HC Deb 18 February 1959 vol 600 cc375-405

3.37 p.m.

Mr. G. R. Mitchison (Kettering)

I beg to move, in page 6, line 38, to leave out subsection (1).

Subsection (1) repeals a provision in the 1958 (Financial Provisions) Act, 1958, that the premises in respect of which an improvement grant is made should remain available for letting unless occupied by the owner or someone, to put it very generally, related to the owner, for a period of twenty years. The effect of subsection (1) is to reduce that period to ten years. The point is quite a short one, and, in moving this Amendment very briefly, as I propose to do, I have in mind the promise given to the right hon. Gentleman from this side that we would do our best to complete the proceedings at a reasonable hour this evening.

We see no reason why this period should be reduced. We attach great importance to these provisions since they make the house, in effect, either owner-occupied or available for letting. We do not think it right that, within a comparatively short period such as ten years for this purpose, the house should be sold and the benefit of the improvements, in respect of which public money has been used to contribute half the cost, should pass to the buyer, the seller taking advantage of public money in receiving a higher price. That position has always been recognised in relation to improvement grants. I have been looking at the debates on the 1949 Act by which they were originated at the instance of my own party, and I cannot find that any objection was taken to the principle.

It occurs to me that we shall be told by the Government, "We are reducing by the Bill the minimum period of leasehold interest which the applicant for an improvement grant must have. It used to be thirty years. The twenty years was related to that. It is now being reduced to fifteen years and, therefore, there ought to be a similar reduction of the period during which the provisions apply." We cannot accept that, because there is no reason why an arrangement of this sort should not go on and attach to the house, although I doubt whether provision will be made for it so attaching. The substance of the matter is that the house should be kept owner-occupied or available for letting during a much longer period than ten years and that an advantage, obtained partly out of public funds, should not accrue on the sale within any period shorter than twenty years.

This is the last moment for restricting the supply of houses available for letting. If these restrictions on improved houses are taken off, we are obviously making the availability of houses for letting a bit more restricted. We are making it possible to take the house away from the market for let houses and to transfer it to the market for sold houses. Without going into detail of the reasons, there is no doubt that in the big towns at present the shortage of houses to let is acute, and that people are being driven by other legislation, for which the right hon. Gentleman and his predecessors in office are responsible, to buying houses when they would not have otherwise bought them because they cannot find houses to let. Incidentally, they are being driven to making some very harsh bargains because of that difficulty.

Therefore, this is the very last moment to make a change which will, to some extent, reduce the pool of houses available for letting. That will be so, in particular, in relation to large towns. I hope that the Minister will reconsider the proposal to shorten the period, and, of course, if he cares to say that twenty years is perhaps too long but that he admits ten years is too short and suggests another period, we shall be interested in what he says. Our own view, however, is that twenty years never was too long, was never thought to be too long and, in present circumstances, certainly is not too long.

The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. R. Bevins)

Like the hon. and learned Member for Kettering (Mr. Mitchison), I, too, should like to speak to this Amendment with brevity. He is perfectly right in his exposition of the existing law and also in his sense of anticipation of the Government's views. The existing position is that the conditions which are set out in the Fourth Schedule to the 1958 Act have to be observed for twenty years after the improvements have been completed.

Clause 11 (1) reduces the period to ten years. That has been done quite deliberately by my right hon. Friend because, in his view and that of the Government, a twenty-year period for the conditions to run must deter people from applying for a grant. It is true that years ago the period was even longer than twenty years, but it has been found by experience that as this period has been reduced the desire to use and the popularity of improvement grants has correspondingly increased.

As the hon. and learned Member and, indeed, the whole Committee know, all of the changes which have been written into the system of improvement grants have the same objective in view, namely, to encourage people to apply for improvement grants. It is chiefly for that reason that to leave the period at twenty years would work in the opposite direction and would discourage people from applying for grants. My right hon. Friend cannot accept the Amendment.

3.45 p.m.

There is an incidental objection to the Amendment, and it is this. To qualify for a standard grant a dwelling need not now have an estimated life of more than fifteen years, and, therefore, to make the conditions of grant apply for twenty years would make the whole business rather ludicrous. That is a purely incidental objection. The main objection is that to leave the period at twenty years is likely to discourage applications.

Mr. James MacColl (Widnes)

I thought that the object of the Bill and of the improvement grants was to provide accommodation for people who could not afford a house with decent amenities. That can be the only justification for spending public money on private houses. There must, however, be some social advantage in doing this. The Parliamentary Secretary's explanation of what is happening blows that theory sky high, because he says that the effect of reducing the period for which conditions are to be in force is immediately to increase the number of people who are prepared to apply for grants. In other words, people who apply for grants, according to the hon. Gentleman, are not interested in providing a house for their own family or providing it at a reasonable rent for a tenant, but are interested in getting quick profits at public expense.

The hon. Gentleman says that provided the period for which these quite reasonable conditions have to be observed is reduced, provided it is whittled down, people will think it worth while waiting 10 years in order to sell it at a profit, whereas they will be put off if they have to wait twenty years. Surely the logical implication of that is that people are merely using public money as an excuse to get quick profits. If that is true—and the Parliamentary Secretary has said it, I am only taking his word for it—it seems to me to be a most deplorable result of the Act and it indicates the dangers of the policy of merely trying to subsidise the property market instead of providing homes for the people.

Mr. Albert Evans (Islington Southwest)

The reply of the Parliamentary Secretary is not convincing. He says that if the term of years during which the restrictions applied were reduced, then the result would be that a great number of people would apply for improvement grants. If that argument is taken further, one could very well see that if there were no term of years and no conditions imposed there would be an avalanche of applications for grants. We must be mindful of the amount of public money which is involved in these grants, which are very generous. A private owner can obtain from the Exchequer and from the local rate fund an amount of up to, I think, £400 for the improvement of one dwelling-house.

When the Minister agrees to hand over £400 to the owner of a private dwelling, the money coming partly from the Exchequer and partly from the local rate fund, he must necessarily impose certain obligations upon the recipient of that public money. We cannot hand out public money willy-nilly without some social tag being attached to it. Nobody here would defend the proposition that we should hand out public money, and in considerable amounts—as much as £400 for one house—without making certain requirements obligatory upon the recipient of the money. To reduce from twenty to ten years the period during which the conditions apply is going a bit far.

I could have accepted the reply of the Parliamentary Secretary as being more reasonable had he said that the Minister would consider changing the ten years to fifteen years to fit in with another part of the Bill, but not even the Parliamentary Secretary can sustain in logic his argument that we should make it easier for people to obtain public money for their own purposes. He must go further and agree that certain obligations must be imposed upon the recipient of public money. It would be more in keeping with other parts of the Bill had the Minister agreed that between ten and fifteen years would have been more appropriate and if he had suggested amending the Bill to make the period, not ten years, but fifteen years.

Mr. Mitchison

I agree entirely with what has been said by my two hon. Friends. The point about a fifteen years' title is a purely incidental one. There is no reason whatever, if it is thought necessary, why some express provision should not be put into the Bill, but I am inclined to think that this arrangement

would run with the House anyhow. Be that as it may, however, that is not the real reason.

The reason why the Government are proposing the subsection is not in the interests of owner occupiers, who will not object, and not in the interests of tenants, but is to increase the number of persons seeking grants having as their object, or one of their objects, to resell the house afterwards with the benefit of the public money which has contributed to the improvements.

