§ Order for Second Reading read.
§ 12.6 p.m.
§ Mr. Harold Gurden (Birmingham, Selly Oak)
I beg to move, That the Bill be now read a Second time.
The House should not be misled by the Title of the Bill. The Bill concerns property which stands on land. We are not so much concerned with the land itself but with the compulsory acquisition by local authorities of property standing on the land. I have used this Title simply to copy what has been done before in other Acts, particularly the 1961 Act.
The Bill seeks to restore compensation for compulsorily purchased property to the basis of a fair value. "Compensation" is a word which I consider to be very much misused in present Acts, because the amount of money paid on the compulsory acquisition of property in clearance areas is below what could reasonably be termed as compensation. This is a very simple and a short Bill. It will repeal legislation which has reduced compensation for property to a mere token payment which bears no relation to the market value of the property standing on the land. The Bill merely makes repeals.
It is very rare in our law—in fact perhaps compulsory acquisition is the only exception—that private property can be taken into public ownership compulsorily under Acts of Parliament without regard to the property's real value. I cite, for instance, various Acts of nationalisation and other such matters, under which compensation for the acquisition of property, even if it is merely shares in a company, bears some relation at any rate to the real value. In thousands of cases of compulsorily purchased property for redevelopment and slum clearance, local authorities can, and must in fact under our law, take over the property at very much less than its fair value—not merely at one-half or one-quarter of its fair value. Often a mere £10 or £20 is paid for houses which, without a compulsory purchase order, would probably fetch £800 or 1944 £900, to put it mildly; it might be considerably more.
Most of these repeals affect the Housing Act, 1957. The first repeal is Section 12(4), which defines the value as that which it would be for the site cleared. Section 29 says that payment is to be made for land and any buildings at cleared site value only. That is all a person may get for the property which he owns. There is no regard paid to the value of it as living accommodation, however small or large that may be. The Second Schedule of this Act provides for additional payment for a well-maintained house. This is extremely limited relief and it may only be money spent in the five years before the acquisition on any improvement for maintenance of the property. More often than not this sum is less than £100. This means that with a compulsory acquisition the total amount of money, including well-maintained payment, amounts to only about £150 for a pretty good house.
The exception to this law as it stands is the owner of an occupied house bought before December, 1955, but after September 1939. In this case full market value is payable. This exception was made because of the intimation of the Government at the time that they were bringing in an Order on this matter and it was thought it would be unfair to people who had bought a house before the Act came in. It was to avoid retrospective legislation to some extent.
This Bill seeks to have full market value paid in all cases of compulsorily purchased property. It may not be a high value, because many of the houses are aged houses, very often in slum clearance areas. There is, however, a wide discrepancy in the value of the houses. It will not affect houses of a very high value in the main. It could do so if the local authority decided to clear an area where there were expensive houses. Mainly it will deal with houses in the price range of £800 to £2,000.
The present law has an iniquitous effect upon the owner occupier. He buys a good, sound house with every reason to believe he has security for the lifetime of the property, which is, on the admission of the local authority who make these orders, perhaps twenty or thirty years. The local authorities state that they have 1945 no intention of clearing a particular site for a long time. Figures quoted in correspondence I have show that they estimate clearance in twenty or thirty years time. So the person who buys a house has no reason to believe he will not be able to enjoy the benefits of it for some considerable time. It is thought by the public that if a solicitor makes a search for conditions imposed on the property at the time of the purchase and if the search shows there is no compulsory acquisition intended, then a buyer can safely enter into the purchase of the house, spending his savings on it.
This is not the case. When the solicitor makes the searches, more often than not the local authority informs the purchaser that it has no intention of making the area in which the house stands a slum clearance area. Then within a matter of weeks or months notice is given that the local authority intends to acquire the house. The situation then is that the owner of the house loses his home and probably for a payment as low as £30 to £50. Where the local authority has no intention of clearing the site immediately but has acquired the house it is then entitled to charge the occupier a rent. The occupier then has to pay rent and continue to pay his mortgage debt and the interest. When the local authority clears the site he has to find alternative accommodation. The result of this in practice is that the occupier who has spent his life savings on the house has no means of finding accommodation.
There are many houses owned by private landlords. This perhaps would cause the House to feel that compulsory acquisition of housing is essential. I agree and my Bill does not seek to interfere with the powers of the local authority to acquire areas for redeveloping. All I seek is fair compensation for the owners.
So far as landlords are concerned, one could suppose it would be part of the solution to confine this Bill to the owner-occupiers. This would not solve the serious problem and the hardships arising when a relative of a disabled person has acquired property in order that this person should have a home. It may also be a young couple getting married for 1946 whom the parents have bought somewhere to live. The relative or the parents then become the landlord and if landlords were excluded from this Bill there would be considerable hardship. There is also the case of widows who have acquired two houses in a road, one to live in and perhaps the one next door let to a relative. They would not only lose that house but their own as well. In fact, all their worldly possessions which they regard as having some cash value would have gone. Therefore, these people are thrown on to National Assistance because they have lost everything.
This Measure has support not only on this side of the House, but there are several hon. Members opposite who have sought to introduce legislation of this kind. There are cases on record which can be found in the OFFICIAL REPORT. The right hon. Member for Blackburn (Mrs. Castle) in July of last year said in a Question that the majority of these houses are owner occupied. I do not know whether that is so, but that is what she said. She also said that people had sunk their life savings into this property and that the local authority was not allowed to pay more than site value. She added that this was causing great hardship and she pressed the then Government to do something about it. I like to think that my party, if it had remained in power, would have done something about it, and I have reason to believe that it would. We shall be hearing later from my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter).
The hon. Member for Cardiff, West (Mr. George Thomas) supports my case, because he asked Questions in 1962 and 1963 pointing out the great hardship involved. He referred to unsuspecting purchasers who get into this difficulty. Then there was the former Member for Bristol, Central (Mr. Awbery), who, on 14th May last year, referred to the hardship inflicted on these occupiers in having these compulsory purchase orders put upon them and in having to find the money to pay the mortgage debt.
The mortgage debt may be owed to the local authority, so that the local authority can not only charge rent for the property which it has—to use a word which I prefer—confiscated, but it can 1947 also insist upon the payment of the mortgage debt and when the time arrives for clearance of the site the occupier can be turned on to the streets.
I wish to pay tribute to my hon. Friend the Member for Crosby (Mr. Graham Page) who has done all the spade work in connection with the preparation of this Bill. I consider him an expert in this field and I hope that he will catch your eye, Mr. Speaker, because I am sure he can put this case far better than I can. I wish to thank him very much for his efforts and for his help in drafting this Bill.
I appreciate that hon. Members may well wish to amend the Bill on the question of the landlord. There could be a case where large blocks of property come into the market when it is well known that compensation is to be paid. This is an arguable point, but I could not very well omit the landlord part of the Bill because this would not remove all the hardship which I seek to remove.
May I quote two cases of hardship, both in Birmingham. One is in my own constituency. The first case relates to a Mr. Addis, who was the owner of property until the local authority issued a compulsory purchase order. The local authority well knew the circumstances of the case when it issued the order. Mr. Addis is not an old man. He is middle-aged, but he was disabled in industry and was, therefore, unable to continue his job. By one means or another he found it possible to buy a very small house in what could be termed a pretty-near slum area, although it was not too bad. He was able to purchase the house for £1,450 for himself and his family.
He did this with the aid of money which he had borrowed largely on mortgage. The front of the house had been converted into a shop, and he felt that there would be a little income to keep him and his family. The searches were made, as happens in thousands of other cases, without any indication that the local authority at some time or other intended to make this a clearance area and take over his property. Even if the Corporation of Birmingham had felt that it was necessary to do this, it could have delayed action for another 10 or 15 years because the corporation admits 1948 that it does not require this area for redevelopment for a long time. However, strictly in accordance with the law, the corporation was entitled to put an order on the whole area. This frequently happens. Local authorities do not normally exclude any cases no matter what the hardship may be.
Here is Mr. Addis with a debt of £1,450, and he is offered compensation of £127 for his house and shop, being a sum in respect of the cleared site value plus a little for well-maintained premises. All his savings have gone and he has to pay a rent of 25s. 10d. a week to the local authority for what he thought was his own property. When this area is cleared his property will be knocked down and Mr. Addis will have nowhere to live.
The local authority wrote to Mr. Addis saying that, whatever its feelings might be, it is unable to do anything more for him than pay him £127 because Parliament has restricted local authorities in this respect. A letter that I have from the town clerk to Mr. Addis says that the matter has been raised in the House but that all the efforts that have been made by the corporation and by Birmingham Members of Parliament have had no effect.
The second case I should like to quote concerns a Mrs. Paton. She became widowed at a fairly young age and was left with young children. Her mother was forced to move out of her own accommodation, leaving Mrs. Paton with nowhere to live. It so happened that she was left a legacy of £400 by her late husband's employer. She could not get a municipal house, although she had been on the list for years, so she decided to try to borrow another £500 on mortgage to pay for a house which was priced at £875.
She thought that with any assistance that she might be able to get, possibly National Assistance and perhaps some part-time work, she would be secure in her home. The solicitors made the usual search and asked the local authority if there was any reason to think that this house which Mrs. Paton was to buy would be taken from her. The local authority said that no plans were known and that there was no reason to think that Mrs. Paton should not enter into a debt of 1949 £500 and pay £400, which was all the money she had, for the house. Only a short time afterwards a compulsory purchase order was applied to Mrs. Paton's property.
After a time she found that she had accumulated a debt for rent to the local authority of £140. The compensation in this case was put at £150. Mrs. Paton was to receive some day £150—and these payments are sometimes delayed for years—for a house which was worth in the open market £875. However, because she had not paid the weekly rent, in the hope that this House would bring in legislation to protect her and to see that she received justice, she found herself a few weeks ago in debt to the tune of £134 for rent arrears to the council. She had only £16 to come in the balance of the so-called compensation money and she then had to find 15s. a week in rent—I suppose from National Assistance.
It is difficult to argue that local authorities should not have slum clearance powers, but here is sheer confiscation of a person's property, and a quite valuable asset—even if it is only land at clearance value—going into public ownership at the expense of each individual. I suggest that local authorities are making a profit out of these people. Even if these people receive the cleared site value it is not a fair value which they could make in the open market for redevelopment. It is absolutely wrong that individuals should have to sacrifice their life savings when slum clearance and redevelopment should be a charge on public funds.
It is not long since we heard arguments in the House about so-called Rachmanism in property. I term this legalised Rachmanism. The local authorities tell these poor people that there is no way out of the difficulty and that they are forced by Parliament to carry out this iniquitous legislation.
This is only equalled by the Hitlerite règime. The only difference is that the people who live in these houses are not sent to concentration camps, but they are often sent to hostels because they have nowhere else to live after the house for which they have paid has been taken from them. I hope that the Government will not just promise legislation to solve this problem. We must have a Second Reading of this Bill today to stop as 1950 soon as possible this awful practice. Local authorities would not be harmed by this. In Birmingham, for example, the local authority has as much land as it could possibly want and enough property to meet requirements for the next 20 years of development.
§ 12.37 p.m.
§ Mr. Neil McBride (Swansea, East)
The hon. Member for Birmingham, Selly Oak (Mr. Gurden) made what was in part an interesting speech, but I wondered where the correlation was between concentration camps and this Bill. I draw the attention of the House to the words in lines 13 and 14 on page 1:… a determination by a local authority to purchase. …This seems to me the purpose of the hon. Member's speech and the basis of his arguments.
The hon. Member spoke of owner-occupiers who are in great danger of losing their houses. In the case of determination by a local authority to purchase for road widening purposes, for example, I have a feeling that the matter is fully protected under the Highways Act, 1959. Existing use value is given for property on land which is required for road widening purposes. When 30 years' occupation is envisaged in the purchase of a house I am certain that the solicitors would search for any future impediment to owner-occupation. The would-be purchaser would have a clear indication of this.
§ Mr. McBride
I will make my speech in my own way, if hon. Members do not mind.
The solicitor, in the course of the conveyancing, would seek to safeguard his client against any danger of the house being taken away from him. The hon. Member for Selly Oak spoke about an area not being a slum clearance area and about the acquisition of slum property or any other property, but with respect to the hon. Member he was basing his argument on desirable property, on a house in which one might want to live for the period which he described. The solicitors of a building society would be chary of giving a mortgage on any property which was threatened or held to be threatened. 1951 Local solicitors, as agents of building societies, have their ears to the ground in these matters and are always seeking information.
The hon. Member spoke of Rachmanism. Local authorities cannot be held to be in that category. Most of them have been reasonably fair in their dealings with people who are held by the hon. Gentleman to be afflicted in this way.
It should not be forgotten that, in the period when the party opposite was in power, great damage was done by the Government's failure to curb land prices. This has harmed an enormous number of people in their acquisition of houses, having added one-fifth to the cost of a house. The Opposition should direct their attention to this and tell us why they failed to eliminate that great social evil, for social evil it is.
I do not quite understand why the hon. Gentleman spoke of the acquisition of slum property or any other property in this connection. If he was directing our attention to what the Bill will do to improve the future prospects of owners or would-be owners of good property, the bracketing of slum property with that was a negation of his argument. There remain many questions which the hon. Gentleman did not properly answer. Perhaps, when we hear other hon. Members speak, we shall have a clearer indication of the exact meaning of Clause 1.
§ 12.41 p.m.
§ Mr. Graham Page (Crosby)
I sincerely congratulate my hon. Friend the Member for Birmingham, Sell) Oak (Mr. Gurden) for having chosen this subject for his Bill, which, if he succeeds, will alleviate a great deal of severe hardship. I congratulate him also for the manner in which he put the case before the House. The hon. Member for Swansea, East (Mr. McBride) is so many miles away from the true facts that it is difficult to answer him shortly. He spoke of a great social evil, but he did not direct his attention to the great social evil which my hon. Friend is trying to correct. There has been and there still is a great social evil as a result of what are known as the site value Sections of the Housing Act, 1957, which originate in earlier Acts.
