§ 5.53 p.m.
§ Order of the Day for the Second Reading read.
§ THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF LAND AND NATURAL RESOURCES (LORD MITCHISON)
My Lords, I beg to move that this Bill be now read a second time. In order for you to understand the background of this Bill, I must ask your Lordships for a moment to cast your minds back about ten years. In December, 1955, we had a period of ten years since the end of the war and the duration of the war itself. During the whole of that time there had been little or no slum clearance. The reason for that is obvious. At the end of the war the building resources of the country were urgently required for war damage where the damage could be repaired, and for building new houses, not only as the result of enemy attacks but also, of course, as the result of changes in industry and the distribution of the population during the war.
That was the position then, and the Government of the day were minded to resume slum clearance and to invite the local authorities to play their necessary part in it. Indeed, they had already collected information from the local authorities as to how many houses would require to be dealt with. In the course of considering this, they came, I think rightly, to the conclusion that to one group of people the pursuance of this programme might cause some rather unfair hardship—namely, the people who during the war, and during the years after it, had been compelled to buy unfit houses because they could not get others, and had bought at a time when they had not in mind early renewal, at any rate, in slum clearance.
The position at law is clear enough. Since 1919, with the agreement of successive Governments of all Parties, the owner of an unfit house will, if the house is purchased, get the value of the site but nothing for the house; and if the house is demolished or closed, he will get no compensation. The most he can get on a purchase is site value. Though there are some rather obscure 69 exceptions, undoubtedly that has been the general rule, and was the general rule in this case. Early in 1956 a Bill was introduced which had been foreshadowed by a statement made by the then Minister of Housing and Local Government, Mr. Duncan Sandys. It was a Bill which gave to certain people additional supplemental compensation, or compensation where there had been none, in both cases giving compensation, or making it up, to the full market value.
The class of people who were to be protected in this way under this additional compensation were those who had bought their houses between the outbreak of war and the time when the statement was made and the slum clearance campaign accordingly inaugurated or foreshadowed, and who at that latter time, which was the date of the Minister's statement, December 13, 1955, were in occupation of the house that they had bought, or, if there had been a change, had a close member of their family in occupation of it. Those people were to get full market value compensation. But this was intended as a temporary expedient, and I shall in a moment refer your Lordships to what was said by those who introduced the Bill at the time. Therefore, the giving of compensation on this scale was to go on for ten years only and was to expire actually next Sunday or Monday of this current year.
If nothing whatever is done about this, the position will be that those who would have become entitled after that date will in fact get nothing. That was, I might point out, the clear intention of those who introduced this as a temporary expedient in 1955. I have in mind two passages, but I think I need refer to only the statement of Mr. Duncan Sandys himself, in the Second Reading debate on the Bill then introduced. He said, at the end, with reference to Clause l—and it is to the provisions of Clause 1 that I have been referring:Clause I is temporary—there is a ten years' limit—and the other two are permanent."—[OFFICIAL REPORT, Commons, Vol. 550, col. 2275, 28/3/56.]The other two clauses were concerned with other matters, to one of which I shall have to refer later. As I say, all I have been saying so far relates only to Clause 1. Mr. Sandys continued: 70Clause 1 is temporary because we feel that when an owner-occupier of a slum house has had ten years' or perhaps, up to 26 years' occupation "—the reference there to twenty-six years is, of course, the maximum that could have been had at that time—he has probably had good use from the house and there is no reason why he should have special treatment after that time.A similar statement, without any reference to twenty-six years, had been made by the Parliamentary Secretary of the day, Mr. Enoch Powell, in introducing the Bill. Therefore, what it was intended to do and its limits were perfectly clear.
To-day the Government could leave it at that, but we believe that there is still a case for continuing, in some measure, the special treatment which has been given. We agree that this cannot go on indefinitely. We have no intention of infringing—nor had those who introduced the Act in 1955—the long-established principle that one does not get payment for an unfit house. We propose to deal with this problem by removing the time limit of next Sunday or Monday. If matters stayed there, the whole business could go on indefinitely. The time limitation which we propose to put in will take a different form. We propose that, after that day, compensation shall be available only to those who have had less than fifteen years' occupation of the house. The reason for this is the reason that was given by Mr. Duncan Sandys, in the passage I have just read: that people who have bought an unsound house at a price appropriate to an unsound house, and are then affected by a clearance or demolition order cannot expect to be entitled to extra compensation beyond the ordinary legal compensation when they have had a reasonable period of use. The Government of those days thought that ten years was reasonable. We are a little more generous about it and are going to make it fifteen years.
