HC Deb 20 May 1935 vol 302 cc143-53

10.12 p.m.

Mr. GORDON MACDONALD

I beg to move, in page 50, line 1, to leave out Sub-section (2).

The Committee will appreciate that we are dealing with the slum landlord and the basis of compensation which ought to be paid to him. As far back as 1919 this House laid down what it thought was a reasonable basis of compensation for this type of landlord. We on this side of the House fail to understand why the Minister desires to change that basis. One of his predecessors in 1924–29 dealt with this question, and he had no reason to alter it. I should be pleased to know from the Minister whether the Chancellor of the Exchequer has now changed his mind also. In dealing with this matter in the Consolidation Act of 1925 he agreed to the basis laid down in 1919. We do not see that any change has taken place to cause the Minister to suggest this change. When the Bill was discussed in 1919 in Standing Committee, the right hon. Gentlemen who are now supporting the Government were strong advocates of this Clause. Some criticised the Minister for paying compensation which was too generous. The right hon. Member for Wood Green (Mr. G. Locker-Lampson) moved an Amendment which appeared to be intended to make the right hon. Member for Swindon (Dr. Addison), who was then in charge of the Housing and Town Planning Bill, into a defender of slum landlords. In moving his Amendment on 7th May, 1919, he said: I should like to remind hon. Members that the Clause deals with bad property. It has nothing whatever to do with good housing or good property. It merely refers to the acquisition of the worst kind of property in the country—the very worst kind—the slums, slums which have in the past been the cause of a great deal of disease—tuberculosis and other disease—and the cause of a great deal of misery, and the cause of a great deal of crime, and it is that kind of property we are dealing with in this Clause. His last words were that when the compensation was paid for a site covered with these rotten houses, then the compensation should be small compensation as a site for houses for the working classes, and they can leave the site as they like. I should like the Minister to tell us in what way does he differ from his right hon. Friend the Member for Wood Green? He himself some few months ago in the country referred to this type of house in the slums. He said then that they were no more entitled to compensation than was the butcher who sold contaminated meat. We agree that the Minister when he said that uttered wise words, and we ask him to get up and utter similar words, or, if he cannot, to defend the deletion of this Sub-section.

There is a further objection. In the industrial field we have often tried to get retrospective legislation. There have been times when we have felt that certain advantages have been denied to the workers far too long and we have asked that there should be restrospection for a few months or a year, but retrospective legislation has never ben looked upon favourably in this House. The Minister in this Sub-section has introduced restrospective legislation. The hon. Member for Central Leeds (Mr. Denman) the other day put up a case for the owner-occupier in the slum. The man who out of his small savings has bought a, house and gone to live there deserves more consideration than the individual who has bought slum property for the purpose of making a profit. We hope that the Minister will put up a far better defence tonight than he did in Committee if he is going to resist our Amendment. We feel that his defence was nothing more than special pleading. Will he show us any reason why what has not been applied for 16 years should be applied now and why the basis of compensation for the owner of slum houses should be altered in order to give more to the slum landlord What earthly reason can there be for the slum landlord receiving more compensation in 1935 than in 1919?

10.17 p.m.

Sir H. YOUNG

So far from my observations in Committee explaining the attitude of the Government in abolishing the reduction factor being special pleading, I have never heard any defence of the so-called reduction factor on any basis of business common sense or justice and, with all due respect to the hon. Member, I have not heard any to-night. What is it that is being done in this Clause? In estimating the compensation that is paid to the owner whose property is to be taken over under the Act of 1930 at site value we have in the first place to ascertain the value of the site. The owner gets the value of the site, but owing to the existence of the artificial arrangement of the reduction factor which is imposed upon the ordinary system of valuation by the legislation to which the hon. Member has referred, we have to ascertain first of all the value of the land in the clearance area available for any form of development. That is what I call the market value, and then we have to ascertain the reduction in value of the land if it might be used only for the purpose of rehousing the working classes, and the unfortunate owner is allowed only the reduced value. In other words, there is a reduction imposed upon the natural market value of the site on the artificial consideration that the cleared land can only be used for rehousing the working classes. If the owner were able to realise the full value of his site, he would get the full value of his site on the basis that it could be used for any purpose, and it is only because there is a special restriction that the cleared land is to be used for rehousing that he receives this specially reduced value instead of the full market value of his site. I have felt, as a plain man, that it was a procedure which it was impossible to justify. It was nothing more or less than confiscation of a part of the site value of the land.