I did not know that the party opposite was prepared to admit so openly that that was one of its purposes in the Bill. I had supposed that it was for the benefit of owner occupiers or tenants and that it was intended to provide for small houses and the rest of the story, which appeals to us all because of the housing position throughout the country and particularly in the big towns. Now, for the Government to say that they adhere to this proposal because their friends will otherwise be unable to make profit out of reselling with the benefit of improvements financed by the Government, is an admission of the real motive which I had hardly expected. I advise my hon. Friends to divide on the Amendment.

Question put, That the words proposed to be left out stand part of the Clause: —

The Committee divided: Ayes 195, Noes 165.

Division No. 44.] AYES [3.55 p.m.
Agnew, Sir Peter Campbell, Sir David Glyn, Col. Richard H.
Allan, R. A. (Paddington, S.) Cary, Sir Robert Goodhart, Philip
Alport, C. J. M. Channon, H. P. G. Gough, C. F. H.
Anstruther-Gray, Major Sir William Chichester-Clark, R. Gower, H. R.
Arbuthnot, John Conant, Ma, Sir Roger Grant, Rt. Hon. W. (Woodside)
Armstrong, C. W. Cooper-Key, E. M. Grant-Ferris, Wg Cdr. R.(Nantwich)
Ashton, H. Cordeaux, Lt.-Col. J. K. Green, A.
Astor, Hon. J. J. Corfield, F. V. Grimond, J.
Baldwin, Sir Archer Crowder, Sir John (Finchley) Harris, Frederic (Croydon, N.W.)
Balniel, Lord Cunningham, Knox Harris, Reader (Heston)
Barber, Anthony Dance, J. C. G. Hay, John
Barlow, Sir John Davidson, Viscountess Hill, Rt. Hon. Charles (Luton)
Barter, John de Ferrantl, Basil Hill, Mrs. E. (Wythenshawe)
Batsford, Brian Digby, Simon Wingfield Hinchingbrooke, Viscount
Baxter, Sir Beverley Dodds-Parker, A. D. Holland-Martin, C. J.
Beamish, Col. Tufton Donaldson, Cmdr. C. E. McA. Holt, A. F.
Bell, Ronald (Bucks, S.) Drayson, G. B. Hope, Lord John
Bennett, F. M. (Torquay) Dugdale, Rt. Hn. Sir T. (Richmond) Hornby, R. P.
Bevins, J. R. (Toxteth) Duncan, Sir James Hornsby-Smith, Miss M. P.
Biggs-Davison, J. A. Duthie, W. S. Horobin, Sir Ian
Bingham, R. M. Eden, J. B. (Bournemouth, West) Howard, Gerald (Cambridgeshire)
Boyd-Carpenter, Rt. Hon. J. A. Emmet, Hon. Mrs. Evelyn Howard, John (Test)
Boyle, Sir Edward Erroll, F. J. Hughes Hallett, Vice-Admiral J.
Braithwaite, Sir Albert (Harrow, W.) Farey-Jones, F. W. Hughes-Young, M. H. C.
Bromley-Davenport, Lt.-Col. W. H. Fell, A. Hurd, Sir Anthony
Brooke, Rt. Hon. Henry Fisher, Nigel Hutchison, Michael Clark (E'b'gh,S.)
Brooman-White, R. C. Fletcher-Cooke, C. Hutchison, Sir James (Scotstoun)
Browne, J. Nixon (Craigton) Freeth, Denzil Hylton-Foster, Rt. Hon. Sir Harry
Bullus, Wing Commander E. E. Garner-Evans, E. H. Irvine, Bryant Godman (Rye)
Burden, F. F. A. George, J. C. (Pollok) Jennings, Sir Roland (Hallam)
Butler, Rt. Hn. R. A. (Saffron Walden) Gibson-Watt, D. Johnson, Eric (Blackley)
Joseph, Sir Keith Maydon, Lt.-Comdr, S. L. C. Stevens, Geoffrey
Kaberry, D. Milligan, Rt. Hon. W. R. Steward, Harold (Stockport, S.)
Kerby, Capt. H. B. Moore, Sir Thomas Stoddart-Scott, Col. Sir Malcolm
Kerr, Sir Hamilton Mott-Radclyffe, Sir Charles Storey, S.
Kershaw, J. A. Nabarro, G. D. N. Stuart, Rt. Hon. James (Moray)
Kimball, M. Neave, Airey Studholme, Sir Henry
Kirk, P. M. Nicholson, Sir Godfrey (Farnham) Summers, Sir Spencer
Lambton, Viscount Nicolson, N. (B'n'm'th, E. & Chr'ch) Sumner, W. D. M. (Orpington)
Langford-Holt, J. A. Noble, Michael (Argyll) Taylor, Sir Charles (Eastbourne)
Leavey, J. A. Nugent, G. R. H. Taylor, William (Bradford, N.)
Leburn, W. G. O'Neill, Hn. Phelim (Co. Antrim, N.) Teeling, W.
Legge-Bourke, Maj. E. A. H. Ormsby-Gore, Rt. Hon. W. D. Temple, John M.
Legh, Hon. Peter (Petersfield) Orr, Capt. L. P. S. Thomas, Leslie (Canterbury)
Lindsay, Hon. James (Devon, N.) Page, R. G. Thompson, Kenneth (Walton)
Lindsay, Martin (Solihull) Peel, W. J. Tiley, A. (Bradford, W.)
Linstead, Sir H. N. Peyton, J. W. W. Tilney, John (Wavertree)
Lloyd, Maj. Sir Guy (Renfrew, E.) Pickthorn, Sir Kenneth Vane, W. M. F.
Longden, Gilbert Pilkington, Capt. R. A. Vickers, Miss Joan
Lucas, Sir Jocelyn (Portsmouth, S.) Pitman, I. J. Vosper, Rt. Hon. D. F.
Lucas-Tooth, Sir Hugh Pott, H. P. Wakefield, Edward (Derbyshire, W.)
McAdden, S. J. Powell, J. Enoch Wakefield, Sir Wavell (St. M'lebone)
Macdonald, Sir Peter Price, David (Eastleigh) Walker-Smith, Rt. Hon. Derek
McLaughlin, Mrs. P. Prior-Palmer, Brig. O. L. Wall, Patrick
Maclean, Sir Fitzroy (Lancaster) Redmayne, M. Ward, Rt. Hon. G. R. (Worcester)
McLean, Neil (Inverness) Renton, D. L. M. Ward, Dame Irene (Tynemouth)
Macpherson, Niall (Dumfries) Ridsdale, J. E. Watkinson, Rt. Hon. Harold
Maddan, Martin Ropner, Col. Sir Leonard Webster, David
Maitland, Cdr. J.F.W. (Horncastle) Russell, R. S. Whitelaw, W. S. I.
Manningham-Buller, Rt. Hn. Sir R. Scott-Miller, Cmdr. R. Wilson, Geoffrey (Truro)
Markham, Major Sir Frank Sharples, R. C. Wolrige-Gordon, Patrick
Marples, Rt. Hon. A. E. Smithers, Peter (Winchester) Wood, Hon. R.
Marshall, Douglas Smyth, Brig. Sir John (Norwood) Woollam, John Victor
Mathew, R. Spearman, Sir Alexander
Maudling, Rt. Hon. R. Speir, R. M. TELLERS FOR THE AYES:
Mawby, R. L. Spens, Rt. Hn. Sir P. (Kens'gt'n, S.) Mr. Bryan and Mr.J. E. B. Hill
Abse, Leo Greenwood, Anthony Mayhew, C. P.
Ainsley, J. W. Grey, C. F. Mellish, R. J.
Albu, A. H. Griffiths, Rt. Hon. James (Llanelly) Messer, Sir F.
Allen, Scholefield (Crewe) Griffiths, William (Exchange) Mitchison, G. R.
Awbery, S. S. Hall, Rt. Hn. Glenvil (Colne Valley) Moody, A. S.
Bacon, Miss Alice Hamilton, W. W. Mort, D. L.
Balfour, A. Hannan, W. Mulley, F. W.
Bence, C. R. (Dunbartonshire, E.) Hastings, S. Neal, Harold (Bolsover)
Benn, Hn. Wedgwood (Bristol, S.E.) Henderson, Rt. Hn. A. (Rwly Regis) Noel-Baker, Francis (Swindon)
Benson, Sir George Herbison, Miss M. Noel-Baker, Rt. Hon. P. (Derby, S.)
Beswick, Frank Holmes, Horace Oliver, G. H.
Blackburn, F. Howell, Charles (Perry Barr) Oram, A. E.
Blenkinsop, A. Hoy, J. H. Owen, W. J.
Blyton, W. R. Hughes, Cledwyn (Anglesey) Paget, R. T.
Boardman, H. Hughes, Hector (Aberdeen, N.) Pannell, Charles (Leeds, W.)
Bowden, H. W. (Leicester, S.W.) Hunter, A. E. Parker, J.
Bowles, F. G. Hynd, J. B. (Attercliffe) Parkin, B. T.
Boyd, T. G. Isaacs, Rt. Hon. G. A. Paton, John
Braddock, Mrs. Elizabeth Janner, B. Pearson, A.
Brockway, A. F. Jeger, Mrs. Lena (Holbn & St. Pncs,S.) Peart, T. F.
Bronghton, Dr. A. D. D. Jenkins, Roy (Stechford) Pentland, N.
Brown, Rt. Hon. George (Belper) Johnson, James (Rugby) Popplewell, E.
Brown, Thomas (Ince) Prentice, R. E.
Burton, Miss F. E. Jones, Rt. Hon.A.Creech (Wakefield) Price, J. T. (Westhoughton)
Castle, Mrs. B. A. Jones, David (The Hartlepools) Price, Philips (Gloucestershire, W.)
Champion, A. J. Jones, Elwyn (W. Ham, S.) Probert, A. R.
Chapman, W. D. Jones, Jack (Rotherham) Randall, H. E.
Chetwynd, G. R. Jones, J. Idwal (Wrexham) Rankin, John
Cliffe, Michael Key, Rt. Hon. C. W. Reeves, J.
Coldrick, W. King, Dr. H. M. Reid, William
Collick, P. H. (Birkenhead) Lawson, G. M. Reynolds, G. W.
Craddock, George (Bradford, S.) Lee, Frederick (Newton) Rhodes, H.
Cullen, Mrs. A. Lewis, Arthur Robens, Rt. Hon. A.
Davies, Ernest (Enfield, E.) Lindgren, G. S. Roberts, Albert (Normanton)
Davies, Stephen (Merthyr) Logan, D. G. Roberts, Goronwy (Caernarvon)
de Freitas, Geoffrey Mabon, Dr. J, Dickson Robinson, Kenneth (St. Pancras, N.)
Delargy, H. J. McAlister, Mrs. Mary Ross, William
Ede, Rt. Hon. J. C. MacColl, J. E. Royle, C.
Edwards, Robert (Bilston) McInnes, J. Short, E. W.
Edwards, W. J. (Stepney) McKay, John (Wallsend) Silverman, Julius (Aston)
Evans, Albert (Islington, S.W.) MacMillan, M. K. (Western Isles) Simmons, C. J. (Brierley Hill)
Fernyhough, E. MacPherson, Malcolm (Stirling) Skeffington, A. M.
Fraser, Thomas (Hamilton) Mahon, Simon Sorensen, R. W.
Gaitskell, Rt. Hon. H. T. N. Mallalieu, E. L. (Brigg) Sparks, J. A.
George, Lady Megan Lloyd (Car'then) Mann, Mrs. Jean Spriggs, Leslie
Gibson, C. W. Marquand, Rt. Hon. H. A. Steele, T.
Gooch, E. G. Mason, Roy Stewart, Michael (Fulhaes)
Strauss, Rt. Hon. George (Vauxhall) Viant, S. P. Willis, Eustace (Edinburgh, E.)
Summerskill, Rt. Hon. E. Warbey, W. N. Winterbottom, Richard
Swingler, S. T. Watkins, T. E. Woodburn, Rt. Hon. A.
Sylvester, G. O. Wells, Percy (Faversham) Woof, R. E.
Taylor, Bernard (Mansfield) Wells, William (Walsall, N.) Yates, V. (Ladywood)
Taylor, John (West Lothian) White, Henry (Derbyshire, N.E.) Younger, Rt. Hon. K.
Thornton, E. Willey, Frederick Zilliacus, K.
Tomney, F. Williams, Rt. Hon. T, (Don Valley)
Usborne, H. C. Williams, W. R. (Openshaw) TELLERS FOR THE NOES:
Mr. Deer and Mr. Wilkins.
Mr. Mitchison

