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' (1) The following section is substituted for section 13 of the 1977 Act:
13.—(1) Except as provided by subsection (2) below—
§ (2) An interest belonging to Her Majesty in right of the Crown shall not prevent a tenancy from being a protected tenancy or a person from being a statutory tenant if the interest is under the management of the Crown Estate Commissioners.".
§ (2) In subsection (5) of section 19 of the 1977 Act the words (in paragraph (b)) "or of the Duchy of Lancaster or to the Duchy of Cornwall" are omitted and at the end of the subsection there are inserted the words "except that an interest belonging to Her Majesty in right of the Crown does not prevent a contract from being a restricted contract if the interest is under the management of the Crown Estate Commissioners".
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(3) In section 5 of the Rent (Agriculture) Act 1976 the following is substituted for subsection (1):
(1) A person shall not at any time be a statutory tenant of a dwelling-house if the interest of his immediate landlord would, at that time—
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(4) In the Landlord and Tenant Act 1954—
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" (7) Part I of this Act shall apply where—
In this subsection ' interest not bound by this Part of this Act ' means an interest which belongs to Her Majesty in right of the Crown and is not under the management of the Crown Estate Commissioners or an interest belonging to a Government department or held on behalf of Her Majesty for the purposes of a Government department.".
§ (5) Schedule (Crown Estate and Duchies— consequential provisions) has effect for making certain provisions consequential on this section.'—[Mr. Heseltine.]
§ Brought up, and read the First time.
§ The Secretary of State for the Environment (Mr. Michael Heseltine)I beg to move, That the new clause be read a Second time.
§ Mr. SpeakerWith this it will be convenient to discuss Government amendments Nos. 143, 144, 149 and 200.
§ Mr. HeseltineThe clause and the associated amendments follow a review of the application of housing legislation to the Crown Estate. The House will be familiar with the fact that there was an answer on 14 May that anticipated the clause and the amendments.
The purpose of the proposals is to give Rent Act protection to short-lease tenants of the Crown Estate Commission, the Duchy of Cornwall and the Duchy of Lancaster. We estimate that respectively there are 2,000, 1,000 and 200 such tenants, who are mostly in London. In future they will benefit from full security of tenure, and they and their landlords will be able to apply to the rent officer for the registration of a fair rent. By virtue of their being protected tenants they will be eligible for improvement grants and will be given the right to improve under the new provisions in the Bill. The provisions of the Rent (Agriculture) Act 1976 and part I of the Landlord and Tenant Act 1954 will also be applied.
The House will be familiar with the fact that the practice of the Crown Estate Commissioners to apply the Rent Act administratively to their tenancies has been long established. However, in the light of recent representation and a review of their arrangements, during which tenant associations were consulted, the Commissioners have concluded that their tenancies should be brought formally within the Rent Acts. That is what we are now proposing.
There is a transitional arrangement which is based on a precedent that was established when earlier arrangements of this sort involving the Rent Acts were considered. There has been some comment and some concern has been expressed about the position of Crown Estate tenants who have paid premiums for their leases to outgoing tenants. I shall try to put this issue in prospective.
First, the Crown Estate does not charge premiums when granting short-term tenancies at fair rent levels. The majority of such tenants are the original occupiers under the lease. They have not paid a premium and they have no right to complain that when formal Rent Act protection 104 is applied they will not be able to charge a premium if they leave before the expiry of the lease. About 5 per cent. of tenants are not originals, and they will have paid premiums to outgoing tenants when taking over the remaining period of the lease on assignment. I can understand that these tenants feel that if they want to leave before the remainder of the lease has expired, they should be able to recoup something by way of a premium from an assignee.
The House faced exactly this problem when the Rent Act was applied in 1973 to tenants of more expensive properties in London and outside, when a much greater number of tenants was affected.
Provision was then made for transitional arrangements so that, where a premium was paid lawfully before the Rent Acts applied, a tenant could recover a proportion of his premium on assignment to a new tenant. We have simply applied the identical provisions in part II of schedule 18 to the 1977 Act to Crown Estate and Duchy tenants. Broadly, it works on an apportionment basis. If there were five years left on the lease when it was assigned and there are, say, two years left when it is reassigned, two-fifths of the original premium can be recovered. I hope that that explains the position that arises there.
There is one other matter that I wish to put to the House. It concerns the controversy about whether the Crown Estate Commissioners are a public body, and ought therefore in some way to have their properties made subject to the right to buy provisions enshrined in this legislation.
