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Repeals

Volume 932: debated on Friday 20 May 1977

The text on this page has been created from Hansard archive content, it may contain typographical errors.

Amendment made: No. 21, in page 15, line 26, at end add:

'1967 c. 88. The Leasehold Reform Act 1967. In Schedule 1, paragraph 8'.—[Mr. Marks.]

Order for Third Reading read.—[ Queen's Consent, on behalf of the Crown, and Prince of Wales's Consent on behalf of the Duchy of Cornwall, signified.]

12.48 p.m.

I beg to move, That the Bill be now read the Third time.

It has given me great pleasure that throughout the exercise of promoting the Bill there has been agreement about ending an ancient injustice which was highlighted in Committee and during the Bill's other stages, particularly on Second Reading, by cases of individual hardship and suffering, including the suffering mentioned in an inimitable speech by my hon. Friend the Member for Stock-port, North (Mr. Bennett), who had armed himself with the deeds of his house, because he was not only the payer of a rentcharge but was a designated rentcharge collector.

We are having a Third Reading debate simply because the Report stage was so technical legally that it was difficult for me to find a peg on which to hang my few remarks. I should like to pay great tribute to the tremendous amount of work done by the Law Commission, in its thinking and physical effort, in examining the problem of rentcharges. In particular, I should like to express my thanks for the help I have been afforded by the officers of the Law Commission and by the Lord Chancellor's office in preparing material for the Bill.

I wish to express my personal gratitude to my hon. Friends the Undersecretary of State for the Environment and the Parliamentary Secretary to the Law Officers' Department, who have given me all possible help and who have harnessed the resources of their Departments from which I have received a great deal of co-operation. I should like also to express appreciation to the only Member on the Opposition Benches who has put forward amendments, the right hon. Member for Crosby (Mr. Page). Debate on the Bill has risen above party politics and has been fair and expeditious.

The people in Bristol, Greater Manchester and North-East Lancashire are very heavily hit by this problem of rent-charges. I hope that when the Bill is enacted the machinery of operation for the redemption of rentcharges will be adequately publicised by the Department concerned, so that people will know exactly how to set about securing what the Bill has obtained for them.

On Second Reading some colourful phrases were used. In Bristol rentcharges were described as "the Bristol twist". In the North rentcharges were described as "the landlords' pension fund", and so on. It is an ancient abuse, and everyone involved in this matter regards it as something which should no longer be repeated. It has imposed personal hardship of the nature I mentioned earlier and to which the right hon. Member for Crosby referred.

Now at long last this abuse is coming to an end. The view of the Law Commission is that there should be no attempt at direct expropriation, and the formula worked out for redemption over a 60-year period may be a matter of argument. Some people may feel that this is too long a period or that some other formula should be used. These are matters of legitimate argument, but beyond peradventure there cannot be any charge other than of almost purely notional expropriation, and that element must always remain, even if the period went on for 100 or 150 years.

Had the original concept of the use of the district councils with an almost over-the-counter transaction been used, we might have seen a great simplification of procedure, to which reference has been made on Report in a couple of the amendments. But, because of the economic climate and other difficulties, it was not possible to do this, and therefore the Department of the Environment, rather than see such a worthwhile reform fail, has undertaken the onus of overlooking and meeting the expenditure on this side of the Bill.

It is, therefore, within the realms of possibility that before this summer ends the Bill will become an Act. In this Bill I embarked on an aspect of property ownership which does not really affect my own area very much. The curse of my part of the country, in South Wales, has been the 99-year lease and not the rentcharge, although I have unearthed pockets of houses in cities such as Cardiff and Swansea which are so affected. But since embarking on the exercise I have come more and more to feel that, like many other hon. Members, I might have the satisfaction of leaving Parliament having in my name an absolutely essential reform, and by so doing leaving the tiniest of tiny footnotes in the tiniest of tiny handwriting on a page of history in this Parliament.

12.55 p.m.

My hon. Friend the Member for Caerphilly (Mr. Evans) has done a great service to the House by promoting the Bill. Now that we have come to Third Reading he is indeed to be congratulated.

My two hon. Friends on the Front Bench, the Under-Secretary of State for the Environment and the Parliamentary Secretary to the Law Officers' Department, have both done great work on the abolition of these charges during the period in which this measure has been working its way through the House.