I beg to move, in page 7, line 17, after "of", to insert: an interval of at least". I should like to refer, also, to the Amendment in line 17, to leave out "three" and to insert "five", and the Amendment in line 17, at the end to insert: (during which the dwelling was at all times occupied by such a person as is described in the foregoing sub-paragraph (a) or the foregoing sub-paragraph (b))". The first two Amendments raise a point slightly different from that raised by the third, but it is quite convenient that they should be discussed together.

Clause 11 (3) introduces a new class of person into the classes of persons who may occupy a house without interfering with the conditions upon which the improvement grant was made. The present conditions are that during the period which we were discussing on the last Amendment, the house shall be occupied by the applicant for the grant or a member of his family or, broadly speaking, his heir after death, or a member of the agricultural population under what I might call tied cottage arrangements. If it is not occupied by any one of these persons it should be let or kept available for letting.

The Government seek, by means of subsection (3), to introduce another type of person who may occupy without prejudice of the conditions, and that is someone who buys or takes, in some form or another, the interest of the applicant for the grant.

The obvious case would be that where a grant is applied for by one person and, at the end of three years, he is entitled to sell the property to someone else without infringing the conditions on which the grant was made. That is, in two respects, a complete change. First, it introduces a purchaser who was not there before in the conditions. Secondly, it sets a time limit of three years. The introduction of such a purchaser without a time limit would be a bit much even for the present Government. It would mean that an applicant, and perhaps a collusive applicant, could apply for a grant and, as soon as the improvements were made, sell the property to someone else who would receive the benefit from the grant, and the public money which had been applied as to half the cost.

Even the present Government, in seeking a change at all, have thought of three years as the minimum period which they could put before us as a decent interval. But if we are to have an arrangement of this sort at all, surely three years is much too short a period. We suggest that it should be five years. I believe that we are being very moderate in that respect. It might very well have been a rather longer period. The object of this provision in the Bill is to prevent the passing of what would amount practically to the whole benefit of public contribution towards the grant, on a sale quite shortly afterwards. If that is the object, then, clearly, three years constitute a ridiculous period. Five years may well be too short, but we have put that period forward as, at any rate, an improvement on three years.

