say that the average cost of the houses is £1,100—that is to say, £1,100 each for 176,000 houses which have; already been sanctioned. How do they get that figure? I know we have heard of huge sums of £1,000 and £1,200 for houses, and no doubt, in some cases, that has been paid; but, as the Committee point out, not more than half of that number of houses had been completed when their inquiry was made. Only some 68,000 houses had been completed, and another 68,000 had been sanctioned and were in course of construction. These latter cannot have cost £1,100 each. Moreover, there are 38,000 houses which have not yet been sanctioned, and they certainly will not cost one-half of £1,100. I have been at some little trouble to take out the official figures given by the Ministry of Health as to the cost of houses from time to time, and I find that, in reply to a question in the House of Commons last year, it was stated that the very highest price, out of all the tenders accepted, had been one of £1,288 in 1920, while there was another, for a non-parlour house, of £1,070. It was added in the answer that these figures must not be taken as comparable with any others, because of the peculiar site difficulties in connection with those houses. It was stated, in reply to a question, that the average price in March, 1921, for a three-bedroom, parlour house was £887, and in June, £823, while for a two-bedroom house, with parlour, the prices at those two dates were, respectively, £808 and £722. Those were the average prices in March and June of last year, and I submit that it is quite impossible to get for 176,000 houses, half of which have not yet been built and 38,000 which have not yet been started, an average price of £1,100. Only the other day, in reply to a question which I put to him, the Minister of Health said that tenders had now been lot as low as £425, and yet, with 38,000 houses not yet started, we are told that the average price for the whole lot is £1,100. I submit that a Committee of business men who give estimates of that sort are really taxing the credulity of the British public and of the House of Commons. I suggest that, if you take the 68,000 houses which have been built and say that they cost an average of £1,100, and the 68,000 which are now under construction—many of which have cost from £800 down to even £500—and if you average them at £900, you are giving a very wide margin; while in the case of those not yet sanctioned, I suggest that £500 would be a fair average figure for those to be built during the next year or year and a half. These figures average £900 for the 176,000 houses which have been already sanctioned, and, therefore, this figure of £10,000,000, which the Committee use as a bogey to deter the House and the Government from carrying out its pledges because it cannot afford to redeem them, is based on fallacy number one, that the average cost of the houses is nearer £900 and not £1,100.

5.0 P.M.

There is a second item in this figure of £10,000,000, that is the rate of interest, and the Committee suggest in their Report that the rate of interest and redemption is 68 per cent, for 60 years. Surely, the Committee have not shown the acumen which they use in conducting their own finances. What local authority has borrowed this money by a long-period loan of 60 years? Housing certificates are issued for periods of five or at most 10 years. I was making inquiry at the week-end, in my own town, and was assured by the accountant that, except in one solitary case, every one of the housing certificates was for a period of five years, but there was one exceptional one for 10 years. A good deal of money has been raised on these terms and a further sum has been raised by Local Stocks, and the period of those loans averages about 20 years, or, at any rate, there is a break period at the end of the first 20 years. Then you have 25 per cent, or more on money granted to small local authorities by the Public Works Commissioners. The Public Works Commissioners have borrowed from the Treasury. Docs anyone suggest that they have borrowed for 60 years at 6 per cent.? It is fantastic. I challenge the Minister to say whether more than 5 per cent., or at the most 10 per cent., of the money already raised for housing bonds has been raised on the full period of 60 years. If it has, it points to incompetence, but I submit that not 5 per cent, has been raised for the full period. What does it amount to? It means that these War Saving Certificates, which have been raised for five or 10 years, and Local Stock, which has been raised for a 20 years' period—and many corporations have raised money on ordinary mortgage, which is redeemable at six months' notice;—all these sums can be redeemed within 20 years. They will be redeemed and re-issued and re-borrowed and then what will be the rate of interest? With the bank rate at 4½ per cent.—and it is suggested in many financial papers that it may be 4 per cent, before very long—who can say that before 20 years it will not be below 4 per cent.? And it is not an unfair suggestion to make that before this period comes you can redeem and reborrow at 5 per cent, or 5½ per cent., and what then becomes of the bogy of £10,000,000? If you can equate your finances by redeeming the money you have borrowed within the next 20 years on a 4 per cent, basis, it means that the whole period of 60 years will work out at something like 5½ per cent., and therefore if you reduce the interest and redemption charge from the 6.8 per cent, taken by the Geddes Committee to the 5¼per cent, which I suggest as a very liberal estimate to cover the next 60 years, you save there a quarter of the total cost of interest and redemption, and instead of having a charge of £10,000,000 a year, your charge will be much less to pay for the houses which have already been built. To suggest that we cannot afford to redeem our pledges because we have already spent up to the hilt—we have already spent £10,000,000—is to mislead the Committee and the public. I ask the Minister to say whether he would substantiate the financial figures shown in the Geddes Report and whether the average price for the 176,000 houses is not nearer £900, taking into account the 38,000 houses not yet built and which can be built probably for £500 instead of £1,100, according to the figures ho has supplied. Allowing also for the rate of interest for the extended period, repaying and re-borrowing before the 20 years are out on the basis of 5¼ per cent., you reduce that figure of £10,000,000 to something nearer £5,000,000.

