§ Mr. Tom KingI beg to move Amendment No. 4, in page 2, line 31, leave out three ' and insert five.
§ Mr. SpeakerWith this amendment we may take the following Amendments:
§ No. 5, in page 2, line 35, leave out 'three' and insert 'five'.
§ No. 6, in page 2, line 42, leave out 'three' and insert 'five'.
§ No. 7, in page 3, line 12, leave out 'three' and insert 'five'.
§ No. 8, in page 3, line 21, leave out three 'and insert five'.
§ Mr. KingOn a point of order, Mr. Speaker. I understood that there was an amendment, No. 3, which was purely technical, renumbering a subsection. Is that not to be called?
§ Mr. SpeakerAs it was merely a drafting correction, it was not necessary for it to be put on the Paper.
§ Mr. KingAmendment No. 4 is linked with a number of consequential amendments on exactly the same point, fulfilling an agreement arrived at in Committee. Originally the clause stated that an agreement should be for a term of three years and that it should be capable of renewal for a further three years. An amendment in the name of the hon. Member for Derby, North (Mr. Whitehead) proposed a term of five years followed by a renewal period of five years, giving a minimum entitlement of 10 years. We reached a great British compromise providing an initial period of five years and a renewal period of three years.
It might be appropriate to give some of the reasons behind this compromise. This is one of the crucial points in the Bill as to how long the protection afforded by an agreement should last. I have found in my discussions that there is not a very strong feeling on the part of site owners against the long leases being offered provided that the condition of the caravan or mobile home is satisfactory. Our difficulty in considering whether to provide a much longer period of lease is that we are not starting mobile home sites from scratch, when all sites will be occupied by new caravans. We are 1806 injecting the Bill into an ongoing situation in which people may well already have been on sites.
These periods are minimum. We hope that in suitable cases much longer leases will be offered, but we feel that an initial period of five years with the right to renew for a further three, subject to qualifications—and this is often misunderstood by some site owners—about the quality and condition of a mobile home, is a suitable balance.
§ Mr. WellbelovedI support the amendment. I do so because we have to recognise the transformation which has taken place in respect of mobile homes. A decade ago many of these homes were formerly touring caravans which were not suitable and, indeed, were not designed as mobile homes for static use, and deterioration was more rapid than is the case with the modern mobile home.
Nowadays people who purchase these homes invest a substantial sum of money into an article which has been carefully designed and expertly constructed not only to provide excellent facilities in a relatively small space but also to withstand the ravages of changes in temperature and inclement weather. Therefore, the purchaser acquires an asset, usually by hire-purchase arrangements, which is designed to last a long time. If he is to be subjected to a short security of tenure it puts at jeopardy what is for most people a substantial investment.
11.30 a.m.
This element of investment by the mobile home owner has been complicated by the proposals of the Chancellor of the Exchequer to apply a 25 per cent. VAT rate to mobile homes. I know that it would be out of order to pursue that on this amendment, but I have no doubt that on future occasions in the House many hon. Members will wish to turn their attention to this matter. I merely adduce the Chancellor's 25 per cent. VAT rate as yet another reason why longer security of tenure, on the lines embodied in the amendment, should be established, because that will increase the investment which the owner has made in his mobile home. There should be a reasonable time for him to recoup his costs.
§ Mr. Tom KingMy understanding is that nobody who is covered by the Bill 1807 and has a mobile home as his only or permanent residence will be affected by the higher rate of VAT. As I understand it, the new rate relates to touring caravans owned by people who have another residence or another home. I should not like there to be any anxiety on that score.
§ Mr. WellbelovedI hope that that understanding is correct. I raised the matter this morning in the hope of eliciting just that kind of statement from my hon. Friend the Minister, because there is apprehension among owners and some retailers of mobile homes that that may not be the case. If my hon. Friend the Under-Secretary of State is able to confirm what the hon. Member for Bridgwater has said, that will be all to the good and will justify my having referred to the 25 per cent. VAT rate. It would be a serious matter if our hopes for a more sensible application of VAT were not fulfilled and one cannot be certain about that until the Finance Bill has completed its passage through the House—and that is all the more reason why we should extend the length of tenure.
§ Mr. Douglas Hurd (Mid-Oxon)I support the amendment, largely on the ground touched on by the hon. Member for Erith and Crayford (Mr. Wellbeloved) in his opening remarks, which seemed to go to the heart of the matter.
Two things are true. First, mobile homes are a permanent and desirable part of the housing scene. Secondly, they are not yet so regarded by large numbers of people living in other kinds of homes, and particularly by large numbers of councillors. It is partly because of the insecurity of tenure that that is so, and I hope that the amendment, which proposes to increase security of tenure, will help to bring about a fundamental change in people's attitudes towards mobile homes.
It will no longer be possible to regard mobile homes as some kind of hangover from the war or places in which transient people live for a month or two. They will no longer be able to be discounted as part of the permanent local scenery. I am sure that these homes should be welcomed as part of the permanent local scenery and I believe that the amendment, following on the original proposals in the Bill, will help to do that.
