§ Order for Second Reading read.
§ 3.45 p.m.
§ The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. J. Enoch Powell)
I beg to move, That the Bill be now read a Second time.
This is a short Bill of limited purposes, but not, for that reason, a Bill which is unimportant either to the thousands of persons who will be affected by it or to the full success of that campaign of slum clearance, which now opening on a large scale.
I will briefly explain to the House the three main effects which the Bill is designed to produce. In the Housing and Town Planning Act, 1919, the rule was established—and it is a rule which has ever since been maintained—that nothing shall be paid for a house, as apart from the site of that house, which is found to be unfit for human habitation and is dealt with either by compulsory purchase or by clearance, demolition or closing order.
The late Lord Addison, introducing that Measure into this House in 1919, said in explanation:I think we have to proceed on this basis, that if this property is condemned as being so bad that it cannot even be patched up and must be pulled down and cleared out of the way, we ought not to be required to pay anything for it. That is the basis of the Clause.'—[OFFICIAL REPORT, 7th April, 1919; Vol 114, c. 1719.]All successive Parliaments and Governments have reaffirmed and maintained that principle, and Her Majesty's present advisers see no reason to depart from it. It follows that persons owning or acquiring houses which are likely to be dealt with as unfit have for a great many years had every reason to know that they would receive no more than site value for those houses when they came to be so dealt with, and, in consequence, when that time did come and when that process was carried out, no legitimate expectations were defeated.
Since the war, however, there has arisen a limited class of people, of owners of unfit houses, for whom in equity, if not in strict justice and logic, some special 2162 treatment is called for. In combination with the post-war housing shortage, the effect of rent control has been to place a high scarcity value on houses sold with vacant possession or let on long leases with vacant possession. The whole emphasis of the scarcity has been funnelled as it were into the sector of vacant possession to which rent control did not, of course, apply. This has created a market for the freeholds or the long leases of unfit or near unfit houses with vacant possession—houses which before the war no one would have dreamed of buying for owner occupation.
Thousands of people, not least ex-Service men, desperate somehow to get a home, have paid considerable sums for the freehold or the long lease of houses of this kind, either ignoring or else being ignorant of the prospect that they stood to be acquired in the course of time at site value only. It was all the easier for people so situated to overlook the risk OF to take it, because for about 15 years after the outbreak of the war there virtually was no slum clearance going on, and so the application of the law as it had stood since 1919 was no longer so familiar, no longer an everyday occurrence, as it had been up to 1939.
The Government therefore believe that this is a case where a too strict insistence on the principle of caveat emptor would be harsh on the individual concerned and, what is more, that it would attach a taint of arbitrariness and unfairness to that process of slum clearance which we want to command universal support.
The Government therefore propose that where a house was acquired by a person for his own occupation after August, 1939, and where he or a member of his family was still occupying it on 13th December last, the price paid for it, if at any time in the following ten years it is dealt with as unfit, either by compulsory purchase or by clearance, demolition or closing order, shall not be the site value only, as the law stands at the moment, but shall be the full compensation which would have been payable if the house had not been dealt with as an unfit house.
In that complicated definition of the cases which fall within the ambit of Clause 1, there are three essential time factors, and I should like to deal with each of those time elements separately. The first is the adoption of 1st September, 1939, as the starting point—the date 2163 on or after which the house must have been acquired by the person concerned in order for him to have one of the necessary qualifications for full compensation. It is true that the scarcity value which I have just explained did not in all areas attach to houses of this kind until the war was over. Nevertheless, there were parts of the country in which that process was already happening during the war itself, and the Government therefore decided to err on the side of including too many houses, rather than too few, by applying the provisions of the Bill to houses acquired for owner-occupation since August, 1939.
Of course, when one goes back beyond 1939 one comes into an entirely different region; one comes into circumstances in which, as I have already explained, there was no legitimate expectation which would be defeated by the acquisition of the house at site value. Hon. Members will, moreover, bear in mind that where the house was acquired for owner-occupation before 1939, the owner-occupier has had at least about 20 years' use of that house, bought for that price, and in most cases a great deal more than 20 years' use.
The second time element in these qualifying conditions is the date of 13th December. 1955, which was the date on which my right hon. Friend announced to the House in outline the contents of the Bill. The date of 13th December plays two separate rôles in Clause 1, which we are at the moment discussing. To qualify, a house must have been bought before 13th December, 1955, by the person, or a member of his family, who still owns the interest in it when it comes to be dealt with as unfit. It must have been acquired for owner-occupation before 13th December last.
This is clearly right and necessary. A later qualifying date would clearly be out of the question. For example, a later date would enable landlords of unfit houses to sell them to sitting tenants, and then, when the houses eventually came to be acquired at a higher compensation than would otherwise be attracted, to share the spoils between the two parties. I think it will be agreed, therefore, that it is right that no house acquired for owner-occupation after the announcement 2164 of the contents of the Bill should be able to qualify.
The other rôle which is played by the date 13th December in the Bill is that it is on that date, as Clause 1 stands, that the house must still have been occupied by the person who bought it or by a member of his family. It may be asked, would an earlier date be possible? This is a very difficult question. Some starting line has to be fixed, because, obviously, when houses have been demolished and cleared away months and perhaps years before, it is impossible to set out on the task of valuing them. There must be some limit beyond which transactions which have been completed and closed cannot be reopened.
The proposal is. therefore, that the concession should start from the date on which both the owners of the houses and the local authorities—that is, the two parties to the transaction—had good reason to know what the new compensation position probably would be. This is, as I have said, a difficult point, however, and it is one which can, if desired, be considered in detail during the Committee stage.
I come to the third qualifying date in Clause I. the terminal date—ten years after the concession begins to run; namely, up to 13th December. 1965. Clause 1, therefore, is a ten-year temporary provision. As this concession is designed to meet temporary and exceptional circumstances due to wartime and post-war conditions, so it should itself be temporary and exceptional. When ten years have elapsed, even persons who bought such houses as these for their own occupation immediately before my right hon. Friend's statement will have had a very substantial use and enjoyment of those houses. The Government do not propose, therefore, that the concession should apply to houses dealt with as unfit after 13th December, 1965.
§ Dr. Horace King (Southampton, lichen)
Before the Parliamentary Secretary leaves the question of dates and times, may I ask whether he proposes to do nothing for the man whose house has been taken over for slum clearance prior to December of last year, and who has received this very inadequate payment?
§ Mr. Powell
As I have said, that is the question of the starting date. Factors 2165 which have to be borne in mind are the impossibility of valuing a house which has already been acquired, the whole site cleared and perhaps even redeveloped. Clearly, there has to be a fairly close starting date.
