TOWN AND COUNTRY PLANNING BILL

HL Deb 23 April 1959 vol 215 cc941-84

House again in Committee.

4.1 p.m.

LORD SILKINmoved, after Clause 1 to insert the following new clause:

Payment by Minister to acquiring authority

". Where the compensation payable in accordance with subsection (1) of section one of this Act by an acquiring authority, not being a Government Department, exceeds the amount of compensation which would have been payable immediately prior to the passing of this Act as mentioned in paragraphs (a) and (b) of the said subsection (1) of section one of this Act, then, subject to such conditions as the Treasury may determine, the Minister of Housing and Local Government may, if he thinks fit, pay to the acquiring authority a sum equal to the difference between such values."

The noble Lord said: I beg to move the Amendment standing in my name on the Order Paper. It seeks to provide that where a local authority are required to pay by way of compensation, through compulsory acquisition under this Bill, more than they would have paid under the previous procedure, the Treasury should have the right—but not be obliged—to make a contribution towards the excess. The case for the Amendment is that most local authorities will have planned ahead for the redevelopment of their areas and for compulsory acquisition arising therefrom, and will have based their finances on the assumption that the cost of acquisition would be on the basis of the 1954 Act.

From the figures which the noble and learned Viscount gave us in replying on the first Amendment there is no doubt that in the large majority of cases this Bill will involve greater expenditure by local authorities than was required before. It is natural that that should be so, and it is the intention of this legislation that owners should get more for their land than they were getting before, because it is alleged—and there is some justification for the allegation—that the previous compensation was anomalous in the sense that there were two standards of compensation, one for private sales and one for public acquisition. So land is going to cost local authorities considerably more. I recognise that in a number of cases local authorities will be getting a grant from the Exchequer in the case of open spaces, roads and se on, and the Exchequer will, therefore, be sharing in the increased cost. Nevertheless, local authorities will he left with a substantial burden to meet themselves, and I want to make it optional on the part of the Treasury, under such conditions as they may desire to make, to give grants to local authorities in special cases.

This would be a matter for the Treasury to determine, but the kind of cases I have in mind are those where the local authority are not in a strong position financially and where, in the nature of the area, there is a large amount of redevelopment to be carried out. Let us take a place such as Glasgow—though I have no brief from Glasgow in this matter; but take a city like that, or some of the Northern towns, where an immense amount of redevelopment is necessary. This Bill will impose on them a very great and unexpected burden—even if it is justifiable—and a burden considerably in excess of what they could have foreseen. Even after allowing for the grant, they will get a burden which is an unknown quantity.

I would say that in those conditions (and these places are not the wealthier areas) the Treasury should have power to make a contribution. I do not want to be invidious, although one always talks of places such as Brighton or Bournemouth as wealthier boroughs; I have no desire to make a case against them, but it is a fact that their redevelopment problem is very slight and that there would be no particular hardship on them in carrying out the terms of this Bill. I visualise that the Treasury would exercise discretion in such a way as not necessarily to provide additional assistance to areas of that kind. I have in mind places such as Birmingham, Manchester, Glasgow and smaller areas where there is a very big redevelopment problem which must be dealt with in the next twenty or thirty years and where the burden will be great.

I cannot help making this point—and I do not want to make it as a debating point: the House will remember that the compensation payable under the 1954 Act was justified up to the hilt. I do not know whether it was the noble and learned Viscount himself who justified that compensation against the advice of a great many of us in this House, but I remember the occasion very well, because he dealt with that in his maiden speech in this House, and I had the privilege of following him and congratulating him as I have done on many of his subsequent speeches. The noble and learned Viscount certainly made a strong point of the fact that compensation payable at that time under the 1954 Act was justifiable and equitable so far as local authorities were concerned. So the position is that local authorities are to-day paying compensation which, on the admission of Her Majesty's Government and the then Minister of Housing and Local Government, who is to-day the right honourable gentleman the Prime Minister, was right. The Prime Minister held very strongly the view that the compensation under the 1954 Act was right—and no doubt it is—as an obligation on local authorities. That seems to me an additional reason for Her Majesty's Government to make up the deficiency in special cases.

It is already recognised that redevelopment is a national obligation, not merely a local one, so I am not asking for anything which is not already accepted in principle, I am asking that the Exchequer should pay an additional grant in respect of the additional compensation paid. I hope that the noble and learned Viscount will be sympathetic to this Amendment and will find some way of meeting the poorer local authorities who are affected. Although I do not put this forward as necessarily commending this Amendment, may I conclude by saying that it was one which was sponsored by the Royal Institute of British Architects, so that it does come of fairly respectable parentage, and will, I hope, be adopted. I beg to move.

Amendment moved—

After Clause 1, insert the said new clause.—(Lord Silkin.)

THE LORD CHANCELLOR

In regard to what the noble Lord, Lord Silkin, said about compensation in 1954 and to-day, I would point out that I dealt in my speeches on the Second Reading with the differences between the two situations; therefore I hope that the noble Lord will not think I am discourteous if I do not repeat that argument to-day, because his main point is one of considerable importance which I should like to deal with as well as I can. There was only one point which is relatively minor, as indeed he indicated in his speech on Second Reading: that the grandfather of this Amendment was the Royal Institute of British Architects. I have had the chance of considering what they said. The Institute did not submit to the Minister any comments on the Bill until after the statement of the noble Lord, Lord Silkin, and there has been no opportunity to explain to the Institute the many fallacies in the arguments which they advance. I yield to no one in my admiration and respect for the Institute or its members; but, with the greatest respect to them, I suggest that they are hardly the body qualified to make recommendations on the division of financial responsibility between the Exchequer and local authorities. It is one of the fields of human knowledge in which I should much prefer to hear the inherent views of noble Lords on the Front Bench opposite.

I should just like to pause for one moment to indicate why I think that their basis was fallacious, because it was referred to not only by the noble Lord, Lord Silkin, but, I think, also by the noble Lord, Lord Chorley, in dealing with the general situation. The point which I should like the Committee to consider(especially the noble Lord, Lord Silkin, with his great experience in this field) is the statement made, which forms the basis of their argument, about the effect of the Bill on the preparation of development plans. The Committee know that development plans indicate proposals for future public development and they also allocate or zone areas for private development. In indicating future public development the plans, I would say, depress values rather than enhance them. That is why, for example, the "blight" clauses are necessary.

Zoning areas for private development plans will enhance values only in so far as they create scarcity by zoning less land than will meet the demands of the market. In neither case, therefore, will the Bill induce authorities, as the Institute think, to show less land for either public or private development than is needed on an objective view. What it will do, through the "blight" Clauses, is to make authorities chary of including vague proposals for public development which do not need to be safeguarded and may never happen; this, in my view, is all to the good.

I now come to the actual form of the Amendment for a moment. I would ask the noble Lord to consider whether it is a satisfactory form of grant when it is bound to be arbitrary in its incidence and wellnigh impossible to administer as time goes on. The noble Lord mentioned a point on Second Reading, and again to-day, which certainly inspires and requires all our interest; and that is as to whether the new provisions will work particularly hardly on the poorer local authorities who have responsibility for carrying out development. I should suggest to him that this is not necessarily so. Increased cost due to the Bill is likely to be relatively small when land which is already developed is being acquired; and I think he would agree with me that the major differences between the present basis of compensation and market value arise with undeveloped land on the fringes of expanding towns. I ask the Committee to consider additional expenditure in its true context. It is unlikely, on average, to involve much more than 1 or 2 per cent. of total local authority expenditure; and I reassert that some of this will be assisted by grants.

The first point in that regard is that any additional expenditure arising from the Bill which increases the cost of a grant-aided service will rank for Exchequer grant on the same basis as any other expenditure on the service. For example (I think this is a relevant example), the cost of acquiring land for the comprehensive redevelopment of an area of extensive war damage is an element in the grants payable under the Town and Country Planning Act, 1947—the noble Lord's own Act, if I may put it that way. Any increased cost arising from the Bill in acquiring land for this purpose would be taken into account in assessing that grant. Another example of a service aided by a specific grant is one with which I am extremely familiar, and that is the police service, where the 50 per cent. grant will apply to increased expenditure in land purchase as it applies to the other costs of running the service.

If the Committee will allow me, I should like to say a little more about the general grant as that is a more recent innovation, and how that will apply. In fixing the amount of general grant for any period, the Minister is required to take into consideration the rate of expenditure on the education, health, fire, child care and other services concerned, and increases in costs which can be foreseen. The Committee will remember, again probably with sorrow, how often they heard me explaining that point during the passage of the Local Government Bi11, because I was very rightly questioned about it extremely carefully from all parts of the House. To the extent that the cost of these services is increased by the Bill, the Minister will be obliged to take that into consideration in fixing the grant. In fixing the grant for the period 1959 to 1961 consideration was given to the full amount estimated as the extra burden to he added to the estimate of expenditure submitted by the local authorities to cover the increased cost in the form of increased loan charges due to the Bill in those years I mention that because I think it was my noble friend Lord Hylton who asked me particularly at the time whether it would be possible to include contingent increases in considering the grant for 1959 to 1961. Noble Lords who are interested will find that dealt with in paragraph 10 of the Minister's report on the General Grant Order which he has issued. That is the second stage and the second category.

