HC Deb 19 June 1991 vol 193 cc427-33
Mr. Soley

I beg to move amendment No. 192, in page 66, line 6, at the beginning insert—

  1. '—.(1) Section 29(1) of the Land Compensation Act 1973 (right to a home loss payment) shall be amended as follows:
    1. (a) in subsection 29(1)(c) the words "repair of or" shall be inserted immediately before the word "improvement"
    2. (b) in subsection 29(1)(d) the words "repair of or" shall be inserted immediately before the word "improvement"
    3. (c) in subsection 29(1)(e) after the words "Housing Act 1986" shall be inserted the words "or in the case of an assured tenant of a housing association the making of a possession order under Ground 6 of Schedule 2 to the Housing Act 1988"
    4. (d) after subsection 29(1)(e) there shall be added.
      • "(f) the making by a magistrates' court of an order under section 82(3) Environmental Protection Act 1990 or section 77 of the Building Act 1984 where the effect of such order will be permanently or indefinitely to prevent the occupier from continuing in occupation"
    5. (e) after sub-paragraph (v) shall be added the words
      • "(iv) where paragraph (f) applies, the owner of the property or such other person as the magistrates' court may in its discretion direct.".'.

The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton)

On a point of order, Madam Deputy Speaker. Amendment No. 196 has been missed.

Madam Deputy Speaker (Miss Betty Boothroyd)

Amendment No. 196 appears on page 1148 of the amendment paper, which we have not yet reached. We are now dealing with Opposition amendment No. 192. Is the Minister happy?

Sir George Young

We do not mind when we reach amendment No. 196, as long as it is reached at some point.

Madam Deputy Speaker

It will be called formally when I reach page 1148. It has already been taken with Government amendment No. 194. We are now dealing with Opposition amendment No. 192.

Mr. Soley

The first amendment on page 1148 is also an Opposition amendment.

I remind the Minister that in Committee we had a significant series of debates on home loss payments for tenants. We argued that tenants were not getting the credit that they deserved for the effort and money that they put into their homes. This is not a repetition of that argument but an attempt to deal with some of the groups who should be covered but are not presently covered. I hope that in my short contribution I can persuade the Minister to act.

The amendment is supported by the Law Society, Shelter, the Institution of Environmental Health Officers and the Institute of Housing, so it has wide housing support. It deals with home loss payments. These are paid to tenants and owners when they are permanently displaced from their homes. The amendment extends eligibility to certain groups of permanently displaced persons not at present covered.

Paragraphs (a) and (b) of the amendment extend entitlement to council and housing association tenants who lose their homes due to the need for extensive repair work. At present, such tenants receive a home loss payment if the work carried out can be described as "improvement". In practice, this leads to an absurd and unnecessary need to categorise extensive renovation work as either "repair" or "improvement", as only in the latter case is payment made. The amendment removes this problem by extending entitlement. It does not apply to tenants able to return to their homes after repair work. It applies only to those required to move permanently.

Paragraph (c) extends entitlement to assured tenants of housing associations required to move out permanently because of extensive work to their homes. At present, secure tenants of such associations have the right to a payment. The amendment maintains fairness between the two types of association tenant. The Government have suggested that it is unnecessary as associations can be encouraged to make payments in such cases by the Housing Corporation. Experience suggests that associations are already pressed for funds and will make payments only when legally necessary. There is a strong case for bringing them into line.

Paragraph (d) deals with the situation of a tenant who has a home declared unfit or dangerous by a magistrates court. Often the tenant will have to move out for only a short period while remedial work is undertaken. However, sometimes the only way to deal with an extensive problem is to demolish the property or to prohibit occupation indefinitely. The amendment extends entitlement to tenants permanently displaced by such orders. Paragraph (e) simply identifies the owner of the property as the person liable to make the payment unless the magistrates court that issued the order directs otherwise.

As I said, the amendment does not repeat the debate in Committee in which we discussed the amount of money paid in home loss. The amendment attempts to tidy up some of the anomalies and I hope that I can carry the Minister and the Government with me in regard to it.

Sir George Young

This amendment would involve an extension of the circumstances in which there is an entitlement to a home loss payment.

The first two parts of the amendment would bring in cases where the occupant is displaced in certain circumstances to allow repairs to be made to his home. Home loss payments are rightly available in cases where a person is displaced permanently from his home. The legislation already provides for payments to be made where there is such a displacement because of an authority's need to carry out improvements. However, I would expect that where repairs—as distinct from improvements—are concerned, there is a stronger likelihood that the occupant will return to his home once the work has been carried out. Therefore, I see no reason to accept that any change is required.