§ Mr. J. A. Sparks (Acton)
This is rather an important point, because there has already been a certain amount of slum clearance since 1945 and there will be quite a number of small people who would otherwise benefit from the Bill but who may not now be entitled to benefit.
§ Mr. Powell
The hon. Member is quite right. I am sure that the whole House realises that whenever any change in the law, in terms of compensation, is introduced, there must be a point of time from which that change will operate, and there will inevitably be people on the other side of that line—and hard cases, too—which everyone would wish could be covered; but it must be inherent in the nature of such a change that a start line has to be fixed.
I would ask the House to note that this start line has been pushed very far back. It does not date from the Royal Assent to this Act it does not date from the presentation of the Bill. It dates from the earliest moment at which the nature of the new proposals could be known, namely, the date on which my right hon. Friend made his statement, 13th December.
§ Mr. T. L. Iremonger (Ilford, North)
Is it the confirmation of the compulsory purchase order as the determining act which has to fall at the right time?
§ Mr. Powell
The material fact about which we have been talking in connection with the date 13th December is occupation of the house. The qualification we have been discussing is that on 13th December, in whatever circumstances, the owner-occupier was in actual occupation of a standing house.
§ Mr. Powell
The purchaser or a member of his family as defined in the Bill in Clause 4. However, as I have mentioned, this is essentially a matter of detail which can be considered during the Committee stage.
In passing now to the remainder of the Bill, I am passing from a provision which 2166 is intended to be temporary to provisions which are intended to be permanent, because they are designed to remedy hardship which arises from certain defects in the slum clearance compensation code which, though admittedly always present, have only been high-lighted and had attention focussed upon them by post-war conditions.
That compensation code as embodied in the principal Act, the Housing Act of 1936, treats a building as a house—and consequently, if unfit for human habitation, as an unfit house—irrespective of the use to which it is being put, provided it is structurally a house. The definition of "house" for the purpose of the principal Act depends not upon the use to which the building is put but upon the nature of its structure.
Consequently where the whole or part of a house unfit for human habitation is being used, without major structural adaptation or change, as a shop or for other commercial purposes, no compensation for that house apart from the site is payable if it is dealt with as unfit by compulsory purchase, clearance or demolition order.
Such a state of affairs is really unjustifiable. A house may cease to have any value as a house, and, as I have pointed out, this proposition lies at the basis of the existing compensation code; but, though having ceased to have value as a dwelling-house because of unfitness, a house may still retain a value for some other purpose for which it may be perfectly suitable and for which it may be quite reasonable and not contrary to public interest that it should be used.
There is no reason why the owner of a business carried on in such a house should not be compensated for the full value of his interest just because the premises happen to be unfit for human habitation, which, in any case, is not the purpose for which he is using them. The result of the law as it is at present is that such persons stand to be deprived of what is, in fact, their livelihood in the process of dealing with unfit houses.
The Bill therefore proposes that where such a house as I have described, or part of it, is dealt with as unfit, the owner of the business shall receive no less compensation than he would have received if the premises had not been dealt with as an unfit house. There are safeguards to 2167 prevent this right to higher compensation being abused by a brief and possibly collusive business use being entered into in future.
§ Mr. Sparks
The hon. Gentleman is referring to cases where persons may be displaced from business. Presumably that compensation would be paid for loss of business goodwill. In many cases, such persons have been accommodated in new schemes developed by the local authority and, in fact, they have only gone to new premises in a newly developed area where there could not be said to be any loss of goodwill at all. In such cases, would the hon. Gentleman not be prepared to take the matter into consideration?
§ Mr. Powell
I am not sure what the hon. Member's point is. The right to compensation for that which is compulsorily acquired is a matter quite separate from the right, if any, to re accommodation or arrangements which the individual may make, with or without the assistance of the local authority, for carrying on his business elsewhere. We want him to be compensated for that which is compulsorily taken from him.
§ Mr. Sparks
May I take up the hon. Gentleman's time a little more on this point? Take, for instance, the case of an off-licence keeper who is accommodated in a slum clearance area where the dwellings are destroyed. Some dwellings are then rebuilt. In some cases it is possible that the local authority can provide a new shop for such a person to carry on his business in within the new area. There is no obligation on the local authority to do that, I think, but in some cases they do sympathetically make that arrangement. In a case like that, it really would not be true to say that the individual would be losing any goodwil at all.
§ Mr. Powell
It depends, of course, upon the terms on which he is re-accommodated. When re-accommodated, he will no doubt be paying a new rent. He may pay a lump sum for the right to carry on the business in the place where he starts up again. We must keep separate these two issues. We are dealing here with the compensation he should receive for that property of his which 2168 is taken from him compulsorily by the act of the local authority.
In turning to Clause 3, I pass to the law dealing with additional payments which are made where houses are unfit for human habitation but have been well maintained by their owners, by their occupiers, or by both. That is provided for by Section 42 of the principal Act, though at the moment payments for a house being well maintained only relate to properties compulsorily acquired under compulsory purchase orders. I will revert to that matter in a moment or two.
Such houses attract a payment for good maintenance which may be calculated on one of two bases. The first basis is the amount by which the sums actually spent on maintenance in the previous five years exceed one-and-a-quarter times the rateable value. There is no reason to alter this basis because it is one which automatically adjusts itself to any change of building costs and the value of money, since it depends upon the bills of costs over the previous five years.
The position is different in regard to the alternative basis which is applied either where it is more favourable or, usually, where no such bills and evidence can be produced. This other basis is a multiple of rateable value: one-and-a-half times the rateable value in the case of a landlord and three times the rateable value in the case of an owner-occupier. This latter basis is completely out of date, for, while building costs have increased since the time of the passing of the principal Act by about three or three-and-a-half times, the rateable values of dwelling-houses have, on the average, only gone up by about 40 per cent. in the new valuation lists which come into force next week. Indeed, I am informed that in the case of houses of the kind we are talking about now, houses which are likely to be dealt with as unfit in the next few years, the increase in rateable value has been much less than 40 per cent. and often has been quite negligible.
§ Mr. Powell
No, all I am doing is pointing out that a basis of compensation for good maintenance which multiplies rateable value today by the same figure 2169 by which it was considered fair to multiply it in 1936 is completely out of date because the two elements, the cost of building and rateable value, have moved entirely out of line with one another.
The Bill therefore proposes to give the Minister power by order to adjust the figures by which rateable value has to be multiplied in fixing the payments for good maintenance. The advantage of doing that by order is that a new Act of Parliament is not required whenever there is some appreciable change either in rateable values or in building costs. My right hon. Friend proposes, however, to make use of this power immediately upon the passing of this Bill and to increase the present figures of 1½ and 3 respectively in the principal Act so as to take into account the changed relationship between the relevant rateable values and building costs.