We have heard from hon. Members opposite a great deal about the hardships inflicted on small owners of property in slum areas that full compensation is not given to them, and I have had to defend the principle of the site value basis; that nothing shall be given for a building which is worth nothing. I should be in an indefensible position if I were not only to say that we are to pay nothing for a building because it is worth nothing but went on to impose an artificial reduction in the value of the site, which is worth something. That is the plain issue, and I think it is perfectly well understood. The reasons why the Government are now proposing to abolish the reduction factor are also perfectly well understood. It is far from the truth to say that there have been no complaints. There have been bitter complaints against the injustice of the procedure, and this feeling of injustice has stood in the way of the rapid progress of the scheme. It is the object of the Government to get out of the way every injustice and hardship which stands in the way of a rapid progress of slum clearance. This extraordinary arrangement about site value stood in the way of rapid progress, and it will promote progress in slum clearance work if we secure a basis of site value which is absolutely sound and defensible.

10.22 p.m.

Dr. ADDISON

The right bon. Gentleman has represented the errors of his colleague the Chancellor of the Exchequer in an attractive fashion, and it is a, pity that the Chancellor of the Exchequer is not here to listen, because he more than anyone else has championed the justice of these provisions and has been responsible for their continuance. What is the case? It is the case of property condemned as insanitary and the price to be paid is the site value. The question is, What is the site value? If site value has something more in it than it possesses when occupied by a dwelling which has been condemned as unfit for human habitation, why does not the owner realise that site value? It is open to him to do so. The event does not arise until a local authority comes along and says, "we will not allow you to let this house for human habitation any longer; it is a danger to the public health. We are going to take it from you and pay you for the land on which it stands." Now we are told that the Chancellor of the Exchequer and other Ministers have been wrong, that they were committing a gross injustice in so deciding; that what the man is entitled to is the value of the site after the local authority has cleared it for any other purpose as a cleared site. If he is so anxious to realise this potentially enhanced value of the site, why does he not clear it? The reason is that he gets rent from the unhappy tenants. There is no justice in the proposal. It is simply a present to those who are the owners of houses which have been condemned as unfit for human habitation, which they are unable to realise them selves, but are enabled to realise by the action of the local authority. That is all it is. I hope my hon. Friends will persist in their objection.

10.25 p.m.

Sir P. HARRIS

This particular Clause undoubtedly has been inserted as a result of pressure from many parts of the House. That does not necessarily mean that it is right. It has nothing particular to do with the purpose of the Bill. In practice it is going to make slum clearance very much more expensive. But it is not going to make it more expensive at the expense of the national Exchequer, but more difficult at the expense of the local rates. We all realise that. I suggest that if the Minister was really convinced of the justice of the case he ought, first, to have made provision for this additional cost to come out of the national revenue, and should not have put the whole burden on the local rates; and, secondly, if the old practice since 1919 is unjust there is no reason why this additional money should not be paid to those persons who had this apparent right taken away from them. If it is unjust it should be retrospective.

I make this proposition: The Government are making a great number of people a very valuable present at the expense of local rates. A great deal of this property has changed hands since 1919. These slums in the great cities, or most of them, are well known to business people. I know that there is the case of the individual who owns a house in one of these areas, and that certainly is a hardship; but the streets of property, the large areas with which the Amendment is mostly concerned, have been well known since 1919 and even further back than that. In my own district of Bethnal Green most of these black spots have been scheduled for 25 years or more. Some of them date back to 1900. Their existence has been common knowledge. I know that large blocks of such property have been bought cheaply because they are slum property and have been bringing in very substantial revenue to the persons in possession.

