PART III (Hansard, 18 March 1975)

HL Deb 18 March 1975 vol 358 cc686-95 686

§ APPLICATION OF ENACTMENTS RELATING TO COMPENSATION ON COMPULSORY PURCHASE, ETC., TO CASES UNDER PART I OR PART II OF THIS SCHEDULE.

§ Compensation

§ 14.—(1) It is hereby declared that where, under Part I or II of this Schedule, a compulsory purchase order is to be treated as made under Part VII of the Housing (Scotland) Act 1966 or Part VI of the Town and Country Planning (Scotland) Act 1972, compensation for the compulsory acquisition of the land comprised in the complusory purchase order is to be assessed in accordance with the provisions applying to a compulsory acquisition under the said Part VII (or as the case may be, the said Part VII).

§ (2) Where, under Part I or II of this Schedule, land or any interest in land within any area is to be treated as appropriated by a local authority to the purposes of the said Part VII, compensation for its compulsory acquisition shall (where it increases the amount) be assessed or re-assessed in accordance with the provisions applying to a compulsory acquisition under the said Part VII.

§ (3) Where, under paragraph 2 of Part I of this Schedule, or under Part II thereof, any interest in land acquired by a local authority by agreement (after the declaration of a clearance area, housing treatment area or housing action area which relates to that land) is to be treated as appropriated for the purposes of the said Part VII—

(a) compensation shall (where sub-paragraph (2) above would have increased the amount) be assessed and paid as if the acquisition were a compulsory acquisition, under Part III of the Housing (Scotland) Act 1966, Part I of the Housing (Scotland) Act 1969 or Part II of the Housing (Scot-land) Act 1974 (as the case may be), to which the said sub-paragraph (2) applied; but
(b) there shall be deducted from the amount of compensation so payable any amount previously paid in respect of the acquisition of that interest by the authority.

§ (4) Where sub-paragraph (2) or (3) above applies, the local authority shall serve on the person entitled to the compensation a notice in the prescribed form giving particulars of the amount of compensation payable in accordance with the provisions applying to a compulsory acquisition under the said Part VII, and if the person served does not, within twenty-one days from service of the notice, accept the particulars, or if he disputes the 687 amount stated, the question of disputed compensation shall be referred to the Lands Tribunal for Scotland.

§ (5) The notice shall be served not later than six months after—

(a) the relevant date, as defined in paragraph 1(4) of this Schedule, or
(b) the date on which the rehabilitation order becomes operative for the purposes of Part II of this Schedule,

(as the case may be), and paragraph 19 of Schedule 1 to the Acquisition of Land (Authorisation Procedure) (Scotland) Act 1947 (service of notices) shall apply to the notice.

§ (6) Sub-paragraph (2) above shall be left out of account in considering whether, under sections 117 and 118 of the Lands Clauses Consolidation (Scotland) Act 1845, compensation has been properly paid for the land; and accordingly sub-paragraph (2) above shall not prevent an acquiring authority from remaining in undisputed possession of the land.

§ (7) Where sub-paragraph (2) above makes an increase in compensation to be assessed in accordance with sections 56 to 60 and 63 of the said Act of 1845 (absent and untraced owners)—

(a) a notarial instrument executed under section 76 of that Act before the latest date for service of a notice under sub-paragraph (4) above shall not be invalid because the increase in compensation has not been paid, and
(b) it shall be the duty of the local authority, not later than six months after the said date, to proceed under the said sections and pay the proper additional amount into the bank.

§ (8) Any sum payable by virtue of this paragraph shall carry interest at the rate prescribed under section 40 of the Land Compensation (Scotland) Act 1963 from the time of entry by the local authority on the land, or from vesting of the land or interest, whichever is the earlier, until payment.

§ (9) In this paragraph, references to an increase in compensation shall be read as if any payments under—

(a) section 49 of the Housing (Scotland) Act 1966, section 11 of the Housing (Scotland) Act 1969 or section 30 of the Housing (Scotland) Act 1974 (payments in respect of well-maintained houses and payments to owner-occupiers),
(b) section 160 of the said Act of 1966 or section 38 of the Land Compensation (Scotland) Act 1963 (allowances to persons displaced),
(c) sections 18 to 20 of the said Act of 1969 (payments to owner-occupiers and others in respect of unfit houses purchased or demolished), and
(d) section 34 of the Land Compensation (Scotland) Act 1973 (disturbance payments for persons without compensatable interests),

were, to the extent that they were made to the person in question, compensation in respect of the compulsory purchase.