The right to buy does not apply to all publicly owned properties. It applies to properties which have been provided by new towns and housing authorities. It does not apply, for example, to Government Departments or to county councils. Obviously, in coming to a broad conclusion about where to draw the line, we decided that it would be appropriate to treat the Crown Estate Commissioners on the same basis as we treated those non-housing authority bodies such as Government Departments or county councils.
§ Mr. Roger Moate (Faversham)Will my right hon. Friend elaborate on that? The 3,500 tenants of a public department, as my right hon. Friend has described 105 the Crown Estate, are not comparable to tenants of county councils where houses are held for a specific purpose. Will my right hon. Friend explain why he felt the tenants of the Crown Estate were somehow unworthy of the right to buy?
§ Mr. HeseltineThere is no question of their being unworthy. That did not enter into the calculations. I realise that there are tenants living in such properties who would find the right to buy financially attractive. But when originally we came to our conclusions about the right-to-buy provisions, we took the view that to make judgments about the disposal of assets it was right to do so where those public assets had been created with the help of taxpayers' support and subsidy for housing purposes. That was the general view that we used to guide ourselves in deciding that the right to buy should apply to local authority and new town tenants.
Those general tests would not apply in the circumstances about which my hon. Friend asked me. Therefore, we felt that they came on the other side of the divide and were more equitable to the local authority houses. If they had been acquired in connection with a road scheme in the hands of county councils, they would not be subject to the right to buy. Where Government Departments might have houses for service tenancies of one sort or another, these would not be subject to the right to buy. We could not see an argument for breaching the broad distinction that I made and extending the right to buy further than we had said it should be given.
§ Mr. William Shelton (Streatham)I welcome my right hon. Friend's remarks. I declare my interest as chairman of a residents' association, and as one who lives in a Crown Estate property I can confirm that the position has been rather anomalous regarding tenants of the Crown Esate.
I regret that my hon. Friend the. Minister for Housing and Construction has not been able to find time to consult further about this. The only letter that I have received from his Department was from my hon. Friend the Member for Hamp-stead (Mr. Finsberg), who told me that legislation might be introduced in the Lords, Consequently, it was surprising to 106 me, since I had missed the answer to the question on Wednesday, that people telephoned me on Friday in a state of some anxiety and dismay because of what they had heard. Mention was made of this in Sunday's newspapers.
There are two matters which concern me. First, as my right hon. Friend says, it is clear that the Crown Estate is in the public sector. Without going into long detail, I quote two authorities. One was Mr. W. A. Wood, now Sir William Wood, who was a Crown Estate commissioner. He appeared before the Select Committee on the Civil List on 21 July 1971, when he was asked about the Crown Estate:
So in effect it is a public estate? ",and he replied:I would think so, yes.The second authority is that very distinguished Queen's counsel, Sir Frank Lay field, who gave an opinion on 28 April 1980 which I know found its way into the hands of the Department. To summarise his views, on page 2 he says that the Crown Estate is a Government Department within the expression "public sector" as it is employed in the Housing Bill.As my hon. Friend the Member for Faversham (Mr. Moate) said, the nub of the matter is the right to buy within the public sector. I accept the criticism from my right hon. Friend that it would be financially attractive to some people should this right be extended to tenants of the Crown Estate, but not more financially attractive than it would be to a council tenant. The main point made by my hon. Friend the Member for Faversham was that the attraction was not necessarily so much financial as that of home ownership.
People in my association have been in their houses for 10, 15 or 20 years and have been denied the right to buy their homes. Under this legislation, they will continue to be denied that right. I must take issue with my right hon. Friend. The people living in these estates cannot be equated with those living in Department of the Environment houses, specially those with some kind of service agreement. It is a housing estate of 3,000 or 4,000 people spread across London. It is possible, I accept, that taxpayers' money may not have gone into their 107 creation, and that might be an argument. However, I do not think that it should gainsay the right to buy which is so much part of the philosophy espoused by my right hon. Friend that we should extend home ownership to the maximum.
However, leaving that aside, there are some fundamental difficulties with this legislation. In the first place, under the tenants' charter the council tenant will have a series of advantages which will continue to be denied to the tenant of the Crown Estate. I mention, for example, the right to sublet. That has nothing to do with the Rent Act 1977 and would have been given to the Crown Estate tenant had the tenants' charter been applied to it. There are a number of other advantages which these people lack and which the council tenant will have, quite apart from the fundamental one of the right to buy.
