Commemorating the centenary of Labour’s first Housing Act

Today’s housing crisis is all too stark. The number of households living in inadequate and temporary accommodation has risen exponentially, whilst rough sleeping numbers continue to increase. Private rents are increasing at the fastest rate since records began and the number of evictions has escalated. Housing pressures are not just affecting those that rent. Rising mortgage costs have plunged hundreds of thousands of households in mortgage arrears. Fourteen years of Conservative inaction and neglect on housing, particularly the gross under-provision of affordable and social housing, has left Britain facing a housing crisis comparable to those which followed the end of both world wars. The raft of housing measures recently set out by the new Labour government in the King’s Speech is heartening, but Labour must now clearly commit to funding the construction of a major programme of social housing. Such a programme will not only provide the much-needed homes for thousands of families and individuals, but it will also contribute significantly to Labour’s plans to grow the economy.

It is fitting that following Labour’s electoral success on 4 July 2024, we should take the opportunity to look back at the housing legacy of the first Labour administration that took office one hundred years ago in 1924. That groundbreaking government, led by Ramsey MacDonald, Labour’s first Prime-Minister, lasted a mere nine months due to its precarious minority status. As a result, its achievements were limited but its greatest success was surely its housing policy. Labour’s Housing (Financial Provisions) Act 1924, that came into effect exactly a century ago on 7 August 2024, gave a renewed impetus to the building of council houses, following the collapse of Lloyd-George’s ‘homes fit for heroes’ housing programme and a subsequent Conservative attempt to close the door on the building of houses by local authorities. Its provisions lasted well into the 1930s and led to the construction of more than 500,000 council houses.

In response to the growing housing crisis immediately following the end of World War One, Lloyd-George’s coalition government planned to provide half a million council homes, comprising generous space standards (as recommended by the Tudor Walters committee that had reported on housing standards) and subsidised for the first time by way of an exchequer contribution. The Housing and Town Planning, etc., Act 1919, more commonly known as the Addison Act (after Christopher Addison the Minister responsible for the then newly established Ministry of Health), handed local authorities the responsibility for identifying housing need and formulating plans to meet such requirements. The 1919 Act provided a generous subsidy to local councils that plugged the gap between all losses in excess of a penny rate incurred by the local authority, provided the housing schemes had been approved by the Ministry of Health. In other words, the local municipalities were guaranteed against any serious losses on their housing programmes, the state taking financial responsibility for the provision of working-class houses. In 1920, private enterprise was given access to a ‘lump sum’ subsidy provided by way of an Additional Powers Act.  However, by 1921, following an economic downturn, Addison’s policy had become too expensive. It ran out of steam and failed to produce houses in the numbers promised. By 1923, the programme came to an end, eventually producing fewer than 214,000 completions (including 43,500 by private enterprise), less than half the number planned. However, the 1919 Act did establish an important principle. The local authorities had become the instruments for the housing policy of the state. Indeed, Addison had opened the door for the treatment of the provision of housing for the working class as a sort of social service.

The 1919 Act was followed by housing legislation less bold both in terms of the exchequer subsidy payable and in addressing the housing needs of the working class. It was one that conformed to the principles of so-called sound conservative finance. Neville Chamberlain’s Housing Act 1923, the vehicle by which Baldwin’s Tory government proclaimed its ‘property owning democracy’ mantra, favoured the construction of houses by private enterprise for sale or rent, benefiting mainly the lower-middle class. At £6 per unit per year over twenty years it offered a less generous subsidy than Addison’s Act. There was no requirement for a contribution from the rates. Space standards were lowered to cut down on cost. Nevertheless, Chamberlain’s statute eventually facilitated the construction of 438,000 houses. However, local authorities were treated as mere ‘also rans.’  The Act allowed councils to build houses themselves only if ‘they succeeded in convincing the Minister of Health that it would be better if they did so, than if they left it to private enterprise’. Although 75,000 council houses were built under the provisions of Chamberlain, the Act was, in effect, a deliberate attempt to prevent the permanent establishment of the local authorities as suppliers of working-class housing. If the supporters of Chamberlain had had their way, such provision would not be a social service as Addison had envisaged.