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§ (10) In this paragraph "prescribed" means prescribed by order made by the Secretary of State for the purposes of this paragraph; and any order under this sub-paragraph shall be contained in a statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

§ Extension of time limits for exercising powers under certain compulsory purchase orders

§ 15. In section 116 of the Lands Clauses Consolidation (Scotland) Act 1845 (time limits for exercising powers under compulsory purchase orders), there shall be added at the end the following paragraph—

§ "For the purposes of this section no account shall be taken of any period during which an authority are, by virtue of Schedule 10A to the Housing Act 1974 (which relates among other things to buildings in clearance or housing treatment or housing action areas), prevented from serving notice to treat under section 17 of this Act.".".

§ 15. In Schedule 14 to the Housing Act 1974, in paragraph 2(b) (transitional provision concerning loans by the Housing Corporation), for "(c)" there shall be substituted " (e) ".").— (Lord Hughes.)

§ On Question, Amendment agreed to.

§ Schedule 1, as amended, agreed to.

§ Lord HUGHES
I beg to move Amendment No. 17.

§ Amendment moved— Transpose Part III of Schedule I to after Schedule 2 as Schedule 2A (Miscellaneous and Consequential Amendments).—(Lord Hughes.)

§ On Question, Amendment agreed to.

§ Schedule 2 [Phasing of rent increases where rent for dwelling-house under regulated tenancy is registered]:

§ 6.13 p.m.

§ Lord CAMPBELL of CROY moved Amendment No. 18:

§ Page 15, line 6, at beginning insert— ("In the case of rents registered after the commencement of this Act,").

§ The noble Lord said: An anomaly arises in the private sector of rented housing in Scotland from this Bill, and the effect of this Amendment would be to remove that anomaly. The anomaly has arisen from additions to the Bill that were made by the Government at very short notice at the Report stage in the other place, so that there was no opportunity for the situation to be realised in time to be raised there. The anomaly can best be demonstrated by what has happened with one group of about 3,000 houses in the Glasgow area which are owned and managed by one company 689 They were all built between 1928 and 1932 and are of the same size and design.

§ In 1973, with, I understand, the full support of the rent assessment officers and other authorities, all the 3,000 tenants were offered an agreement by the company which would raise their rents in three stages, arriving at the third stage at a figure of £240, which was £100 less than the fair rent which had been assessed from test cases. In Scotland, the fair rent system operates in the private sector but not of course in the public sector. A large number of the tenants signed, leaving only 57 who did not. This relieved the rent officers and the appeal committees of an immense amount of work and also, I think, of public expenditure.

§ However, what then happened? By accident of timing the rents of those who signed the agreement were frozen—that is nearly 3,000—and the rents of the 57 who for one reason or another did not were frozen. By the late additions which the Government made to the Bill in the other place, the opportunity of evening up the rents and removing the anomaly was removed. What it means is that the large majority of these tenants, who were told at the time that they would do better by signing the agreement because they were going to pay a rent at the third stage considerably less than the fair rent —and they were advised I think by everybody from whom they sought advice, including I understand the rent officers, to go ahead with this—have, quite by chance, ended up by being worse off. They were told that they would do better if they signed the agreement and by the chance timing of the freeze they have unintentionally been let down, as they may well feel. The 57 tenants are in a better position by accident.

§ Moreover, this did not happen in England and Wales. There was a similar situation there, but the Bill on rents and subsidies for England and Wales has not made it impossible for this anomaly to be removed. I must make it clear that there is no question of the amount of money involved here being more than negligible. The point is one of principle. And no hardship arises because the tenants who cannot afford to pay the rents are covered by the rents allowance system. But it is the future we must 690 think about. The situation could be damaging on the prospects of obtaining similar agreements between landlords and tenants, which both sides of your Lord-ships' House recommend, if the accident which has happened here were allowed to damage tenants' confidence in agreements. Every one agreed that the agreements were welcome. They avoided overloading the rent assessment system. But with this glaring anomaly of the small minority who did not sign the agreement appearing to benefit in relation to the others, what are the chances of many tenants in the future signing agreements of this kind? This situation will be reached when the three-year period ends.