Let us see how this will work out. To take the position to-day, the only people who can have had less than fifteen years' use of their house are people who bought after a given date in December, 1950. Next year it will be only people who bought after a given date in December, 1951, and so on, year by year. Finally, the whole business will come to an end 71 in December, 1970, by reason of the fifteen years' qualification. This, I think, is the right thing to do; it is also a felicitous way of ending a piece of temporary legislation, gradually and, as we see it, fairly.
When the original Bill came forward, it was opposed by the Opposition of the day with commendable vigour, but on only one ground: that the money was to come from the local authorities, and we thought that there ought to be an Exchequer subsidy. Two things have entirely altered that situation. The first is that for ten years payments of this special compensation for slum clearance and slum property have been made out of the funds of local authorities. That having been done, there seems little to be said for changing the incidence of the burden at the moment when we are providing for its ultimate termination. Moreover, today, as it happens, my right honourable friend is introducing in another place a Rating Bill—a rather sweeping measure, as I understand it. This is all part of something that has been going on for some time, a thorough review of the financial relations between local authorities and the central Government, which is now being carried into effect. Therefore, I would not now seek to apply the arguments which were put forward with such clarity and force by the Opposition in 1955.
I should like to say a few words about the total amount involved. It is exceedingly difficult to get accurate figures without asking local authorities for one return after another, and so taking up a disproportionate amount of their time. The best figure we can give is that the total cost to them will be somewhere in the region of £3 million. The total cost to the Exchequer will be much smaller, and it will arise mainly out of changes in the rate deficiency grant. I would repeat that the 1956 Act was introduced as a temporary measure, on the footing that ten years' occupation of a slum house was sufficient consideration for the supplementary compensation to be paid, and that thereafter no further payment by way of compensation, beyond the ordinary site values, should be involved.
§ LORD NEWTON
My Lords, I have been listening very patiently, and I should 72 like to ask the noble Lord one question. If he is maintaining that the 1956 Act laid down the principle that ten years' beneficial occupation was long enough, why in fact did that Act provide that even after 26 years' beneficial occupation the owner-occupier should get market value?
§ LORD MITCHISON
For this reason. It divided matters at the date when the slum clearance was to begin again. It treated in one group those who had not been able to find accommodation, and who had had to buy houses, during or after the war, which probably they would not otherwise have bought, without regard at that time to the possibility of compensation if slum clearance were resumed. That was the reason for the mention of the 26 years. I am sure the noble Lord would not have approved if the Government of the day had confined it more closely than that. They had to have that period because of the circumstances at that time. I read that passage from Mr. Duncan Sandys' speech, and if there is any doubt about it I may say that there is a similar passage in Mr. Enoch Powell's speech.
§ LORD MITCHISON
What we are now dealing with is what was introduced as a temporary expedient, founded on the basis that ten years' occupation of a slum house was sufficient consideration for this purpose, and that where that had been enjoyed, or tolerated (whichever word one likes to use), there was no occasion for the additional compensation to which I have been referring. That is the main purpose of the Bill.
There are two other points which are involved. The first is a comparatively small matter related to what I have just been saying. The original provision in the Bill fixed as the period to be taken for the purpose of the slum clearance order not the order itself but the demolition or vacation of the condemned house. That might have been all right if only demolition or vacation had to be considered; but there are also questions of purchase. A local authority under a clearance order frequently purchases the houses concerned: and this is a matter upon which entitlement to compensation can depend. In such a case inconvenience would be involved. Under the 73 compulsory purchase procedure it is rather hard to say when the purchase actually takes place; there are difficulties which arise over delays, and matters of that sort. Therefore, for the purpose of this provision and for the future, the date to be taken is the date of the order which had the result of condemning the house.