So much for the first two Amendments. The third relates to a rather different point. The proposal there is that during an interval of, as we say, five years, and, as the Government say, three years, the house must be occupied at all times by the applicant or by a member of his family. What we desire to prevent is that a landlord, having applied for the grant and having the house let at the time, should then be entitled to sell it with the benefit of the grant improvements.

We think that it is much better that, if it is to be made at all, a concession should be made in favour of the owner-occupier or someone virtually in the position of an owner-occupier. If, therefore, this Amendment is accepted, we would not allow a landlord, having taken the benefit of a subsidised improvement grant, to sell to someone else at the end of the period of three or five years. He would have to wait for the end of the period of ten years which we were discussing on the previous Amendment, when the conditions cease to apply.

We draw a distinction in this case between the landlord with a tenanted house, where we say that the three or five years' interval should not apply to the owner-occupier house, to which we have not got a similar objection. I call the attention of the Committee to the point that in both cases what we are concerned with is the position as at the date of the grant, and the position for the period of three or five years following that. We are not concerned with the person who buys at the end of the period. If we are to have this at all, what we seek to avoid is the landlord with a tenanted house then getting the benefit of the improvement grant on a sale within such a comparatively short period.

I would also point out to the Committee that there is much more to be said for this Amendment, though there was much to be said for it anyhow, now that the total period for the observance of the conditions has been shortened to ten years. It is not asking much of a landlord if, when he has had a large contribution—and these are substantial figures in relation to the value of many houses—he should wait ten years before he turns them into cash, part of the cash representing the public contribution by way of a grant.

That, therefore, is the proposal in the third Amendment. I can only say to the right hon. Gentleman—even if it is to some extent a repetition of what was said on the previous Amendment—that these conditions, in slightly changed forms but substantially these conditions, have been on the Statute Book for nine years now. I cannot believe there is any case deserving of an improvement grant where the applicant would not apply if our Amendment were accepted if he would have applied under the Bill as it stands. I can believe that there are cases where, unless the Bill is amended in this sense, people will make a profit out of a social need and the contribution out of public funds to meet that need, which nobody in this Committee would admit he desired them to have. It is to avoid that kind of profit being made that we move this Amendment.

We say, too, that we have every wish to see improvement grants used to the maximum for the purpose for which they were intended. If the Government have any more money available, it is easy to increase the amount of the grant. It is easy to spend that money in other ways which will make a much greater and a more deserving contribution to a solution of the housing problem than adherence to the present provisions of the Bill. The money they represent, unless amended in the sense I have indicated, will be partly money that once more will appear to be a contribution towards improving the housing situation but will, in fact, be a contribution towards the pockets of the landlords, and for the purposes of the phrase, "the pockets of the landlords", I assume that limited companies have pockets.

4.15 p.m.

The Minister of Housing and Local Government and Minister for Welsh Affairs (Mr. Henry Brooke)

The object of this Clause, which the hon. and learned Gentleman the Member for Kettering (Mr. Mitchison) seeks to amend, is to encourage and speed the giving of improvement grants.

I will remind the Committee of the history of these grants. When the improvement grants were enacted in the 1949 legislation, the restrictions imposed by Parliament were found to be so severe that for some years very few improvement or conversion grants were applied for or made. The conditions were substantially loosened in the 1954 Act, and from that time until now improvement and conversion grants have been made at the rate of between 30,000 and 40,000 a year. They have levelled out at that figure. That was a great enhancement of the previous figure, but it still remains relatively small in comparison with the total number of houses which are structurally sound and which could be made better places to live in if they were modernised as the grant system envisages.

Experience has shown that there are certain conditions in the existing legislation which discourage applicants from applying for grants. The Government have sought, in this Clause, to relax those conditions so far, and only so far, as is necessary to make as sure as we can that improvement grants will be applied for and made on a considerably larger scale than at present. This point, to which the hon. and learned Gentleman is addressing himself, concerns the three-year limit. The Government are proposing that it should be possible for a man who has improved his house with the benefit of grant to sell after the expiry of three years, without the necessity of repayment of grant, if the house thereafter is no longer kept available for letting.

The first point is whether that three years is a reasonable period. In the view of the Government it is a reasonable period because nobody whose approach is merely to be in and out of property in the financial sense will be attracted, with the idea that he can make a quick profit. Certainly, the owner-occupier will not say to himself, "I will improve this house solely because I think I shall probably want to sell it more than three years' hence." If the situation changes, and he wishes to sell the house, he will be able to do so, and there is no doubt that the fact of being restrained by the existing conditions from selling the house to somebody who intends to occupy it without having to repay the grant has deterred many people from applying for grant in the first instance.

It has also had the effect, and there is evidence of this, that mortgagors have found it difficult to get building societies from whom they have received mortgage advances to agree to their applying for improvement grants. That is because, from the point of view of the mortgagee who has made the advance, any conditions attaching to the sale of the house thereafter are of importance. The situation might arise Where the mortgagee, if the mortgagor fell down on his payments, was taking over a house the further disposal of which might be difficult or impossible because of these restrictive conditions.

The Government had all this in mind and came to the conclusion chat three years was a reasonable time limit. One year might be too short, because it might be thought that a man could just get his improvement grant and sell the house forthwith. Five years, in the view of the Government, is needlessly long.

I must advise the Committee, also, that the Government could not accept the third of these Amendments, which is not on the three-year or five-year point, but on the other point.

Mr. Mitchison

It is quite clear, is it not, that the question is not whether the man can sell, but whether he can sell without repaying a proper part of the advance made by the Government and the local authority? I did not make it quite clear when I was speaking, but I had hoped that it was understood.

Mr. Brooke

That is perfectly clear. The hon. and learned Member will realise how what he has just said links up with the contingent situation which I mentioned in the case of the mortgagor and the mortgagee, because, clearly, the mortgagor who is unable to keep up his mortgage payments will also be unlikely to be able to make repayment of the grant. There are further considerations, but I do not think that I need go into greater detail.

The effect of the third Amendment, as I understand it, would be that, if an owner improved his house and let it to a tenant, a sale to another man who was to occupy the house himself would be in breach of the grant conditions. The hon. and learned Member has a suspicion that, unless the Amendment is written into the Bill, the landlord of a tenanted house might be disposed to apply for grant, get the grant, have the house improved and then, after three years, if it was a decontrolled house, turn out his tenant and put the house on the market with vacant possession.

Mr. Mitchison

The difficulty would arise if he sought to do that during the three-year or five-year period. The house ought, as we say, to be owner-occupied by a family during the three or five-year period. I have left out the agricultural labourer.

Mr. Brooke

I am, perhaps, going a little further than that, because the hon. and learned Member is saying that the owner-occupier who improves the house and continues to occupy it for the period of three years shall then be free to sell it to a new owner without liability to repay grant. The hon. and learned Gentleman does not seek to alter that by his Amendment.

Mr. Mitchison

Not by this Amendment.

Mr. Brooke

No, not by this Amendment. On the other hand, the hon. and learned Gentleman says that, if a man applies for and gets a grant, and during the three years lets the house to a tenant, after that he should not be able to sell it for owner-occupation without repaying the grant.