As I said on Second Reading, there have certainly been occasions when such Bills have been brought forward and have floundered for one reason or another. I should have liked to see the House giving a Third Reading today to a Bill to abolish rentcharges completely, because in my view the cities of Manchester and Bristol are still in an iniquitous position and they will be even after the Bill is enacted. We are still not on a par with the rest of the country. That must be completely understood by my hon. Friends. That is why there will be no dancing in the streets of Bristol or of Manchester, even though there may be dancing in the streets over other matters.

To my mind the fly in the ointment is the 60-year redemption period. I have fought for a long time, together with other hon. Members from the Bristol area, to get some formula for the redemption and I believe that 60 years is much too long a period. In the area that I represent, where there are very many rentcharges, people have said to me when I have tried to explain to them that the Bill is before the House "I shall be dead and gone by then. It will not benefit me." That is the great regret that I have now that we have come to Third Reading, because we are still in an iniquitous situation and the anomaly in the Bristol and Manchester areas will remain. But in order to persuade the Opposition to allow the Bill to proceed and so that we shall not be thwarted as in the past, we have had to agree to the lines of the report of the Law Commission, and I acknowledge this.

Certainly on two issues there has been great success, and this will be widely welcomed. The first is the provision in the Bill to prohibit new rentcharges for new buildings. The second is the formula, which has been agreed in the Bill, for the redemption of rentcharges. These two items will certainly help my constituents in Kingswood and people in the Bristol and Manchester areas in particular.

Perhaps it can be said that we have half a loaf in this Bill. There is an old saying that half a loaf is better than no bread, but the main problem has been the 60-year redemption period. I hope that this aspect can be examined again. As I stated earlier, it is because this problem has not been overcome that there will not be dancing in the streets.

But my hon. Friend the Member for Caerphilly has done a great service to us on the two counts of prohibiting new rentcharges and of bringing about a formula for redemption that will be widely welcomed and used by many of my constituents.

1.0 p.m.

I add my congratulations to my hon. Friend the Member for Caerphilly (Mr. Evans) on getting his Bill so far, but I hope that he has not concluded his toils. In Committee we pointed to one of the areas of concern, and I trust that when the measure gets to the other place my hon. Friend can act in an advisory capacity and persuade some of their Lordships to bring in amendments that will make the Bill more welcome to this side of the House.

In this connection I am referring particularly to the 60-year period. It is clear that there is a lot of concern and feeling about this, and I ask my hon. Friend to have another go at discussing the matter with Ministers to see whether some improvement can be made.

There was an interesting amendment in the name of the right hon. Member for Crosby (Mr. Page) that was not selected. I can think of good reasons for its not being selected, but it would have looked at the question of the tax on income from rentcharges. I wonder whether, if someone had considered granting a tax concession, there could have been a considerable reduction in the 60 years. Such a change would have helped to tidy up the statute book.

We have pressed the Minister about the date on which the measure will come into effect. I hope that he will take to heart the strong feeling on this side of the House that the Bill should come into effect as quickly as possible.

I propose now to deal with the question of organisation. In Committee we expressed considerable disappointment and concern that local authorities had refused to take on this responsibility and that it will have to be carried out by the Department of the Environment. Most hon. Members feel that it would be much more satisfactory if there were someone in each area to whom people could talk across the counter rather than have to write to some remote Department. We pressed that if this task could not be done by local authorities paid to do it by the Government, the Department of the Environment should consider the possibility of setting up regional offices, so that somebody could go to an office in the centre of Manchester, or Bristol, and present his problem face to face with an official there.

Yesterday one of my Labour councillors received a query from one of his electors about a notice from the Department of the Environment. I did a little checking this morning and I rang the Department. It took me nearly five minutes to get through. It took the Department a little time to find the relevant papers and only about two seconds to answer my question, which was whether the property was freehold or leasehold. Having received an answer to my query, I knew how to proceed.

The situation is not too bad if someone is phoning a London office from the House of Commons. One has to allow the switchboard time to put the call through and the Department time to find the relevant papers. One then asks a short, simple question and gets an answer. If, however, somebody 'phones from, say, Manchester, it is annoying to find the money ticking up for the call. I hope that local people can be used to deal with these problems.

