Clause 32.—(OBLIGATION TO PURCHASE RESIDENT OWNER-OCCUPIER'S IN TEREST AFFECTED BY PLANNING PROPOSALS.) (Hansard, 24 March 1959)

§ Mr. MacColl
I suppose that the paragraphs got into the Bill in Committee.

§ Mr. Skeffington
I beg to move, in page 48, line 5, to leave out "or part".

§ Mr. Speaker
The hon. Member has a number of other Amendments on this page of the Notice Paper. I suggest that we take them together, with the exception of the Amendment in line 10, to leave out "three" and insert "ten", which we could take later.

§ Mr. Skeffington
With respect, Mr. Speaker, there are three separate sets of Amendments. The first Amendment which I have just moved and the Amendment in line 6, after "dwelling", insert: or in the case of a hereditament of which part only is used as a private dwelling occupies the whole of that part can go together, and then the Amendments in line 16, to leave out "or part", and in line 16 at the end to insert: or in the case of a hereditament of which part only is used as a private dwelling occupied the whole of that part". That is one point. There is the separate point covered by the Amendment in line 10, to leave out "three" and insert "ten". The Amendment in line 13, to leave out "that" and insert "the relevant" would go with the Amendment in line 18, leave out from first "the" to "the" in line 19 and insert "relevant date". I might, for the convenience of the House, speak on the first four that I have indicated and then subsequently deal with the others.

§ Mr. Speaker
The hon. Member must act as he thinks best. He has now moved the Amendment in line 5. If he will indicate to the House which Amendments he discusses with it I shall mark them off and see that we keep matters straight.

§ Mr. Skeffington
I propose that we take with the Amendment I have moved 1254 the Amendments in line 6, in line 16 to leave out "or part", and in line 16, at the end to insert: or in the case of a hereditament of which part only is used as a private dwelling occupied the whole of that part". The Clause as drafted enables a resident owner-occupier of the land affected by certain planning proposals specified in subsection (1), which has been as a result rendered unsaleable or saleable only at a very considerably reduced price, to serve on the appropriate acquiring authority notice asking it to purchase its interest. The resident owner-occupier is defined in subsection (6) as a person who (a) occupies the whole or part of the hereditament as a private dwelling in the right of a freehold interest therein or in right of a tenancy granted or extended for a term … of which not less than three years remain unexpired … and has been in occupation of the hereditament or that part of it, as the case may be, during the whole of the period of six months ending with the date of the service of the notice, or (b) has occupied in such capacity the whole or part of the hereditament for a period of six months ending not more than six months before the date of the service by him of such a notice … the premises having been occupied since the end of that period.
The local authorities view with some concern the inclusion of a resident owner-occupier of part of the hereditament in the Clause having regard to the definition of a hereditament in subsection (7) as being … the aggregate of the land which forms the subject of a single entry in the valuation list for the time being in force for a rating area. It would, therefore, appear that the Clause would cover the case of an owner of a large house which has been let off to persons in a number of single rooms and of which the owner occupies one or two rooms.
9.45 p.m.
The Clause as drafted would enable the owner-occupier in cases to which it applied to serve a notice on the authority concerned to require it to purchase the premises with vacant possession of one or two rooms only. In other words, it would have possession of a property which would be no use whatever to it. In addition, the Clause could saddle a 1255 local authority with a large number of houses occupied by a number of people and scattered all over an area, with consequent additional expenditure for maintenance and management quite unjustified by any of the statutory duties which the authority would have to fulfil.
It is clear from our discussions upstairs that the Clause is not really designed even by the Government to further the interests of owner-occupiers of this kind. It would seem both wrong and unjust if such owners could take advantage of the Clause as drafted. The four Amendments to which I am speaking now would, if accepted, ensure that owner-occupiers of property falling within the Clause would be only owner-occupiers of the whole hereditament. That is the purpose of the Amendments. They would not exclude the owner-occupier of a shop-cum-dwelling house. That is, at any rate, the intention of the Amendments, but in a subject of this complexity one is never quite certain that one has covered every possible complication. It would, I think, still include the owner-occupier of a shop-cum-dwelling house.
I hope that the Minister will feel that it would be quite wrong to allow the provisions of the Clause to be abused in the case I have mentioned, for which it was never intended, and will agree that it cannot be in the public interest that such a development should occur.

