AMENDMENTS OF LEASEHOLD REFORM ACT 1967 etc.

HC Deb 22 May 1980 vol 985 cc723-65 3.51 pm

Mr. Alec Jones (Rhondda)

I beg to move amendment No. 140, in page 85, line 1, after ' 3 ', insert ' 4, 9 '.

Mr. Speaker

With this it will be convenient to take the following amendments:

Government Nos. 85 and 106.

No. 141, in schedule 19, page 135, line 33, at end insert— '1A. In section 1(1)(b) of the 1967 Act for "five years" in both places where it occurs substitute "three years".'. No. 133, in page 135, line 33, at end insert— ' 1B. In section 9(3)(b) of the 1967 Act delete the words "five years" and insert the word "year".'. No. 134, in page 135, line 33, at end insert— ' 1C. In section 9(3)(b) of the 1967 Act delete the words "five years" and insert the words "three years".'. No. 138, in page 135, line 33, at end insert— '1D. In section 4(1) of the 1967 Act for the word "⅔" substitute the words "4/3 or such fraction as the Secretary of State may specify by order ".'. No. 139, in page 135, line 33, at end insert— ' 1E. In section 1(1)(b) of the 1967 Act for "five years" in both places where it occurs substitute "one year".'. No. 133a, in page 135, line 33, at end insert— '1F. In section 9 of the 1976 Act for subsections (1) and (2) substitute:— 9(1) The price payable for a house and premises on a conveyance under section 8 above shall be calculated (except where it has been determined by agreement or otherwise before this section comes into force) by applying the formula set out in subsection (2) (2) the formula is—

	R		R		k.V
P=£		−		+
	Y		Y(1+Y)n		Y(1+Y)n

where P = price payable; R=ground rent payable for the house and premises at a yearly rate; Y=the yield (expressed as a decimal fraction) from 2½ per cent. Consolidated Stock; k=the appropriate constant (expressed as a decimal fraction); V=the rateable value of the house and premises on the appropriate day; ⁿ = the period, expressed in years (taking any part of a year as a whole year), which the tenancy would have to run if it were not extinguished by enfranchisement. (3) In subsection (2) above—

1. (a) "Rent" shall have the meaning assigned to it in section 4 above.
2. (b) "The appropriate constant" shall be 0.3 or such other amount as the Secretary of State may by order specify.
3. (c) "The appropriate day" shall have the meaning assigned to it in section 1 above.
4. (d) In calculating the yield from 2½ per cent. Consolidated Stock, the price of that stock shall be taken to be the middle market price at the close of business on the last trading day in the week before the tenant gives notice in accordance with this Act of his desire to have the freehold.

(4) In the Leasehold Reform Act, 1967, in Section 15, for subsection (2) substitute— (2) The new tenancy shall provide that as from the original term date the rent payable for the house and premises shall be a ground rent calculated or to be calculated by multiplying the rateable value of the house and premises for the time being by the appropriate constant (as defined in section 9 of this Act) for the time being ".'. No. 132, in page 135, line 33, at end insert— ' 1G. In section 9 of the 1967 Act for subsection (1) subsection (2) substitute— ' The price payable for a house and premises on a conveyance under subsection 8 above shall be calculated (except where it has been determined by agreement or otherwise before this section comes into force) by applying such a formula as the Secretary of State may by order determine.'. No. 135, in page 135, line 38, after ' tenancies) ', insert ' in subsection (1) omit paragraph (a) (leaseholders who have extended their leases) and in subsection (2) after the words "subsection (1)" omit" (a) or "and.'. No. 136, in page 136, leave out lines 24 and 25.

Mr. Jones

These amendments concern the operation of the Leasehold Reform Act 1967. Amendment No. 140 and Government amendment No. 85 are paving amendments which will allow amendments to that Act if the House so wishes.

My view, which is shared by many of my hon. Friends, is that the 1967 Act has brought considerable relief and benefit to many leaseholders in different parts of the country. But, in the 13 years since the Act was passed, deficiencies have turned up.

In 1967, the House was moving into new realms of leasehold reform, so there was a tendency to make the Act somewhat over-cautious. This whole string of amendments—some from the Government, some from the official Opposition and others from individual Members—confirm that there are defects in the 1967 Act. I believe that now is an excellent opportunity to correct some of those defects. That is the purpose of the amendments.

Attention has been drawn to defects in the working of the 1967 Act by individuals and organisations representing housing interests throughout the country. I have had letters mainly from Wales. However, the leasehold problem is not exclusively Welsh. A glance at the statistics will clearly show that the problem is to be found in all parts of the United Kingdom. The criticisms are twofold. They deal with people who are excluded from exercising the right to enfranchise under the 1967 Act and the method of calculation of the price of the freehold.

Amendment No. 141 deals with one such exclusion. The 1967 Act included a residential qualification of five years before a person could become entitled either to acquire the freehold or to a 50-year extension of his lease. When that five-year ban was introduced, it was claimed that it was necessary to have such a lengthy residential qualification to prevent the abuse which would occur by people buying up what were then described as fag end leases. I have not seen any evidence of that. None has come my way or the way of many of my hon. Friends. When we discussed this matter in Committee, the Under-Secretary of State for Wales—the hon. Member for Conway (Mr. Roberts)—was unable to indicate that there was any evidence of profiteering by owner-occupiers buying up these fag end leases.

Five years is an arbitrary period. I can find no justification for it. In Committee I sought to remove this residential qualification altogether. The Government said that they would consider it. Indeed, the Minister said: I see the force of the argument that a modification could help some people who bought leases which had not long to run. Precisely what that modification should be I am not certain, but I agree that the term should be reduced if possible and, as I implied earlier, I am prepared to consider the position further and to come back to it later."—[Official Report, Standing Committee F, 17 April 1980; c. 2169–70.] The Minister has certainly lived up to his word. He has considered the matter and come back to it. But this time he has come back with a three-year residential qualification. I can find no more logic in three years than I could in five years. The only possible argument for the three-year period is that it is somewhat in line with the right-to-buy provision in the Bill. Even if one is driven to accept the reduction from five years to three years, one still has to accept that it will cause considerable hardship.

It is difficult to sell leasehold houses. People frequently need to move to find new jobs, to accept promotion or even retirement. People with leasehold houses find it difficult to sell them. Therefore, they cannot move and their prospects become that much worse.

I hope that, even at this very late hour in considering the Bill, the Government will seriously consider accepting amendment No. 139 which would reduce the residential qualification to one year. I think that one year is an adequate period of residence to qualify for enfranchisement.

I turn now to amendments Nos. 134 and 133. The second exclusion in the 1967 Act relates to an owner occupier serving a notice of intention to buy the freehold or to extend the lease and then being forced or obliged to withdraw his notice. If the notice is withdrawn, such an owner-occupier cannot serve a fresh notice within five years.

Why does someone withdraw such a notice? It is obviously to his advantage to acquire the freehold. A notice is withdrawn because a person's circumstances may be such that he cannot afford to buy the freehold at that time. Until he serves a notice, there is little prospect of getting any idea of the price of the enfranchisement.

Government Amendment No. 106 would reduce the gap between applications to three years. I concede that is better than five years. If the justification for bringing down the residential qualification from five years to three years is to bring it in line with the right to buy provision, the fresh or second application should likewise be brought into line with that right to buy provision.

We treat people in two different ways. The council tenant, under the provisions of the Bill, can make a second application to buy his house—that includes the freehold—one year after withdrawing his first application. Under the 1967 Act, even with the Government's amendment, the owner-occupier will not be able to make a second application with three years. What is sauce for the goose should be sauce for the gander. We should seek to treat council tenants and owner-occupiers in the same way by giving both the right to make a fresh application one year after the first application has been withdrawn.

4 pm

Government amendment No. 106 goes some way towards meeting the five-year qualification period, and in that respect it is preferable to the existing Act. But it would be a mistake to let this opportunity go by when, by accepting my amendments, we could have extended the scope of the Act to allow more people to benefit from the enfranchisement provisions.