It would be helpful if the documentation were simpler and more easily understood. Let me quote from a letter sent by the Department of the Environment. The letter deals with leasehold, but I understand that this is the standard form of letter. It says:
"You will note that your property has been included in Part Four of the draft Order in the unapportioned residue. This has been done as your property forms part of the security for the rent and as such it must be shown in any Order which may be made. It does not however in any way affect the amount of rent you may pay or your possible indemnity against this rent."
I have probably read that rather badly, but that is that sort of phrase that leads people to wonder what is meant. The recipient of the letter was not sure what it was all about and whether it was not a notice that the charge had gone up.

Having checked the matter, I can give the answer that the charge has not gone up and that it is possible that the person concerned has been overcharged for some time. The receipt of the letter caused considerable concern and worry. I think that it could have been phrased better. It could have said at the beginning of the sentence that there was no change, or no extra charge, and then, if necessary, set out all the legal wording.

I hope that the Minister will be able to assure us that the scheme will operate quickly and simply and that there will be someone in each locality from whom those who are involved can get personal advice instead of having to write to London or make telephone calls.

My hon. Friend the Member for Manchester, Gorton (Mr. Marks) is well placed. If we do not receive the kind of service for which we are asking we shall advise people to go to his advice bureau rather than come to see us. I hope that my hon. Friend can give us the assurances for which we have asked.

1.5 p.m.

Let me first congratulate my hon. Friend the Member for Caerphilly (Mr. Evans) on steering the Bill to its Third Reading. It is always a formidable task for a non-lawyer to attempt to present a Bill fraught with legal technicalities. Not only are there such technicalities, but almost inevitably one faces the formidable but genial figure of the right hon. Member for Crosby (Mr. Page). That is something for which we all have to be prepared and do our homework. The right hon. Gentleman's amendments and his contributions to the Bill have been extremely helpful, and for that I pay tribute to him.

Not only is it a pleasure for me to have played a part in helping to steer the Bill through the House, but I have a direct constituency interest. In Accrington and North-East Lancashire there are probably more houses directly affected by rent-charges than there are in any other part of the country, and for many years the collection problem has been a scandal.

Many elderly people are extremely grateful to my hon. Friend for having introduced the Bill. For years people throughout North-East Lancashire have had to collect rentcharges from their neighbours. They have done that with patience and fortitude, whereas I am sure that I and many other hon. Members would have done so far less happily. Now at last they know that the procedure for getting rid of the burden of collection will be very much easier and simpler, and if that will not cause dancing in the streets, it will at least give them a measure of pleasure.

I pay tribute to the Law Commission for the great and scholarly work that it has done on this subject. It beavers away on what to the public appear to be erudite subjects, but, as a result of its work, life is made that much better for many members of the community. I assure the right hon. Member for Crosby, who mentioned the subject of positive covenants, that the Law Commission is studying the whole topic of appurtenances to land. It will, I hope, soon be ready to report, and perhaps that anomaly will be dealt with in a way that will satisfy the right hon. Gentleman.

Like my hon. Friends, I am disappointed that the extinguishment period has to be as long as 60 years. If it were possible to reduce that period nobody would be happier than myself or my hon. Friend. I am sure that their Lordships and my noble Friend the Lord Chancellor will take note of what has been said today.

My hon. Friend the Under-Secretary of State for the Environment will deal with the points about procedure, and how it can be simplified, because that is the responsibility of his Department.

I thank all hon. Members who have taken part in the debate. It is a great pleasure for me, because many years ago almost one of the first things that I did in the House was to introduce a Private Member's Bill to abolish rent-charges. At least now something has been done about it. I would again thank my hon. Friend the Member for Caerphilly and congratulate him.

1.10 p.m.

I welcome the opportunity to pay a warm tribute to my hon. Friend the Member for Caerphilly (Mr. Evans) and to say to him that I can speak on behalf of my constituents, who widely welcome the measure that he has steered through the House. I wish him continuing success in getting the Bill on the statute book.

I regret that, because of illness, I was unable to be present during the Second Reading debate. I would say to my hon. Friend that, while nothing detracts from his measure, many of my constituents would have welcomed a much more radical measure. However, in the opinion of my constituents, the Bill is a move very much in the right direction.

I shall be brief, because I know that many of my hon. Friends want to add their congratulations. I do not want to let this occasion pass without saying that there are other hon. Members, particularly my right hon. Friend the Member for Bristol, South (Mr. Cocks), who made valiant attempts years ago to bring a measure of this kind to success and fruition. There was my hon. Friend the Member for Accrington (Mr. Davidson). As my hon. Friend the Member for Stockport, North (Mr. Bennett) has said, my hon. Friend the Member for Manchester, Gorton (Mr. Marks) will have a distinguished place in the history of this Bill. We very much welcome the assistance that he has given to it.

