HC Deb 09 April 1964 vol 692 cc1384-8
Mr. Corfield

I beg to move Amendment No. 98, in page 55, line 14, to leave out subsection (8) and to insert: (8) Section 12 of the Act of 1959 (under which the local authority may fix a rent limit higher than that prescribed by paragraph 4 of the said Schedule 4 to the Act of 1958) shall apply in relation to the said paragraph 4 as amended by this section, and accordingly—

  1. (a) the references in subsections (1), (2) and (5) of the said section 12 to the limit imposed by section 20 of the Rent Act 1957 shall include references to the limit imposed by subsection (2) of this section, and
  2. (b) in the said section 12(2) as applied by this section the reference to section 20(3) of the Rent Act 1957 shall be omitted.
As the House knows, under the existing law the controlled rent which has been imposed as a condition after the approval of grant is normally assessed in accordance with the provisions of the Rent Act, on the basis of twice the 1956 gross value. There is, however, provision under Section 12 of the 1959 Act which gives a discretionary power to local authorities to fix a higher rent.

When the Bill was originally drafted the Government took the view that, in the light of revaluation and the current 1963 gross value being the basis for the controlled rent, it was no longer necessary for local authorities to have this discretionary power. However, in Committee was represented to us that in certain areas there might be a case for a higher rent and, therefore, for retaining that power.

Since the Committee stage we have discussed this matter with the local authority associations and others and the Government have decided to move this Amendment, which restores the position and gives a discretionary power to local authorities to consider a higher rent in any particular case.

Mr. MacColl

The hon. Gentleman has given one side of a rather more complicated story about how all this arose. He was tactful enough not to mention that the initial proposal for giving flexibility to go over the gross value came from me. My hon. Friend the Member for Salford, East (Mr. Allaun) took strongly the point that in many parts of the country where the relationship between gross values and market rents was rather different from what it is in London there was just as much ground for giving flexibility and discretion for a local authority sometimes to go below gross value when it was fixing rents. Although the Minister tried to suggest that there were differences, both views are compatible because conditions are different in different places. It is certainly true that in parts of the country market rents are very much more than gross value particularly where property has been converted.

It can be said therefore that the Amendment is a reasonable proposal, but in its present form I cannot support it. Discretion should be both ways. It is a monstrous injustice that discretion should be only one way. There is absolutely no limit to the hysteria with which the Government are determined at all costs to bribe landlords to carry out these improvements and get improvement grants.

Mr. Graham Page

The hon. Member is saying that we must not base rentals on rateable values put right as recently as last year.

Mr. MacColl

As the hon. Member knows, this is a rather delicate matter, because the relationship of gross values of different types of property in the Borough of Paddington is sub judice and I do not want to get involved in discussion of the principles. The short point is that for certain types of new property, such as new blocks of flats and post-war houses, gross values seem to some people to be very high. On the other hand, gross values of Victorian houses, which often receive grants for conversion, are frequently rather low. I quoted figures in Committee.

In certain areas market rents are perhaps two or three times the gross value. On the other hand, the position is entirely different in other parts and with other types of property. It is not possible to be absolutely sure that one can stick to current gross values, but I would prefer to stick to them for better or worse than have the position under the Amendment where the landlord is given more than is necessary to bribe him to do the work and power is not provided to give him less where the state of the market indicates that this is desirable. I think therefore that this is a most unfortunate way of meeting the situation.

Mr. R. J. Maxwell-Hyslop (Tiverton)

Could my hon. Friend the Parliamentary Secretary tell us whether the complete absence from the Chamber of any representatives of the Liberal Party means that they have previously indicated agreement with or dissent from this important proposal?

Mr. Deputy-Speaker

Order. I find it difficult to connect that with the Amendment.

Mr. Maxwell-Hyslop

I was thinking that when my hon. Friend comes to reply he might have some message to communicate to the House which would indicate whether the Liberal Party, who are absent from the Chamber, agree or not with the proposal which is before the House at the moment.

Amendment agreed to.

Mr. Graham Page

I beg to move Amendment No. 99, in page 55, line 26, at the end to insert: (10) A request under section 12 of the Act of 1959 to fix a rent limit higher than that prescribed by paragraph 4 of the said Schedule 4 to the Act of 1959 may be made not only in the application for a grant but also at any time thereafter and the local authority may fix such higher rent not only on approving the application but also at any time after such a request as aforesaid. This is an administrative Amendment. It is not intended to have any real principle in it. The position is that in respect of houses which are to be improved by an improvement grant or a standard grant, Section 20 of the Rent Act, 1957, fixes the rental at the 1956 gross value. Under the previous Amendment it would be the present gross value. The local authority can alter that if it is requested, but the request has to be made at the time of the application.

Section 12 of the Housing Act, 1959, which is mentioned in this Amendment, gives the local authority power to fix another rent than that based on the gross value, but only if the request is in the application. It could only fix another rent at the time that it is granting the application. This is by reason of the wording of Section 12 of the 1959 Act.

The request for a variation of the rent from the gross value is made by answering, I believe, question No. 12 on a form. I have known many cases when people applying for grants have not quite understood what the question means. It refers to the local authority fixing the rent for them. They omit to say "yes" or "no" in answer to the question. It dawns on them later that this is something that they ought to have done, and merely by failing to understand the question they have lost every opportunity of asking the local authority to fix a rent other than the gross value. This is unfortunate.

I may perhaps have worded this Amendment rather wider than I intended. I think that if it were accepted as it stands it would be possible for the owner who has improved his house by means of an improvement grant or a standard grant to apply to the local authority to fix it within any time. What I had intended was that the local authority and the owner should be able to get together before the property is let. When improvements are done and the letting is coming about, they should then be able to fix a rent, and they should not both be tied to the application form—the owner tied to whether he has answered this question correctly, and the local authority tied to making this variation only at the time that it makes the grant.

I hope my hon. Friend can meet me on this point because it is a very practical point. I have personally known it to arise in many cases where the owner has hoped to get the local authority to fix a more reasonable rent and where the local authority would be only too happy to do so, but has been prevented by law from doing so because the owner has not made the request at the time of sending in the application form.

12.30 a.m.

Mr. Corfield

I am grateful to my hon. Friend, because I certainly took it, from reading the Amendment, that he intended that it should apply in the way he suggested and that the owner should be able to apply to the local authority at any time and the local authority be able to fix at any time, and my reaction to that was that with the reduction from ten to three years this was really weighting the thing unnecessarily towards the person doing the improvements. I think my hon. Friend has now made plain that he has a much more practical point in mind, that perhaps it may be possible to improve the form in which the question is put on the form to which he referred. Although certainly not committing myself at this time of night, I certainly would look at that rather narrower point he has raised, to see whether we can ensure that at any rate it is made clear to the applicant exactly what he is answering and the full implications of whatever answer he gives; or alternatively, perhaps keeping it open a little longer, till the improvements are near enough complete to see how the terms would work out in the ordinary formula. On that understanding perhaps my hon. Friend will withdraw the Amendment.

Mr. Graham Page

I am very grateful to my hon. Friend for his sympathetic reception of my Amendment, and I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.