What do this wonderful Committee and this Government suggest as their solution? To sell the 176,000 houses. And they will sell them for £550. In the first place, how can you sell the houses without turning out the tenants? The bulk of the tenants are ex-service men. Ninety per cent, of the tenants of the local authority houses are ex-service men. Are you going to turn them out after they have been in possession for a year or two? They are not protected by the Rent Restrictions Acts. If you are not going to turn them out, who is going to buy? Will anyone go into the market to buy unless he can get vacant possession? Even if you ignore the claims of the ex-service men, if you are willing to turn them into the street after having provided houses for them for a few years, who will pay £550 for a house? The Minister told us the other day that they were accepting tenders at £425. To that has to be added the cost of the land and street construction. Add another £100, which is more than the cost of the land and the sewering of streets, then you you get a price to-day of a new house less than the Geddes Committee suggests these houses should be sold for. Suppose you find anyone foolish enough to pay £550 for one of these houses, how will it work out as a financial proposition? He has to borrow the money. I suppose to-day, on the security of a house of that kind, he would have to borrow at 5 per cent, or 5½ per cent.

Then he would have to provide for redemption. He will want to redeem the property. Not having Government security behind him, and having a limited length of life, he will want to redeem probably in 20, 30 or 40 years. Add another 1 per cent, or 1½ per cent. Then he must provide for empties, for management and other charges. He has also to provide some profit to himself because he will not buy a house merely for the fun of it. If you add 5 per cent, or 5½ per cent, for interest, 1½per cent, for redemption, 1½per cent, or 2 per cent, for cost of management and loss on empties, and 1 per cent, for his profit, you have to have 10 per cent, on your money before you can get any yield at all. 10 per cent, on the cost price which the Geddes Committee suggest of £550 gives you a rent of more than £1 a week. The tenant who goes in will have to pay rates of, at any rate, 10s. a week. How are you going to find buyers of houses who will have to find hundreds of thousands of tenants to pay 30s. a week in rent and rates? The whole thing is utterly fantastic and ridiculous. You cannot sell the houses at£550. It is not an economic proposition. But you say, "We will sell them at less." If you do, you are not going to cut your liability. It was only by selling at £550 that you were going to save this £3,500,000, according to the Geddes Report. It is not a sound financial proposition, and as you reduce your price, which you would have to do to find a market, so you will reduce the saving that you will get through the sale of the houses. The houses already being in existence and the Government being able to borrow more cheaply than any private investor, it is impossible on the face of it to be able to sell houses now held and built for the Government at a price which will reduce the standing charges. That is altogether apart from the question of the honesty of turning out the tenants.