I should also like to pay tribute to the Law Commission for its efforts in assisting the Bill to reach this stage. I welcome the opportunity of saying on behalf of my constituents that this is a step in the right direction. It may well be that we could have had a more radical measure but, nevertheless, nothing should detract from what my hon. Friend the Member for Caerphilly has done. I know that he will receive the grateful thanks of many individuals in my constituency and in the larger area of Manchester.

1.13 p.m.

I, too, welcome the Bill. I have played no part in the proceedings so far, either on the Floor of the House or in Committee, but, as the hon. Member for Caerphilly (Mr. Evans) will remember, I did privately express my support for the Bill and offered him any help that I could give. I am glad that that has not been necessary both from the point of view of the success of the Bill and from my own point of view.

I should not like the occasion to pass without welcoming the Bill and congratulating the hon. Member for Caerphilly on being the latest but successful of a long line of hon. Members who have been pursuing this matter. I think it has been an ancient custom rather than an ancient abuse, the phrase used earlier. The system has been capable of abuse, but it has not always been abused. It did not necessarily grow up in an abusive manner.

I would add to the list of hon. Members my hon. Friend the hon. Member for Manchester, Withington (Mr. Silvester), who introduced a not dissimilar Bill a short time ago of which I was one of the sponsors, but my hon. Friend did not have the luck and the success of the hon. Member for Caerphilly.

I do not want to go into the details but, as has been mentioned by other hon. Members, I agree that the 60 years' period in the Bill is on the long side. I am not one of those who favour the immediate abolition of rentcharges. It seems to me that that would be unfair particularly to some of the owners of the rentcharges, although, naturally, there are others with whom I have less sympathy. However, 60 years is on the long side and if during the course of debates in another place this period can be reduced, hon. Members can count on my support, for what it is worth.

The Law Commission Report was an excellent document. I do not pretend to have understood more than a small proportion of it, but it seems to me that it came down in the right direction. The Bill follows that report and is a small but useful improvement to the law of the land.

1.16 p.m.

I shall be brief. I join other hon. Members in congratulating my hon. Friend the Member for Caerphilly (Mr. Evans). When one has the good fortune to draw a high place in the draw for Private Members' Bills, it must be a great temptation, when one looks at the vast number of subjects that are possible, to introduce a Bill dealing with some of them, particularly affecting one's constituency. But my hon. Friend recognised, in fine Socialist tradition, an anxiety which scarcely, if at all, affected his constituents and introduced this measure to benefit our constituents in the North-West. The fact should be recognised that my hon. Friend did not choose a measure directly affecting his own particular area but rather one which had wider implications. We are all very grateful to him, particularly those of my constituents who face this problem.

Like other hon. Members I am concerned about the 60-year period. It is interesting to see that the concern about the 60-year period stretches far beyond the Labour Benches and disturbs hon. Members opposite. I hope that we can look at the possibility of getting rid of these rentcharges in a much shorter period. Perhaps the Government Departments concerned will be looking at that possibility in the next few weeks.

I am still attracted to the idea of having the redemption procedures conducted by the local authorities.

My hon. Friend the Member for Stockport, North (Mr. Bennett) outlined the kind of approach which is possible at local authority level. In my experience older people are more at ease when they can go to a counter and deal with someone on the other side of it than when dealing by telephone or, perhaps, worse still, experiencing the protracted delays that arise from time to time through correspondence. I hope that we shall look at this point and deal with it at local level.

The strength of the Bill is that no more rentcharges are to be created. We are extremely pleased about that, but I can see some anomalies arising. Only recently I lived on a housing estate containing about 60 houses, half of which have been sold. Some have rentcharges imposed on them of about £12, some are subject to rentcharges of between £15 and £16 and some are not yet sold. What will be the situation for those houses which are not sold once the Bill becomes law? I can imagine the discussion that will take place in my "local" among the people who live on that estate about the various anomalies that arise in these circumstances.

I hope also that the Department of the Environment will be able to get away from legal jargon when we come to devise the redemption procedures. It will be necessary to draft them in a way which will be intelligible to people like me, and that may be extremely difficult. They may have to be simple beyond belief. But I want to be able to understand them, as do my constituents. I hope that there will not be a great chunk of legal jargon being sent to people who have to go through these procedures. There is a great deal of virtue in simplicity.

