HC Deb 17 November 1972 vol 846 cc847-54

2.42 p.m.

The Minister for Local Government and Development (Mr. Graham Page)

I beg to move, That the Housing (Payments for Well Maintained Houses) Order 1972, a copy of which was laid before this House on 6th November, be approved. The intention of this order is to double the amount payable when a well maintained but statutorily unfit house is acquired by the local authority for demolition. This proposal was set out in the White Paper issued exactly one calender month ago today—Cmnd. 5124 "Development and Compensation—Putting People First." The order was made within three weeks of the proposals being set out in that Paper, so I think the House will agree that we have moved as quickly as possible on this item.

It was in paragraph 44 that this was set out. It was pointed out that the market value basis of compensation does not apply to a house that is declared to be unfit for human habitation. That may cover houses which are recognised as quite good homes but are unfit in certain respects. When such a house is acquired for demolition, compensation is restricted to the value of the site cleared of buildings. We have amended the law in that respect over a period of time, and owner-occupiers of such houses now receive the equivalent of full market value. But in the case of tenanted houses an unfit house that is being acquired at site value but has been kept in good repair in spile of its inherent unfitness will attract a well-maintained payment. At present that payment is four times the rateable value of the house—that is, if it has been wholly well-maintained. If the exterior only comes into that category half that payment is made, and the same if only the interior comes into the well-maintained category. If the tenant has carried out the maintenance of the house, or if the landlord has done part of it and the tenant part, an apportionment of those payments between the landlord and tenant is a matter for the local authority.

Our intention in the order is to encourage owners of houses which are approaching the end of their lives to keep them in as good repair as possible. In the Government's view, a little further encouragement is required than the payment of merely four times the rateable value. Therefore, in future, with respect to any order becoming operative on or after 17th October, when the White Paper was published, the proposed payment will be double the existing payment; that is to say, it will be eight times the rateable value.

The Government could have chosen in this case to say that the owners of these houses should receive market value, but I think there are two advantages in making the compensation a reasonable figure by means of the well-maintained payment. First, it is an encouragement to landlords of such houses to keep them fit and put them in a proper order and maintain them well. Secondly, there is the advantage that if the payment is made by means of the machinery of a well-maintained payment, the tenant can share it. If one had adopted the procedure of basing compensation on the market value it would have been difficult to give the tenant his fair share for what he had spent on maintaining the house.

When in 1919 this long-established principle was first recognised—that the structure of a house condemned as unfit is worthless and, consequently, only the site value should be paid—we were thinking of pulling down what were identified as slums. I think that the development of towns has gone further than that now. In order to carry out development we frequently pull down houses which, even if inherently unfit, are still in a state to provide good homes—houses on which, perhaps, people have spent considerable sums of money in maintenance over the years in order to keep them as homes and not let them fall into ruin. So, to compensate those who have kept their houses—which they are letting and not occupying—in good order, we are providing eight times the rateable value as the compensation—plus, of course, the site value.

On the basis of the recent National House Condition Survey it was estimated (hat there were 1.2 million unfit houses in England and Wales, 700,000 of which are in existing or potential clearance areas. That is roughly the sort of figure with which we are concerned. Over the next 10 years some 70 per cent.—those that are tenanted—may qualify for this compensation—provided, of course, that they are well maintained. I think that anything that can be done to encourage the maintenance of these houses, while they last, so that they make good homes for the tenants, should be welcomed.

As to the operative date for entitlement to payment, the order applies to any payment made after it comes into force in respect of houses in an order becoming operative on or after the date of the White Paper—that is, 17th October. Clearance operations, as the House will know, may take several years to complete, and on that date—17th October this year—there were many schemes in the machinery at different stages.

It is therefore necessary to specify what stage in the procedure should have been reached on or after the date of the White Paper for there to be an entitlement to the higher payment permitted by this order. Whichever stage is selected someone will be on the wrong side of the line, and I have no doubt that there will be cases of hardship just because someone is on the wrong side of the line. The date we have selected is that which will bring in the largest number of people that is reasonable in a reform of this sort. The later the stage in the pro- cedure the larger the number of people who will benefit and the latest date that can be adopted, which will ensure equality of treatment between claimants with houses in the same order, is the date of coming into operation of the order.

The order will be of great benefit to both tenant and landlord and will bring a measure of justice and fairness into the compensation code on the acquisition of an individual's property for the benefit of the community.

3.52 p.m.

Mr. Denis Howell (Birmingham, Small Heath)

I am glad to say, on behalf of the Opposition, that we fully support the Government's intention to introduce the order, including the improved compensation terms which it contains. It will tackle a very important and growing problem, particularly in many of our large cities. There can be no doubt that the growing rate of obsolescence in many of our large cities is an increasing problem, particularly in the inner areas, as I know from the city of Birmingham. Anything that can be done to encourage landlords, tenants and owner-occupiers to keep their property in good order and to see that they are properly compensated when the time comes for demolition is, in my judgment, a social service of the first importance.

We have only to look at some of the streets in our inner cities to find the result of decay and obsolescence when people start to let their houses go. It is not only their houses that suffer but the whole environment of the neighbourhood. Neighbours complain about the deterioration in the standard of houses, and so on.

Until a few years ago there were very strong and proper complaints about the compensation terms available in such circumstances. I am glad to say that both major parties in Parliament have been very responsive to public opinion and to the distress caused to so many people who, when they lost their house, found that the old compensation arrangements, under which they received only the site value because the house was worthless, having become virtually uninhabitable, caused considerable financial distress.