1952 I wish to dispel the idea that we are dealing only with slum property here, and I shall give examples to prove my point. The trouble starts with Section 4 of the 1957 Act, which describes the standard of fitness. If a house does not come up to that standard of fitness, it can be statutorily unfit for habitation although, to the ordinary common man, it may be perfectly fit for habitation and quite a reasonable house. Section 4 is headed "Definition of standard of fitness" and provides:In determining for any of the purposes of this Act whether a houe is unfit for human habitation, regard shall be had to its condition in respect of the following matters"—and there then follow nine matters: repair, stability, freedom from damp, natural lighting, ventilation, water supply, drainage and sanitary conveniences, and facilities for storage, preparation and cooking of food and for the disposal of waste water. It is then provided—this is the important part of the Section—and the house shall be deemed to be unfit for human habitation if and only if it is so far defective in one or more of the said matters that it is not reasonably suitable for occupation in that condition.A house can be deemed unfit under only one of those nine matters. Half the houses in the country could be statutorily unfit under the Section. How many houses have no damp-proof course? If they have not a damp-proof course, they can be declared statutorily unfit under the Section. This is where the trouble starts.
§ Mr. Marcus Lipton (Brixton)
If, as I suspect, the hon. Gentleman was a Member of the House in 1957, what action did he take when the Act was going through the House?
§ Mr. Page
The hon. Member for Brixton is frequently in his place in the Chamber, but he cannot have been in his place on the many occasions when, from the back benches on the other side, I objected to this definition of unfitness and to the site value provisions in the 1957 Act and earlier Acts. I come before the House with a perfectly clean sheet on this. I have always maintained that these Sections are most unfair. I maintained it against my own Government during their 13 years of office, and I still maintain it.
1953 When a house is proclaimed statutorily unfit, it can be the subject of an order under Section 12 of the 1957 Act, that is, that it is not capable of repair at reasonable cost; it can be the subject of a demolition order or a closing order, followed by a compulsory purchase order made by the local authority; or it can be included in a clearance area, again followed by a compulsory purchase order. If it comes under any of those headings, the house and the land on which it stands can be acquired at site value. The bricks and mortar of the house count for nothing. True, the site value must not be less than the gross value of the property, but that is a paltry sum compared with the value of many of the houses coming under these provisions.
The importance of whether a house is classified as statutorily unfit or escapes that classification has been shown in many cases. I give just one from Lewisham, where a house was classified as statutorily unfit and compensation of £50 was offered by the acquiring authority as the right sum for site value. The owner fought that classification and succeeded, obtaining the market value for the house, which was £975 Thus, there was a difference between the site value of £50 and the value which he eventually received of £975 because he succeeded in having the house taken out of the statutory definition of unfitness.
We should remember that, in the main, we are dealing in these cases with houses which have a gross value. The local authority, being also the acquiring authority, looks upon these houses as having a gross value. It collects rates on the basis of the gross value and of there being beneficial occupation—until a compulsory purchase order is served, at which stage the house becomes worthless. By Statute, the house is no longer worth anything and the local authority can acquire it, not for the value of the house but merely for the value of the land on which the house stands.
My hon. Friend has already referred to the exception to this rule. If the present owner-occupier happens to have purchased his house between 1939 and 1955, he gets the market value for it. If, on the other hand, he purchased it before 1939 or after 1955, he gets only the site value. The House should note carefully that this exception will die next 1954 December. This is why it is vital that my hon. Friend's Bill should be accepted now or that, at least, we should have an assurance from the Government about what they intend to do in the matter before next December. As things stand now, if a local authority holds back its compulsory orders until next year, those who bought their properties between 1939 and 1955 and are still in owner-occupation will get only site value. If a compulsory purchase order is served now, they will get the market value for the property.
Frequently—I will give some examples—one finds two or three or four identical houses in a street. One of them may be acquired by the local authority at site value either because it is a tenanted house or because the owner-occupier purchased it after 1955 or before 1939. Yet the owner of an identical house alongside it will receive market value for his house because he happened to have purchased it between 1939 and 1955.
If I may give examples of this, it brings me back to what I was saying at the beginning, that we are not here always dealing with slum property. We can see the distinction between the site value and the real value of the property when we have identical houses side by side, one purchased between 1939 and 1955 and the other purchased outside those years. I will give one or two examples taken from some 300 which I have collected. These are not necessarily the worst ones.
I have an example from Smethwick. No. 37 in a street received site value of £30 because the owner-occupier purchased it in 1956. No. 39, purchased in 1958, had £30. No. 40, purchased in 1958 but well maintained, received £150, which included the well-maintained payment. No. 38 had, fortunately, been purchased by the owner between 1939 and 1955—actually in 1943. Against the £30 received by his neighbours, he got £550. the market value of the property.
In Pontypool an owner-occupier who purchased in 1960 for £200 got £28, which included a well-maintained payment. His neighbour, with an identical house, got £300 because he was one of the 1939–55 purchasers still in owner-occupation.
1955 At Royton, Lancashire, there was an owner-occupier of a dwelling house purchased in 1959 for £300. He had spent £150 on improvements to it. He was paid £88, which included a well-maintained payment. His neighbour received £250 for an identical house, again because he purchased it in the magic years 1939–55.
In the case of a terrace of houses in Sheffield, £75 each was paid for two of them. Three others received £500 each. There we have the difference between site value, £75, and the market value of the property, £500.
In Leeds £40 was paid altogether for four tenanted houses. A similar house next door, because it was in the hands of an owner-occupier who had purchased between 1939 and 1955, received £1,250. In that case it is £10 against £1,250.
In Kidderminster there was a dwelling-house owner-occupied by an old lady of 89 who purchased it in 1938, which was just before the magic period. She was given £30 plus a well-maintained payment of £72. Five other houses in he road were acquired at figures between £700 and £750 each.
I shall not weary the House with all the examples that I have, but perhaps I might mention some at Woolwich. One owner-occupied dwelling-house purchased in 1958 received £150. The one next door, purchased between 1939 and 1955 received £1,150. There is also a most amazing case from Woolwich. The houses were Nos. 12, 16 and 18 in a street. They were identical. No. 12 received £200 site value, No. 16 received £200 site value and a well-maintained payment of £189, the reason in both cases being that they were purchased prior to 1939 by the present owner-occupiers. But in the case of No. 18 the local authority made a mistake in the notices served on the owner-occupier, and because of that mistake it had to pay the owner-occupier the market value, which was £1,650. Therefore, £200 each was paid in respect of two of these three identical houses and, as a result of a slip in the procedure adopted by the acquiring authority the lucky owner-occupier of the third received £1,650.
I will not weary the House with further examples, but taking an average of the examples which I have obtained, there 1956 is a difference of this sort of dimension, that if one happens to have purchased one's house between 1939 and 1955 one will get ten times as much for it as if one purchased it outside that period or if the house is tenanted. This really is grossly unfair. It is causing an immense amount of grievance among a great number of people who see their neighbours get these large sums for their houses compared with the small sums paid to them. In all the cases which I have quoted I have checked that there really was no difference in the real value of the properties. They were identical. There was no substantial difference in the repair or maintenance of them.
This surely is a situation which ought not to be allowed to continue. It may be said that if we give the owner of a house the full value of the property, we are making it very expensive to carry out slum clearance and rehablitation of property. Is that a good argument for saying that we must deprive an individual of something which belongs to him? That is what we are doing under the present law. We are depriving him of the bricks and mortar and paying him nothing for them. I do not think that any benefit to the community justifies our confiscating property from an individual.
§ Mr. Ivor Richard (Barons Court)
In regard to the Second Schedule of the 1961 Act relating to acquisition, could the hon. Gentleman answer one question? What is concerning me is this. As I understand his argument, he is saying that it would not be right in normal circumstances to deprive an owner of the value of the bricks and mortar of the house he happens to own. Assuming, as one has to under the Second Schedule, that the fact is that the house—the bricks and mortar—is unfit for human habitation and not capable at a reasonable cost of being rendered fit for human habitation, why should we pay for bricks and mortar of a house which is unfit and cannot be rendered fit?
§ Mr. Graham Page
I endeavoured to explain what was meant by "unfit" in the Statute. The examples which I have given show that houses are labelled "unfit" even though, to take the Woolwich case, they may be worth £1,650 as against the site value of £200. It means that, although we are dealing with houses which can be called statutorily 1957 unfit because they are not up to the standard of fitness in only one of the nine points in Section 4 of the Housing Act, 1957, we are not necessarily dealing with houses which the ordinary man would look upon as unfit. Indeed, the local authorities themselves, when acquiring these houses, do not recognise them always as being unfit because many of them continue to let the owner live there as tenant or put a tenant in themselves for five or ten years.
§ Mr. Richard
I take the point. But if a house is really unfit on any view, does the hon. Gentleman think that we should still pay full compensation for bricks and mortar even if the house cannot be patched up and used?
§ Mr. Page
I can quote many cases where the house is not worth the money which one has to pay to clear it. In fact, one would want money to take away the bricks and mortar because the house is so unfit. All I say is that we should value the house for what it is worth. If it is bad and unfit, then the owner should receive nothing. But if it has a market value then that should be paid.
When the community takes property away from an individual for the benefit of the community, then it should be prepared to pay the individual the value of his property. In all other aspects of compulsory purchase—nationalisation, for instance—that principle is recognised. But it is not recognised in application to clearance, demolition and closing orders. That is what my hon. Friend wishes to correct by the Bill.
§ 1.0 p.m.
§ Mr. John Hynd (Sheffield, Attercliffe)
I shall speak for only a few moments and I hope that hon. Members will follow my example because I am anxious to hear what the Minister has to say. I think that all of us recognise that there are anomalies in the present situation. The hon. Member for Crosby (Mr. Graham Page) referred to Sheffield. In my constituency there has been considerable difficulty because of large clearance orders.
One of these is in connection with the new flyover junction in the Tinsley area, where practically all the local inhabitants have been cleared out, including shopkeepers and others and churches. It is 1958 fair to say that, under the present provisions, most of the people affected have been well dealt with and provided with good alternative accommodation. But there are other problems and these are not dealt with by this Bill. That is why I query its terms. It leaves so many things out. For instance, a small church in Tinsley has found it impossible to find an alternative site in the area. All the assistance of the Ministry and of the local authority has been unable to find such a site. This is as serious a problem as the compensation aspect in many cases.
It is right that the Government should be able, in pursuit of the necessary purpose of developing new sites, new roads and so on, to acquire land. But there is a direct obligation upon the Government in doing so to ensure that provision is made in advance up to suitable limits to ensure that the legitimate activities in the community—represented in the churches, for example—should be re-sited within reasonable reach. This is not done now.
In the Woodhouse area of Sheffield, redevelopment of an old area is taking place. It is a desirable and necessary piece of planning. There is to be considerable demolition of houses and shops, many of which are still very good and substantial. Here again, compensation will be paid. Tenants will be given new houses and site value will be paid.
There is an anomaly, which was mentioned by the hon. Member for Crosby, concerning the expenses, where differentiation will cause extreme bitterness and jealousy amongst those involved. For example, there is the case of a hairdresser who has already been moved three times under similar conditions. He gets not a penny of compensation. He will be supplied, however, with alternative premises, but the trouble is that many of these small people who are just earning a livelihood find it of no use to he offered a modern shop which will cost them considerably more although it may be a business proposition. Such property is no good for a man of 60 and his wife, who merely want to turn an honest copper. Nothing is done to provide them with something suitable for their age and conditions. The barber I have mentioned must find somewhere else to go and he may get assistance but this 1959 will be the fourth time that he has had to change his clientele.
The hon. Member for Crosby referred in particular to the question of the definition of what is unsuitable for human habitation. The Bill does not deal with that aspect. I recognise the anomaly and would like the Government's view. I do not think that the hon. Gentleman would suggest that there should not be some definition which would make it clear that compensation shall not be paid for wholly valueless property. The definition of what is in other Measures is a separate problem.
There is also the problem concerning the amount of compensation. Having listened with considerable interest and sympathy to what has been said for the Bill so far, by the hon. Member for Crosby in particular, I am not yet convinced that there is a case for paying full compensation based on an assessment, generally the owner's assessment, of what that property might have valued over an indefinite period of years. There might be a case for some kind of assessment tribunal which would consider reasonable compensation, but not based on the book-keeping assessment of what such property could be valued at.
Trades people have a right, for instance, to settle in particular places to earn their money from the local populace. Owners who have been renting houses to tenants have to make their contribution to the development necessary, but may directly benefit in the long run because they will have money to invest anyhow and will probably get better returns because of the improved development. One could not say what might have been the future earning capacity of the cleared houses but there seems to be a case for some kind of body to consider the situation and make some kind of recognition of the fact that pure value is not always fair and adequate as a consideration.
Another aspect which is not covered in the Bill and to which attention should be paid is that of removal and incidental expenses. Tenants may be provided with new houses but they are not provided with new electricity points, for instance. Anyone who knows about the transfer of electricity from 15 amp. or 5 amp. to 13 amp. in a house knows that it is a 1960 considerable expense for poor people. They are not now provided with that kind of thing. The same applies to linoleum, which may well be useful in a house where it has been lying for 10 years but quite useless elsewhere.
Even removal expenses are not always paid. I know that this is not entirely the Government's fault. Local authorities are empowered to pay them but not a lot of them do. These things ought to be considered by the Government when they are going into the question of financial compensation. I submit these considerations because of the unhappy experiences of many of my constituents in this connection and so that the Government can touch upon these points in indicating what their general approach is likely to be.
§ 1.10 p.m.
§ Mr. David Price (Eastleigh)
The hon. Member for Sheffield, Attercliffe (Mr. John Hynd) was very sympathetic to the broad range of problems with which my hon. Friend the Member for Birmingham, Selly Oak (Mr. Gurden) is endeavouring to deal in his Bill. I should like to congratulate my hon. Friend on his skill in getting his Bill on the Order Paper on a Friday when the Order Paper is not already filled with Bills which have a higher precedence. Like the right hon. and learned Gentleman the Solicitor-General who spoke earlier on a different Measure, I am very envious of any hon. Member who succeeds in getting a Private Member's Bill even to the stage of having a Second Reading debate.