Secondly, insecurity will continue by applying the Rent Act. The difference between the Housing Bill and the Rent Act is that the former is based on the identity of the landlord whereas the Rent Act is based on the rateable value of the property. Some of the Crown Estate properties—in Regents Park, for example, with which I have nothing to do—will still be excluded from the Rent Act because some of their rateable values may be above £1,500 a year which, after all, is a figure which is now a good many years out of date. So this 1977 Rent Act provision will not cover all Crown Estate properties, to the best of my understanding.
Then there is this extraordinary application in part II of schedule 18 to the 1977 Rent Act referring to premiums. I say "extraordinary" because my understanding is that schedule 18 came with section 121 of the counter-inflation legislation of 1973 which was then consolidated in 1977 and was introduced by the Government of the day to control prices and incomes within a counter-inflation package. It is hardly applicable to present circumstances. It introduces a considerable problem.
As my right hon. Friend said, the premium that the outgoing tenant may charge must diminish pro rata to the percentage of the lease that he has enjoyed. I take a simple case. If such a 108 tenant paid £1,000 five years ago for a 10-year lease and now wishes to sell it, I understand that the maximum he can charge is £500. That takes into account no aspect of inflation. A former colleague in this House, Sir George Sinclair, has his lease on the market. By this provision, if the legislation goes through, he will stand to lose some £20,000. He bought his lease between 10 and 15 years ago I believe, and paid I would guess £2,000. It is now on the market for about £20,000. He will be allowed to charge £1,000—if, indeed, according to my reading of the schedule he is allowed to charge anything at all.
I understand that a premium can be charged only if the person who is the outgoing tenant has recently bought the lease. Under a series of seven-year leases, someone like Sir George, who acquired his lease 20 years ago, has his third seven-year lease. My understanding of the schedule is that he is therefore not entitled to charge any premium at all. Only those outgoing tenants who have bought the most recent seven-year lease and did not carry on from previous leases—I hope I make myself clear—have any right to charge a premium. In that case, Sir George would not only be unable to charge £1,000 but could not charge anything at all.
This provision in the schedule is directly contrary to the assurance given in writing by Sir William Wood, the then commissioner, when he informed tenants that they would have the right to assign at market prices until the expiry of their leases, some of which run until 1990. The legislation will obviously override that assurance. I am sure, however, that my right hon. Friend, reflecting upon the points I have raised, will wish to see what I consider an injustice and a betrayal of the assurance of the Crown Estate put right at a later date.
Mr. Ronald W. BrownI do not agree with the hon. Member for Streatham (Mr. Shelton) with regard to the assigning of leases. This is not a problem that causes much concern in my constituency. I wish to pursue the argument put by the Secretary of State that he is happy to ensure that the Crown Estate Office should be placed in the private sector. I simply ask "Why?" For a long time, it could have come into the private sector but expressed no wish to do so, 109 because the private sector was controlled. It is true that it attempted to stay within the general framework of housing in the private sector but it made clear that it was not a part of it. When one wished to pursue it in any particular it claimed its right not to be pursued because of its status as administrator of Crown property.
I do not understand how the Secretary of State can now discover a profound legal opinion put before him advising him that the Crown Estate Office is part of the public sector. When, for the first time, his own advisers cannot challenge the legal advice, he decides that the Crown Estate Office is not in the public sector—although it is clear it is—and he puts it in the private sector. The Secretary of State owes it to the House to explain why he has rejected the legal advice that was clear and appears to be supported by almost everyone, and has opted instead for the private sector.
§ Mr. Tim Rathbone (Lewes)I suggest that the answer may be found in my right hon. Friend's answer to my hon. Friend the Member for Fareham (Mr. Lloyd) last week, in which he said:
the Commissioners have concluded that their tenancies should be formally included within the rent Acts and associated legislation."—[Official Report, 14 May 1980; Vol. 984, c. 509.]It seems that the Department has taken the commissioners' view at face value without any question.
Mr. BrownThe Secretary of State should help the House to understand why this has happened. Until now, there was no evidence on which side of the fence the Crown Estate Commissioners would fall. Now the evidence is that it is the public sector. But the Secretary of State has said that it is the private sector. The right hon. Gentleman has had advice from the Crown Estate Commissioners, who, as he pointed out, have consulted their tenants. I am bound to point to the extent of their consultation. One of the commissioners wrote to the tenants' associations, saying "I am sorry to hurry you, but within the next two weeks, I must have observations on the proposals in the Housing Bill." When the tenants' association in my constituency said that that presented some difficulties, the reply was "Just get something in." The 110 comments from the tenants' association in my constituency is one man's attempt to understand the Housing Bill in order to provide advice to the commissioners.