Mr. Mitchison

If the right hon. Gentleman looks at the Amendment, he will see what I have in mind. It relates entirely to what is to happen during the three-year or five-year period. Our objection is that a landlord may get his grant and then, at the end of a three-year period, may sell it with the benefit of the grant, and it may be tenanted. We do not take the same objection to an owner-occupier getting the grant and then selling the house. The reasons are perfectly obvious. The one has what I might call a home interest in the house and the landlord has a purely financial interest.

Mr. Brooke

The hon. and learned Gentleman and I are not really at cross-purposes about the meaning of the Amendment. He is concerned with the case where the house during the initial three years is tenanted.

Mr. Mitchison

That is it.

Mr. Brooke

And then the three years are up. Then, under the Bill as it stands, the landlord would be able to sell the house to somebody else, who might move into occupation, if the tenant went out, and could then become the owner-occupier. The initial owner would not be under any obligation to repay the grant. The hon. and learned Member argues that, if the initial owner is also the occupier, there is no objection to that, but if he is the landlord then there is objection to it.

In reply to the hon. and learned Gentleman, I must say that one of the disappointing things about improvement grants so far is the slowness with which they have been taken up by landlords for the benefit of rented property. Almost all the improvement grants which have been applied for and taken up by house owners, as distinct from local authorities, have been taken up for the benefit of owner-occupied houses. This is a fact to which, in the Government's view. Parliament should properly pay attention, because the improvement grant system should ideally operate just as much for the benefit of those who are living in rented houses as for those who are owner-occupiers. That being so, the Com- mittee ought to give its attention to the reasons why landlords have hitherto been reluctant to take up improvement grants.

The hon. and learned Member is seeking, by the Amendment, to sustain that reluctance and to make it the more discouraging for a landlord of a rented house to take an improvement grant and improve the house. The reason in the hon. and learned Member's mind is that, after the end of three years, it may cease to be a rented house and the landlord may sell it in the open market. He may be able to sell it with vacant possession, and there will be no guarantee that the house thereafter will be in the rented house category.

I must say to the hon. and learned Gentleman with all sincerity that, if that view were to prevail, it would certainly render it the less likely that rented houses would be improved with the help of grants. The Government desire that the improvement grant system should operate much more extensively than hitherto for the benefit of rented houses. We do not wish to introduce elements of discouragement such as the Amendment would introduce. We also take the view that, if an Amendment of this kind were written into the Bill, and if it was the case of a decontrolled house—and, indeed, so far as I can judge, the hon. and learned Member's anxieties could only apply to decontrolled houses where the tenant could be given notice to quit—

Mr. Mitchison

Decontrolled now or in the future.

Mr. Brooke

If those two conditions were to apply, the sinister type of landlord whom the hon. and learned Member has in mind would be likely not to apply for improvement grant forthwith, as we want him to do, but to wait and do nothing until he has had the opportunity of obtaining vacant possession and then sell. The effect of that would be to delay the date at which the house would be improved.

What the Parliamentary Secretary and I are arguing throughout the discussion on this Clause is that it is in the national interest that these houses, and particularly these rented houses, should be improved as quickly as possible. I must advise the Committee not to accept Amendments which, however well intentioned, would have the practical effect of discouraging landlords from applying for improvement grants.

4.30 p.m.

Mr. A. Evans

I agree with the Minister that we should not discourage landlords even of rented property from making application for improvement grants. We want not only owner-occupied houses but rented houses to be improved.

Having said that, I think that the Minister has not paid sufficient attention to the very generous encouragement which he is offering. What can happen is that if we limit the period to three years there can be a rather dangerous invitation to speculators in house property. If the Bill goes through as drafted, a speculator can buy an old property without modern amenities and improve it, and in doing so he will receive perhaps £400 of public money. We must have regard to the handing out of public money.

As the Bill is drafted, that person, having received £400, will be able after three years to end his commitments to the local authority and sell the house and recoup the £400 for his own personal gain. This would give him a tax-free capital gain. I am certain that that sort of thing will happen if the small speculative builder becomes free after three years to sell the house which he has improved.

Much as we wish rented houses to be improved, we think that the Minister, in his desire to get improvements carried out, is being rather over-generous to the type of person who deals in old property and improves it. If such a person is to receive up to £400 of public money, he should be restrained from selling the property for at least five years. There is not much between the two sides of the Committee; it is a matter of three years or five years. I suggest that five years is not an unreasonably long period to restrain a landlord from selling property, having regard to the fact that he has been aided to the extent of perhaps £400 from public funds.

Mr. Mitchison

I have said what I wanted to say on the difference between three years and five years, but I feel bound to reply to some of the right hon. Gentleman's observations on the other point.

I assume, for the purpose of what I am about to say, that the period will remain at three years. What we are seeking to do, by our Amendment, is to prevent a landlord, corporate or individual, from getting £400, or whatever it may be, of public money and then, at the end of a comparatively short period, selling the property at a higher price than he would otherwise have obtained. When I refer to a landlord I mean the landlord of a tenanted house. We think that in this respect there is a distinction between handing out public money to people who desire to improve their homes and handing out public money to people who desire to improve the source of their income. That is the distinction between the owner-occupier or the tenant, on the one hand, and the landlord, on the other.

The right hon. Gentleman said that landlords have not made sufficient use of improvement grants in the past. I entirely agree with him, but I see no reason whatever to suppose that it is these conditions which have prevented them from doing so. What I think has made landlords not make sufficient use of improvement grants in the past is that they have had to put up half the money, and a great many of them have been unwilling to do it in the case of houses which represent a comparatively poor investment because they need the improvements.

They are, on the whole, the older houses that one has in mind, and the difficulty has been, and will be when the Bill becomes an Act, to get the landlord to put up his share. We must strike a balance between any inducement that we can reasonably offer and what amounts very likely to a misuse of public funds if we are too slack in these conditions. So far as I know, this set of conditions has never been extended in this form or anything like it before. I do not know what complaints the right hon. Gentleman may have had. He did not tell us any. I can say that I have never heard of any case where this would have turned the balance.

As to the origin of the Amendment, I will let the right hon. Gentleman into a secret. It comes from the Urban District Councils Association, which has not taken any more substantial objections to much of the Bill but on this point feels, as I do, that it is opening the door to a very likely abuse and that, in effect, the result will be not that there will be any more houses improved—we do not believe that from that point of view it will make any difference—but that many landlords will get more money by selling their property and the increase will be due to the public contribution towards the improvement grant.

The right hon. Gentleman rightly said that this would apply mainly to decontrolled houses because those are the houses where, if they are tenanted during the three years, there will be an even greater temptation on the landlord to turn the tenant out at the end and put into his own pocket the advantage of the improvements and the increase in the price which the improvements have caused. I think that that is true. However, the right hon. Gentleman knows perfectly well that, although at present only a certain number of houses have been decontrolled, we have the express statement of his predecessor in office that it is the intention of the Tory Party to decontrol all houses. That was said by the then Minister of Housing and Local Government, at Llandudno, in the autumn before the Rent Bill was introduced, and a Clause to give effect to that was put into the Rent Bill and we protested against it.

Therefore, since we are providing not merely for the period until the present Government lose the next General Election but for a very indefinite period in the future, we think it wise to insure ourselves against what we agree is a very remote possibility, that the Conservative Government may be returned to power, because we know that if they are returned to power they intend to decontrol all houses, and a provision of this sort would then become of much wider importance and application even than it is at present.