The hon. Member for Hammersmith (Mr. Soley) went on to propose an extension of home loss payments to assured tenants of housing associations which require possession of the tenant's home on ground 6 of schedule 2 to the Housing Act 1988. The hon. Gentleman will, I suspect, be aware that I have very recently written to the hon. Member for Knowsley, North (Mr. Howarth) explaining that, having looked again at the relevant legislation, we have concluded that all housing association tenants—including those with assured tenancies—are in fact already eligible for home loss payments under the existing provisions where they are displaced in qualifying circumstances. No further provision is therefore necessary, but we have asked the Housing Corporation to make sure that the tenants' guarantee will make the position absolutely clear.

Finally, the amendment seeks to extend entitlement to home loss payments to people displaced as a result of certain proceedings taken under the Environmental Protection Act 1990 or the Building Act 1984, where that displacement is permanent or indefinite.

Those statutory procedures are concerned with properties that are unfit for human habitation or structurally unsound and I accept that, where action is taken under one or the other of them, the effect will often—although not invariably—be to displace people who are living in them. Whether that displacement turns out to be permanent will depend very much on the circumstances of the case. In some instances, it may be permanent, in others not.

However, the key point is that it will not necessarily be clear at the time when the statutory action is initiated whether any displacements which may be required will be permanent or not. So I doubt that the distinction enshrined in this proposal would be workable. Also, it runs counter to the general principles of the home loss payment scheme by requiring a third party—the owner or another person as directed by the court—to be responsible for making the home loss payment, whereas under the scheme it is invariably the body responsible for the displacement which pays. On balance, therefore, I do not believe it would be right to bring this type of case within the home loss payment scheme.

Against that background, I hope that the hon. Gentleman will not feel it necessary to press his amendment.

Mr. Soley

I invite the Minister to ask his civil servants to read the Official Report tomorrow and, if necessary, to contact the Law Society, the Institute of Housing and Shelter. He will find that there is a good case for bringing those into line, and this is the appropriate time to do that.

Amendment negatived.

Mr. Iain Mills (Meriden)

I beg to move amendment No. 105, in page 67, line 7 after 'different', insert `percentage and'.

This is a small amendment about compensation. The Government have seen fit to introduce enabling powers in clause 61(3)(5) and (6) under which the Secretary of State can change the maximum and minimum amounts for compensation by statutory instrument.

Why should the Secretary of State have the power to change the maximum and minimum compensation for home loss, but not the percentage? That is why I have described the amendment as very small. That must lead to the view that compensation levels need entail no addition in overall terms to the cost of road developments. That could increase the speed of introducing the developments.

If there is a preparedness to take the powers to deal with maximum and minimum, why is there not a readiness to take powers to increase the percentage? If the taking of such powers would reduce the many years that ensue before road developments are completed because of the consequences of the public inquiry system, would it not be a good idea to take them? I am not saying that a percentage should be specified, but if it were found that a higher percentage would ease a certain scheme, whether in my constituency or elsewhere, or facilitate the introduction of new motorways, such as the M42 and the M6 in my constituency, that would surely be an important consideration.

11.30 pm
Sir George Young

I am grateful to my hon. Friend the Member for Meriden (Mr. Mills) for the concise and persuasive way in which he moved the amendment, which would enable my right hon. Friend the Secretary of State to vary by regulations the percentage that is to be used in calculating the level of home loss payment for owner-occupiers. My hon. Friend knows, as a member of the Standing Committee that considered the Bill, that the level of payment is set at 10 per cent. of the market value of the dwelling, subject to a minimum of £1,500 and a maximum of £15,000. There is provision for my right hon. Friend to vary the minimum and maximum amounts by regulation, but not the specified percentage.

As we have made clear, the object of the home loss payment is to compensate for the distress and upheaval that people will usually suffer when forced to move home at a time not of their own choosing. Setting the level of that compensation can only be a matter of judgment as to what is fair, to those who are displaced and to the central and local taxpayers who are called upon to foot the bill. It is not an easy judgment to make, but we are generally satisfied that the approach that we propose to adopt strikes the right balance.

When we have specified the upper and lower limits for the flat-rate payments for claimants in the Bill, we have made provision for the Secretary of State to prescribe alternative amounts by regulation. That is common practice in primary legislation, and a prudent thing to do. A specified percentage is a different matter.

We believe that the proposed system represents a sound basis on which to calculate the level of home loss payment for owner-occupiers, and we see no reason to provide for it to be changed. Even if we were to decide that an alternative percentage were needed, I would regard that as a change so fundamental that it should be introduced by way of primary legislation rather than by regulations.