Amendment No. 135 is identical to an amendment which we moved in Committee. At that time, the Under-Secretary of State for Wales indicated that the Government were still considering the substance of the amendment, but that he could not promise to return with a firm proposal. As we expected no firm proposal has been put forward.

Who are these people who have extended their leases and wish to exercise their right to buy the freehold? At present, most owner-occupiers who have already extended their leases are denied the right to enfranchisement for all time. They are often driven into accepting extensions because they cannot afford the purchase price of the freehold at the time that the offer is made. They take the extension as an easy way out. Later, if their circumstances improve, they find that they are completely banned from exercising their right to enfranchisement because of the provisions of the 1967 Act. But not only those people are affected. Under the 1967 Act, if a person buys a house from an owner who has extended the lease for 50 years, the new purchaser is banned for all time from buying the freehold of that property. That is an anomaly which should be changed.

Mr. Ian Grist (Cardiff, North)

I have much sympathy with the right hon. Gentleman's point, but in my constituency—where this situation has started to arise—freeholders are willing to sell on the basis of the same valuation as under the existing Act.

Mr. Jones

If that is so, it is a strong argument in favour of allowing people to do that as of right. I accept that there may be such individual cases, and that what the hon. Gentleman says is true, but, in the main, people—certainly people in Cardiff—are running up against a problem. In Committee we quoted a number of examples of owner-occupiers in Cardiff who extended their leases because they could not afford anything better at the time, and who, under the 1967 Act, are now being denied the opportunity to buy the freehold for all time. If we give council tenants the right to buy the freehold of their council houses—which have been paid for out of public funds—we should give the right to these people to have a second bite at the cherry.

I turn to amendment No. 138. Again, under section 4(1) of the 1967 Act, the right to enfranchisement or the right to extend the lease is available only when the rent is low. A low rent is defined as a rent which is not more than two-thirds of the rateable value. That acts as a block on certain groups of people being allowed to exercise their rights under the 1967 Act. Throughout the country people are being prevented from buying the freehold of their properties by this restriction in section 4(1) of the Act.

In Committee I said that I had not encountered this problem in my constituency. But the problem exists in London, and I have received many letters on the matter. I received a letter from the De Beavoir Town Leasehold Reform Association, drawing my attention not only to the difficulties of that but to cases where landlords were using this provision in the 1967 Act as a loophole to avoid compliance with that Act. Landlords were setting ground rents in excess of two-thirds of the rateable value, and thereby denying these people the right to buy their freehold. I hope that this amendment will be accepted by the Government, because we are seeking to substitute for a figure of two-thirds a figure of four-thirds, or such fraction as the Secretary of State may specify by order.

I turn to amendment No. 136. The Government are proposing a price formula for intermediary leases with a profit rent of not more than £5 per annum. Yet examples flow in from leaseholders who are suffering hardship from intermediary leases with profit rents of not more than £5. They are suffering hardship because they are being denied the right to buy the freehold. In Committee the Under-Secretary of State for Wales said that, in his view, the limit of £5 should cover cases that arise in practice but that the Government would consider a higher figure if there was evidence that it was needed.

I ask the Under-Secretary of State whether the Government have been looking for evidence to suggest that the figure of £5 is wrong. Organisations dealing with housing problems—certainly organisations in the Birmingham and Cardiff areas—have drawn my attention to many cases where the £5 figure is too low. By amendment No. 136 we seek to allow the price formula to be used for all intermediary leases. That would be a simpler solution to the problem that this section of the Act creates.

Amendments Nos. 132 and 133 suggest that a formula should be adopted for the calculation of the cost of enfranchisement. Many hon. Members will realise that the suggestion of a formula for the calculation of the terms of freehold was always considered to be advantageous—certainly in South Wales—but which, for a variety of reasons, was never regarded favourably by Governments. The Government are now introducing a formula for the intermediary lease, and we should consider a formula for leases in general.

Under the present system, a leaseholder who wishes to buy the freehold of his property has no idea of the price, and in most cases he cannot get that figure until he serves the official notice. When the official notice is served and the price is produced, a person who finds the price too high is therefore forced to withdraw, and he loses his right to apply again for five years. It would be an advantage if a formula could be introduced so that there could be a calculation of the price beforehand.

Often the high cost of the valuation process is a deterrent. In Committee, I mentioned the case of a Mr. Thomas of Cardiff who was paying £190 for the freehold of his property, but the valuation and solicitors' costs were £250. There is something askew there. For that reason, I again put forward the suggestion of the formula because we need a simpler, cheaper, valuation procedure.

All the groups of organisations which have written to me on the question of leasehold have pressed this point about a formula. Cardiff city council passed a motion on it, which was supported by all members of the council from both major political parties. It called on the Government to introduce a formula so that leaseholders could acquire the freehold of their houses at a fair price and without undue delay or cost.

Similarly, the Welsh Consumer Council made the point in a document which it sent to the Secretary of State for the Environment that the adoption of a specific formula for calculating the price of the freehold and the offer of a price for the freehold by the freeholder before the leaseholder becomes committed in any way was something about which it felt very strongly.

In the particular formula in the first of the two amendments, No. 133, we have chosen a formula which has been acceptable to large groups of people throughout the country who are concerned with leasehold problems. It is a formula similar to that proposed in the Bill for dealing with intermediate leases, and it is, I understand, largely a codification of the present rent tribunals practice of valuing the site itself. But one thing is a certainty: if we had a formula, it would eliminate the need for expensive valuation, certainly when leaseholders are buying cheaper freeholds.

As the Leasehold Reform Act 1967 already excludes any leasehold with a rateable value of over £200, or over £400 in London, full valuation procedures would still apply in buying those more valuable properties. However, the present ridiculous situation where the cost of the valuation of and of solicitors' fees is greater than that of the freehold would be ended if these amendments were accepted.

If the Government say that this formula is not acceptable, I commend to them the second amendment in the group, No. 132, which says that the price shall be calculated by applying such a formula as the Secretary of State may by order determine.

In the Bill one finds on so many occasions that the Secretary of State is taking powers to do things by order or other means. I should have thought that this was a very suitable matter for the exercise of the Secretary of State's powers. I commend that amendment to the House. I hope that most, if not all, of these amendments will find favour with the Government.

Mr. W. Benyon (Buckingham)

First, I declare my interest as an owner of a leasehold property. I do not know the position in Wales, but I know something about the position in London. I should like to put the other side of the picture in a moderate and, I hope, reasoned way.

I deal first with Government amendment No. 106, together with amendments Nos. 141, 134 and 139—although the last one deals only with bringing the period down to one year. There is no justification in the change which is proposed. The only effect which it would have, certainly in this capital city, would be to improve the position of the speculator, who would be able to buy in the tail ends of such leases much easier in order to make tax-free capital gains on the eventual sale. He would be able to realise the assets very much sooner than he does at present.

Five years can be supported. It is not unreasonable to say that it should be five years, because that is the sort of average period over which genuine occupation can be established. The genuine occupier would not suffer with a period of five years. Perhaps one may compare this with other things. The right hon. Member for Rhondda (Mr. Jones) mentioned the position of council houses tenants under the Bill, but he could also have cited the case of improvement grants. The recipient of such grants has to live in the relevant property for five years if no part of the grant is to be repayable. On the point about the council tenant who can buy after three years' occupation, it should be borne in mind that if the discount applies, and if he does not remain for five years after that, he must pay back some of the discount.

Therefore, there is a strong argument for saying that five years is a reasonable period to establish permanent occupation, and not to allow for purely speculative buying, which would certainly take place in London if the amendments were accepted.

