HL Deb 17 November 1966 vol 277 cc1401-32

6.10 p.m.

House again in Committee.


I cannot claim to be a great admirer of this proposal to bring empty property into rating. Rating of empty property has not proved particularly successful in those places where it has been introduced, and I do not think it is going to prove particularly successful in this country. It gives rise to a good deal of trouble, and the result is very sparse. But I am quite sure my noble friend is right in allowing the experiment to be made and not opposing it.

There is in the country, I know, strong feeling in some quarters, strong feeling in some local authorities, that it is not just that a person should be allowed to keep his property empty for a protracted period in the hope of getting either a better price for it or a more satisfactory tenant. But there is, of course, nothing wicked about this action on the part of a landowner. There is no reason why a landowner should not do that if he desires to. When we make these changes in the law it is, I think, essential that we should be sure that the changes will work fairly. I am quite sure that noble Lords opposite desire to act fairly, even towards landlords. For the reasons advanced by my noble friend with such clarity and, I thought, with such force, I am sure that we should be acting more justly if we amended this proposal and made the period six months instead of three months as proposed in the Bill. I hope that your Lordships will agree to do that.


When my noble friend on the Front Bench proposed this Amendment he spoke largely as if it concerned property for sale and the owner of a house which was empty chiefly had in mind the question of a larger price if he left it empty for a certain length of time. There may be some who think in those terms, but I am sure that does not apply to the main part of the people concerned, and I do not think most of us would have a great amount of sympathy for those who did want to keep property empty for a long time in order to get a larger price. At present, if they did that, they would be more likely to get the reverse, a lower price, for reasons which we need not develop here.

There are a number of other reasons why a house may be empty for a certain length of time. I am sorry that the noble Earl, Lord Longford, is not present. I used to be his trustee, and I am sure he would appreciate what I am going to say. Whatever time we choose to insert in this Bill we must have a figure which is going to be accepted as fair. There is no particular magic about the figures 3, 4 or 6. What we want is a figure which will be accepted generally as being fair. As my noble friend said, we are here introducing a new principle. I am sure that noble Lords opposite will appreciate the sort of reasons that I have in mind why property is empty.

It might be that the noble Lord who is to reply had a house in a village which was empty and which he thought would be extremely useful for some relative of his who was about to retire or coming back from abroad. This might be due to happen in, say, six or nine months. It would be a great mistake to let the property on a short term and then have difficulty in obtaining possession again, and it might be very unfair on the family who went into the property for a short time. That is a perfectly legitimate reason why a house might be empty for more than three months.

Or again (as is the case in the county in which I live) there might be a motorway planned right across the county and near to a number of villages. No one knows what will happen in the future. In one village which I know there have been several rumours from time to time about where the line of the road is to be. It would be pointless to spend money on improving a house and putting someone in it if the property was to be acquired compulsorily shortly afterwards. That is not an argument for extending this period of three months indefinitely, but it is an argument to show that three months is too short a period. I hope that noble Lords opposite will agree that many local authorities and central Government Departments take more than three months to make up their minds on what might be a simple but none the less vital issue. I suggest, therefore, that the figure of six months proposed in the Amendment is infinitely preferable to the figure of three.


May I briefly support my noble friend Lord Brooke of Cumnor in his Amendment to extend this period from three months to six months? I agree with the general principle which lies behind this proposition, but my experience in London has been that, however willing the two parties may be to agree to conclude their bargain, it is often not possible, either for legal or for personal reasons, for them to do so within the very brief period of three months. I am quite certain that, while people would accept this proposition for a period of six months, they would think it grossly unfair on both owner and tenant if the period were restricted to three months.

There is one other point to which I should like to refer briefly. My noble friend mentioned the period which often elapses before people are able to occupy property when alterations are being carried out and redecoration being done. I am able to speak with close and rather bitter experience of this, because I am in process of moving into a new property. I have discovered something that I had not realised before, that alterations and decorations involve extremely intricate operations. You have such people as plumbers, electricians, heating engineers, builders, plasterers—the lot. Any one of these men who fails to do his job within the allotted time can completely hamstring the other people. They cannot get on with their work until, shall we say, the heating pipes have been provided or the electric wiring has been installed. Very often, through no fault whatever of the owner, there will be a delay which is protracted over three months; either because there is a lack of a technician being immediately available or because one of the technicians has been held up for some reason, perhaps because of the weather or the failure of materials to arrive on time. Through no fault of his own the unfortunate owner cannot get into his house within the period of three months. Having heard the speeches from this side of the Committee, I am quite confident that the Government will accept the Amendment moved by my noble friend in the interest of fairness to the people of this country.


I hesitate to add much to what has been said by various noble Lords on this side of the Committee. I realise that this is a measure which is permissive and that local authorities may choose whether to bring it into force or not. I am quite prepared to believe that there are large areas of the country where nothing is going on which would require a local authority to do so. At the same time, we must try to safeguard things a little in case it becomes necessary for the measure to be operated.

I do not dissent from the argument that bad things go on and that this measure is aimed to prevent them happening, but in view of all the examples that have been instanced by noble Lords I think there is every reason to believe that it could cause just as much inequity and injustice as it seeks to cure. That the cure should be applied where necessary, I do not disagree. But where houses are being repaired or put in order, there are so many instances where the building operations take several months, as my noble friend Lord St. Helens has just said, that I would add my voice to the plea that six months is a more reasonable period than three months.


As all the speeches that have been made on this Amendment have been against the proposals in the Bill, I rise to assure my noble friends on the Front Bench that there are those in the House who support the Government's proposals. In opposing a period of three months and suggesting six, the noble Lord, Lord Ilford, went out of his way to assure the House that property owners were not all wicked. One does not have to be wicked in order to have the privilege of paying rates. I am the most virtuous person alive, and I have been paying rates for 30 or 40 years. In our local government debates we are constantly talking about the need to provide local authorities with additional sources of revenue. This proposal of the Government would provide them with additional sources of revenue, albeit they may be small.

