New Clause No. 3.—(COMPENSATION NOT PAYABLE, IN RESPECT OF RIGHTS OF OCCUPATION, UPON COMPULSORY PURCHASE.) (Hansard, 21 July 1967)

§ Mr. Graham Page
I beg to move, That the Clause be read a Second time.
The Clause deals with the compensation which may be payable on the compulsory purchase of property subject to the wife's right of occupation. I draw a parallel here with the case of compulsory purchase of property which is rent-controlled. When an acquiring authority such as a local council wishes to acquire property which is subject to a rent-controlled tenancy, it can acquire the property at the value of the property with a controlled tenant in it; that is, it can acquire the property at investment value and not at vacant possession value.
The unfortunate owner of the property may see it passed to the local authority at a low value because it has a controlled tenant in it and, immediately it gets into the hands of a local authority, the local authority is not bound by the Rent Act and does not have to keep the controlled tenant there. It can get him out. Having acquired the property, the authority gets it at vacant possession value, having paid for it at its value with a controlled tenant in it.
We may have exactly the same parallel in the case of a wife—and again I use the example of the husband's house and the deserted wife, or the wife who has been subject to a matrimonial offence of some sort—when the local authority puts a compulsory purchase order on the house. It offers the husband who owns the house the value of the house with the wife in occupation and with the wife's right to occupy, a right to occupy as against the owner of the property for something longer than the mere periodic 2714 tenancy, for the life of the whole marriage and possible longer. There is a great difference in value between a house with vacant possession and a house with the wife in occupation who has been deserted but who has a right to occupy it and may have an order of the court giving her that right. The local authority may be able to purchase the house at that low figure and then acquire vacant possession from the wife.
As the Bill stands, I do not know whether the wife's right of occupation holds good against a local authority which has acquired the property, but, on a proper construction of the law, that right does not hold good against the local authority, although the authority is under some obligation when it acquires property to assure the Minister who gives consent for the compulsory acquisition that it can re-house the tenant if it desires to pull down the house. But, strictly, the local authority would have the right to turn it into property with vacant possession, having acquired it at a value subject to the wife's right to occupy indefinitely.
Neither the husband-owner of the house nor the wife-occupier of the house would benefit out of the value of the right to occupy. The local authority acquiring the property would put that value in its pocket. This cannot be right and the Bill must contain a provision to avoid that.
In the new Clause I have suggested that, because the right to occupy is a matter between the spouses it should be disregarded in a compulsory acquisition of the property and that the acquiring authority should pay the value as though that right did not exist, that it should pay the value of the property as it would be when it got into its hands and it had vacant possession. The domestic right of occupation as between the spouses should not be a matter of profit to the acquiring authority, and as the Bill stands it would.
I would not mind if it were provided that an acquiring authority should pay to the injured wife compensation for her right to occupy, or should give her alternative accommodation and give the remaining compensation to the husband. But it would be quite wrong if the acquiring authority could acquire the property at a value which showed that the property was subject to the right of occupation for an 2715 indefinite period and could then acquire vacant possession from the person entitled to occupy it. In some cases the authority would be paying no more than half the proper value of the property, and there should be some provision to prevent that.
The new Clause would prevent that and it would be fair and it would allow the husband and wife to make arrangements between themselves as to future accommodation for the wife. This should be dealt with somewhere in the Bill, which should make clear what is to be the position on the compulsory purchase of the property.

§ Mr. Archer
The problem which the hon. Gentleman has mentioned arises from the difficulty of holding the balance fairly among the various interests which may be entailed in a piece of property. The principle of compensation on compulsory acquisition is that the acquiring authority should pay the market value of the property, neither more nor less. Any property may be subject to a number of acts which can appreciate or depress its value and the kind of situation which could arise under the Bill with the wife in occupation might be one. Of course, if the husband were to sell the property privately to a private purchaser, he might well receive for it a lower price than he would have received if the wife had not been in occupation.
The sponsors of the Bill have devoted a great deal of attention and consultation to this matter. They feel that the public ought not to be called upon to pay more than the private purchaser would be called upon to pay in that kind of situation. The principle running through the whole of compensation on compulsory acquisition is that the public should pay precisely what a private purchaser would pay, and in those circumstances we feel that the husband ought not to receive more because the property has been acquired compulsorily than he would have received if he had sold it privately to a private purchaser.
It is fair to say that the wife's problem, as the hon. Gentleman was fair enough to indicate, would almost certainly be met from the fact that she would probably receive alternative accommodation from the local authority. No doubt the hon. 2716 Gentleman will acknowledge that we could not write into the Bill legislation which would fetter the discretion of the local housing committee, but there is every reason to believe that the wife's problem would be solved.
If both husband and wife are sensible, they can dispose of the whole problem. If the husband were minded to sell privately to a private purchaser, he would no doubt say to the wife that it was in both their interests that they should receive the highest possible price for the property, and that it would therefore be sensible for the wife to realise her right and for them to make their own arrangements as to the financial situation between them. Equally, one hopes that the husband would do precisely the same thing if there were any likelihood that the property would be acquired compulsorily. If in these circumstances and contrary to her own interests the wife still held out and refused to surrender her interests, it would be open to the husband to apply to the court to terminate her interests under Clause 1, and the court would be entitled to take into account all the conditions arising.
In the circumstances, there does not appear to be any risk of injustice to anyone. There would be a risk, if the new Clause were accepted, that the public would suffer injustice, because it would be called upon to pay more than a private purchaser.