§ The Government must surely want to avoid the trouble and expense of many unnecessary cases going through the rent assessment system, which was avoided for this three years. Otherwise, in Scotland it might well mean additional rent officers having to be taken on because of the greatly increased work. All this would add to public expenditure, which need not be incurred, so I hope the Government will look at this matter. The difficulty could be avoided quite simply by this Amendment. If the Government think they have a better way of doing it, of course I shall be only too happy, but I understand that this Amendment provides one way of removing this anomaly which could upset the confidence of a large majority of tenants in a position of this kind in the future. If the Government, who I know are familiar with this problem—they have had many points to consider under this Bill—cannot accept this Amendment today, I hope they will at least consider putting down one of their own for the Report stage. I beg to move.

§ Lord HUGHES
As the noble Lord, Lord Campbell of Croy, knows, and as was indicated in his remarks, this has been an exceedingly difficult problem to deal with. It is not confined to the one company, notwithstanding that they are the biggest single example. The result of the Amendment, which is not one which the Government can accept, would be to draw an arbitrary distinction in the post-freeze period between those steep increases which should be moderated by a counter-inflation limit and those in-creases which should not be so affected— because the £1.50 is a counter-inflation 691 limit. The question whether the limit should apply would be determined solely by reference to the date of registration. The limit of £1.50 a week in any year was included in the Bill as a counter-inflation safeguard similar in purpose to the limit on individual increases for public sector houses. It is an essential part of our provisions to enable rents to be increased progressively, where appropriate, in the post-freeze period. The Amendment would bring about a completely inequitable situation after 15th May, with the dividing line drawn by reference simply to the date of rent registration between a majority of tenants who would benefit from the overall limit or increase and a minority who would not.
Under the terms of the Bill, all tenants who had rents registered during the freeze will begin phasing on 16th May. In most cases, their phasing will run until May 1977. If this Amendment were accepted, during that period certain tenants would face increases of more than £1.50 per week, while other tenants, who happened to have had their rents registered after 15th May, would be protected from increases above that amount.
In moving his Amendment, the noble Lord has had in mind the benefits, or otherwise, to the interests of the particular group of tenants of the unnamed company. I gather from the attitude of certain tenants that they would regard the company not only as unnamed but as unmentionable! The Government have to attempt to take a wider view and consider equity for private tenants throughout Scotland. It cannot reasonably be expected that the Government will make an exception of a particular group of tenants who had their rents registered during the freeze, although I infer from the Amendment that the noble Lord sympathises with the general purpose behind the limitation of rent increases.
The noble Lord has referred to the 57 tenants of this particular company. But it is not only these 57 tenants who are affected. I cannot give the total number throughout Scotland, but the number of tenants affected is very much greater than the 57 tenants of this particular company. I am told that the figure is probably 500 tenants throughout Scotland—not 500 tenants of this com- 692 pany, but 500 tenants who are in a position which is comparable to that of the tenants of Western Heritable. However, I know that today the draftsman has been working on another Amendment. I mentioned this to the noble Lord, Lord Campbell of Croy, earlier in the day. However, as the Amendment had not been submitted to me for consideration before I came to this House, I do not know whether the Amendment will be helpful in any way to the position to which the noble Lord has referred. If. therefore, as I advise, the noble Lord withdraws this Amendment, it would be completely without prejudice to his position. I will ensure that the new Amendment is sent to the noble Lord and to his noble friend Lord Lyell as quickly as possible so that they may have the earliest opportunity of deciding how they wish to deal with this matter.

§ Lord LYELL
May I thank the noble Lord for the speed and ability with which he has answered, or tried to answer, some of the queries which have been raised. I am interested to learn that he believes that 500 tenants all over Scotland are in a comparable position. No doubt the noble Lord is nearer to the truth than we are; we understood that the number was nearer 100. Nevertheless, there is a point of interest here—that rent officers all over Scotland must be having a fair time negotiating what is, or what is not to be, the proper rent. The extra cases which the noble Lord has pointed out will be a fair burden upon rent officers. May I stress that in the representations which have been made to us the companies have stressed how much they admire and appreciate the good work which has been done by the rent officers. Since the noble Lord has told us that the draftsman is working on a further Amendment today, I think that we can reserve our position and look at the matter again on Report.

Lord CAMPBELL of CROY
I am glad that the noble Lord is looking at this point. My noble friend has indicated that, because the numbers are few, we did not think this anomaly would cause much difficulty for others. However, I beg leave to withdraw the Amendment.