In supporting three months against six, I suggest that if a property is left void for a longer period than three months it tends to deteriorate, and that is not good for the property owner, the local authority or the community at large. Within a few hundred yards of my own house there is an attractive house that has been standing empty for seven years. It was originally, to use the estate agents' modern terminology, a good middle-class family house, a desirable residence. It was bought up by a man who desired eventually to open up another branch of his business there. He has not allowed anybody to occupy it. The house has been standing vacant for these seven years and there has been no pressure, naturally, of a financial kind such as this clause might impose. The whole building is going to waste.

Fifty or sixty yards farther along the road there is a row of shops with housing accommodation over them. They are gradually being emptied, because the man who has bought them plans to redevelop the whole block at some future stage. The result is that this property is also tumbling down. Two miles away, there is a block of property, 300 yards long and 200 yards deep, comprising about 20 Victorian houses of the type that used to be occupied by City merchants of the last century. I know what is going to happen there. They are going to be pulled down, and a block of new luxury flats will be erected on the site. That is good development, but for some considerable time these houses have been standing empty. So the local authority has lost the revenue from the old houses and is not yet able to receive revenue from the new houses. As one who has been chairman of the finance committee of two local authorities, I have an eye on revenue, and I feel that it is only fair that these properties should be made revenue-producing, not only from a financial point of view, but from the purely social point of view, as well, for the benefit of the community. I oppose the Amendment.

6.27 p.m.


I am grateful to my noble friend who spoke last because I thought that we were going to get examples of only one side of this case. The point resides in this: that there are different situations in different places, and for that reason, the Government have decided to make this clause permissive. If the Committee pass this clause as it stands, it will give power to local authorities to decide whether or not to apply this provision in some areas after making their own assessment of what are the greatest social needs in their areas. In the case where the dominant social need is to free property that is being deliberately withheld from occupation by landlords, they may adopt this power. If, on the other hand, they find that the dominant social need is any of the others mentioned by noble Lords opposite, and there is no particular trouble about property being kept empty on purpose, they may not adopt it.

The noble Lord, Lord Inglewood suggested the lengthening of the period because of the construction of a motorway or other development. I think that this point should really be made in connection with planning applications and could more properly be taken on Amendment No. 14.

The Bill does not require rates to be paid in respect of an empty hereditament until it has stood empty for three months, or, if it is a newly erected dwelling house, for six months. These Amendments would make the free periods six months and twelve months, respectively. The point is that rates are, in a way, payment for services, and the owners of empty properties are benefiting from local authority services, though not to the same extent as owners of occupied property, and it is therefore not proposed that rates should be levied on empty property to the same extent. This seems a just arrangement to the Government. The owners of empty property benefit from such services as police, drainage and road lighting. We can think of beneficial applications of all these services to empty property.

The Government recognise, of course, that it takes time to arrange the selling or letting of empty property and that while the property is empty the owners are less able to pay rates, presumably because they get no income from the property. This is the reason why the provision of three months and six months was introduced. The Government also accept that three months will not always be sufficient for the selling or letting of property, and when the owner becomes liable to rates after that period this does not imply that he has been acting antisocially in any sense. Failure to sell or let a property may have been due to circumstances entirely beyond the owner's control. It is for this reason that the Government have decided to restrict the rates to one-half of the normal amount.

Let us see how this works out. If a property is unoccupied for less than three months the owner will pay no rates at all. If it is unoccupied for four months he will pay half of the rates for one month, which is the equivalent of paying rates for the whole period at one-eighth of the rate poundage. If it is empty for six months—and the noble Lord has proposed six months as the period for property other than new houses—the owner will be paying the equivalent of rates for the whole six months at only one-quarter of the normal rate poundage. Rates, as originally conceived, are not really a payment for services, though they have that effect. They are a tax on property; and an empty house is property.

The noble Lord, Lord Brooke of Cumnor, wound up his speech upon the Amendment by saying that if we lengthen the period justice will be done, and that where the owner of empty property had to pay rates after three months nobody would be blameworthy and therefore it would not be proper to impose rates after three months. In the view of the Government, nobody is blameworthy whatever we do about this provision. Rates are not a fine; they are a tax. We are simply discussing at what point it is opportune to start imposing a tax on empty property, as we already impose it on occupied property. The concept of blame, I think, should be entirely absent from our minds in this discussion. In conclusion, I must say that the Government believe that the clause as drafted ensures that justice is done. All these things being so, I must advise your Lordships to reject the Amendments as enumerated by the noble Lord in moving.


Before the noble Lord leaves the subject, may I put this question to him? It is not what benefit street lighting is to an empty house, but if for some reason which seems good property has to be left empty for a prolonged period, in excess of three or six months, is there anything that can be done to render it, so to speak, rate-free? Would it be sufficient to remove the doors or windows, to cut off the water supply, or as I believe accords with the present law in Scotland to remove the roof?


First of all, on the point of street lighting, in the case of an empty house it does enable the police or anybody else to see if somebody is trying to break in. I do not know the full answer to the noble Lord's question about taking the roof off. The Government would be sorry if this provision had that effect. If anybody has to leave his house empty for a good reason for a long time, it is open to that person to ask for a reassessment of the rateable value on the ground that he is unable to obtain the rent on which rates are theoretically calculated.


I do not know whether the speech of the noble Lord, Lord Kennet, satisfied your Lordships generally, but certainly it did not satisfy me. Just before he spoke, the noble Lord, Lord Leatherland, said that this would be a new source of revenue for local authorities. It is going to be a pretty small source. And the Government, both here and in another place, went out of their way on the Second Reading of the Bill to say that they were not thinking of this primarily as a revenue raiser, but were thinking of it as a means of reducing waste of accommodation. I cannot think that any local authority would choose to adopt this discretionary provision because they thought it might substantially increase their rate revenue.

The noble Lord, Lord Kennet, went on to argue that it was very kind of the Government to impose rates at only 50 per cent., and suggested that this would help to pay for the police, street lighting and so on. But, of course, if you own empty property, you do not need education services or domiciliary health services: there are many expensive local services on which you will not be making any call at all.

Going on from the 50 per cent., the noble Lord argued that if a house was vacant for four months the owner would have to pay only one-eighth of the rates due. But if the house had changed hands at the end of three months, a new owner who could not occupy the house because it was not ready for occupation would have to pay rates at the full half-rate, as laid down in the Bill. If I may respectfully say this to the noble Lord, I really think that this argument about paying only one-eighth of the total rates if the house is empty for four months is a completely misleading and fallacious one.

