HC Deb 08 February 1965 vol 706 cc161-70

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Howie.]

10.6 p.m.

Mr. Edward Milne (Blyth)

This debate concerns 86 houses in three streets in my constitunecy. The tenants are British Railways employees, widows of former employees and retired employees. All are doing or have done vitally important work for British Railways. They made an outstanding contribution not only to the railways but indeed to the nation's economy, and they have been exploited.

On 8th December I wrote to the Minister of Transport, arising from reports from my constituents who had been visited by a property company's representatives and asked if they would be prepared to purchase the houses which at that time they were tenanting from British Railways. On 12th January I received a reply, giving very scanty details indeed, from the public relations adviser of the British Railways Board. I think that if the public relations adviser of British Railways is going to reply for the Chairman, the quicker we get this point sorted out the better.

Eight days before I received the reply from British Railways the houses had been sold. It is true that certain guarantees had been given to the tenants arising from the transfer of their tenancy, but this was limited to a period of only 10 years from the date of sale, and the type of letter sent to my constituents would only engender a feeling of insecurity. This letter of 7th January stated: I am now able to advise you that the sale of the property which includes the house you live in, was completed on the 4th January, 1965, the purchaser being Ellinson Estates Limited… I want to look at some of the history of this transaction and to take the House back to the time when the houses at North Blyth were first offered for sale to Bedlington Urban District Council. They were offered for sale at £70,000, a figure that was subsequently reduced to £35,000, and then we find that Ellinson Estates Ltd. are able to purchase the houses for £23,000. This must prompt the question, since the council was brought into the negotiations, why it was not offered the houses at the figure which the property company paid?

Indeed, it prompts the further question why the tenants themselves were not offered the houses for a reasonable price. If we examine the financial aspects of the transaction we find that Ellinson's, having bought the houses for about £250 or £270 each, are now offering them for sale to the sitting tenants at £750 each. The British Railways Board apparently argues, through the medium of its Vice-Chairman, Mr. P. F. Shirley, that the capital from such transactions could be used for development, thereby avoiding the need for the Board to borrow money.

But, if we examine the figures, we see that it should have been quite easy for the Board to offer the houses at, say, £400 to each tenant and to have made for itself an increased profit on these houses, not to mention saving the tenants about £350 per house. While we are dealing with the question of my constituents who live in the houses, and who are railway employees, we must not forget that public money is also involved in this transaction. Only two years ago 56 of the 86 houses were renovated with the aid of an improvement grant. The cost to the Board, less the grant, is estimated to be about £6,000.

In 1961, the electricity supply to those houses, previously supplied by the Board, was renewed, and the supply was taken from the electricity board, at a cost of £10,000. We are entitled to ask in whose interests these renovations were made, Certainly there was increased comfort for the tenants, but they also greatly enhanced the value of the property. If we consider the argument on the basis of income to the Board—the question of borrowing and of the financial benefit that would accrue—we must also consider the figure of about £6,000, which I believe is the annual rent yield of these houses. An annual rent yield of £6,000 would, in four years, provide the amount which was paid for these houses by Ellinson's when the transaction was completed.

All this adds up to the fact that when next we talk about railway redundancies we ought to think in terms of some members of the Board at least, and certainly the estate surveyors who carry out this policy. I have raised this matter on three or four different grounds. I have raised it in relation to tenants who, living in this part of my constituency, are separated from the rest of the community. This means that any British Railways employees who are transferred to this area have difficulty in securing accommodation.

I have described the financial aspect of the matter. As I have said, a considerable amount of public money was put into the renovation and repair of these houses. We must also consider the question of the rent yield to the community. I have added all this up. To return to the figures which I have already given, I feel that they require some searching examination and, in my view, an inquiry by the Ministry of Transport. We come back to the figure of £23,000, the sum for which these houses were sold, bearing in mind the £70,000 and, subsequently, £35,000 which was the price at which they were offered to the local authority. It prompts the question that if the local authority was approached, as indeed it was, on the question of purchase, why was it not also brought into the transaction when the figure of £23,000 was arrived at?

We have raised a constituency matter, but it is extending into a national matter. Reference has been made to 86 houses in the Blyth constituency, but we believe that something like 23,000 out of the 34,000 houses which the Railways Board owns in various parts of the country may be affected. We ask that the most searching inquiry be made into this matter so that some comfort may be given to my constituents and to railway employees throughout Britain.

10.17 p.m.

Mr. Arthur Blenkinsop (South Shields)

I support my hon. Friend the Member for Blyth (Mr. Milne) who has raised this matter, for exactly a similar kind of issue involves some of my constituents. In South Shields there are about 133 railway houses which have been disposed of to a private developer, and it would appear, though we are not conversant with the full details, that the property has been disposed of at a shockingly low price, bearing in mind that it is public property. It has not been offered to the sitting tenants. The houses were disposed of, so far as we can ascertain, at about £400 each. We have evidence that some of these houses7mdash;not by any means the best of them—have been offered to the sitting tenants by the new owner at £900 within a matter of days. If my figures are accurate, this represents a profit of more than 100 per cent. Naturally in my constituency there is great anxiety about this matter.