§ Amendment, by leave, withdrawn.

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§ 6.26 p.m.

§ Lord HUGHES moved Amendment No. 19:

§ Page 15, leave out line 40 and insert ("(b) the period of delay shall begin ").

§ The noble Lord said: I beg to move Amendment No. 19. This is a minor Amendment to the paragraph of Schedule 2 which deals with cases where a rent agreement is made after the commencement of the Bill and within two years a rent is registered. The paragraph provides that in such a situation, phasing shall begin from the date upon which the rent agreement took effect. To give effect to this intention, a period of delay is denned in the Bill as it stands as a period of two years, beginning from the date when the rent agreement took effect. In any case where the maximum increase of £1.50 per week applies, it does not follow that the period of delay should be limited to two years. This Amendment simply omits from the definition the reference to a period of two years.

§ If I may be strictly out of order, I should be remiss if I failed to deal with the fact that I have recollected that I omitted to mention a point which the noble Lord raised earlier. I do not wish the House to be misled. In his reference to the circular, the noble Lord assumed that it would not be sent out until the Bill had completed its passage through Parliament. In fact, because of the time factor, we intend to send out the circular while the Bill is going through Parliament. If local authorities are to do what both the noble Lord and I want; namely, to have the necessary consideration of the rental position along with the budget position, they ought to know the views of the Government on this matter as early as possible. Therefore, we are taking the rather exceptional step of assuming that Parliament will eventually pass the legislation, and this circular will give preliminary guidance on the matter. The usual detailed circulars which follow the passing of legislation will be issued, and if the eventual form of the Bill should necessitate any change to the preliminary circular—which one would expect to be only minor—this would be done.

§ This has got absolutely nothing to do with the Amendment. However, I thought that it would be wrong to let the House 694 remain under the impression that the circular is not to be issued for some weeks. To return to order, I beg to move this Amendment.

Lord CAMPBELL of CROY
On this Amendment, as on others, I wish to reserve the position of those outside this House who cannot have had a chance to see the Amendment and who may have comments to make.
On the other point which the noble Lord has raised, I welcome the fact that he has chosen this opportunity to tell us that the circular will be sent out before the Bill is enacted. Governments always take a risk when they do that; I believe that the Government will be accused of trying to beat the gun before Parliament has finally decided what should happen. For my part, provided that the noble Lord is trying to describe what the Government consider should be the criteria for deciding upon reasonable rents and how often the review should be carried out, may I say, without prejudice to what may be done in Parliament, that I do not mind how soon the circular is sent out, because it will give us an opportunity to discuss it before this Bill has completed its passage through Parliament.

§ On Question, Amendment agreed to.

§ Schedule 2, as amended, agreed to.

§ Schedule 3 [Repeals]:

§ Lord HUGHES
I spoke to this Amendment when I dealt with Amendment No. 6. I beg to move.

§ Amendment moved—

§ Page 19, leave out line 42.—(Lord Hughes.)

§ On Question, Amendment agreed to.

§ Lord HUGHES
I beg to move Amendment No. 21 which is purely a drafting Amendment listing the repeals of the provisions of the Housing Act 1974 and of the Land Compensation (Scotland) Act 1973, which were made by the earlier provisions of the Bill as amended in Committee today.

§ Amendment moved—

§ Page 20, column 3, leave out lines 6 to 11 and insert— ("In section 29(1), the words "other than associations falling within section 18(1)(b) of this Act".

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§ In section 32(1), the words "or paragraph (b)".

§ Sections 109 to 116.

§ Schedule 10.

§ In Schedule 13, in paragraph 42(1)(a), the words from "and at" to the end of head (a), and paragraph 43(1)(b).")—(Lord Hughes.)

§ On Question, Amendment agreed to.

§ Schedule 3, as amended, agreed to.

§ In the Title.

§ Lord HUGHES
I spoke to this Amendment on Amendment No. 8. I beg to move Amendment No. 22.

§ Amendment moved— Line 5, after ("1974") insert ("to render certain housing associations in Scotland whose rules restrict membership to tenants or prospective tenants and preclude the grant or assignation of tenancies to persons other than members, eligible for housing association grant and revenue deficit grant under the Housing Act 1974;").—(Lord Hughes.)

§ On Question, Amendment agreed to.

§ The Title, as amended, agreed to.

§ House resumed: Bill reported with the Amendments.