4.15 pm

In addition, of course, and reverting again to the public sector argument which the right hon. Gentleman used, public sector housing is allocated on the basis of housing need, whereas in the private sector that does not apply. There is no need to establish this concerning the public sector tenant because his council has decided that he is the occupier and is in need of that occupation, or the council would not have given him the tenancy in the first place. In the private sector, that does not apply and we have to have a longer period to establish that someone is a genuine occupier who can buy under the terms of the 1967 Act. That was the basis that was laid down when that Act was passed, which was for people who were in established occupation.

Reducing the period to three years would produce considerable speculative buying of tail-end leases, which has already happened in relation to the five-year pediod, and it would certainly happen more if the period were reduced to three years.

Amendment No. 133a seeks to establish an alternative formula for deciding the value at which property can be purchased under the Bill. Here I submit, in contrast to the right hon. Gentleman, that it is entirely wrong to bring in an arbitrary formula totally unrelated to accepted valuation procedures, which are well known and accepted. The accepted valuation basis has worked only against the landlord. It has never worked against the tenant. The whole basis of the 1967 Act was that the house belonged to the tenant and the land belonged to the landlord.

Mr. D. E. Thomas (Merioneth)

The hon. Gentleman referred to the valuation procedure as being objective. Would he care to comment on the remarks of Mr. Walmsley, presiding in Cardiff in January 1975, who said: The valuation exercise under section 9 of the 1967 Act is not only hypothetical, it is also artificial.

Mr. Benyon

It is based on valuation principles, whereas this is an arbitrary formula not based on valuation principles at all. I would need time to study a technical opinion such as that. But the formula, certainly as far as London is concerned, has stood the test of time. It is on an established valuation basis and it has worked on the basis which the 1967 Act laid down—that the bricks and mortar were the tenant's and the land was the landlord's. But, obviously, the valuation has to alter as the lease gets shorter.

The point that I was making was that this formula was laid down for the benefit of the tenant and not the landlord. The formula which is now being suggested in the amendment would be even more biased in favour of the tenant and against the landlord. It would result again in purchases at prices so favourable that speculation would become commonplace, particularly if allied with the reduction in the period which the previous amendments sought to apply.

I am advised by technical experts that the tax-free capital gains on the basis of this formula would be even higher in percentage terms than those already made under the 1967 Act and, indeed, more latterly, under the Housing Act 1974.

Amendment No. 138 seeks to raise the rateable value limit from two-thirds to four-thirds. I do not know whether the right hon. Gentleman has realised that this would bring into legislation properties which were totally outside the intentions of the 1967 Act and the 1974 Act. Not only would ground rent be taken into account—which was the basis of the 1967 Act—but higher rents as well, which include not only the value of the land but the value of the property as well. I wonder whether that point has been realised.

This provision does not cover the majority of properties that were orginally envisaged to be enfranchised under the 1967 Act. By definition, these must be new properties and new occupations. Therefore, they are buildings which have been either built or renovated by their owners and subsequently let on lease. They do not fall into the category of the origins of the 1967 Act, which was the provision of a green field by the landlord on which the ground lessee built a house.

The properties referred to are not like that. In this case, the landlord has either built or renovated a house and then subsequently let it. Therefore, the proposal will widen the principle of the 1967 and 1974 Acts. Parliament did not intend that then: nor, I hope, is that the intention of this Parliament.

Amendment No. 135 seeks to allow leaseholders who have extended their leases and taken the choice of an extended lease, as opposed to enfranchisement, subsequently to enfranchise themselves. This would cause total uncertainty in what, until now, certainly in London, has been a perfectly recognised situation.

The amendments that have been grouped together would result in no properties ever again being let on long leases, certainly in London, within the valuation limits. Have hon. Members considered what could happen? In the urban situation there would be owner-occupation on the one hand and council or rack renting on the other. There would be nothing in between. In a period when house and land prices are rising—we are always hearing criticism of that—this form of leasehold tenure has a considerable amount to recommend it. If the amendments are passed, there will be no further leasing. No further properties will be let in that way. The House must consider carefully whether that is to the advantage of those who seek greater security of tenure, which is not available if they do not have the money with which to buy a house.

I hope that the amendments will not be accepted.

Mr. Edward Rowlands (Merthyr Tydfil)

The hon. Member for Buckingham (Mr. Benyon) spoke sensibly about a number of aspects of the proceedings of the House. However, I do not think that he fully appreciates the emotion felt by leaseholders in South Wales. Otherwise, he would not use terms such as "tenant ". We are not talking about tenants. We are talking about home owners, householders, people who bought their homes, who might have built them and who certainly have renovated and improved them. In many cases in South Wales they own old homes. They do not see themselves as, and should not be described as, tenants. They are home owners and householders who have been deprived of the right to and the total assurance of the ownership of their properties or who were affected by the leasehold system that prevailed before the 1967 Act.

I wish now to refer to the five-year and three-year periods. I am one of the few remaining members of the Committee that considered the Leasehold Reform Act 1967, and I remember that we debated at length the five-year residential qualification and the fear that there would be exploitation or utilisation of fag-end leases. It was said that the five-year period would ensure that a person was a bona fide residential owner-occupier leaseholder. I find it difficult to believe that a landlord would race around living in a property for three years, become enfranchised and then move on to another property. There is a residential leasehold qualification. The occupier must live in the property for three years, even under the Government amendments put down as a result of representations made by hon. Members in Committee. The occupier must be a residential leaseholder. It is difficult to envisage large-scale exploitation of fag-end leases when a person must go through the process of living in the property before qualifying under the Act.

The central issue is the question of the formula. It is sad that we must now go back over the ground covered in 1967. I do not think that we should dismiss the original Leasehold Reform Act 1967. It removed from thousands of householders the fear of blackmail and inability to obtain freeholds, because they were at the whim of the freeholder. In those days I represented the Cardiff, North constituency. I remember the letters sent out to leaseholders—who, with, in some cases, their parents before them, had owned a property for 80 or 90 years—which dashed their hopes of obtaining freeholds at a fair price. Those letters blackmailed or forced leaseholders to pay an extortionate price or accept an extension of a lease on extortionate terms. For a large number of people, the 1967 Act removed from ground landlords the right to conduct that blackmail. It gave many householders and owner-occupiers the chance to enfranchise themselves. Those of us from Cardiff, North, the Rhondda and Merthyr Tydfil can testify to the fact that whole streets were successfully enfranchised.

Nevertheless, from the start, the problem of the 1967 Act was the valuation. I do not know in which world the hon. Gentleman is living when he says that everyone knows clearly how valuations take place and that the 1967 Act formula is clear and understood by the valuers. He should remind himself of the history attached to that Act. Within 12 months of the passing of the 1967 legislation, the House had to reform it and amend it further. The Lands Tribunal drove a coach and horses through what we thought to be the meaning of "valuation" in that Act. We spent hour upon hour in Committee and on the Floor of the House debating exactly what was a valuation. Therefore, the hon. Gentleman cannot talk about the valuation being clear and well understood. It was obviously understood by the ground landlords and misunderstood by the Lands Tribunal decision, which transformed the whole basis of valuation as we thought we passed it in 1967. Within 12 months the legislation had to be amended so that the original intention of the 1967 Act could be established.

A large number of people managed to use the powers of the 1967 Act to prevent blackmail by ground landlords and to become enfranchised. In my constituency, the majority of those in that position were able to do so by organising themselves on a street basis or through local residents' action groups. If they had to go to the Lands Tribunal they were able to do so as a group. However, many individuals have not done so. In Cardiff many leases have now expired and householders who were home owner-occupiers have become tenants. Some ground landlords are either using the vagueness, ambiguity and difficulties of the valuation procedures under the 1967 Act to demand a higher price than the Act intended or to thwart genuine requests by owner-occupiers for a reasonable price, or people have made higher offers than should prevail under the 1967 Act. The poor individual owner-occupier is faced with the prospect of going to the Lands Tribunal and incurring considerable expense in fighting his or her case.

