HC Deb 13 December 1955 vol 547 cc1007-10
Mr. Speaker

Mr. Sandys.

Lieut.-Colonel Lipton

On a point of order, Sir. Would you be good enough to indicate when, and by whom, permission was given to the right hon. Gentleman the Minister of Housing and Local Government to make a statement at the end of Questions in answer to these various Questions? I take it that the right hon. Gentleman sought the permission of the House, but I do not know whether that permission was granted.

Mr. Speaker

The Minister sought my permission and I granted it. Mr. Sandys.

Mr. Sandys

I will now, with permission, reply to Questions Nos. 1, 2, 5, 7, 8, 9 and 31.

In view of the impending resumption of slum clearance on a large scale, the Government have been reviewing the terms of compensation for unfit houses which are compulsorily purchased, or demolished or cleared.

Our broad conclusion is that we should adhere to the long-established principle that owners of slum dwellings should, apart from payments for good maintenance, receive no compensation beyond the value of the site. However, we feel that some action must be taken to mitigate the acute hardship which is inflicted in a limited number of cases. With this object I intend to introduce a short Bill to make certain changes in the existing terms of compensation.

Perhaps the most distressing cases are those of people who, in recent years, have been driven by the extreme housing shortage to buy unsound and substandard dwellings to live in themselves. Although they may have paid substantial prices for these houses and have kept them in good repair, the law entitles them to compensation at little more than the value of the bare land. The Bill will provide that an owner-occupier, who is today living in an unfit house which he bought since the outbreak of war, shall, if the house is compulsorily purchased, demolished or cleared, receive compensation at the same rate as would have been payable had the house not been declared unfit.

Serious hardship may also arise in the case of a small shop or business, which forms part of a dwelling-house. If the living quarters in the rest of the house are declared unfit for human habitation and the building is compulsorily purchased, or demolished or cleared, the shopkeeper may get virtually no compensation for the loss of his premises and his livelihood. The Bill will provide that, subject to certain qualifying conditions, the occupier, whether owner or tenant, shall be compensated for his shop or business at the same rate as he would have received if it had not been declared unfit.

Severe hardship is also caused by the insufficient compensation for houses which, though structurally unfit, have been well-maintained. Where accounts of expenditure cannot be produced, the rates of compensation payable under the Housing Act, 1936, are based upon building costs at that time, and have consequently become totally inadequate. The Bill will therefore provide that the Minister may, from time to time by Order, adjust these rates to take account of changes in the cost of repairs. The Bill will also extend the scope of these payments to include houses which are subject to individual demolition Orders.

I have had preliminary consultations with representatives of local authority associations, the London County Council and the Metropolitan boroughs. While they naturally cannot commit themselves before seeing the Bill, they have indicated their sympathy with the object of these proposals.

I do not, of course, claim that the changes which I have outlined will remove all unfairness and distress. However, while preserving the basic principles of the existing code of compensation, they will, I believe, give substantial relief in the worst cases of hardship.

Mr. H. Morrison

We are much obliged to the right hon. Gentleman for his statement, but like the local authorities to whom he has referred, it would be wrong for me to express any opinion at this stage. Therefore we must wait until we see in further detail the proposals, which we shall examine with all fairness and impartiality, and we will come to the conclusion which we think is right. I do not think it would be proper for me to express any opinion about those proposals at this stage.

Mr. Stevens

Is my right hon. Friend aware that his statement will be much appreciated by a substantial number of owner-occupiers in this House and throughout the country; but will he also bear in mind the standards against which those houses are judged unfit or not, since some of the provisions appear to be unreasonable, such as, for example, the absence of a damp course?

Mr. Sandys

As I indicated, there are a large number of changes which could reasonably be made in the slum clearance legislation. I am attempting to do something much more modest—to deal with the worst and most acute cases of hardship.

Mr. Mitchison

While it is obvious that we must consider carefully this matter, and the Bill when it comes, there are two points to which I would direct the attention of the right hon. Gentleman. The first is that the basic principle to which he has referred is, I think, open market value compensation on the basis of existing use. I hope I understood him to say that this will remain. The second point is that if this entails any further payments by local authorities, I hope he will remember the very difficult state of their finances, lately increased by Government policy, and will do what he can to meet any additional burden in the form of payments from Government funds.

Mr. Sandys

The hon. and learned Gentleman raised two points. He asked, first, what was the basis of compensation. If he is referring to compensation for owner-occupiers, in the case of compulsory purchases for the purposes of slum clearance, compensation will be on the same basis as for the compulsory purchase of houses which are not unfit; and that means that the owner-occupier will get the current market value of the house as a house—that is to say, existing use plus any admitted claim for development value as at 1947.

On the second point, I think I can assure hon. Members that while the hardship is acute in these cases, the number of cases is not large. From a sample which I have taken of compulsory purchase orders which have come through our hands in the last year or so, it looks as though the proportion of unfit houses which are occupied by owners is probably about 5 per cent.

Mr. J. R. H. Hutchison

Are these provisions intended to apply, and will they apply, to Scotland? If not, will some parallel steps be taken by the Secretary of State for Scotland?

The Secretary of State for Scotland (Mr. James Stuart)

May I, with your permission, Mr. Speaker, and that of the House, make this brief announcement? The position in Scotland is somewhat different both as regards the scale of the problem and the basis of compensation under the existing law. I have, however, noted the matter for consideration when new Scottish housing legislation is next being prepared.

Mr. Woodburn

Does that mean that the Secretary of State is not dealing with this problem? There have been some scandalous cases in the west of Scotland of people being compelled to buy these slum properties? Will he be taking this into account or will he consider the Bill which my hon. Friend the Member for Dunbartonshire, West (Mr. Steele) proposed, under which this would be dealt with by Act of Parliament and prohibited? In the case of those who have already bought the houses, will the Secretary of State take the matter into consideration at an early date or at some very far distant date?

Mr. Stuart

I said that it would be done when fresh housing legislation for Scotland is being prepared. We have given our reasons for not accepting the Bill of the hon. Member for Dunbartonshire, West. I do not think that there are many cases in Scotland, where the system of compensation is different, but I will bear this matter in mind.

Squadron Leader Cooper

Is it intended that the operation of this Bill shall have a retrospective effect?

Mr. Sandys

The Bill will provide that these changes will take effect as from today.

Several Hon. Members rose—

Mr. Speaker

We had better have the Bill and have a look at it, as the Minister suggests.