I want to thank the Ministers who have been involved in our consideration of this Bill. I know of the great interest of my hon. Friend the Member for Accrington (Mr. Davidson). We have a common constituency boundary, and we have discussed this problem on many occasions. He was quite right when he said that it was North-East Lancashire, especially its terraced properties, where there was one of the highest concentrations of rentcharges. I know, too, of the long interest of my hon. Friend the Member for Manchester, Gorton (Mr. Marks). I thank them both for the immense amount of work that they have done, and I am sure that we shall soon see this measure on the statute book, to the great relief of many people in the South-West and the North-West who have faced this iniquity for far too long.

1.22 p.m.

I, too, pay tribute to my hon. Friend the Member for Caerphilly (Mr. Evans), whose constituency is not far away from Bristol, anyway. I agree with my hon. Friend the Member for Rossendale (Mr. Noble) that it was a very unselfish act on the part of my hon. Friend the Member for Caerphilly to introduce a measure which affected certain areas of the country but which was not a problem in the area which he represents. There are many people in my constituency who very much appreciate the fact that my hon. Friend is putting through this Bill, which we hope will become an Act of Parliament very quickly, and who also appreciate that the Government have given it their support.

At the same time, I, too, feel that the measure does not go anything like far enough. These rentcharges seem to me to be almost symbolic of feudalism. They are an anachronism going back almost to feudal days, and I think that we could have found ways to abolish them even more quickly than we have decided to do.

I am also a little concerned that, under Clause 2, we are to retain estate rent-charges for the carrying out of services, and so on. We have left open the possibility there for a load of rentcharges which will not be covered by this legislation. The right hon. Member for Crosby (Mr. Page) referred to this difficulty in Committee, and I am still concerned about it.

I, too, feel that the 60-year period which we have provided is far too long. In my view, that becomes even more apparent if we sit back and think that, in the year 2037, these rentcharges could still be in existence and that presumably by then there will be developers active on other planets. I do not know whether they will support rentcharges.

How right my hon. Friend the Member for Kingswood (Mr. Walker) was when he saild that his constituents and mine will say "In 60 years, we shall all be dead and, therefore, this legislation will not help us". I am afraid that many of us will be dead by then, although I do not include you, Mr. Speaker, in that category because I know that you will still be here. But certainly many of my constituents will be dead by then, although I suppose that some of them who are very young now will be going round collecting these pernicious rentcharges.

It has been suggested that we should ask the other place to consider this matter with a view to amending the Bill as it is now drafted. I must confess that I am reluctant to ask an anachronistic institution to amend an anachronism. I have no time at all for that body down the Corridor and, for that reason, I am not inclined to agree with that suggestion. However, if I may hide my conscience a little, I hope to find that, when the Bill comes back from the other place, it contains a provision stipulating some period less than 60 years. I was pleased to hear the hon. Member for Gloucestershire, South (Mr. Cope) make the same point.

I do not believe that we should call in aid the views of the Law Commission on this matter. It makes it clear on page 20 of its report that it regards the acceptance of the principle that existing rentcharges should ultimately expire without compensation as more important than the actual period chosen. It goes on to say that the final decision about the period is a matter for political decision.

We are making a political decision, and in my view it is not right to call in aid the fact that the Law Commission has laid down that it must be 60 years, although in its report it talks about the "appropriateness" of 60 years. For that reason, I hope that we can cut this period considerably.

Finally, as my hon. Friend the Member for Rossendale and others have done, I ask the Government to think again about the possibility of local authorities dealing with this matter. I know that the Association of District Councils said that it was not very happy about taking on the job. I do not know whether that is because the Government, with their views about capital expenditure, were not prepared to provide a little additional money for the purpose. I suspect that it would cost far less to give local authorities a small additional sum for the purpose than to let the Department of the Environment do the job. Bristol, for example, has a first rate Housing Aid Centre which could do the necessary work very easily. I do not know whether Rossendale has a similar set-up.

As I say, the Association of District Councils would not like to take on the job. I wonder whether that is said from the financial point of view, or whether the Association as a body has made that judgment when the problem exists in the areas of only two or three of its constituent members.