Therefore, in calling the attention of the Committee to that point, the right hon. Gentleman has, I think, called our attention, at the same time, to the very real risk that is being run all over the country in respect of decontrol and the effect that that will have on the matter of improvement grants and the period of three years.

I would always agree that one has to strike a balance in conditions of this sort. If we make them too harsh we shall no doubt deter landlords from improving houses. If we make them too slack we shall not be giving any benefit to the tenant; all we shall be giving him is some improvements for three years and then the street, and we shall be enabling a number of landlords, corporate and individual, to make an unearned and entirely unmerited profit out of a public contribution which was intended to meet a social need.

I hope, therefore, that my hon. Friends will feel that we ought to support the first two Amendments, although we shall be able to divide only on the first, and also on the quite separate point of the third Amendment, which is the one we have been discussing in some detail. I do not want to cut the discussion short, but the issues are tolerably clear. Since we have been talking about sinister landlords, a lurid light is thrown on the sinister intentions of the Government, and I hope that the Committee will not accept the Government's view.

Question put, That those words be there inserted: —

The Committee divided: Ayes 173, Noes 205.

Division No. 45.] AYES [4.42 p.m.
Abse, Leo Brown, Rt. Hon. George (Belper) Evans, Albert (Islington, S.W.)
Ainsley, J. W. Brown, Thomas (Ince) Fernyhough, E.
Albu, A. H. Burton, Miss F. E. Fitch, Alan
Allen, Arthur (Bosworth) Butler, Herbert (Hackney, C.) Fraser, Thomas (Hamilton)
Allen, Scholefield (Crewe) Castle, Mrs. B. A. Gaitskell, Rt. Hon. H. T. N.
Awbery, S. S. Champion, A. J. George, Lady Megan Lloyd (Car'then)
Bacon, Miss Alice Chapman, W. D. Gibson, C. W.
Balfour, A. Chetwynd, G. R. Gooch, E. G.
Bence, C. R. (Dunbartonshire, E.) Coldrick, W. Greenwood, Anthony
Benn, Hn. Wedgwood (Bristol, S.E.)
Benson, Sir George Collick, P. H. (Birkenhead) Grey, C. F.
Beswick, Frank Craddook, George (Bradford, S.) Griffiths, Rt. Hon. James (Llanelly)
Blackburn, F. Grossman, R. H. S. Griffiths, William (Exchange)
Blenkinsop, A. Cullen, Mrs. A. Hall, Rt. Hn. Glenvil (Colne Valley)
Blyton, W. R. Davies, Ernest (Enfield, E.) Hamilton, W. W.
Boardman, H. Davies, Stephen (Merthyr) Hannan, W.
Bowden, H. w. (Leicester, S.W.) Deer, G. Hastings, S.
Bowles, F. G. de Freitas, Geoffrey Henderson, Rt. Hn. A. (Rwly Regis)
Boyd, T. C. Delargy, H. J. Herbison, Miss M.
Braddock, Mrs. Elizabeth Ede, Rt. Hon. J. C. Hewitson, Capt. M.
Brockway, A. F. Edwards, Robert (Bilston) Holmes, Horace
Broughton, Dr. A. D. D. Edwards, W J. (Stepney) Houghton, Douglas
Howell, Charles (Perry Barr) Mitchison, G. R. Skeffington, A. M.
Hoy, J. H. Moody, A. S. Slater, Mrs. H. (Stoke, N.)
Hughes, Cledwyn (Anglesey) Mort, D. L. Sorensen, R. W.
Hughes, Hector (Aberdeen, N.) Mulley, F. W. Soskice, Rt. Hon. Sir Frank
Hunter, A. E. Neal, Harold (Bolsover) Sparks, J. A.
Hynd, J. B. (Attercliffe) Noel-Baker, Francis (Swindon) Spriggs, Leslie
Janner, B. Noel-Baker, Rt. Hon. P. (Derby, S.) Steele, T.
Jeger, Mrs.Lena (Holbn & St.Pncs,S.) Oliver, G. H. Stewart, Michael (Fulham)
Jenkins, Roy (Stechford) Oram, A. E. Strauss, Rt. Hon. George (Vauxhall)
Johnson, James (Rugby) Owen, W. J. Summerskill, Rt. Hon. E.
Jones, Rt. Hon. A. Creech (Wakefield) Paget, R. T. Swingler, S. T.
Jones, David (The Hartlepools) Pannell, Charles (Leeds, W.) Sylvester, G. O.
Jones, Elwyn (W. Ham, S.) Parker, J. Taylor, Bernard (Mansfield)
Jones, Jack (Rotherham) Parkin, B. T. Thornton, E.
Jones, J. Idwal (Wrexham) Paton, John Tomney, F.
Pearson, A. Ungoed-Thomas, Sir Lynn
Key, Rt. Hon. C. W. Peart, T. F. Usborne, H. C.
King, Dr. H. M. Pentland, N. Viant, S. P.
Lawson, G. M. Plummer, Sir Leslie Warbey, W. N.
Lee, Frederick (Newton) Popplewell, E. Watkins, T. E.
Lewis, Arthur Prentice, R. E. Weitzman, D.
Lindgren, G. S. Price, J. T. (Westhoughton) Wells, Percy (Faversham)
Logan, D. G. Probert, A. R. Wells, William (Walsall, N.)
Mabon, Dr. J. Dickson Randall, H. E. White, Henry (Derbyshire, N.E.)
McAlister, Mrs. Mary Rankin, John Wilkins, W. A.
MacColl, J. E. Reeves, J. Willey, Frederick
McInnes, J. Reid, William Williams, Rt. Hon. T. (Don Valley)
McKay, John (Wallsend) Reynolds, G. W. Williams, W. R. (Openshaw)
MacMillan, M. K. (Western Isles) Rhodes, H. Willis, Eustace (Edinburgh, E.)
MacPherson, Malcolm (Stirling) Robens, Rt. Hon. A. Winterbottom, Richard
Mahon, Simon Roberts, Albert (Normanton) Woodburn, Rt. Hon. A.
Mallalieu, E. L. (Brigg) Roberts, Goronwy (Caernarvon) Woof, R. E.
Mann, Mrs. Jean Robinson, Kenneth (St. Pancras, N.) Yates, V. (Ladywood)
