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Business Premises (Demolition)

Volume 12: debated on Thursday 5 November 1981

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Motion made, and Question proposed, That this House do now adjourn.— [Mr. Brooke.]

10 pm

This debate should have taken place two weeks ago. It did not because the Division Bell supplied by the Post Office failed to work. It was put right, but tonight British Telecom advises me that it has gone wrong again. I am grateful that it let me know this time. I apologise to the Minister and to you, Mr. Speaker, and thank you both for your generosity and understanding in this unfortunate matter and for arranging another debate.

I wish to raise a subject of relevance to every city—the widespread use by local auhorities of compulsory purchase of houses and businesses and the way in which they demolish them or not, as is their wish. Between 1966 and 1976 the indiscriminate and unreliable use of those powers resulted in Liverpool demolishing 21,489 houses, Birmingham 19,715, Manchester 29,265, Glasgow 53,396, Sheffield 21,776 and Leeds 24,055. Such action destroys not only homes but neighbourhoods and close-knit communities. Neither is it something of the past, as successive Governments would have us believe. Between 1975 and 1980, Liverpool demolished 6,446 houses, Birmingham 2,735, Manchester 9,854, Glasgow 17,497, Sheffield 11,130 and Leeds 8,403.

Not only houses have been bulldozed out of existence. In Liverpool alone 463 small businesses have been displaced in the past five years, and 6,000 in Birmingham over the past 15 years. The first task of the Secretary of State should be to ban the bulldozer, which is the local government controlled machine that destroys inner cities, the rate base and jobs, and drives people beyond the city boundaries.

The two cases that I wish to bring before the House illustrate vividly the way that compulsory purchase orders can destroy livelihoods and cause rate loss and, as a consequence, higher rates. The first concerns two factory buildings in Toxteth. The scene is inner Liverpool and the street Maple Grove, close to the epicentre of last summer's riots. It consisted of two parallel terraces of Victorian two-up-and-two-down, back-to-back houses. They were well built and once housed a flourishing and well integrated community.

Nos. 34 and 36 at the end of one terrace were purchased in 1968 by a constituent of mine, a former Battle of Britain pilot, who prudently invested to provide a little extra income for himself on retirement. He let No. 34 to a builders merchant, Mr. West, and received a rental of £600 per annum. Mr. West's company employed five local men. My constituent let the house next door, No. 36, to Trust Houses Forte for a 35-year term at £1,000 per annum, with rent reviews. That subsidiary employed 12 people to repair fruit machines in the North-West.

However, in the last year the scene has changed dramatically. Seventy of the houses in Maple Grove are no longer standing. They have been flattened by the bulldozer. It is not as if the council has insufficient land in its ownership. There are already 1,200 acres of vacant, dormant and derelict land within the Liverpool city boundaries alone. Why increase that total even more?

Having pulled down the houses, the city council has turned its talents to my constituent's two business premises which were compulsorily purchased by the council in August 1980, when Trust Houses Fortes was ordered out of No. 36. Since then the premises have lain idle and vacant. Mr. West, the builder, stayed on in No. 34. From the date of the compulsory purchase order he has, of course, been paying his rent, not to my constituent but to the council.

I am delighted to see present many hon. Members on this side of the House although I am sorry that there are no Opposition Members present to hear this important debate. Hon. Members may already have concluded that the buildings of Nos. 34 and 36 were so derelict that the best thing that could happen was for them to be demolished. That could not be further from the truth. No. 36 is a well-constructed, single-storey, brick-built house erected in the 1930s. There are good offices, car parking facilities and 3,000 sq. ft. of factory space. It has at least 50 years of life left, if not more.

To rebuild a factory like No. 36 at today's prices would cost over £60,000. What is the sense of dispossessing a business and pulling down the building merely because it does not fit within the council's comprehensive redevelopment plans?

A few months ago, after the council had demolished the houses in Maple Grove, it decided that it was about time it demolished No. 34, Mr. West's premises. The city council offered Mr. West the use of No. 36—the property where Trust Houses Forte had its fruit machines. Mr. West was moved from No. 34 to No. 36 and my constituent was dispossessed of both properties.

Let us hope that the debate will draw the country's attention to the dreadful task which the city council has performed. It has lost my constituent income and has moved one of his tenants from one of his former buildings to another.