Before announcing the precise figures which are proposed, my right hon. Friend will, naturally, have to hold consultations with the local authority associations and other interested bodies, but the general objective is quite clearly and definitely to make an adjustment in regard to the changed relationship between rateable value on the one hand and the costs of maintenance on the other.
§ Mr. H. Butler
Before leaving Section 42 of the 1936 Act, will the hon. Gentleman add anything about the qualifying period which applies in respect of well-maintained houses? So far as I can see, there is no reference to that in the Bill, but, as the hon. Gentleman may know, there has to be a particular time for occupation under that Act.
§ Mr. Powell
It is not thought that Section 42 requires amendment except in so far as the changed value of money and the changed cost of building in relation to rateable value has rendered Section 42 out of date. There is nothing in the principle of Section 42 with which I would invite the House to disagree.
The opportunity has also been taken in making this adjustment of multiplier for well-maintained payments when houses are compulsorily acquired to introduce 2170 the well-maintained payment to houses which are subject to clearance, demolition or closing orders and for which, in the past, no such payment has been available. In doing so, it has been necessary to provide a machinery of appeal by the owner or occupier against the determination one way or the other of the local authority because, of course, the making of a demolition order or a closing order is essentially a local authority operation, whereas the decision on a well-maintained payment under a compulsory purchase order is a decision taken by the Minister on the evidence provided by his inspectors.
I have now outlined and given the reasons for the three main provisions of this Bill. I am sorry to see from the Order Paper that the Opposition apparently consider this Bill, the purposes of which I have just outlined, to be one which the House ought to reject.
§ Mr. Powell
Yes, but it is still a proposal for the rejection of the Bill. The reason for doing so appears to be flimsy to the last degree, for it alleges that for a Bill such as this an indispensable condition ought to be the introduction of new, special, direct Exchequer subsidies in respect of the additional payments which are involved.
Let us try to get this thing into proportion. My right hon. Friend indicated on an earlier occasion—in fact, when he first acquainted the House of the intention which this Bill fulfils—that the proportion of houses likely to be dealt with as unfit which are owner-occupied does not exceed about 5 per cent. Of course, that 5 per cent. includes owner-occupied houses acquired before September, 1939, which, as I have explained, are outside the scope of the Bill. It may, therefore, be safely assumed that the proportion of unfit houses covered by Clause 1 is substantially below 5 per cent.
§ Mr. Percy Collick (Birkenhead)
Am I right in understanding that the proportion of scheduled slum houses in the country which are owner-occupied is 5 per cent.?
§ Mr. Powell
I am not sure that "scheduled" is the term of art in this connection, but of the houses which are 2171 likely to form part of the slum clearance programmes put forward under Section 1 of the 1954 Act by local authorities the best estimate that can be made is that about 5 per cent. are owner-occupied.
§ Mr. David Jones (The Hartlepools)
Can the hon. Gentleman tell us how the Minister arrived at that percentage, as the plans of local authorities for the next five years, let alone ten years, are not yet known?
§ Mr. Powell
Obviously, there is no difficulty in taking quite a large sample of slum houses which have been dealt with under all these procedures in the last few months or years and working out from the statistics the proportion of those which are owner-occupied. The only remaining link in the chain of argument is the assumption—which, I think, is a fair one—that the proportion of owner-occupation would not be substantially different in the houses falling to be dealt with in the next few years from that in those which have been dealt with in the last few years. We have the material upon which to make such an estimate—which, though it cannot be correct to the last point of decimals—can be reasonably accurate.
§ Mr. Collick
The hon. Gentleman will appreciate that this figure is of great importance because, as I am sure he knows, in the country slum owners have been bringing pressure to bear on tenants to buy those slum properties. I should have thought that the figure would have been more than 5 per cent.
§ Mr. Powell
Of course, it is very easy to form an impression from cases brought to one's attention. It would be cases of the kind which the hon. Member has mentioned which, naturally, would make an impact upon one's mind, but this matter has been gone into quite carefully, with the evidence of houses dealt with over recent months, and indeed years, and I think I can commend the figure of 5 per cent. to the House as not likely to be seriously misleading.
§ Mr. Albert Evans (Islington, South-West)
If we accept the sample given by the hon. Gentleman, which seems reasonable enough, why does he go on to say that the actual net figure will be substantially below 5 per cent.?
§ Mr. Powell
For the simple reason that the 5 per cent. is of houses owner-occupied, whether they were bought before September, 1939—and, therefore, fall outside the Bill—or since that date. It is only the lesser number, bought since 1939, which falls within the scope of the Bill.
§ Mr. Speaker
We have had a great number of interruptions of this speech. It makes it very difficult to follow a speech when there are so many interruptions.
§ Mr. Powell
What the House is concerned with, surely, is to know what is the worst case which is likely to be dealt with. If one establishes that 5 per cent. must be the outside figure, since it covers cases not covered by the Bill as well as cases which are covered by the Bill, at least we have the maximum figure and we know that the real figure will be below that.
We then come to the percentages of slum houses, not covered by Clause 1, which will attract increased payments either under Clause 2, that is, business use, or under Clause 3 as well maintained. It will at once be observed that there will be a considerable overlap between those three classes, especially in the case of the well maintained payments, because it is most often the owner-occupied house which is well maintained, although unfit for human habitation. Similarly, many of the houses of which part is used as a shop, or for some business use, are houses which are in owner occupation. In each of these two cases again, the maximum percentages are no greater than those of the houses which are dealt with under Clause 1.
It is fair to conclude on sufficient evidence that the proportion of houses falling to be dealt with as unfit which will attract increased payments under any of the three provisions of the Bill is a very small minority. The House will further note that these increases are increases on the Site costs of the new development. They increase one of the factors in the acquisition of the site by the local authority which is doing the clearance. But site cost itself, except 2173 where it is so high that the special subsidies for high site costs are attracted, is itself only a fraction of the cost of the new house, or other new development upon the site. The Bill increases only a fraction of local authorities' costs for a very small fraction of their sites.
Even for local authorities which have a large slum clearance commitment, the annual additional cost resulting from the Bill will be extremely light. I remind the House that the annual cost of these additional payments falls to be spread over 80 years, which is the normal period for the amortisation of site costs. Both in fixing subsidies for housing purposes and in fixing the planning subsidies where comprehensive redevelopment is involved, regard has always been had to the total charges falling to be borne by the local authority in consequence of the operations in question. It has never been thought right or necessary to single out some particular item of site cost for special treatment.
I suggest that it would be ludicrous to make the slight increases—and I have proved how slight in proportion they are—which the Bill involves in the case of slum clearance the basis for a new, separate subsidy.