The noble Lord went on to say that nobody was suggesting that to keep a house empty for a period of three months was blameworthy. The noble Lord, Lord Leatherland, spoke of a house that had been empty for seven years. I should have thought that that definitely was blameworthy. When the noble Lord,

Resolved in the affirmative, and Amendment agreed to accordingly.

Lord Kennet, says that no blame is being attached to anybody, I must say—


If I may intervene for one moment, I did not say that it was never blameworthy, or that no blame could be attached to anybody. I agree that it sometimes can. I merely said that this provision did not intend to suggest that there was always blame attaching to everybody who left a house vacant for more than three months.


What the noble Lord said on Second Reading was that the primary purpose of this provision was to reduce waste of accommodation, and I think waste of all kinds is blameworthy. What I am saying is that in cases where there can be no question of waste this clause will nevertheless bite if it remains at three months, and rates will have to be paid on a house which could not reasonably be re-occupied within that period. In view of the extremely unsatisfactory nature of the noble Lord's reply, I must ask my noble friends to divide the Committee.

6.37 p.m.

On Question, Whether the said Amendment (No. 5) shall he agreed to?

Their Lordships divided: Contents, 47; Not-Contents, 14.

Albemarle, E. Dudley. L. Mancroft, L.
Amulree, L. Effingham, E. Mersey, V.
Auckland, L. Emmet of Amberley, Bs. Milverton, L.
Balerno, L. Ferrers, E. Mountevans, L.
Birdwood, L. Ferrier, L. Newall, L.
Brooke of Cumnor, L. Gage, V. Oakshott, L.
Brooke of Ystradfellte, Bs. Grimston of Westbury, L. Redesdale, L.
Carrington, L. Harlech, L. Redmayne, L.
Chesham, L. Henley, L. St. Aldwyn, E. [Teller.]
Colville of Culross, V. Howard of Glossop, L. St. Helens, L.
Conesford, L. Howe, E. Strange of Knokin, Bs.
Cromartie, E. Ilford, L. Teynham, L.
Cullen of Ashbourne, L. Inglewood, L. Thurlow, L.
Daventry, V. Jessel, L. Vivian, L.
Denham, L. [Teller.] Killearn, L. Wolverton, L.
Drumalbyn, L. Kilmany, L.
Champion, L. Kennet, L. Phillips, Bs. [Teller.]
Citrine, L. Latham. L. Sorensen, L.
Crook, L. Leatherland, L. [Teller.] Stow Hill, L.
Gardiner, L. (L. Chancellor.) Longford, E. (L. Privy Seal.) Wootton of Abinger, Bs.
Greenway, L. Morrison. L.

In view of the fact that Amendment No. 6 to some extent cuts across the Amendment we have just dealt with, I think it would be better if I did not move it at this stage, but of course I reserve the right to do so at a later stage.

6.40 p.m.

LORD BROOKE OF CUMNOR moved, in subsection (3), in the definition of "relevant hereditament", to leave out "shop, office, factory, mill or other building whatsoever,". The noble Lord said: My next Amendment, No. 8, is consequential on this Amendment. This is an Amendment to leave out of rateability all rated vacant shops, offices, factories, mills or other buildings whatsoever. The principal reason given by the Government for bringing in the rating of empty property after a period was that there would otherwise be waste of accommodation. I confess that I thought, from what had been said both here and in another place, that the Government particularly had in mind the waste of housing accommodation kept vacant for long periods in areas where there was a housing shortage, and that therefore it seemed desirable to give the local authority optional power to bring this clause into effect.

I find it difficult to conceive that anybody voluntarily keeps a factory vacant for an indefinite time. It would be no use to him; there would be no production going on, and he would not be drawing rent from it. Surely any owner of an empty factory would wish to sell or let it at the earliest possible moment. Similarly anyone who purchases or rents an empty factory presumably is not doing it for fun; he wants to make it productive as quickly as possible. Frankly, in the case of many of these buildings, I do not see that any deterrent is needed. Indeed, I seem to remember that in the debate in another place the Minister himself said that he would be prepared to consider exemptions by way of amendment of this list. It is because the argument with regard to factories and the like seems to be wholly different from the argument with regard to houses that I move this Amendment, in order that I may discover exactly what purpose the Government have in mind in regard to many of these other types of buildings which are not dwelling accommodation. I beg to move.

Amendment moved— Page 17, line 14, leave out from ("house") to ("together") in line 15.—(Lord Brooke of Cumnor.)


It is true, as the noble Lord has said, that the main purpose of this provision is to discourage house-owners from withholding their houses from the market. But it did not seem right for the Government to introduce a distinction between the owners of house property and the owners of other types of property, such as factories and shops, which the noble Lord mentioned, since this is in essence a taxation measure.

I should also remind the Committee that if it is true that an empty dwelling house benefits from local authority services, it is equally true that shops and factories benefit from them while empty. Indeed it is obvious that shops may benefit more from street lighting and police protection because they have bigger plate glass windows which need protection. It seemed to the Government that although the main social purposes related to dwelling houses, there was not a sufficient reason why the owners of other types of property, accounting for about half the rateable value in the country, should not make some contribution to the local rates when the scheme is introduced, on the same basis as the owners of house property.

Having said that, I should like to add that between now and the next stage of this Bill my right honourable friend and I will examine together once again the justification for including factories, shops, et cetera, with empty houses in this connection.


I am grateful to the noble Lord, Lord Kennet, for what he has just said. This is in no sense a wrecking Amendment. It was intended as a probing Amendment, and I hope I have established to the satisfaction of your Lordships that there should be further examination of this policy of making the rateability of vacant premises extend over all premises of every kind, seeing that the argument is so much stronger in the case of empty housing accommodation in an area of housing shortage than it is in regard to these other types of purely commercial premises. Moreover, if the experiment is to be a success at all it must be such that the local authority will feel it is acting justly in adopting the power.

I believe that there are some areas of the country where a local authority might reasonably feel that it should adopt this power, particularly now that we have extended the three months' period to six months. But I seriously think that it might be deterred from adopting this power if it found it had to charge rates on various kinds of property where it would seem unreasonable to do so. Having said that, and in view of the noble Lord's reply, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.