§ Mr. William SheltonThe same situation applies to ourselves. The result of our consultation was that the Crown Estate Office should be in the public sector. I cannot accept that any attention was paid to the consultation that was undertaken.
Mr. BrownWe are getting a picture. The Secretary of State should understand that we are not satisfied with his approach. There was no consultation in any meaningful sense. The right hon. Gentleman said that he had decided, even if the Crown Estate Office had been in the public sector, with the opportunity to buy, it should not have that opportunity, because it was different and did not possess the inalienable right of people to purchase their own houses. That apparently does not apply, for some unknown reason. The right hon. Gentleman argues that even if the Crown Estate Office were in the public sector there should not be this right, because taxpayers' money is not involved. That is not true, either.
Some years ago, when I sought to comment on the amount of increase in rent that the Crown Estate Commissioners were charging, I tabled a question asking why the Treasury was insisting that the commissioners had to make a profit on the housing. I asked why such an edict had been given by the Treasury. I was told that it had not been given. On the other hand, I was told, money goes to the Treasury and the Treasury, therefore, has an overall view. The Crown Estate Office is responsible for industrial enterprise, commercial enterprise and private residential enterprise, in order to balance its books, but the beneficiary is the taxpayer.
I do not understand why the Secretary of State should make a positive statement to the effect that the taxpayer is not involved when he is, in fact, primarily involved. If the Secretary of State accepts my argument, as I feel he must, on taking advice—I shall be pleased, if he does not propose to accept it, to hear his rebuttal—does that not take him back a stage? If his only argument for not permitting Crown Estate tenants to purchase their property is that taxpayers' money is not involved, he must pull 111 back, because taxpayers' money is involved. I hope that he will change his mind.
If he pursues the wrong argument, a question arises about the Crown Estate Office's letting policies. One of the principal problems in my constituency relates to the letting of property. What are the terms? How is it let? Why is it let? What sort of lists are drawn up? Those who seek a letting are told that there are lists. I should like to know the criteria for those lists. Do I understand that, according to the tenants' charter provisions of the Bill, Crown tenants, under new clause 30, will be entitled to have that information and that they will be covered by all aspects of the tenants' charter?
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I do not think that the House can accept that, because the Crown Estate has been left alone for so long, it can continue in that way. Too many points need to be argued. Too many problems are being left behind. The Secretary of State cannot leave it by saying "I was advised by the Crown Estate Commissioners that they would prefer now to be under a qualified part of the private sector." The Crown Estate is either in the private sector, in which case it comes under the whole gamut, or it is in the public sector, where, I submit, it should be. I insist on the Secretary of State's telling me whether it is fully in the private sector under the new clause. If so, it is covered by everything in the Housing Bill relating to the tenants' charter. Will the right hon. Gentleman review the situation and understand that it should be in the public sector, and that tenants should have the inalienable right to buy?
§ Mr. MoateLike my hon. Friend the Member for Streatham (Mr. Shelton), I declare an interest, being a Crown Estate tenant. Because of that, I speak with some reluctance in this debate. But, despite that reluctance, I feel that I should be letting down a large number of honourable colleagues and tenants of the Crown Estate if I did not express my view on this proposal.
I believe that my right hon. Friend has made a mistake. I also believe that the way in which the new clause has been 112 put forward leaves something to be desired.
What we are debating today from the standpoint put forward by my hon. Friend the Member for Streatham and the hon. Member for Hackney, South and Shoreditch (Mr. Brown) represents the interests of thousands of tenants. I suspect that many of those tenants have no idea that this debate is taking place today. They have no idea that their future, rights, property interests and, in some cases, financial interests are being debated and changed. That is because the new clause came to our notice only on Friday. Within 48 hours of its being tabled, a major decision on the future of many people is likely to be taken. That cannot be right.
This proposition has not been discussed. There has been no consultation. It has not been put to these tenants. They have no way of putting forward their response or of making representations about this proposition. Does my right hon. Friend believe that to be right? Does he believe that the Government want to proceed in that way as regards consultation with minority groups? I know that it is not the way that he believes this should be done. Yet in this instance it is being done.
Because of the important nature of this proposition affecting so many tenants and considerable property interests—a matter of historic importance—I ask my right hon. Friend not to proceed with the new clause. Would it not be better to allow a short period of consultation to take place to discuss and understand the full implications of this move?