My Lords, I have been talking about slum clearance orders. What I think are really involved are clearance orders which affect a group of houses, all of which must be unfit for the purposes of the order—demolition orders affecting a single house or closing orders which have a similar effect but a rather different scope. It is the date of one of those orders that is going to matter in future. This will mean that a comparatively small group of people, who at the moment have not reached the stage of finishing the purchase or the demolition or whatever it is, will be able to come in, because the order is always the first step and they will therefore have had the order. I feel very doubtful whether any of your Lordships will object to that small modification.
The third point is also not a very large one in practice, and it is this. There are two other clauses in the previous Bill, to which I referred just now, and one of them related to the position of mortgagors and mortgagees where the subject of the mortgage was a house which was going to attract one of these supplementary payments. Broadly speaking, it gave the county court power to adjudicate between the two parties, both where there was a formal mortgage and where there was a deferred payment by instalments, as there quite often is in that type of case. That jurisdiction was in addition to such powers as the courts have otherwise in connection with mortgages. It was in broad terms (I can refer to it if need be) and all that happens in this Bill is that the jurisdiction is extended generally to slum houses which are condemned—condemned, as it were, to demolition or vacation—or are under a clearance order. Indeed, it extends to them now, if the facts justify it. It is, in fact, a small change because there has been comparatively little use of this provision. There is a very small number of cases year by year. But there is no doubt that the existence of a provision of this kind makes it easier for the two 74 parties concerned to come to a fair agreement between themselves, if they know that the matter can be dealt with on these broad terms in the county court.
The present Bill also entitles the county court to take account of something which has not been, at any rate, specifically mentioned before, and that is the price that was paid for the house. I can develop these matters further if your Lordships wish, but I notice that they attracted comparatively little attention in another place. I doubt whether there could be much objection in principle to the last two points I have mentioned; it is, perhaps, the first of them that I ought to have dwelt on and which I have tried to dwell on.
Before I sit down, I should like to say this. I feel like somebody who changes the whole thing at the last moment, but this is only a matter of form. The 1956 Act was, in fact, incorporated in the Housing Act, 1957, which was a codifying Act, and your Lordships will find it in its full beauty without any alteration in Part II of Schedule 2 at the end of that Act. That is merely a question of reference, and accordingly your Lordships will notice that in the Bill now before us the references are not to the 1956 Act but to the codifying Act —the Housing Act, 1957. I hope I have made matters clear. I think I ought to wait till I am attacked and then try to meet the attacks, but whatever attacks are made I hope that your Lordships will join with me in recognising that it might well have caused hardship to terminate this provision as it was originally intended to be terminated, and that there is a great deal to be said for terminating it gradually. That is, in effect, the result of the stipulation that there should be no more than 15 years' residence in the house if this additional compensation is sought. My Lords, I beg to move.
§ Moved, That the Bill be now read 2ª. —(Lord Mitchison.)
§ 6.15 p.m.
§ LORD NEWTON
My Lords, I am sure that we are all grateful to the noble Lord for the care with which he has explained to us what this Bill is about, for although it is a small Bill it is fairly complicated. I think it will have been apparent to the House as well as to the noble Lord, because of my intervention, that I do not go the whole way with 75 him in his construction of what I may call the philosophy behind the 1956 Act.
As the noble Lord has explained to us, one of the main purposes of this Bill is to prolong for the benefit of certain persons, and certain persons only, some of the provisions of the Slum Clearance (Compensation) Act, 1956, which, as he told us at the end of his speech, was subsequently consolidated in the Housing Act, 1957. I propose to talk about the 1956 Act rather than the 1957 Act, but I do not think it will matter. These things being so, I thought I ought to refresh my memory as to what transpired during the proceedings in Parliament on the 1956 Act, and it is obvious that the same thought has occurred to the noble Lord, Lord Mitchison. It was a very good thing that I did, because I discovered—and this I had forgotten—that on the Second Reading of that Bill in another place the then Opposition moved and divided the House on a reasoned Amendment, which invited the House to reject the Bill because it did not provide for direct Exchequer subsidies towards the payments which it proposed, and thereby placed an undue burden upon the rates. This Amendment was moved, as the noble Lord said, with commendable vigour—I think those were his words—from the Opposition Front Bench, and indeed it was. But the noble Lord is being unduly modest, because he failed to tell us that it was the honourable and learned Member for Kettering who moved that Amendment.