It is sad that we have to return to amending the 1967 Act, not because it did not do quite a good job but because there are still a number of ground landlords who are using the ambiguity, vagueness and difficulties of the valuation process to obstruct the right of a leaseholder to obtain his freehold at the price that we believed we were incorporating in the 1967 Act.

4.30 pm

We have had some cranky and curious ground landlords in South Wales, but the saddest aspect is that the most rapacious ground landlord, Western Ground Rents, has been bought by the BP pension fund, which is behaving in the same rapacious and, at times, unfeeling and uncaring way in handling the genuine requests of householders.

Such ground landlords are prompting the growing demand for further amendments to the 1967 Act. I should like to think that if the many pensioners in the BP fund realised that it was using its power to drive harsh bargains with householders and to act tough and without feeling or care, they would not want such actions to be taken in their name. It is regrettable that a distinguished company, which is half owned by the Government, should behave in that way.

Sir Raymond Gower (Barry)

I do not dissent from what the hon. Gentleman has said about that company, but is he aware that some of my constituents are discontented with the prices quoted to them by a major county council in South Wales? It is unfair to mention only the company. The council is also asking high prices. Of course, councillors and the managers of the pension fund feel responsible for managing properly the money that is entrusted to them.

Mr. Rowlands

I do not know which county council the hon. Gentleman is referring to, but any authority behaving in such a manner deserves the same strictures as we apply to private ground landlords. The way out of the problem is a reasonable, clear cut formula. I hope that we can count on the hon. Gentleman's support in the Lobby. He can give us the help that we need to carry the amendments.

One amendment sets out detailed proposals, and I appreciate the problems of that formula. We do not want to stick to it totally, and amendment No. 132 will allow the Government to think during later stages of the Bill about the possibility of an alternative formula to satisfy the legitimate demands and wishes of leaseholders who have been owner-occupiers for a long time.

A formula would remove the final obstacle to enfranchisement. The leaseholder will know what it will cost and a ground landlord will not be able to obstruct enfranchisement because of the ambiguity, uncertainty and difficulty of the valuation system in the 1967 Act.

Conservative Members make powerful speeches about home ownership and the property-owning democracy, and I hope that they will support us on this straightforward case of enfranchisement to ensure that householders living in properties that their parents may have owned and which they worship as little palaces-remarkable improvements have been made to many older properties—will ultimately achieve their greatest goal of complete ownership through enfranchisement.

The best way of removing the obstacles is to search for a clear cut formula to insert in an amendment of the 1967 Act.

Sir Raymond Gower

I supported the original Act, the amending Act and various Private Members' Bills and I also introduced my own Bills on this subject before the passing of the 1967 Act.

Strangely, it seems that both my hon. Friend the Member for Buckingham (Mr. Benyon) and the hon. Member for Merthyr Tydfil (Mr. Rowlands) are right. The problem is that what is needed in a limited area of South Wales would create an unfair advantage in parts of London. That is why I sought some years ago to bring in a Bill that was limited to Wales, where we have special problems.

My hon. Friend the Member for Buckingham was right to say that the leasehold system is a useful addition to other forms of tenure in most of the great cities of England. However, he may not realise that in a significant, heavily populated area of South Wales that form of tenure is a social evil.

The original Act and the amending Act undoubtedly conferred significant benefits. In the early months of the operation of the 1967 Act, there was a steady enfranchisement of many dwellings. I know from my contacts with most of the solicitors and estate agents involved that matters were going along reasonably well. Recently there has been a change.

I gathered that one hon. Member was suggesting that the amendments should apply to someone who had bought a property within three years of the end of a lease.

Mr. Rowlands

No. Three years' residence was referred to.

Sir R. Gower

In that case, I withdraw what I said. Obviously, someone who bought a property during the last three years of the lease would get it at a very low price.

The problem that has arisen in recent months can be appreciated by anyone who has dealings in these matters. The local tribunals are an important improvement and the most significant change. Many people have been deterred from resorting to the Lands Tribunal because of the possible cost involved. That was a great deterrent in cases where the outcome was uncertain.

I am not sure about the methods that have been suggested. I have some doubts about them. Before the Bill is enacted. I hope that every effort will be made to improve the present practice. Some change should be made. The right hon. Member for Rhondda (Mr. Jones) confessed that there was great difficulty in framing a satisfactory provision. He suggested that a formula might have to be evolved and that the Secretary of State might have to bring forward an order. That reflects the difficulties involved.

The systems of valuation in a defined area of South Wales are inadequate. Within that area there are towns in which 80 per cent. of the properties are held on leasehold. Long before leases terminate, they become unmortgageable. If there is only 20 years left on the leasehold, it is impossible to get a mortgage. Indeed, even if the lease has another 35 years to run, it is difficult to get a mortgage. Someone may get a mortgage on a house that has a 42-year lease. However, after a few years it is impossible to sell the house.

Mr. W. Benyon

I appreciate that South Wales has a special problem. However, a case has been quoted in which the solicitor's fees were about £500. The price of the leasehold was £250. I do not know how much the house was worth. Is my hon. Friend saying that those people could not get any form of finance to pay £250 on, for example, a £6,000 house?

Sir R. Gower

One needs to know the circumstances and the ages of those involved. Indeed, age is probably a vital factor. A person in his late fifties may desperately need a mortgage, but he may find great difficulty in raising that sort of money. One cannot generalise. I am convinced that the system is not right. It needs to be adjusted. I do not wish to make a massive adjustment, nor do I wish to make it easy for a person to acquire a freehold and then make a lot of money.

Mr. Ioan Evans (Aberdare)

People feel that a great injustice has occurred because some properties were bought at a low price several years ago. There is now a trend towards acquiring land as an investment. As a result, rates have gone up.

4.45 pm

Sir R. Gower

I am not sure what the hon. Gentleman means. As a lease gets shorter, the reversion becomes more valuable. Perhaps the hon. Gentleman was referring to that.

I am glad that the tribunal is being changed. That is an important step. However, there should be some re-examination of the valuation formula method. I do not believe that we should support the easy formula—20 times the ground rent—that earlier writers have prescribed. If we were to do that, we would be using too heavy a weapon. It would be grossly unfair. However, we need a better system. I hope that the system will be modified before the Bill is enacted.

Mr. David Alton (Liverpool, Edge Hill)

I support the amendments to which I have put my name. Having heard the arguments that have been deployed, I am particularly pleased to support the amendment. It is ironic that the Government rejected the arguments of Opposition Members when they were deployed in a different way. For instance, we argue that, in housing, local housing problems require local solutions. The hon. Member for Buckingham (Mr. Benyon) used that argument when he spoke about the compulsory sale of council houses. He rightly said that different circumstances pertain in different parts of the United Kingdom. This debate is a classic example of that. Particular circumstances pertain to areas of South Wales, parts of the Midlands and other towns and cities. Those circumstances do not apply, for example, to London.

When the Bill is discussed in the other place, I hope that the Minister will consider incorporating in it some of the sentiments expressed in the amendments. I hope that he will apply those sentiments to South Wales. It was interesting to hear enthusiasm from Opposition Members for the concept of home ownership. In our other debates on the Bill, Conservative Members expressed enthusiasm for the provisions concerning council tenants. That is right. I should like to see as many people owning their homes as possible. Leaseholders are already owners, but they do not own the property completely. They are being caused great distress. They face acute problems.

I am pleased to be able to support the aims of the Welsh leasehold reform campaign by putting my name to these amendments. They have been tabled on behalf of that campaign. Recently I visited Cardiff and met representatives of the campaign. We discussed the acute problems being experienced in parts of South Wales. Those problems have arisen as a direct result of this feudal system. I fully appreciate that other areas of Britain contain leasehold property, but South Wales is greatly affected by the problems it causes.