The problems raised by my hon. Friends the Members for Selly Oak and for Crosby (Mr. Graham Page) and by the hon. Member for Attercliffe are acute in my constituency. It would be fair to say that in the central area of the Borough of Eastleigh this is a public issue of overwhelming importance, which is hardly surprising since those concerned are threatened with being thrown out of their houses at the instance of the local authority under clearing orders and are faced with the prospect of getting anything between one-fifth and one-tenth of the former market value of their houses as compensation.
Even if I had not personal evidence of the suffering which is involved among constituents in my own constituency, I should still wish to take part in this debate in support of my hon. Friend because ever 1961 since I have been a Member of this House I have taken a keen interest in the whole question of compensation for compulsory purchase. My continuing view has been that a fair market value should be paid as compensation to those whose property or livelihood is acquired compulsorily. I have great sympathy with the cases which were referred to by the hon. Member for Attercliffe. We could discuss the problems of shopkeepers with very short tenancies who have occupied the premises concerned for many years. Their right by law to compensation is limited because their tenancy from a legal point of view is only short, although they know that the landlord will renew the tenancy every year, and the whole community is aware that these people will remain in the premises until the time when they retire.
The Town and Country Planning Act of 1959 went a long way to achieve the provision of fair compensation which I wish to see, although as I said at the time when it was introduced, the Private Member's Bill of my hon. Friend the Member for Gloucestershire, South (Mr. Corfield) contained a simpler and a more just approach. The major grievances remaining regarding the treatment of properties which are subject to compulsory purchase lie in the clearance areas. When we refer to a house as being in a clearance area it connotes a slum in the minds of many people. From memories of the pre-war years we all have a clear image of what is a slum. Therefore, to suggest that a slum property should receive more than site value seems on the face of it slightly outrageous.
As was pointed out by my hon. Friend the Member for Crosby, some houses which are involved are not slums in the popular sense of the word. It is true that they will have been condemned as unfit under Section 4 of the 1957 Act. It is also true that if there is a public inquiry, the Ministry's inspector has to confirm the certification by the local authority that the property is unfit. If I recall the provisions of the Act correctly, it must be stated in writing to the owner of the property in what respect the property has been condemned as unfit. Nevertheless, the occupants of many of the houses—certainly many in my constituency, I may possibly have a rather higher percentage of such houses—feel that their property is not unfit. Perhaps, in order to get the 1962 proper emotional flavour, one should refer to these properties not as houses but as homes. They are homes on which owners have spent money on improvements and devoted their own labour and provided their own modifications. I could show hon. Members one or two properties in my constituency which are threatened at the present time where a great deal of artistic imagination has been shown by the owners.
These houses are owner-occupied. I do not come here—I am sure that my hon. Friends do not—to plead for more compensation for slum landlords. I plead first for the owner-occupiers of well-maintained houses whose property has been condemned as unfit under the provisions of Section 4 of the 1957 Act. My hon. Friends the Members for Selly Oak and for Crosby discussed the current state of the law about the amount of compensation paid in these cases.
Without, I hope, being repetitious, I should like to make a few comments on the present state of the law. The general rule, as the House will know, is that compensation for houses included in a clearance area and condemned as unfit is the value at the time the valuation is made of the land cleared of building and available for development. I understand that this provision goes a long way back in the housing legislation, it was not introduced for the first time in the 1957 Act. It had been for many years the view of Parliament of what would be the appropriate compensation. I have tried to look up earlier debates, but I have not succeeded in tracing sufficiently far back to find a full debate on this, but I guess that the reason behind the action of our predecessors in Parliament in deciding this was the right approach was that they had in mind the sort of old back-to-back property on which, it was felt, the owners had received back many times over in the form of rent the cost that had been originally incurred and that there was no debt left to be paid off.
§ Mr. Graham Page
Perhaps I may assist my hon. Friend. This started from the housing legislation of 1936 when the Conservative Government of those days started a massive slum clearance drive.
§ Mr. Price
I am obliged to my hon. Friend. In the past this was probably a fair approach.
1963 There is a second point, which neither of my hon. Friends has touched on, involving houses included in a clearance area simply by reason of geography. The property is not condemned as unfit and full compulsory purchase value is paid. This refers to the point made by the hon. Member for Barons Court (Mr. Richard) in his intervention during the speech of my hon. Friend. The difference here can turn on a fine point of judgment on one of the nine factors in Section 4 of the 1957 Act. If the view is taken by the Ministry's inspector that a particular item in respect of which the property was condemned is not serious and could be put right, the occupier gets full compulsory purchase value. On the other hand, if the inspector takes the view of the local authority that it is something which cannot easily be put right, the occupier gets only site value plus a well-maintained allowance. As was pointed out by my hon. Friend the Member for Crosby, this could make a very substantial difference.
Thirdly, there is the special provision about which we were told by my hon. Friend the Member for Selly Oak. The owner-occupier of a house acquired after 1st September, 1939. and before 30th December, 1955, is eligible for compensation at the full market value when it is acquired by the local authority. This is contained in Part II of the Second Schedule of the 1957 Act. If I recall our deliberations correctly this provision appealed to hon. Members because it was argued that this was taking care of the housing problem arising from the bombing which was followed by the very acute post-war housing shortage. It was felt that people had acquired property which they might not otherwise have done because of sheer necessity and that unless some special provision had not been put into the 1957 Act the injustice which my hon. Friends have mentioned would have been very much more acute.
So the House recognised at that time that there should be a special provision in the Act for houses acquired before 13th December, 1955. The view then was that the housing shortage was over. I think that that was a rather optimistic view. It was also felt that, in future, if anyone had any view as to whether a house was or was not unfit or was likely to come under a clearance order, a search 1964 would be made and everybody would be in the clear and that Parliament was giving a caveat emptor to a prospective buyer of a house on the margin of fitness or unfitness. It has not quite worked out that way.
As I shall demonstrate in a number of cases from my constituency, searches have been made of the local authority, and after the local authority has given out its pronouncement a house is suddenly the subject of a clearance order. Another factor is the additional payments for well-maintained houses. I believe that my hon. Friend the Member for Selly Oak did not make it clear that under the Housing (Payments for Well-Maintained Houses) Order, 1956, the maximum which could be paid for an ordinary rented house is three times the rateable value, and, for an owner-occupied, up to six times.
Even so, that in no way compares with the market value. It means that after looking at the present state of the law the most immediate problem is the continuation of the provisions of Part II of the Second Schedule, that is, that after December of this year the position of owner-occupiers will be severely prejudiced. Secondly, even under the existing law there are, as my hon. Friend the Member for Crosby has illustrated, great anomalies between the compensation payable for comparable or nearly comparable houses.
I should like to give the House one example from my constituency. A man with a family who took secondary employment in order to save up enough money to put down a deposit acquired a house in December of last year for £2,175 in a terrace in Eastleigh called Cranbury Road. He received a mortgage over 25 years of £1,950, with a very reputable building society. Of course, the building society had sent its surveyor to inspect the house, because building societies do not give mortgages for 25 years without having a look at the house. A search was made by my constituent's solicitor. He went into his house in October and on 14th December, six weeks later, he was served notice that his house was in a clearance area.
To be fair, when the Minister of Housing sets up a public inquiry, pursuant to the clearance order which Eastleigh Borough Council have proposed, and this 1965 property is inspected, it is possible that it will be decided that it is not unfit, but that it should be part of the clearance area, in which case my constituent will get the market value. But if the condemnation is upheld by the Minister's inspector, then his compensation will, at best—
§ The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl)
The hon. Member will realise that it is very embarrassing for me to discuss this if it is sub judice. I must not discuss it at all. He must be clear, however, that it is not my right hon. Friend's inspector who decides, but my right hon. Friend himself.
§ Mr. Price
Of course. I stand corrected by the Joint Parliamentary Secretary. The inspection will not be done by the Minister; it will be done on his behalf by his inspector. I do not think that it would be unfair to say that the Minister's decision will be greatly influenced by his inspector's report. Let us put it no higher than that.
Would not my hon. Friend agree that it is most unusual for the decisions to be reversed, that in the majority of cases the orders are confirmed?
§ Mr. Price
I should not care to comment on my hon. Friend's suggestion. Good citizens as we are in the borough of Eastleigh, we believe the powers which Parliament has given to Her Majesty's Ministers to have relevance. Therefore, we are very optimistic that, when the public inquiry is held, the Minister of Housing will judge these things and that the greatest equity as well as the best principals for clearance will be very much in his mind.
This is an interesting case. Earlier on, the hon. Member for Swansea, East (Mr. McBride) told the House that this is not really a problem because, before a person purchases a house, his solicitor makes a search, and the local authority will tell him, but it is not as easy as this. In the case which I quoted, my constituent took the matter up and complained to the Law Society that his solicitor had not made a proper search. The Law Society replied:We have referred to your title deeds, but see that your solicitor asked the following question (amongst others) of the Local Autho- 1966 rities before you purchased the property— 'Have the Council made any order (whether or not confirmed by the appropriate Minister) or passed any resolution for the compulsory acquisition of the property'?—and the answer given by the Local Authorities is 'No'. Accordingly we do not think that your solicitor has been negligent in this matter …Of course he had not.
But I ask hon. Members to look at it from the point of view of the official of the local authority when this inquiry was made of him. His council had not yet discussed the matter. They had certainly passed no resolution nor put up a draft scheme to the Minister. Could that official, with integrity, even if he might have suspected that his council was likely in the future to bring this into a clearance order, have said, "Yes. I think it will be included in a clearance order"? That official would be blighting that area on his own authority and not on the authority of the council whose servant he is.
This is a serious problem. I do not pretend to know what the answer is, because it would be quite wrong if officials were to give advice of this nature without the authority of a resolution passed by their council. They would be blighting areas and the owners of property would, I think, have, at least prima facie, the right of an action against the council official concerned. It is very unfair on the purchaser that he is not told, yet if no council resolution has been passed it is very difficult to see how the council official can give advice of the kind which was asked for in this case. The result on the purchaser of the house, in this case my constituent, is very severe.
I think that this is the first factor which adds to the difficulty of the situation. The second is—
§ Mr. R. W. Brown (Shoreditch and Finsbury)
The hon. Member is making an interesting point, which I believe is a very real problem to people who serve on local authorities. I have been involved in just this sort of situation. It is often alleged that local authorities deliberately act in this way. This is nonsense. Things move so fast these days that a decision can be made next week, when one has no idea this week that one would take such a decision. If the time scale is so short and it is known by the officers of the authority that within a week something will be done, I feel that between lawyers a nod or a wink would be sufficient to 1967 indicate that there are grounds for considering that something will be done. I have always felt that it was rather dishonest if somebody knows that that will happen. It seems to be a little unfair if this can be done between lawyers. I agree that it is the time scale that counts. I cannot draw the line, but—
§ Mr. Price
I am interested in the hon. Member's intervention. This is a problem. I am inclined to think that the way that it could be dealt with, if my hon. Friend's approach in the Bill is regarded by the House as being too total, is that this aspect could be taken up by a more limited way of dealing with the problem: that is to say, if a local authority, in reply to a search, states that it has nothing in mind, that should be a guarantee over a period of 10 or 15 years and if the house was acquired within that period, the owner would get the benefit of full market value or variants on that theme.
In quite a number of cases, the houses in my constituency which are under threat of a clearance order are houses on which people have fairly recently acquired mortgages. They are not, perhaps, as extreme as the case I have quoted where it happened within six weeks, but within two or three years mortgages might have been obtained for 25 or 30 years. As both my hon. Friend the Member for Crosby and my hon. Friend the Member for Selly Oak have explained, that leaves the owner of a house, after his property has been acquired, with a debt on his hands or a property which has been removed from him and the compensation for which is inadequate. He is left with the prospect of trying to acquire another property or of finding himself paying rent either to the council or to a private landlord. This cannot be just.
I also have examples of houses on which improvement grants have recently been given. I suggest that if my hon. Friend's approach is not acceptable, at least the Minister should consider legislation to provide that if a local authority has given an improvement grant for property, there should be security of tenure for a period of years. Thus if, for 1968 reasons of wider consideration, a house comes into a clearance order area, the owner occupier should get full market value.
Those are some of the problems that we face in my constituency and there is then the final problem of sterilisation. In our case, there has been a good deal of discussion in the council, a draft scheme has been produced and it has gone to the Minister but, no doubt, it will be some time before he holds his inquiry. Then the report will go back to the Minister who will make his decision.
In the meantime, I have a particularly notorious case of a man who wants to move to get a job in another part of the country, the sort of move of which the Minister of Labour would entirely approve. This man's property, however, is now completely sterilised. There is no market for it. He cannot sell it, because anyone who bought it while it was under threat of a clearance order would be a complete fool and we are not fools in my part of the country. It is difficult to see how to overcome this problem other than trying to make the procedure operate as quickly as possible.
I want, however, to draw attention to this aspect. There are a number of methods dealing with this problem. The most obvious way is to extend the provisions of Part II of the Second Schedule of the 1957 Act beyond 12th December this year for a further period of years. That would be the quick way of dealing with it. I put this question to the Joint Parliamentary Secretary on 23rd March, when the hon. Gentleman replied:As far as I know, there is not likely to be any official Bill to extend the powers of that Act.I hope that in the light of the evidence which the hon. Gentleman has had subsequently, he may feel that he would like to review that opinion.
In reply to a subsequent question, the hon. Gentleman's colleague, the other Joint Parliamentary Secretary, rather indicated that it might be possible to deal with the sort of hard luck case that could arise. The hon. Gentleman said:I was asked about compensation and I say again that we are concerned only with paying site value for a house which is found to be unfit for human occupation. It may be that the owner-occupier bought the house just before it 1969 was compulsorily acquired and there may be individual hardship which we would be prepared to consider, but we believe in the principle of paying only site value and no more for such property."—[OFFICIAL REPORT, 23rd March, 1965; Vol. 709, c. c. 313–315.]The interesting phrase is thatwe would be prepared to consider".Does that mean that the Government would contemplate introducing Amendments to the current law to deal with the situation, or do they mean, as I thought that the Parliamentary Secretary meant, that the hon. Gentleman has power to allow a local authority to pay more than the site value plus certain additions laid down in the 1957 Act?
