§ Question again proposed, That the Bill be now read a Second time.
§ 1.54 a.m.
§ Mr. Boyd-Carpenter
When the House was summoned to attend the Lords Commissioners I had just concluded that part of my comments on the Bill relating to Clause 1. I come now, therefore, to Clause 2.
I am quite sure that the county court is the right tribunal for determining the issue in respect of these mortgages between individual citizens and I have no comment on that part of the effect of Clause 2. On the other hand, we should consider whether it is the right way to handle the matter when the mortgage in question was granted by the local authority which itself has brought forward the clearance order. In such circumstances, I imagine that the House would feel that the right, the inevitable, course is for the mortgage to be waived— and, indeed, with the right hon. Gentleman's permission, that is the current practice.
I am afraid, however, that the introduction of the provisions of Clause 2 will cause local authorities to take to the county court the question of mortgages in these cases. It may well be that with the fear that the district auditor may otherwise order a surcharge, local authorities will feel bound to avail themselves of this procedure. If so, the effect of these provisions in these cases will be to make somewhat less advantageous than at present the position of people who have in good faith taken a mortgage from a local authority and have then found the same local authority introduce a 889 slum-clearance scheme affecting their property. This is not just an academic question. As the right hon. Gentleman knows, it is a question that arises in a number of cities today. There has been considerable trouble in that respect in the City of Cardiff.
We will therefore want to consider at the next stage of the Bill whether in such cases it is right that the matter should go to the county court; whether, indeed, it is right to carry a provision which will have the effect, inevitably, of the matter being taken to the county court, or whether we should not separate such cases where the mortgagor is the local authority promoting the scheme. As I say, I quite accept the fact that where we are dealing with the question of which of two citizens shall carry the loss, or how the loss should be divided between them, the county court is the right and sensible place to determine the matter.
The point I have made in respect of local authority mortgages ties up with what I thought was the very sensible point made by the hon. Member for Bolton, West, that in these cases the Minister should circularise local authorities and asked them to make advances, either under the Small Dwellings Acquisition Act or other powers, to people who have been turned out of their house as a result of a slum clearance scheme. That suggestion is well worth pursuing, but it would hardly be possible to do so if there were any question of the person concerned not being able to take on a mortgage for the new house because of having in addition to make payments in respect of the former house that had been demolished. Therefore, if the hon. Member's suggestion is to be followed up, we must press the right hon. Gentleman on the question of mortgages granted by the local authority which is also promoting the slum clearance scheme.
We shall want to examine this Bill further in Committee, but I must repeat that it is a disappointment for us. It only deals with a relatively small fraction of the problem, even of the immediate problem, which is created by the fact that 13th December of this year is the terminal date in respect of schemes under the 1957 Act. It seems to me that even the full extension of the 1957 scheme is not really enough.
890 It may well be that because of the timetable it is reasonable not to expect the right hon. Gentleman to deal with the whole problem in this Bill, but I very much hope that—if not tonight, at later stages of the Bill—we shall hear from him some indication of his intention to go a great deal further into the general question of compensation in respect in particular of owner-occupied houses. This is a problem which extends beyond slum clearance. Many owner-occupied houses are taken for other public purposes. Perfectly sound houses are taken for redevelopment schemes and for road schemes. In many cases very acute personal problems are created. Even in cases where full market price is paid there are very real problems for the person who has to leave a home which he may have occupied for many years.
Until, I think, 1919 an additional payment of 10 per cent. was made in such cases by way of helping with resettlement expenses. As none of us was in this House in 1919, I do not know why that was dropped. One of my hon. Friends found that that went through the House without any apparent explanation at that remote period. I hope that the fact that tonight we will give our agreement—I hope that we shall—to the Second Reading of this Measure and in Committee we shall seek to amend it within its scope and try to make it more effective for the purpose of carrying forward the purposes of the 1957 Act in full and not in a mutilated form, will not leave the impression that we have really dealt with the problem at a time when hon. Members opposite say—I am glad that they say it—that they favour owner-occupation and at a time when undoubtedly it is the deep belief of my hon. Friends and myself that it is desirable to extend that owner-occupation.