I understand that the Under-Secretary of State, my hon. Friend the Member for Hampstead (Mr. Finsberg), in a letter, suggested that, if there were to be legislation affecting the Crown Estate, this would be taken in another place. That is a very good suggestion. I think that he is right. I fail to understand why my right hon. Friend has not pursued that sensible course, but has decided to move the new clause today. I ask him, in the interests of public consultation in which I know he is a strong believer, to consider not proceeding with the new clause, but to have it moved in another place to allow the intervening period—probably short—for sensible consultation to take place.
113 I put to my right hon. Friend the reasons why I think that there should be some scope for second thoughts and time for consultation. At stake is the principle of home ownership. I do not suggest that my right hon. Friend does not believe passionately in home ownership. We know that over the years it has been unclear in many people's minds whether the Crown Estate is a public or a private sector estate. The Crown Estate has recently been asserting that it is in the private sector and therefore tenants should not have the right to buy. Recently we had the opinion by Frank Layfield asserting powerfully and leaving no vestige for doubt that the Crown Estate is a public sector body. I shall not bore the House with all the evidence to support that view, but the evidence is overwhelming and the conclusion is absolutely conclusive.
How do the Government respond? Instead of saying "We accept that opinion. We believe in home ownership and we shall give all these tenants the right to buy", they introduce a new clause at very short notice that states "We shall ensure that they are in the private sector for this purpose only and we shall deny them the right to purchase their own homes."
Who are these people? My hon. Friend the Member for Streatham mentioned people who had a considerable interest in the leasehold values of their properties. The hon. Member for Hackney, South and Shoreditch has spoken of many of his constituents who are small tenants in the classical sense of that word. I cannot understand the logic that they should be denied the right to purchase their properties.
If this is a large public sector estate, if these are Government tenants, in a sense, council tenants—my right hon. Friend should have tried hard to examine the arguments a little further and to have given them the right to buy. He has not examined the argument further because the answer that he gave, which was quoted by my hon. Friend the Member for Lewes (Mr. Rathbone) gave the game away. My right hon. Friend said that
the Commissioners have concluded that their tenancies should be formally included within the Rent Acts ".—[Official Report, 14 May 1980: Vol. 984, c. 509.]114 It seems that on this occasion the Secretary of State has listened to the Crown Estate Commissioners, but not to his hon. Friends or to the representations that have been made by Crown Estate tenants. If ever there were evidence that the Crown Estate is in the public sector, it is that the civil servants have been working together and that little heed has been paid to Parliament. That is evidence, if evidence were needed, that this is a public sector body. The Commissioners are civil servants, ex-civil servants or people who might go back to the Departments. It is very much a public sector body.I turn now to those tenants in this area who have an interest in leases. I suggest that my right hon. Friend has done an unpleasant thing to some of these people. I can think of people who have recently moved in, having paid substantial sums for leasehold properties, in the not unreasonable belief that they would be able to remain there indefinitely and would not lose all their cash. But, from today forward, such people will feel that they have been deprived totally of their investment. Basically, these people want to stay, but, like everybody else, they want to feel that at some stage they will have the freedom to move and to realise the value of that property.
I should like to quote from some minutes of a meeting which took place between certain tenants and the Crown Estate Commissioners. I was not present at the meeting, but it makes the point. It states:
Tenants had taken on full repairing covenants, and for the most part, had taken assignments upon payment of a premium (with the knowledge of the Commissioners) in the not unreasonable expectation that the policy of the Commissioners would not be changed in such a way as would put them at a disadvantage. Much distress had been caused by virtue of the fact that many tenants who had put money into their homes (whether by way of premiums or improvements) were condemned either to have to move home so as to recoup themselves—when most of them did not wish to move—or stand to lose the money which they had invested.People moved into those homes believing that they would be able to secure renewal of those leases, which was the general policy at that time, only to find that they are now being deprived of the right to assign. In effect, they are having 115 the capital value of their homes taken away from them.If the Crown Estate were a superb example of estate management, I might have some sympathy with this approach. But hon. Members have only to walk to Millbank and to look at that estate to judge for themselves whether it is private or public sector. Had that been a private estate, I do not believe that, 35 years after the war, there would still be yawning gaps where the bombs fell leaving valuable sites empty. We would not now have the wide ranging demolition of properties that, within the private sector, would have been protected as buildings of historic interest. I do not believe that the properties would have been allowed to deteriorate as they have done in many areas.