I have searched the Statutes. I am not a lawyer and, therefore, I am sure that my searches have been incomplete and I cannot find by what legal authority the Minister could enable a local authority to pay more than is provided by the statutory formula laid down in the 1957 Act. I should be grateful if the Joint Parliamentary Secretary will tell me whether his Department has some overriding power in some other Statute that would enable the Minister to authorise, say, in our case, the Eastleigh Borough Council in hard luck cases to pay out more than the statutory compensation which is provided for in the 1957 Act.
§ Mr. Richard
Before the hon. Gentleman leaves the question of the Second Schedule to the 1957 Act, I understand that he is talking in terms of extending the provisions of Part II of that Second Schedule. He will, of course, realise that under the Bill the whole of that Schedule will be repealed. There is no question of extension.
§ Mr. Price
I have been examining some of the ways in which this problem might be dealt with, but in default of the Government offering to produce legislation on these lines I believe that the only thing we can do to deal with this problem is to follow the approach taken by my hon. Friend the Member for Selly Oak of paying a fair market value.
I believe that the criterion of fair market value has one or two difficulties, with which we might be able to deal in Committee. Those who are much more informed than I on these matters tell me that it is conceivable that a market 1970 could be set up in the buying and selling of slum properties and, as a result, people would be getting ahead of clearance orders. The way in which that might be circumvented would be to limit my hon. Friend's Bill to owner-occupiers. It is difficult to see how the market could he rigged for owner-occupiers on the basis of one person being entitled to only one house. In default of any proposal by the Government to deal with this problem. which is made urgent by the cessation of the powers specified in Part II of the Second Schedule of the Housing Act, the simple solution offered by my hon. Friend must appeal to the Minister.
Undoubtedly, hon. Members can see deficiencies in my hon. Friend's approach. For my part, when the Joint Parliamentary Secretary replies he can offer Government legislation on what, I am sure, most hon. Members agree is the real problem concerning us. I for one would be well content provided that the Government bring in that legislation in, say, the next Session of Parliament.
I end with some words which I used in an earlier debate on this general subject six years ago at the time of the introduction of the Town and Country Planning Bill in 1958. I do not apologise for repeating these words. I believe that what I said then is still true. I said:In endeavouring to establish the just price, the margin of error should, in my opinion …be in favour of the private citizen, for where the private citizen receives less than his due from the community, the reputation of the Community as the custodian of justice is debased and, therefore, we all suffer."—[OFFICIAL REPORT, 13th November, 1958; Vol. 595, c. 625.]That is still my view today.
§ 1.41 p.m.
§ Mr. R. E. Winterbottom (Sheffield, Brightside)
I submit that this is not the sort of Bill that should be introduced at present. It seeks to amend the law applying to the compulsory acquisition of land as contained in the 1957 Act, which was part of the consolidation Measure passed in 1961. Hon. Members who supported those two Measures were not, I assure the hon. Member for Crosby (Mr. Graham Page), anti the Government of the day. A Conservative Government were responsible for those Measures and it is an anachronism that a Bill should be introduced now to amend them without sufficient proof having been 1971 provided that the market has changed so much between 1961 and now that legislation of the type we are discussing is necessary.
Everything that has been said about the Bill by hon. Gentlemen opposite today could have been said in 1957 and 1961, but it was not. Why the sudden change of heart? Why the sudden repentance? Why do we suddenly find St. Paul seeing the light on the road to Damascus? The motive underlying the introduction of the Bill is obscure; that is, until one looks at the purpose of the Measure. That purpose is, of course, to amend the law relating to the compensation payable upon the compulsory acquisition of land. All the talk about the market value of houses and the goodwill value of shops does not matter at all in our consideration of this proposed legislation. What matters is the price of the land upon compulsory acquisition.
When I was a boy my father said to me, "You have an inquiring mind. You ask why the cow jumped over the moon and why the dish ran away with the spoon". I suppose that he could have gone on to tell me, "If you live long enough you may ask why we must wait for our wings until we die". All the time, he said, I asked, "Why, why, why?" So I ask why about the Bill.
Land values and the problem of housing has become one of the main political issues of our time, particularly during the last five years. So important are the problems involved that the Government declared in the Gracious Speech that they intended to introduce legislation to deal with them. Why is a Measure of this type being introduced when it is well known that a comprehensive Measure will be coming forward from the Government? I am not saying that this is either a small or unimportant Bill. It is extremely important in terms of its scope and range.
Reference was made by hon. Gentlemen opposite to shopkeepers and, as they pointed out, shopkeepers will be affected by it if it becomes law. Many shopkeepers wonder, when a compulsory purchase order is made and when they must leave their premises after perhaps many years of trading there, why the goodwill of their shops is not included in the compensation payable.
1972 Not long ago traders in a market in Sheffield, many of whom have been trading on the site for many years, were told that they would have to move to a newly-built market which had all the latest modern conveniences and scientific apparatus for efficient marketing. They protested because, they said, the goodwill which they had built up over many years of trading had not been included in the compensation arrangements. Every one of the traders who moved into the new market in Sheffield now has a much higher goodwill value attached to his premises than he had previously.
Three days ago I received a letter from my sister who has moved into a new housing estate She had to leave the shop and living accommodation which she and her husband had occupied for a considerable time because that property was being demolished to make way for improvements. In terms of compensation she has not done at all badly. In fact, she has done extraordinarily well if one considers that, as a result of moving, her new premises in a new estate have the goodwill value of about 1,500 potential customers. Her trade and profits in the first month have exceeded those of an average month's takings at her previous premises. Let us, therefore, get a sense of reality, and start asking a few questions when we talk of market values and goodwill values.
As a young man I worked with the local co-operative society, and outside my responsibilities in the shop one of my painful jobs was occasionally to examine houses. The society had a mortgage system for its members only, and the scheme covered an area of about 10 square miles. It is rather sad to reflect that in those days the mount paid for a very modern six-roomed house with a bathroom, but with no central heating, was no more than £400 in any part of that district. Provided that the examiner thought that the market value of the house was £400, the society was prepared to lend £360 on any house in that area.
In this way I got friendly with a number of estate agents and a number of house purchasers, especially those purchasers who worked in the society. I was the secretary of the employers. One of them asked, "Will you examine some houses for me? There are six of them; 1973 three good ones, and three not so good at the back. They are asking £1,000 for them, and. I am thinking of investing." He insisted on my looking at them because of my knowledge of houses in the district. In the end, he got those houses for £850, with a ground rent of 15s. per year. These are revealing figures. Once he had got the property, I said, "The first thing you want to do, my lad, is to capitalise on that, and acquire the leasehold." He did so—for about £9 10s.
I did not see that man for years—until about six months after the Conservative Government introduced their Housing Act. He told me, "One of these houses is for sale, would you like to look at it?" I did not want to, but for friendship's sake I went with him. He did not sell the house, but he told me that he had been making 11½ per cent. on those six houses until the last three years, when he had got 5 per cent. True, he had looked after them. He told me, "I do not want to sell anything. They will drive a road through there. About 30,000 citizens have gone at the top, and I think that I will get good value." His houses would be about 150 years old.
What about market value in that case? He has put in the bank far more than adequate interest on his money, and has had his capital back twice over as well. He was able to increase his rents because of the Tory Housing Act. A few months ago he wrote to tell me that the three houses at the back had been condemned, exactly on the lines described by the hon. Member for Crosby.
The 1957 Rent Act, and the amending Act of 1961 gave him, as they gave everyone else, the opportunity of consultations with the local authority. In all my experience I have never known a local authority seriously misuse the term "unfit for human habitation" in order to get a property cheaply. That man will now get about twice as much for those houses as he paid for them in the years between 1928 and 1930. What are we to do about market values there?
Part of the division of Attercliffe was once in my division of Brightside. The English Steel Corporation wanted to develop there, and it bought up all the houses close to its then works because it wanted the site for a factory. The area was scheduled for industrial development. 1974 The firm said, "We must get rid of these tenants. In spite of the house shortage, we want to demolish these dwellings and build our new factory" When the local authority would not agree to provide alternative accommodation in order that that should be done, English Steel started buying houses in Sheffield in order to transfer to them the tenants from the houses on the land where the factory was to be built.
There was nothing wrong in that and I do not grumble about it, but that action inflated the market price in Sheffield for that type of house—a house with four rooms, split like an egg box, no hot water, no bath, and the only modern amenity a cold water tap. Those houses sold for fabulous prices, but that determined also the market value of houses in the surrounding area. Is that the market value which the hon. Member hopes will be the standard payment for land values if his Bill becomes an Act?
There is a difference in owner-occupiers. Some of them own the land as well as the house, while in other cases the house is on leasehold. The cases cited by the hon. Member for Crosby could be duplicated in almost every other area. This Measure would not improve the lot of those owner-occupiers who do not own the land on which the houses stand. It would only improve the value of the land itself—
§ Mr. Gurden
My understanding is that under previous Acts the owner-occupier of a leasehold house would receive fair compensation.
§ Mr. Winterbottom
The compensation for the house is totally different when the house it attached to the land and has a freehold invested in it. When a ground landlord is involved there is another party to consider. I suggest that merely in the wording of the hon. Member's Bill it will be seen that there is no provision at all which could increase the value given under compulsory purchase by the municipality for the house itself. The only provision which is made is for an increase in that which can be paid for compulsory acquisition of land. The Preamble to the Bill is quite clear.
§ Mr. Gurden
I am sure the hon. Member is making a mistake. Many of the houses we cite are under lease from the 1975 landowner. Although I would not quarrel with any Amendment which could be put forward in Committee on the lines he is suggesting, I am absolutely sure that the leaseholder would get a fair value under the Bill.
§ Mr. Winterbottom
I am not suggesting that the leaseholder would not get a fair value for the property. I am suggesting that this is not provided for in the Bill. The Bill is limited, in the Preamble, to land and the law relating to compensation upon compulsory acquisition of land.
I am coming to the point on which I think there may be some confusion between the hon. Member and myself. There is the question of whether the land is involved with the house. This is always a difficult problem. I shall use an illustration. Some few months ago in my constituency many houses were demolished. The local authority provided alternative accommodation. Incidentally, in some cases they were one-up and one-down, back-to-back houses. In certain cases they belonged to owner-occupiers, but they also owned the land. We had great difficulty, because there were those who were seeking to secure the property in order that they would have a sort of collective site of land which they could lease for new factory purposes. It is now an industrial site. We came to the difference between compensation paid to those who had leaseholds and those who owned the land. I appreciate that there are differences.
Just as those tenants were faced with this alternative, if one did not want to give or sell that land altogether but wanted to sell it separately in accordance with the market value of land, one would have to accept the work of demolition of the property. The corporation would not accept the sale of the houses with the ownership of land unless those people were prepared to do their own demolition. There is this division and, because of the division, I suggest that the only purpose of the Bill is to deal with the price of land.
If that is so, the Bill is premature. The problem should be tackled, not by Private Member's Bill, but in a comprehensive way by a Government who can deal not just with one little problem in a gigantic series of difficult issues, but can deal with 1976 them all as they dovetail one with another and fit together in a comprehensive whole. The Bill is premature, and because of that it should be rejected. In spite of the fact that I agree in principle with many of the provisions in the Bill from the point of view of fairness to those who have invested much money, I believe that this is the wrong way to go about the problem.
§ 2.5 p.m.
§ Mr. John E. Talbot (Brierley Hill)
We have reached a stage in the debate at which little purpose would be served by discussing the workings of compensation law. We should concentrate on the principles which underlie the Bill. In that sense, we have a difficulty because we are simultaneously discussing two entirely different matters.
One is the payment of compensation to owner-occupiers and their treatment. The other, which is implicit in the Bill, is the general way in which we should pay compensation to landlords, property owners, shopkeepers and others who are injuriously affected. Dealing with the owner-occupier problem first, what stands out is that if one had a house in what my hon. Friend the Member for Crosby (Mr. Graham Page) called the charmed years one is all right, and that position lasts for another six months. I wonder whether hon. Members remember the circumstances under which that particular concession to owner-occupiers was brought about. I wonder whether they remember that at or about that time there was a notorious case in which an unfortunate man named Pilgrim put an end to his life because of a grievance he entertained about the way in which he had been treated.
It was said at the time that this was intended to be only a transitory concession. It was intended to overcome the exceptional shortage caused by bombing in the war before slum clearance started. It was a warning to everyone not to undertake purchase of houses which might come under slum clearance orders at a later date or at all. Pressure was brought to bear on the last Government and on this Government and was rebutted every time with the suggestion that the dates of the Pilgrim concession should be extended. This Bill is an attempt to deal with the matter comprehensively. The owner-occupier—whenever he purchased, 1977 whether before 1938 or after 1955—usually got fair market value for his purchase. I have heard all sorts of reasons advanced for denying that view. Sometimes it is the solicitors who are said to be at fault as the unhappy chap had bad advice as a result of which he had been involved in financial loss. Then people would seek to blame the local authority—
§ Mr. Herbert Butler (Hackney, Central)
I understood the hon. Member to say that sometimes a person has been badly advised and the solicitor is to blame. Is it suggested that the person who has been badly advised has no action against the solicitor?
§ Mr. Talbot
No. Of course he has an action against the solicitor, it it can be proved that the solicitor has been negligent. I was not admitting negligence against the legal profession, of which I am a member. I was saying that the excuse was given by various spokesmen of Governments—not the present Government, but former Governments—that the solicitor ought to have done something more than he did. Very often it is expected that solicitors are invested with the gift of prophecy and not merely that of the law.
It is plain that an officer of the local authority who takes it upon himself to say something wherein he has not got the backing of his council runs a grave personal risk. No one can expect an officer of the local authority to say to an inquirer: "It is all right at the moment, but I heard the chairman of the health committee say that we would have to go down there next year". A local authority officer cannot talk like that. Either a thing is on the register and notice of it is given, or officially it is clear.
