HC Deb 16 October 1975 vol 897 cc1708-18

8.30 p.m.

Mr. Michael O'Halloran (Islington, North)

I welcome this opportunity to raise a subject of great concern to Islington council tenants, ex-gratia payments to certain Islington council tenants who, under the Housing Act 1974, were ineligible to claim home loss compensation under the Act as they moved prior to 31st July 1974. I am raising this matter not in general terms but in the specific instances of the tenants of Cranworth House, Loraine Estate, N.7, and Asker House, Tufnell Park Estate, N.7. The compensation involved in the ex-gratia payments we are asking for amounts to under £22,000.

Islington Borough Council has, over the past few years, undertaken a considerable amount of rehabilitation work on its older properties, mostly blocks of flats owned formerly by the Greater London Council. Two such modernisation and rehabilitation programmes were scheduled for Loraine Estate, on Chelmsford House and Cranworth House, and on Asker House. The tenants of Asker House were moved during the course of 1974 and the former tenants rehoused elsewhere. Whilst these tenants would not have been eligible for compensation for home loss under the Land Compensation Act 1973, they became eligible under the Housing Act 1974, which came into force on 31st July 1974.

All the tenants of Chelmsford House were removed before that date, so I am concerned only with the situation which has arisen in the case of Cranworth House and Asker House. All the tenants of these two houses were informed of their pending removal at the same time and should have been moved by May 1974, when none would have been eligible for compensation, as in the case of the tenants of Chelmsford House. However, as most were moved after 31st July 1974, it seems to me that they should all be treated equally in respect of any home loss compensation.

But the situation has arisen whereby seven tenants of Cranworth House and 26 of Asker House were not eligible for compensation since they moved before the qualifying date, 31st July 1974.

I have here details of these tenants, supplied by the Islington council borough valuer, showing that the total compensation which would have been paid to them had they moved after 31st July would amount to £4,419 in the case of Cranworth House and £17,559 in the case of Asker House—an insignificant sum, as I am sure the House will agree.

I appreciate that under the letter of the law—the Housing Act 1974—these tenants are not eligible for any home loss compensation. My concern is that a minority should be at a disadvantage compared with the remaining majority of tenants of these houses who moved after 31st July simply because they cooperated with Islington council by accepting the first offer of alternative accommodation made to them, thus moving before the qualifying date. They therefore, through no fault of their own, became ineligible to claim compensation while those tenants who either did not accept the first offer of alternative accommodation made to them, or who were not made an offer until a later date, became eligible for such compensation in spite of the fact that all had been given notice of removal on the same date.

This differentiation in treatment has given rise to a considerable amount of bitter feeling locally and it is generally felt that all tenants of the houses concerned should have been treated on an equal footing regardless of the actual date of their removal. I therefore raised with the Islington council the question of making an ex-gratia payment to the 33 tenants concerned, and through the council the matter was raised with the Department of the Environment. In its letter of 14th March 1975, addressed to the borough valuer, the Department wrote: The terms of section 130(2) of the Housing Act 1974 are quite specific in providing that the amendments to section 20 of the Land Compensation Act 1973 which were made by Schedule 13 of the 1974 Act—which confers entitlement to home loss payments on people moved permanently from their homes for the carrying out of improvement works—are effective only in the case of those displaced on or after 31st July 1974. Whenever a new provision, or as in this instance an extension of an existing provision, is introduced a firm starting date has to be laid down. It is understandable that people displaced before 31st July 1974 from the two blocks mentioned in your letter will feel aggrieved because they failed to qualify for home loss payments but I am afraid there is clearly no question of their being entitled to payments as the law stands. Nor would it be right for the starting date imposed in the Housing Act to be set aside by sanctioning under section 161(1) of the Local Government Act 1972 the making of ex-gratia payments to people who moved before 31st July 1974. The Secretary of State's power of sanction under the section is used exceptionally in those isolated cases where although the proposed expenditure would be illegal it would not be directly contrary to the relevant statutory provisions. The making of ex-gratia payments to tenants who were displaced before 31st July 1974 for the carrying out of improvements works would, it is concluded, be in conflict with the intention of the provisions in the 1974 Act and for that reason I am afraid sanction cannot be given. I particularly draw the attention of the House to the last section of this letter: Nor would it be right for the starting date imposed in the Housing Act 1974 to be set aside by sanctioning under section 161(1) of the Local Government Act 1972 the making of ex-gratia payments to people who moved before 31st July 1974. The Secretary of State's power of sanction under the section is used exceptionally in those isolated cases where although the proposed expenditure would be illegal it would not be directly contrary to the relevant statutory provisions. My contention is that, since there is no question of a general request for ex-gratia payments to be paid to council tenants who moved prior to 31st July 1974, but only for sanction to be given by the Department to the 33 tenants of two particular blocks of flats so that they may be treated on the same footing as the majority of tenants of these flats who received home loss compensation, their cases are proper cases for sanction to be given by the Secretary of State under Section 161(1) of the Local Government 1972 Act.