§ Mr. Sparks
I beg to second the Amendment.
My hon. Friend referred to the example of an owner who may occupy one or two rooms in a 10-room house. I came across a case the other day in a redevelopment area where a man and his wife owned three such houses and in each had reserved two rooms for their occupation. How they managed to reside in two rooms in three different houses at the same time, I do not know. Each house, apart from the two rooms reserved for the owner, was let, single rooms to some tenants, two or three rooms to other tenants, and so forth.
The Amendment is designed to introduce a much fairer definition of "owner-occupier". It is quite obvious in the case I have mentioned that such a person could not be a genuine owner-occupier. He is making a business out of letting 1256 rooms in large houses. It was never intended that such a person should be regarded as a genuine owner-occupier. There might be something to be said if he resided in only one house, having his residence in a part of that and sub-letting the remainder. We know that there are cases where there would otherwise be a surplus of accommodation not used.
We ought to be quite sure, when considering whether to admit the owner-occupier who occupies a part only of his dwelling-house, that we are dealing with a real owner-occupier who is genuinely living in a reasonable part of the house, and not living in one room himself and letting out ten, fifteen or more rooms to someone else. The Clause as it stands appears to leave the door wide open to bring in a range of people who are not the genuine owner-occupiers we all wish to help in this connection.
The Amendment endeavours to prevent such an abuse arising. I hope the hon. Gentleman will be sympathetic in his attitude towards this series of Amendments, because I am certain that unless there is a much more clear definition in the Bill as to who is a genuine owner-occupier it will let in many—I will not say undesirable people—but people whom I am sure we do not intend to benefit by the Clause in cases where they are running a business and are not genuine owner-occupiers in the sense that we expect.

§ Mr. Bevins
What the House is currently discussing is the definition of "owner-occupier" for the purpose of empowering certain people to dispose of their interests under Clause 32 in cases of blight. It would appear from the speeches of the two hon. Gentlemen that they feel that the present definition in the Clause is too wide. If one is to go by the speech of the hon. Member for Acton (Mr. Sparks), the Amendments are directed against the wicked landlord who lives in one part of the house and lets off the rest of it at exorbitant rents.

§ Mr. Sparks
Or lives in three houses.

§ Mr. Bevins
Or, to add the rider of the hon. Member for Acton, lives in three houses and lets them all off at exorbitant rents. I do not see that that matters.
The question to which the House has to address its mind is whether the group 1257 of Amendments would achieve the purpose which the hon. Gentleman quite clearly had in mind. These four Amendments say that an owner-occupier would qualify under Clause 32 only where, first, the whole of the hereditament is a private dwelling and he himself occupies the whole of that private dwelling—that is a perfectly simple case—or, secondly, where part of the hereditament is a private dwelling and he occupies the whole of that part.
What would the Amendments do? To begin with, they would exclude from the scope of Clause 32 any owner-occupier if he sub-let simply one room. He might have a house which contained ten rooms altogether occupied by a middle-aged gentleman and his wife who had let off one bedroom to a third party. In those circumstances, under the terms of the Amendments, the owner-occupier would be prevented from disposing of his interests under Clause 32.
What I think is worse is that the effect of the Amendments in practice would be inconsistent. If, for example, a hereditament consisted partly of a house and partly of a shop, the owner would be entitled to sell his interest in the whole of the hereditament even though the shop portion was sub-let. That follows from the second leg of the Amendment. On the other hand, if the part sub-let was not a shop but was part of the dwelling, the owner would be excluded from the provisions of the Clause.
For those reasons, I cannot honestly feel that the Amendments achieve anything that is by any stretch of the imagination desirable. If the hon. Member for Hayes and Harlington (Mr. Skeffington) cares to analyse their detailed effects he will probably agree that the Amendments are ill-conceived.