My hon. Friend touched on an argument that we heard much of in Committee, which is that, if the percentage were higher, claimants would have an incentive to move more quickly from their homes, and public development projects might move faster. There is no hard evidence that that would happen if higher levels of compensation were payable, not least because many objectors are not those who are directly affected and who receive compensation. I am not persuaded that higher rates of compensation would automatically have the effect that my hon. Friend desires.

I hope that my hon. Friend will accept that one factor is varied by regulation and the other by primary legislation. I hope also that he will decide, on reflection, not to press the amendment to a Division.

Mr. Peter L. Pike (Burnley)

The Automobile Association strongly supports the amendment and has advocated its acceptance. Percentages are important, especially in areas where values are low enough not to be caught by the arrangements that are set out in the Bill. Someone in a low-value house might not be attracted to vacate it, but he could be if a higher percentage provision could be implemented. I recognise, of course, that any such provision could work both ways. We are anxious to see movement facilitated to prevent schemes from being held up when it is unnecessary. Of course, for an individual or family to move from a house is just as difficult and inconvenient whether the house is worth £5,000, £200,000 or any other amount.

Mr. Mills

I am tempted, because I am not quite satisfied with what my hon. Friend the Minister has said, to use the terms of Opposition Back-Benchers and say that I wish to call a Division. However, I am mindful of the time, the discussions that we had in Committee, and the Minister's obvious understanding of the matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Soley

I beg to move amendment No. 193. in page 69, line 4, at the beginning insert— '(9) In section 37(3) of that Act subsection (c) shall be omitted.'. Neither Back-Bench nor Front-Bench Members seem to be having any luck with the Minister tonight, but I intend to try again. I hope to persuade the Minister on compensation for tenants. The purpose of amendment No. 193 is to remove the effect of a decision of the High Court in Crown v. the London borough of Islington ex parte Knight, in which section 37(3)(c) of the Land Compensation Act 1973 was applied so that Mrs. Knight was denied a disturbance payment because the land from which she was displaced had been acquired by the council by agreement in 1930, many years before she became a tenant in 1975.

The first reason for the amendment is that many tenants are affected by the decision in view of the period over which authorities have acquired land. Secondly, paragraph (c) of section 37(3) is not compatible with paragraphs (a) and (b). Those paragraphs deal with denying payment to those who were not in occupation before the compulsory purchase process commenced. That is, they took up occupation when their displacement was imminent and could be deemed to have been aware of that. That was not so in Mrs. Knight's case. Her displacement did not become a possibility until six years after she took up occupation.

The amendment is compatible with parliamentary intention as stated in paragraphs (a) and (b). Unless the amendment is accepted, tenants could be denied disturbance payments when the land was acquired many years before the question of displacement arose. There seems to be a contradiction in the law. The amendment is an attempt to put that right, and I hope that the Government will take the opportunity to do so.

Mr. Yeo

The suggestion is that this proviso as to lawful occupation is unfair, in that it precludes a disturbance payment in the case of someone who may have lived in a property for a long time but cannot satisfy the test of having been in occupation when the authority's original acquisition took place.

The decision in the case to which the hon. Gentleman referred did not have a direct bearing on the concern at which the amendment is directed. I am advised that the decision turned on a technicality unrelated to the question of when the claimant entered into occupation of the dwelling. As I promised when the matter was raised in Committee, we have carefully considered whether there is a case for amending the existing provision, but the hon. Gentleman will be disappointed, although perhaps not surprised, to know that we have concluded that there is not a case.

The purpose of the restriction as to lawful occupation is to ensure that a disturbance payment is made to an occupant who stays on in a property after acquisition and is subsequently displaced, but not to someone who moves in after acquisition knowing full well that in due course he will have to move. That is perfectly reasonable. Many housing authorities and housing associations make a point of allowing people to occupy, on a short-term basis, accommodation which has been acquired with a view to redevelopment.

Having said that, where a claimant does not qualify for a disturbance payment as of right, the authority may none the less consider that there is good reason to pay expenses. Authorities are empowered under section 37(5) of the Land Compensation Act 1973 to make a discretionary payment. That ought to be sufficient generally to ensure that hardship is avoided in deserving cases.

We do not have evidence that a large number of people are being denied payment in the way that the hon. Gentleman describes. Against that background, I am afraid that it seems to us that the law is best left as it stands. I cannot recommend the House to accept the hon. Gentleman's amendment.

Amendment negatived.

  1. Schedule 13
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  2. Schedule 14
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  3. Schedule 15
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