This is where a number of these troubles have arisen. A man, after having taken all due precautions and had his searches returned, had a clear entry; yet within two or three years, or even sooner, as my hon. Friend the Member for Eastleigh (Mr. David Price) said, there is action by the local authority. This is not a problem which can be bounced back on local authorities. It stands fairly and squarely with the Government of the day. I hold no brief 1978 for what my Government did then, because I was among those who pressed them strongly to do something about it.
§ Mr. Talbot
I did not get on at all. I hope to have better luck with the present Government. As the years have passed, the problem has become more apparent, because, instead of dealing with out and out slums, things that hon. Members and anyone who is not a surveyor or a sanitary inspector would instantly condemn as slums, we are now getting to the bottom of the barrel, except in a few large cities. I know that in large cities the problem has not been scratched. But, in the rest of the country, incorporated in clearance areas are not only houses which hon. Members would condemn out of hand but a great many other houses which fail to comply with the statutory requirements which have been quoted. Those requirements are pitched so high that it is almost safe to say that any house built before 1914 can in some way or other be faulted. What is happening now is that people are being paid site value only for houses which in 1957 when the provision came in no one would have dreamed would ever have been dealt with as slums.
The march of time has made it necessary for this problem to be re-examined. I will tell the House the way in which it should be re-examined. There is only one form of justice for everybody. If it is fair to give owner-occupiers compensation at the full rate if they bought in the charmed years, is it not equally fair to give them compensation at that rate whether they bought before or after 1957 or will buy next year?
The 1957 Pilgrim concession did not stop people buying houses which became slum houses within a few years. There was not very much risk, as the hon. Member for Barons Court (Mr. Richard) pointed out, that mortgagees and local building societies would lose money, because, generally speaking, they are canny about these matters. Those who put the money into these houses have paid cash—£300, £400 or £500—and are getting £50 back. The loss in most of these cases falls solely and directly on the man himself and not on the building society, town council, or 1979 other money lending organisation, because those organisations saw the storm coming a long time before they got anywhere near that property and just put a complete block on any type of lending of that sort. I will not say that perhaps one or two have not been caught, but it is my general local experience that these organisations have not been caught.
Therefore, the owner-occupier should be dealt with in one way only. There can be no justification for applying a site value criterion to somebody who has made a home for himself and who has spent a lot of money on it but who may not have a big garden. The houses with big gardens do not come off too badly. They have plenty of site value to be paid for. Many of these little houses occupy a space only about twice the size of the Table. When it comes to compensation, the district valuer says, for example, "Ten square yards at £1 a yard". We should assume that as long as houses have a continuing value—I do not mean to say that it is a permanent value—it is a value that the market of the day will establish.
I am not asking, and I do not think that anybody on this side of the House is asking, for more compensation to be paid than the place is worth. Nobody would want to impose a burden on local authorities which is not fair. There is the other side of the picture. Local authorities and the Government, too, ought to assume responsibility for justice. If justice requires that the man should have what is the fair market value of his place, to which he has perhaps added by his work, that ought to be paid and we should not think up theoretical wangles to diddle the man out of what is fair compensation.
§ Mr. Norman Buchan (Renfrew, West)
The hon. Gentleman talks about the market value having been increased by the man's own efforts. Much of the market value is created by the public effort. How are you going to deal with this?
§ Mr. Deputy-Speaker (Dr. Horace King)
The hon. Member for Renfrew, West (Mr. Buchan) has now been long enough in the House to know that he must put questions to another hon. Member through the Chair.
§ Mr. Buchan
I am sorry, Mr. Deputy-Speaker. How would the hon. Gentleman deal with that problem where social amenities have been added and perhaps a great amount of money expended by the community? Would you add this automatically on to the price?
§ Mr. Talbot
It is a difficult question which I cannot answer because I am only a poor lawyer and not a valuer. In broad terms, value takes account of everything, public and private. After all, the value of your house rises—not a slum, but a nice house in a pleasant suburb—because your town is getting better.
§ Mr. Buchan
On a point of order. The hon. Gentleman is continually referring to your house, Mr. Deputy-Speaker.
§ Mr. Deputy-Speaker
I should have thought that the last person who would want to raise this point of order was the hon. Member for Renfrew, West himself after his own lapses. In this case the hon. Member for Brierley Hill (Mr. Talbot) was using "you" impersonally.
§ Mr. Talbot
I have nearly finished what I have to say about the owner-occupier. The dilemma facing the Government—they will have to face it because of the temporary nature of the present law—is: what will they decide is fair compensation for an owner-occupier? One must be as broad and as intrinsic as possible and not try to think up special cases of difficulty. We must try to evolve a criterion which will be fair and applicable to large cities such as London and Birmingham and equally fair in small country towns and even in the countryside. I hope that the Government will do some thinking about this. The Joint Parliamentary Secretary will agree that there has been a large measure of agreement between the two sides on the Bill, although most hon. Members have had inequities and difficulties brought to their attention by constituents.
There is a prejudice against the property owner which has exemplified itself in Measures before the House in 1981 this Session. For the moment I ask you to lay your prejudice, if you have any, aside—
§ Mr. Deputy-Speaker
Order. Now the hon. Gentleman himself is slipping. When he uses "you" impersonally that is all right. When he uses "you" otherwise he is referring to the Chair, and it is not in order to accuse the Chair of having any prejudices.
§ Mr. Talbot
Thank you, Dr. King. I do apologise. I am afraid it must have been contagious. The English language would be so nice if one could talk like the Italians and the French using the impersonal pronoun "on".
§ Mr. David Weitzman (Stoke Newington and Hackney, North)
On a point of order, Mr. Deputy-Speaker. Is it in order for an hon. Member to refer to you by name? Is not the proper thing to address you as Mr. Deputy-Speaker when you are in occupation of the Chair?
§ Mr. Talbot
That again was unintentional, and again I think I am copying a mistake some other hon. Members have made this afternoon.
To deal with the question of landlords, the problem is nothing like so easy because, in the case of a slum, one cannot begin with the easy approach and say that what is worthless should not have anything paid for it. That is a sensible approach as a beginning to the matter, but it is not the last word. If one could regard a batch of houses as a going concern, there is the same value in the bricks and mortar, apart from the value of the land, even if it were only worth demolishing and using to fill up a hole. The market value of something that is condemned as a residence is often more than the site value, particularly if there is someone else living near who wants to acquire it to add it to property which is not in the clearance area. I have known of those circumstances.
In logic and common sense there is no case for treating the property owner differently from the owner-occupier.
§ Mr. Donald Chapman (Birmingham, Northfield)
Would the hon. Gentleman give an answer to the problem which 1982 arises in cases where a landlord has actually acquired some of this property on the basis of present-day valuations and would be making a profit if the valuations were altered to the form proposed in this Bill? What real justice is there in that?
§ Mr. Talbot
There would be no justice at all except in relation to the fact that the world is basically unjust and some people make profits and others make losses.
§ Mr. Talbot
That would be equally applicable in this case, because there would be lots of people who would make losses when the law was changed to their detriment with whom one would have no sympathy, although I am well acquainted with the view, broadly held on the opposite side of the House, that it is without honour to make a profit in your own country.
It it is fair for an owner-occupier to be paid the fair compensation, it is equally fair for anyone, because fair compensation on the basis of market value very often will not be any more than site value. What is the market value in condemned property? Who wants to buy a lawsuit with the Ministry or have placed on his hands property which will cause him trouble with the corporation? In many cases, but not all, the market value and the site value will be the same, and I can even contemplate the possibility that market value could be less than site value because there would be such a small demand for property of this kind. I know the hon. Member for Birmingham, Northfield (Mr. Chapman) is not one of those on the other side who does not know much about valuation. Hon. Members can take it that there are no flies on the district valuer and cases where too high a price has been paid for property are almost so small as to be ignored.
This needs to be emphasised, because I think Members of this honourable House are inclined to hold the view that it is the council which makes these hard deals. It is nothing of the sort. The council itself has no power but to pay what the district valuer franks, and until the district valuer franks it the council does not get a loan on it and the contempt so many people pour on local authorities and their 1983 staffs is quite unjustified in many cases. There is always an appeal from the district valuer to the Lands Tribunal. Justice is open and free to all, like the Ritz Hotel. I do not think it is possible to say very much detrimental to the way in which compensation claims are handled, though there may be some rather hard dealings between the surveyor acting for an owner and the district valuer.
On the whole the result is fair. In 35 years of professional experience I have never had to take a case to the Lands Tribunal. The decision of the district valuer, after some argument, has nearly always been acceptable. The broad effect of today's debate must be to exhibit to the Minister that there is a problem, and we all have our own ideas how to solve it. I think the hon. Member for Selly Oak is to be congratulated on presenting this Bill. It is extremely praiseworthy, because it has focused attention on something which is of cardinal importance to the well-being and happiness of people. I hope that the Minister will be able to make some suggestions for clearing up the anomalies, the injustices and the uncertainties in the law as it stands today.
§ 2.28 p.m.
§ Mr. W. R. Brown (Shoreditch and Finsbury)
The hon. Member for Brierley Hill (Mr. Talbot) spoke about the district valuer's price being acceptable. To whom was it acceptable? The hon. Gentleman suggests that it has always been acceptable to him when he was acting on behalf of a client. This has always been my fear. We never had any trouble dealing with the district valuer in purchasing property on the authority I served. He always met the price. The ordinary commonsense people in the area knew how much property was worth, they knew how much they had bought houses for and yet they could see prices being agreed by the district valuer which were £1,000 or £1,500 more than they had paid a year ago. This ruling has been challenged so often and in some areas it has been argued that it would be impossible to get the district valuer to buy anything for them because he is always tight on his price.
This has certainly not been the case in the area of London I served and certainly not since 1957, because much of the problem the hon. Gentleman has spoken about arose over the introduction of the 1957 1984 Rent Act, which brought in its train the most abysmal hardship to people. Whilst the hon. Member accepts that the district valuer's price is acceptable to him, acting on behalf of a client, I am not so sure that it has always been so acceptable to me acting on behalf of ratepayers in London.
§ Mr. Talbot
I have 27 years' experience in local government and during the time when I was chairman of the finance committee we only once rejected the district valuer's report and then obtained the property more cheaply. afterwards.
§ Mr. Brown
I accept that. I was also chairman of a finance committee and it is germane to my argument. We had to try and help people who were being thrown out and therefore we had to accept the district valuer's assessment. There was no alternative to it. If we had offered less than the district valuer had agreed, clearly the owner would not have come to terms with us. As we all know, if we had tried to act on a compulsory purchase order under the previous Administration it would have been thrown out, as it was on the only one occasion when we so acted. We knew that was not "on". So we had to have the ordinary ratepayers milked in order to safeguard people from being turned out. I therefore accept what the hon. Member for Brierley Hill says, that there has been no problem between the district valuer and himself as agent and that, in fact, they have come to terms.
The hon. Gentleman also referred to slums. A dwelling has to fulfil a positive criterion before it can be declared a slum. There is no argument about this. This is not a subjective matter in the sense that one can fit in what one likes. There are clearly-defined criteria, and in the end the medical officer of health must put his seal and his word on the fact that these criteria have been met. They are very tight criteria. Some of us have argued that the top level of the criteria are too low and that there are places which ought to be classified as slums but which, because they do not meet the criteria, cannot be so regarded. Therefore, it is not possible just to declare a house to be a slum. I gathered from the hon. Gentleman and some of his hon. Friends that if a person was turned out of such a dwelling 1985 he was being deprived of something very valuable, when in fact a property to be declared a slum must be right at the end of its life.
The other important point to consider when discussing compensation for the owner-occupier is that he is guaranteed a home. This must be borne in mind. Before my right hon. Friend will confirm a slum clearance order the local authority has to guarantee that it will rehouse all the people displaced under that slum clearance order. Therefore, when one is talking about compensation one must remember that when a person loses his home there is an obligation on the local authority to rehouse him, if that person so desires, at a rent that he can afford. So there is also this aspect of compensation which is not tangible in terms of money, although it is tangible in terms of enabling him to continue to live somewhere.
Listening to the hon. Gentleman, I believe there has been some confusion between the words "development" and "clearance". Hon. Members will see in the third line of the Explanatory Memorandum:… property within an area of development, clearance, etc.…One is brought to the conclusion that the hon. Gentleman did not grasp the significance of what he was trying to achieve. I accept that he was endeavouring to see that justice was done to somebody, but there are two separate issues. One is development and the other is clearance. I do not know what the "etc." covers, but I know what development is and I know what clearance is.
Let us go through the exercise and see how the procedure is conducted. First of all, the local authority surveys an area, usually under the guidance of the Minister of Housing. He says, "We want all your slums cleared by a certain time. Tell me your programme." The local authority then sends to the Minister its programme. In order to do this it has to survey the area and determine those properties which will fulfil the slum criterion. Once that has been done and the local authority has got approval for its plan, it then has to determine how its plan is to be embodied. One 1986 therefore begins to look round for the worst of the slum property which is classifiable.
But there is another consideration. This aspect forms a very minute part of any economic development. One cannot in London, including my own areas, talk about a slum clearance being in itself an economic unit. It is much too small. One inevitably has to have this nucleus to start with, and gel rid of it. Then one begins to find an area which is economic. Because there is slum clearance as a nucleus, the areas round about become twilight areas. Some of the houses are bad and some are not too bad. Others are not quite classifiable. There may be bulging walls but no sloping floors, so they are not classifiable. That is the grey area around about.
In a twilight area there are houses which, if they were repaired, might be retained. For economic reasons it might be better to take this area into the development area and do some first-aid work to extend the life of the properties by 30 years. This is one of the problems which we cannot settle in a hurry but which we want to settle as quickly as possible. Hon. Members opposite urge us on this side of the House to carry out our five-year programme in five months. We are doing our best, but it takes time to develop these things. Therefore, one thinks. "If I can delay the decay of these houses I can get myself a good programme."