The third category is rate-deficiency grant, and there again it has to be remembered that the rate-deficiency grant paid to local authorities whose rate resources are below the national average varies with local expenditure, and the poorer authorities will get increased grant from this source towards any additional expenditure resulting from the Bill. I hope that, in dealing with these three categories, I have shown that in the three fields the local authorities will benefit from the grant in a fair way.

In view of that, I find it difficult to see why there is a case for making any greater Exchequer contribution to local authorities on expenditure incurred in paying the market price of acquiring land than on expenditure in paying the market price for any other commodity. or in paying fair wages. In other words, increased expenditure on land acquisition for specific grant-aided services, or for services assisted through the general grant, and additionally, in the case of local authorities receiving rate-deficiency grant, for all services, will affect the level of Exchequer grants in just the same way as increased expenditure on those services from other causes. I submit that this is a perfectly fair arrangement for the Exchequer and for local authorities alike. If it were the case that it covered a high proportion of expenditure, then I could see more in the argument; but when we are dealing, as I said, with 1 or 2 per cent. of the total expenditure, and that is grant-aided. I cannot myself see the logic of differentiating between this and, as I have said, paying the market price for acquiring any other commodity.

I must say to your Lordships. therefore, that the arguments have not convinced me. As always—and I should like the noble Lord to realise this—I have studied the Amendment. I have not had the advantage of studying the noble Lord's speech, but I have listened to it carefully. I shall go through it very carefully with those who are advising me from the Department, and I shall look into it: but I must say that at the moment I am not convinced. If I may give a lighter touch for a moment—and I am sorry my noble friend Lord Saltoun is not in the House—there is a favourite song in Scotland written by Robert Burns: How happy could I be teething a heckle. which, translated into English, means: "Putting new teeth in a comb". I can assure the noble Lord that not only myself but those advising me will see that there are new teeth in the comb—it is a very small toothcomb with which we shall go through his speech—and that we will consider it carefully. However, I cannot accept the Amendment.

4.23 p.m.

LORD LATHAM

I have not seen the communication addressed by the Royal Institute of British Architects, and I do not necessarily adopt their argument. In so far as it is stated by them that the carrying out of development plans will, under the Bill, cost more, I would say that to me it seems to be incapable of confutation. It is the case, as shown by the financial memorandum which was issued with the Bill originally, that the provisions of this Bill will cast upon the local authorities an additional expenditure per annum of some £8 million. In addition to that, according to the financial memorandum, there will be an additional £4½ million cast upon the Government or upon other public undertakings; and to that extent the additional expenditure falling upon local authorities will inescapably curtail their activities in the carrying out of development plans. To what extent the financial obligations have been increased as a result of the Amendments to the Bill made in another place, and the consequent extension of the provisions of the Bill, I cannot say, but it is quite certain that the expenditure will not be less—and it is very likely that it will be more—than the figures given in the financial memorandum.

If I may say so with infinite respect, I think that the reference by the noble and learned Viscount the Lord Chancellor to 1 or 2 per cent. of the total expenditure of local authorities was a little equivocal. The point here really is: how much more is the land going to cost the local authorities, or how much more must the local authorities pay for carrying out the planning and the development projects which they have in mind? Since the noble and learned Viscount the Lord Chancellor has himself raised the question of grant, I must point out that, as regards town planning, whilst a percentage grant was formerly given in respect of certain expenditures for open spaces, that is not now the case, as the grant is now covered by the block grant: and to that extent, of course, the local authorities are so much the worse off. I do not think that it can be questioned that the additional expenditure which will be thrown upon local authorities by the provisions of this Bill is such as will hold up and frustrate proper planning and the carrying out of the developments—and, even more so, the revision of the development plans which, of course, has periodically to be done. In the Barlow Report, in the Scott Report and in the Uthwatt Report, it was stated with almost accumulating energy and definitiveness that the main factor which prevented planning in this country was finance: the cost of their acquiring the land and the compensation which had to be paid and the absence of any provision to enable the community to recover betterment which the community had itself created.

The noble and learned Viscount will remember, I am sure, a White Paper issued by the Coalition Government called, The Control of Land Use, published in June, 1944 (Command 6537), in which the Coalition Government adopted, by and large, the principles of the Uthwatt Report—though, I agree, with certain modifications. At page 4 of that White Paper, after having dealt with the procedural matters of town planning, in connection with which a Bill was at that time before Parliament, it says—and I quote from paragraph 5: But there will still remain to be corrected what is generally agreed to be the defect which most of all prevented or distorted good planning before the war—namely, the state of the law regarding the payment of compensation to landowners affected by planning schemes and the collection of betterment from those who would benefit therefrom.

I think it is incontestable that one of the results of the provisions of this Bill, if it becomes an Act, will be faster planning. Planning authorities will once again be looking over their shoulders. With all the pressure on local government expenditure arising from the accepted need for expanding and developing educational services, which it is estimated will cost within a few years no less than £1,000 million a year, and from the other obligations which local government quite properly has to face, this additional payment for compensation, largely a payment by local authorities for the very values they themselves have created, cannot fail, in my submission, to hamper and frustrate good planning.

4.31 p.m.

VISCOUNT GAGE

As one who has had a long association with local government, I am nearly always in favour of any project for transferring funds from the Exchequer to local councils, but on this occasion I must confess that I think that the noble and learned Viscount was absolutely right in considering the additional cost likely to arise from this Bill as one of the factors which were taken into account in the calculation of the general rate. Unless entirely new money is put by the Exchequer into the whole fabric of local government, I am afraid that the net result of what the noble Lord, Lord Silkin, wants to do would be simply to create an addition to the general grant which would have to be paid for by other local authorities. That is why, on this occasion, I cannot support this transfer of money to local authorities.

On Question, Whether the said Amendment shall be agreed to?

Their Lordships divided Contents.19; Not-Contents, 54.

CONTENTS
Addison, V.	Latham, L.	Silkin, L.
Alexander of Hillsborough, V.	Mathers, L.	Stansgate, V.
Burden, L. [Teller.]	Milner of Leeds, L.	Stonham, L.
Crook, L.	Ogmore, L.	Williams, L.
Granville-West, L.	Shackleton, L.	Winster, L.
Greenhill, L.	Shepherd, L. [Teller.]	Wootton of Abinger, Baroness.
Henderson, L.
NOT-CONTENTS
Ailwyn, L.	Beauchamp, E.	Chesham, L.
Airedale, L.	Blackford, L.	Coleraine, L.
Ashton of Hyde, L.	Brecon, L.	Colville of Culross, V.
Baden-Powell, L.	Broughshane, L.	Colyton, L.
Bathurst, E.	Buckinghamshire, E.	Devonport, V.
Dovercourt, L.	Jeffreys, L.	St. Aldwyn, E. [Teller.]
Dundee, E.	Jessel, L.	Salisbury, M.
Fairfax of Cameron, L.	Killearn, L.	Saltoun, L.
Gage, V.	Kilmuir, V. (L. Chancellor.)	Saye and Sele, L.
Goschen, V.	Long, V.	Sinha, L.
Grenfell, L.	Luke, L.	Somers, L.
Hailsham, V. (L. President.)	Massereene and Ferrard, V.	Soulbury, V.
Harmsworth, L.	Merrivale, L.	Stonehaven, V.
Hastings, L.	Meston, L.	Swansea, L.
Hawke, L.	Milverton, L.	Teviot, L.
Hayter, L.	Onslow, E. [Teller.]	Tweedsmuir, L.
Home, E.	Perth, E.	Waldegrave, E.
Hylton, L.	Ponsonby of Shulbrede, L.	Wemyss, E.

On Question, Amendments agreed to.

Resolved in the negative, and Amendment disagreed to according.

Clauses 2 to 4 agreed to.

4.40 p.m.

LORD HYLTON moved, after Clause 4 to insert the following new clause:

Assumptions in respect of compensation for dwelling-houses on basis of site value

"Where in accordance with the provisions of the Housing Act, 1957, compensation in respect of the dwelling-houses in a clearance area falls to be determined on the basis of site value thereof and the site of any of the said dwelling-houses has on account of the dimensions thereof a value which is less than the value which such site would have on the assumption that it formed part of a larger site which would be capable of redevelopment it shall be assumed in determining the amount of the compensation that such site forms a part proportionate to its area of such larger site"

The noble Lord said: It will be within the recollection of the Committee that on Second Reading attention, not confined to noble Lords on this side but from all sides of the House, was drawn to the position of cases of land compulsorily acquired under the Housing Acts, compensation for which was assessed at site value and at purely nominal amounts. This, of course, applies to houses unfit for human habitation under the Housing Act. Often these sums of compensation have been not more than £1 for the site of the house, because district valuers have maintained that individual sites were of insufficient size to permit the erection of a house which would comply with existing by-laws. Yet the aggregation of such sites, taking a number of small sites together, frequently results in a site worth far more than the aggregate compensation paid to the owners.