The Bill will be welcomed in the Bristol, North-West constituency though, as my hon. Friend the Member for Kings-wood said, there will not be singing in the streets. Many people will look to us to bring in a far more radical measure. However, in that respect no blame attaches to my hon. Friend the Member for Caerphilly. We all pay tribute to him for bringing forward this measure, and we hope that it will not be too long before it is an Act of Parliament.

1.27 p.m.

I congratulate the hon. Member for Caerphilly (Mr. Evans) on his success in getting his Bill to this stage. I hope that it will be given a good passage through another place.

The hon. Member has achieved far more than the great F. E. Smith. Of course, he has always achieved more than F. E. Smith in terms of eloquence. But this reform was started by Lord Birkenhead in 1925, and he failed to do it very well. Section 191 of the Law of Property Act 1925 is an utter nonsense. Over the years, it has achieved nothing. That is why, when we needed some measure of redemption here, the Law Commission looked into it. However, it has taken rather a long time.

I recall that, when I first entered this House, there were hon. Members thinking about presenting Bills on rentcharges. Incidentally, we in the North-West call them "chief rents". I hope that this will not confuse people when it comes to advertising what the hon. Member for Caerphilly has done in this Bill and that they will realise that it applies to chief rents as well as to rent charges. I hope that that fact will come out in the circulars and advertisements which the Department of the Environment is to issue.

As I say, we have been trying to get a redemption of rentcharges for many years—in fact, for nearly the 60 years that we have been discussing. When I saw the Patronage Secretary enter the Chamber during this debate, I was disappointed to discover that it was only to give the Queen's Consent. I was hoping that he would join in the debate and tell us about his own struggles, because he presented at least two Bills to the House. I remember supporting him at the time and urging him to go on with them. He tried and failed where the hon. Member for Caerphilly has succeeded.

It may be thought that when one is lucky enough to come out of the Ballot it is easy to take a Law Commission report because there is a draft Bill at the end of it available for one's use. It was not as easy as that for the hon. Member for Caerphilly. For one thing, the draft Bill had to be altered considerably because the Law Commission had proposed that the local authorities should take on the task. There is also the disadvantage that Law Commission reports always put both sides of an argument, which stimulates debate. I must admit that many of the ideas that I have put forward have not be original; they have been stolen from the Law Commission. Anyone who promotes a Bill recommended by the Law Commission has to face those obstacles.

The Ministers and the hon. Member for Caerphilly have met extremely well the arguments that have been advanced. Their replies have not always been entirely satisfactory to me but we have a Bill that will work. The two major points that arise from it that are subject to criticism concern the arguments that I have already put about local authorities. Many of us wished the local authorities to take on the task, but perhaps this is the wrong time when local authorities are being criticised on the ground of expenditure and when we in this place are being criticised for putting more and more duties on local authorities that create expenditure.

Perhaps this is the wrong time to oblige local authorities to take on even this small job. Of course, the work would relate only to a few local authorities. Surely it could have been done on an agency basis, the Department of the Environment appointing local authorities as its agents and paying the money for the work. I suggested that in Committee but it has not emerged in the Bill.

Am I correct in thinking that the Bill does not prevent the Secretary of State, if he wishes, from appointing agents through local authorities at some later stage, if they are willing to take on the task on an agreed financial basis? Presumably the Secretary of State will not be doing the work personally. He will present the task to some agents, whether they are his own officials or the local authorities. It does not seem that the Bill rules out the possibility of the local authorities doing it.

It is true that the Bill does not rule that out. It may be that the Department of the Environment will consider that the best way of proceeding is by appointing local authorities as agents to carry out the work.

I have offered my congratulations to the Ministers for helping the hon. Member for Caerphilly to get the Bill through the House, but I must also congratulate their servants in the Department. With my knowledge of these matters I know that they have acted extremely efficiently in applying the procedure that is now laid down. That is the present procedure before the Bill comes into operation. They have acted expeditiously, but it was difficult to expedite the present procedure. I congratulate the Ministers' officials on the efforts that they have made and the help that they have given to the Bill.

My anxiety about the local authorities not taking on the job and my eagerness that the Department of the Environment should appoint local authorities to do it is that I can see that right hon. and hon. Members will be the ones who suffer. We shall meet these inquiries at our surgeries. Most of us have plenty of other inquiries to answer whenever we offer our services in the constituency surgery. I should like to be relieved of this task. I should like the local authorities to answer these questions. I should like to be able to pass people on to whoever is dealing with them at the local authority.