This is the way that I think an efficient local authority would begin its work. The slum clearance aspect is an issue which stands on its own. It is the nucleus. We cannot add development to it in the Bill, because when we deal with slum clearance we are obliged by law to categorise it, and the payment for the property is, as the hon. Gentleman has said, determined on site value. Then we come to the question of the land to form the economic unit, and for this the district valuer's price is paid.
In my own authority, in order to carry out economic development we argue that 13½ acres is the sort of economic unit which will provide us with 500 units of accommodation. That is right because it is a tremendous burden which is just about what the ratepayers can carry. It is right from the point of view of the 1987 building programme and it is right in the sense that, so far as we are concerned, the areas beyond that can usually be maintained for a longer period. Therefore, there is no problem here. When the hon. Gentleman tacks these two words "development" and "clearance" together he implies something which does not really exist. One has to take these words entirely separately. If we ae talking about slum clearance we are talking about a minor part of what is the general development area.
I now come to the question of indicating to a solicitor who is making a search that whilst there has been no decision in the sense of a resolution of the council, nothing but a catastrophe can stop that decision being made at the next meeting of the council on Wednesday night. But it is not a resolution of the council and technically it can be overturned at the council meeting.
My view is that legally or illegally one should err on the side of justice. I should prefer to say to people that the decision was to be made the following Wednesday, knowing in my heart that I had not led someone to make a fruitless inquiry. I would prefer to give an answer which, whilst technically it could not be given, it would be unfair to withhold from that person. Some of my hon. Friends who are lawyers will tell me that I am straying beyond the rule of law of which we heard so much in the House last week.
§ Mr. David Price
In that mood of generosity, would he not cause the local government officer to find himself in a difficult position if on the following Wednesday the council did not approve the whole of the area and the house about which inquiry was being made turned out not to be in the approved area? This would put the local government officer vis-á-vis the potential owner in a difficult position.
§ Mr. Brown
I agree that it looks like that but the decision depends so much on a time scale. If it is three months ahead the information cannot be given. We had an example recently in my locality of a very irate person who said that we were dishonest because within three months of his taking a place the area was declared a development area. It is true that he would get his price 1988 but he was not interested in the price. It was a happy location for him and his business. He said that it did not seem right that three months previously the council did not know its own intentions, yet in that case the council did not know. There had been no attempt at that stage to recast the programme for the following year. I am certain that this man did not believe me. It was very difficult to get it across to him. He said, "This is nonsense. You do not make up your mind in only three months."
§ Mr. William Hamling (Woolwich, West)
I am sure that my hon. Friend knows Stepney well, and I taught there for a number of years. Would he not agree that there are thousands of properties in Stepney which are not today designated as slums but which could be so designated under the Act and if they were they would be such a burden on the local authority that it could not cope with the problem?
§ Mr. Brown
I am grateful to my hon. Friend for drawing attention to that point which perhaps I should have made earlier. The question of how to carry out a slum clearance programme is a very real problem. Urged on by the Governments of the day, the burden is so great that in my local authority I have always tried to get people out of such property at the earliest opportunity and even at great expense to the ratepayers because I do not think that it is fair that we should expect anybody to live in such appalling conditions that the property can be classified under the criteria required for slum clearance.
It has been said already in the debate that the local government officer cannot give this information in advance because if he did so this would blight the area. This is the problem. My own authority has published its programme because the Minister asked that it should be published and we have illustrated where these areas are. Here again one is on the horns of this dilemma. If we know what we are going to do in the next five years, even though it is only a planning view at that stage, it can be said that we are dishonest if we do not tell everybody what is intended. Yet we know that if we do tell everybody the problem of people moving into the area becomes acute.
1989 One has migration of people into the area. One has the shrewd characters moving in. Who is to blame them? This is life today, and 13 years of "I'm all right Jack" have taught them to perceive where they can best get in. They buy property years in advance of development because they know that eventually that development will come. If the information is kept secret one has all the lawyers saying that it is dishonest and that it is hole and corner and there are demands that the Press should be admitted to council committees.
If the Bill were accepted, the whole field would be open for people to select their areas and get there as quickly as they can at whatever price, knowing that prices would be appreciating over the years. One would have people advising spivs on the best places where they could secure capital appreciation in the future. This is the problem. The area is blighted anyway, if blighted it is, once the information is published.
My own authority has made it public knowledge over the years that it is intended to complete the redevelopment of the whole borough in 50 years. We have made no secret of this. The people in the area were happy to know that the authority was vigorous enough to see the need for this turnover at the earliest opportunity.
These were target figures and it may turn out in the end to be 100 years and not 50 years, but at least this is the aim. I do not believe that people then begin to get out. People in London are not so much concerned over whether an area is blighted because it is going to be developed in the future. I know that the area where I have my own house will be developed in 30 years. This knowledge does not drive me to run away. I have paid my money and I hope that I shall have finished buying my house and have 20 to 30 years to enjoy the living. I have little doubt that it will then be redeveloped. In any area where the new concepts of the twentieth century or the twenty-first century are being followed, this must happen. In my view, the old idea of still using houses 100 or 150 years old is a thing of the past. There will be a much quicker turnover because the evolution of society will raise standards so enormously.
1990 One can almost see this happening now. Someone comes to me and says that he is in a desperate housing situation. I listen, as all hon. Members do, I discuss his problem, and it is clear that he is in a distressing plight. I do the best I can for him with the appropriate local authority. Sometimes one has a bit of good fortune—every now and then, one has a little good fortune which makes life worth living—and one is able to do something to help. But then one sees the people back again, very irate and upset, saying, "What do they think we are? We are not going to live in something like that". One discovers that they have been offered a flat built in 1935, but they seem to think that what they are being offered is slum property. One gets irate about it—I am sure that I lose votes over it sometimes—and one has to say, "You are very lucky people. Just look at what you are living in now and compare it with what you are offered". But, they say, "What about the place round the corner, with central heating, a garage, and all the rest?" That is how people are beginning to think. I do not believe that the idea of carrying on using houses 100 years old will be on 30 years from now, and I am sure that there will be a much quicker turnover in property as new standards come to be expected more and more.
The Bill does not refer specifically to owner-occupied houses. It relates to all property, apparently. There is a vast amount of evidence, particularly in London, to show that the situation today cannot be dealt with by means of a Private Member's Bill. It is much too big. It is not just a problem for the landowner. There are many problems here, and I hope that my right hon. Friend will find it possible to deal with them. This is why I agree with my hon. Friend the Member for Sheffield, Bright-side (Mr. Winterbottom) when he says that we cannot deal with the matter in a small way but it must be tackled on a comprehensive basis.
Here is an illustration of one of the problems. There is a non-conforming user in an area and, so long as the present owners are there, it is perpetuated. Suddenly, unbeknown to anyone, the owner arranges to sell. The prospective new owners buy on speculation, with the 1991 idea that they will get planning permission to carry on. It is normally accepted—though I have challenged it many times—that if ownership changes the same non-conforming user may continue. This hurts me, but I understand that to be the rule, and I have seen it happen. The prospective owners who have bought on speculation apply for planning permission for an alternative use, but, because, in the broad sense of the planing application, it does not need to come down to the borough council, the planning authority deal with the matter without reference to the borough council. The matter then goes to the second stage of planning approval and still the borough council is not aware of what is going on. Things are taking their normal course. Suddenly, someone in the area discovers what is taking place. In the case I have in mind, this happened only because someone garaged his car in the area of the non-conforming user, he was turned out, and had to put his car on the street, and, when asked why he did so, he said that the place was being sold. The chap who finds out hot-foots it to the town hall and says, "They are selling this place. It is a non-conforming user. Can it now be extinguished?"
At this point, the thing begins to catch fire. The new owners have paid something like £12,000 for the property. The local authority goes to work immediately and puts a compulsory purchase order on the area because it is a nonconforming user and the authority wishes to use it for other residential purposes. The new owners have never set foot in the place; they have had it surveyed and decided that it is suitable for them. They have paid out no money and done nothing to appreciate the property in any way. After the compulsory purchase order is made, there is negotiation to try to reach agreement for acquisition, but the new owners are quite adamant and the matter goes to public inquiry. The Minister decides that, in all the circumstances, the local authority is right in trying to take the area over for residential purposes. In the case I have in mind, it was for garages.
Another year or more is taken up by discussion and argument to get all the bits and pieces tied up and agreement on this and that. In the end, the new owners, 1992 who have done nothing on the site, receive the district valuer's valuation of the market price at £32,000. Two years have elapsed, nothing has been done on the site, the owners have involved themselves in no expenditure apart from certain abortive legal costs, but there is that sort of appreciation. The sense of grievance in people's minds when they see that sort of thing happening really puts this type of Bill completely out of court. Can any hon. Member justify such a state of affairs to an angry ratepayer who raises the matter with him? He knows only what he reads in the Press, of course; no one in the general public knows the original price, although it is known to all the people concerned. But ratepayers see that the maximum price has been paid, and they want to know what is happening. Can anyone justify the difference between £12,000 and £32,000 in such circumstances, merely because the local authority wants to take control of the area where there is a nonconforming user in order to get industry out of a residential area?
§ Mr. Gurden
I appreciate that some of these things arise. The hon. Member is quoting the law as it stands. But surely this is a Committee point. An Amendment could be tabled to the Bill to provide that where a deal was made for the purpose of capital gain or investment improvement a limit could be applied—perhaps the price paid or some other value. We are seeking mainly to protect people from hardship.
§ Mr. Brown
I understand what the hon. Gentleman is trying to do. I do not want to be unkind, but this seems to be so confused. It is impossible to come to the House of Commons with a Bill and say "Here is the general idea. We will knock it into shape", and then accept this or that compromise as various objections come along.
§ Mr. Graham Page
The Bill is very precise in what it intends to do. If the hon. Member wants to do something else, let him bring in his own Bill.
§ Mr. Brown
That is a matter of opinion. The hon. Member for Crosby (Mr. Graham Page) is well versed in the law. Who am I to challenge his views on what is precise? I would only conjecture that if he were engaged by a client 1993 to fight this type of Bill in court, he would demolish it quickly. I am more concerned with the attitude of the hon. Member for Birmingham, Selly Oak (Mr. Gurden) than with the preciseness of the terminology to satisfy the legal background of the hon. Member for Crosby.
The hon. Member for Selly Oak is really in agreement with my hon. Friend that this is a big problem and that numerous things must be done, which substantiates my point that this ought to be part of a much more comprehensive Bill. The Government are introducing their Land Bill, and that will take account of many of these points. No doubt that Bill will lay down what compensation should be paid. I urge the hon. Member for Selly Oak to withdraw his Bill, because it is before its time. It has its place, but these are issues which should be discussed on the Land Bill.
Market value always seems to be involved in the purchase of property. Oddly enough, it is really completely indeterminate. I will illustrate what I mean. I know how much I paid for my house a few years ago. Since then we have had the 1957 Rent Act. My authority, I am delighted to say, was one of those which decided that to put people out on the street was completely and utterly indefensible. It went to the limit within the law to ensure that that did not happen. We used every device allowed to us by the Government. This involved us in buying about 1,500 houses on the open market. Because my authority did this in order to protect people from the effects of the 1957 Act, the houses in my area have appreciated almost 100 per cent. in value.
These houses are now twice the price they were when the exercise began. At any point of time in carrying out that exercise from 1957 onwards, who could say what the market price was? It was no more the market value than the man in the moon. It was an artificial price placed on property because the then Government had introduced a Measure which put housing at a premium and because the local authority decided that it could not see families put on the street and reduced to an anxiety neurosis. It was these factors which put up the price of housing. Is that what hon. Members opposite mean by the market value? It is completely artificial.
§ Mr. Gurden
But if a person has been thrown out of his house and has no money to buy another, except compensation, he must get the market price because that is what he will have to pay for another house.
§ Mr. Brown
But these people do not simply get thrown out of their houses. Alternative accommodation suitable to their needs is offered. If the local authority behaves anything like my own, then these people are made a number of offers and are thus given an opportunity to choose the place they want. Some might ask why they should be given such a choice and suggest that they should have to take what is offered. But the local authority is obliged to be responsible for them under the slum clearance legislation and, that being so, it should ensure that they are satisfied with what they are offered as alternatives.
I wanted to make this point about market price and market value. The argument which hon. Members opposite have used about market value is frequently made. I begin to wonder whether I understand words any longer because there seem to be so many interpretations. But, clearly, market value is not necessarily the price one pays. At one time, market value was the market price in a free market but there is now no free market because there are so many pressures on housing. The market is conditioned by circumstances and to use the term "market value" is stretching the meaning beyond what one would normally intend.
I have tried to range over wider issues because one has had experience of trying to deal with these problems. I am not pouring cold water on the Bill. I applaud the hon. Member for his concern. If more people had been concerned in the past we might not have been in this hopeless housing situation, certainly in London.
I applaud the hon. Gentleman and his co-sponsors and I do not want him to feel that I am being carping about it. But I urge, now that he appreciates that there are so many other factors—as he himself has admitted—that, having made his case, he should withdraw the Motion. The Bill, although it has the best of intentions, cannot stand on its own. Its provisions should form part of a larger Measure. As he knows, the Government are bringing forward legislation which will 1995 allow him to put the points he is concerned with. He will have the chance to raise this matter then. If he withdraws the Bill today I am sure that these issues can be discussed at a later stage.
§ 3.8 p.m.
§ Mr. John Boyd-Carpenter (Kingston-upon-Thames)
I join hon. Members on both sides in congratulating my hon. Friend the Member for Birmingham, Selly Oak (Mr. Gurden) on his choice of subject. Those congratulations are shown very justifiably by the very high quality of the debate. I hope that I shall not do the hon. Member for Shoreditch and Finsbury (Mr. R. W. Brown) irreparable political harm when I say that I and the House were interested in the results of his practical experience which he detailed so clearly. Of course, the whole subject of compensation for compulsory purchase is a very old, very tangled and extremely difficult one. It arouses differences of view which by no means coincide with party lines. There are very real differences of opinion which run transversely between the parties.