The Minister said with apparent plausibility that we are taking away from these people the value of land that is rightly theirs and for which they are entitled to a revenue. As a matter of fact in most of these cases you are going to present the owners of these properties with a very valuable present, because in London nearly all these sites have a much greater value as commercial propositions than they have when covered by houses, as they are regulated by the Rent Restrictions Acts. Many of the owners of these properties have been trying by all kinds of means to get rid of their tenants in order to sell the sites for commercial purposes, for factories or workshops, or some other industrial purpose. Owing to the restriction on rents they have not been able to dispose of these properties at a commercial value. Now the right hon. Gentleman comes along with this Clause, the tenants are to be cleared away and these people are to be put in full possession of the sites for which they will be able to get, not the value of houses which were subject to restricted rents, but the value from a commercial point of view. In South and East and West London some of these sites are worth three times as much from a commercial point of view.

Personally, I am so keen about getting on with this job that, if the Exchequer in their wisdom decided to pay out of the taxes this additional money, although I would not like it in theory, I would not offer much objection. But I know that in practice this additional burden is going to be placed on the local rates, and in many parts of the country, particularly in the North, it means that the slum clearance programme must necessarily be delayed. It is common knowledge that there are places in the North where the rates are something like 20s. in the £, and there is no source of revenue from which to provide this additional cost. Inevitably, there will be a hold up of slum clearance in many of the great provincial towns where there is a large amount of unemployment. Before we pass this Clause we have a right to ask the Minister whether he has made any estimate of the additional cost to the local rates that will be involved. The Minister has no right to come here and lightly and in an irresponsible way to seek to change what has been the law of the land since 1919, without giving the House any estimate of the extra burden which will be placed on the local rates. Local authorities have often said—I do not say always with justification—that Parliament is too ready to put extra burdens on them when Parliament has not to provide the money. Here certainly is an example of that kind of legislation. We are entitled to an estimate of the additional cost to the local rates of this heavy addition to the charges for the slum clearance programme.

10.34 p.m.

Mr. PIKE

The right hon. Gentleman the Member for Swindon (Dr. Addison) said it was wicked to exact rent from the unfortunate tenants of delapidated property, a sentiment with which I wholeheartedly agree. But I would ask him to agree that it is also vicious to take property from any persons, whoever they may be, without giving them adequate compensation. I wish to thank the Minister for his statement, not on my own behalf so much as on behalf of the Socialist party in my division, whose club is at the moment the subject of an inquiry with a view to demolition. As a result of his words to-night they have a prospect of receiving adequate compensation.

10.35 p.m.

Sir H. YOUNG

In reply to the specific question of the hon. Member for South- West Bethnal Green (Sir P. Harris) he may be assured that careful inquiries have been made into the effect of the Clause both in relation to past obligations and in relation to the future. The general result of those inquiries is to convince me that the effect upon the financial operations under the Bill from the point of view of the Housing Revenue Account, will be by no means substantial. I cannot give any general figures, but if the hon. Gentleman were to ask for any particular figure, I might be able to let him have it.

10.35 p.m.

Mr. McENTEE

The statement made earlier by the Minister does not at all satisfy me. The Government contemplate a position in which slum landlords shall be able to get the fullest price in the open market for the site value of their land. But what is the real value of any land? It has no value unless it is to be used for some purpose and labour is to be applied to it. Having no value, if it is used for agricultural purposes, it will have a very small value; if it is used for building working-class houses, it will have a somewhat higher value; and if it is used for the purpose of building factories or for some other industrial purpose, it will have a very much higher value still. The Minister, because of his desire to see that the slum owners get the fullest measure of compensation, gives assessors the opportunity of valuing the land at its highest possible measure of value. I think that is grossly unfair, and I would like to remind the Government that in a great many of these cases the slum property has been in the same ownership for many years. It was probably purchased at a time when its site value, either as agricultural, housing, or factory land, was very much lower than it is now, and as a consequence of the general increase in the value of land, that value is to be given to the present owner, who is a slum owner.