The other major issue is the period of redemption of 60 years. I do not criticise that period. That is because I do not believe that it means what it says. In the Bill it is stated that rentcharges shall be extinguished after a 60-year period. I take that to mean that it is an element in the formula for redemption.

It may be assumed that there will be very few rentcharges that last out the 60 years. When it becomes known to the payers of rentcharges that they can redeem, there will be almost a rush to do so right away.

Redemption will improve the value of the house when it is sold. I think that on almost every occasion when a house is sold with a rentcharge on it there will be a redemption. This will become the advice that is given by the solicitors and the estate agents to those buying and selling houses. They will gradually be redeemed on that basis if not before someone thinks of sale.

The 60-year period shows the fair way in which the hon. Member for Caerphilly has dealt with the issue between confiscation and compensation. The figures that the Law Commission were given by the Government Actuary are set out in page 19. The Law Commission states:
"We also asked the Government Actuary to state how much of each £1 of rent charge income received annually by a rent owner during a given period would have to be set aside by him and accumulated in a sinking fund in order to provide a full £1 a year in perpetuity after the period had elapsed, independently of the rent charge."
The Commission was asking for fair compensation, replacement of what the rent owner would lose by not being able to collect the rentcharge. It was supplied with the figures. They are given for periods of 10 years from 20 to 90 years. Assuming a rate of interest of 8 per cent., at 60 years it is necessary to put aside only one new penny a year to have at the end of the period a sufficient sum to invest to bring in the same £1 rentcharge. That seems to be a reasonably fair way of compensating the rent owner. If we assume an interest rate of 10 per cent., it needs only·33 of 1 new penny. It seems that a fair basis has been set.

There is a difficulty that will arise in respect of tax. A certain amount is being paid as capital and a certain amount as interest during a fixed period. For the remaining period for rentcharge it will be said that there will be redemption at so much, whatever the figure may be, and that part of the payment is capital and part is interest. That issue has not been settled in the Bill but the Finance Bill is now passing through the House. Perhaps at the dead of night I may be able to sneak through a little amendment in Committee on the Finance Bill to provide that some of the payment should be treated as capital and not as the income of the rent owner, and that if treated as capital it should be disregarded as part of the taxable income.

I am glad that we have reached this stage at last in the redemption of rent charges. I warmly congratulate the promoter.

1.39 p.m.

I add my congratulations and thanks—indeed, not only my thanks but, I am sure, the thanks of a great many of my constituents—to my hon. Friend the Member for Caerphilly (Mr. Evans) on reaching this stage with his Bill. I should add that he will deserve the thanks not only of the citizens of Manchester and Bristol but of others elsewhere, since one of the dangers of the system was that builders were getting hold of the idea and it was spreading.

Information was coming to us from Southampton, Sunderland and a great many other places that, as house building came to be done by builders on a national scale, big firms were bringing in the idea for other areas. Thus, my hon. Friend has saved a great many people from some expense and frustration in the future. Moreover, the amounts spoken of were not small sums such as £2, £5 or £7, as they were in the 1950s, but were up to £25, £30 and probably much more.

My hon. Friend the Member for Caerphilly has performed a service also by the way in which he has kept in touch with hon. Members on both sides, giving them information—true, with the help of my Department—about various possibilities regarding certain amendments.

It has been suggested that my hon. Friend drew a high place in the Ballot. In fact, he drew No. 8, which is not in the first six favourites. However, because of his parliamentary knowledge and, I suspect, the great liking which so many right hon. and hon. Members have for him, by dint of persuasion and debate he has now reached No. 3 in Bills to reach Third Reading.

I came into the House at the end of 1967. In 1969 I saw the first Law Commission working paper on rentcharges, and I realised that it applied to the deadly chief rents of my own area. In the eight years since then I have turned from Back Bencher to Minister, from poacher to gamekeeper, perhaps, but as a Minister I have encountered some of the difficulties in matters of this kind, with the need for all the i's to be dotted and the t's to be crossed. We have had to maintain fairness in what we have done. Moreover, we were involved in the minefield of land law, in which the right hon. Member for Crosby (Mr. Page) is so adept. I confess that on many occasions I have felt that I was absolutely in a forest.