I was glad, therefore, that in 1969 the Government, with the support of the Opposition, were able to put on the statute book a measure which responded to this concern and to the very serious problem. The Government are now going further and are proposing that the amount of compensation for well-maintained houses should be increased from four times to eight times the rateable value. I congratulate the Government on taking yet a further step in this direction.

I find, however, that although we have enacted legislation on the matter, far too many people are still unaware of its provisions, and that they can now get more adequate compensation when the house is demolished. They do not know that the tenants can share with the landlord in the amount of compensation which the order and the act enable local authorities to pay. Will the Minister tell us what the Department's view is of the effect of the new arrangements which were made in 1969? When we last discussed the subject many hon. Members sought to express their concern. The fact that their concern is not reflected in the Chamber today shows that the measures that we then took have had a considerable degree of success.

Nevertheless, my hon. Friends and 1, and other hon. Members who represent inner city areas, will confirm that tremendous ignorance still exists. It is extremely widespread. It is not confined solely to tenants; it seems also to extend to their professional advisers. When the House has approved the order, as I hope it will, I urge the Government to embark upon some sort of publicity campaign so that everyone knows what his rights are, and so that the people know that if they keep their houses in good order, when the time comes for them to be demolished they will be entitled to reasonable and adequate compensation for the money they have spent in the last few years of their houses' lives.

Such publicity should be by traditional means. The Government might try sending a circular to local authorities asking them to advise each household involved of the provisions of the order and of the way in which those provisions have been extended, and advising tenants and owner-occupiers to consult their legal advisers to ensure that they are getting the maximum amount of benefit from the order.

This is a useful step to tackle a growing problem of great concern and I greatly appreciate the speed with which the Government have acted following the White Paper. It is in every way commendable, and I hope that what we are trying to do on both sides of the House will not be thwarted by ignorance of tenants, owner-occupiers, or their professional advisers.

2.58 p.m.

Mr. Julius Silverman (Birmingham, Aston)

The Minister has pointed out that tenants can participate in the benefits to be given by the order. The benefit will go largely to landlords rather than owner-occupiers, because most owner-occupiers already receive reasonable compensation under the 1969 Act. We do not object to that, because if the order provides for a higher state of house maintenance it encourages landlords to repair their houses, which we welcome.

If the tenant were the person who had kept the house in a reasonable condition and maintained it well, it would be monstrous if he did not receive the benefit of the grant for himself. Can the Minister tell us more about the machinery by which the tenant will apply for the grant?

I reinforce what my hon. Friend the Member for Birmingham, Small Heath (Mr. Denis Howell) said about the desirability of publicising the tenant's rights, because few tenants know about them. Some of us have already encountered problems, though not very widespread, where the tenant has done the repairs and has applied for a grant but the landlord has received a sum exceeding the well-maintained grant by way of his compensation, perhaps because of the site value, and the tenant has received nothing. In those circumstances there is no inducement to him to do his repairs and maintain the house well.

Has the Minister any figures of the extent to which tenants have availed themselves of the grants and what percentage of the grants has been given to them as distinct from the landlords? Those figures should be available. Perhaps we may have them from the Minister on another occasion if he cannot give them to us today.

3.1 p.m.

Mr. Graham Page

With the leave of the House, I will answer the last question of the hon. Member for Birmingham, Aston (Mr. Julius Silverman) first. I cannot satisfy him today, but it is a figure which we should have and one which might be included in the publicity that I hope we can give to the payments.

Although I cannot give the figures, my impression is that tenants are not claiming as they should, and that in many cases the payment goes by default. The tenant is offered a council house in exchange for the house from which he is to move, there is all the bother of moving, getting his family into the new place and so on, and he does not claim what he might be entitled to receive for the money that he has spent on keeping his previous home in order.

The claim is made entirely informally. This is one of those cases in which the informal procedure is of great advantage. The claim does not have to go to the county court or anything like that. The tenant merely applies to his local town hall. I think that the division of the payment is determined in a fair manner. Inquiries are made of the landlord and tenant and there is an attempt to obtain agreement between them on the apportionment. If that is not possible, the matter is settled by way of arbitration at the town hall.

I turn now to the question of publicity, for which the hon. Member for Birmingham, Small Heath (Mr. Denis Howell) called. The order is part of a whole package, set out in the White Paper, on improving compensation. I cannot guarantee to do any publicity on this one item alone until we have passed the Bill giving the whole package, which I hope will be achieved shortly. When the whole package is put together we shall ensure publicity about it.

At present, at the time of making a compulsory purchase order good local authorities send to each occupier—and to the owner if they know who the owner is—a letter explaining the exact process that can be adopted, how to make claims, and so on. Even so, I have found, when I have gone down a street to be demolished, that although the town clerk in my constituency has sent a very informative letter, people do not read such letters. The letters are closely typed, and people just think, "This is not for me". It is not until someone calls and discusses the matter with them that they take it in.

Therefore, we must think of better means of publicity than the formal letter from the town clerk, however good and informative it has been. A personal touch is needed here, if only through television and radio, although calls at the house are best. We shall be sending out circulars to the local authorities advising them on this matter, and when the compensation Bill has been enacted, I shall keep both hon. Members informed of how we shall publicise the whole package.

Question put and agreed to.

Resolved, That the Housing (Payments for Well Maintained Houses) Order 1972, a copy of which was laid before this House on 6th November, be approved.

    c854
  1. WELSH GRAND COMMITTEE 34 words
    2. c854
  2. ADJOURNMENT 12 words