This is a good time for having a further look at the problems which arise in a complicated society such as ours and involve the taking of someone else's property. I am not satisfied that the general market price provisions are in this day and age necessarily right and accurate, but I do not want—indeed, I should incur your displeasure, Mr. Speaker, if I did —to take that matter further. I hope that the Parliamentary Secretary will answer the questions put to him, will seek 891 to explain the consequences of rescinding the 15-year rule and will give such indication as he can of the answers to the points which my hon. Friends and hon. Members opposite have sought to make so that when he sits down we can give an unopposed Second Reading to the Bill.
§ 2.3 a.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) said that he and his hon. friends were extremely anxious to see this Bill go through. Therefore, I think he will not—any more than I would—grudge the fact that in order to be sure that it goes through we are having the Second Reading at a rather early hour of the morning.
§ Mr. Boyd-Carpenter
I hope the hon. Gentleman will not take the fact that we did not object to the somewhat unusual procedure of having the Second Reading moved at 10 minutes to 12 as an indication that he and his right hon. Friend should be encouraged to treat this as a precedent.
§ Mr. MacColl
I do not think we shall be encouraged to do so, provided that we are able to get some of these Measures through, which we have to tackle and tackle fairly quickly.
Although the right hon. Member said quite a lot about the importance of this Bill and why we have taken so long about it—the hon. Member for Crosby (Mr. Graham Page) made the same point— the fact remains that the last Government showed no sign of getting such a Bill through or of doing anything about the former Act. When we were debating the Gurden Bill, the right hon. Member tried to find some reason why and even as late as the summer of 1964 there was no indication of what the fathers of the present Act intended to do about it.
I should like to make clear that we regard this as a stop-gap Bill. It is a Bill which we are basing largely on the 1956 Act and making some improvements on it, but basically we are accepting the approach to that Act at the moment. That does not mean that we are wedded to it or that we think that this is a final 892 solution. My hon. Friend the Member for Willesden, East (Mr. Freeson) referred to the Sub-committee of the Central Housing Advisory Committee under Mrs. Denington's chairmanship which is reviewing the standards of fitness to try to get some kind of uniformity on what we mean by unfit property. That is a very necessary part of the wide approach to the problem of dealing with unfit areas in the future. When that report is issued —I hops it will be issued before long— I hope it will be a starting point.
Hon. Members pointed out that there is nothing in the Bill about Exchequer subsidies and that this would be a burden on the rates. The review of housing subsidies which is likely to be an early piece of legislation and the more general review of local government grants will both have some relevance to this question. Therefore, this is not the final word about the apportionment of the financial burden between the ratepayer and the taxpayer. It is an interim Measure while the more fundamental changes are made.
There is a change in the slum problem. As slum clearance progresses, the standard of property coming under the attentions of the housing authority, although a complicated and long procedure has to be followed before demolition clearance orders are made, is less dramatic than it was in the very early days of slum clearance when there was such a big backlog. As more and more people buy their own houses, the owner-occupier's problems will play a greater part in this. My right hon. Friend is very aware of this and is by no means committed to accepting the present position. He is looking generally at the whole problem created in regard to standards of fitness by the quality of property coming into redevelopment and the special problems of the owner-occupier.