The policy of the Geddes Committee is wrong and is entirely based on fallacies. First, they overestimated the cost of the existing liability both with regard to the cost of the houses and the interest charges, and on the other hand they overestimated the price at which they could sell the houses. The only thing for the Government to do is not to leave it to the ordinary play of economic forces, because who suggests that this year, or next year, or in the next three or four years, any ordinary private individual is going to be able to build houses at to-day's prices and let them at an economic rent? The lowest price the Minister suggested is £425 without sewers and roads. Say £500. According to the figures I have given, for a £500 house you must get a rent of something like £1 a week in order to make it a paying proposition to the ordinary investor. Who is going to pay £l a week to-day for a workman's cottage? It is ridiculous to suggest that such a thing is possible. We have to face the facts as they are. Ordinary private enterprise cannot supply on an ordinary economic basis the houses that are required. We know from figures which have been given that at least half a million houses are required. A return was taken out by local authorities under the 1919 Act, under the instructions of the right hon. Gentleman's predecessor, which showed that over 835,000 houses were required by local authorities in order to provide decent housing accommodation. Cut that down by half if you like, you still have to provide over 400,000 houses at once in order to have decent housing accommodation. The right hon. Gentleman and the Government say leave it to private enterprise and ordinary economic forces. What is going to be the result of leaving it to private enterprise? You cannot build a house to-day for less than £400 or £500. You cannot let a house of that sort under 15s. or 20s. a week, with rates on the top. Does anyone suggest that in these days it is possible for a workman to pay that sum?

We have to face the facts as they are. We are left as an aftermath of the War with this tremendous shortage—abnormal shortage—of houses, due to the fact that during the War the Government would not allow house building. The Government and the community are responsible. The shortage is an artificial shortage brought about by the cessation of house building during the five years of the War, and the community and the State must realise and take up their responsi- bility, and until that shortage is made up, it is a burden and a duty upon the State to provide these houses before you talk about the ordinary play of economic forces. You have the economic forces artificially weighted against the tenant because of this abnormal shortage of houses and we have to face the situation. If you were pressing on your housing programme when houses were £1,100 or £1,000, surely now they have dropped to £425 is not the time to cry halt, but to go ahead. You can build another 500,000 houses at £425 and then you will not have overstepped the total amount which the Government originally intended to spend on redeeming their pledges at the election. The Minister of Health preceding the right hon. Gentleman suggested that £10,000,000 a year was the sum which would have to be found in order to redeem our housing pledges. For £10,000,000 a year, without exceeding that sum, you can provide that 500,000 houses. On the figures I have given, the 176,000 houses already sanctioned will not cost more than £5,000,000 a year, allowing for the reduced cost and rate of interest. The right hon. Gentleman looks astonished. He was out when I was making that point. Beyond that, for £5,000,000 you can build more than 500,000 houses, because with the price to-day at £500 and you will soon be able to borrow on State security at 4½ per cent.—if the right hon. Baronet the Member for the City (Sir F. Banbury) objects, let me take it at 6 per cent. For £500 at 5 per cent, you have to find a revenue of £25 a year. You have a rent, according to the Geddes figures—I take them because they are the lowest—of 6s. 2d. a week. £16 from £25 leaves a loss of £9.

The Geddes Committee say the local authorities under the 1d. rate are paying £4 a year of that loss, and the local authorities should not object, knowing as they do the conditions under which the people live, to provide their share. Therefore, you reduce the net cost to £5 a year to the State. The Minister of Health and the Government cannot allow things to drift along merely by private enterprise. They must fulfil their bargain. They must build extra houses until we have at least another half-million houses. Surely hon. Members have not forgotten the housing returns which have been sent into the Ministry of Health, showing the most appalling overcrowding that exists throughout the country. In my own town there are still over 3,000 men waiting for houses, and we have given them something like 600 houses, and the Minister refuses to allow more, although we have bricklayers, joiners and plasterers walking the streets and drawing unemployment benefit.