§ LORD NEWTON
The honourable and learned Member for Kettering now adorns the Government Front Bench in your Lordships' House, and is in charge of this Bill. These things being so, one might have expected that this Bill would provide for direct Exchequer subsidies towards the payments which it proposes, thereby avoiding an undue burden on the rates. The noble Lord felt it incumbent on him to explain this omission, and I hope he will not mind my saying that I was not fully convinced by his first argument, that because this has been a burden on the rates for ten years it would jolly well go on remaining a burden on the rates for a further five years.
76 As regards his other arguments, I hope the noble Lord will forgive me if I say that I thought the explanation given in the other place by Mr. MacColl, the Parliamentary Secretary, was rather more convincing. What Mr. MacColl said was this.The review of housing subsidies, which is likely to be an early piece of legislation, and the more general review of local government grants, will both have some relevance to this question. Therefore, this is not the final word about the apportionment of the financial burden between the ratepayer and the taxpayer." [OFFICIAL REPORT, Commons, Vol. 720 (No. 6), col. 892; 15/11/65]Your Lordships may think, and I think, that that was a perfectly plausible explanation. Indeed, a similar explanation was given at the time of the Second Reading of the 1956 Act, because it so happened that at that time a similar review was taking place of local authority finances. But that explanation did not satisfy the honourable and learned Member for Kettering. On the contrary, his argument was that, precisely because that review was shortly to be completed, it was unnecessary to impose an additional burden on the local health authorities even for a short period of time. But I am not complaining that the Bill does not provide for direct Exchequer subsidies. All I am trying to do is, rather gently, to pull the leg of the noble Lord. I hope, though I sometimes doubt it, that I, too, grow in wisdom.
As the noble Lord explained, the 1956 Act undermined the rule which had been almost universally accepted since 1919: that only site value, not market value, is payable when a house is declared to be unfit for human habitation. It is possible to argue—indeed, it often is argued—that a moral principle is involved here, the principle being that it is wrong to pay more than a nominal sum for rubbish. But I do not think it is really necessary to bring in ethics at all, because I personally have always believed that the explanation of the site value rule is really financial. There is usually, or at any rate very often, a considerable difference between site value and market value, and I would think it probable that, but for the existence of the site value rule, there might never have been any plans for slum clearance in this country, or at any rate very few. This point was eventually admitted by the other Parliamentary Secretary, Mr. Mellish, in another place on 77 Second Reading. I do not think I need trouble your Lordships with the quotation, but if any noble Lord doubts that he admitted it, I have got the quotation here.
However, as again the noble Lord, Lord Mitchison, said, the last war and its aftermath introduced a new factor, because slum clearance stopped, as he said, after the beginning of the war, and it did not really start again until 1955. That is why the 1956 Act introduced the principle of market value compensation for the owner-occupier of an unfit house who bought his house between the outbreak of war and December 13, 1955. The main point was, of course, that at the time those people bought they had no reason to anticipate that in the foreseeable future, at least, their houses would be compulsorily taken away from them. Now that one has the benefit of hindsight, one can naturally make out a strong case for saying that in fact December, 1955, W AS too early a terminal date, and that a later date—perhaps 1960, or something like that—would have been wiser and fairer, in that it seems likely that quite a number of owner-occupiers of unfit houses bought after 1955 without fully realising, as perhaps they should have dole, what they were letting themselves in for. But I am not concerned to argue that point this afternoon. 1955 is the terminal date we have, and have had for ten years, and I am sure in my own mind that, back in 1956, it was the right year to choose.