I have been asked throughout the debate what is the philosophy behind the 15-year period, why the Bill applies only to people coming in between 1950 and 1955. The philosophy of it is in the present Act. I cannot do better than quote what was said as recently as 11th November by the hon. Member for Gloucestershire, South (Mr. Corfield) referring to the Bill:As I understand the proposals, whereas the existing provisions resulting from the 1957 Act give a guaranteed period of 10 years, provided 893 that the house was bought before the introduction of the Act, for either beneficial occupation or full compensation, the right hon. Gentleman has now made it a period of 15 years. I would not cavil at that, and, in fact, I think that I am probably the author of the idea."—[OFFICIAL REPORT, 11th November, 1965; Vol. 720, c. 433.]No doubt that is why the hon. Member for Gloucestershire, South has been hurriedly removed to the back benches, so that he may not compromise the cogency of the doctrine which is at present being expounded by the Opposition Front Bench. I do not want to be unfair to the hon. Gentleman. It is only fair to say that he went on in that speech to make precisely the point that we have been making, that we have got to look at the problem of owner-occupation and of the kind of property which will come up for demolition in the future. He was making the same point that my right hon. Friend is very conscious of. I have never found any evidence that the Act that we are now finishing was something intended to be renewed automatically every 10 years. As far as I can find out, nothing was said in debate to suggest that that was the case. All the evidence was that this was intended to be something once and for all.
If hon. Members look at the terminal dates they will find that the first one was 1939 when, with the war, the whole slum clearance programme finished. The other date was 1955 when the programme began again. The theory was that people in that period who bought property for owner-occupation could not reasonably be said to expect that they could be caught in a slum-clearance programme. After that date it was reasonable to expect that they should realise that this was a risk which they might have to meet. The effect of the Act was that if one bought property earlier in that period one might have 25 years' occupation of the property. If one bought at the end of the period one would not have more than 10 years' occupation, from 1955 to 1965. We have therefore made a substantial improvement inasmuch as we guarantee that people should have 15 years' occupation, whereas under the existing Act the people at the lower end of the scale were getting less than 15 years.
§ Mr. Boyd-Carpenter
Is not the hon. Gentleman overlooking the fact that under this Measure he is giving abso- 894 lutely nothing to anybody who bought a house before 1950?
§ Mr. MacColl
I have tried to explain the philosophy behind the right hon. Gentleman's own Act. It was, as I quoted the hon. Member for Gloucestershire, South, that one took 10 years as being a reasonable period of enjoyment of the house. If one had had the house before 1955 one had had it for over 10 years and therefore one came out of the provision. What we are now saying is that all these people should have at least 15 years and we are extending the law to ensure that everybody who comes under the legislation will get 15 years' occupation. We are therefore very much improving the service offered to those affected.
§ Mr. MacColl
It is early in the morning and I do not want to spend too much time with the right hon. Gentleman, but he does not seem to have got the point yet. It is that everybody has at least 15 years' enjoyment of the house.
§ Mr. Boyd-Carpenter
Obviously if anyone has had 15 years' occupation, even the hon. Gentleman cannot take it from him. The point which I make is that the hon. Gentleman is giving something extra only to those who bought their houses after 1950.
§ Mr. MacColl
All the people who will be getting something under the new Measure will be people who have not had 15 years' enjoyment of their house. In other words, everybody will be brought up to the minimum standard of having 15 years.
§ Sir A. Meyer
The hon. Gentleman keeps on saying "everybody", but those who purchased after 13th December, 1955, will get very much less than 15 years.
§ Mr. MacColl
I have already dealt with them. They are the people who will come under the other test—that they acquired the property after the slum-clearance programme began again. It is open to the right hon. Gentleman or the hon. Member for Eton and Slough (Sir A. Meyer) to say that that is a silly 895 argument, but it was an argument advocated with great skill and clarity by no less a person than the right hon. Member for Wolverhampton, South-West (Mr. Powell). We know that he is not always sounding the keynote of the Conservative Party, but in this case he had the support in the Division Lobby and elsewhere of his party. No one who knows the right hon. Member for Wolverhampton, South-West, or the right hon. Member for Streatham (Mr. Sandys) who was Minister at the time, will suggest that they blundered into this; they did some clear and careful thinking about it. The hon. Member for Gloucestershire, South who was in the Department recently, took very much the same view and claimed credit for the principle of 15 years. It is therefore a little out of place for the right hon. Member for Kingston-upon-Thames to blame us for it now.
