HOUSING (PAYMENTS FOR WELL MAINTAINED HOUSES) ORDER, 1963 (Hansard, 26 March 1963)

§ THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD HASTINGS)

My Lords, I beg to move that the Housing (Payments for Well-Maintained Houses) Order, 1963, be approved. This Order is consequential on the introduction on April 1 of the new valuation lists, in which all rateable values are substantially higher than in the previous lists. Under the Housing Act, 1957, houses which are unfit for human habitation can be dealt with by compulsory purchase order, clearance order, demolition order or closing order. Whichever method is used, compensation is not normally paid for the loss of the buildings. But if the house has been well maintained, in spite of inherent defects which make it unfit, the local authority may be required to make a special payment. This payment is the higher of two alternative amounts: either the actual expenditure on the house during the last five years, less 1¼ times the rateable value; or the rateable value multiplied by the appropriate multiplier. These two formula' may be described respectively as "the expenditure formula" and "the multiplier formula".

These provisions were originally enacted in the Housing Act, 1935. The purpose of the expenditure formula was to reimburse a landlord for expenditure on maintenance, less that proportion of the rent which he could have been expected to devote to maintenance in any event. The multiplier formula was designed to produce a broadly similar result in cases where the landlord could 69 not produce accounts, and also to allow for the fact that owner-occupiers receive no rent. The multipliers of rateable value, prescribed in the 1935 Act, were 1½ for rented houses and 3 for owner-occupied houses.

By 1956, maintenance costs were substantially higher than they were before the war, but the rateable values of houses were, of course, still calculated by reference to the 1939 rental values. Power was therefore taken in the Slum Clearance (Compensation) Act, 1956, to alter the multipliers by Order, and the Housing (Payments for Well-Maintained Houses) Order, 1956, altered them from 1½ and 3 to 4½ and 9 respectively. This Order is still in force.

The new rating valuations, which come into force on April 1, will obviously have a striking effect on these calculations. The Valuation Office advise us that the new rateable values for unfit and nearly unfit houses are on average about 2½ times as high as the previous values. The purpose, therefore, of the present Order is to give claimants approximately the same payments as they would receive in present circumstances. It is thought that multipliers of 2 and 4 respectively, applied to the new rateable values, will produce this result, and that is what is contained in this Order. I hope, therefore, that your Lordships will approve it.