§ Mr. Collick
I am trying to follow the argument of the Parliamentary Secretary. What he is saying, in effect, is that the cost will be so small that there is no argument why it should be met by the Exchequer, instead of through the rates; but is that not a greater reason why the cost should be met by the Exchequer?
§ Mr. Powell
I should have thought that if it were proved that the cost were substantial the argument for special Exchequer assistance would have been strengthened. It must follow that the less extra cost is involved the less must be the case for special Exchequer assistance, outside that already available under both the Town and Country Planning Acts and the Housing Acts.
My own view of the reasoned Amendment is that it is not and cannot be seriously meant. I prefer to regard it as an item on the agenda put down to ensure that the financial consequences of the Measure are not overlooked in the debate which is to follow. I am inclined to think that the Opposition, no less than the Government, wish to see upon the Statute 2174 Book as soon as possible a Measure which removes unfairnesses to thousands of individuals which might diminish the speed and impair the popularity of the campaign of slum clearance.
§ 4.25 p.m.
§ Mr. G. R. Mitchison (Kettering)
The Bill proposes to make certain additional payments and I should like to begin by saying a word or two about the payments before coming to the question of who should make them. We gather from the Parliamentary Secretary that the baby which has been conceived by himself and his right hon. Friend is quite a small one. We will see about that in a moment. Let me reassure him about something at once. We should not have opposed the Second Reading of the Bill had it contained proper provision for direct Exchequer subsidies.
We have some minor points—rather of comment than of hostility—about the payments themselves. However, we take the strongest objection to the fact that the whole of the payments is to be put upon the rates and I shall elaborate upon that later. I was glad to hear the hon. Gentleman explain so clearly that we were making a complete departure from the principle derived from the Housing, Town Planning, &c., Act, 1919, and repeated, as he said, again and again. It appears, for instance, in the Housing Acts of 1930 and 1936, and I can put it very shortly indeed.
It is simply that if a man can be made to clear a site at his own expense and to remove from it a house, because it is unfit to live in, there appears to be no logical reason why he should get any more by way of compensation than the value of that site. That undoubtedly has always been the general principle. What is being done here is to make a departure for what seemed to us, as they seemed to the Government, to be perfectly good social principles. The reason is simply that there are people up and down the country who have had to buy these unfit houses and live in them, because they could not find anywhere else to live at the time.
We recognise that and we recognise, as do right hon. and hon. Gentlemen opposite, that slum clearance obviously had to be suspended during the war and after the war the first need was new houses. 2175 I need not quote what the right hon. Gentleman himself said in introducing the Housing Subsidies Bill, but everyone recognises that it had to be so. There is no doubt that from that point of view we welcome the first Clause as a good social measure, even though it does involve a departure from principle.
I can tell the hon. Gentleman that if we had been in office, I have not the last doubt that we would have done something of the sort, subject to similar limitations. I have very little with which to disagree so far as that goes. There are some minor points. For instance there are questions of whether this ought not to be extended a little. I am not sure that the hon. Gentleman did not go rather far in suggesting matters which might be dealt with in Committee. We have not yet come to the Money Resolution, but it is lamentably tight and we shall have to see how much is open to us.
I am glad to see that the hon. Gentleman shakes his head, which means, I take it, that the terms of that Resolution have been carefully considered, and that it would, therefore, be possible, if it were thought fit, to move back the date of 13th December. 1955. Clearly, no one wishes to move it forward because, as he pointed out, it would open the door to collusive transactions since then.
§ Mr. Powell
To move back the date of 13th December, 1955, in the context in which I made reference to discussions in Committee.
§ Mr. Mitchison
This is a Committee point, so let us leave it at that for the moment. There are other similar points. There are many cases where demolition orders and the consequence of them have been avoided by agreement, and they probably should be considered, too. There are matters of that sort, but they are minor points.
I earnestly hope that the hon. Gentleman's exceedingly bad example of neglecting the terms of the reasoned Amendment, and trying to make out that we were opposed to this Clause, will not be followed. We put down the Amendment in terms clearly expressing what we thought, and we meant what we said. It has not been done as a joke or for the purpose of ensuring proper financial discussion or anything of the sort. What 2176 we want the Government to do is to reintroduce tomorrow a similar Bill, but with the provision of a direct Exchequer subsidy in it; and I will come to that matter in a minute.
We are somewhat more critical about the next two Clauses of the Bill, and for this reason. Clause 1, as has been pointed out, is a temporary provision—lasting, it is true, for some time, but still temporary—to provide for a particular social need. Clauses 2 and 3 make permanent provisions, and we are not at present entirely satisfied why the statutory provision in Clause 2 is now required in addition to the corresponding provision which already appears in Section 42 of the Housing Act, 1936.
I am bound to say that I was somewhat surprised that the hon. Gentleman, in introducing the Bill, did not think it even necessary to mention that the local authorities, in dealing with houses which are unfit houses—the same type of houses as those being considered in this Bill—have already a discretion to make such reasonable allowance as they think fit—to any person carrying on any trade or business in any such house or other building,…may pay also such reasonable allowance as they think fit towards the loss which, in their opinion, he will sustain by reason of the disturbance of his trade or businessand they are also to have regard—to the period for which the premises occupied by him might reasonably have been expected to be available—Indeed, there is a further subsection giving effect to the changes in custom in relation to a shop.
Therefore, that Act already gives powers to local authorities in their discretion to meet exactly the kind of thing, so far as I can see and speaking subject to correction, that it is proposed to meet in the form of a statutory right in Clause 2. While we should not have thought this a matter for voting against the Second Reading of the Bill, I hope that when the right hon. Gentleman speaks at the end of the debate he will tell us what relation he supposes there will be between the discretionary right in Section 44 of the 1936 Act and the statutory right which he now proposes to superimpose on top of it.
That seems to me to cover substantially the same sort of thing. The discretionary right is actually, as one would expect a discretionary right to be, considerably 2177 wider, and at first sight I found it difficult to see why local authorities are not fully competent to deal with the matter of this sort.
§ Squadron Leader A. E. Cooper (Ilford, South)
I think that this particular provision which the hon. and learned Member for Kettering (Mr. Mitchison) is now discussing, which is a discretionary power which local authorities now have, relates solely to the trading losses of particular owners, and has nothing whatever to do with the property in which they live.
§ Mr. Mitchison
I do not so read the Section which I have quoted, and the hon. and gallant Gentleman must take his own interpretation of it. It seems to me, to put it at the very lowest, that there is a very wide overlap between these two provisions, and I should have thought that the discretionary powers of the local authorities went rather further than what is now proposed. I agree that the language is not exactly the same, but, of course, one is a discretionary and the other a statutory right, and their coexistence seems to me to need some sort of explanation.