Several thousand houses—it is difficult to ascertain exactly how many—were built at the time of the great expansion of the Cardiff docks at the end of the last century. They were let on 99-year leases. Those leases are now coming to an end. Some landlords are being most unreasonable about selling the freeholds to present occupiers at a reasonable price. Some of those landlords are greedy and are motivated by profit. However, they are within the law. Leasehold can be compared to a time bomb that is ticking away in the hearts of our cities. Its detonation could destroy the Government's plan to extend owner-occupation and to improve older properties.

It is worth considering the type of hardship that is being caused. It has become the accepted policy for landlords to charge approximately 30 per cent. of the market value of the house as the purchase price of the freehold. As house prices are soaring, the freehold price can shoot up £1,000 in the time that it takes to complete the necessary legal work. Indeed, that happened in one case that was brought to my attention. In addition, the freehold price bears no relation to the ground rent that the occupier has been paying or to the rateable value of the house. The latter must be a more reliable indicator of the value of a property than the cash value on the ever variable market at one point in time.

Two things should be done. First, we should extend the right to buy. Under the Leasehold Reform Act 1967, only leaseholders who have been living in their homes for five years are entitled to buy their freehold. That can cause hardship. Shelter brought one example to my attention. A couple in their sixties live in Craddock Street, Cardiff. They recently brough the leasehold of the house in which they had lived for 40 years. However, they were not qualified to buy the freehold for another two years. Meanwhile, it is not financially viable for them to improve the property.

Secondly, there is the question of a need for a price formula. The Government have accepted the case for a price formula for intermediary leases in order to eliminate expensive valuations, but the Bill should include a similar price formula for all leaseholders buying their freehold. Valuation is too complex, time-consuming and costly. Another resident, aged 86, of Beauchamp Street, Cardiff, had to pay £250 in valuers' and solicitors' fees when the freehold was only £190.

Two other cases have come to my notice that are typical of the problem. The first concerns a pensioner who is in a bad state of health and virtually unable to climb stairs. He requires constant access to an oxygen bottle. The property that he rents is exceedingly damp, has no bathroom or hot running water and has collapsing floorboards and rotting window frames. It has two years remaining on the lease and, as a tenanted property, has no real market value. The leaseholder is eager to purchase the freehold in order to sell the property to a housing association that would renovate the property, but he cannot possibly afford the £4,500 that the ground landlord is asking. The other case also concerns a pensioner, who in this case has a heart condition. Her house has a leaking roof and dangerous electrical wiring. Her landlord went bankrupt. Although the Official Receiver is willing to sell and a local housing association is willing to buy, the freehold price is £4,500, which the local district valuer says is well above the price that he is willing to agree.

I received a letter only yesterday from a member of the Cathays and Roath Leaseholders Association, who said that many householders cannot afford the new prices at present being stated by the landlords ". In a recent letter to my hon. Friend the Member for Cardigan (Mr. Howells), the Welsh Leasehold Reform Campaign stated: The leasehold situation in Wales is now approaching crisis point as an increasing number of leases reach expiration This is resulting in freeholders demanding sums of money from leaseholders that they do not have, cannot borrow and have not thought they would be asked for. There is undeniable evidence that the 1967 Leasehold Reform Act is not protecting the interests of the leaseholders ". Time and again during debates on the Bill, it has become obvious that housing problems cannot be solved by blanket nationwide solutions. Most problems are local, and leasehold is no exception. As local problems, they need local solutions. It is therefore appropriate to confine examination of the problem to a specific area where it is particularly relevant. For the same reason, there was a long debate two nights ago on an issue of relevance only to London—service charges.

Last November, I brought the matter to the attention of the Minister for Hous- ing and Construction. I asked him whether he would amend the Leasehold Reform Act 1967 to enable the relaxation of the five-year rule of occupation which would permit a relative to buy the freehold, re-examine the formula used to determine the price of the freehold, consider direct assistance to pay the legal fees wishing to buy the freehold, establish local appeals tribunals to replace the London based lands tribunal and release funds to local authorities to permit home owners to borrow the money necessary to purchase their freeholds."—[Official Report, 26 November 1979; Vol. 974, c. 545.] I am glad the Government have gone some way towards accepting those points, but I wish that they had gone further. I ask them to examine the amendments to see whether there are any points that they can accept, which can be incorporated in the Bill in another place. The Bill goes a long way to extending the rights of many people to buy their own homes, but people living in leasehold properties should be given the same opportunities.

Mr. Grist

In the contribution of the hon. Member for Liverpool, Edge Hill (Mr. Alton) we heard the genuine voice of a populist politician. The next time that the hon. Gentleman wishes to bring up cases in my constituency, perhaps he will have the courtesy to let me know.

Mr. Alton

I did not know that the cases were in the hon. Gentleman's constituency. I was not aware which constituency they were in. They were brought to my attention by Shelter and by individuals who wrote to me. I intended no offence to the hon. Gentleman. There is nothing wrong in trying to be popular. However, when the occasion arises, one also has to take unpopular decisions. I have also been on the receiving end. I hope that the hon. Gentleman will accept that I put the cases with sincerity and will withdraw the imputation.

Mr. Grist

I am afraid that I do not withdraw my remarks. There are certain courtesies in this House, which also involve visiting other Members' constituencies. Perhaps I may tell the hon. Gentleman about them after the debate.

I welcome amendment No. 106, as do most people who have made representations to me and other hon. Members representing South Wales constituencies, where, as has been pointed out, there is probably a greater concentration of leasehold property than elsewhere in the country, although not necessarily a greater number of leasehold properties.

I liked the look of the formula in amendment No. 133a when I first saw it some time ago, but I never believed that it was workable. I notice that it is put forward not on the basis that it is workable but that we should just think about the idea. Amendment No. 132 is included as a fall-back. Both amendments are highly capricious. One of them pays no attention to the fact that rateable values do not change over considerable periods. Therefore, at a time of inflation, the figure would get out of kilter. The amount of ground rent peyabel becomes ludicrous after 99 years.

The formula is designed to obtain cheaper freeholds. That is reasonable, and I would not argue against it. However, I wish that people would be honest enough to say what the intention is. It is not to provide greater clarity. Many factors are variable, including the yield on consolidated stock, which would provide changeability from time to time anyway. The formula would not bring the certainty that people like to imagine.

We should all beware, as politicians, of handing the power contained in the other amendment to Ministers to introduce and determine their own formula. That would be wide open to exploitation for political reasons.

I did not agree with my hon. Friend the Member for Buckingham (Mr. Benyon) that the cut in the number of years' residence from five to three would encourage speculation, for the reasons put forward by the hon. Member for Merthyr Tyfil (Mr. Rowlands). It is unlikely that someone would choose to live in a house for three years for speculative reasons. We are dealing with genuine residents—people who live in their own houses. I do not believe that the reduced period will encourage speculation.

Mr. W. Benyon

This is the difficulty with the blanket idea that every part of the country is the same. I assure my hon. Friend that, even on the five-year basis, that is happening in London.

Mr. Grist

I cannot believe that in most areas that is so.

The hon. Member for Edge Hill suggested, I believe on the basis of my hon. Friend's contribution, that we should have different law in different parts of the country. I do not find that argument convincing. It would require not only different land law but different trusteeship law. As the hon. Member for Merthyr Tydfil pointed out, a great many properties are held by trusts which have to meet the requirements of the trusteeship legislation in favour of beneficiaries. People who urge otherwise endanger those who administer trusts under the present law. I wish that when people make populist claims and denunciations, they would bear that in mind.

The hon. Member for Merthyr Tydfil and my hon. Friend the Member for Barry (Sir R. Gower) rightly praised the introduction of the 1967 Act, which was a great breakthrough for South Wales. All of us who were there at the time remember the welcome expressed for the security and freedom that the Act would give people. There is the 50-year extension if the tenant does not buy the freehold or the option to remain as a tenant during the term of the lease. In 1967, the newspapers said that no one now would be thrown out of his home at the end of the lease.