However, Labour’s 1924 housing legislation, championed by the Clydeside MP, John Wheatley, Labour’s first Minister of Health, was both radical and ambitious. Born in 1869 in County Waterford, Ireland, Wheatley grew up in Lanarkshire, his father Thomas, a labourer, having found work in the Scottish coalfields. Wheatley himself became a miner at the age of 12. He lived with his parents, eight siblings and lodgers in a one-roomed terraced house, which lacked many basic amenities, and had shared toilet facilities and water supply. Wheatley later described the degrading conditions of such housing in a pamphlet he published entitled, Mines, Miners and Misery, where he blamed the mine owners for dehumanising the workforce. Wheatley’s political activities had initially centred around local government where he specialised in and campaigned for housing at affordable rents. He was first elected to the House of Commons in 1922, leading the ‘Red Clydeside Group’ of MPs to Westminster following their triumphant showing at the election of that year. Received by George V on his appointment to the cabinet in February 1924, the king noted in his diary that Wheatley was an ‘extreme socialist’.  

Wheatley’s Housing (Financial Provisions) Act 1924 provided for a fifteen-year housing strategy and an increase in the number of houses built each year from between 63,000 and 95,000 in 1926 to between 85,000 and 127,000 in 1928/1929, reaching a maximum of between 150,000 and 225,000 in 1934/1935. Wheatley’s Act afforded an exchequer subsidy to local councils for housing for rent at a rate of £9 and £12.50 per unit per year respectively in urban and rural locations, over forty years, shifting the emphasis back to council housing provision. The exchequer grant was conditional on the municipalities contributing a subsidy from the rates of 50 per cent of that received from the centre. Crucially, Wheatley built the foundations of his housing policy carefully, first working to gain an agreement between builders and the building trades on the expansion of the apprentice system to ensure there was the workforce to increase housing production. He also sought agreement with building materials suppliers to help limit price inflation, and wisely consulted the local authorities about his plans. As a result, the 1924 Act enabled the first ever peacetime collaboration between government, the building industry and trade unions to try to overcome the haphazard and casual nature of construction and to train workers to replenish wartime losses. Wheatley aimed at high quality standards, coining the phrase ‘homes not hutches’. However, the houses built under Wheatley’s statute were similar in size to those built under Chamberlain, but due to the deteriorating economic circumstances of the time, Chamberlain’s minimum space standards regularly became Wheatley’s maximum. Nevertheless, the houses constructed were considered to be of a good standard, requiring, for example, that homes built with a subsidy should have a fixed bath in a bathroom.

The Wheatley Act restored the powers of the local authorities to provide working class houses without first having to prove that they could not be provided by private enterprise. As such, Wheatley re-established the local authorities as part of the permanent machinery for providing working-class housing; a position that was reaffirmed in a codifying Act of 1925, following the Tories return to office in late 1924. The Wheatley subsidy was eventually repealed by the Conservative led National government in 1933. Nevertheless, by that time its provisions had resulted in the construction of more than 520,000 homes. Wheatley himself was well aware of the limitations of his housing legislation and did receive criticism from some of his parliamentary colleagues that it was too moderate. He was, however, a pragmatist stating ‘ … I have to take the materials which are available and use them, however much I may disagree with them, in order to contribute, however slightly, to the betterment of my fellow men’.

John Wheatley died on 12 May 1930, aged 60. The Wheatley Housing Group (Scotland’s largest registered social landlord) is named after him. It is fitting that we should commemorate and remember the centenary of the passing of the Wheatley Act. It represents a groundbreaking piece of housing legislation that blazed a trail for the provision of millions of good quality council homes for working people in the years that followed. In many respects Wheatley was the inspiration for Aneurin Bevan’s herculean efforts that produced over a million council houses between 1945 and 1951. It has been said that ‘the solid brick terraces which march across the inner suburbs of every British city could not have been built without John Wheatley […] the greatest of Clydesiders’. I for one will not argue with that.

Dr John Temple, CIHCM, is a retired housing professional. He served as a Labour councillor on Tyneside from 1981 to 2004. He is a member of the Labour Housing Group.