One of the conditions imposed by the 1956 Act was that for an owner-occupier to qualify for market value—or, rather, for the supplement, making his payment up to market value—his house should have been purchased by the local authority or vacated by him before next Monday, December 13. There are at this moment of time, of course, some people—I do not know how many, but certainly some—who have had their houses made the subject of a clearance order but who, none the less, will still be living in those houses next Monday. Their rights, as the noble Lord has told us, are protected (or preserved, if you like) by subsection 1(a) of Clause 1, and I am very glad they are.
§ LORD MITCHISON
My Lords, the rights are created. They would not have had any under the previous Bill.
§ LORD NEWTON
If the noble Lord likes to put it like that, he may; but if he wants to talk about creation, I would prefer that he talked about re-creation, because the rights were in the 1956 Act. If he is just reminding me that the Act is going to expire next Monday, I know that, of course. As I say, I am very glad indeed that there is this provision in this Bill, but I should like to ask your Lordships to note, in passing, that even if one of these owner-occupiers bought his house as long ago as September, 1939, his rights will still be protected or re-created by this subsection; and there is no test in the case of these people as to the length of beneficial occupation of the house.
When Mr. Mellish was explaining in another place the reasons for the introduction of this Bill, he said, among other things—and I am now quoting from column 853:the number of slums which remain to be cleared is so large that there must be many owner-occupiers who expect to get the supplement whose houses are still waiting to be included in authorities' clearance programmes."—[OFFICIAL REPORT, Commons, Vol. 720 (No. 6); 16/11/65.]Yet, my Lords, we know—and we have been told very clearly by the noble Lord —that in the Bill it is proposed in future to pay the supplement only to those owner-occupiers who bought their houses between December 13, 1950, and December 12, 1955, and who have not lived in those houses for longer than fifteen years. However you like to make it out, this position is in fact discrimination against those owner-occupiers of unfit houses who bought before December 13, 1950, and it seems to me (I am not just trying to make a debating point) that this discrimination is horribly unjust and unkind. I am quite certain that it is going to create a deep sense of grievance in the minds of those who will suffer from—it people who will not, I fancy, appreciate the subtleties of sophisticated argument about the length of time in which they have enjoyed beneficial occupation.
Let us just consider two identical, adjacent houses in the same street in a clearance area. One owner-occupier will get market value by means of the supplementary payment: the other, because he bought his house a few days or a few weeks earlier, will get only site value; 79 and the difference could amount to perhaps anything up to £1,000 or £1,500, a difference large enough to determine whether the individual in question is in a position to buy a new house for himself or whether he will have to become a council tenant. To make matters even worse, under the Bill as it stands at present some people will lose the market value which they have been expecting to get, for no other reason than the fact that the local authority did not get around to making the clearance order before next Monday. This, I suppose, is a Committee point; and I do not want to discuss it at great length. But I should like to say two things now. First, I find totally unacceptable the Government excuse that when an owner-occupier of an unfit house has had fifteen years' beneficial occupation, he does not deserve anything more than the site value in compensation. Personally, I do not think that the length of occupation is relevant at all in this connection and I never have thought so. But, if it had any relevance, I would stand the argument on its head and insert this principle: the longer one has lived in one's home, the greater the hardship when one is turned out of it.
The other point I should like to make is that all Parliamentarians know that many Statutes have to contain dividing lines, and there is always an argument about where you draw the line. But wherever you draw the line there is hardship. The moral of that seems to me to be that one should never write dividing lines into Statutes unless it is absolutely essential to do so. I do not consider that it is necessary to draw a dividing line in this Bill. There was no dividing line in the 1956 Act. To think this, is a mistake on the noble Lord's part. That Act said that the provisions would last for ten years. That, of course, left the way open for those provisions to be extended if necessary; as, in fact, they are being extended in this Bill, though in a limited capacity. It would have been easy in this Bill simply to provide that the relevant provisions of the 1956 Act (which I think are in Section 1 of that Act) should continue for another five years—I say five years since that is the time chosen by the Government—for the benefit of what I may describe as the whole 1939–1955 class.
80 My Lords, I wish I knew why the Government have not done this. Is it, I wonder, that they are afraid of the cost? But, however that may be, I would ask the noble Lord to tell us, if he can—and I have given him notice of this question—what the additional cost would be over and above the £3 million mentioned in the Explanatory Memorandum of the Bill if the relevant provisions of the 1956 Act were extended for five years to cover all the remaining people in what I call the whole of the 1939–1955 class.