§ Mr. Willis
The Parliamentary Secretary has told the House why these Amendments should not be accepted, but he has not replied to the very pertinent remarks of my hon. Friend the Member for Acton (Mr. Sparks). My hon. Friend quoted a specific case in which it was quite clear that certain difficulties arise, and the hon. Member might have addressed himself to it. Surely he could have admitted that this was a real problem and could have said that, even though he was unable to accept the Amendments because of certain 1258 difficulties, he would look at the matter again.

§ Mr. Bevins
It is wise when discussing Amendments to discuss them. That is what I have tried to do.

§ Mr. Sparks
Will the Parliamentary Secretary tell the House what an owner-occupier is? Is he a person who lives in one house, or is he a person who may live in more than one at the same time?

§ Mr. Bevins
I think it would be abuse of the privileges of the House at this time of evening to give the definition of owner-occupier, which is quite clearly stated in Clause 32.

§ Mr. Skeffington
I must concede that for one or two of the reasons which the Parliamentary Secretary has been good enough to indicate I may have failed to attain the object of these Amendments, but I should like to impress upon him that when we originally discussed Clause 32 the case was that the ordinary resident occupier should not have to suffer as a result of planning. That was generally accepted on both sides.
On the other hand, if the definition of the resident owner-occupier of land is as wide as it is now we may saddle the local authority with the acquisition of a large number of houses occupied by many people. That seems to me to carry the compensation proposals far beyond anything contemplated in the Clause. However, if I am right at all—and I am supported by the valuers of the London County Council—I hope that some Amendment or modification may be made in another place.

§ Mr. Skeffington
I beg to move, in page 48, line 10, to leave out "three" and to insert "ten."
This is a separate point, and perhaps I may briefly address myself to it. As I indicated when speaking to the previous series of Amendments, in order to fall within the definition of "resident owner-occupier" in subsection (6), the person can be tenant of the premises with a term of not less than three years remaining unexpired.
Many local authorities consider this unexpired period to be too short for a person to serve on the appropriate authority a notice to purchase. Such an 1259 interest might well couple with it a heavy liability for repairs. The premises may be worth very little quite apart from any result of planning proposals. The period which would appear to be appropriate, being the sort of period which would occur in a commercial transaction, would be ten years. It is for that reason that I am suggesting the Amendment.
10.0 p.m.
If the Bill becomes law in its present form it would enable a resident owner-occupier with a very short lease to require a local authority to take the property with this very considerable liability for dilapidations. It would also mean in a great many cases that money spent on repairs would be useless. The lease might well have fallen in before the local authority was actually in a position to acquire the remaining interest and proceed with the development.
It places on the local authority a heavy responsibility which to a large extent could be avoided if the Government accepted the period of ten years instead of three years.

§ Mr. Sparks
I beg to second the Amendment.
There is a point I should like to put to the right hon. Gentleman in connection with the Amendment. The Clause is headed: Obligation to purchase resident owner-occupier's interest affected by planning proposals. It means that until the development plan has been approved there can be no planning proposals in this kind of case. It is only the introduction of a development plan that sets in motion the provisions of the Clause.
The area concerned may well be included in the development plan for slum clearance or some other form of comprehensive redevelopment. The comprehensive redevelopment may not be undertaken for some years. It may be ten years or longer before the local authority has the resources to put into operation its proposals for redeveloping the whole area.
I could understand it if the Clause provided that at the time when the development plan designated this area for redevelopment persons who had been resident there for a minimum period of 1260 time should be entitled to ask the local authority to take over their houses if they could not sell them. In many cases, however, it will be found that owner-occupiers in residence at the time of the approval of the development plan may be able to dispose of their houses, in a short time at fairly reasonable prices.
Is it fair that an owner-occupier who comes into a redevelopment area for one, two, three, four, five or even eight years, after the area has been designated for redevelopment should, after having been in residence there for three years, be able to serve on the local authority a requirement to purchase his house at the market value as though there were no planning proposals in relation to this site.