This matter was gone into at great length in another place, and on recommittal of the Bill the Minister sought to put what he described as a kind of floor in the amount of compensation for every owner of an unfit house acquired by a local authority, the floor being the gross annual value of the house for rating purposes. That is the figure now proposed in the Bill. I am given to understand that this sum normally would be within the range of £10 to £15. On Second Reading considerable dissent was expressed that such a small sum should be paid as compensation. Not only has this matter been ventilated to a great degree in another place, but it has also given rise to correspondence in the Press, and I would quote from one letter which appeared as recently as April 13. The writer, speaking of the passage of the Bill through your Lordships' House, said that he hoped your Lordships will stand back from the trees of legal intricacies and take a broad view of the woods of policy in which this legislation is to be rooted. That appears to refer to the fact that some or your Lordships are described as backwoodsmen; we are all expected to appear from the backwoods and it is hoped that we shall take a broad view of such woods.

Be that as it may, I feel that there is a case to be answered. On to-day's prices I do not think anybody can really say that one year's gross value of a house is suitable compensation for a site which, though small in itself, may when aggregated with one, two or three other small sites provide for the acquiring authority a site of considerable value, worth, in fact, much more than £10 or £15 multiplied by four, six, ten or any other numeral which your Lordships may care to use.

I feel that what your Lordships would wish to do is to find a fair sum in these cases. It is true to say that the authority acquiring a small site for housing redevelopment would possibly have to spend a large amount of money on putting in new services, building new houses and so on; but the site itself, when acquired in toto, is a valuable asset and must be more valuable than the total gross rateable value of the houses. I have explained, so far as I am able, the basis of this Amendment. I am sure we are all anxious to avoid the injustices which occur in these acquisitions of small properties, and it is with that intention in view that I have put down the Amendment. I beg to move.

Amendment moved—

After clause 4 insert the said new clause.—(Lord Hylton.)

4.50 p.m.

LORD MESTON

I think this is a most important Amendment, and I hope that something definite can be done about this matter. I have always taken the view that the site basis of value of compensation for houses is not only unfair but positively ridiculous. You take an old house and knock it down and you say that the bricks and mortar are worth nothing. You then go on to say that the site value is worth £1 or £2. You then have second thoughts on the subject and say, "Well, we must give the poor fellow who is the owner of this site a little more." With those amiable intentions in mind you then concoct a number of artificial formulæ. Quite frankly, this is one of the artificial formulæ, and it is one of which I am in favour.

The fact of the matter is that in a Bill dealing with town and country planning it is impossible satisfactorily to alter the basis of compensation as laid down in a Housing Act. Another Housing Act is needed to achieve that purpose. Therefore all we can do in the present Bill is to modify and improve this artificial method of compensation which is based upon site value. Suppose, for example, that the frontage of an old, destroyed house is only 12 feet. At the present moment the district valuer might give £1 or £2 for that frontage. On the other hand, if that frontage were taken in conjunction with the adjoining houses, so as, notionally speaking, to create an area capable of reasonable development, then one might say that each foot frontage was worth £8. Multiply 12 by £8 and the answer is £96, which is obviously a great improvement upon the present situation. But I admit that it is quite artificial. because the house which was knocked down might have been old and quite unsuitable for further habitation of any description. On the other hand, it might have been, technically speaking, unfit for human habitation within Section 4 of the Housing Act, 1957, and yet capable of standing up well for another ten or fifteen years. So, whatever is done on this basis must be artificial. It cannot be helped. It is not our fault, but the fault of the Housing Act. I think this is a most important Amendment, and I hope that, after years and years of talk on this subject, something can be done along these lines or along other lines.

LORD HAWKE

This is an extremely technical Bill, but this is one of the points in which I believe a layman can intervene without singeing his hair too much. It seems to me that these sites have three different types of value. There is the site value to the developing local authority; there is the value of the existing structure to a landlord if it is a let structure, and there is the value of the home to the individual. They will all he completely different. The site value to the local authority may be determined by the cost of clearing, and so on. The value to a landlord will in many cases, theoretically at any rate, be nil, because his outgoings should exceed his ingoings if he keeps the property in repair. But the home value to the individual may be very great. The individual may have no intention whatever of clearing out, but if the house which the owns and for which he pays no rent, and in which he might well expect to live for five, ten or fifteen years is taken from him, what is he likely to get in exchange?—a small money compensation. If we really did him justice, the only thing would be to give him in exchange something of equal value; but since a similar house is not available, that is impossible. The alternative is to give him a money value, which I am afraid, on the best construction, is bound to be considerably below the home value to him. But, at any rate, in so far as it is an improvement on the existing position, I hope that the noble and learned Viscount will be able either to accept this Amendment or give some promise to my noble friend.

THE LORD CHANCELLOR

With your Lordships' forbearance, I should like to put the various aspects of this problem, so that those of your Lordships who are interested can perhaps do me the honour of studying them. I note that the noble Lord. Lord Silkin, has an Amendment later on in slightly different terms, and with the general approval of the Committee and the noble Lord in the Chair we could perhaps resume our discussion of that at a later stage in the Bill. I think this is a difficult problem, and there are many matters which we need to bear in mind.

I should like first of all to deal with the difficulties which are peculiar to the Amendment of my noble friend Lord Hylton. The basis of his suggestion is that the site of a dwelling-house should be valued as a proportional part of a larger area. The first difficulty with regard to that solution is that such a provision is open to the objection that it might be of no benefit at all to just that class of owner whom it is desired to assist—the owner of a very small site in a clearance area which is unattractive to developers. Moreover, my noble friend's provision is open to the further objection that it is, in my view, too wide in its effect, since it provides that the compensation for any site, including, for example, sites which may already have a high commercial value, must be increased over and above the market value if enhanced compensation would result from aggregation with other sites. Not only would owners get more, under this provision, than market value, but this kind of aggregation would rig the market against the acquiring authority by introducing an artificial duplication of values into the compensation payable for individual sites. These are, as I say. difficulties which are peculiar to this solution. I know your Lordships will not be content if I stop it there, and I should not dream of doing it. I want to consider the general problem, and I hope your Lordships will bear with me if I occupy a certain amount of time in doing it.

I think there are certain negative matters that, in fairness to the local authorities, one ought to clear out of the way, because at some moments in the Second Reading debate the impression was created that for the expenditure of perhaps £1,000 on the acquisition of 100 slum dwellings, a local authority may become the owner of land worth £10,000 and thereby make a profit of £9,000. I hope that I am not wasting time in demolishing that impression, but I think it is fair to local authorities that one should state the matter. Because, as noble Lords are well aware, apart from the acquisition of land the local authorities have not only to rehouse the occupants of all the dwellings but, also to demolish the houses, clear and level the area, close rights of way and divert services. I am told, and I think noble Lords would agree, that it is very rare for a local authority to show any return from this operation.

The next point I would put to your Lordships is that it is misleading to imply that the purchase of slum sites at nominal sums is common. The noble Lord, Lord Meston, rather implied that by his speech, and therefore again I should like to put the considerations to him; and, of course, at this or any stage I shall be pleased to answer his points. The criticisms which have been made of the slum clearance compensation are mainly criticisms of the amounts paid to owner occupiers: they are the criticisms that we have heard today. When slum clearance was restarted a few years ago it was found that great hardship was likely to be suffered by those owners who during the years of housing scarcity and high prices had bought worn-out houses to provide a home for their families. I think we all agree with that view. That matter was dealt with by the Slum Clearance Compensation Act, 1956, which provided that owner-occupiers of slum houses who had bought between the outbreak of war, September 1, 1939, and December 13, 1955, should receive the full market value of the house.

As soon as that Act became law the many complaints which had been reaching the Ministry of Housing and Local Government dwindled to nothing. Owner-occupiers who receive only site value compensation to-day must therefore have bought before the war or after 1955. In any event, in only a small proportion of cases has the compensation payable on the present basis been nominal. Of 2,000 acquisitions of single sites in the first half of 1958, 10 per cent. received less than £5; that is 200 were in the category which we have been discussing to-day. Those cases in which only a nominal figure was paid included all those where the small payment was due to the existence of some form of rent charge or to the fact that the lease had only a very short time unexpired, so that in any event the house would soon have been lost to the owner. One cannot blame the local authority for either of those conditions. I am trying to make this completely objective. If there is a rent charge, or if you have only the fag end of a lease and there is a very small period to go, then you are in small sums anyway. We tried to consider that, and it is estimated that, apart from the provision for paying as the minimum the gross value, which we have put in the Bill, the Bill will more than halve the number of those cases. That is, it will reduce my figure of 200 to 100.