This Amendment is consequential on the passing of No. 5. I beg to move.

Amendment moved— Page 17, line 21, leave out ("three") and insert ("six").—(Lord Brooke of Cumnor.)

On Question, Amendment agreed to.


This is a little more than a drafting Amendment. Subsection (3) of Clause 21 defines the "relevant period of vacancy" during which an unoccupied hereditament will be liable to be rated. As defined, this is a period beginning on a certain day and ending with the day preceding that on which the hereditament becomes or next becomes occupied. It may be, however, that the hereditament will never be occupied again. It might cease to exist by being converted into a different hereditament or hereditaments—for instance, a large house might be broken up into flats; and in such a case it might be argued that there has never been a "relevant period of vacancy". This defect in the Bill will be cured by the addition of the words "or ceases to exist", to the definition. I beg to move.

Amendment moved— Page 17, line 25, at end insert ("or ceases to exist").—(Lord Kennet.)


This may be only a drafting Amendment, but it seems to me to be a very good Amendment and I am happy to support it.

On Question, Amendment agreed to.

Clause 21, as amended, agreed to.

Clause 22:

Supplementary provisions, exemptions and reliefs


(2) In relation to a relevant hereditament being a newly erected dwelling-house within the meaning of the said Schedule 2, the said section 21 shall have effect as if for references to a period of or exceeding three months there were substituted references to a period of or exceeding six months.

(3) No rates shall be payable under the said section 21 in respect of a hereditament for, or for any part of the three months beginning with the day following the end of, any period during which—


This Amendment is also consequential on Amendment No. 5. I beg to move.

Amendment moved— Page 17, line 42, leave out ("three") and insert ("six").—(Lord Brooke of Cumnor.)

On Question, Amendment agreed to.

6.52 p.m.

LORD BROOKE OF CUMNOR moved, in subsection (2), to leave out "six" and insert "twelve" [months].

The noble Lord said: This is not quite consequential on Amendment No. 5, but is clearly related to it. The Bill as presented by the Government provided that rateability at 50 per cent. shall start after three months in the ordinary case but that in the case of a newly erected dwelling-house (which is defined in Schedule 2), the period shall be six months. I have no doubt that is because a person who builds a house may find it very difficult indeed to judge how soon he will find a purchaser. Indeed, it seems to stand to reason that the period before rateability starts ought to be longer for a newly erected house than for an existing house. As we have now substituted six months for three months in regard to existing property, it would seem to be logical to substitute a longer period than six months in the case of a newly erected house.

Apart from the logicality of it, I have made certain inquiries and I am certainly led to think that it would be a discouragement to private builders if they knew that whatever happened, whatever the state of the market, a new house which they built was going to be liable for rates within six months, assuming that they had not sold it by then. I know—at least, I think I know—that the Government are not anxious to bring speculative house building to an end. Indeed, any Government which cares about the housing of the people must want the assistance not only of public authorities but also of the private builder, including the so-called speculative builder. I say "speculative" builder, but I think it is a pity if that adjective is thought to be a disparaging one, because there is a great deal of valuable building done by those who have no guarantee beforehand that a housing estate which they are building will all be taken up quickly by purchasers. There is at many times of the economic cycles a great deal of doubt and uncertainty in the mind of a builder as to whether he will be able to sell his houses quickly. On all these grounds it seems to me desirable that we should fix a longer period for the new house than for the existing house.

I am sure that in any case six months would be too short a period for a newly erected house, if we are not to discourage building of private houses in advance of immediately apparent demand. So far as I can judge, twelve months would be a fair period. No period can be defined as being absolutely right, but one must take a reasonable average. If we were to say that rateability of 50 per cent. started after twelve months it would not be reasonable, it seems to me, for any builder strongly to object. But I am quite sure that if we leave it at six months not only will it be anomalous in relation to the change we have made for the existing property, from three to six months, but it will also be a definite disincentive to a number of builders, particularly some very good builders, to go ahead. On those grounds I think we should make an Amendment. I beg to move.

Amendment moved— Page 17, line 43, leave out ("six") and insert ("twelve").—(Lord Brooke of Cumnor.)


I cannot but believe that the Government will be overjoyed to accept my noble friend's Amendment. After all, by the Bill we were discussing the other day, the Land Commission Bill, the Government have "scared the pants off" every builder in the country. Builders do not know what is going to hit them next; and the eight million owner-occupiers in the country have suddenly realised they were sold a pup at the last Election when the Land Commission was put in the prospectus before them. Here is an excellent opportunity for the Government, by accepting this Amendment, to reassure the eight million owner-occupiers and a great many builders that the Government are definitely not out to "do them down."


There is obviously force in what the noble Lord says about changing three to six and then six to twelve, and moreover I think if we do not pass the Amendment the noble Lord is now moving, a provision of the Bill a little further back (I refer to subsection (2) of Clause 22) will not make sense. Nevertheless, the Government will clearly have to reconsider the whole of this clause as a result of the Amendment just passed which changed "three months" to "six months". In those circumstances I do not feel I should advise the Committee very strongly one way or the other about whether or not we make this Amendment now, since we shall, as I say, be reconsidering the whole question before Report and Third Reading stages.

I would invite the noble Lord, Lord Brooke of Cumnor, to withdraw the Amendment on that understanding, but, if he does not, I should not be unwilling to accept it this afternoon without prejudice to further consideration and further discussion in this House at a later stage.


After a speech like that, I should greatly wish that I could accept the suggestion of the noble Lord, Lord Kennet. But the fact is that if I did, subsection (2) of Clause 22 would make absolute nonsense, and I do not think that I should ask your Lordships to pass a clause in that condition. For that reason, in addition to the reasons which I gave in my earlier speech, I do not feel able to withdraw my Amendment.

On Question, Amendment agreed to.


This, also, is consequential on Amendment No. 5. I beg to move.

Amendment moved— Page 17, line 45, leave out ("three") and insert ("six").—(Lord Brooke of Cumnor.)

On Question, Amendment agreed to.

7.1 p.m.

LORD ILFORD moved, in subsection (3), after paragraph (a) to insert: () an application by the owner for planning permission or an appeal by the owner against a planning decision is awaiting determination;".