The Minister himself asked not very long ago, at a certain conference, "Would you compensate a purveyor of rotten meat?" You would not, nor would you compensate the purveyor of rotten property, or the Minister would not have done so then, but since then apparently he has not only become willing to compensate the purveyor of rotten houses, but he is now contemplating the compensation of slum owners on the highest possible site value that can be got in the open market. This Bill contemplates a site value, not for factories or workshops, but for housing purposes, and the Minister himself, or his Department, would never sanction the purchase by a local authority of land at the rate of £400 or £500 per house if such a purchase were contemplated by a local authority. In this case, however, it may work out in that way. If a site somewhere near the City of London in a slum area is to be assessed at the value that it would fetch in the open market for the purposes of industry, it will amount for housing purposes to a high price per house, and an altogether unfair price which will more than adequately compensate the owner. The whole thing is so grossly unfair and has been admittedly unfair in the past. It is amazing that the Minister of Health, particularly after the utterances he has made to the public in the last 12 months or so, should have changed his mind to such an extent as to bring this Clause before the House.

10.41 p.m.

Mr. G. R. STRAUSS

The Minister told us in his first speech that the Government were here remedying a great injustice under which owners of slum property had been living for the last 16 years. Then he defended himself later by saying, "Really, there is not much.

money involved; you need not take much notice of it." We would like to know whether it is really a big thing that he is doing, or only a tiny thing about which we need not take any notice. It cannot be both. With regard to his statement that it will not make much difference or put much burden on the local authorities, I would like to remind him that the estimate that has been made by the London County Council is that this provision will add to every house purchased the cost of about £30. That is a considerable sum, and with the extensive operations that will take place in London it will add a large amount to the cost of slum clearance. If we are able, as we hope to be, to clear something like 5,000 houses a year in the London area, this extra cost will amount to £150,000, which is equivalent to more than a halfpenny rate. It is no use going away with the idea that this Clause will not add a great burden on local authorities. I want to emphasise the serious burden that will be put on them by this alteration in the law. It can only have one result, which is to hamper and to delay the local authorities in carrying out their slum clearance schemes and the rehousing of the people who are now living in slum houses.

Question put, "That the words pro posed to be left out stand part of the Bill."

The House divided: Ayes, 221; Noes, 50.