I therefore raised the matter with the Ombudsman. Sir Alan Marre has stated that there is no question of maladministration. In his letter of 1st August 1975 he said: there is a provision in the Parliamentary Commissioner Act which expressly precludes me from questioning the merits of a discretionary decision in these circumstances. I must therefore conclude that there is no action I can take in this case. I take this to mean, and I am sure that the House will agree with me, that the discretionary decision could have been a different one and sanction could have been given by the Secretary of State for the Department of the Environment under Section 161(1) of the Local Government Act 1972 to the expenditure by Islington Borough Council to make ex-gratia payments to these tenants about whom I am concerned.

This being the case, I consider that the decision for discretionary sanction by the Secretary of State to ex-gratia payments by Islington Council to these 33 tenants should be reconsidered. I urge this first so that all tenants of Islington council properties who were given notice of pending removal on the same date should be treated equally—by receiving either home loss compensation under the Housing Act 1974 or an ex-gratia payment under Section 161(1) of the Local Government Act 1972; second, because the sum involved is so small—less than £22,000; third, because this is a specific case which affects only 33 tenants in the Borough of Islington and will not and cannot affect others or be applied in other cases; and fourth, to enable the people of Islington to see that our Government are using their discretionary powers to ensure that justice is done, and is seen to be done, in cases such as this.

I said that Islington has a vast housing programme of older properties and I give the council full credit for the job that it is doing—especially the housing committee. Like me, it wants the tenants treated fairly. That is why I appeal to the Minister to look again at the position with a view to resolving it satisfactorily.

8.40 p.m.

The Under-Secretary of State for the Environment (Mr. Gordon Oakes)

I am grateful to my hon. Friend the Member for Islington, North (Mr. O'Halloran) for raising this matter on the Adjournment. I appreciate the real concern which he has expressed on behalf of his constituents. I can assure him that I fully understand their feelings even though, as I think he may know, I shall not be able to give him an answer which gives them any encouragement.

My hon. Friend quite rightly and movingly spoke of the often distressing circumstances in which many ordinary people, including council tenants, find themselves when they are forced to move from homes to which they have grown attached over the years to make way for redevelopment or so that a housing estate can be modernised and improved. I was myself a member of the Committee which considered the previous Government's Bill—now the Land Compensation Act 1973—which introduced home loss payments. Although welcomed by both sides of the House, these provisions were nevertheless very closely examined and keenly debated. We were indeed able to make a significant advance on the previous Government's original proposals by reducing the qualifying period from seven years' to five years' residence.

As a Labour Government we have been able to extend the provisions still further through the Housing Act 1974. As a result, home loss payments can now be made to council tenants who have to move home so that essential improvements can be carried out. It is this further provision in the Housing Act which lies at the root of the problem my hon. Friend spoke of when referring to the unfortunate position in which some of his constituents found themselves when moved by Islington council from Asker House on the Tufnell Park Estate and Cranworth House on the Lorraine Estate.