Moreover, we are dealing here with unfit houses—houses of a kind which has been rather extended since the term appeared in Housing Acts—but, still, unfit houses. We are told that a great slum clearance campaign is to be introduced. We are told that all this is to be got out of the way in a short time. I do not accept that kind of statement at anything like its face value, but I think it very remarkable that in these circumstances it should be thought necessary to introduce a permanent provision in favour of shopkeepers while giving only a temporary one in favour of owner-occupiers living in their own houses. I therefore regard with some suspicion which, I hope, will be dispelled, some of the features of Clause 2.
Clause 3 deals with the special cases of what is called a well-maintained allowance, and here again I merely mention the point that this is to be indefinite in duration. The power to vary the fixed well-maintained allowance, if I may so describe it, which is contained in Section 42 (2, b) of the 1936 Act, is to be exercised indefinitely by the Minister. If that is to be done, I suggest that the House ought to remember that the primary intention of that Section was to relate it to 2178 the amount spent on repairs, and that if, in fact, the rateable value is no longer a proper guide for the purposes of the fixed allowance, then it ought also to be varied for the purposes of the amount of repairs required to have been done.
I notice with some suspicion that this power is taken to vary the multiplier provided in subsection (2, b) of Section 42, though no similar power is taken to deal with the inaccuracy of the rateable value, which also appears in connection with the amount of repairs that have to be done. I mention this matter simply to illustrate that these changes entirely within the Minister's discretion and for an indefinite time will have some uncertain effects, and I should have thought—and I agree that this is rather a Committee point but still an important one—that instead of the negative procedure that is provided for in the 1936 Act, the Minister ought in a matter of this sort, which is of considerable importance, to be obliged to obtain an affirmative resolution of the House before varying the multiplier. That is all that I have to say about the payments themselves.
I repeat for about the third time, I hope not tediously, that we should not have opposed the Second Reading of the Bill if it had provided for proper Exchequer subsidies. I wish to make that perfectly clear. We were told that the absence of those subsidies was a flimsy reason for putting forward our Amendment. We were told that this was a very small baby. I would remind the House that the last thing that broke the camel's back was a straw, and whether the camel's back of local authority finance has or has not been broken already, is an open question.
One thing is perfectly certain—the miserable camel, the local council, has a very heavily loaded back indeed, and the Minister is constantly putting on to that back one straw after another. There is not the least doubt about it that some time or another the Minister will attain what appears to be his object and completely cripple the finances of local authorities as regards housing. I can come to no other conclusion.
I find this the more remarkable, because just at this time the right hon. Gentleman is engaged in a review of the financial position of local authorities, and surely that review will lead to some fairly 2179 comprehensive result. It is thought to be about to be concluded reasonably soon—I put it no higher than that—and there is no real need to put this extra burden on local authorities for the comparatively short time which we hope will elapse before the Minister feels driven to come to their aid, in some respects at any rate, as a result of his review.
I am complaining about the absence of direct Exchequer subsidies and I am glad that the Parliamentary Secretary did not even attempt to put up the bogey that all would be met by changes in the Exchequer equalisation grant. That somewhat discredited instrument would certainly not be suitable for the purpose. Any changes in Exchequer equalisation grant would be quite inadequate and, for all practical purposes, negligible.
I take leave to differ entirely from the kind of estimate which the Parliamentary Secretary has just given. It must have been produced at rather short notice. I asked the Minister a Question a day or two ago and his Written Answer appears in today's OFFICIAL REPORT. I asked:…what estimate he has made of the additional cost to local authorities in England and Wales of compensating"—on the basis adopted here—any owner-occupiers of the unfit houses which it is proposed to demolish during the next five years at full compulsory purchase value instead of at site value…"—[OFFICIAL REPORT, 27th March, 1956; Vol. 550, c. 175.]The Minister said that it was difficult to make any precise estimate.
An estimate was not available then, because no answer was given to the Question about what estimate the right hon. Gentleman had made. I did not ask whether it was difficult or easy to make a precise estimate. I simply asked what estimate the right hon. Gentleman had made. He did not answer. Therefore, I have made an estimate of my own. I do not know where the 5 per cent. derives from and I find that very difficult to follow.
I have in mind Cmd. 8996, entitled "Houses The Next Step". Roughly speaking, and it is fairly accurate, that shows that out of houses not being council houses, one-third were owner-occupied and two-thirds were let. I imagine that that proportion is about right. If we are told that the proportion is entirely 2180 different in the case of unfit houses, we want to know how that proportion has been arrived at and what is the real reason for the difference.
I should have thought that the social need which we are recognising in the Bill—the fact that people were driven to buy these houses in order to find somewhere for themselves to live—would have tended to show a rather higher proportion of owner-occupied houses in those cases than in the generality of houses in the country. However that may be, I find it quite impossible to see any reason for the extraordinarily wide discrepancy now suggested by the Parliamentary Secretary.
§ The Minister of Housing and Local Government (Mr. Duncan Sandys)
The hon. and learned Member seems to be suggesting that this figure of 5 per cent. has been jumped upon the House at the last moment since Question Time yesterday, but it was a figure which I myself gave when I announced, on 13th December, that a Bill on these lines would be introduced.
§ Mr. Mitchison
I am not suggesting that. I heard what the Parliamentary Secretary said and I recall what the right hon. Gentleman said on that occasion, but I cannot accept the figure and I do not know upon what it is based. I do not at present believe that it can be right. I am perfectly certain that if that is the figure generally it will not be the figure in particular cases—that is to say, the spread of the percentage will differ very widely.
I am going to take for the moment the one-third given in "Houses The Next Step" as my figure and I am going to make a rough estimate. The local authorities proposed to demolish 75,000 unfit houses in a year. That was before the special Tory incentive to demolish more induced the Minister to lower the figure to 60,000 a year. That is the result of Tory incentives, but we have had that one before.
Let us take the 75,000 houses and take one-third of them, that is, 25,000. Let us take a hit-and-miss figure for the sort of amount that is likely to be involved in this additional compensation. On experience, I take about £200 to £250 as a likely figure. If we take that figure and combine the two figures, the result is 2181 about £5 million a year. That is the equivalent over the country, on the total new rateable value, of about a 2d. rate. I do not say that I am right. I may not be. I merely say that I asked the Minister for an estimate and he did not give one and I had to make an estimate myself. If, therefore, the right hon. Gentlemen is going to correct me now, I only wish that he had answered my Question and had saved me the trouble of trying to explain to the House what I think the estimate might be.