§ Sir C. Thornton-Kemsley
Surely he can do that only if he has made reasonable attempts to sell the house and has been unable to do so except at a price which is unreasonable in the circumstances.

§ Mr. Sparks
That is quite true, but where redevelopment is not likely to take place for a long time it is reasonable to expect that a property could be sold in the early years. There may be exceptions but, generally speaking, in the first year or two of designation it Should be possible—indeed, I know of many cases where it has been possible—to sell the house at a quite good price.
In such cases, the new owner-occupier should be thoroughly aware that redevelopment is to take place in the future and that he may not be able to sell the house for the price he paid for it, or even at the market value, for some years to come. Is such a person to be entitled to receive the benefit of the Clause? The owner-occupier at the time when the development plan designated the area for comprehensive redevelopment has a sound case, but I would not have thought that people moving into the area subsequently ought to expect to benefit. The present period of three years, in circumstances where redevelopment is likely to take as long as ten years, may allow many people to benefit whom I would have thought ought not to be entitled to do so.
The right hon. Gentleman ought to try to clear up this point. The period of three years is far too short. The provision must have some regard to the time 1261 when redevelopment is likely to take place, and under the present proposals there may be a constant succession of people coming into a redevelopment area. We should know whether the provisions of the Clause relate solely to owner-occupiers in possession at the time when the planning proposals are made, or include all people who subsequently enter into possession of such houses.

§ Mr. Brooke
I am in some difficulty because the hon. Member for Acton (Mr. Sparks) addressed himself almost exclusively to the next Amendment. I hope that it will not be necessary for him to make the same speech when we come to the next Amendment, if it is selected. I hope that he will forgive me if I address myself to the question before the House, namely, whether the term of years should he three or ten. It is a question whether riot less than three years or ten years remain unexpired. I think that I understand what is in the mind of the hon. Member for Hayes and Harlington (Mr. Skeffington), but I wonder whether he has probed the repercussions of the Amendment deeply enough.
In practice, it is unlikely that a person holding the end of a short lease could prove that he was suffering from blight unless the redevelopment was likely to take place before the lease expired. Far from putting undue burdens on local authorities, I submit that it will be wiser, from the local authorities' point of view as well as everybody else's, to keep the Bill as it stands. The shorter the limiting period the harder it will be for leaseholders to show that they are blighted, because it will be extremely difficult for anybody to show that he is suffering from blight if the redevelopment is not to take place until some time after his existing lease expires.
Frankly, that is the reason which activated the Government in inserting the three-year period rather than a longer period in the Bill. If people want to take advantage of the Clause to try to get rid of embarrassing ends of leases, they are more likely to want to do so when there are very few years to run. The shorter the period the harder it will be for them to give evidence that they are suffering from blight.
The hon. Member for Hayes and Harlington will appreciate that it is inherent 1262 in the Clause that there will not be an obligation on a local authority to purchase unless the owner of the interest in the property can prove that blight is affecting the market value of his interest.

§ Mr. Mitchison
I do not want to follow the Minister far in probing the repercussions of a blighted leaseholder. I think, however, that there is inconsistency between keeping three years in the Clause for the purpose of defining a resident owner-occupier and putting ten years instead of three years into a preceding Clause for the purpose of defining an owner. On the other hand, I know, and I am sure that the Minister and many other hon. Members know, that the Clause is largely directed to conditions in Wales. It has had a great deal of support from my Welsh hon. Friends, and I know, also, that in Wales there are a great many long leases expiring about now.
I feel a little anxious that in trying, to be logical and perhaps fair to people in London, we may involve ourselves in being rather hard on the Welsh. This is especially a Welsh problem, and I am sure that my hon. Friend the Member for Hayes and Harlington (Mr. Skeffington) recognises that. He will perhaps feel that the other provisions, to one of which the Minister referred, namely, proof of damage, are sufficient safeguards in all the circumstances. Moreover, ever since the Parliamentary Secretary told us that hardly any owner-occupiers would be affected by the earlier Clauses about compensation, I have been waiting for the moment when the resident owner-occupier would get something out of a Bill which professedly was intended to give him quite a lot. Here it is, and I hope that we shall not be too stingy about it.