The amendments cutting the period from five to three years for residence and reapplication for buying freeholds are not earth-shattering. They do not represent as; much as I ask my right hon. and hon. Friends at the Welsh Office and the Department of the Environment for, but they introduce a welcome degree of flexibility into the operation of the 1967 Act.

5 pm

Many more people will now be able to purchase their freeholds. There are many terraced properties in my constituency. I live in one myself. They are often bought by young people as their first house. They do not always stay in such properties for very long. The terraced properties will be much easier to buy and sell.

The availability of freehold means that those properties will be able to attract mortgage money. Mortgages for properties with leases shorter than 21 years are almost impossible to obtain. Now that there is the possibility of buying freeholds in a shorter period, it will be easier to obtain mortgages and young people will find it easier to buy and sell terraced properties.

Many people become involved in what I call the daisy chain process. We are all aware of it. It means buying and selling in a long row of owners. If one person breaks the link, the person who is obliged to purchase his freehold as a condition of selling to the individual who is prepared to buy the house suddenly finds that he cannot go ahead and cannot complete the purchase of the freehold.

People in that position will have been held up for five years. In effect, they have been locked into their houses for five years. After five years, the cost of purchasing the freehold has risen considerably. One has only to consider what has happened to house prices over the past five years to realise what a difference that can make. At any rate, there is to be a reduction from five years to three years.

The amendment will be welcomed by all those in South Wales who have been coming to see me and other hon. Members. These are the amendments for which they have been calling in all then-talk and representations. The amendments will not encourage speculation. They will increase flexibility. They will allow the tenant to purchase his property on a slightly longer lease—instead of it being five years nearer the conclusion of his lease, it will be three years nearer—and to purchase it at a marginally cheaper price.

These provisions, together with the new leasehold valuation tribunals, mean that the Government have done more for thousands of my constituents than any Government since 1967. There are those who makes populist noises when in Opposition—others were in quasi-coalition during the latter period of the previous Labour Government—but they did nothing when in Government, when they had the opportunity to make changes. I am glad that the Government are taking the opportunity.

Mr. D. E. Thomas

I look forward to reading the memoirs of the hon. Member for Cardiff, North (Mr. Grist) so that I can discover what he asked his right hon. and hon. Friends for in the Welsh Office. No doubt "The Memoirs of a Parliamentary Private Secretary" will be selling very well in Lear's, Bookshop 108 and many other bookshops in Cardiff.

The hon. Gentleman suggested that the amendment is a major breakthrough in the leasehold system.

Mr. Grist

I did not.

Mr. Thomas

He said that it is a breakthrough that has not been equalled since 1967.

Mr. Grist

I said that the amendments are not earth-shattering.

Mr. Thomas

It is a matter of semantics whether what is not earth-shattering may be a breakthrough.

Despite our extended debates on leasehold, in Committe and outside the House, I have yet to hear a rational defence of the leasehold system and its contribution to the housing policy. I see that the hon. Member for Lichfield and Tamworth (Mr. Heddle) is in his place. We have exchanged remarks on the issue in Committee. I fail to understand how the operation of the system in South Wales as I know it—I have a limited knowledge of its operation in London—has made a specific contribution to tenure. It does not make more property available.

Conservative Members have argued for shorthold. However, leasehold does not make for property to be transferred in a meaningful way. It does not make the housing stock any more variable or useful. The system is related to the ownership of land. In that sense it is right to describe it, as I did in Committee and as the hon. Member for Liverpool, Edge Hill (Mr. Alton) has done today, as a relic of the feudal system.

Mr. John Heddle (Lichfield and Tamworth)

The hon. Gentleman should not be allowed to get away with such irresponsible remarks. The leasehold system started in South Wales about 99 years ago. The land was bought by builders, such as Thomas Cubitt. They developed houses cheaply to house those who would otherwise have been unable to buy their own house. The great landowners of those days, by developing the leasehold system in South Wales, Birmingham, London and elsewhere, performed a great function. By no means were their intentions feudal. They were, to an extent, charitable.

Mr. Rowlands

Lord Bute?

Mr. Thomas

The hon. Gentleman will forgive me for not repeating the formulation that I set out in Committee. However, I described the leasehold system as a relic of feudalism. It continued through the period of capitalism, and it is now becoming a form of corporatism. That sums up how the system has operated. An example is the BP pension fund.

The form of the system as it applies to leaseholders in Cardiff, other parts of Wales and other parts of Britain is related to the continued ownership of land, interest in land and remuneration from land. It is not related to the needs of householders or potential householders. For that reason, I have always favoured the abolition of the leasehold system, which distinguishes me from the official Opposition.

I know, Mr. Deputy Speaker, that I should be out of order if I were to speak in detail on my magic formula, which we debated in Committee when discussing one of my amendments. That formula would result in a leasehold not being conveyed at more than 1 per cent. of the total value of the property. I do not consider that the Government's concessions, especially on amendment No. 106, are moves to tackle the problems that are bound to face the leaseholder as he attempts to purchase the freehold. I itemised the problems in Committee, and I do not want to repeat them.

The householder faces a risk in seeking to obtain a valuation. If I wanted to sell my "ancestral" home in the national park of Dolgellau, I should ask the local estate agent to provide me with a valuation. Obviously, I should have to pay something for that service. If I were the owner of a leasehold property in Cardiff or in London and I wanted to obtain a valuation for the purchase of a freehold, I should not be able to do so. I should be required to serve notice under the terms of the Act and go through the costly motion of attempting to obtain the purchase of the freehold. If I decided at any stage to withdraw from the purchase, on finding that the price would be exorbitant or that it could not be afforded, I should be disfranchised even under the amendment, though for three years, not for five.

The Government may seek to dress up their amendments in response to the justified agitation and protests of many groups in Cardiff who, on a number of occasions, have taken their protests to the ancestral home of the Secretary of State for Wales, where they were offered cups of tea, for which I am sure they were grateful. Those protests arose because of the extent of feeling on this subject. I want to ask the Minister not to close the door on the issue and not to reject out of hand the possibility of looking again at the formula. I hope that he will examine the difficulty facing leaseholders who want to purchase the freehold but are not able to ascertain objectively what is likely to be the cost of the freehold.

I ask the Minister to look again also at the excessive cost of conveying the freehold. I trust that he will examine in more detail the manner in which the new valuation tribunal that he has set up operates. At the risk of provoking another response from the hon. Member for Lichfield and Tamworth, I refer again to the problem of the vested interest and the material interest of chartered surveyors in the matter of negotiation.

I draw the Minister's attention to what seems to be the incredible and irrational difference between the cost of the freehold being conveyed by the local authority, in this case the city council, and the district valuer's valuation of £300 and £500—the two examples of which I am aware. I hope that these are not in the constituency of the hon. Member for Cardiff, North.

Mr. Grist

I should be grateful if the hon. Gentleman would at some time indicate the houses on which it is claimed the district valuer put a price. My investigation did not reveal them. The district valuer does not normally value freeholds.

Mr. Thomas

I have had long correspondence with the office of the district valuer in Cardiff. I shall see that the hon. Gentleman has a copy of the correspondence so that he can study it at his leisure.

There is a difference between the valuation that is obtained when the city council, with the consent of the district valuer, is disposing of the lease to the leaseholder and the level of valuation that obtains when there is a private disposal. The most scandalous case that I have quoted previously is a £3,000 transaction for the lease of a terraced property valued at £10,000. It seems to me that the level of valuation and the process of valuation undertaken by firms of chartered surveyors in Cardiff represent an upping of the market value on the basis of one part of the valuation procedure of the spot value of the site in question.

It is extremely suspect, to say the least, that firms of chartered surveyors find themselves representing all parties to the transaction. I hope that the deep anxieties that have been conveyed to me by leaseholders in Cardiff and other areas will be investigated by the Welsh Office. These were put to the Minister by the group that he graciously met after they had recently been to tea in Cardiff with the Secretary of State. I hope that his reply to the debate will not merely be a statement that appears to close the door on future Government reform on this matter.