The noble Lord said very little about Clause 2: I have little to say about it. I welcome its provisions and I am quite sure they are right in principle. To be frank, I think that principle ought to have been recognised in the 1956 Act. A Bill on the lines of this Bill is certainly necessary to-day and I hope your Lordships will give it a Second Reading—but I wish it did not contain the real blemish that I have mentioned.
§ 6.34 p.m.
§ LORD MITCHISON
My Lords, I will not take very long in replying. If I understood the noble Lord aright, he is concerned with substantially two points. The first I must admit I could not have resisted deploying myself if I had been in his position: it was too good. I refer to the one about the distribution of cost as between the Exchequer, on the one hand, and the local authorities, on the other. But I had intended to refer to it; I made reference to it when I spoke first, and I do not think I have anything further to add. To summarise it shortly, since half of the exercise with which this Bill is concerned has gone through on one footing, it is really untidy and unnecessary to shift now on to another footing, when it is, in effect, half way through. Moreover, as there is a complete revision of local authority and central finance going on at the moment, this would be the worst possible time to make a change of that sort.
The second point was a more substantial one. The noble Lord pointed out that there was a philosophy in this Bill. I have always regarded Mr. Enoch Powell as a bit of a philosopher, and I once accused him of being like Diogenes, who was no mean philosopher, even if he lived by himself in a tub: but in this period, there was no question of a 81 tub. I must read what Mr. Enoch Powell said:As this concession—the ten-year temporary provision, as he called it—is designed to meet temporary and exceptional circumstances due to war-time and postwar conditions, so it should itself be temporary and exceptional. When ten years have elapsed even persons who bought such houses as these for their own occupation immediately before my right honourable friend's statement will have had a very substantial use and enjoyment of those houses. The Government do not propose, therefore, that the concession should apply to houses dealt with as unfit after 13th December, 1965."—[OFFICIAL, REPORT, Commons, Vol. 550, col. 2164; 28/3/56.]That is the reason, and so far as the debates show, the only reason, why the ten-year limit was put in. We are going a bit further—a bit better in one sense: we are now having fifteen years' limit. I can only say this to the noble Lord. If he had done what I think he intended to do, and carried on these provisions for another five years, then at the end of that time there would have been one unmitigated bump, if I may call it so. This is, at any rate, a tidy tapering off of the intention and provisions of the Act.
I do not think I need say much more. It is said that this Bill makes a distinction between one owner and the owner of a similar house next door—
§ LORD MITCHISON
Any provision of this kind, of course, does that. The original Bill did it just as much. I think the noble Lord himself provided the answer: that the moment a limit of any sort is fixed, there are bound to be some people on one side and some on the other. The question always to be considered is whether it is desirable to make some intermediate provision. We find this again and again when dealing with financial provisions. If you draw a sharp line, some people are on the right side, while others, from their point of view, are on the wrong side. I think that people understand this by now.
Then the noble Lord said that there was discrimination. Really, that is a bit stiff. These people would have had no rights whatever if the original piece of legislation had been allowed in this respect to lapse on Sunday or Monday 82 next. Yet we are now told that we are discriminating against them because we rescue some people from the Conservative morass, if I may use that phrase, and do not rescue them all. We have our reasons for making the distinction and I have tried to explain them. It is monstrous to suggest there is discrimination in any pejorative sense. It is as if you had half a dozen drowning men and you rescued only three of them. And we did not drown them.
§ LORD NEWTON
My Lords, may I ask this question? The noble Lord keeps trying to get the House to take the view that the 1956 Act contained a dividing line similar to this dividing line. It did not. What it did was to say that the whole range of people who bought between 1939 and 1955 would be eligible. What it said was that the Act would run for ten years, and it left the door open for the Act to be extended, as it is going to be extended now, although only to a limited extent. That is not imposing a dividing line.
§ LORD MITCHISON
There was no word or intention of extending the Bill. I do not think I need say any more.
§ On Question, Bill read 2ª, and committed to a Committee of the Whole House.