I was interested in what the hon. Member said as an argument against proceeding with the Bill—that these issues would be dealt with in the Government's Land Bill. I am at a disadvantage, because I do not know what that Measure will contain. No public statement about it has made it clear that it will deal with the sort of issues to which my hon. Friend the Member for Selly Oak referred. Nor do we know the timetable, which is a very important matter in view of the point which I propose to make in a moment. There have been suggestions, whether well-founded or otherwise, that it may be delayed. We can deal only with the Measure which is now before us. In respect of that I am bound to say that I do not go all the way with my hon. Friend. In some respects this Bill goes wider than I would be prepared to go. At the same time it does not deal with issues, as was indicated by the hon. Member for Sheffield, Attercliffe (Mr. John Hynd) which are equally points which we should consider. The hon. Gentleman had in mind the question of a church which was moved and the problem in respect of small shops. The hon. Gentleman's attitude was extremely sensible on this matter.
1996 That the House has to consider is whether we are prepared to leave the various anomalies and difficulties which have been referred to as they are, or whether we should embark on legislation, subject to amendment in Committee, which seeks to cope with some of them. I do not think that anyone who has listened, as I have listened—apart from a few moments when I was engaged in what the Royal Air Force used to call "landing to refuel and rearm"—to the debate could deny that there is a general indication from both sides of the House that there are real differences, difficulties and anomalies in our present law which required to be tackled.
My concern—it is a narrow argument, I agree, though it is one which may be dealt with under the Bill—is with the owner-occupier. There the matter is urgent. As has been already pointed out, the protection given to certain owner-occupiers, those who acquired their houses between September, 1939, and 1955, ends in December of this year. The hon. Member for Sheffield, Brightside (Mr. Winterbottom) made a fair point that it ends because of provisions, for which my party is responsible, in the Housing Act of 1957. He compared our concern over this matter today with the experience of St. Paul when he saw the light while on the road to Damascus. I do not know how far one is permitted to pursue a theological point, but I am bound to say that after that experience St. Paul never looked back, and so I find it a rather encouraging example which the hon. Member gave us.
In all seriousness, the question of whether this provision should be allowed to lapse or be extended is obviously one which any Government laying plans of this kind for some years ahead must feel would have to come up for reconsideration as the terminal date approached. No one can necessarily foresee in 1957 what the situation would be in December 1965, what would be the demand for housing, and so on. The hon. Member for Shore-ditch and Finsbury made an extremely good point by drawing our attention to the fact that with the rising standards of today the demand for high quality housing has grown enormously. That is an extremely good thing in itself, but it contributes to the problem of housing generally, into which I must not stray, 1997 and particularly to the situation of individuals whose homes are taken under various schemes by compulsory purchase.
I do not think, with respect to the hon. Member, that he wholly answered their difficulties when he drew our attention, quite rightly, to the fact that it is the general practice of all Ministers of Housing and Local Government not to approve these schemes unless the local authority is prepared to undertake the rehousing of the people displaced. I think I am right in saying that no Minister of Housing of any party has approved a scheme, certainly not for many years, except under those conditions. What happens is that someone who was an owner-occupier is transferred into a tenant paying rent. That is not necessarily what the person wants. The very fact that he has taken the trouble to become an owner-occupier is some indication that he wants to be one. I do not think one meets the difficulty, which caused the previous Government to make this provision in the 1957 Act—that that person may wish to continue to be an owner-occupier and may therefore require, by way of compensation, the equivalent of what is necessary to buy himself a similar house—just by saying, although it is an important consideration, that he will be rehoused by the local authority. The hon. Member must realise a little of the difficulty in his suggestion that it is right and sensible for a local authority to try to find premises which suit a person affected by a clearance order, although there is no statutory duty on the local authority so to do. They might not, with the other demands of their waiting lists, be able to do it.
Therefore, as we are now in May in the year in which, in December, this protection expires, we should be concerned about whether we should allow this protection to lapse or at least consider what I am certain the 1957 Government thought would have to be done—whether or not to extend it.
§ Mr. Hamling
That was seven years ago. The right hon. Member was in the House then and has been here continuously. Why has nothing been done since?
§ Mr. Boyd-Carpenter
It is eight years ago, if my mathematics is right. The hon. Member asks why nothing has been 1998 done since. I do not know at what date he thinks these things should be considered. When coming up to a terminal date in December, I should have thought that this is about the right time to do it, when there is still time to act—
§ Mr. Boyd-Carpenter
The hon. Member says, "Really?" If one is to judge of a situation as it will be in December 1965, the nearer one can get to December, 1965, while allowing time for legislation, the more likely one is to come to a decision consonant with the facts. The hon. Gentleman is being a little unreasonable in putting this point to me. If he differs from me by a month or two over those last few months—which is the only relevant period—then it is his right hon. Friends and not mine who would be responsible.
§ Mr. Hambling rose—
§ Mr. Boyd-Carpenter
I will just finish this sentence, if I may.
Though this is a private Members' day and we are discussing a Private Member's Bill, I can claim that it is my hon. Friend who is trying to do something about it. Whether what he is trying to do about it is exactly right is the kind of question which the House may wish to consider during later stages of the Bill, but at least the hon. Member for Woolwich, West (Mr. Hamling) cannot reproach my hon. Friend the Member for Selly Oak, nor my other hon. Friends who have set their names to the Bill, for not doing anything about it.
§ Mr. Hamling
Would the right hon. Gentleman not agree that there were ten years before 1957 when we had precisely this method of compensation, so that we have had eighteen years' experience of it, not just eight years'?
§ Mr. Boyd-Carpenter
The hon. Gentleman, no doubt inadvertently, is missing the point. We have had experience of this over a number of years, and it has offered very useful protection to those affected. Now that we are at about the right time to decide, the question which we have to decide is whether to allow that protection to lapse. The hon. Member surely realises that if one is to form a sensible judgment as to 1999 whether a serious situation is now so easy that one does not have to give people this protection is a matter best decided as near the date as is reasonably practicable, while leaving time for legislation.
Therefore, the decision whether to go on beyond December, 1965, is most sensibly taken during the course of the calendar year 1965. For that reason, I am particularly glad that my hon. Friend should have taken advantage of his good fortune in obtaining an opportunity to introduce a Bill to introduce one on this subject.
I have said that we are all expressing our individual opinions on this Private Members' Day, and my opinion is that, in some respects, my hon. Friend's Bill goes too wide. I think that there is real force in what one or two hon. Members opposite have said, that if one goes beyond the owner-occupier, one risks stimulating the kind of speculation in slum property which no sensible person on either side of the House wants to see happen. I think that there is a risk of that.
I am concentrating the limited time which I propose to take upon where there is a point that is not only of considerable importance—whether this protection to owner-occupiers should be allowed to lapse—but which equally is the problem of all of these that is the most urgent. There is, obviously, force in what one or two hon. Members have said about the desirability of dealing with these complex problems comprehensively and widely. I doubt whether the Land Bill, if it appears, will do that. I do not say that offensively. It is a Measure which I have not seen, but I do not think that it is aimed very much at these problems. We shall see when it comes, if it comes.
What we cannot delay is a decision on this continuation of protection for a certain number of owner-occupiers under the Second Schedule to the 1957 Act. The hon. Member asked why something was not done before, and I gave him my views about that. He will, I think, agree that if we decide not to proceed now, in the latter part of May, with legislation which could deal with this matter, we are taking a definite decision to let the protection lapse, because it is incon- 2000 ceivable at this stage of the year, and in the present condition of the Government's legislative programme, that the comprehensive legislation which hon. Members have said they prefer to deal with this matter could possibly take effect in time to deal with the situation in the coming December.
Therefore, the decision which lies before the House is not whether in its Second Reading form my hon. Friend's Bill on this difficult subject is 100 per cent. right. That is a decision which is, perhaps, more relevant for the House to take if and when we come to Third Reading. What the House has, however, to make up its mind about today is whether to go forward with a Measure which, among other things, continues the protection given by the Second Schedule to a number of owner-occupiers or whether deliberately to take a decision, by rejecting the Bill, to let that protection lapse. That is the immediate point and none of us can avoid the responsibility of taking our decision upon it.
§ 3.23 p.m.
§ The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl)
The right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) began by saying that he had only taken time off to refuel and rearm before launching his attack. I never would have thought that the day would come in this House when I would get up, having had two hours' sleep during the morning and having had no lunch, and say that I had enjoyed every moment of the debate and that I was extremely grateful to those who had helped to clarify a difficult and complicated problem.
The hon. Member for Brierley Hill (Mr. Talbot) said that this debate and the problems created by the Bill exhibited to the Minister that a problem existed. That is perfectly correct. We are aware of that, and we were aware that there was a problem before this debate, but the value of this debate has been, as debate in this House always should be, certainly on a Friday, to give back-bench Members an opportunity of talking frankly about their problems and the difficulties as they see them so that all the issues can be looked at.
2001 Perhaps I might deal with a slight deviation from the general trend of the debate by my hon. Friend the Member for Sheffield, Attercliffe (Mr. John Hynd), who looked particularly at the problems of non-residential occupiers of property in the development areas. He referred particularly to shopkeepers and other trades people.
§ Mr. MacColl
And, indeed, to churches.
The previous Government produced some planning bulletins dealing with the whole problem of central area redevelopment which contained wise advice about consultation between developers, local authorities and people affected by development, and particularly about the importance of seeing that alternative facilities were available for people either within a development area or immediately outside the area. The points in those planning bulletins relevant to this are accepted by my right hon. Friend as being his views on the matter.
I have in the last few days had discussions with representatives of bodies of traders on precisely this point. We have been discussing what, if anything, more could be done. However, on the general principle of dealing humanely with the people affected by development, that is something which we entirely accept.
At the risk of irritating the hon. Member for Eastleigh (Mr. David Price) by referring to ex gratia payments, I assure him that local authorities can be authorised to make ex gratia payments when they consider that hardship is being caused. I will come to the specific point about the relevance of this to slum clearance problems shortly.
It might assist the House if I gave a short summary of the history of this complicated matter, because it goes back further than some hen. Gentlemen opposite seem to think. It is not all due to the 1957 Act, as the hon. Member for Birmingham, Selly Oak (Mr. Gurden) said. The provision of paying site value for property found to be unfit goes back to at least 1919. There is no complica- tion about the principle of this. It is somewhat difficult to say that a property is a danger to health and then to go on 2002 to say that one will pay the value for that property in itself. That is the principle which clearly impressed this House after the first war, and it has, broadly speaking, been the philosophy underlying compensation for slum clearance ever since.
However, it had a breach made in it, not as the hon. Member for Crosby (Mr. Graham Page) said, in 1936—and for once I am able to correct the hon. Gentleman—because the 1936 Act was a consolidating Measure. It was, in fact, the 1935 Act, which introduced the question of payments to the owner-occupier for well maintained property.
§ Mr. Boyd-Carpenter
I congratulate the hon. Gentleman on having done what I have never been able to do; namely, to fault my hon. Friend the Member for Crosby (Mr. Graham Page) on a point of law.
§ Mr. MacColl
I take no pleasure in doing so. I like to trust the advice given to us by the hon. Member for Crosby on these complicated matters. Perhaps I remember the 1935 Act and the consolidating Measure because I was a member of a housing committee at the time.
The well maintained principle is that one gets a grant if one has kept property in good repair—and this is linked, as has been pointed out, to the rateable value. For what it is worth, I should mention that the new valuation has meant that the amount of grant has gone up, for the increases in rateable value in the last two years have had the effect of increasing the grants for well maintained property.
A second breach which was made in the general principle is the one which we have been mainly discussing today; that owner-occupiers who purchased property between 1939 and 1955 were entitled to compensation at the market value. The principle behind that is that people who bought during those years could not be assumed reasonably to have realised that slum clearance was coming back again. During the war years there were upsets of war damage and so on and it was reasonable to say that they should have more compensation when, after 1956, the accent began again on slum clearance. The ten-year period was not just a matter of luck. The principle was that it gave people a reasonable time for the 2003 enjoyment of their property. It was felt that if they had acquired it and had ten years of enjoyment, they had not done too badly considering the other rights they had got.
There is no doubt at all about the duty of the local authority to see that there is rehousing available for people being moved from a clearance area. Not only is it a question of administrative action by my right hon. Friend, but the 1957 Act lays down that the local authority either has to be satisfied that there is accommodation available or, if it is not available, must provide it or secure its provision—
§ Mr. John Hynd
My hon. Friend has referred to the local authority's responsibility for ensuring that alternative houses are available, but what is the position of the churches, and the other bodies I mentioned?
§ Mr. MacColl
I am not sure whether my hon. Friend was here when I dealt with that point, but I did deal with it—although I skipped the churches, I admit. I would be grateful if he would look up what I said about it, and if he likes to take up the matter again with me he knows, where he will be able to find me all next week.
I want to make it clear that when the hon. Member for Selly Oak talked about people being put into Part III accommodation because they were being moved as part of a development scheme, I do not think that that could have been all the story. There is this other important obligation. Many people are very happy to have made available to them a brand-new house at a reasonable rent fixed by the local authority rather than what may be a fairly bad house. I do not say that that covers all the cases mentioned, but I will deal further with the point in a moment.
The hon. Member for Selly Oak referred particularly to the difficulties arising in Birmingham over the patching that has been going on, and the failure to demolish property. I do not want to get invloved in defending or criticising any particular local authority—I want to deal with this on general grounds—but it must be remembered that patching was done in response to the very urgent request of Mr. Harold Macmillan, because 2004 it was in the earlier Sections of the 1954 Act that the principle of patching was put into the general law. Therefore, it was recognised that where property was bad and could not, because of the load on the housing machine, be cleared at once, it should be taken over and kept in tolerable condition.
Patching often includes re-roofing, rebuilding defective walls and chimneys, replacement of gutters and down pipes, partial re-plastering, repairs to floors, replacement of fire grates, decorating, when necessary the provision of piped water, electric light and new water closets. Therefore, where it is carried out properly and systematically, patching makes a substantial improvement not only to the value of the property but to its tolerableness as a place to live in.