I am opposed to the system. I am unable to find any rational justification for its continuance. I was not moved by the arguments of the hon. Member for Buckingham (Mr. Benyon). The system makes no contribution to housing policy. It creates substantial insecurity in the minds of householders, and that insecurity has been demonstrated clearly in Cardiff in recent weeks as these leases have matured. I hope that the House will be more sensitive to these anxieties.

5.15 pm

Mr. A. P. Costain (Folkestone and Hythe)

The hon. Member for Merioneth (Mr. Thomas) asks for justification of the leasehold system and claims that it does not work correctly. My hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle) caused laughter when he said that the system was often used for charitable purposes. The response of hon. Members to my hon. Friend's remark shows little realisation of what the leasehold system has done and is continuing to do.

Mr. Donald Anderson (Swansea, East)

In South Wales?

Mr. Costain

I am talking about the system generally.

Many hon. Members would not have a flat in Dolphin Square if the leasehold system did not exist. At the time of building Dolphin Square, it was necessary to buy the land freehold. Because money was cheaper on leasehold property due to its greater security, and, therefore, one could borrow at a lower rate of interest, it was possible to sell the freehold at double the price by creating a new leasehold. That gave the company concerned enough money to build the block of flats. Without the leasehold system, the flats would never have been built. The proposal had been turned down by two firms, including a great American syndicate.

Mr. W. Benyon

My hon. Friend's argument is relevant, but no such blocks would ever be built in the future if these amendments were passed.

Mr. Costain

No flats of that sort will be built in the future in this country so long as the Rent Acts continue to operate.

Mr. Anderson

The hon. Gentleman is saying that, as a result of the leasehold system, the builder was able to make a more substantial profit. That cannot be described as charitable, in the words of the hon. Member for Lichfield and Tamworth (Mr. Heddle).

Mr. Costain

The hon. Gentleman should bide his time. The leasehold system did not allow the builder to make a greater profit. Socialists always get their housing policy wrong. The system allowed finance to be secured so that the flats could be built. They provide about 100 Members of Parliament with comfortable accommodation at a very reasonable rent. The profit, in fact, is made by the Members of Parliament who live in those flats at a reasonable rent.

The subject of charities has been mentioned. A well-known housebuilder, whose name escapes me, from Morpeth wanted to build houses and sell them cheaply and, therefore, created a leasehold. He did not want to make a bigger profit. He wanted to employ more people on building houses. When he created the leasehold, he gave it to a charity because he considered that that was the right way to run the leasehold system.

Mr. Rowlands

I am following the hon. Gentleman's historical description of how, in some circumstances, leasehold has been charitable. Will he address himself to the problems of the origins of the leasehold system in South Wales? It began when the illegitimate son of Charles II was granted land because Charles II wanted to get rid of him as far away as possible in what he considered was a misty, miserable land. After 150 years, that family makes an enormous killing and still, through successor companies, visits the problems that have been described. What is charitable or sensible about that system?

Mr. Costain

One thing that I have learnt in my days in the House is that it is a fool who starts to make a speech on a subject that he does not know enough about. I know nothing about the leasehold system in South Wales, but I do know about the leasehold system in my constituency, and that is why I have intervened in the debate.

We have a similar problem in Folkestone, because the town was built when the railway arrived there nearly 100 years ago and the majority of house owners were given 99-year leases, which are now beginning to come up for renewal. A number of constituents have come to see me about the problem. When the orginal leaseholds were created they were for large houses, which were then fashionable but now have been turned into residential, high-class hotels, which I recommend.

The original ground rents were extremely low, even relative to the value of money at that time. By today's standards they were stupid. Now, we have to create new ones, and the problem is how to assess them. The Minister must take a completely new look at the matter and introduce a formula that allows up-to-date values, so that there is fairness on all sides. When one wants to borrow money, leasehold is the most attractive way. The problem is that when the lease is running out it is the most unattractive way. We must sort out the matter.

The Under-Secretary of State for Wales (Mr. Wyn Roberts)

We have had a very interesting debate. The hon. Member for Merthyr Tydfil (Mr. Rowlands) referred to the Bute family, who were descendants of Charles II. He questioned their charity. I have no knowledge of the family, except through history, but I remind the hon. Gentleman that they gave the land known as Cathays Park and the castle to Cardiff city council.

I do not wish to prolong our excursion into history. I would rather return to the present and to the amendments, which would make a number of radical changes to the Leasehold Reform Act 1967. This is not the first time such changes have been suggested. In March last year, when the Leasehold Reform Bill was before the House, the hon. Member for Bed-wellty (Mr. Kinnock) made an impassioned plea for such changes. He said: a reforming Government, such as the one we have the good fortune to have at the moment, should be responsible enough to make legislative provision so that these anomalies and difficulties are removed."—[Official Report, 7 March 1979; Vol. 963, c. 1303.] The hon. Gentleman was told by the then Under-Secretary of State for the Environment, the right hon. Member for Durham, North-West (Mr. Armstrong), that his detailed points had been carefully noted and he was advised to await publication of the Labour Government's Housing Bill.

That Bill, which appeared later that month, contained provision to establish leasehold valuation tribunals. That was a helpful provision, which we have included in the present Bill. But I assure my hon. Friends the Members for Cardiff, North (Mr. Grist) and Barry (Sir R. Gower), among others, that there was nothing in the Labour Bill about a formula for valuing freehold or to enable a leaseholder who had opted for a 50-year extension instead of enfranchisement to have a further opportunity to purchase his freehold. That was the position when the Labour Government left office last year.

I do not criticise the right hon. Member for Rhondda (Mr. Jones) for introducing amendments which were suggested to his own Government and, as far as we can tell, rejected by them. The reasons why they were not incorporated in Labour's Bill last year are just as valid today.

It is difficult to change the Leasehold Reform Act without undermining its principles, which seek to provide a basis for fair dealing between ground landlord and leaseholder. There are some, such as the hon. Member for Merioneth (Mr. Thomas), who would like to abolish the leasehold system altogether, for commercial as well as domestic property. The hon. Gentleman told us as much in Committee and he told us so again today. But leasehold is a recognised and legitimate form of tenure, established by law, and it cannot be abolished without confiscation of the ground landlord's interest. If that were contemplated, there would have to be compensation. In any case, it is clear from remarks made by my hon. Friends the Members for Buckingham (Mr. Benyon) and for Folkestone and Hythe (Mr. Costain) that there would be considerable opposition to any such suggestion, because the leasehold system still has its value.

The present Government fully appreciate the current position in Wales, where many 99-year leases are coming to an end. We have given full consideration to the representations made to us. As the hon. Member for Merioneth said, my right hon. Friend the Secretary of State for Wales has twice seen representatives of the various reform groups when they have turned up, somewhat unfairly, at his home at weekends. I have seen those representatives officially at the Welsh Office. The more I listened to them, the more convinced I became that the new leasehold valuation tribunals were the best answer to their problems.

My sentiment was echoed by the right hon. Member for Rhondda when, in his opening speech, he called for a simpler, cheaper valuation procedure. I sincerely hope that when the tribunals are set up the leaseholders' representative groups and those who represent the ground landlords will take full advantage of them.

The hon. Member for Merioneth spoke about the membership of the tribunals. The members are to be drawn from the rent assessment panels. My best assurance to the hon. Gentleman is that I have heard no complaint of bias against those panels. I hope, as I am sure the House will, that there will be no bias but complete impartiality by the tribunals.

Mr. D. E. Thomas

In view of the hon. Gentleman's emphasis on the work of the panels as a solution to the problems as perceived by the groups in Cardiff and other areas, can he give the House an assurance that after the panels have been operating for, say, two years his Department will review their work and indicate how successful they have been in dealing with the problems?

Mr. Roberts

I am sure that we can keep a constant eye on the workings of the panels.

In this connection, I welcome the support given to us by the hon. Member for Liverpool, Edge Hill (Mr. Alton), who welcomed our moves towards increased home ownership. Therefore, we shall expect his support on Third Reading.