The noble Lord said: The purpose of this Amendment can, I think, be stated quite shortly. Clause 22(3) enumerates a number of different sets of circumstances in which a house may be empty without the intention of the landlord to secure better conditions when it is reoccupied and, indeed, without the fault of the landlord. Your Lordships will see that one such circumstance is where the owner is prohibited by law from occuping the hereditament or allowing it to be occupied", Then the subsection goes on to set out a number of other circumstances in which there must be a lapse before the three months or six months begin to run.

My Amendment proposes to add to those circumstances the case where an application has been made by the owner for planning permission, or an appeal by him against a planning decision is awaiting determination. Both of those are circumstances in which the property may remain vacant without the intention of the owner to obtain better conditions when it comes to be reoccupied. We all know that planning permission sometimes takes a long time to obtain.

In the debate on the Land Commission Bill the other day some figures were given which showed that the period of time within which town planning consent can be obtained is gradually getting longer and longer. It surely is not fair that a landlord should be liable for rates during a period when he is awaiting the consent of the town planning authority. In the same way, it is surely not just that he should be liable for rates while he is waiting for the Ministry of Housing and Local Government to give their decision on a planning appeal. Both of those are sets of circumstances which are not altogether out of his control, but the fact is that the house remains empty, albeit not as part of the purpose which the landlord has in view.

I should have thought it was so obvious that these planning delays ought to be treated in the same way as the other circumstances set out in subsection (3) that I hope that the noble Lord will see his way to accept this Amendment. It is, I think, an Amendment which does no more than justice to the owners of property, and I hope that the noble Lord will see his way to meet me about it.

Amendment moved—

Page 18, line 4, at end insert the said paragraph.—(Lord Ilford.)


I had viewed this Amendment with some degree of sympathy when I first read it, and I am equally sympathetic towards its background, after having heard the noble Lord, Lord Ilford, but I should have to feel that any delay which had been caused by an appeal or by a planning permission was really genuine. I have only two sentences to say. Would it not be possible for a man, when he finds that his house has become vacant, immediately to ask the local authority for planning permission to build a greenhouse and thereby to cover himself? There could be trickery in dealing with this clause if it were amended in this way. I am not going to say that it is not drawn with the verbal tightness that we expect from the noble Lord, Lord Ilford, but if it were drawn still more tightly I should be prepared to give it objective consideration. At the moment, however, I can see that hordes of tricky people would drive horses and carts through it.


May I speak briefly in favour of my noble friend's Amendment? I am not so sure that everybody is out to "diddle" the law by putting forward a spurious planning application. I had a case for planning permission which I have just recently obtained and which entirely confirms all that my noble friend has said. I obtained planning permission in principle from the county authority in regard to a piece of land, but I had to wait several months before that planning permission was confirmed by the local authority who had the last word. That was through no fault on my part. This must happen to masses of applicants, and I think it quite unreasonable that the owners should be made to suffer because of these possibly perfectly warrantable delays in exercising I a higher authority.


As every noble Lord has said, this Amendment draws attention to a genuine problem which I hope the Government will recognise. As one who, for over four years, was responsible to Parliament for the determination of planning appeals, I am only too well aware that what seems to the applicant an inordinate time is liable to elapse between the time when he lodges his appeal and the moment when the Minister gives his decision. This is on top of any period for which he may have had to wait after he had put in his first application to the planning authority.

At the same time, I recognise, as I am sure does my noble friend Lord Ilford, a genuine difficulty, in that this Amendment as it stands contains no protection against the rather unscrupulous owner who, whenever he thinks he is coming up to the moment of having to pay rates, puts in for another planning permission. As your Lordships may or may not be aware, even when you have put in a planning application, had it rejected by the planning authority, and appealed to the Minister and had your appeal dismissed, you can instantly put in exactly the same planning application again; so that it would he possible for a certain type of person to play this for rather a long time. At the same time, it seems extremely hard that somebody who is genuinely seeking what may he a desirable development of his property should find himself sliding over into the period of rateability simply because he cannot get an answer from the planning authority. With the best will in the world, we know that some planning authorities are so heavily pressed with planning applications that they cannot give decisions as quickly as the elected members of the authority would no doubt wish.

Therefore, I greatly hope that we may hear from the noble Lord, Lord Kennet, that the Government have given thought to this matter. I feel sure that the Government will appreciate the excellent motive for which my noble friend has moved the Amendment, and I greatly hope that, maybe not in these exact words but with some modification, perhaps with necessary provisos, the Bill may be amended in the sense which has been suggested by my noble friend.


I desire to make only one observation in reply to the point which was raised by the noble Lord, Lord Leatherland, and to which my noble friend has referred. If the planning authority or the local authority receive a planning application which they believe not to be a genuine application but an application which seems to them to have been made for the purpose of securing the benefit of this clause, the remedy is in their own hands. They can expedite their decision and not keep the applicant waiting for any great length of time. That would appear to be a simple answer to the point raised by the noble Lord, Lord Leatherland.


But if they expedite their decision and rule against the applicant, could not the applicant then appeal to the Minister? That gives him another six months.


The Minister could expedite his decision, too.


Ah, you do not know Ministers.


We all know, that, unfortunately, expedited decisions are often bad ones and delays are not always due to papers mouldering in in-trays.

I should like to take up the point which was made by the noble Lord, Lord St. Helens, but he did not say why he was not getting any income from his piece of land pending his planning application. The general point here is that we all know the determination of planning applications can sometimes be very slow indeed, and nobody knows this better than the Minister of Housing and Local Government. That is the reason why at present he is spending many hours a week preparing a major overhaul of the system which will get rid of these delays. And noble Lords who closely follow town and country planning matters will know the sort of thing we have in mind.

The important point is that it is not normally the case that properties have to stand empty while planning permission is being sought to alter them. This is so in only a minority of cases. There is no prima facie reason to suppose that they should be empty. If you want planning permission to change something that is yours, you would be wise to continue using the property up to the moment when the builders move in.

For this reason the prudent owner will make his application well in advance, as it is very much in his interest to keep his house occupied or his factory ticking over to the last minute, to the day when the planning permission finally arrives. The other aspect to this question is that planning permissions are not normally sought in order to make changes which will render the property less profitable or to keep it at the same level of profitability. They are normally sought to make changes to increase its value and enable greater profit to be extracted from it.