There is another provision which noble Lords will remember when I recall it to their minds; that if the house has been properly looked after, and an owner-occupier has every incentive to do this, there is an addition to the site value of a "well-maintained" payment equal to nine times the rateable value. It can thus be stated categorically that the problem of nominal compensation for slum houses arises only in a small proportion of cases—where houses were bought before the war or since the Act of 1955, and have not been well maintained. Those who bought before the war will have paid a low price for the house and will have had at least twenty years' life from the house. If a man bought before the war at a low price, and has had twenty years' life, then he is getting—I know noble Lords could argue that it should be twenty-five years—near having had his money's worth. With the amount of publicity given to slum clearance programmes, no prudent person buying since the Act of 1955 should have paid a substantial price for a slum house. The scope for genuine hardship is thus very limited, and once the market value provisions of the Bill have taken effect it should be even further reduced. Finally, the provision for a minimum payment of the gross value of the property will ensure that in future no owner-occupier, however small his interest, if he has even the "faggest of fag-ends" of his lease, will receive only a nominal sum.

For those reasons I do ask your Lordships to consider this matter, and I would suggest that there is no justification for introducing elaborate and quite artificial systems of valuation unrelated to market value; and, of course, to do so might well create further difficulties, since the effect would be to stimulate the market for slum houses and so increase the possibility of hardship to unsuspecting persons. I think it is very important that we should see this problem as a whole. Your Lordships will then analyse your own views of the value of the various points I am making.

I want just to say a word, from the historical point of view, about slum clearance. This, in a sense, is the answer to the very human and moving approach, if he will allow me to say so, of my noble friend Lord Hawke. It is, I repeat, essentially a public health operation. That is one of the fields where, in the general interest, one must consider the importance to the community; and it is a long-standing principle that the owners of house property, whether for their own occupation or as landlords. are responsible for keeping the houses in good repair and for pulling them down when they are no longer fit to live in.

An outworn house is no different, in essence, from any other outworn article which may become a source of danger to its owners. Your Lordships will remember the many powerful speeches which the noble Lord, Lord Lucas of Chilworth, made in regard to outworn motor cars on the roadway. When a house is no longer fit for human habitation, and has been found to be in that state, it must be demolished, whether it is bought by the local authority or left in the hands of the owner; and it is because of this obligation that an unfit house must be demolished that a local authority, when buying an unfit house for the purpose of demolition, has never been required to pay for the bricks and mortar but only for the value of the site.

The noble Lord, Lord Meston, suggested on Second Reading that a house is bought at site value if it infringes some very wide definition of unfitness. He implied—or at least gave me the impression that he thought—that that decision is a mere technicality. That is not so. A house is not acquired at site value unless the Minister has confirmed that it is unfit. Section 4 of the Housing Act, 1957, lists the matters to which regard is to be had, but a house is deemed to be unfit only if it is so far defective in one or more of those matters that it is not reasonably suitable for occupation in that condition. The Minister sees to it that every house is thoroughly inspected before a decision is taken, and great care is taken to ensure that houses are not classed as unfit which are, in fact, really obsolescent. I am sure that that is a policy which Ministers follow quite irrespective of who occupies the Ministerial chair.

As I have already indicated, it does happen that on the present basis of compensation, but only in a small proportion of cases, the compulsory purchase value of a bare site is nominal. The value of these sites has been restricted to the sum of their existing housing uses and their development value as at August 1, 1948. At that time the development value of an outworn house, probably subject to a statutory tenancy, was at the best low, and often non-existent. In addition. many of these small sites are in unattractive areas and often they are burdened with rent charges. For the present artificial method of valuation, we have substituted in this Bill the price which the cleared site would fetch in the open market with planning permission for the future use to be expected if the local authority had not made a compulsory purchase order. Where the future use of the land is industrial or commercial there may well be a considerable increase in the compensation payable. As I indicated earlier, where the future use is housing, that will depend on the attractiveness of the area for housing purposes.

However much the principle of site value may command general acceptance, it is inevitable that when the time comes to clear outworn houses there will be complaints of hardship. That is why I went through with your Lordships the whole collection of legislation, in order to show how that had been done. I do not think that when your Lordships have considered it—if your Lordships will do me the honour of considering what I have said—you will find that these cases are more than a few in number. As the result of the Bill and of the special provisions for owner-occupiers who bought during and immediately after the war, the number of cases where only nominal payments are to be made in future for slum houses is likely to be very small indeed. These cases will arise mainly where the property is subject to rent charges or is so sited that there is no demand at all for housing. The Government recognises that this is a problem because, although owners of such property will be receiving market value, it is very difficult to justify paying to the owner-occupier of a house, who is dispossessed of his home, no more than a nominal sum. It is for this small number of people who are in that position, where there is either, on the one hand, a rent charge, or, on the other hand, no real open housing development, that we have said that rather than leave them to the nominal value, they should be given the gross rateable value for the year. That is how we have arrived at the position.

Again, of course, I should willingly consider what anyone has to say; and if anyone has any doubt about the construction of my argument or thinks that my premises are wrong, I should be delighted to reconsider the matter. This is the best that I can do, having carefully examined the information given to me. That is the reason why I could not accept the Amendment of my noble friend Lord Hylton, because it has the difficulties which I mentioned at the outset of my speech. Therefore I ask him not to press it. What I would suggest to your Lordships—because this is an important point and I am anxious to hear everything your Lordships have to say—is that if you agree with me that Lord Hylton's solution is not acceptable, perhaps your Lordships would look at what I say in Hansard and return to the charge on Lord Silkin's Amendment on the Second Schedule.

LORD HYLTON

I am most grateful to the noble and learned Viscount for taking immense pains to answer some of the queries that were put to him. If he will allow me to say so, he has produced so many trees that it is almost impossible to see the wood. What I think I should like to do—perhaps other noble Lords feel the same—is to look at the noble and learned Viscount's speech in Hansard and consider the arguments that he has put before your Lordships' Committee. It has not escaped my attention that the noble Lord, Lord Silkin, has an Amendment on the Second Schedule, the wording of the second part of which is, I think, somewhat similar to the Amendment standing in my name.

I should just like to make one further comment. The noble and learned Viscount referred to a "well-maintained" allowance. As I understand it, that sum is an additional payment made to the owner of a slum-condemned house when the property is demolished. Perhaps the noble and learned Viscount will look into this matter once again, because I am informed that in another place the Minister's Amendment was so framed as to take the place of the "well-maintained" allowances. If that is so, then there is some slight discrepancy between that and what we have heard this afternoon. This, like so many other questions on this Bill, is full of abstruse technical difficulties. If the Committee agrees, I should like to have an opportunity of reading in Hansard the full reply which has been given before carrying this point any further.

In conclusion I would just draw your Lordships' attention to this: in the course of his reply the noble and learned Viscount the Lord Chancellor said that he thought that only a few cases of hardship, injustice or whatever we may care to call it, would remain after the others had been assisted by various forms of additional compensation, and so on. Such miracles of draftsmanship have been already performed in producing this Bill that I do not believe it is beyond the powers of existing draftsmen to find a form of words so that the very few cases referred to will be entirely eliminated. That I am sure, is the wish on all sides of the Committee, because there is suspicion and very genuine criticism from the general public that all is not entirely well in this matter; and until that doubt is put at rest I feel that we ought to continue our efforts in this House to put the matter right.

LORD SILKIN

It might be convenient if I were to say a word on this Amendment rather than on my own Amendment later. I have promised the Committee that I will not speak twice, but perhaps it would be convenient if we had one bite at the cherry rather than two and if the noble and learned Viscount will himself take into consideration, as we will, what has been said and will be said on this matter. First, I would say at once that I am sure no one will complain of the length and detail at which the noble and learned Viscount has dealt with this very important subject. It is an important one and it is as well that we should be reminded of what has gone before.

I was for many years chairman of a housing committee and was instrumental, in my time, in declaring a great many areas as slums; therefore I have had some experience of this matter. In the days before the war when we were dealing with slum clearance we were dealing with a slum landlord and, frankly, one had very little sympathy with him. To be fair to him, he never asked for sympathy. He had made a good thing out of his property while the going was good, and when the time came for demolition he did not expect to get more than the site value. The owner-occupier of a slum house was then a most rare phenomenon. I would say he is almost entirely a postwar phenomenon, brought about by the shortage of housing and by the fact that people have a little more money in their pockets and are able to afford, or to acquire the small amount of money that is required for the acquisition of, a house of this kind. To that extent I would qualify what the noble and learned Viscount has said on this subject—but only to that extent, because I believe he has put forward a very fair, accurate and correct statement of the position. In this Amendment we are dealing with someone quite different from the normal kind of slum landlord.