I join my hon. Friend's tribute to Islington council, which stands out among London boroughs and, indeed, among many local authorities, in the way that it is modernising its older council property in this way.

The situation, as my hon. Friend explained it, was that, although the tenants were all apparently told by the council of their impending removal at the same time, some moved before 31st July 1974 and some after. The significance of that magic date is that it was the date on which the Housing Act 1974 received Royal Assent, and by virtue of Section 130(2) of the Act the new provisions which it introduced as respects home loss payments apply only to people actually displaced on or after that date. This means that those tenants who moved before 31st July 1974 had no statutory entitlement to a home loss payment whereas those who by chance happened to move after that date were more fortunate and did get payments.

I can appreciate that those of my hon. Friend's constituents who missed getting a home loss payment will naturally find it difficult to understand why all the tenants involved in the modernisation scheme are not treated equally regardless of when they moved. As my hon. Friend has said, it will often have been the case that those tenants who were the most co-operative and accepted the first offer of alternative accommodation failed to get a home loss payment whereas those who were more selective and less prepared to accept the first dwelling offered to them might well as a result have secured for themselves the bonus of a home loss payment.

I also recognise that many of the tenants have stressed how happy they were in their existing houses which they had furnished and decorated at no small expense and that normally they would have been quite unwilling to move, especially when this meant that they had to spend substantial amounts in order, for example, to curtain and carpet their new homes. The tenants excluded from receiving a home loss payment by the provisions of the Act will no doubt say—and I would not attempt to deny it—that they have suffered just as much distress and upheaval as their more fortunate neighbours, and, quite understandably, they feel very bitter about it.

By comparison with the eloquent and moving manner in which my hon. Friend has argued on behalf of his constituents, I fear that my reply may seem cold and unsympathetic. Certainly I would not wish to give any such impression, and, as my hon. Friend will, I hope, accept, it gives me no pleasure to give an answer which I know he and his constituents will find it hard to accept.

I can assure my hon. Friend that the Secretary of State and the Department have looked at this case very thoroughly to find a way in which we might assist. Nevertheless, there is another side to the coin and I am grateful to my hon. Friend for the opportunity afforded by this debate to explain briefly some of the reasons which lie behind the Department's policy in dealing with those cases.

First, I should make it clear that this is not a new problem. It has occurred, I imagine, in the past with every new benefit conferred by statute where elegibility for a payment has to be defined by reference to some form of commencement date, and it will inevitably happen again. Indeed, the original home loss provisions of the Land Compensation Act 1973, which the Housing Act has now extended, were also tied to a starting date, in that case 17th October 1972—the date when the proposals were first made public in the White Paper which preceded the legislation.

The circumstances that my hon. Friend has now described are virtually identical with the many similar cases which hon. Members on both sides of the House have in the past drawn to the Department's attention in connection with that first starting date. The most common case then was the slum clearance scheme, which resulted in some people being rehoused before the starting date and failing to get a payment, but others having the good fortune to move at the right time and so getting the payments they were entitled to. I think my hon. Friend will accept that the circumstances there are not so very different from those he has just described.

But the answer we had to give then is the same as I must give now. The provisions of both the 1973 Act and the recent Housing Act are quite clear. Only those people who moved on or after the starting date—in the case of the Housing Act 1974, 31st July 1974, when the Act received Royal Assent—can have any entitlement to a home loss payment and there is no provision in either of the Acts for any discretionary payments to be made to those who moved before.

It is a hard fact that whenever a new benefit like this is introduced there must be some starting date. Unlimited retrospection is just not feasible on grounds of either the expenditure involved or simple practicability. The further back in time that one takes any entitlement, the more difficult it is to ascertain the facts and determine whether or not the person was really entitled to a payment. In the case of the original provisions of the 1973 Act, the date of the White Paper was thought to be a justifiable starting date because advance notice had in fact been given of the new scheme.