There may have been cases of hardship, where some owners have to pay a rent to the council for their property and where, at the same time, there has been inadequate compensation and high rents. I can only say that, as I am at present advised, where Birmingham only pays site value, the rent normally is to be 5s. a week paid for 48 weeks in the year. That is £12 in the year, which is intended to represent £10, plus 6 per cent. on the amount paid for site possession. When the property is fully reconditioned in the way I have described, I understand that the rents may go up. As I say, I do not want to get involved in a complicated argument, but the story is not entirely all on one side.
§ Mr. Chapman
Perhaps my hon. Friend might add that Birmingham spent about £11 million putting into order this kind of house which it has bought but cannot demolish at the moment. It has therefore done its job in improving these properties for the people still living in them.
§ Mr. MacColl
I am sure my hon. Friend the Member for Birmingham, Northfield (Mr. Chapman) is quite correct.
The hon. Member for Eastleigh put two points to me. He asked if it is correct that an improvement grant can be paid on a property and that at the same time, or within a few weeks, it has been cleared under a slum clearance order. I cannot discuss any particular case and 2005 certainly not one which is the subject of an inquiry, but I make the general point that I cannot see how at the same time or within a reasonable time it can be said that a property has 15 years' life but is unfit for human habitation and cannot at a reasonable expense be made fit. I should have thought there was something a little incongruous about the suggestion, but that does not permit me to comment on a particular local authority or a particular house.
The hon. Member spoke about ex-gratia payments. He did not know where to find the reference. It is in Section 228 of the Local Government Act, 1933. It is not an absolute authority for the payment, but is an insulation from the activities of the district auditor. A local authority in certain circumstances may make a payment which otherwise would be unlawful and be disallowed by the district auditor, but, if it gets permission from my right hon. Friend before incurring the expenditure, that is a protection against disallowance and surcharge by the district auditor. That is the instrument which on the whole has been used, and is frequently used today, to deal with some of these awkward cases.
The normal practice is that sanction would be given to ex-gratia payments made to alleviate hardship of owner-occupiers who had purchased houses which they thought would not be affected by slum clearance in future. There has been a sort of ethical thread running through the debate to the effect, should an officer tell? The point was put by my hon. Friend the Member for Shore-ditch and Finsbury (Mr. R. W. Brown). The moral I drew from what he and other hon. Members said, was that this emphasises the importance of planning slum clearance and development programmes ahead so that people may know what is going on and an authority does not have to make rushed decisions.
It must be in the discretion of the local authority judging any particular case when deciding what is the ethical thing to do. Like many things which one has to do in public administration, there are sometimes difficult decisions to make. It is clear that the local authority wherever possible should prevent people getting involved in undertakings such as purchase of property without proper 2006 advice and getting all the available information which can be given to help them. My hon. Friend the Member for Shoreditch and Finsbury put the layman's common sense point of view. This is the sort of problem which causes frightful headaches among lawyers, but honest men can get over these difficulties and no one is the worse off. Provided they know ahead what the decision will be, local authorities can handle this problem. I quite agree that there are difficulties when they make rushed changes in policy.
One of the two points which have emerged so clearly from this discussion is that, as ideas of redevelopment and slum clearance progress, the standard of what is unfit becomes higher. It is well known that in the South, on the whole, standards of what is unfit are more rigid than they are in the North, because in the North we lived with so many hideous legacies of the past that things that shock people in the South we have to accept as a cross we must bear. It is true that there are these differences.
Very soon after he came into office my right hon. Friend asked the Central Housing Advisory Committee to start an inquiry into standards of fitness. The inquiry is proceeding. Hon. Members who are familiar with this subject know the value of some of the reports of the Central Housing Advisory Committee. In case hon. Members opposite begin to sneer at them, I would mention that the right hon. Member for Hampstead (Mr. Brooke) used to be in the chair at some of the committees. Therefore, obviously these Reports will carry a great deal of weight with hon. Members opposite. I hope that this particular report will help to show what can be done by way of getting better standards of fitness.
Another point arises in which my right hon. Friend is extremely interested and concerned. Again, I cannot attach this comment to any local authority. More and more, as redevelopment proceeds, local authorities must make a considered choice between when to improve and when to demolish. It does not always apply that a better job is achieved by demolishing property and having to rehouse people who may not want to be rehoused. It may well be that, by skilful improvement and by the use of improvement area procedure, it will be possible to get a balance 2007 of improvement and redevelopment which, in the long run, not only satisfies people better but also gets over some of the difficulties of allowing property which decaying to go completely beyond hope of repair. This is the problem to which my right hon. Friend is addressing a great deal of thought at the moment.
Possibilities for action have been deployed in the debate. First, there is the Bill, which says that across the board it should be market value for everything. This suggestion has had surprisingly little support. The right hon. Member for Kingston-upon-Thames hedged about this. He clearly was uneasy about its implications. The hon. Member for Eastleigh said that there were difficulties about the fair price covering all sorts of properties, because there was the difficulty of dealing in unfit property to try to get advantage of the compensation. There were the problems of the pure slum exploiter who makes a profession of running slum property to death, and unhappily there are still some of this type.
It might in certain circumstances create difficulties in the field of betterment, on the search for a solution to which the party opposite at least, we understand, are focusing all their great intellects. There may be cases where market price across the board might affect the raising of the price through development in a comprehensive area or a new town.
The figures quoted about Woolwich conveyed to me that scarcity widens the difference between market and fair value. This is one reason why it is so difficult to say that market value is the equivalent of fair value. Nobody has defined "fair value" today. Everyone has realised that it does not mean necessarily what somebody gets for a site in Woolwich because of a desperate shortage of housing in London, about which we all, since Milner Holland, are so properly aware. I think this has made this Bill an extremely difficult operation.
The next possibility is that we should confine it to all owner-occupiers. That would obviously be resisted by the hon. Member for Crosby and by the hon. Member for Brierley Hill (Mr. Talbot), because he thought that good landlords ought to be given help as well as owner-occupiers. It will also be resisted by the hon. Member for Selly Oak because he 2008 quite reasonably mentioned the case of the man who buys a house in which to put his family. To make the distinction between owner-occupier and the rest would cause complications and difficulties. A third possibility is to extend the existing law. That would lead to a great deal of criticism. The hon. Member for Crosby was impassioned about the unfairness of it, the indefensible position where there are two house owners and one is getting market value because it was bought between these dates and the other is not because it was bought since. Quite clearly, merely to extend is going to create great feelings of injustice and resistance. I am not putting it out of my mind, because I am approaching this with an open mind, anxious to know what is the best thing to do.
I have also the difficulty that there is no doubt that the local authority associations are against it. The right hon. Gentleman the Member for Kingston-upon-Thames said that now is the time to do something about this. I would have been happier if he and his right hon. Friend the Member for Leeds, North East (Sir K. Joseph) had pursued that further than I think they have done with the local authority associations.
The latest record I can find of local authorities' views is in 1962. It comes from the Housing Committee of the A.M.C.:It has been suggested to us that there is a case for Amendment of the Housing Act, 1957, to enable compensation to continue to be paid to owners or occupiers of houses in clearance areas, irrespective of the dates when these houses were purchased, and that the present 10-year period for the payment of compensation which expires on 13th December, 1965." hould be indefinitely extended.In other words, both these possibilities that have been deployed today were put by somebody, whom I imagine might he someone not vaguely connected with the Ministry. It went on:It is reasonable that the present arrangements should he limited to their original purpose of alleviating the hardship of those who during and shortly after the war, paid high prices in order to obtain accommodation, without any reliable knowledge as to whether the property was liable to be condemned. If the purchaser of one of these properties is still in occupation by 1965 then at the very least he will have had ten years' use out of the property. Generally speaking, we feel that ever since slum clearance programmes were reviewed in 1955, purchasers have been able 2009 to obtain information of slum clearance projects over a reasonable period before buying property. In the circumstances, we feel we can only reiterate our previous decision that it would not be appropriate to recommend the Association to seek any extension of the present ten-year period for the payment of compensation, and that the basis of site value only for a house declared unfit for human habitation is right.That is the view taken by the A.M.C. No one will rise to say that I should ignore the A.M.C. I am always being scolded for ignoring it.
§ Mr. Graham Page
The hon. Gentleman has invited me and I would say certainly ignore the A.M.C. in this case when it is making a statement of this sort. The local authorities are involved and of course they are against this because they have to pay compensation.
§ Mr. MacColl
I was coming to the second point made by the hon. Gentleman. It is correct to say that the A.M.C. is an interested party but then, of course, the decision to leave the payment of compensation with the local authorities was taken by the hon. Gentleman's Government. The effect, so far as I can get the kind of figures that we are talking about, is that unfit houses at present are costing the ratepayer about £2 million a year. If we add on the cost in respect of owner-occupiers that would bring the present £2 million up to about £4½ million. The cost of the Bill would put it up to at least £7 million. Therefore, there are very substantial increases involved in charges on the rate fund and the housing revenue account.
§ Mr. Graham Page
These figures are extremely interesting. Of course, we do not get that information on this side of the House. [HON. MEMBERS: "Why not?"] It is not the sort of information which is available to bank benchers. An increase from £2 million to £4½ million is a comparatively small amount, considering the hardship which owner-occupiers are undergoing at the present time. I should have thought it would have been something like £5 million.
§ Mr. MacColl
I am not saying that if we could arrive at a just decision we should not do it. I am not sheltering behind these figures. I am saying two things. I am saying, first of all, that the decision to leave this burden on the rates 2010 was a little inconsistent with what has been said recently about the rate burden, and if we are going to be generous we should not be generous at the expense of the local authority and the ratepayer.
That raises the whole question of subsidies. One of the things that we must look at is the problem of subsidy if we are to do something. The other point that I wish to make is that before we go in this direction, in view of the expressed hostility of the A.M.C., we must consult that body before we start making a very drastic change of this kind.
§ Mr. David Price
The hon. Gentleman has mentioned the A.M.C. But surely he ought to report that he has had representations from some of the local authorities which are most concerned with these hardship cases. That is certainly true of my own council in Eastleigh, which I would point out is a Labour council. Politics are not involved in this.
§ Mr. MacColl
I know that politics are not involved, and I am not trying to make political capital. I am looking at the problem from the point of view of what is the right thing to do. I have no doubt—I think my own postbag would confirm this—that a number of local authorities have said that the present position is extremely difficult and they would like to see something done. Many hon. Members on both sides of the House have expressed that view. I do not deny that at all. All I am saying is that one of our problems is that the A.M.C. has clearly gone on record in the way in which I indicated in that rather weary quotation.
§ Mr. Boyd-Carpenter
Two or three times the right hon. Gentleman has indicated that he has not closed his mind. He said, "If we are to do something". Can he confirm that to do anything, if he decided so to do, would require legislation? Is there any practicable vehicle for such legislation likely to be effective before December, except this Bill?
§ Mr. MacColl
As I say, the simplest thing to do is to extend the Bill. It is, of course, open to a private Member at any time to try to do that. All I am saying is that this debate has shown, rather to my surprise, that there is a good deal of doubt about the wisdom 2011 of just doing that, not only with the local authority associations but with the formidable figure of the hon. Member for Crosby and others.
If I may sum up what seems to me to be the agenda which this debate has left for my right hon. Friend and myself which must be taken actively into consideration. First, there is the question of considering the impact of the standard of fitness in the modern world. Secondly, we have to look at the balance between improvement and demolition; that is a matter which at the moment we are discussing with local authorities. Thirdly, we must look at subsidies not only for housing but for all forms of redevelopment. This is something which my right hon. Friend has already said he is actively discussing and he is hoping to introduce a new system of grants which will cover specifically redevelopment plans and housing. As a corollary of that, he must also consult the local authorities about what can be done.
I agree with the right hon. Member for Kingston-upon-Thames that the land legislation that is expected will not solve this problem. I wish that I thought it would, but it will be relevant to it and it is one of the factors which must be taken into account. Finally, I have to say, at the end of a speech made on an empty stomach, that I have followed the debate with a great deal of interest because hon. Members on both sides have deployed the difficulties of the problem. We are very sympathetic to it and we recognise it as a difficult problem. I shall certainly take back to my right hon. Friend a summary of the discussion to see what we can produce.
§ 3.56 p.m.
§ Mr. Herbert Butler (Hackney, Central)
I am sorry that I missed the speech of the hon. Member for Birmingham, Selly Oak (Mr. Gurden) and did not hear the arguments deployed, but I had the benefit of hearing the hon. Member for Brierley Hill (Mr. Talbot), and although I did not hear the hon. Member for Crosby (Mr. Graham Page), I have known him so long and heard him so often that I could almost say that I heard what he said. It was amusing to hear the hon. Member for Crosby say that he was not in possession of the figures after all his experience in the House and our experi- 2012 ence of his experience in talking about matters connected with housing.
The hon. Member for Brierley Hill was at great pains to bring forth once again the old widows' and orphans' argument. He reminded me of what the late Mr. Aneurin Bevan said when we were discussing this matter years ago. In reply to the then Member for Winchester he said that a slum was a slum whoever owned it. We are talking today about an attempt on the part of the hon. Member for Selly Oak to get more money from the local authorities and the ratepayers for people who own slum property.
§ Mr. Graham Page
The hon. Member was not here when my hon. Friend the Member for Selly Oak introduced the Bill. My hon. Friend made it perfectly clear that he was pleading mainly for the owner-occupier. I also gave examples of hardship.
§ Mr. Butler
I am grateful for the hon. Member's intervention. I listened to the speech of the hon. Member for Brierley Hill and also to that of my hon. Friend the Parliamentary Secretary. The Bill is concerned with paying compensation for slum property. When a public health inspector finds for sale plums which are unfit for human consumption they are destroyed at the instigation of the health authority. Do hon. Members opposite suggest that people who are purveying property which is dangerous to health should be compensated?
§ Mr. Butler
Hon. Members opposite are suggesting that compensation for slum property is too low. In 1934 in the local authority of which I was a member—
§ Mr. Graham Page rose—
§ Mr. Butler
We had to time whether we should property. Unfortunately bought the property and Member for Brierley Hill is—
§ It being Four o'clock, the debate stood adjourned.
§ Debate to be resumed upon Friday next.