As I said in my speech on the Second Reading of the Bill, this is the case of the small man who, generally speaking, finding no other means of acquiring a roof over his head, has been compelled to buy a slum house, because it was cheap. I agree with the noble and learned Viscount that to a considerable extent that man's case has been met by the legislation passed, I believe, in 1956, whereby he gets the market value, but I am not sure how this has worked out in practice; for what is the market value of a house which has been accepted as unfit for habitation and is to be demolished? I suppose the market value is what a willing buyer would pay to a willing seller. But where is this willing buyer who would pay any kind of price for a house condemned as unfit for habitation and about to be demolished? I do not know, therefore, the extent to which the owner of a slum house has benefited from that provision. But, be that as it may, there still remains a number of cases dealt with in this Bill which are recognised as needing to be dealt with, as they are referred to in the Second Schedule.

I feel, therefore, that we ought to concentrate our minds on this particular person who is not going to get the market value—if there be such a value, and I would submit there is no market—but who is to be paid the site value. I agree with the noble and learned Viscount that there are very few such cases, but I would submit that if they are few it makes them all the easier to deal with. The normal slum house of that kind, whose site value is nil, would be on a site so small that no other building could be put on it—perhaps a house with a frontage of 10 or 12 feet with a return of perhaps 20 feet, a site of some 200 square feet altogether, which is of no use whatever for building. Nevertheless, where such a site is joined with a number of other similar sites, there may be something of value, and the purpose of the noble Lord's Amendment and mine, although they are differently worded, is to provide that the payment should be made on the assumption that this small site was part of a larger site and should get a proportion of the value.

Possibly the noble Lord's Amendment and my own are inadequately phrased, for we have not the services of Parliamentary draftsmen—not that their services are all that good when nearly 200 Amendments to the Bill are needed after coming from another place—so we have to make do with what we can draft ourselves, inadequate as that may be. The proposal to pay a proportion of the total site value seems to me to be fair and reasonable. I submit, in the alternative, that the figure should be three times the annual value. What would be the annual value of a site such as I have described? It would not be more than £10 and I doubt whether it would be that. If the figure were £10 then three times the annual value would be £30. I feel that £10 as compensation is derisory. If that is supposed to be an act of generosity on the part of Her Majesty's Government then I am really at a loss to find a way of describing it.

What I would suggest in my Amendment is that the figure should be three times the annual value, although that is quite arbitrary and it might be four or five times the value. I considered what figure I should put down, but any figure, being arbitrary, would be subject to criticism. I propose three times the annual value of the site or a figure calculated in that way in which the noble Lord or myself would have it calculated—whichever is the greater. It cannot amount to very much, in any case, for if my calculation is right a site of 200 square feet is about one two-hundred-and-fortieth of an acre—a very tiny site; and if the land is worth even £2,000 or £3,000 per acre it will not amount to very much. In that case the other side of my Amendment—that is, three times the annual value of the site—would be the greater. But it could conceivably be a part of a very valuable site which might be used for industrial purposes; and, I suppose, the worse the area, the more likely it is to be used hereafter for industrial purposes, and in that case the site can become very valuable. Even a small proportion of a valuable site might itself be of some considerable value. I am not moving the Amendment, because we have not reached it, but I am in part supporting the Amendment of the noble Lord, Lord Hylton.

I submit that something more should be done for these unfortunate individuals, the owners of slum houses, than is provided in the Bill. Because there are so few of them it will not break the local authority. It cannot amount to very much, under either form of Amendment. I would suggest to the noble and learned Viscount that he might consider what has been said, just as we will consider what he has said, and perhaps before the next stage those of us who are interested may have an opportunity of talking the matter over.

LORD HAWKE

May I ask a question of the noble and learned Viscount arising out of his explanation? One feels when one comes to slum clearance—and it is obviously going to increase in speed—that when an area is considered to be a slum area the temptation will be to treat every house in the whole area alike, not-withstanding the fact that some houses may be perfectly fit, when they are obviously all required for redevelopment. The local authority are, presumably, the judge of whether a house is a slum or not a slum; and the noble and learned Viscount has told us that they will use great care in giving judgment on the matter. But are they judge and advocate in their own court? Because the amount they pay will depend on their judgment of whether the property is a slum or not a slum. Is there a right of appeal? this is a matter of considerable principle. That is what I wanted to ask, because It is the old story of the individual against the Executive, and it is a sphere in which tile individual can, and will, feel himself aggrieved. Therefore, everything that the Governrnent can do to make it clear that the individual is being properly protected in this matter will, I think, redound to their own advantage and, of course, to the justice of the citizen.

LORD LATHAM

We are in danger, I think, of getting into the realm of housing and slum clearance, and it is as well that we should clearly understand what is the position of the local authority in regard to condemning houses as unfit for human habitation and deciding whether a house is to form part of a clearance area or not. The local authority are not the judge in their own court. The procedure is that the medical officer, who in this respect enjoys a quite definite and valuable independence, inspects the houses and, through his staff, prepares what is known popularly as "a reference book". He makes the recommendation or the declaration to the local authority that the house or the housing is unfit for human habitation. But before anything can be done by way of demolition or otherwise, as the noble and learned Viscount said earlier, the Minister must approve; and so the interests of the public as well as the interests of the individual are considered in regard to slum clearance.

LORD HAWKE

I thank the noble Lord for his explanation exposing my ignorance in the matter. But has the individual the right of appeal against the choice of his particular house as being unfit?

LORD LATHAM

Indeed he has. I should have thought that the procedure was as protective of the interests of all concerned as might well be the case. As the noble and learned Viscount said, slum clearance is a social health problem. It is because the slums of this country were very substantially reduced that that fell disease known as tuberculosis has almost disappeared. The breeding grounds for tuberculosis were slums, and they have largely gone. There still remain more than we should like to admit, perhaps, but a very large proportion of them has gone.

May I now, however, return to the Amendment. The noble Lord, Lord Hylton, seemed concerned that a site should be valued by reference to other sites in an area which he did not define. The assumption seems to be that it is frequently the case that we have a small site surrounded by other buildings—factory buildings, shop buildings, warehouse buildings. That is sometimes the case, but in the majority of cases all the sites within the area have houses on them which are unfit for human habitation, and the mere aggregation of a number of those houses would not increase the value of any single one of them, because they are all unfit for human habitation and they are all only of a site value to the local authority. The next point and the final point I should like to make is this: that it would be, I think, very unfortunate if out of (as I believe) unreasonable and perhaps slightly excessive concern for a very small number of people this Bill were amended so that the cost of acquisition of these sites in a slum clearance area were, as it could well be, substantially increased.

LORD HAWKE

Would the noble Lord explain? If there is a very small number of people to be given higher value, how can the cost of acquisition be substantially increased?

LORD LATHAM

I was coming to that. I doubt whether one could in social justice distinguish any more than has been done between the owners of these small sites having houses unfit for habitation. What I wanted to stress was this: at present the cost to local authorities of slum clearance is very high indeed. It is not only, as the noble and learned Viscount said, that the local authority have to re-house; the experience is that they have to provide, by and large, three times as many dwellings to house the population which is displaced as the number of houses in which the occupiers lived before they were displaced; and that itself amounts to a very considerable financial liability, apart from the fact that the houses to which they go, built by local authorities, are all under subsidy and very few of them are let at anything approaching an economic rent. I do not want to disagree with my noble friend Lord Silkin; nor do I wish to imply that I have had a larger experience of housing matters than he; but he and I were associated closely together at County Hall and I thought it might be of some value to indicate the procedure followed as regards clearance areas.

THE LORD CHANCELLOR

I think the noble Lord, Lord Latham, has answered the point raised by my noble friend, Lord Hawke.

LORD HAWKE

Yes.

LORD HYLTON

I am grateful to the noble Lord, Lord Silkin, for his remarks; and we shall be coming to his Amendment on the Second Schedule—not, I think, to-day. I am also grateful to the noble Lords who have supported this Amendment. If I look at Hansard and try to follow the pattern put before us, I shall be in a slightly clearer frame of mind when we come to the Second Schedule; and, with your Lordships' permission, I should like to withdraw the Amendment standing in my name.

Amendment, by leave, withdrawn.

Clauses 5 and 6 agreed to.

Clause 7 [Extension of ss. 5 and 6 to special cases]:

5.42 p.m.

EARL BATHURST

This Amendment is a technical Amendment consequential to Amendments to Clause 5 moved in another place. This Amendment deals with special cases in Scotland, and I do not imagine that your Lordships will wish me to say further. I beg to move.

Amendment moved—

Page 10, line 22, at end insert— ("(5) An application for a certificate made by virtue of subsection (1) or subsection (3) of this section shall specify the matters referred to in paragraph (a) of subsection (3) of the said section five, and shall be accompanied by a statement specifying the date on which a copy of the application has been or will be served on each of the parties directly concerned; and, in relation to such an application, subsection (4) of the said section five shall have effect with the substitution, for the reference to the date specified in the statement accompanying the application in accordance with paragraph (b) of the said subsection (3), of a reference to the date specified in the statement accompanying the application in accordance with this subsection, or, where more than one date is so specified, the later of those dates.")