The main objection to the Amendment was described very vividly by my noble friend Lord Leatherland, and was one which the noble Lord, Lord Brooke of Cumnor, freely accepted. It is the fact that, if we accepted the Amendment, owners would be able to ensure that their empty property paid no rates by putting in a nice little planning application which it would take six months to determine; and then they could appeal against the decision, which, I regret to say, might take anything up to fourteen or sixteen months and then when the appeal was turned down they could submit another application to the local council, which would take another six months to determine, afterwards appealing to the Minister. It costs nothing to make a planning application: it does not even have to be properly drawn out. You can do these things very sketchily, and if we were to pass this Amendment it would give absolute carte blanche to anybody to evade the part payment of rates, the principle of which is admitted by noble Lords opposite.

I find it very hard to see any way of splitting the difference on this. The Government are extremely anxious to avoid laying on local authorities the burden of judging the intention or the bona fides of a given property owner. This would so much complicate their lives that, desirable as it would be in the interests of abstract justice, we have felt that true justice over the broad field would not be served by laying this burden on them. That being so, I do not see any half measures, as what has been sought for cannot be declared not to exist. In view of the noble Lord's words about its not being necessary to pass this Amendment in exactly the words in which it is drafted, I do not know whether he will feel inclined to withdraw it, with the possibility of a further discussion later.


I think the Government have recognised that there is a genuine problem here, but that this Amendment as drafted would leave too many loopholes for evasion. I must accept that as regards this particular Amendment, and I would respectfully urge my noble friend not to press it to a Division to-night, but I think that this is a subject on which we all might seek to do some more work between now and Report stage. I hope, for instance, that one could at any rate insert words to guard against repetitive applications. It seems to me that when somebody has put in a planning application the moment he is in a position to do so and is still waiting for a final determination of it, it is hard if through no fault of his own he has to succumb to rateability. I hope that there is sufficient common ground on which we might work further at this. If I am right in thinking that is the view also of the noble Lord, Lord Kennet, perhaps we might leave the Bill as it stands now and think about it further before we let it go.


In the light of what the noble Lord has said, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

7.17 p.m.

LORD HENLEY moved to add to subsection (3):

The noble Lord said: I am in a little difficulty in moving this Amendment, because it should really be two Amendments. Paragraphs (g) and (h) deal with reconstruction and conversions. Paragraph (h) is subsidiary to paragraph (g), whereas paragraph (i) is a separate subject altogther and deals with houses for agricultural workers. I may need the guidance of the Committee to tell me what to do about this. In regard to paragraphs (g) and (h) which deal with reconstruction and conversion, it seems to me that there is no provision in the Bill for property which is undergoing reconstruction. I listened to what the noble Lord, Lord Ilford, had to say in regard to his Amendment. He thought some assistance might be found within the Bill to provide for this, but I think his eventual answer was that it could not. I myself cannot find anything in relation to this, though there is something in one of the Schedules which might help. Again perhaps the noble Lord who is to reply will be able to tell me whether he thinks there is anything in the Bill relating to this matter.

Everybody will agree that there is a problem involved here in regard to houses which have to be reconstructed. The principal difficulty one faces is the one raised by the noble Lord, Lord Leatherland, on the last Amendment, the point about the danger of abuse; there is also the point raised by Lord Kennet, about profitability. When one is reconstructing a property one is presumably reconstructing it with a view to making a profit out of it. This applies less where demolition is concerned. Nevertheless, there is a problem here which I do not think is met in the Bill, and paragraphs (g) and (h) are designed to add these matters to the list of exceptions. As I say, these two paragraphs ought to be one Amendment by themselves.

Paragraph (i) deals with the matter of agricultural workers' houses. It is sometimes difficult to get a man, or the right man, and it may be necessary to leave a house empty for longer than three months. I have had some personal experience of this problem. I do not think my proposed paragraph would lay any great burden on the local authority, and I feel that it would possibly be of some help to agriculture. I wonder whether the noble Lord would tell me if any part of that Amendment would be acceptable to the Government. As I say, it should be two totally separate Amendments, though it is down as one. On the one hand, there is the part which deals with the reconstruction of buildings, which I think may be acceptable to many noble Lords; and, on the other hand, there is the part about agricultural cottages, which possibly may not be. I beg to move.

Amendment moved— Page 18, line 28, at end insert the said paragraphs.—(Lord Henley.)


We must, I think, discuss the Amendment as it appears on the Order Paper, and the Government see an objection to each of the three classes of hereditamcnts which it is proposed to exempt from part-rate payments. However, I will, as is becoming familiar this evening, undertake to reconsider the purpose of the noble Lord's Amendment under the two headings which he described in his speech. But for the moment we must keep the three together.

The first of these additions, the first of the classes which the noble Lord asks to add to exempted properties, is hereditaments which are left vacant because the owner intends to demolish or to reconstruct them entirely. Once again, I am afraid that this would provide an opportunity for evasion of liability. How can you tell whether the owner really intends to demolish them or to reconstruct them entirely? The only way out of this difficulty would be to leave it to the local authorities to gauge his intention, and this task the Government are most unwilling to lay upon them.

As regards the second category, once demolition has begun the liability to rates ceases in any event because the building will cease to be capable of beneficial occupation—the concept on which all rating depends—and in any case will very soon cease to exist at all. It will no longer be a hereditament. So it seems that there is no need to make the second proposed addition to the list of exempted classes of buildings. Where the building is being reconstructed or improved—it is actually at the moment when the builders are in—by means of works which prevent its beneficial occupation, the owner will be able to have recourse to the doctrine of rebus sic stantibus, and will be able to obtain a reduction in its rateable value by a nominal amount, because it has to be assessed as it is at a given moment and it will not be susceptible of beneficial occupation. It goes without saying, of course, that if it is a fairly short repair or reconstruction job the owner will not find it worth doing, nor, presumably, will he too much resent having to pay rates on it during this period.