Division No. 208.] AYES. [10.45 p.m.
Acland-Troyte, Lieut.-Colonel Brocklebank, C. E. R Dickie, John P.
Adams, Samuel Vyvyan T. (Leeds, W.) Brown, Col. D. C. (N'th'l'd., Hexham) Drewe, Cedric
Agnew, Lieut.-Com. P. G. Brown, Brig.-Gen. H. C. (Berks., Newb'y) Duckworth, George A. V.
Allen, Lt.-Col. J. Sandeman (B'k'nh'd) Cadogan, Hon. Edward Duncan, James A. L. (Kensington, N.)
Anstruther-Gray, W. J. Campbell, Sir Edward Taswell (Brmly) Eastwood, John Francis
Apsley, Lord Campbell, Vice-Admiral G. (Burnley) Edge, Sir William
Aske, Sir Robert William Caporn, Arthur Cecil Ellis, Sir R. Geoffrey
Astor, Maj. Hn. John J. (Kent, Dover) Carver, Major William H. Elliston, Captain George Sampson
Bailey, Eric Alfred George Castlereagh, Viscount Erskine-Bolst, Capt. C. C. (Blackpool)
Baldwin, Rt. Hon. Stanley Cayzer, Maj. Sir H. R. (Prtsmth., S.) Evans, R. T. (Carmarthen)
Baldwin-Webb, Colonel J. Cazalet, Thelma (Islington, E.) Fleming, Edward Lascelles
Balniel, Lord Chapman, Col. R. (Houghton-le-Spring) Fraser, Captain Sir Ian
Barclay-Harvey, C. M. Clarry, Reginald George Fremantle, Sir Francis
Barrie, Sir Charles Coupar Cochrane, Commander Hon. A. D. Fuller, Captain A. G.
Bateman, A. L. Colman, N. C. D. Gillett, Sir George Masterman
Belt, Sir Alfred L. Colville, Lieut.-Colonel J. Gluckstein, Louis Halle
Benn, Sir Arthur Shirley Conant, R. J. E. Goff, Sir Park
Bernays, Robert Cooke, Douglas Goldie, Noel B.
Blindell, James Copeland, Ida Goodman, Colonel Albert W.
Bossom, A. C. Courtauld, Major John Sewell Graves, Marjorie
Boulton, W. W. Crooke, J. Smedley Greene, William P. C.
Bower, Commander Robert Tatton Crookshank, Col. C. de Windt (Bootle) Gretton, Colonel Rt. Hon. John
Bowyer, Capt. Sir George E. W. Crookshank, Capt. H. C. (Gainsb'ro) Grigg, Sir Edward
Boyce, H. Leslie Croom-Johnson, R. P. Grimston, R. V.
Braithwaite, Maj. A. N. (Yorks, E. R.) Crossley, A. C. Gunston, Captain D. W.
Braithwaite, J. G. (Hillsborough) Cruddas, Lieut.-Colonel Bernard Hamilton, Sir George (Ilford)
Brass, Captain Sir William Culverwell, Cyril Tom Hanbury, Cecil
Briscoe, Capt. Richard George Davies, Maj. Geo. F. (Somerset, Yeovil) Hannon, Patrick Joseph Henry
Broadbent, Colonel John Denman, Hon. R. D. Hartington, Marquess of
Harvey, George (Lambeth, kenningt'n) Margesson, Capt. Rt. Hon. H. D. R. Salt, Edward W.
Haslam, Henry (Horncastle) Marsden, Commander Arthur Samuel, M. R. A. (W'ds'wth, Putney).
Haslam, Sir John (Bolton) Martin, Thomas B. Sanderson, Sir Frank Barnard
Hailgers, Captain F. F. A. Mason. Col. Glyn K. (Croydon, N.) Sassoon, Rt. Hon. Sir Phillip A. G. D.
Henderson, Sir Vivian L. (Chelmsford) Mayhaw, Lieut.-Colonel John Selley, Harry. R.
Heneage, Lieut.-Colonel Arthur P. Mellor, Sir J. S. P. Shakespeare, Geoffrey H.
Herbert, Major J. A. (Monmouth) Mills, Major J. D. (New Forest) Shaw, Helen B. (Lanark, Bothwell)
Holdsworth, Herbert Mitchell, Harold P. (Br'tf'd & Chisw'k) Shepperson, Sir Ernest W.
Hope, Capt. Hon. A. O. J. (Aston) Monsell, Rt. Hon. Sir B. Eyres Somervell, Sir Donald
Horobin, Ian M. Moore, Lt.-Col. Thomas C. R. (Ayr) Somerville, Annesley A. (Windsor)
Horsbrugh, Florence Moreing, Adrian C. Somerville, D. G. (Willesden, East)
Howard, Tom Forrest Morgan, Robert H. Soper, Richard
Howitt, Dr. Alfred B. Morris-Jones, Dr. J. H. (Denbigh) Southby, Commander Archibald R. J
Hudson, Capt. A. U. M. (Hackney, N.) Morrison, William Shepherd Spencer, Captain Richard A.
Hudson, Robert Spear (Southport) Muirhead, Lieut.-Colonel A. J. Stanley, Rt. Hon. Lord (Fylde)