—(Earl Bathurst.)

Clause 7, as amended, agreed to.

Clause 8 agreed to.

Clause 9 [Modification of rules for assessment of compensation]:

VISCOUNT GAGE moved, after subsection (6) to insert: ( ) Where there is attached to the relevant land an unexpended balance of established development value the amount thereof shall be taken into account in determining market value in accordance with Rule 2 of section two of the Act of 1919.

The noble Viscount said: This Amendment concerns rather an intricate question of valuation with which, in some respects, I do not feel entirely qualified to deal. It arises from circumstances which have already been mentioned by Lord Silkin, I think; that in certain cases the value of what is known as the Part VI claim will be greater than the assessed market value. Your Lordships will remember that the Part VI claim was the assessment of value to which the owner was entitled in the event of refusal of permission to develop, and, of course, in the large majority of cases, the market value will be higher than what I may call the formal value—the existing use value plus claim.

I am concerned to see that nobody will be worse off as a result of this Bill, and particularly that two people in identical circumstances shall not be treated unequally. Therefore, in formally moving this Amendment, I should like to put this question to my noble and learned friend. Suppose two men owned identical plots of land and had identical Part VI claims attaching to them, the only difference between them being that one had "cashed in" on his Part VI claim and the other had not; and suppose those two plats were acquired compulsorily. Would both those owners get, in total, exactly the same amount of money? I ask this question because the matter seems a little intricate. If there is to be equality of treatment, it seems to me that, unless the Government are prepared to make the owner who has already got his Part VI claim disgorge part of it, then they must, to put the two on a parity, pay the other man the Part VI claim plus market value. If I can be satisfied on that point, although I have heard it stated by valuers that the absence of any specific reference to it in the Bill is likely to mislead certain valuers, I do not think I should wish to press the Amendment.

Amendment moved—

Page 15, line 15, at end insert the said subsection.—(Viscount Gage.)

LORD MESTON

I should like, in a few words, to support this Amendment, which is a very amiable one. I understand that Government spokesmen have already said that the unexpended balance of development value is, in fact, taken into account when the land is sold in the open market, and will similarly be taken into account when the land is valued for compulsory purchase purposes. Nevertheless, because there is some doubt whether all district valuers will in fact take these balances into account it is considered that an Amendment in these terms should be inserted in the Bill.

THE LORD CHANCELLOR

Before I deal with the argument of the noble Lord, Lord Meston, may I deal specifically with the question put to me by my noble friend Lord Gage? This Amendment provides that, in determining market value in accordance with Rule 2 of Section 2 of the 1919 Act—that is, arriving at the price which a willing seller could expect to receive in the open market—the amount of any unexpended balance of development value attached to the relevant land shall be taken into account. This Amendment would be a direction to the valuers to take into account something which they would normally do automatically, without the direction. In my view, therefore, the Amendment is unnecessary. I will come back to that point when I deal with the argument of the noble Lord, Lord Meston, but may I give an example which I hope will satisfy my noble friend Lord Gage?

Imagine two adjoining plots of land in a green belt, with no prospects of development, both of which had an unexpended balance, but in one case the owner has had planning permission refused and the unexpended balance has been paid to him. These two plots are now acquired compulsorily. The owner of the plot which is now without an unexpended balance, because it has been paid to him, will receive as market value the existing use value. In the open market a purchaser of the other plot would know that, in addition to the existing use value, he was buying the right to cash the unexpended balance merely by applying for planning permission and getting a refusal. He would have to pay for that right. The market value thus takes account of the unexpended balance, and so, therefore, would the compulsory purchase compensation under the Bill. The result of that is, as I hope I have demonstrated, that both would be in the same position.

May I say one word to the noble Lord, Lord Meston? That being the effect of the position as it is to-day, in the circumstances which my noble friend, Lord Gage, predicated, I do not think it is a good thing to put in the Bill Amendments asking people to take account of something of which they would, in fact, take account without the Amendments, because it immediately raises doubts as to other matters which they would take into account automatically—and I need not quote the Latin tag which the noble Lord, Lord Meston, knows much better than I do. For that reason. I would ask him not to press the matter, provided that my noble friend Lord Gage is satisfied, as I think he is. After all, what I have said to-day can be quoted, and I hope will have some effect in soothing doubts that exist.

VISCOUNT GAGE

I am obliged to my noble and learned friend. I agree that the assurance he has given would appear to be quite sufficient for the purpose I had in mind. Therefore, I beg leave to withdraw this Amendment.

Amendment, by leave, withdrawn.

Clause 9 agreed to.

Clauses 10 and 11 agreed to.

Clause 12 [Other special cases]:

EARL BATHURST

With your Lordships' permission, I will take this Amendment with Nos.7 and 8, which deal with Scotland. This Amendment preserves the special basis of compensation which is available for statutory undertakers under the Eleventh Schedule of the 1947 Act; and, as I have said, the two following Amendments apply it to Scotland. I beg to move.

Amendment moved—

Page 16, line 40, at end insert— ("(3) In relation to compulsory acquisitions of interests in land which has been acquired by statutory undertakers for the purposes of their undertaking, the provisions of this Part of this Act shall have effect subject to the provisions of subsection (5) of section forty-five of the Act of 1947 (which makes special provision as to the compensation payable in respect of certain acquisitions of land so acquired).")—(Earl Bathurst.)

EARL BATHURST

I beg to move the next two Amendments.

Amendments moved—

Page 16, line 42, after "sections" insert "forty-five".

Page 16, line 46, after "sections" insert "forty-two".—(Earl Bathurst.)

Clause 12, as amended, agreed to.

Clause 13:

Power to pay allowances to persons displaced

13.—(1) In connection with any compulsory acquisition to which section one of this Act applies, and in connection with any sale of an interest in land by agreement in circumstances corresponding to such an acquisition, the acquiring authority—

1. (a)may pay to any person displaced from a house or other building on that land such reasonable allowance as they think fit towards his expenses in removing therefrom; and
2. (b)may pay to any person carrying on any trade or business in any such house or other building such reasonable allowance as they think fit towards the loss which, in their opinion, he will sustain by reason of the disturbance of his trade or business consequent upon his having to quit the house or building.

(2)In estimating loss, for the purposes of paragraph (b) of the preceding subsection, the authority shall have regard to the period for which the premises occupied by the person in question might reasonably have been expected to be available for the purpose of his trade or business, and to the availability of other premises suitable for that purpose.

5.52 p.m.

LORD COLERAINE moved, in subsection (1) (a), to leave out "may" and insert "shall". The noble Lord said: This and the next three Amendments cover the same point and, if I may, I will deal with them together. Amendment No. 8E covers a slightly different point, which I will develop separately, if I may. I am not at all familiar—perhaps not so familiar as I ought to be—with the highly technical and complex body of legislation of which this Bill is the latest excrescence. It may be that I come to it with a fresh mind—or perhaps I should say, an untutored mind—and I find the word "may" difficult to understand in this connection.

It seems to me that if a person who is displaced by compulsory purchase from his house or building is entitled to compensation for his displacement, then that ought to be given as a matter of right, and not left to the discretion of the acquiring authority. If this discretion is left to the authority, there must be a certain amount of variation from one part of the country to another in treatment and in the degree of justice which is accorded to the dispossessed person. It seems to me that it would be much fairer, and more in line with what I understand to be the intention of the noble and learned Viscount, that there should be a direction to the acquiring authority to pay a reasonable allowance in these cases. If the noble and learned Viscount should accept this Amendment, then presumably he would accept the following Amendments which would define what those expenses are, and again not leave it to the discretion of the authority. I beg to move.

Amendment moved— Page 17, line 3, leave out ("may") and insert ("shall").—(Lord Coleraine.)

THE LORD CHANCELLOR

There is rather more difficulty in this Amendment than my noble friend Lord Coleraine has appreciated, and I should like to develop it. As he said, the intention of his Amendments is to convert the discretion given by Clause 13 to an acquiring authority to pay reasonable allowances towards removal expenses, or towards loss due to disturbance of trade, into an obligation to pay the actual expenses incurred in the removal and the actual loss sustained. The position is that when the occupier of a house or of business premises has an interest of a year or more, he is entitled to the service of notice to treat, in which case compensation is payable for the value of his interest and will include compensation for disturbance. Compensation for disturbance will include removal expenses and any losses directly attributable to the disturbance by the compulsory purchase. This is a provision which has existed for many years; there is a specific reference to compensation for disturbance in Rule 6 of Section 2 of the Acquisition of Land (Assessment of Compensation) Act, 1919, and the items which are properly included have been established by the Courts over those years.