If the council pull down the premises, it will be guilty of incompetence or negligence, or both. That would merely confirm that it is determined to destroy what is left in the inner cities. On the other hand, if it lets the premises stand, it will have to pay my constituent substantial damages by way of compensation for wrongful eviction. To date, the council has offered £6,000 compensation. My constituent has already lost £2,000 in rent and if he were still in possession his lease would be worth approximately £35,000.

Ashton, Motor Company, which is also in the inner city at the Old Swan—a part of my constituency—was once a flourishing small garage employing a local work force. The council advised the garage proprietor in 1976 that his business site fell within another grand clearance scheme and would be demolished forthwith.

By January 1980, the Ashton garage was still standing. At that time, the estates department advised the proprietor that it would be demolished in May 1980. Therefore, the proprietor closed his business and handed the site over to the council. It was not demolished in May 1980, at Christmas 1980 or in May 1981. Indeed, it is still standing, as a derelict and empty building. It is an eyesore to the local community, who now complain to the city council that it is about time that it demolished the premises.

Both cases I have used as examples disclose a quite scurrilous situation of mismanagement or negligence, or both.

Mr. Caplan's property was sequestrated and handed over to someone else without compensation. In the Ashton Motors case, the owner acted on information from the council which it failed to honour and he has suffered damage and loss.

It is not only my constituents who have lost. Everybody has lost. People have lost jobs and the city has lost rate income. Both cases symbolise the powerlessness of the individual against the State, and they show how small firms continue to be driven out of the inner city and often out of business. Both cases show the effect of public intervention and the damage caused by it.

The problems are compounded by the typists' strike in the city council, which has meant that since May letters just do not get answered. The council seems to prefer to disregard the needs of Liverpool city ratepayers than to dismiss a few typists who are holding it to ransom. There is no shortage of girls to take the strikers' places, but the council is too feeble to take a stand for the sake of Liverpool.

The cases to which I have referred are two of many hundreds of such cases in Liverpool. They illustrate the continued damage caused by the indiscriminate use of power—in this case the power of compulsory purchase—and the way in which councils can serve notices without thought of their consequences. The local authority's cavalier attitude and disregard of the people it is supposedly representing strike at the roots of the problem of our cities. Those in authority should remember that they are the servants of the people and not their masters.

10.12 pm

I am grateful to you, Mr. Deputy Speaker, and to my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen) for allowing me to intervene in the debate, which is about inner cities, but it is concerned also with compulsory purchase powers, and I should like to concentrate on the latter aspect. I am also grateful to my hon. Friend the Under-Secretary of State for the Environment for kindly consenting to my participation in the debate.

My hon. Friend the Member for Wavertree nurses his constituency assiduously, carefully and compassionately, as is clear from his speech. I do not want to dwell on the problems of Liverpool or inner city areas in Manchester, Leeds, or Birmingham, but I believe that the Government should consider the whole principle of compulsory purchase, the mechanics of compulsory purchase legislation and the nuts and bolts of the Land Compensation Act 1973.

When a local authority or a statutory undertaking has designs on an area—whether in an inner city, a town such as Tamworth, perhaps 12 or 15 miles from a conurbation, or a rural area that may be designated as the site for a reservoir—it can use the threat of a subsequent CPO to acquire property in advance of the granting of compulsory purchase powers or planning permission to carry out the proposed development.

That blights the area and causes owners to sell their livelihoods and birthrights, because they know that if they do not sell to the strong arm of the State, whether a local authority or a statutory undertaking, their property will be blighted, the free market will be taken away from them and there will be no one else to whom they can sell. They are bludgeoned subtly by the threat of a compulsory purchase order into selling against their wishes. That is the erosion of freedom.

The House and the country should be grateful to my hon. Friend the Member for Wavertree for having raised that basic issue of freedom. I am happy to be able to support him.

10.15 pm

My hon. Friend the Member for Liverpool, Wavertree (Mr. Steen) has done the House a service by raising a subject related to the problems of inner city development and the difficulties of a local authority being engaged in the acquisition of property compulsorily, yet illustrating the consequences that that can have on individuals and businesses.

In opening his speech my hon. Friend made his customary ode to the bulldozer. He is right to keep reminding us that in many of our inner city areas we have a legacy of major schemes begun in good faith and taken to initial stages, but not completed. The acquisition of land has taken place, but the erection of buildings and the construction of roads and other amenities has not followed.

I welcome also the comments of my hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle). Once again, and early in the new Session, my hon. Friends the Members for Wavertree and Lichfield and Tamworth and myself are engaged on problems concerned with inner urban areas.