§ Mr. Skeffington
I referred to the fact that if the owner of the fag end of the lease was able to ask the local authority to acquire the property, the local authority thereby takes over liability for dilapidations. This is a serious point. The money would be spent on dilapidations even though, when the leases actually fall in, the local authority may not be able to enter the land because it is not yet at that phase for the next stage of its development plan. In these circumstances, does the Minister not think that 1263 there is a problem that dilapidated property may be passed on to a local authority and public money wasted because a local authority is not in a position to enter the land for some period after the lease has expired?

§ Mr. Brooke
I do not consider that there is a genuine danger here. I was obliged for what the hon. and learned Member for Kettering (Mr. Mitchison) said. The owner of the interest cannot take advantage of the Clause unless he can show that he has been unable to sell it except at a price substantially lower than that for which it might reasonably have been expected to sell if it was unblighted.
I seriously doubt whether many of the owners of fag ends of leases would he able to show that, because the probability is that blight will not affect the value at which they could dispose of the fag end of their leases. In any event, their interest is an interest that must he valued in relation to everything that attaches to the interest, and it seems to me most unlikely that under the ordinary provisions of compensation law they would be able to establish a high value for such a fag end if the fag end of the lease carried with it the sort of onerous obligations to which the hon. Member for Hayes and Harlington (Mr. Skeffington) has referred.

§ Mr. Skeffington
I beg to move, in page 48, line 13, to leave out "that" and to insert "the relevant".
To complete this series of my Amendments, I hope that it will be for the convenience of the House for me to discuss, at the same time, the Amendment in line 18, to leave out from first "the" to "the" in line 19 and to insert "relevant date".
Briefly, it is considered by a number of local authorities that the powers given by the Clause to a resident owner-occupier should be available only in cases in which the land was occupied before the relevant date as defined in subsection (7), that is, the date when the proposal affecting the land is formally confirmed.
If a person purchases property already affected by any of the proposals specified in subsection (1), it does not seem right that he should be able to take advantage 1264 of the Clause. The Bill, however, provides in subsection (6) for a qualifying period of occupation of six months before the service of the notice and, in the case of unoccupied property, a period of six months ending not more than six months before the date of the service of the notice. Neither of these periods specified in paragraphs (a) or (b) of subsection (6) bears any relation whatever to the question of whether the property was occupied with knowledge about the proposals.
These two Amendments, taken together, would provide for a clarifying period of occupation of six months prior to the formal confirmation of the proposals affecting the land. It is considered that the usual inquiries to designate or allocate the land, if made six months beforehand, would be practicable and possible, but inquiries earlier than that would probably not produce the necessary information. It would seem, therefore, that this redefinition of the clarifying periods would both improve what I am sure is the intention of the Clause and would make the proposals much more readily workable by the local authority in applying them.

§ Mr. Sparks
I beg to second the Amendment.