But the extensions to the 1973 Act, although important and valuable in themselves, were not central to the theme of the 1974 Housing Act and, therefore, no specific announcement was made of their impending introduction. It therefore seemed most appropriate in that case to choose Royal Assent as the starting date. I might add too, in fairness, that we could very well have decided to bring this particular provision into operation at a later stage by a commencement order, and, indeed, this was the way in which the rest of the Act was largely brought into effect. We decided, however, that entitlement should start as soon as the Act was passed and, therefore, made express provision to that effect. I hope hon. Members will accept that this action does at least demonstrate our concern that there should be no delay in making these benefits available to those for whom they were intended.

But, whatever starting date we had chosen, the problem would have been the same. The moment one has a dividing line in any enactment it is inevitable that some people will fall on one side of it and some on the other, and to those who fail to qualify the choice of a starting date must inevitably seem arbitrary and unfair. Nevertheless, there is no real way round this, and, hard though it is for those who have been unlucky to accept the situation, I am afraid there is no remedy which I can offer in a case where the Act so clearly states that there is no entitlement to a payment.

I must emphasise that point because it has been suggested by my hon. Friend that there is a solution to the problem and that it lies in the discretionary power which my right hon. Friend has under Section 161 of the Local Government Act 1972 to sanction extra-statutory payments by local authorities.

I shall, if I may, try to explain a little of the nature of this power and of the policy which governs its use as I believe this is of central importance to the matter we are debating.

The power is to authorise expenditure by a local authority which might otherwise have been subject to challenge by the district auditor. The district auditor's duty is to consider, in relation to the council's accounts, whether a council's actions have been ultra vires. He has powers—by application to the court, or certifying that money should be recovered from a person or persons—to seek redress wherever he finds that an item of account is contrary to law. All London councils are subject to the scrutiny of the district auditor. Any item of account which is sanctioned by the Secretary of State under Section 161 is thereby removed from the purview of the district auditor. In other words, he cannot apply to the court or certify items which the Secretary of State has sanctioned.

These powers are used only in the most exceptional circumstances and only after the individual circumstances of each case have been thoroughly and carefully examined. This point is of cardinal importance. If Section 161 were widely invoked and extensively applied, the effect would be virtually a circumvention of statute—in short, legislation by administration. I am sure that no hon. Member on either side of the House could accept or sanction that. We are, therefore, obliged to be very strict in invoking that section.

This is even more the case when we have a situation such as that which my hon. Friend has described. Here we have an express provision in a statute that only those displaced after a certain date shall be entitled to a payment. To use the discretionary powers under Section 161 in such a case would clearly be in contravention of the statute itself, and this, as I hope hon. Members will agree, cannot be accepted or condoned.

My hon. Friend also had another point. He argued that this was an exceptional case and that, in view of the small number of tenants involved and the fact that the payments would not be substantial, the Secretary of State could use his discretionary power without creating any precedent. But, as I think the House will appreciate from what I have already said, this case is not unique. We had exactly the same sort of case in connection with the original starting date in the 1973 Act, and I can assure my hon. Friend that the case of his constituents is far from being the only one which has come to the Department as a result of the starting date in the Housing Act 1974.

I cannot conceive that the House would think it just for the Secretary of State to single out this one case for special treatment, and for the reasons that I have given a general use of the power would be equally unacceptable.

When, therefore, the Islington Borough Council wrote to my Department on 21st February this year asking for extra-statutory payments to be sanctioned for those of its tenants who had been rehoused before 31st July 1974 the Department was bound to refuse its application for the reasons I have given, and this it did, after careful consideration of the circumstances of the case, in its reply dated 14th March.

In short, I have every sympathy with the circumstances in which my hon. Friend's constituents find themselves, and I assure him that I understand the way they must feel. I appreciate that my hon. Friend has taken this issue as far as any hon. Member could take it by raising it on the Floor of the House. However, there is no way in which I can alter the fact that as the law stands his constituents have no entitlement to a home loss payment.

Question put and agreed to.

Adjourned accordingly at five minutes to Nine o'clock.