HC Deb 09 April 1964 vol 692 cc1380-4
Mr. MacColl

I beg to move Amendment No. 96, in page 52 line 28, to leave out "three" and to insert "seven".

Mr. Speaker

I think that it would be sensible to discuss also Amendment No. 97, in Clause 51, page 53, line 12, to leave out "three" and to insert "seven".

Mr. MacColl

A similar Amendment raised a point of substantial disagreement in Committee upstairs. We very much regret the direction in which the Government have moved in this Clause and in Clause 51. Clause 50 is the English Clause and Clause 51 the Scottish Clause.

They both deal with the same point—the altering of the period for which the conditions are to be attached to improvement grants. We do not see any need to reduce the present period. It seems to have worked very well up to now. But we were so startled by the action of the Government that we have tried to meet them by coming part of the way. We have not contented ourselves with proposing to retain the period of ten years, which we feel is the sensible course. In a spirit of good will, and a desire to reach a compromise, we have done our best by suggesting a reduction to seven years.

Everybody would agree that if we are to give public money away in improvement grants we must impose some conditions in order to prevent exploitation. In this case public money is being paid to private individuals—in most cases to private landlords—by way of grants in respect of private property, which will ultimately be reflected in an increased value of that property. People do not spend money putting in a bath or a water closet, or whatever it may be, unless they expect eventually to be able to obtain a substantial improvement in the value of the property.

The point at issue is the question how long should we prevent the full benefit of the improvement from being reaped by the landlord. The period of ten years has operated for a considerable time. I am not sure how far back it goes. Quite a substantial amount of money can be involved, and we cannot understand why the Government want to reduce the period of three years. The maximum grant is now about £500, which can be a considerable amount in the case of some houses, and can considerably increase their value. What possible case can there be for being so lax in the administration of public motley as to allow people to reap the benefit after a wait of only three years? In the meantime, before the three years are up, they will be getting the benefit of increased rents and other benefits from the property.

It is not as if the full cost of the improvements fall on the persons doing the improvements. Very often, in other contexts, we have considerable discussions about how to prevent people who have bought something under the market value suddenly reaping the benefit by selling at the full market value. A house which is worth £2,000 can be improved, so that it is worth considerably more. Yet, after waiting for only three years, the owner can get the benefit of the increase. We consider that the period should be not less than seven years.

Mr. Corfield

As the hon. Member for Widnes (Mr. MacColl) indicated, this is a point on which there is a genuine difference of opinion between the two sides of the House. It must be remembered that the Government's objective remains basically to speed up the rate at which these old but sound houses can be improved and brought up to modern standards.

Although the Bill provides for compulsion, it is still hoped that the maximum amount of improvement will take place on a voluntary basis. The Government take the view—and I think there is a good deal of evidence to support it—that the 10-year period has been a disincentive to landlords taking advantage of these grants and improving houses as fast as they would otherwise have done. It is possible for the so-called regulated rent, following improvement, actually to be lower than the rent before the grant one would expect for doing the improvement. I hardly think anyone in this House will suggest that this is an incentive to get on with this important job.

I fully appreciate that one cannot satisfactorily argue the sanctity of three years as against four or five years or two and a half years, but the Government take the view that all these restrictions which act as a disincentive should be looked at very carefully where they have a discouraging effect. The Government take the view that three years is a suitable period to remove this discouragement while at the same time being long enough to prevent any active speculation in improvement grants. I therefore hope that the House will not accept the Amendment.

Mr. A. Evans

I am surprised that the Parliamentary Secretary has told the House that it will be possible for the landlord, after having made an improvement, to receive rent lower than that he received before making the improvement. I do not follow that argument. I understand that the landlord is entitled to an increase in rent equivalent to 2½ per cent. of his capital outlay. It follows that he would receive a rent higher after the improvement has been made than before he made it. Perhaps the Parliamentary Secretary made a slip there.

As my hon. Friend the Member for Widnes Mr. MacColl) said, there is not only the question of encouraging the landlord to effect improvements. There is the other side of the matter, the point of view of the local authority and of the tenant. That aspect previously made it incumbent on the landlord to keep a house available for letting for, originally, 20 years, which was later cut to 10 years. The landlord must also arrange his rent at a level satisfactory to the local authority for that period of 10 years.

The Government would like to see the number of improvements very much increased. We can understand and share that hope, but in previous attempts to increase the number of improvements the Government have not been content with reducing the period over which the control should continue. They have allowed an increase in the amount of rent and a percentage increase in the capital outlay of the landlord. It would be quite possible to effect the purpose of the Government and to increase the number of improvements and grants by allowing the landlord a larger increase in the rent he can require the tenant to pay. It would be possible to arrive at the purpose of the Government in that way. In the past that course has been adopted. The most preferable course would be for the Government to allow the rent to be increased and encourage landlords to im- prove their houses so that those properties remain available for letting. The housing problem generally is bad, but the shortage of houses to let is the most acute. As I say, it would be better to increase the rent rather than decrease the number of years in which the control continues.

12.15 a.m.

One hon. Member opposite dealt with this problem in Committee, representations having been made to him by one of the larger local authority associations. That hon. Member suggested that discretion should be given to local authorities to require the period of control to continue for five years. That might have been a suitable compromise, remembering that the whittling away of the period of control when public grants are involved is the cause of complications and difficulties for local authorities, which are already faced with acute housing problems. I hope that the Minister will consider this matter further and, if an Amendment is required, he can make one at a later stage.

Amendment negatived.