For many people, they have been marvellous homes and the Crown has been a reasonable manager. But, if we look at the overall picture, I do not believe that we see a picture of something that we should preserve. I suspect that many of the causes of the poor management result from factors beyond the control of the Crown Estate. I sympathise with the situation in which the 16 commissioners find themselves.
However, their response should surely be not to acquire more protection for their tenants. Their response should be to sell the properties. Perhaps my right hon. Friend will tell me why he has not encouraged them to sell the houses even if they are in the private sector. Could he not on this occasion have come to the House and said that, despite these restrictions, the Crown Estate would pursue an enlightened policy of selling to all its tenants at fair prices? Why has my right hon. Friend not done that and secured such a concession? It seems to me that that would be in the interests of the Crown Estate. It would be commercial, sensible and enlightened, and it would be in the interests of the tenants.
This debate has come upon us unexpectedly and certainly much more quickly than many of us expected. It really is not fair to tenants and the House to discuss a matter of this major importance under such pressure of time. The matter needs more attention, and I ask my right hon. Friend to consider not pressing the clause today but pursuing 116 it in another place when there has been proper time for discussion.
§ Mr. W. BenyonI do not wish to delay the House nor do I wish to oppose this new clause, though I think that the suggestion of my hon. Friend the Member for Faversham (Mr. Moate) deserves consideration. There are a number of features of the new clause that are doubtful.
I rise to point out that this is one of the difficulties we can get into when we establish a statutory right to buy. At an earlier stage in our proceedings I asked what, in equity, was the difference between the tenants of a private landlord and the tenant of a public landlord. I was told, as we have been told today, that the difference was that the latter was financed by public money.
When King George IV made a deal with the then Government and exchanged his private properties for the Civil List—it was a good bargain for the taxpayers of the country, a fact often forgotten by the hon. Member for Fife, Central (Mr. Hamilton)—he transferred lock, stock and barrel those assets to the Government of the day. They have been held ever since. Therefore, the profits or losses are profits or losses to the national Exchequer. They are as much a part of the public purse as, let us say, local authority housing or housing association property.
In certain sections of the public sector, there are large numbers of houses that are not subject to any debt at all. The debt has been paid off and therefore they are in exactly the same position as these houses. In logic, if not in political fact, there is no difference whatever between these properties and those of local authorities.
To deny the right to buy to one and not to the other is illogical. It may be practical and it may be important, and I am the last person to suggest that the Crown Estate should be broken up. But it is illogical to defferentiate between one part of the public sector and another.
§ Mr. Peter Bottomley (Woolwich, West)I apologise for coming late because I did not realise that this discussion would be reached so soon. I openly admit that I did not realise that a significant number of my constituents would be affected by a new clause moved almost without notice, as far as I can see. It has been 117 moved without notice to me as a Member of Parliament in whose constituency there are a number of houses which contain both Crown Estate tenants and, more importantly, Crown Estate leaseholders.
I have not had time to go into the merits of this issue. I believe that it is important that the House should have the opportunity to do that for two reasons. The first is to protect the name of the Crown; the second is to protect those of our constituents who are affected.
I hope that some of the arguments that I have heard from both sides of the House will receive a suitable answer from Ministers. If it is not possible to provide a full justification for this new clause now, I hope that my right hon. Friend will not push this new clause at the moment. If it is introduced in another place, that would give me, and other hon. Members, time to go into the merits of the effects of the new clause. It will afford the opportunity for a full discussion in the other place and, when it comes forward as an amendment to the Bill, it will give the House an opportunity to consider it, having had consultations—which I certainly wish to have with my constituents—on the effect of the new clause at such a late stage.
§ Mr. HeseltineI believe that there are two issues before the House in this set of proposals. The first one is whether or not the tenants of the Crown Estate should be brought within the protection of the Rent Acts. The second is whether they should enjoy the right-to-buy provisions associated with a commitment made by the Conservative Party in the general election campaign.
The practice of the Crown Estate has been to apply private sector policy in respect of the Rent Acts to its tenants. It has now decided that it would be right to see that practical application of the Rent Acts extending into statutory form. That is what the amendments do. They merely confer legally on tenants the rights which they have enjoyed in practice. It cannot be in the interests of those tenants not to have those rights on the statute book. They are losing nothing and they are gaining a statutory backing for their present position. That must clarify the position in which they live if nothing else.
Mr. Ronald W. BrownThe Secretary of State says that, but the statement must be qualified. Tenants did not have rights under the Rent Acts. When their rents were going up, the Crown Estate Commissioners—the landlords—claimed that they consulted the rent officer but the rent officer did not consult the tenants. He could not do that. It is, therefore, not true to say that tenants have the same rights.
