§ Mr. Thomas Fraser (Hamilton)
I beg to move, in page 44, line 42, at the end, to insert:Provided that in no case shall compensation as a result of amendments to the Housing (Scotland) Act, 1950, made by this section be more than it would have been if the amendments had not been made.
§ Mr. Speaker
I believe we could discuss with this Amendment the next one, in the name of the hon. Member for Edinburgh, East (Mr. Willis), in page 44, line 42.
The two Amendments are not exactly the same, Mr. Speaker. I think it would be more convenient to take them separately.
§ Mr. Fraser
I think the House and the Government will appreciate the purpose 1226 of this Amendment. We have debated this Clause before, and some discussion took place on it on Second Reading. It makes certain amendments to the provisions of the Housing (Scotland) Act, 1950, and substitutes existing use value for cleared site value in the compensation to be paid by the local authority on acquiring certain properties.
The right hon. and gallant Gentleman has held hitherto that this new formula, existing use value, will be advantageous to the local authorities as the acquiring authorities inasmuch as they will now pay less than they would do if they had to pay compensation on the basis of cleared site value. Some of us doubted very much whether that would be so, and the right hon. and gallant Gentleman tried to assure us that we were under a misapprehension and that there was no need for us to have any fears at all. Some of us, in discussing these matters with local authority officers, have found that in some cases they have tended to agree with us in the fears we expressed.
One thinks of houses to be acquired by local authorities under the Housing (Repairs and Rents) (Scotland) Act to be patched up and continued in use for, perhaps, 15 years. We find it difficult to believe that the existing use value of land with houses upon it to be used for 15 years will be less than the cleared site value of that land. We may be wrong; but in discussing it with local authority technical officers we learned that they found themselves in exactly the same dilemma as we had found ourselves. They think that the new price to be paid will in this case, in all probability, to put it no higher than that, be in excess of the cleared site value.
What we are proposing in the Amendment is that a proviso shall be added to the Clause to make quite certain that the amendment we are here making to the Housing (Scotland) Act, 1950, will not be disadvantageous to the local authorities. If the right hon. and gallant Gentleman is quite right in his belief that these new provisions will be advantageous to the local authorities, there cannot be very much harm in making sure by using for that purpose two and a half lines in a Bill of 74 Clauses plus one or two new ones that we added yesterday and a great number of Schedules, all calculated to protect the interests of a few claim holders under the Town and Country 1227 Planning (Scotland) Act. If we can devote all those pages to protecting the interests of a few landlords, it seems to us that we might well devote two and a half lines to protecting the interests of the great local authorities.
I am sure that the right hon. and gallant Gentleman accepts this and, even though he may think that we are wrong in our fears that the cost to the local authorities of acquiring this land may in certain circumstances be greater, that nevertheless he will be willing to accept the Amendment, which will make quite certain that the local authorities will not be put to any disadvantage as a consequence of this Clause.
I am worried that the hon. Gentleman and his right hon. and hon. Friends have fears about this matter. I can assure him that the Clause would not be in the Bill if I shared their fears. It has always seemed to me ridiculous that in all cases of acquisition other than that of the unfit house the local authority should be called upon to pay only the value of the site with the building on it, whereas in the case of the unfit house they should have to pay the cleared site value, with the building still on the site—in other words, they should have to pay for the demolition of the building twice over. That was why this Clause was inserted in the Bill.
I want, if possible, to put hon. Members minds quite at rest on this matter. The fear which the hon. Gentleman expressed is that, in the absence of the cleared site formula, the purchase price might be inflated by taking into account the possible continued payment of rent either for the unfit house or for the house as repaired and continued in use by the authority under the Act which has recently received the Royal Assent.
We have been to the valuation department and obtained its advice, which is that the possibility of continuing to receive rent for an unfit house does not influence the market price of the property and that the compensation is assessed on the value of the property at the date of the notice to treat; and that accordingly, in assessing the compensation, no account can be taken of the future actions of the 1228 acquiring authority in respect of the property. We are informed that there is no possible chance of there being an increase above the figure obtained under the cleared site value. In fact, it must inevitably be less.