There were two parts to the speech of my hon. Friend the Member for Wavertree. One was concerned with the general issues involved in the policy of compulsory purchase and the other with the two specific cases to which my hon. Friend drew attention. I shall deal first with the specific cases that he raised. I apologise for overlapping my hon. Friend's presentation of his constituent's case, but it seems to me important to put the case on record as far as we understand it, having had consultations with the local authority in Liverpool.

In April 1978 the Liverpool city council made the Moss Grove area compulsory purchase order, a clearance order whereby the premises, to which my hon. Friend has referred, were, together with other land, to be transformed into housing and public open space. The particular premises in question, as my hon. Friend mentioned, are Nos. 34 to 36 Maple Grove. At the public inquiry in March 1979 neither the landlord, Mr. Caplan, nor anyone else made any objection to the clearance of either of those properties and the order was confirmed in August of that year. Notice of entry and notice to treat were issued in October 1979 and possession was taken in August 1980. The city council acquired the leasehold interest in the properties and is still negotiating for the purchase of the freehold with my hon. Friend's constituent, Mr. Caplan.

As I understand it, Mr. Caplan is in dispute with the city council over the price to be paid; he is also interested in the alternative course of resuming his interest as landlord. Those are matters that are entirely between the owner of the interest in the premises and the acquiring authority, and I have to tell my hon. Friend—as I suspect he knows—that the Government have no locus to intervene.

I understand that the builder, Mr. West, had been using 34 Maple Grove, but that that has had to be demolished because of structural weakness caused by the earlier demolition of the adjacent buildings. The builder has been offered, by the council, premises at No. 36 which he is now occupying, for a small rent, as a tenant at will.

It is only right to correct the record in that respect. When Mr. West was being offered the tenancy of No. 36, the landlord, my constituent through me, wrote to the city council—we did not receive a reply, because of the typists' strike—saying that he would like to repossess the property that the council had taken from him. The council did not reply, but put Mr. West into No. 34, in the old building. That situation calls for Government comment.

The only comment that a Government can make is to agree with my hon. Friend that, where there is an aggrieved party and an authority seeks to execute its legitimate powers of compulsory purchase, differences of opinion as to the quantum of the purchase price or the conditions under which the purchase is being made are matters for negotiation between those two parties. I cannot accept that the Government should have a right to intervene in a negotiation between two parties who may be aggrieved but who could come to an agreement in due course.

I suspect that my hon. Friend is aware that the transactions in this case have not yet been completed. I understand that the local authority, Liverpool city council, has made an improved offer to my hon. Friend's constituent, Mr. Caplan, which his agents are considering. Therefore, it is not for me to extract from this case a matter of principle upon which the Government should intervene.

I return to the saga, for that is what it is. My hon. Friend is right in saying that it draws out matters of important principle. The city council certainly expects to seek other premises for the builder, Mr. West, before No. 36 is demolished. Therefore, I must stress that there appears to be no question of the occupier of No. 36 being, as it were, squeezed out of business. In fact, the contrary is the case. I understand that No. 36 will not be demolished and that the land will not be cleared until new premises are found for the builder and his business. When the compulsory purchase order was made, No. 36 was vacant. Therefore, by the builder moving into it, it is now in productive use.

I wish to correct one matter on which my hon. Friend is clearly confused. Trust Houses Forte was driven out of No. 36 and that meant that the rent that it paid to the landlord went, that 12 men who worked on the fruit machines went, and that the rate income was lost. The builder in No. 34 has gained No. 36, but the council has lost the rate income from No. 34 and the landlord has lost the rent from No. 34. Therefore, one firm has been lost and one is still going. However, the landlord wants the property back so that he can use it again.

My hon. Friend seeks to embroider further—if that is necessary—the point that in this relatively small case there are several dissonant elements. I agree that it would appear that the local authority has lost considerable rate income and has had to make temporary arrangements for the use of buildings whose long-term future may, or may not, be secure in the council's mind. As my hon. Friend knows, the public often urges councils to make long-term plans for the rehabilitation of areas. Nowhere is that more important than in the inner urban areas of Liverpool. However, such plans must involve major changes in present activities if a new beginning is to be made. Nevertheless, I accept that in this instance there seems to have been Pelion piled on Ossa in a manner that has left a certain degree of confusion. However, the council's pan in this affair has not been entirely dishonourable.