Marquand, Rt. Hon. H. A Ross, William Zilliacus, K.
Mason, Roy Royle, C.
Mayhew, C. P. Short, E. W. TELLERS FOR THE AYES:
Mellish, R. J. Silverman, Julius (Aston) Mr. John Taylor and Mr. Rogers.
Messer, Sir F. Simmons, C. J. (Brierley Hill)
Agnew, Sir Peter Crowder, Petre (Ruislip—Northwood) Hope, Lord John
Allan, R. A. (Paddington, S.) Cunningham, Knox Hornby, R. P.
Alport, C. J. M. Dance, J. C. G. Hornsby-Smith, Miss M. P.
Anstruther-Gray, Major Sir William Davidson, Viscountess Horobin, Sir Ian
Arbuthnot, John de Ferranti, Basil Howard, Gerald (Cambridgeshire)
Armstrong, C. W. Digby, Simon Wingfield Howard, John (Test)
Ashton, H. Dodds-Parker, A. D. Hughes Hallett, Vice-Admiral J.
Astor, Hon. J. J. Donaldson, Cmdr. C. E. McA. Hughes-Young, M. H. C.
Baldwin, Sir Archer Doughty, C. J. A. Hurd, Sir Anthony
Balniel, Lord Drayson, G. B. Hutchison, Michael Clark (E'b'gh, S.)
Barber, Anthony Dugdale, Rt. Hn. Sir T. (Richmond) Hutchison, Sir James (Scotstoun)
Barlow, Sir John Duncan, Sir James Hylton-Foster, Rt. Hon. Sir Harry
Barter, John Duthie, W. S. Irvine, Bryant Godman (Rye)
Batsford, Brian Jennings, Sir Roland (Hallam)
Baxter, Sir Beverley Eden, J. B. (Bournemouth, West) Johnson, Eric (Blackley)
Beamish, Col. Tufton Emmet, Hon. Mrs. Evelyn Joseph, Sir Keith
Bell, Ronald (Bucks, S.) Erroll, F. J. Kaberry, D.
Bennett, F. M. (Torquay) Farey-Jones, F. W. Kerby, Capt. H. B.
Bevins, J. R. (Toxteth) Fell, A. Kerr, Sir Hamilton
Biggs-Davison, J. A. Fisher, Nigel Kershaw, J. A.
Bingham, R. M. Fletcher-Cooke, C.
Bishop, F. P. Fraser, Hon. Hugh (Stone) Kimball, M.
Bossom, Sir Alfred Freeth, Denzil Kirk, P. M.
Boyd-Carpenter, Rt. Hon. J. A. Garner-Evans, E. H. Lambton, Viscount
Boyle, Sir Edward George, J. C. (Pollok) Langford-Holt, J. A.
Braithwaite, Sir Albert (Harrow, W.) Gibson-Watt, D. Leavey, J. A.
Bromley-Davenport, Lt.-Col. W. H. Glyn, Col. Richard H. Leburn, W. G.
Brooke, Rt. Hon. Henry Goodhart, Philip Legge-Bourke, Maj. E. A. H.
Brooman-White, R. C. Gower, H. R. Legh, Hon. Peter (Petersfield)
Browne, J. Nixon (Craigton) Grant, Rt. Hon. W. (Woodside) Lindsay, Hon. James (Devon, N.)
Bryan, P. Grant-Ferris, Wg Cdr. R. (Nantwich) Lindsay, Martin (Solihull)
Bullus, Wing Commander E. E. Green, A. Linstead, Sir H. N.
Burden, F. F. A. Grimond, J. Lloyd, Maj. Sir Guy (Renfrew, E.)
Butler, Rt. Hn. R. A.(Saffron Walden) Gurden, Harold Longden, Gilbert
Campbell, Sir David Harris, Frederic (Croydon, N.W.) Lucas, Sir Jocelyn (Portsmouth, S.)
Cary, Sir Robert Harris, Reader (Heston) Lucas-Tooth, Sir Hugh
Channon, H. P. G. Hay, John McAdden, S. J.
Clarke, Brig, Terence (Portsmth, W.) Henderson, John (Cathcart) Macdonald, Sir Peter
Conant, Mai. Sir Roger Hicks-Beach, Maj. W. W. McLaughlin, Mrs. P.
Cooper, A. E. Hill, Rt. Hon. Charles (Luton) Maclean, Sir Fitzroy (Lancaster)
Cooper-Key, E. M. Hill, Mrs. E. (Wythenshawe) McLean, Neil (Inverness)
Cordeaux, Lt.-Col. J. K. Hinchingbrooke, Viscount Macpherson, Niall (Dumfries)
Corfield, F. V. Holland-Martin, C. J. Maddan, Martin
Crowder, Sir John (Finchley) Holt, A. F. Maitland, Cdr. J. F. W. (Horncastle)
Manningham-Buller, Rt. Hn. Sir R. Powell, J. Enoch Taylor, William (Bradford, N.)
Markham, Major Sir Frank Price, David (Eastleigh) Teeling, W.
Marlowe, A. A. H. Prior-Palmer, Brig. O. L. Temple, John M.
Marples, Rt. Hon. A. E. Redmayne, M. Thomas, Leslie (Canterbury)
Marshall, Douglas Rees-Davies, W. R. Thompson, Kenneth (Walton)
Mathew, R. Renton, D. L. M. Thompson, K. (Croydon, S.)
Maudling, Rt. Hon. R. Ridsdale, J. E. Thornton-Kemsley, Sir Colin
Mawby, R. L. Ropner, Col. Sir Leonard Tiley, A. (Bradford, W.)
Maydon, Lt.-Comdr. S. L. C. Russell, R. S. Tilney, John (Wavertree)
Milligan, Rt. Hon. W. R. Scott-Miller, Cmdr. R. Vane, W. M. F.
Moore, Sir Thomas Sharples, R. C. Vickers, Miss Joan
Mott-Radclyffe, Sir Charles Shepherd, William Vosper, Rt. Hon. D. F.
Nabarro, G. D. N. Smithers, Peter (Winchester) Wakefield, Edward (Derbyshire, W.)
Neave, Alrey Smyth, Brig. Sir John (Norwood) Walker-Smith, Rt. Hon. Derek
Nicholson, Sir Godfrey (Farnham) Spearman, Sir Alexander Wall, Patrick
Nicolson, N. (B'n'm'th, E. & Chr'ch) Speir, R. M. Ward, Rt. Hon. G. R. (Worcester)
Noble, Michael (Argyll) Spens, Rt. Hn. Sir P. (Kens'gt'n, S.) Ward, Dame Irene (Tynemouth)
Nugent, G. R. H. Stevens, Geoffrey Watkinson, Rt. Hon. Harold
O'Neill, Hn. Phelim (Co. Antrim, N.) Steward, Harold (Stockport, S.) Webster, David
Orr, Capt. L. P. S. Stoddart-Scott, Col. Sir Malcolm Whitelaw, W. S. I.
Page, R. G. Storey, S. Wilson, Geoffrey (Truro)
Peel, W. J. Stuart, Rt. Hon. James (Moray) Wolrige-Gordon, Patrick
Peyton, J. W. W. Studholme, Sir Henry Woollam, John Victor
Pickthorn, Sir Kenneth Summers, Sir Spencer
Pitman, I. J. Sumner, W. D. M. (Orpington) TELLERS FOR THE NOES
Pott, H. P. Taylor, Sir Charles (Eastbourne) Mr. Chichester-Clark and
Mr. J. E. B. Hill.