My constituents wish to know why the sitting tenants were not given a chance to buy the property, as many wished to do, and as happens in similar cases in respect of property owned by the Coal Board. They want to know whether the offer was the same as was made to the corporation. We are not at all clear whether it was the same as was made to the private developer. We wish to know what is the position of the tenants in relation to their agreements. They are told that they have a ten-year guarantee of tenure, but under new agreements put before them by the new owner which are far worse than their agreements with the Railways Board.

I strongly support my hon. Friend in his request that the Minister should go into the matter and to carry out a really searching inquiry so as to give us the full details in order to make sure that the public is not being rooked and that the tenants are not being rooked.

10.18 p.m.

The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Stephen Swingler)

First may I say how grateful I am to my hon. Friend the Member for Blyth (Mr. Milne) for the full notice which he gave of the points which he intended to raise and also express my gratitude to my hon. Friend the Member for South Shields (Mr. Blenkinsop) who has raised similar problems affecting his constituents, and who gave me an opportunity to make a thorough investigation of the case.

This is another Adjournment debate regarding matters affecting transport boards which I have had to answer within a few days and once again I am astonished, as I suppose we are now entering the second week of the alleged period of alleged reinvigorated opposition to the Government, to be confronted with completely empty benches on the opposite side of the House. We know that the Railways Board owns houses all over the country and this must be a matter affecting the constituents of a considerable number of hon. Members opposite who should be concerned that the property is disposed of on proper terms. It is extraordinary to find that there is not one representative who has bothered to attend even as an observer on behalf of Her Majesty's alleged Opposition in order to give attention to the subject which my hon. Friend has taken so much care to raise tonight.

I am completely sympathetic to the points which he has raised on behalf of the tenants affected by the sale of property in North Blyth, and, of course, in South Shields. I want to emphasise that this Government are absolutely determined to stop the unreasonable eviction of tenants and the imposition of unreasonable terms upon tenants. That is the reason that action has been taken by this Government very early in their period of office in order to give some special protection to them. I shall be referring in a moment to the Protection From Eviction Act, 1964, which extends certain safeguards to tenants who are in positions such as have been explained tonight by my hon. Friends. First of all, however, I think my job is to ex plain the position and policy of the British Railways Board in this matter and to try to set out the record so far as I can to the satisfaction of my hon. Friends.

To begin with, I should state quite clearly that again tonight I am speaking on a matter which is a managerial responsibility of the British Railways Board. The management of its property, including its housing property, is a part of its management responsibility, and it has powers under Section 14 of the Transport Act, 1962, to dispose of any property which it no longer requires for Operational purposes. The Railways Board owns a considerable number of houses, scattered throughout the country, many of which were built towards the end of the last century or thereabouts to house people employed at that time in operating the railways. Many of these houses are no longer required by the railways for their operational purposes.

The Board has considered for some time that the number of houses which it has inherited is considerably in excess of those which it needs for present rail- way activities and, therefore, it has adopted the policy of selling these surplus houses. However, as my hon. Friends have emphasised, the Board is a publicly accountable Board, a national Board, and, therefore, we rightly expect that in carrying out its powers to dispose of its property under Section 14 of the Act, it will be careful to do so with minimum disturbance to the tenants, and to do so in the public interest. I am informed that the policy and practice of the British Railways Board in this matter is to adopt one of two courses—either to offer the houses to the tenants who are in occupation, and a number of railway houses have been sold in recent times in this way; or to first offer blocks of houses to the local authorities in the area to be taken under municipal ownership. In selling the houses in blocks, the Board has always sought to have some form of protection for the tenants included in the terms of the sale. This, I am advised, is the policy of the Board which governed its sale of the housing estates in North Blyth and South Shields, to which my hon. Friends have referred tonight.

I come to these cases under discussion tonight. I am advised that the facts are as follows: several years ago, I am told, the tenants of these estates were approached about the modernisation of some of the houses, which I believe urgently required modernisation. But the Board states that it met with a poor response, because the spending of money on modernisation was necessarily associated with an increase in the rents of these houses. This led the Board to the view that only a proportion of them would be sold. The Board therefore came to the decision that it wished to dispose of these estates outright to a single purchaser in order to be relieved totally of the expense of maintenance and management.