1808 The owner of the site will not find that he is landed without any redress against an occupier whose behaviour is unreasonable. No amendment has been tabled to the important provision in the Bill which gives the owner the right to terminate the agreement in the event of a breach of it. The owner has a guarantee of reasonable behaviour, and the occupier now has a guarantee of extended security of tenure. The amendment strikes a reasonable balance, and I hope that it will be accepted.
§ Mr. Phillip Whitehead (Derby, North)I rise to support the amendment which represents the compromise suggested in Committee by my hon. Friend the Member for Renfrewshire, West (Mr. Buchan).
Embedded in the heart of the dilemma of the mobile home owner, which led to the introduction of the Bill in the first place, is the problem that when he purchases a mobile home he purchases a residence, but at some later stage if he wishes to sell it as a vehicle the depreciation is regarded as a kind of vehicular depreciation.
As we know from the brochures issued by reputable sellers of mobile homes these vehicles are guaranteed for considerable periods of time. As my hon. Friend the Member for Erith and Cray-ford (Mr. Wellbeloved) said, if people purchase new mobile homes which are guaranteed to last for 20 years or more and in that period provide a suitable residence, surely it is right to give a reasonably prolonged expectation of tenure to those people—often elderly—who make a substantial investment in such dwellings.
On balance, I think that we are right to do it this way. Although the lifespan of the vehicle will almost always be longer than eight years, three plus five, as the hon. Member for Mid-Oxon (Mr. Hurd) said, is about right in giving the kind of security that we want for the owner and I too, hope that the amendment will be accepted.
§ Mr. KaufmanThe contributions made to the debate today by my hon. Friend the Member for Erith and Crayford (Mr. Wellbeloved) are so apposite and relevant that it is a pity he did not favour us with more contributions in Committee. His intervention on the question of VAT 1809 has been extremely valuable, because it has elicited a response from the hon. Member for Bridgwater (Mr. King) which I am happy to confirm and endorse. These dwellings are not liable to VAT in the way that holiday and touring caravans are.
What was said by my hon. Friend and repeated by the hon. Member for Mid-Oxon (Mr. Hurd) about the new status of mobile homes is something which ought to go out from this House of Commons. My right hon. Friend the Secretary of State for the Environment recently issued a circular about the need to get more homes more quickly and more cheaply. That was the part of his speech at Brighton on 30th October last year which was widely misunderstood as apparently implying that he wished to see prefabs going up all over the country. That is not so.
My right hon. Friend wishes to see mobile homes achieve a new status as semi-permanent, if not permanent, dwellings which can provide many of the conveniences and comforts which dwellings built in a more orthodox fashion can provide. Indeed, the circular which my right hon. Friend has recently issued asks local authorities to consider the much wider use of mobile homes. I am grateful to my hon. Friend the Member for Erith and Crayford for reinforcing that plea today. There are many ways in which local authorities, among others, can use mobile homes to provide satisfactory dwellings for those who cannot find a decent place in which to live.
I am satisfied that the hon. Member for Bridgwater and my hon. Friend the Member for Derby, North have embodied in these amendments the compromise which was put forward by my hon. Friend the Member for Renfrewshire, West. In moving the amendment the hon. Member for Bridgwater referred to it as a great British compromise. It is a compromise which shows the value of Great Britain because, as I say, it was suggested by my hon. Friend the Member for Renfrewshire, West who has fought so valiantly for Scottish interests, no other smaller party seeming to care a hang about them. This compromise will be of great value to those who live in mobile homes.
§ Amendment agreed to.
1810§ Amendments made
§ No. 5, in page 2, line 35, leave out 'three' and insert 'five'.
§ No. 6, in line 42, leave out 'three' and insert 'five'.
§ No. 7, in page 3, line 12, leave out 'three' and insert 'five'.
§ No. 8, in line 21, leave out 'three' and insert five—[Mr. Tom King.]
§ Mr. Tom KingI beg to move Amendment No. 9 in page 3, line 23, leave out from 'shall' to end of line 26 and insert
so extend the term of any agreement entered into in pursuance of that duty that it will expire on a date which is not less than five years from the date on which the agreement commenced'.This is a drafting amendment which aims to cover the point arising from the proviso in Clause 2 that a tenant must be offered a five-year agreement unless the site owner does not have five years' entitlement to that site.This difficulty is illustrated by a case in my constituency where the planning permission on a site is to expire in three years' time. It is obviously impossible for the owner to give five-year agreements since he will not be entitled to operate that site for longer than three years. The site owner is appealing against the refusal of the local authority to extend the planning permission. If his appeal is successful it is right that the occupiers should have their right to a five-year agreement reinstated.
The amendment seeks to clarify the point. It is very much in response to a point made by my hon. Friend the Member for Rushcliffe (Mr. Clarke) who unfortunately has an urgent constituency engagement today and cannot be here. We appreciate his contribution in Committee where, as a lawyer, he helped us to improve some of the wording in the Bill.
§ Amendment agreed to.