It sometimes happens, however, that the occupants of houses or of business premises have no sufficient legal interest to entitle them to a notice to treat. In some parts of the country small shops may often be held on no more than a weekly tenancy. In such cases the occupants have no security of tenure, apart from any protection under the Rent Acts or under the Landlord and Tenant Acts. Normally, in such cases, local authorities do not acquire the interest, but merely serve notice to quit, as landlords, at the end of the period of the tenancy. This is the class of case with which the clause is intended to deal. I hope that I take my noble friend with me when I say that to place a statutory obligation upon local authorities to pay compensation for removal expenses and for loss of business would be making an arbitrary distinction between private landlords, who can serve notice to quit without any such obligation, and local authorities acting as landlords. I do not see how we can justify such a distinction. In any case, the obligation could probably be avoided by the local authority's arranging for the landlord to give notice to quit before they buy out the landlord's interest—which, however, would not be a very technical way of dealing with the matter.

There is a further difficulty about making provisions in this clause mandatory: that the amount of loss actually sustained, by disturbance of business cannot be determined with any precision. I do not wish to develop that point. The other point which I think my noble friend ought to consider is that discretionary powers similar to those in Clause 13 of the Bill already exist in the Housing and Town and County Planning Acts, and have operated now for many years. All this clause does is to extend similar discretionary provisions so that they are available when property is bought under powers other than those Acts. So that this is not a case where we are changing the law against the tenant of small properties: we are merely projecting into this Bill the existing law. For these two reasons—the differentiation between local authority and private landlord, and the fact that we are only putting into operation the existing statutory code—I would ask my noble friend not to press his Amendment.

LORD COLERAINE

In the light of the explanation given by my noble and learned friend, for which I thank him, I do not feel that I can press the Amendment, and I beg leave to withdraw it.

Amendment, by leave, withdrawn.

LORD COLERAINE

Here again I think it will be convenient if I discuss the Amendment at page 17, line 17, and the following Amendment together, and though I shall speak to the first, the argument will in fact be related to the second. The point here is that a number of small traders carry on their business in premises which they have under agreements covering a quarter, a month or even a week; in many cases they have carried on these businesses with these short-term agreements for many years, and, indeed, in some cases for generations. It would seem that, in order to be fair, in a case where a man has an agreement which is technically limited in terms of time but which in practice has proved to be virtually unlimited and which he and everybody else regards as being indefinite, the authority should have regard to those facts when they are estimating the loss which any displaced tenant may be incurring. I beg to move.

Amendment moved— Page 17, line 17, leave out ("and").(Lord Coleraine.)

THE LORD CHANCELLOR

I confess that it had not occurred to me that these Amendments really fell into a different position from the rest of the block, because I understood from my noble friend that he was taking the case where there was an interest in the premises of less than one year.

LORD COLERAINE

Where there is a technical interest of less than one year.

THE LORD CHANCELLOR

As I said before, the practice is to give notice to treat where there is an interest of one year or more. This procedure has been going on for forty years, since 1919, and it would be difficult to alter it. Frankly, I cannot see how it could be done. Therefore all I can say to my noble friend is that the question of altering interest has never entered my mind till now, and I do not think it has entered anyone else's. In that position, all I can do is to say that I will read his speech and consider it, but I cannot hold out any hope of altering a procedure which has stood for forty years and really with little variation since 1845.

LORD SILKIN

Perhaps I might give some comfort to the noble Lord, Lord Coleraine. I can assure him that, in practice, a case such as he has in mind, of possession of premises undisturbed for thirty years, even though the person may have only a weekly tenancy, is a factor which every decent local authority—which I imagine most of them are—would take into account. They have discretion; there is a good deal of elasticity in the amount of compensation they pay, and I have no doubt that they would err on the side of generosity in the case of a tenant such as the noble Lord has in mind, as against the person who has been there for only a short time.

LORD COLERAINE

I am obliged to the noble Lord, Lord Silkin, for the assurance which he has given, which does give me some degree of comfort. However, I should be obliged if my noble and learned friend would look into this matter. As I understand the position under the Bill as it stands, the authority shall have regard to the period, and what I am asking is that, if possible, they should have regard to what are the realities of the case and not only to the apparent facts. I appreciate that this may not be possible, but I should be grateful if it could be looked into. In those circumstances, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 13 agreed to.

Clause 14:

Long-standing notices to treat

14.—(1) This section applies to every notice to treat served before the sixth day of August, nineteen hundred and forty-seven, by a public authority possessing compulsory purchase powers, being a notice in respect of which the following conditions are fulfilled, that is to say,—

6.7 p.m.

VISCOUNT GAGE

moved in subsection (1), to leave out "sixth day of August, nineteen hundred and forty-seven" and insert "first day of January, nineteen hundred and fifty-five". The noble Viscount said: This is another somewhat complicated valuation point which, to some extent, is coupled with the last Amendment I moved. Your Lordships will remember that we were then told by my noble and learned friend the Lord Chancellor that the unexpended Part VI claims are always taken into account in the calculation of market value. But perhaps your Lordships remember that under the 1947 Act, unless claims were registered by a certain date it was assumed that the applicant had lost his opportunity and had no claim. Then came the celebrated Pilgrim case, and it was then provided that the Minister should have a discretion in the case of hardship to make this Part VI claim payment.

When this matter was raised in another place the Minister seemed to take the line that that discretion has now become more or less a formality and it is always assumed that the Pilgrim clause would apply, notwithstanding that the registration of a claim might not have been made in the first instance. As the Minister thought that this Amendment had certain undesirable features, he resisted it. I have no desire to run counter to the wishes of the Minister, but to a layman it seems a little odd that quite an important principle of valuation should be settled, as it were, not by any legal sanction but by a sort of administrative convention that could possibly be altered at will. I would ask my noble and learned friend whether he does not think that some rather more formal action ought to be taken. It is in the hope of getting some explanation that I move this Amendment. I beg to move.

Amendment moved— Page 17, line 25, leave out from ("the") to ("by") in line 40 and insert ("first clay of January, nineteen hundred and fifty-five").—(Viscount Gage.)

THE LORD CHANCELLOR

If I may trouble your Lordships by dealing with the history of this matter, I think it would help on the point. The Amendment would apply the special provisions of Clauses 14 and 15 to notices to treat served between August 7, 1947 and January 1, 1955. If the acquiring authority wished to proceed under these notices to treat it would have to serve first a notice of intention to proceed and it would then be open to owners to elect to have compensation assessed as though a notice to treat had been served on January 1, 1958. I have emphasised that because it raises a difficulty on the present Amendment, which I will come to in a moment.

But to deal with the point on which my noble friend Lord Gage asked me a question: as he said, when a similar Amendment was put down in another place it was intended to give to such owners the benefits of Section 35 of the Town and Country Planning Act, 1951—the Pilgrim Clause which I had the honour to introduce in your Lordships' House in 1954—that is, to enable owners to receive a payment for loss of development value existing in 1947 where the owners have failed to make a claim under Part VI under the 1947 Act. Such payments are already being made by local authorities on an ex gratia basis under arrangements made by the Minister during the passage of the 1954 Act. Actually, it was a result of a statement made in consideration of Lords Amendments which your Lordships will find in the OFFICIAL REPORT of another place of November 22, 1954, in column 898. By that time my right honourable friend the Prime Minister had been replaced by Mr. Duncan Sandys, who said: In the case where a transaction for a purchase has not been completed when the Bill comes into force, if local authorities wish to make an ex gratia payment, as the Romford Borough Council has done to Mrs. Pilgrim, we are ready to support them. Where appropriate, these ex gratia payments will rank for Exchequer grant in the same way as if they had been made under the clause. On that statement these payments have in fact been made ever since that date, and there is no reason to believe that local authorities will fail to make such payments in any of the cases which would be affected by the Amendment. I reinforce to-day what my right honourable friend said on November 22, 1954.

I know that in a perfect world it would always be better to have everything in the Statute, but I think that, from the point of view of practical effect, when a statement has been made by the Minister, it has been acted upon for five years and is underwritten by the Lord Chancellor in your Lordships' House, the people concerned are reasonably safe. Of course, there is a difficulty when you rightly strive towards perfection, as my noble friend Lord Gage has done on this occasion—and I entirely sympathise with his view; I think it is a right and proper one. This Amendment would have the effect that the amount of compensation paid for the existing use value of property which is acquired under these notices to treat would be assessed in terms of the value at January 1, 1958, instead of the value at the date of notice to treat. This would cause serious anomalies between the compensation received by persons served with notice to treat before July 1, 1955, and those served with notice to treat between January 1, 1955, and January 1, 1958. It just shows—although I could not agree more with my noble friend—that although it is desirable, it is very difficult; and I hope for the moment he will rest with my assurance. But I will certainly personally convey to Mr. Brooke what the noble Viscount has said, and I hope he will not press the Amendment.

THE DEPUTY CHAIRMAN OF COMMITTEES (THE EARL OF BUCKINGHAMSHIRE)

Before the noble Viscount rises, I would point out that there is a slight misprint in the Marshalled List, because in line 40 there is no word "by". Does the noble Lord mean the word "by" in line 26, or the one in line 39?