I was asked whether it would be possible, under Clause 2—dealing with mortgages—for the court in looking at the mortgage to take into account the fact that there had been an extortionate rate of interest. I think that the court would be free to exercise discretion in the matter. One of the points which it can look at in reaching a decision about the mortgage is whether there has been a quite unreasonable rate of interest. The court would take that into account in what it decided. The value of the provision is that it gives discretion to the court. We have been in trouble lately about giving discretion to the court, but this is one of the cases in which we do it.
The hon. Member for Hemel Hempstead (Mr. Allason) asked how we had this extraordinary provision that it should be limited only to people who could have the supplement. If he is interested at this hour of the morning, I can tell him that this idea started as an Amendment put down by my noble and learned Friend Lord Mitchison in Committee, supported by my insignificant self. We could do no more than this because of the extraordinarily narrow and thoroughly stupid Money Resolution which the Government had put down. The Government had to alter that Resolution before Report because they could not even amend the Bill as they wanted; they had to take the time of the Committee in altering the Money Resolution. This was a 896 Government Clause put down to meet the point made by my noble Friend and others in Committee. We can claim a good deal of credit for the Clause, but we had to limit it because of the limits of the Financial Resolution.
We have put into the Bill a mucli more sensible idea. It was pointed out that the people most likely to need this were those who could not get the market value. It raises a point which my hon. Friend the Member for Oldham, East (Mr. Mapp) made: will not it mean that building societies will fight shy of old property because they will be afraid of being caught by Clause 2? This is part of the problem which arises; we must balance the two points. The position formerly was that an owner-occupier might be quite happy to take a council house at a reasonable rent without minding about losing his old house, but then he suddenly found himself sued by the mortgagee for the money which had been advanced to him for buying the house.
We really had to say, "If you are so unwise as to lend money on such precarious security and that security is literally disappearing, the best thing to do is to call it a day and balance the loss to the mortgagee with the fact that the mortgagor is losing the house." It means that there will be reluctance to lend money on old property but one has to balance the two things. While my right hon. Friend acknowledges the value of owner occupation of old property provided it is good and can be preserved, it is not wise for this to be extended into property which runs the risk of being condemned as unfit.
There are cases—the hon. Member for Eton and Slough mentioned one—when local authorities have blown hot and cold. They have said first that they do not intend to make an unfitness order with the result that people have borrowed money, and have then, acting usually in good faith, changed their policy and have declared the houses unfit. In that sort of case, my right hon. Friend is willing to use his power to authorise ex gratia payments. They are difficult things to define but where there is a case for saying that people were misled in good faith by the local authority he is always sympathetic to an application for an ex gratia payment.
897 The change which the hon. Member for Crosby dismissed as comparatively trivial is rather important. It concerns the date on which the purchase order was made. It will mean that everyone within the order will have a uniform starting date—the date when the order is made. Although the date of purchase may vary with different houses within the same order, the clause makes it clear that everyone within the order will be treated the same whenever the process of purchase is completed.
It also means that, where there has been an order made before this Bill becomes law, even if the finalising of purchase proceedings is not completed until after the present Act has expired and those concerned do not come under this Bill, they will still get the advantage of the present Act. The hon. Member for Crosby, in an adjournment debate recently, complained bitterly that we would not come to the rescue of local authorities which were, he said, bewildered by legal difficulties, but now he has pooh-poohed the whole thing as a triviality.
§ Mr. Graham Page
The local authorities were confused because of the circular sent out by the Minister saying what this date should be.
§ Mr. MacColl
The hon. Gentleman was complaining that it created unfairness because there were various interpretations of the word "purchase". That was in the original Act, but by changing it to the date of the making of the order, we made it quite clear.
I hope that the House will give the Bill a Second Reading. It will help a number of people who need help. It is not a final solution. It is not intended to be. But at any rate it goes further than the Act it succeeds.
§ Question put and agreed to.
§ Bill accordingly read a Second time.
§ Bill committed to a Committee of the whole House.—[Mr. Fitch.]
§ Committee Tomorrow.