Hume, Sir George Hopwood Munro, Patrick Stevenson, James
Hunter, Dr. Joseph (Dumfries) Nicholson, Godfrey (Morpeth) Stones, James
Iveagh, Countess of Nunn, William Storey, Samuel
James, Wing-Com. A. W. H. O'Donovan, Dr. William James Strickland, Captain W. F.
Jamieson, Douglas Orr Ewing, I. L. Sugden, Sir Wilfrid Hart
Joel, Dudley J. Barnato Peake, Osbert Tate, Mavis Constance
Jones, Sir G. W. H. (Stoke New'gton) Pearson, William G. Taylor, C. S. (Eastbourne)
Jones, Henry Haydn (Merioneth) Peat, Charles U. Thomas, James P. L (Hereford)
Jones, Lewis (Swansea, West) Penny, Sir George Thompson, Sir Luke
Kerr, Lieut.-Col. Charles (Montrose) Perkins, Walter R. D. Thorp, Linton Theodore
Kerr, Hamilton W. Petherick, M. Touche, Gordon Cosmo
Latham, Sir Herbert Paul Pike, Cecil F. Turton, Robert Hugh
Leckie, J. A. Powell, Lieut.-Col. Evelyn G. H. Wallace, Sir John (Dunfermline)
Leech, Dr. J. W. Power, Sir John Cecil Ward, Lt.-Col. Sir A. L. (Hull)
Lees-Jones, John Pownall, Sir Assheton Ward, Irene Mary Bewick (Wallsend)
Leighton, Major B. E. P. Procter, Major Henry Adam Ward, Sarah Adelaide (Cannock)
Lennox-Boyd, A. T. Raikes, Henry V. A. M. Waterhouse, Captain Charles
Liddal, Walter S. Ramsay, Capt. A. H. M. (Midlothian) Wells, Sydney Richard
Lindsay, Noel Ker Ramsay T. B. W. (Western Isles) Whiteside, Borras Noel H.
Llewellin, Major John J. Reed, Arthur C. (Exeter) Williams, Charles (Devon, Torquay)
Lockwood, John C. (Hackney, C.) Remer, John R. Williams, Herbert G. (Croydon, S.)
Loftus, Pierce C. Rhys, Hon. Charles Arthur U. Willoughby de Eresby, Lord
Lovat-Fraser, James Alexander Rickards, George William Wilson, Clyde T. (West Toxteth)
Lumley, Captain Lawrence R. Ropner, Colonel L. Windsor-Clive, Lieut.-Colonel George
Mabane, William Ross, Ronald D. Wise, Alfred R.
MacAndrew, Lieut.-Col. C. G. (Partick) Ross Taylor, Walter (Woodbridge) Worthington, Dr. John V.
Mac Andrew, Capt. J. O. (Ayr) Ruggles-Brise, Colonel Sir Edward Young, Rt. Hon. Sir Hilton (S'v'noaks)
McCorquodale, M. S. Runge, Norah Cecil
McEwen, Captain J. H. F. Russell, R. J. (Eddisbury) TELLERS FOR THE NOES.—
McKie, John Hamilton Rutherford, Sir John Hugo (Liverp'l) Sir Victor Warrender and Sir
Manningham-Buller, Lt.-Col. Sir M. Salmon, Sir Isidore Walter Womersley.
NOES.
Adams, D. M. (Poplar, South) Greenwood, Rt. Hon. Arthur Mander, Geoffrey le M.
Addison, Rt. Hon. Dr. Christopher Grenfell, David Rees (Glamorgan) Milner, Major James
Banfield, John William Griffiths, George A. (Yorks, W. Riding) Nathan, Major H. L.
Batey, Joseph Groves, Thomas E. Parkinson, John Allen
Brown, C. W. E. (Notts., Mansfield) Grundy, Thomas W. Rathbone, Eleanor
Cleary, J. J. Hall, George H. (Merthyr Tydvil) Salter, Dr. Alfred
Cocks, Frederick Seymour Harris, Sir Percy Smith, Tom (Normanton)
Cripps, Sir Stafford Jenkins, Sir William Strauss, G. R. (Lambeth, North)
Daggar, George John, William Tinker, John Joseph
Davies, David L. (Pontypridd) Jones, Morgan (Caerphilly) White, Henry Graham
Davies, Stephen Owen Lansbury, Rt. Hon. George Williams, David (Swansea, East)
Dobbie, William Lawson, John James Williams, Edward John (Ogmore)
Edwards, Charles Logan, David Gilbert Williams, Thomas (York, Don Valley)
Evans, David Owen (Cardigan) Lunn, William Wilmot, John
Foot, Dingle (Dundee) Macdonald, Gordon (Ince)
Gardner, Benjamin Walter McEntee, Valentine L. TELLERS FOR THE NOES.—
George, Major G. Lloyd (Pembroke) Maclean, Neil (Glasgow, Govan) Mr. D. Graham and Mr. Paling.
George, Megan A. Lloyd (Anglesea) Mainwaring, William Henry

Question put, and agreed to.