I take this figure with very great interest, for another reason. In my Question I went on to ask the Minister about particular cases. The right hon. Gentleman did not answer that part of the Question at all. I asked him about Leeds and Bournemouth. I worked out my little sum in relation to their programme and in relation to their rateable value, and the results were startling. I asked the House to observe this, that though the basis of my sum may be wrong, the inaccuracies in it, if any, will not affect the proposition I am now putting. It is this, that as regards Leeds, for instance, instead of an average 2d. rate the rate would he about 6d. For Bournemouth it would be about one-tenth of ld.
The reason is a simple one, that in relation to its rateable value Leeds has a difficult job of slum clearance to do, and this bit of legislation follows the pattern of all Tory legislation, it gives to the rich and does not give to the poor. In this case, of course, it imposes a burden on poor Leeds and little or nothing on wealthy Bournemouth.
Take another instance. The right hon. Gentleman's own Borough of Wands-worth comes out rather well, as against the average I have given, at the equivalent of ½d. a rate. If we take the county districts in the County of Durham, a mining county full of houses where clearances have to be made, where new houses have to be built, where there actually exists a new town for the purpose, we find that there it is rather over a 4d. rate on these figures.
My basis may be wrong but, right or wrong, the inaccuracies of it will apply to all the places in that comparison, and the net result is perfectly clear. It is that Leeds and the county districts of Durham will get it in the neck once more, while places like Bournemouth and 2182 the Borough of Wandsworth will come out, Bournemouth very easily and Wandsworth fairly easily.
This is something which can only be justified as a measure to meet a particular social need arising out of the war. But why should the Minister, if he is to meet a need of that kind. meet it unfairly out of the rates instead of meeting it as a general public need out of taxation? I know no answer to that question and I shall be interested to hear it from the right hon. Gentleman, and to hear it in relation to the justification which his hon. Friend gave, and with which I agree entirely, for Clause 1 of the Bill.
That is the first point. The next point is this. The Government are intent on shedding the very last drop of the financial blood of local authorities. They will not shed any of their own but they are going to save the country at the expense of the rates, since presumably the Chancellor will not allow them to do it in any other way.
Just look at the position in which local authorities and their treasurers and finance committees find themselves at present. Let us take rateable value first. They do not know at present what will be their rateable value. The country is stiff with appeals from shopkeepers. It is true that in Circular 62/55 the Minister told them not to take those too seriously, but he is so intuitional about these things. The right hon. Gentleman could not give me an estimate but he felt sure that it would not amount to much.
The Minister ought to be careful. He had the same sort of hunch or intuition, or whatever one calls it, about the effect of the Housing Subsidies Bill—it would not really stop council housing in the country. Well, even within the dark portals of the Ministry rumours must have arrived that council housing is being held up all over the country as a result of what was done on that occasion. And if that was one of his intuitions, then I am not inclined to place too much weight on this one.
That is not all. There are other uncertain things. I shall not bore the House by going into them in detail but, curiously enough, some of the rate relief for charitable and other organisations has had a considerable effect. What is happening about this rateable value? Council after council appears to reduce 2183 the rates, but that is simply because the rateable value has gone up on this last valuation. I followed with great interest the calculations which were made in the Local Government Chronicle of 10th and 17th March.
An ingenious person there had carried on the 1955 to 1956 expenditure and had shown what rate it would have meant on the new valuations. So. of course, we can compare like with like, and I think that was done fairly accurately as far as I can judge. If we look at the actual rate and at what the rate would have been if there had merely been the 1955 to 1956 expenditure, we find some startling results which, however, are not altogether surprising.
They show clearly that local authority expenditure has not only gone up considerably but that it has gone up very irregularly. The county increases on the basis I am giving now—that is to say, eliminating in effect the change in the valuation list—varied from 5d. in London to no less than 4s. 10d. in Cambridgeshire. The county borough increases showed sharp rises, being 3s. 2d. in Leeds, 3s. 5d. in Norwich, 4s. 5d. in Oxford and 4s. 10d. in Sheffield.
§ Mr. Mitchison
That may be.
This is what is happening. The expenditure of local authorities is steadily and necessarily increasing and the Government 'are not exempt from blame. I said just now that the right hon. Gentleman was ready to shed the last drop of the financial blood of the local authorities. If he does not like that rather nasty bit of language, let me assure him that it is not any worse than what his hon. Friend said when he declared that "the emphasis of scarcity funnelled into the sector of vacant possession." For somebody with a classical education to use such a phrase is horrible, so I shall keep to my financial blood.
What happened the other day? We had a debate about teachers and teachers' pensions. In that instance another 1 per cent. of teachers' salaries was put by the Minister on the backs of local authorities. Further, he encouraged teachers in the claim they will soon make before the Burnham Committee. The right hon. 2184 Gentleman was quite right to do it, but all this was at the expense of the local authorities. It is no use telling me that it comes down on the council and that they are not the housing authority because what comes down on the county is reflected in the precept, and comes down on a county district. In the case of a county borough there is only one authority.
That is not all. There are many other things happening to these local authorities now. They are partly uncertainties and they are partly the quite definite increases that are going on. I do not want to go into them in detail. I believe that right hon. and hon. Members of this House keep in some sort of touch with their own local authorities and they know what is going on perfectly well. What is going on is that for some years past now, local rates have been rising steadily, and yet Government grants have been required to meet the necessary expenditure.
The position has been that Government grants have in recent years outstripped the total product of local rates, and that is merely a measure of the insufficiency of local rates to meet the necessary expenditure of local authorities. Local authorities have had to face all the time not merely questions of the increase of teachers' salaries, not merely uncertainties about this or that Measure of the Government, but the common inflation which exists in the country at present, and they have had to face it in two ways.
First, they have had a constant rise in salaries and wages of all sorts—everybody from the town clerk to the humblest man who is employed by a local authority. They have had rises in everything that they have had to do, and who thinks otherwise? What have the Government done to help them? They have done just this: local authorities have to meet their major expenses by borrowing. The Government have put an additional sum of about £10 million a year on the backs of the local authorities by putting up the rate at which they have to borrow from about 3 per cent. to 5½ per cent. That has been done in the cause of the sound administration of local finances. They are to have no exceptional benefits, and the dear money policy of the Government—their patent remedy for the ills of the country—is to be visited to the full on the local authorities.
2185 Look at the present position—rising costs, rising rates of interest, difficulty in borrowing, uncertainty as to what more is to come. Some of these large authorities are putting aside millions towards teachers' salaries. The whole of this presents a position of financial desperation, and financial uncertainty which it would have taken a Tory Government to bring about in local finance. Now, on top of it, they come forward with this Bill—small, I agree—and, in a spirit of miserable niggardliness, they intend to put the whole cost of it on the rates and not one penny on the Exchequer, although the Bill is meant to meet a general social need. If they allow it to go through in this way, it will come down hardest on those local authorities which have the most to do and the most difficult job to face.