§ Mr. HeseltineIn that case I think that the hon. Member for Hackney, South and Shoreditch (Mr. Brown) is going further than I was going in showing why the tenants positively gain from the legal provisions that are now before the House. What he has said strengthens what I was saying, because it clarifies and puts the rights which tenants would enjoy if the House approved these amendments against a statutory backing. Therefore, I think that the House should take a decision on a matter which can only enhance the position of the tenants.
Questions have been put to me about the letting policies of the Crown Estate Commissioners. I do not have a statutory role in relation to the letting policies of the Crown Estate Commissioners. They act independently and reach their own judgments. It is not for me to try to lay down the various codes of practice to which they should adhere. I make the point that the Rent Acts do not prevent subletting. The whole business of letting is a matter for the Crown Estate Commissioners, and they would pursue the policies which they thought appropriate in the circumstances. It is not for my Department to try to do that.
The second point of discussion——
§ Mr. William SheltonThe thrust of my argument was that, while my right hon. Friend is right, if the tenants' charter applied, the Crown Estate, of course, would have to give to its tenants the privileges council tenants will have. While the Rent Act applies, that is not so. That is why I was arguing that the tenants' charter should apply rather than the Rent Act.
§ Mr. HeseltineI am grateful to my hon. Friend the Member for Streatham (Mr. Shelton), because his intervention brings me to my second point, which is 119 whether or not tenants should have the right to buy because that provision is not in an amendment before the House at this time. The question would be whether, by passing these provisions, we would preclude a subsequent amendment to give the right to buy. I should have thought that, on consideration in another place—even if the Bill had been amended as proposed today—it would be possible to devise amendments for consideration there to give the right to buy if that seemed desirable.
The right-to-buy—or discount—provisions promised to new town and council tenants are generous. They were never promised to anybody in the public sector outside those categories. Indeed, there are exclusions within those categories, and they were spelt out at the time that the provisions were announced. Not only were some local authority tenants excluded but, by implication, it was clear that we were not talking about Government Department tenants or local authorities which are not housing authorities but which have tenants incidental to their main purposes as local authorities.
Whether the Crown Estate Commissioners are in the public or private sector, they would not be within the right-to-buy provisions. We should have to make a policy judgment about whether we wish to extend the right-to-buy provisions from the council and new town tenants to other tenants who might be able to claim to be in the public sector but who are not the tenants of housing authorities. We were right not to extend the provisions to such tenants. The debate is about whether we should extend the provisions to a new category of tenant.
The broad view is that the Crown Estate Commissioners operate private sector tenancies. We have given the right to buy to the tenants of housing authorities which provide houses as a main purpose and where substantial sums of public money have been used in the creation of assets. We felt that we were entitled to make a judgment about the use of public funds and about assets accumulated by the taxpayer. We believed that we had a status, whatever the merits of the argument. We have no such status in relation to Crown Estate property. Such property was not built as a public asset with subsidies from the 120 public purse. It is not right to violate the principle on which the original judgment was made, and we do not wish to change our minds.
§ Mr. RathboneI follow the two parallel lines of thought which the Minister has developed, but I do not see where they meet.
§ Mr. Frank Dobson (Holborn and St. Pancras, South)Parallel lines do not meet.
§ Mr. RathboneI am grateful to the hon. Member for Holborn and St. Pancras South (Mr. Dobson). Parallel lines do not meet, and that is the crux. If the Secretary of State accepted that the Crown Estate is part of the public domain, he would still feel that he should not change his mind about the right to buy. I do not see how any of his arguments support that line. Perhaps he will elaborate.
§ Mr. HeseltineThe hon. Member for Holborn and St. Pancras, South (Mr. Dobson) helped me in his intervention about parallel lines, because there is no meeting of the two lines of argument that I was developing. We would not have brought the Crown Estate into the right-to-buy provisions because such houses were not provided with public funds or subsidy and therefore we have no locus to make decisions about their disposal. Historically, one can argue about whether Crown property involves a public asset or activity. However, such property was not provided with subsidies from the public purse, and we have no right to dispose of it. That is why the arguments fail to converge, let alone meet.