§ Mr. Brooke
The hon. Gentleman the Member for Hayes and Harlington (Mr. Skeffington) has had the advantage in support of his Amendment of the speech made in seconding the previous one. I hope that I shall answer both of those speeches if I address myself to the speech made on this Amendment.
I understand that the hon. Gentleman does not want people to be able to take advantage of the provisions in this Clause in a way which seems to him to be unfair. Broadly, he wishes to establish that if an occupier has come in and taken possession of the property after the date of the event from which the blight stems, then he should be regarded as having taken on his shoulders voluntarily the risk of blight, and, therefore, should not be able to get advantage from the Clause. Again, I venture to say that I believe on further analysis he will find that it would not be wise to make a provision of this kind, and I cannot help thinking that there would be a risk of causing hardship unwittingly if we were to accept this Amendment.
1265 Let us take the case of land which has been defined in a development plan as a site for a school, but where the land is not expected to be required for school purposes for perhaps fifteen years from the date of the development plan. He and I, having both had some connection with the County of London Development Plan, will appreciate that this is a case which might easily arise in London. Then we might find an owner-occupier wishing to move three or four years before the land was required for school purposes. He finds that owing to the blight he cannot sell. Yet if the Amendment were accepted he would not be able to take advantage of this Clause unless he could show that he had been the owner-occupier of the property at the date when the development plan was approved, which, by then, would be ten or twelve years before.
In fact, it is in the later years that the blight settles. Indeed, my expectation would be that when the basis for compensation has been changed, as it will be by this Bill, and when Clause 32 is on the Statute Book, it will lead to a much freer market in all this property; and, if the blight settles at all, it will be much slower to settle. My fear is that if these Amendments were made, the blight might come down at a much earlier stage, because then there would be the two classes of owner-occupier property, that is to say, the classes where the owner-occupier had been in possession at the time of the development plan, and the other classes of property which would suffer under this Amendment because the owner-occupier had not been in occupation at that date. Certainly, the Amendment would thereby increase the amount of blight. It would make it more likely, in my judgment, that the local authority would have to purchase.
The most desirable result of this Clause is that properties will to a considerable extent be saved from being blighted at all. That is what would suit everybody. It would suit the owners, and it would suit the local authorities, because the local authorities would not have the obligation to purchase imposed upon them; but I cannot help thinking that if we were to make these Amendments, they would ensure that any property affected by a proposal under a development plan, however, remote in the future, would be blighted 1266 from the date of approval of the plan so soon as a new owner moved in.
I cannot think that that would be to anybody's interest, and on those grounds, having thought about the matter as well as I can, I would advise the House that nobody would gain by introducing this further complication into this Clause.

§ Mr. N. Macpherson
I beg to move, in page 50, line 19, to leave out from "and" to end of line 20 and to insert: for the words from 'a freehold interest' to the end of subsection (1) there shall be substituted the words 'the dominium utile in the land, subject to any feu duty, any ground annual and any servitude or other restriction affecting the land at the relevant time, but otherwise free from burdens.' This Amendment is put forward to meet a point raised in Committee by the hon. Member for Edinburgh, East (Mr. Willis), who asked why the words explaining the phrase such an interest in the land as is mentioned were included in respect of England, but not for Scotland. The Amendment fills in that gap, and explains the words, as he wishes.

§ Mr. Ross
On behalf of my hon. Friend the Member for Edinburgh, East (Mr. Willis), I should like to thank the Joint Under-Secretary for what he has done. I think that this Amendment serves two very useful purposes. The first is that it makes it a little more clear to anyone reading the Bill exactly what is being done in relation to Scotland, and, at the same time, it demonstrates the great difficulty that Scots hon. Members have had over the way in which this Bill has been dealt with.
Undoubtedly, an English Member reading the Bill would know exactly what was intended by the reference to a particular Section of the Act of 1954, but the Scots were left completely in the dark. Even with these Amendments, anyone who tries to do it would find that it takes some little time to work it out, put the whole thing together and get an intelligent result. I hope that the Minister will at least have learned that Members from Scotland do not like to be treated in this off-hand and inconvenient way, and that he will not repeat that performance.
The second thing is that we now have in the Bill, and they will remain enshrined for all time for English legislators, the 1267 words dominium utile. These words had, at first, an air of mystery, and were never reasonably well explained to the satisfaction of anyone during the Committee stage. Now, we have side by side the English term "freehold interest", and that explanation, and our dear friend dominium utile enshrined in the English Bill. We know that we are to get a separate Scottish Bill and that everything Scottish will be extracted from this Bill, but the English will be left with dominium utile in their town and country planning legislation for a long time.
I am sure that in accepting this Amendment at the suggestion of my hon. 1268 Friend the Member for Edinburgh, East, the right hon. Gentleman has provided a key to the actual meaning of the phrase.

§ Mr. Mitchison
I add my plea and hope that the Minister will introduce a Bill to remove this Scottish jargon from an English Bill. "Freehold interest" I can understand. The rest does not convey much to me and I do not see why, because of the confusion which the Government have caused by introducing one Bill instead of two, we English should be afflicted with this unintelligible stuff.