It is said that this is to be part of a campaign of slum clearance. What is the use of coming down on local authorities who have their hands full and are overburdened with the job of slum clearance with a bit more financial discouragement, and then expecting them to get on with the job wholeheartedly? Let us remember about this business of slum clearance, that the slum clearance subsidy, as I may call it, does not meet the increases which local authorities have had to face. It ought to be £30 for all purposes and it is £22—another bit of Government niggardliness towards the local authorities.
I can come to no other conclusion than this: either the Government do not mean to promote proper local government in this country and do not mean to encourage the people who have to do the job in local authorities, or they just do not know what they are doing in this respect. I say to them, "Take your Bill away bring it back with a reasonable Exchequer subsidy and recognise that the biggest subsidy that the people get in connection with local government is the unpaid, voluntary, publicspirited work of the thousands of people who serve local authorities and serve their fellow citizens because they think it right to do so."
§ Mr. Mitchison
The right hon. Gentleman says, "Hear, hear." If, instead of saying that, he would give the local authorities a reasonable Exchequer subsidy I would have greater belief in the 2186 enthusiasm with which he welcomes local authority efforts.
I beg to move, to leave out from "That" to the end of the Question, and to add instead thereof:this House declines to give a Second Reading to this Bill, because it does not provide for any direct Exchequer subsidies towards the payments proposed and so imposes an undue burden on the rates.
§ 5.7 p.m.
§ Mr. Norman Pannell (Liverpool, Kirkdale)
I was very encouraged by the peroration of the hon. and learned Member for Kettering (Mr. Mitchison), when he referred in such flattering terms to the servants of local authorities. presumably meaning the councillors, since I am a councillor of the City of Liverpool, and it is only for that reason that I presume to speak on this subject.
The Bill, in my view, is a measure of simple justice designed to relieve innocent people of the consequences of their sometimes ill-considered and imprudent actions A great many people have suffered in recent years because such a Bill as this has not been on the Statute Book. would like the Bill to be retrospective, but I know full well that there are insuperable difficulties in that course.
This is a problem of very great consequence to Liverpool. As a recent report showed, 44 per cent. of all houses in Liverpool had been declared unfit in some way or other. In my own division of Kirkdale large areas have been scheduled for slum clearance. They have been so scheduled for many years, so that the term "slum clearance" has almost fallen into derision and few people expect anything to be done about it. There is now a wide gap between promise and performance. The architect's plan of Liverpool does not represent what the position will be for a very long time to come. The practical measures that have to be taken, the availability of funds and so forth take a very long time. I am encouraged by the fact that the recent Housing Subsidies Act has lent an impetus to slum clearance, and that gives further point to the Bill.
In my division, and no doubt in others, there are cases of people of independent 2187 outlook, previously living in unfortunate housing conditions, who have not been content to continue to endure those conditions and who have sought their own means of housing themselves. In some cases the houses which they have chosen have been in areas already scheduled for clearance or subsequently scheduled. These people have been so desperate to obtain a house that they have not made very close inquiries. In many cases the lawyer for the vendor has also acted for the purchaser and facts which might otherwise have been disclosed have not been apparent to the purchaser.
§ Mr. James MacColl (Widnes)
Is not the hon. Gentleman making a rather grave accusation against a very distinguished profession? If a solicitor is acting for both parties, as I understood he was in the hypothetical case quoted, is it not a very shocking allegation to say that he has not revealed information vital to the value of the house which would affect the purchaser as well as the vendor?
§ Mr. Pannell
I intended no slur on the legal profession. I am not a lawyer, but the case I had in mind was where one lawyer acts; he acts for the vendor and the purchaser employs no solicitor at all. The legal formalities are completed on behalf of one party, but, in a sense, on behalf of the purchaser, too. The facts about the imminence of clearance are not disclosed.
These unfortunate purchasers then find that the council suddenly decides to proceed with a slum clearance scheme in the area and they are offered site value for their property. If they dispute it, they are faced with a compulsory purchase order. In Liverpool the site values vary between £10 and £20, which is very poor compensation for the owner of the property.
Some of these people have put their life savings into the property and others have bought the property on mortgage—a mortgage on onerous terms, because property of this description will never attract the most favourable terms. In Liverpool, and no doubt in other corporations of humane outlook, there is a moral obligation to house people whose property has been demolished, and Liverpool always honours that obligation. If a man has lost his life savings through 2188 being dispossessed, he may not find difficulty in paying the rent of the council house allotted to him, but if he had purchased the house on mortgage he may be in grave difficulty, for he will be called upon to pay the rent of the council house plus the mortgage payments on property which he no longer possesses.
For a time I was chairman of the Arrears Committee of Liverpool Corporation, and it was the duty of the committee to examine many heartrending cases every month of people who were unable to pay their council house rents. Not infrequently these were cases of people who had been dispossessed of houses which they had bought on mortgage in good faith; and, on being dispossessed, they had had to continue their mortgage payments in addition to paying the corporation rent. They had to choose between one and the other, and they failed to pay their corporation rent. These are cases which are extremely hard and which the Bill does much to overcome.
The Bill will not do everything. It does not deal with cases of people who may innocently buy these houses in future, since it deals only with people who have bought houses before 13th December
§ Mr. Lindgren
The hon. Gentleman is speaking from a long practical experience and has been dealing with these cases as chairman of the Liverpool Arrears Committee. Will he say what was the percentage of owner-occupiers in Liverpool?
§ Mr. Pannell
I am sorry, but I could not possibly give those statistics. The proportion of those who were owner occupiers who had been dispossessed and who could not pay the rents of the council houses allotted to them was not very high, but there were such cases and they were significant cases.
The Bill does not cover the cases of those who may innocently buy such houses in future. It is important that the widest possible publicity should he given not only to the rights of people under the Bill but also to the dangers of purchasing property which might be subject to a slum clearance order at some later date. It is incumbent upon local authorities to give this the widest publicity, and I hope that my right hon. Friend will issue a circular to them to that end.
2189 In conclusion, I do not think the burden likely to fall on local authorities will be heavy. The number of owner occupied houses in slum clearance Lucas is very small in relation to those which are landlord-owned, and I would also say that these sites are cheap sites. If, in a block of twenty houses, only one comes under the provisions of the Bill, the compensation for it is not likely to exceed £400 or £500, and the other nineteen houses will be bought at site value, at about £10 each. Taking the twenty houses together, the site will be extremely cheap. We must also remember that the Housing (Subsidies) Act raised the subsidies for buildings erected in slum clearance areas.
§ Mr. Pannell
By replacing one basis for another, in my view a corporation will be at an advantage on these cheaper sites compared with previously.
§ Mr. Mitchison
The hon. Member has made a slip. All the Act did was to maintain the existing subsidies in most cases, while reducing subsidies in other cases.