My hon. Friend the Member for Streatham asked about the premiums and the transitional arrangements. There is a transitional arrangement for bringing Crown Estates into the Rent Acts. It has the effect that if somebody has paid a premium he can dispose of that lease and charge that premium, which represents a proportion of the original premium, only in relation to the amount of time that has expired. My hon. Friend asks what will happen when a premium has been paid for the original lease which has expired and the new extension does not come within the provision. I shall examine that matter. Somebody who buys a short lease which then 121 expires has the benefit which he anticipated when he purchased the original lease. The lease would be time-limited, and no assurance would have been given that it would be extended into a new lease. It is difficult to argue that the capital value of the original lease should run over to the supplementary lease. I am trying to be helpful. Without optimism, I undertake that the issue will be examined in another place.
§ Mr. William SheltonFor the person who bought a current lease, the provision takes no account of inflation. It is contrary to the express undertaking of the commissioners that such leases should be sold at market value.
§ Mr. HeseltineI accept that the provisions do not take account of inflation any more than the original provisions did when they were introduced in the early 1970s. We can examine the detail, but I do not wish to raise false hopes about the principles. We are not likely to want to change our direction.
§ Mr. Peter BottomleyThe Crown Estate Commissioners were kind in reviewing some of their policies towards leaseholders. Many of my constituents have been prohibited from buying freeholds because of planning and development problems. Are such leaseholders affected in any way by the provisions? When the review by the commissioners is concluded, will their conclusions be included in the legislation? If a significant number of leaseholders and tenants are affected, hon. Members should be given time to consult about the provision. My right hon. Friend has given some assurances, many of which are satisfactory. However, many significant areas are left uncovered. Will my right hon. Friend think again and introduce the new clause in the House of Lords and come back to the House in a week or two so that we can give it proper consideration after consulting constituents who have not the slightest idea about what is going on this evening?
§ Mr. HeseltineConsultation has taken place. The amendment was tabled in time for the debate. There have certainly been meetings at which discussions on the broad issues took place. I have read the minutes of such meetings. I do 122 not believe that they were private. They involved my hon. Friend the Member for City of London and Westminster, South (Mr. Brooke) and representatives of tenants. The meetings were on the broad issue of principle, not the detail. It is for the House to consider the detail.
We are applying the existing legislation which has been time-tested to give certain protections to tenants who have had the benefits of protections. The other issues in the right-to-buy provisions are not affected by the amendments. The Government do not feel able to move from the view that Crown Estate does not come within the category of activity covered by the right to buy. I cannot see how I can help such tenants by holding up benefits. The issue can be considered in another place, but I cannot see how I can serve any purpose by delay.
§ Mr. HeseltineThe provisions do not apply outside the categories of public housing authorities and, therefore, the tenants' charter will not apply to the Crown Estate, any more than it applies to other private sector landlords, to properties owned by a Government Department and let to tenants—but incidental to the main activities of that Government Department—or to local authorities in similar circumstances. The tenants' charter applies to tenants of a housing authority. We are not now talking about tenants in such categories.
§ Mr. MoateI know that my right hon. Friend sets great store by consultation. However, this proposition—which is not a detail but an important principle—came like a bolt out of the blue to the large majority of those involved. They do not feel that they have been consulted. I ask him to consider that, and to find some way to defer a decision so that there can be proper consultation.
§ Mr. Peter BottomleyI thank my right hon. Friend for giving way to me also. Leaseholders in my constituency are affected in their opportunities to sell their leases, which may make a financial difference to them. We have had only the weekend to consider the new clauses— 123 that is, if we were clever enough or alert enough to pick them up on Friday. We should recognise that this sort of matter normally would have been dealt with in Committee, and there would have been time for consultation between hon. Members and constituents before Report stage.
I apologise once more to my right hon. Friend for intervening so late in the debate. The danger is that if the new clause passess through the House today, and is not amended in the other place, we have lost our opportunity to put forward our constituents' interests. Possibly none of my constituents would be adversely affected, and if my right hon. Friend could give me that assurance I should be relatively satisfied. If he is not able to give me that assurance, and as there is clearly no assurance that sub-sequential amendments may be made in the other place, I must ask him not to push these points, and allow the House the opportunity to consider them in depth.
§ Mr. HeseltineWe have had a range of discussions on the matter. There are benefits for the tenants. There is no reason why the re-introduction of these amendments in the other place would not be compatible with the main objective of Government policy. If it would help my hon. Friends to consult their electors on a wider basis, I have no objection to acceding to the requests made widely in the House that more time should be given for the ideas to be ventilated on a wider scale. I beg to ask leave to withdraw the motion.
§ Motion and clause, by leave, withdrawn.