At North Blyth, I am told, the Board went to considerable trouble to give to the local authority, the Bedlington Urban District Council, the first refusal of the estate. It had lengthy discussions with the Council and in October, 1963, it made a firm offer to the Council. I am advised that the Council decided that it did not wish to buy these 86 houses. Although the Board states that it made it clear that the price which it was asking was only a starting point for negotiations, the Council told the Board quite definitely that it did not wish to purchase the houses. The Board therefore decided to pursue the question of selling the houses to a single purchaser. We recognise that the Council had no obligation to buy from the Board any more than the Board had any statutory obligation to sell to the Council. But having failed to interest the Council in buying the houses, the Board proceeded to try to negotiate a sale, and, as my hon. Friend said, a sale of the block of houses was eventually completed on 4th January this year to Messrs. Ellinson Estates Ltd.

At South Shields, I am informed, a similar process of events occurred. The Board offered the houses to the local authority. The Corporation, having been given the opportunity to buy the houses concerned, felt that it could not offer a price which was acceptable to the Board. Eventually, after exchanges between the Board and the Corporation, the South Shields Corporation was not prepared to make an offer, even though it was asked by the Board to do so. In fact, it expressed doubts as to its ability to manage and maintain the estate economically if it bought it. The Board therefore came to the conclusion that it was necessary to search for a purchaser elsewhere.

It has been said that the Board should have offered the houses to the tenants individually and given them an opportunity to buy. I want to make it as plain as I can that it was a matter of administrative convenience or administrative organisation which forced the Board to the decision to sell these houses as a block, and as it could not sell them to the local council as a block, it decided to sell them as a block to a private concern because of the difficulties and the possibly lengthy negotiations which might have ensued in an attempt to sell them individually to the tenants concerned.

Mr. Blenkinsop

Is my hon. Friend aware that the tenants in South Shields offered to join together as a kind of cooperative to make an offer for a group of the houses and so to avoid this difficulty?

Mr. Swingler

I am interested in that point and am prepared to investigate it further. My information, however, is that the Board was confronted with the choice of selling the houses en bloc to the local authorities, which were not interested, or to a private concern, or individually to the tenants, which latter course would have involved lengthy negotiations and procedures. Since the Board could not arrange a deal with the local authorities, it decided to sell the houses en bloc to a private purchaser.

In regard to the estate at North Blyth, the Board included as a condition of sale the provision that the purchaser, Ellinson Estates Ltd., would give the existing tenants an opportunity of buying the houses they occupied, if any of them wished to do so. No tenant is under a compulsion to purchase, but the Board made it clear that this opportunity should be given by the purchaser to the tenants.

Mr. Blenkinsop

But at double the price.

Mr. Swingler

We are quite prepared to investigate that matter. If there are any allegations of exploitation we are prepared to investigate them, but I will, in the remaining minutes left for this debate, deal with the important question of the protection of the tenants. I want to make the position clear.

As I understand the position, 66 of the tenancies at North Blyth and 77 of the tenancies at South Shields are controlled under the Rent Acts, and the tenants therefore are afforded the protection of that legislation. In other words, the court can make an order only on certain specified grounds; for example, the nonpayment of rent, failure to observe the obligations of the tenancy, or conduct by a tenant which causes a nuisance or annoyance to the adjoining occupiers. The tenancies which are not controlled under the Rent Acts—20 at North Blyth and 56 at South Shields—are covered by the new Government's Protection from Eviction Act, 1964. In the event of the owners proposing to evict a tenant—for example, in the event of the tenant refusing to agree to an unreasonable increase in rent, or simply to gain possession to sell with vacant possession—the owners would be obliged under the Act, which this Government recently put through Parliament, to obtain an order for possession from the county court, which has power to suspend execution of the order for up to 12 months. I wish to emphasise that the 1964 Act is an interim Measure, pending the Government's main legislation on rents to provide greater security and will introduce a system under which rents can be fixed on a fair basis.

In addition, the railway tenants—that is, employees or former employees of the railways system, or their widows, who are the majority of people on these estates—enjoy the further safeguards that have been included by the Board in the contract of sale.

I am advised that at North Blyth the Board has included in the contract of sale a condition that provided that the tenants are not in any breach of their tenancy agreements, their tenancies cannot be terminated within 10 years of the date of the sale of the estate without the consent of the Board.

These are the legal safeguards which these tenants have concerning their security of tenure and the level of their rents. Further, if any of the tenants are in any doubt as to their position, they should immediately seek legal aid about any proposals which are being made to them by the new proprietors of these houses.

My hon. Friends have tonight made allegations concerning the finances of these deals. They will appreciate, of course, that I cannot speak in detail on that aspect of the matter because the commercial negotiations in which the Board, using its managerial responsibilities, has been involved, are confidential, despite the way confidential things sometimes become bandied about in the Press. I undertake to my hon. Friends that I will make further investigations into the financial aspects of these deals, and I am prepared to advise them as best I can.

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty-four minutes to Eleven o'clock.