§ Mr. Pannell
I had in mind the multistorey flats which are a feature of Liverpool's new building programme. I think I am right in saying that in those cases the subsidies have been materially increased.
I think the Bill is an overdue measure of justice, and I sincerely hope that it will be given a Second Reading.
§ 5.19 p.m.
§ Miss Alice Bacon (Leeds, SouthEast)
This is a very difficult question. To my knowledge, and to the knowledge of the hon. Member for Kirkdale (Mr. N. Pannell), there are some very distressing cases. The hon. Member quoted what my hon. Friend the Member for Widnes (Mr. MacColl) called a "hypothetical case." During my speech I hope to quote not a hypothetical case but a real one to show how innocent people are sometimes deliberately taken in and misled.
The Bill is an attempt to remedy certain injustices, but what I fear is that in remedying those injustices we may be in danger of creating others. The Bill will undoubtedly recompense the many rather poor people who in the past few years 2190 have bought old houses without realising the true position. I thought that the Parliamentary Secretary viewed this matter today in a rather detached way. I find it difficult to view it in a detached way because, representing the constituency I do, I live with this problem, and am faced with it almost every day. I cannot have the interviews which I have regularly with my constituents without people asking that something should be done about the problem.
Leeds has a great many unfit houses. Leeds has already been referred to by my hon. and learned Friend the Member for Kettering (Mr. Mitchison). We in Leeds wish to demolish more than 14,000 houses in the next five years. That is double the number Liverpool hopes to demolish. I think it is double the number to be demolished in any other provincial city. As my hon. and learned Friend said, the whole of the burden of the Bill will be put upon the local authorities.
Practically all our new council houses in Leeds, with the exception of a few which are being let to people for medical reasons, are of necessity being allocated to tenants from areas of slum clearance, and nobody living in otherwise overcrowded conditions stands any chance of getting a new council house—unless he happens to live in an area of demolition. During the last year almost all our new houses have been let to people from demolition areas, and this allocation of necessity certainly will not stop for the next five years.
The constituency which I represent comprises the centre of Leeds and the whole of the ring around it, and contains a great many of these unfit houses. I could quote many individual examples of hardship, but as I do not want to weary the House too much I shall quote only two, with the object of showing the problem we are up against, and how the Bill will help. One of these examples is of a man who bought a house in February, 1953, for £400, which is rather more than the amount for which a house of this type is going for at present in Leeds, the majority of such houses being sold for any amount between £150 and £250.
I will read to the House a letter which that man sent to me, for it shows how he entered into this transaction, by which he 2191 paid £400 for a practically worthless house. The letter says:We were living in lodgings and received seven days' notice owing to my wife having her second child. There was no other way but to take this house we are now living in, or be out of a home for my family. I had to buy the house at £400 plus 5 per cent. interest. I pay it at £3 per month plus £1 4s. rates per month.He goes on to say that the house is not fit to live in and that he has got into debt trying to repair it. He details what is wrong with the House, and says:The roof is parting from the brickwork. It is raining into the bedroom. The living room floor is sinking from its level. Brickwork outside is cracked, and there are many more items inside which need repair.Although he paid £400 for the house only two years before he wrote to me, he implored me to try to get the medical officer to condemn the house as unfit to live in. I wrote asking him if he realised that he would receive only site value, but he was not deterred. The medical officer saw the house and it was condemned, and today the house is closed and that man is now living in a new council house.
It is proposed in the Bill that the local authority shall not any longer pay just the site value but the market value, but I should think that the market value of such a house would be well below the £400 which that man paid for that house. The Bill is really an expression of sympathy for certain classes of people. It is not pretended that the local authority is buying anything for its own advantage or getting anything out of the Bill. The local authority is being directed to make certain payments merely out of sympathy with people who, perhaps, did not understand what they were doing. I am not at all sure that the Bill will help that man very much.
I come to the second case, about which I feel very strongly indeed. This relates to the question about the solicitors. It is important that the Minister should know about the kind of practices which are going on in the buying and selling of these houses. The man in this case has no objection to his name being given in the debate. He is Mr. Carney, who bought a house at 48, Ney Street in Leeds. A few weeks ago I had all his letters relating to the transaction, and I am very sorry that they are not in my 2192 possession now, but ten days ago Mr. Carney set off to Southern Rhodesia to take up employment there, and I have not been able to get the letters back from him.
He bought a house for £180 in the middle of 1954. He followed a mode of purchase which is very common in Leeds. He paid £30 down and a private mortgage was arranged for him at £1 a week. He was an ordinary workman who came from the other side of the city and did not know that the area in which was the house he was buying was scheduled for demolition in the very near future. He bought the house through an estate agent. The estate agent said to him, "You will need a solicitor." Of course, the purchaser said, "I am only an ordinary working man and I do not have a solicitor." The estate agent said, "I will provide you with one." Only after the transaction was completed did the purchaser realise what had happened.
He realised then that the solicitor with whom he had been provided was the solicitor acting for the vendors, who owned quite a number of houses in that district. The solicitor actually wrote a letter to him afterwards, saying that to warn him about the property had nothing to do with him. He admitted he knew, the estate agents admitted they knew, and the vendors knew, that the house was in an area scheduled for demolition. The solicitor said, "You decided to buy the house before I came in. I was employed merely to do the conveyancing."
Such practices as this ought to be stopped. While it may be strictly true that solicitors are brought into the business only to do the conveyancing, surely there is a moral obligation to ensure that ordinary working people are not taken in in this way. This house is one of a block of seven houses, of which two have already been sold. I suppose the vendors have been looking for somebody to buy the other five.
What happens under the Bill? We have heard a great deal about this Measure and about the sale of these houses, but something seems to have been forgotten. It is true that under the Bill people who have been taken in, or even have bought unfit houses knowingly, are to be reimbursed to some extent, though, perhaps, not to the whole. It depends how much the market value is, compared with the 2193 price paid for the house. That is one thing: they will be reimbursed to some extent, though the local authority will have to pay for that. What seems to have been forgotten is that the people who will really gain by the Bill are the previous owners who have been selling the houses. Nobody has said anything about that at all.
Some time last year, as, perhaps, the Minister will remember, because it was referred to him, there was in Leeds a case which received a great deal of publicity. At that time the Secretary to the Leeds and District Property Owners' and Ratepayers' Association wrote to me to see if I would take up the matter in the House. I wrote back to him to say:I believe it is significant that owners of slum property in Leeds, having collected rents for years, are now selling. Surely there is some moral obligation on such owners not to sell off their houses in this way.There has been no attempt by the Government to try to stop people acting in this way. I know it is difficult by law, but there has been no attempt by the Government to condemn these most reprehensible actions.