§ Mr. Graham Page
It is quite untrue that the public would be called upon to pay more than the private purchaser. The hon. Gentleman has missed the point and I have probably not explained it carefully enough.
If there is a sale to a private purchaser by the husband and the sale is subject to the wife's right to occupy, the private purchaser pays a price less than he would pay for vacant possession. If he wanted vacant possession, he would have to buy out the wife, to buy her right to occupy, and he would then have paid full vacant possession value of the property.
If the sale is to a public authority, is that authority bound by the wife's right to occupy? I have had no answer to that as yet. I think that it would not have to buy the wife's right to occupy, but could acquire vacant possession without paying for it.

§ Mr. Archer
It is quite true that I did not answer that question. The advice which the sponsors of the Bill have received is that the authority would not be bound by the wife's right of occupation but in practice would almost certainly rehouse her, so that it would not be a question of buying her out, but of arranging alternative accommodation.

§ Mr. Graham Page
This is a shocking position. In this case a public authority is lot paying more but is paying very much less. It is acquiring property at an investment value and is then able to turn it into a vacant possession property. It is the public authority, or the public through the authority, which is gaining the benefit of there having been a squabble between husband and wife.

§ Mr. S. C. Silkin (Dulwich)
Does not the hon. Gentleman appreciate that what he is really suggesting is that, in a case where a husband has the fetter of the obligation to provide a home for his wife, the local authority should pay the husband a sum which does not reflect that fetter but which compensates him as though he had no such obligation in any shape or form—and that, having done that, the local authority should accept the obligation of rehousing the wife?

§ Mr. Page
When a local authority acquires property which is occupied and proposes to demolish it, it has the obligation of rehousing the tenants. Certainly it is under at any rate a vague obligation to do so in that it must obtain the consent of the Minister to a compulsory purchase order and, in doing so, the necessity to rehouse is there. While there may be no obligation, the Minister is told that the authority will be able to rehouse them.
There is no getting away from the fact that, in a case where a husband and wife have had a squabble of this sort, the local authority will be able to acquire the property at half its value. I said in my opening remarks that I did not mind if the Measure contained a provision stating that the authority should pay the wife her right to occupy, but—

§ Mr. Archer
Is the hon. Gentleman suggesting that the local authority should pay the wife the value of her right to occupy and then rehouse her?

§ Mr. Page
This must happen in the case of an ordinary owner occupation. If the house is owner occupied and is not subject to a clearance order, when the local authority must pay only the site value, then the authority must pay the value of the property to the owner occupier—and it is under an obligation to rehouse that owner occupier. It should he remembered that, in such a situation, the local authority is taking away from an owner occupier the property in which he is living rent free and is giving him accommodation in a council flat or somewhere else.

§ Mr. Archer
In which case?

§ Mr. Page
I am talking about the ordinary owner occupier of a house. On acquiring that property, the local authority must pay the value of it, regardless of the fact that it is also under an obligation to rehouse the owner occupier. It rehouses him in a council flat, for which he must pay rent, when, in his own property, he was not paying rent.
Exactly the same should apply if the owner occupiers are husband and wife who have become estranged. The local authority should not be allowed to acquire the property at less value than it would be able to acquire it if the couple were living together in a happy matrimonial home. Just because the two people are estranged the local authority will, under the Bill as drafted, be able to acquire the property at a lower value. Since there is no provision in the Bill to prevent this from happening, I cannot withdraw the new Clause.