I come now to the question of publicity and administration so far as it affects my Department. I have already assured the House that we shall go into action as soon as possible in implementing the parts of the Bill concerning redemption and apportionment. I shall do all I can to ensure that whatever forms are issued are understandable. My hon. Friend the Member for Rossendale (Mr. Noble) was a bit worried about this. Perhaps I may tell him that for about five years I was a teacher of backward children, and I am sure that the level of understanding, about which he was concerned, will be such that people will be able to know what is necessary if they wish to take advantage of the Bill.

We all know—especially those of us who regularly have surgeries in our constituencies—that many people would rather come and talk than try to write a letter. There are various facilities nowadays that help people in that way. We ourselves provide one such facility at weekends. The citizens' advice bureaux will be given full information about the Bill and a collection of the forms. The district councils have done a great deal to assist us in helping people under the Law of Property Act 1925. A great many people have been able to redeem their chief rents in that way—or their ground rents, as they are called in Bristol—and I hope that that will continue. Although they do not want to have the job of dealing with implementation of the Bill directly, I know that the district councils will ensure that their information officers provide a great deal of information to people who need it.

Although I said earlier that there may not be dancing in the streets of certain cities on account of the Bill, we ought not to underestimate its value.

Before leaving the question of administration, will the Minister comment on the point I raised with my right hon. Friend the Member for Crosby (Mr. Page)? Would it be possible at some future stage for the local authorities to be appointed agents?

My advice is that we can divide the work—I have in mind here the suggestion made by my hon. Friend the Member for Stockport, North (Mr. Bennett)—having centres where the Department could run the thing in, say Manchester and Bristol, but I am advised that under the Bill as it stands at present it would not be possible to appoint local authorities as agents.

There have been references to consultation with the local authorities. My Department is bound to have such consultations through the local authority associations, and it has been the advice of both the AMA and the District Councils Association that the local authorities did not want the job. Therefore, we could not deal directly with individual local authorities. I suggested in Committee that hon. Members themselves might care to contact their local councils in order to ascertain their view.

I am surprised—and I saw expressions of surprise on other faces in the Chamber—that the Department cannot appoint anybody as agent to do this job, and certainly cannot appoint the local authorities. What prevents the Secretary of State from having power to ask anyone to do the job, if he pays for it to be done? Indeed, what prevents his asking a local authority to do it? The local authorities do not need statutory powers to do it if the Secretary of State employs them to do it. He could employ the chief executive to appoint administrators for him. I am puzzled that it cannot be done unless there is a statutory power.

I can only say that I asked for advice immediately before 11 o'clock this morning, and that was the advice I received. However, I shall have another look at it. When things are easier for local authorities, we might well be able to do something on those lines in the future.

I hope that that is possible. If it is not, may we have my hon. Friend's assurance that he will accept the suggestion of my hon. Friend the Member for Stockport, North (Mr. Bennett), and that it will be done by the Department of the Environment in Bristol? I can give my hon. Friend a short example to show why that is necessary. The noise insulation regulations, which were a problem in my constituency, were handled from Taunton, and this created difficulties. In my view, if we cannot have the job done by the district council, it should certainly be done by the Department of the Environment in Bristol.

As I said in Committee, I cannot give an assurance on that. Only a small section of my Department will be involved, and it may be possible to split it in that way under the Bill. That is the only assurance I can give.

The right hon. Member for Crosby has dealt in detail with the period of 60 years. I know that some of my hon. Friends and a great many of my constituents would have liked to see us going nearer to expropriation, but we must realise who the rent owners are nowadays. They are not the builders who made their pile under the system immediately after the building of the houses. My hon. Friend the Member for Caerphilly gave various names which have been used to describe the system. In my area it was known as the builder's bonus, meaning that the builder built the houses, put chief rents on, and then sold the chief rents.

Now, however, a great many of the chief rents in my area are owned by charities and friendly societies. This is not, therefore, a matter in which we could deal unfairly with the rent owners. The idea of choosing 60 years came forward because the Law Commission asked the Government Actuary to give us the period that would deal with the matter fairly.

We have managed to interweave into our debate the subject of a football match to be played tomorrow, as well as the possibility of dancing in the streets. Whatever the result of that match may be, I am sure that both teams will receive a tremendous welcome in their own areas. I can only hope that their Lordships will give this Bill the same tumultuous reception as those teams will have tomorrow night.

Question put and agreed to.

Bill accordingly read the Third time and passed.