The third case is the hereditament subject to a planning condition restricting occupation to a person employed in agriculture or forestry; in other words, tied cottages. Permission to build cottages to which these restrictions apply is usually given only because of a pressing need for accommodation for agricultural workers, and since these permissions are only given because of the existence or alleged existence of a shortage of accommodation for this specific type of occupier, it would seem somewhat indefensible to allow relief from rates when they were empty. This is precisely the kind of property which we want to see occupied all the time. If the particular farm in question no longer has a use for a given tied cottage, there may well be other agricultural workers in the area who would be glad to move in, and this is what we hope to encourage by not exempting it from rates. The farmer may want to keep a cottage empty for some specific or personal need of his own, because he wants to have another sort of farm labourer of his own there rather than somebody else's employee who is seeking accommodation round about. I do not think it should be the purpose of the House to amend Government legislation in such a way as to make it easier for him to do this. The purpose should be to get the cottages occupied.

In any event, as I said in the case of the second proposed exemption, if a cottage really cannot be relet and the owner cannot attract a tenant who is his own employee, or is otherwise employed in agriculture or forestry perhaps on the next farm, there will in that case be evidence that the property cannot command a rent while it is subject to this restriction, and the owner will be able to make a proposal for the reduction of the rating assessment in accordance with that situation. In view of the explanations which I have given, I hope the noble Lord may feel that it is not neces- sary to amend the Bill in the directions he has proposed.


With regard to the first part of my Amendment, I think the real point of the noble Lord's rejection is this question of his not wanting to put local authorities in what is, to him, the invidious position of having to make judgments. I do not see the force of this argument. In fact, my earlier Amendment which I withdrew, because the preceding Amendment had been carried, was to ask that local authorities should be given very much greater latitude than they already have. Nevertheless, that is not the Government's view. The Government do not accept that and I have no option but to bow to their decision.

With regard to what the noble Lord had to say about tied cottages, I take his point. There are certain difficulties. I know that the argument is that we have these tied cottages because there has been a pressure for them, and we must keep them full. Very often, in the rather remote areas where we are dealing with stockmen, shepherds and so on, it is sometimes extremely difficult to get a man at all, and it is necessary to keep the place empty for a long time. I agree that six months is quite a long time, but I should have liked to see this made part of the exemption. Nevertheless, I do not intend to press this Amendment and I beg leave to withdraw it.

Amendment, by leave, withdrawn.

On Question, Whether Clause 22, as amended, shall stand part of the Bill?


I should like to make a brief intervention. On an earlier Amendment, the noble Lord opposite diverted an argument which I used, and said that it applied more appropriately to the Amendment moved by my noble friend Lord Ilford. But when we came to the discussion on that Amendment he ignored it. I do not wish to repeat my argument now. I just wish to remind him that I thought that argument was relevant, and I am going to ask him to consider this again when he considers parts of this clause, as he said he would, before Report stage.

It is an important feature that certain houses are empty because they are under the shadow of some action by a public authority. They are not prohibited from occupation (I think such houses are provided for here) but they are under a shadow. I mentioned the policy with regard to motorways. Another example might well be of a water undertaking, about which we know so much in this House, proposing to construct an impounding reservoir. If the noble Lord opposite had a house which was in such an area, he would certainly not find it easy to sell should it become vacant. It certainly would not be worth while spending any money in order to improve it so as to be able to re-let it, and it might well, owing to the processes that we know only too well, remain empty or remain in this state for well beyond these few months. May I ask the noble Lord, when he looks at this clause again, to consider that not unimportant group of circumstances in which property may become empty. Because it would be foolish in the extreme to try to occupy such property, since it would simply add to the compensation which the authority might have to pay for the improved property when a decision was finally made.


I apologise to the noble Lord, but I expected him to get up on the Amendment I had in mind. I quite forgot the point. I will do as he asks and look at the matter between now and Report stage.

Clause 22, as amended, agreed to.

Clause 23 [Rating of certain office premises of nationalised boards, &s.]:

7.28 p.m.

LORD KENNET moved, after subsection (1), to insert: (1A) In determining the rateable value of any office premises which are to be rated by virtue of subsection (1) of this section, any part of the premises which is not used as an office or for office purposes, or for purposes ancillary to the use of the premises as an office or for office purposes, shall be disregarded.

The noble Lord said: When my honourable friend the Joint Parliamentary Secretary moved at Report stage in another place that this clause be read a second time he let it be known that alterations to it might be required. This is precisely what has happened. The Amendment which I am now going to ask your Lordships to pass is the alteration of which he gave notice at that stage. Its purpose is to meet a grievance of local authorities, that where a new "spec"-built office block in their area happens to be occupied by a nationalised industry, they do not get any rates directly from it.

The intention, as my honourable friend explained, is separately to rate the offices of nationalised industries which are away from railway stations, generating stations, or gasworks, but not those which are within the operational areas of the under-takings concerned. Although this proposal is easy enough to express in general terms, as I expressed it myself in introducing this Bill into your Lordships' House, it has proved highly complicated to put into statutory form. I can assure the Committee, however, that this Amendment and the consequential ones that I shall be proposing are all consistent with the explanation I have just given. The Amendment provides for the case where office premises which are liable to be rated under the clause are used partly for the direct operational purposes of the undertaking. It is not the intention of the clause to secure the separate rating of operational premises, and the Amendment accordingly provides that the parts so used shall be disregarded in determining the rateable value of the office premises. I beg to move.

Amendment moved— Page 19, line 16, at end insert the said subsection.—(Lord Kennet.)


I think that it is possible that the noble Lord, Lord Citrine, may wish to say something before we leave this clause. I should desire only to thank the Government for having taken trouble about this whole difficult subject. If I remember rightly, this clause which we are discussing was introduced at the Report stage in another place, and on that occasion the Parliamentary Secretary said that they might not have got it exactly right but that it had to be produced under some pressure—pressure exerted by the Members for Croydon and certain other places, in particular, which are much affected by this difficult matter. I certainly do not wish to criticise the Government in any way for having had further thoughts since the Report stage in another place, and for having tabled these Amendments to improve the clause. At this hour I certainly shall not seek to detain the Committee about it, but I should be very interested to hear what the noble Lord, Lord Citrine (who, for obvious reasons, has taken an interest in the subject over many years), may wish to say about these further Amendments to the clause.