Nevertheless, I wish to put the minds of the hon. Member and his hon. Friends completely at rest and I am therefore prepared to accept the Amendment in principle, although it will require to be slightly re-worded to be brought into line with the Bill. In those circumstances, perhaps he will see his way to withdraw the Amendment.
§ Mr. T. Fraser
I am very glad to have that assurance, and I beg to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ 4.15 p.m.
§ Mr. Willis
I beg to move, in page 44, line 42, at the end, to insert:(2) The basis of compensation in cases of acquisition under the foregoing subsection shall be existing use value and in determining this full allowance shall be made for the cost or estimated cost of demolition of buildings and the clearance of the site.This Amendment deals with the same point as the previous Amendment. The Bill alters the basis of compensation from cleared site value to existing use value, as I understand it. We have accepted that in this Amendment but have tried to define what is meant by existing use value. When the right hon. and gallant Gentleman commenced his reply to the previous Amendment, he seemed to suggest that the existing use value, when determined, should be the cleared site value.
The compensation to be paid on compulsory acquisition is the existing use value plus the claim.
§ Mr. Willis
Plus any unexpended portion of the development value, I understand. The right hon. and gallant Gentleman did not mention that previously.
§ Mr. Willis
If it is to be on the basis of the existing use value, surely the existing use value should take into account any sums expended by the local authority in clearing the site. It seems to me quite unfair that the local authority should have to bear the burden of clearing the 1229 site instead of it being borne by the owner from whom the land is acquired. The owner is, after all, receiving the existing use value for the land. If he were to put the land into that condition while it remained in his own hands, he would have to clear the site. It has no existing use value until he has cleared the site. If the local authority acquires the site, he avoids that responsibility and the local authority has to accept the responsibility of demolishing the building.
It seems to me that that is unfair to the local authority. One local authority has complained to me that it is unfair and that there should be a clearer definition in the Bill. It may be that the wording of the Amendment is not all that could be desired, and I am prepared to accept that, but I should like to know whether the right hon. and gallant Gentleman accepts the principle.
§ Mr. James H. Hoy (Leith)
I beg to second the Amendment.
I am happy to do so, although I do not do so with very much hope, not because the case put by my hon. Friend the Member for Edinburgh, East (Mr. Willis) has not been overwhelming, but because the Joint Under-Secretary of State insisted on taking this Amendment separately from the previous Amendment. Having heard the right hon. and gallant Gentleman accept the previous Amendment, I can only expect rejection on this occasion. Hope has not gone, however, and I will make way for the right hon. and gallant Gentleman to reply.
The hon. Member for Leith (Mr. Hoy) showed considerable acumen in seeing why I asked for the two Amendments to be taken separately. This Amendment can be divided into two distinct parts. The first part is that the basis of compensation shall be the existing use value, and that I am quite unable to accept, because the basis of compensation is, in fact, existing use value plus the unexpired value of the claim. If the hon. Member for Edinburgh, East (Mr. Willis) had wanted to make this plea, he should not be making it now; he should have made it when the 1947 Act was going through, because that Act provides for the automatic payment of the established claim. We are merely continuing that.
§ Mr. Willis
I accept that, but at the end of my remarks I asked the right hon. and gallant Gentleman to say whether the existing use value, irrespective of the unexpended portion of the development value plus one-seventh—the existing use value itself—could not be defined in these terms.
I have dealt only with the first part of the hon. Gentleman's Amendment. I am coming to the second part now. In the second part of his Amendment, he says that, in determining what the existing use value is, full allowance shall be made for the cost or estimated cost of demolition of buildings and the clearance of the site. That is exactly what happens now. I thought that I had explained that in dealing with the last Amendment. The hon. Gentleman will understand that, in the circumstances, I cannot accept the Amendment.
§ Amendment, by leave, withdrawn.