Today compensation reflects the market value of the land. In cases of compulsory purchase the amount is set at the sum that is thought would have changed hands, in the particular circumstances of the case, between a willing buyer and a willing seller. My hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle) referred to the Land Compensation Act 1973 and its consequences. Between willing buyer and willing seller a reasonable contract could be made and it is on the basis of that valuation that a CPO can be agreed.

What is in dispute in the case of Mr. Caplan is not the basis on which compensation is assessed—open market value—but the actual amount of compensation. This, of course, is made up of two components: the actual figure to be obtained for the property at a given date, and also, in Mr. Caplan's case, the loss of income from renting the property. If the dispute cannot be resolved between the parties, the remedy lies in recourse to the Lands Tribunal to determine the appropriate sum. As the transactions in the case have not yet been completed, I think that it would be wrong for me to pursue that point. I sincerely hope, however, that the present negotiations which have resulted in an improved offer being made to Mr. Caplan's agent will form the basis of an agreed decision.

My hon. Friend has questioned the propriety of a local authority letting premises which were acquired in order to be demolished. Frequently, where land is being progressively cleared of buildings over a period following a CPO some buildings may still perform a useful function until the time comes for them finally to be demolished and the land developed or put to other uses. I must say to my hon. Friend that this is a perfectly reasonable phase that a council should pass through in developing an inner city area. It is quite usual, for example, for this period to be occupied by a temporary letting, which can sometimes, as in this case, take the form of a tenancy at will on a weekly rental. This is entirely a matter of arrngement between the public authority and the tenant-at-will. It is appropriate that the authority should take the proceeds of any such letting, since it pays market value for the property in the first place. It is clearly right that when an authority has acquired a building for demolition it should put that building to whatever good use may be possible until the time for demolition comes.

I turn briefly to the question of what happens if land which is compulsorily acquired eventually becomes surplus to the authority's requirements as this brings very much into focus the point raised by my hon. Friend the Member for Lichfield and Tamworth.

Where Crown land is concerned, successive Administrations have agreed that surplus agricultural land should be offered back to the former owner at market value before being put on the open market. As my hon. Friends will know this practice was established following the Crichel Down case. Last year the Government decided that non-agricultural land should be subject to the same requirements. Administrative rules for this purpose were circulated to interested bodies in draft and have been applied in the meanwhile. The final version of these rules will be published shortly. They represent a code of practice which the Government propose to follow and which they commend to other public bodies, including local authorities, for application where appropriate in the light of their particular functions and circumstances.

I turn to the second case raised by my hon. Friend the Member for Wavertree—the Ashton Motor Company. I understand that the premises concerned were included in the Ashton Street CPO made as far back as January 1977. The ground was needed primarily for housing purposes and I gather that nearby residents had complained about the activities of some of the firms in the street, possibly including the Ashton Motor Company whose car breaking business was involved. I stress that a public inquiry into the CPO was held on 27 September 1977, when I gather that the proprietor of Ashton Motors made no objection. Therefore, the CPO was confirmed in the following March.

My hon. Friend has mentioned the proprietor's complaints that, having vacated his premises, they are still standing empty and have not yet been demolished and the land used for some other purpose. It is true that the housing scheme originally planned, which was well advanced, had to be shelved when all municipal schemes were suspended last year as part of the review of housing needs and expenditure. My hon. Friends will understand, as indeed I do, that councils are having to reassess their expenditure and this will sometimes cause delays in the system. None the less, the council has now decided that the land should be used for "special" housing and is currently evaluating what sort this should be—whether for pensioners or the handicapped, and so on.

It is, of course, regrettable that the land should not yet be redeveloped. None the less, in my view, my hon. Friend has not painted the whole picture. I am told that Ashton Motors was still trading from the site in question until June 1980 and that it only vacated the site in order to receive advance compensation—in this case, £5,850. If the company had been willing to forgo advance compensation, it could doubtless have remained on the site for longer. But the proprietor specifically requested such compensation, and in order to be able to be paid the occupier has to surrender possession.

I should also mention that the council made several offers of alternative premises, all of which were rejected by the proprietor. In January 1980, he notified the council that he no longer wished to inspect alternatives as he was retiring.

Perhaps in the remaining half minute I may turn to a more general point that my hon. Friend raised. Of course, neither my right hon. Friend the Secretary of State nor I would wish to see a return to the wholesale demolition of large areas that was common in the recent past. We fully realise the immense damage this can cause in the dispersion of old-established communities and the erosion of the industrial base—

The Question having been proposed at Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at half-past Ten o'clock.