Amendment proposed: In page 7, line 17, at end insert: (during which the dwelling was at all times occupied by such a person as is described in the foregoing sub-paragraph (a) or the foregoing sub-paragraph (b)) ".—[Mr. Mitchison.]

Question put, That those words be there inserted: —

The Committee divided: Ayes 175. Noes 206.

5.0 p.m.

Mr. H. Brooke

I beg to move, in page 7, line 22, at the end to insert: and the said sub-paragraph (b) shall be amended by inserting before the word 'or' at the end thereof, the words 'or by a member of the family of such a person'". This Amendment deals with a small point. It is suggested that we should make a slight amendment to the 1958 Act, the consolidating Act. One of the exceptions mentioned in the Fourth Schedule to that Act is the occupation of a grant-aided dwelling by a person who, at the death of the original applicant for the grant, becomes entitled to the applicant's interest in the house. It seems reasonable in such a case that we should extend the exception to cover a member of the family of the person who has become entitled to the house. I hope that the Committee will consider this a sensible Amendment.

Mr. G. Lindgren (Wellingborough)

We agree that this is a reasonable Amendment and I shall advise my right hon. and hon. Friends to accept it.

Amendment agreed to.

Motion made, and Question proposed, That the Clause, as amended, stand part of the Bill.

Mr. G. W. Reynolds (Islington, North)

The Minister said that the idea behind making some of the relaxations in this Clause was to speed up the giving of improvement grants. After listening to the discussion, I think that the result will be an improvement in the taking of the grants rather than in the giving of them. Local authorities will now examine ordinary improvement grants, as distinct from the special ones introduced for the first time under this Bill, and be less willing than at present to make such grants.

My hon. and learned Friend the Member for Kettering (Mr. Mitchison) mentioned that he was approached by the Urban District Councils Association on this subject. The Minister must realise that while it is made easier for the property owner to take a grant— and perhaps to make a substantial profit if he is so disposed—more doubts will face local authorities about whether to make such grants. There is no compulsion on a local authority to make an improvement grant under the original Act as amended by the 1954 legislation and now by this Bill.

By giving this concession to property-owners we may well find that some property-owners will apply for a grant. On the other hand, we may see more local authorities refusing to give such grants, because of the loose conditions which, in future, will be attached to the spending of public money in that way. I may be wrong, but as I understand, and as the Clause is drafted, it will be possible for a property-owner in my constituency who has a late or mid-Victorian dwelling of three or four storeys, to ask for an improvement grant of £1,200 to convert the property into separate and self-contained flats. He would be given a grant of £1,200 by the local authority, which he would match with £1,200 or more of his own money, and—in three years in some cases, and in all cases in ten years—would get his £1,200 back.

Many local councils will look twice at such applications if they realise, as they do at present, that they are putting public money at risk, and must bear part of the cost. We know that the Exchequer bears the major part. But this is giving to someone who may be able to realise his capital in a period of ten years. It would prove a better investment than Premium Bonds or a Post Office savings account. The old saying, "Safe as houses" still applies in certain instances, and especially in London, where property values do not drop. If money is invested in a house, and a substantial sum of public money is granted to assist in the improvement of the property, provided that the owner does not want his capital for ten years, this would prove a good investment, with a capital gain of £1,200 over ten years.

We have heard the Minister say that this will encourage owners, but I do not think that they will be encouraged, except the sort of owners who would wish to make something out of the transaction; and that is the type we do not wish to encourage. A large number of local authorities will be discouraged from making grants of this nature.

Mr. H. Brooke

The hon. Member is entitled to his view, but the proof of the pudding will be in the eating. The 1949 Act, placed on the Statute Book by his party, proved far too restrictive, and the improvement grant scheme scarcely started to operate. The 1954 Act improved the situation, but it is clear that 35,000 applications a year is not a great number in relation to the mass of houses which are structurally sound and where the occupants, whether owners or tenants, could benefit and enjoy their lives more were the houses modernised.

As I said when we were discussing the previous Amendment, the Government wish to speed up the applications for this improvement grant. Experience has shown that there must be a large number of people who could well apply for improvement grants, but are discouraged from doing so by the existing conditions. Under the Bill, while local authorities will be compelled to give a standard grant if the conditions are satisfactory, they will have discretion about improvement grants. Hon. Members will bear in mind that henceforth, under the provisions of another Clause of the Bill, if a local authority refuses to make an improvement grant it may be required to give its reasons in writing. That may prove salutary, because in all these matters we clear our minds when we have to put something down in writing or approve something which is written. Then we must see whether it expresses our point of view.

I sincerely believe that when the Bill becomes an Act we shall find that there will be a considerable increase in the number of applications and a considerable increase in the number of grants. That is what the Government desire. I realise that there are hon. Members opposite who are dead keen to make sure that no landlord shall gain by it. The Government are dead keen to make sure that the houses are modernised.

Mr. Lindgren

The Government may be dead keen, but their keenness up to the present has not resulted in any benefit for the tenant. Any action taken by this Government at any time and for any purpose has resulted in benefit to the landlord and not to the tenant. That is true in the case of any type of property, local authority-owned or otherwise.

As the Minister said, under the 1949 Act the number of improvement grants totalled 70,000. It is also true that the 70,000 applications which were approved were made by owner-occupiers. It is equally true that since the present Gov- ernment have been in power, and under the provisions of the later Act, applications have numbered about 35,000. If the Minister is honest, he will admit that those applications were in respect of owner-occupiers and not of tenanted property; that is, with the exception of some estate landlords who applied on behalf of the workers on their estates, and I am not including them in the general term "landlord". Those were largely agricultural estates. But the majority of the landlords in the towns and urban areas have not used the grant for existing tenancies. The Minister says that he wishes to speed up the applications for grants. They would have been speeded up but for the point made by my hon. Friend the Member for Islington, North (Mr. Reynolds).

There is hardly a Member of the House of Commons who has not at some time approached the Minister about the refusal of local authorities to make improvement grants. In my own contituency, the Wellingborough Rural District Council has, over a period of years, refused to make these grants. It has refused to do so on the ground that as it was ceasing to make rate contributions to housing subsidies it should, in equity, cease to give housing subsidies to owner-occupiers or landlords. Local authorities will now think twice before making such grants because of the points raised by my hon. Friend the Member for Islington, North.

Why is it that we think that in some cases even the existing owner-occupier as well as the other landlord might take advantage of public money? The answer is that we have had experience of this sort of thing. The Government have been taking actions which help the "Smart Alec" at every turn. In my own town, Welwyn Garden City, which is represented in the House by the Parliamentary Private Secretary to the Minister, the Government forced the corporation to try to sell existing rented property to the tenants.

What happened? The "Smart Alec" tenant bought at the sitting tenant's value and within a month or two had sold the property at a profit and had gone to live elsewhere. That meant, of course, that the person who bought such a property in Welwyn Garden City, and in any of the other new towns, as well as the new tenants, has had no control exercised over him whatsoever regarding the purpose of new towns and of people working in the district or being essential to the industries of the district.

While we do not propose to divide against the Clause, we would point out that it is a Clause which gives the greatest advantage to landlords to realise capital gains out of public moneys granted to them. As we have said all the way through about the Bill and about quite a lot of other legislation which has come forward recently, it is more to the advantage of the landlord than to that of the tenant.

Mr. Ede (South Shields)

During the course of the Minister's reply to one of the Amendments moved by my hon. and learned Friend the Member for Kettering (Mr. Mitchison) the right hon. Gentleman alluded somewhat satirically to what he described as the "sinister landlord." We on this side of the Committee do not fear the sinister landlord, because he is so easily recognisable. What we object to is the dexterous landlord, and his opportunities for dexterity under the Clause are being very considerably increased by making it easier for him to get public subsidies.

I am thinking particularly of those landlords who consist of limited companies and who have been buying up some of this semi-derelict property. They have not been treating their tenants very well in the past, and I am quite certain that they will now take these grants and, having taken them, will then prove that though they take with their right hand they will give nothing with their left. They will dispose of the property as soon as possible at the increased value which the Minister's policy will have put upon it. When that occurs, there will be no benefit to the tenant at all.

I think that this is a thoroughly unsuitable Clause to ask local authorities to work, and I have no doubt that they will be deterred from stating a good many of the reasons for their action in not wanting to make grants because of the unsatisfactory state of the law of libel.

Question put and agreed to.

Clause, as amended, ordered to stand part of the Bill.