I was going to reserve what I had to say until we came to the Motion, "That the clause stand part of the Bill", but if it is opportune to introduce my remarks here I will certainly do that. On Second Reading I drew attention to the Annual Report of the Electricity Council in which they complained very strongly about the excessive burden they found on electricity consumers due to the payment of rates by the electricity supply industry. They pay £30 million a year, which is a huge sum by any kind of calculation. In saying what I did, it was not my purpose to embarrass the Government or to deprive the local authorities of any additional revenue to which they were legitimately entitled. The electricity supply industry has been—I will not say the victim, but the subject of considerable additions to its costs which are not due to its own controlled policy. They have been due to the policy of Governments—although not of the present Government. I make no complaint about that, but it is a fact that they have added some millions of pounds to the costs of the electricity supply industry.

In reply to what I said, the noble Lord, Lord Sorensen, was good enough to say that this was an interim measure and that a drastic review would be undertaken by the Government, as it was felt that the position was unsatisfactory. I should have thought the logic of the situation demanded that anything which would increase a burden which was already extremely heavy would have been postponed until that review had taken place—or at least that part of the review bearing on this question. I said that the Electricity Boards, so far as I knew their mind, had no objection to the separate rating principle. What they did object to were the additional costs which this would involve unless some provision was made in the Bill to avoid that. It would mean an additional £3 million which the electricity consumers would have to find; and I should have thought that the proper course for an industry already over-burdened would be to pro- vide in the Bill for a deduction from what is the aggregate or global total of rates which are paid by the gas industry and the electricity supply industry. As I pointed out, a precedent was set under the Local Government Act 1958 when the showrooms for gas and electricity were separately relieved. A special provision was then inserted to permit that separate rating to be deducted from the aggregate sum of rates paid by the two industries, and I should have thought that it was equitable to treat the Electricity Boards—and, indeed, the other Boards if they are paying excessive rates—in the same way.

The electricity supply industry is undoubtedly paying too much now, by any kind of comparison that can be made. The last figures I have seen other than those in the Annual Report for 1964/65, which I quoted, show that the amount of rates paid by the electricity supply industry was £26 million, four-and-a-half times as much as the gas industry pays and seven times as much as British Railways and London Transport put together pay. By that standard, the waterways rating is negligible. In point of fact, nearly three times as much is paid in rates by the electricity supply industry as is paid by the various bodies enumerated in the Bill itself. Even if the rates of the coal industry and the Post Office—two other nationalised industries which are outside this Bill—were added, it would still be found that the electricity supply industry was paying rather more than they were so far as concerns England and Wales, which this Bill covers. It is estimated, on the best information that I can obtain, that if this measure is passed, then, in two years' time the electricity supply industry will be paying £38 million, probably, in rates, and I think it is going a little too far, with an industry that is struggling to give a good and an economical service to its consumers, to keep adding burdens in this way.

I am not suggesting that the other Boards pay too little: what I am suggesting is that the Electricity Boards pay too much. If you compare it with private industry and take the rates per employee, which is one comparison it is safe to make, the electricity industry is paying in rates six times as much per employee as is the manufacturing industry. What I hope is that the Government will consider this position and will take steps in the later stages of the Bill to enable this question to be reviewed at greater length, and that they will make some possible revision in the direction that I have asked.


I had hoped that the present Amendment (which we are still discussing, I think) would make the clause as a whole slightly less unpalatable to my noble friend than it would otherwise have been, because it does let off from rates any portion of the city centre offices which are not really used as offices at all. But I realise, of course, that it does not make it half unpalatable enough for him; and, in view of his exceptional experience and knowledge of the field in question, I undertake to convey his views immediately to my right honourable friend.


I thank my noble friend.

On Question, Amendment agreed to.

7.39 p.m.


There are several more Amendments to this clause which are down in my name. They follow, more or less, after the first one. I do not know whether your Lordships would think it appropriate if I were to move them formally, without making too lengthy an explanation in each case, but, if so, we could then have a look at the whole clause, as amended, at Report stage. I beg to move Amendment No. 17.

Amendment moved— Page 19, line 7, after ("shall") insert ("from time to time").—(Lord Kennet.)

On Question, Amendment agreed to.


I beg to move Amendment No. 18 formally.

Amendment moved— Page 19, line 9, leave out from ("lists") to second ("of") in line 10 and insert ("so as to give effect to the foregoing provisions").—(Lord Kennet.)

On Question, Amendment agreed to.


I beg to move Amendment No. 19 formally.

Amendment moved—

Page 19, line 10, at end insert— ("() A valuation officer may if he thinks fit, before making a proposal in pursuance of subsection (2) of this section in respect of any premises,—

  1. (a) raise a question as to whether the premises are situated on operational land of an authority to which this section applies; and
  2. (b) make an application to the appropriate Minister for the determination of the question in pursuance of the following provisions of this section;
and where a valuation officer certifies that a proposal made by him for an alteration of a valuation list is so made in pursuance of subsection (2) of this section in consequence of a determination given on an application made by him by virtue of this subsection on a date stated in the certificate, the proposal shall have effect as if it had been made on that date. () Any question as to whether, for the purposes of this section, any premises are situated on operational land of an authority to which this section applies shall be determined—
  1. (a) where the authority is the British Railways Board, the London Transport Board or the British Waterways Board, by the Minister of Transport;
  2. (b) in any other case, by the Minister of Power.")—(Lord Kennet.)

On Question, Amendment agreed to.


I beg to move Amendment No. 20.

Amendment moved— Page 19, line 16, at end insert (", as respects office premises situated in England, the South of Scotland Electricity Board. ()").—(Lord Kennet.)

On Question, Amendment agreed to.


I beg to move Amendment No. 21 formally.

Amendment moved— Page 19, line 23, leave out from ("under-taking") to ("not") in line 24.—(Lord Kennet.)

On Question, Amendment agreed to.


I beg to move Amendment No. 22.

Amendment moved— Page 19, line 26, leave out ("or in which interests are held").—(Lord Kennet.)

On Question, Amendment agreed to.


I beg to move Amendment No. 23 formally.

Amendment moved— Page 19, line 30, leave out from ("work") to ("'clerical") in line 32 and insert ("and handling money").—(Lord Kennet.)

On Question, Amendment agreed to.

Clause 23, as amended, agreed to.

House resumed.

House adjourned at eighteen minutes before eight o'clock