VISCOUNT GAGE

This is rather a quick piece of concentration for which the noble Lord Chairman is asking. What I meant to do was to bring the clause within the range of the Pilgrim Clause. I wonder whether the Lord Chairman could help me on this matter?

THE DEPUTY CHAIRMAN OF COMMITTEES

Does the noble Viscount mean to alter the date, August 6, 1946, to January 1, 1955?

VISCOUNT GAGE

Yes.

THE DEPUTY CHAIRMAN OF COMMITTEES

Then I suggest that it is the word "by " in line 26. I do not know whether I am right.

VISCOUNT GAGE

I think it is a slightly academic point, because I was about to ask leave to withdraw the Amendment. In doing so, I should like to say this. I am grateful for the reply which has been given. Of course, if the Lord Chancellor, speaking in his official capacity, says that he thinks it is pedantic to want any legal sanction for what has been administrative practice, who am I to say that that is not right? Occasionally, in town planning matters a case is taken to court, and we get a sharp reminder about difficulties of loose drafting, as happened quite recently in connection with the case about caravans. But I cannot imagine anybody taking a case of this sort to the courts, and if the noble and learned Viscount is satisfied, I am perfectly satisfied also. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 14 agreed to.

Clauses 15 and 16 agreed to.

6.15 p.m.

THE LORD CHANCELLOR moved, after Clause 16, to insert the following new clause:

Outstanding right to compensation for refusal, conditional grant, revocation or modification of planning permission

"(1) The provisions of this section shall have effect in relation to a compulsory acquisition to which section one of this Act applies where—

1. (a) before the service of the notice to treat a planning decision or order has been made in such circumstances as to give rise to a claim for compensation for depreciation of the value of an interest in land, being land which consists of or includes the whole or part of the relevant land;
2. (b) whether such a claim has been made or not, no notice stating that compensation has become payable for depreciation of the value of that interest in consequence of that planning decision or order has been registered before the date of service of the notice to treat; but
3. (c)such a notice is registered on or after that date.

(2)Where the preceding subsection applies, the compensation payable in respect of the compulsory acquisition shall be assessed as if the notice referred to in paragraph (c) of the preceding subsection had been registered before the date of service of the notice to treat and had remained on the register of local land charges on that date.

(3)For the purposes of this section a planning decision or order shall be taken to give rise to a claim for compensation for depreciation of the value of an interest in land if (subject to the making and determination of a claim in accordance with the relevant provisions, and to the effect of any direction of the Minister under section twenty-three or section forty-five of the Act of 1954) a person is entitled to compensation for depreciation of the value of that interest in consequence of that decision or order.

(4)In this section any reference to compensation for depreciation of the value of an interest in land is a reference to compensation payable either—

1. (a) under Part II or Part V of the Act of 1954 in respect of depreciation of the value of that interest, or
2. (b) under subsection (1) of section twenty-two of the Act of 1947 in respect of loss or damage consisting of depreciation of the value of that interest;

any reference to registration is a reference to registration in the register of local land charges under subsection (5) of section twenty-eight of the Act of 1954, or under the provisions of that subsection as applied by section thirty-nine or section forty-six of that Act; and 'the relevant provisions', in relation to compensation under Part II of Part V of the Act of 1954, means the provisions of the said Part II, or those provisions as applied by the said Part V, and, in relation to compensation under subsection (1) of section twenty-two of the Act of 1947, means the provisions of regulations made under the Act of 1947 with respect to claims for compensation under that subsection.

(5)In the application of this section to Scotland—

1. (a)for references to the Act of 1947 and section twenty-two of that Act there shall be substituted references respectively to the Scottish Act of 1947 and section twenty of that Act;
2. (b)for references to the Act of 1954 and to the following provisions of that Act, that is to say, subsection (5) of section twenty-eight, the provisions of that subsection as applied by section thirty-nine, section forty-five and the provisions of the said subsection (5) as applied by section forty-six there shall be substituted respectively references to the Scottish Act of 1954 and the following provisions of that Act, that is to say, subsection (1) of section twenty-nine, section forty-one, section forty-seven and the provisions of the said subsection (1) as applied by section forty-eight;
3. (c)for any reference to the registration of a notice in the register of local land charges there shall be substituted a reference to the recording of a notice in the appropriate register of sasines; and
4. (d)in subsection (2), the words from 'and had remained' to the end of the subsection shall be omitted."

The noble and learned Viscount said: The refusal of permission or the grant of permission subject to conditions may lead to the payment of compensation under Part II or Part V of the 1954 Act. Likewise, the confirmation of an order revoking or modifying a planning decision may lead to compensation under Section 22 of the 1947 Act, as qualified by Part IV of the 1954 Act. When this happens, the amount paid is registered as a charge on the land. Unless some part is remitted by the Minister, the amount charged on the land has to be repaid before any future development of the land is commenced. If such land is bought in the open market for development the price paid will be reduced because of the liability to repay the charge, and similarly the compensation on compulsory purchase with the benefit of assumed planning permissions will be reduced. This may not work properly, however, if notice to treat is served after the planning decision or the confirmation of the order, but before registration of the payment of compensation. This new clause therefore provides that in such circumstances the payment will be deemed to have been registered before the service of notice to treat.

Your Lordships will see that subsection (1) defines the circumstances in which the clause applies; subsection (2) provides that the notice shall be deemed to have been registered before the date of service of notice to treat; subsection (3) defines what is meant by a planning decision or order which gives rise to a claim for compensation, and subsection (4) defines what is meant by compensation for depreciation of the value of an interest. Subsection (5) contains the Scottish application of the clause. This clause is only clearing up a technical matter, and therefore I have taken it rather shortly. I beg to move.

Amendment moved—

After Clause 16 insert the said new clause.—(The Lord Chancellor.)

LORD SILKIN

I think I follow the noble and learned Viscount in his explanation of what is intended to be done. May I just ask which clause provides for the payment that he referred to be taken into account? This is merely a technical addition, I take it, where there has been an omission to register a payment; it puts that right, and so it should do. Could the noble and learned Viscount refer me to the particular clause which this Amendment seeks to enlarge? It is not Clause 16. If it is not, is this really the right place for the new clause? Should it not follow immediately the clause which it is intended to enlarge?

THE LORD CHANCELLOR

Actually, the payment of compensation arises under Parts II and V of the 1954 Act, and the confirmation of the order revoking or modifying the condition may lead to compensation under the old Section 22 of the 1947 Act, as qualified by Part IV. When this happens, the amount paid is registered as a charge on the land, and unless some part is remitted by the Minister the amount charged on the land has to be paid before any future development of the land is commenced. If the land is bought for development the price will be reduced because of the liability to pay the charge. Frankly, I thought that all followed from the old Acts; that was my impression when I read this. May I just look into it and be certain; and if there is any point I will write to the noble Lord. I was trusting my memory; I thought that that was an old provision. I should like to check it.

LORD SILKIN

I think the noble and learned Viscount is quite right, and I put my question down to my stupidity after three and a quarter hours of concentration.

Clause 17 [Additional compensation for new planning permission in respect of land acquired]:

THE LORD CHANCELLOR

I do not think these Amendments should cause any trouble; they are all consequential Amendments. I think that all the Amendments to Clause 17 are within the category of the noble Lord, Lord Silkin. Therefore, I might move them en bloc. I beg to move Amendments 11 to 21.

Page 21, line 7, after first ("the") insert ("principal").

Page 21, line 10, after first ("the") insert ("principal").

Page 21, line 30, leave out from ("plan") to ("as") in line 33.

Page 22, line 11. after ("other") insert ("act or").

Page 22, line 12, after ("that") insert ("act or").

Page 22, line 16, after ("that") insert ("act or").

Page 22, line 28, at end insert ("and any reference to an area defined in a development plan is a reference to an area defined in such a plan in the form in which (whether as originally approved or made by the Minister or as subsequently amended) that plan was in force on the relevant date").

Page 22, line 29, leave out from beginning to end of line 37.

Page 22, line 41, at end insert ("the following, that is to say").

Page 23. line 27, leave out from ("if") to ("and") in line 31 and insert ("for paragraph (d) thereof there were substituted the following paragraph, that is to say—

(d) to land acquired by a local authority, whether compulsorily or by agreement, where on the relevant date the land consisted or formed part of an area to which a town development scheme under Part II of the Housing and Town Development (Scotland) Act, 1957, related").

Page 24, line 29, leave out paragraph (d) and insert—

("(d) if in accordance with the last preceding paragraph a person would be entitled to additional consideration in respect of an acquisition or sale, but before the planning decision in question that person has died, or any other act or event has occurred whereby the right to the additional consideration, if vested in him immediately before that act or event, would thereupon have vested in some other person, the right to the additional consideration shall be treated as having devolved as if that right had been vested in him immediately before his death or immediately before that act or event, as the case may be, and the additional consideration shall be payable to the persons claiming under him accordingly.").—(The Lord Chancellor.)

House resumed.

House adjourned at twenty-five minutes past Six o'clock.