The hon. Member for Merthyr Tydfil reminded the House that ground landlords these days were often pension funds, such as the British Petroleum pension fund, which has an interest in many of the properties in Cardiff. The law must be equitable and deal fairly with all the interests involved. We must be as just to the BP worker whose pension contributions are invested in freeholds as we are to the leaseholder whose house stands on ground owned by the pension fund. We cannot favour one at the expense of the other. That is the back-ground to the present debate.

5.30 pm

As the right hon. Member for Rhondda said, I told the Committee that the Government were prepared to examine the various existing limitations on eligibility under the Leasehold Reform Act and that the two five-year requirements are matters of judgment. I gave an undertaking to come back to the issue on Report, and I am now doing that.

In order to qualify under the 1967 Act, a leaseholder must be occupying his house under the lease and have done so either for the last five years or for a total of five years out of the last 10 years. The reason for that requirement in the 1967 Act was that the Act was intended to benefit genuine long leaseholders who had lived for an appreciable time in the house which they owned. I do not think that it would be right to abolish this requirement. On the other hand, I think that its purpose could be served by a three-year period. I assure my hon. Friend the Member for Buckingham that in our view a three-year period would comprise what he called genuine occupation.

The first part of our amendment No. 106 reduces the residential period from five to three years or, alternatively, three years out of the last 10 years. The effect of Opposition amendment No. 141 is the same, and clearly there is a measure of agreement between us. I hope, therefore, that the right hon. Gentleman will not press amendment No. 141.

Amendment No. 139 would further reduce the residence requirement to one year. That might well open the field to speculators, and I shall ask the House to reject the amendment. The change from five years to three years in the residential qualification will help leaseholders who bought at the tail end of a lease, with only a few years to run, either by giving them the chance to enfranchise, which they would otherwise not have had if the lease had less than five years to run, or by enabling them to do so sooner, and more cheaply, if it had more than five years to run.

The second part of Government amendment No. 106 relates to the provision in the 1967 Act which provides that where a leaseholder withdraws an application to enfranchise he may not make a second application for another five years. When a leaseholder serves a notice of enfranchisement, he is effectively entering into a contract which immediately binds the landlord but from which the leaseholder only may withdraw.

That rule is to discourage the leaseholder from playing fast and loose with any landlord by making claims that he is not in a position to follow up. I think that the House will agree that such a provision is reasonable. Nevertheless, it can give rise to hardship when a leaseholder, for reasons beyond his control, is unable to proceed with his intention to enfranchise where the lease has not very long to run because he might never get another chance. Again, we think that a three-year period would be a sufficient interval for a leaseholder to wait before submitting another claim.

Opposition amendment No. 134—which is, incidentally, incomplete—would have the same effect. Here again, we have a measure of agreement. Amendment No. 133 would reduce the period to one year. Once more, our judgment is that this is too short a time. The right hon. Member for Rhondda raised the question of the right to buy, but we would take the line that there is not an exact parallel between what we are discussing now and the right-to-buy provisions, and, of course, there is a difference between public and private bodies.

Both parts of amendment No. 106 will benefit leaseholders who have already bought the tail end of a lease, provided that the original term of the lease has not expired when it comes into effect. I recommend this amendment to the House.

Amendment No. 138 seeks to change the definition of low rent. We considered an identical amendment in Committee and there is nothing to add to what I said then. I do not think that the right hon. Gentleman had very much to add either, because he confessed in his opening speech that he did not know of any case. Even if we accepted—

Mr. Alec Jones

May I put the record straight? I did not say that I did not know of any cases. I said that I knew of no cases in my constituency but that my attention had been drawn to cases in London, which were the ones I quoted.

Mr. Roberts

I am grateful to the right hon. Gentleman. Even if we accepted that the two-thirds rateable value test was no longer right for the Leasehold Reform Act, one could not simply adopt four-thirds because the two-thirds limit applies in the case of the Rent Act 1977. Though there is a lower limit here, the result would be to create a substantial area of overlap where two separate codes would apply simultaneously. Once the ground rent for a long tenancy rises above the limit, the Rent Act applies, with the result that the restrictions on charging a premium on an assignment will bite on long leases which were previously freely marketable.

There is, therefore, a double problem. We are seeking solutions, but it is a complex area of the law and any change could produce adverse effects on some individuals. One difficulty is that the effect of raising the limits in the two Acts would remove the protection of the Rent Act from some existing tenants, and I imagine, Opposition Members would agree that such a result is not desirable.

I hope, therefore, that Opposition Members will feel able to withdraw the amendment on the understanding that we are considering the wider problem. I hope that it will be possible to come forward with an acceptable solution but I cannot promise at this stage that we shall do so.

I turn to the amendments proposing that there should be a mathematical formula for calculating the price payable for the freehold under the Leasehold Reform Act. I explained in Committee that it had not been possible to devise a mathematical formula to produce the price without the need for individual assessment. I gave the reasons why the particular formula suggested in amendment No. 133a would not be acceptable. I refer to what I said during the fortieth sitting of the Committee: This particular formula, put forward as a replacement for the valuation basis under section 9(1) of the Leasehold Reform Act as amended by the Housing Act 1969, makes the arbitrary assumption that a modern ground rent can be taken as some fixed proportion of the rateable value, but this would not be the case in practice. By using a rate of interest that is appropriate to transactions in the money market, it would substantially reduce the price below what the Lands Tribunal would at present determine."—[Official Report, Standing Committee F, 22 April 1980; col. 2178.] I think that it was the arbitary nature of this kind of formula to which my hon. Friend the Member for Buckingham objected.

The requirement as regards the price was, I think, put extremely well in the debate on 7 March. The right hon. Member for Brent, East (Mr. Freeson) said succinctly: the price to be paid by a leaseholder has three elements. The first is the present capital value of the existing ground rent for the remainder of the original term of the lease. The second is the present capital value of the new rent for the 50-year extension. The third element … is the present value of the landlord's reversion at the end of the 50-year extension."—[Official Report, 7 March 1979; Vol. 963, col. 1288–9.] If anybody can work that out in terms of a formula, we shall be happy to consider it. That is the answer to the hon. Member for Merthyr Tydfil.

If hon. Members wonder why the Bill contains a formula for the price of minor intermediate leasehold interests, they must remember that the situation is different. No question of valuing land arises. It is merely a matter of paying a person a capital sum to compensate for the loss of a known payment of a few pounds a year payable for a known number of years.

Like the previous Government, we are providing for local leasehold valuation tribunals to settle disputes. They will take over from the present Lands Tribunal, and an appeal to the Lands Tribu- nal will be held in reserve. That will be an important contribution to helping people who are enfranchised, without undue delay and costs. The leaseholder will not be liable to pay any cost incurred by the landlord in relation to a reference to the new tribunals. The local valuation tribunals should quickly establish a pattern of values and thus remove the need for cases to go to them. We are not providing a formula for establishing the price of freeholds. I invite the House to reject the amendment.

Sir Raymond Gower

Does my hon. Friend agree that the biggest advantage is that local tribunals will not award costs? In the past, references to the Lands Tribunal have been deterred because of the cost.

Mr. Roberts

My hon. Friend is right. The leasehold valuation tribunal system will have a number of significant advantages.

Amendment No. 135 would allow a leaseholder who has extended his lease to enfranchise after the original lease has expired. I said in Committee that I was not persuaded that that was right. The 1967 Act gives a qualified leaseholder the choice of buying his freehold or extending his lease by 50 years. Nevertheless, a leaseholder who decides to extend his lease may still enfranchise as long as the original lease has not expired. When he extends his lease, he still has a valuable, saleable asset. It is fair that once the term of the original lease expires the landlord knows that the position is no longer subject to change. Therefore, the uncertainty referred to by my hon. Friend the Member for Buckingham is removed. It is unlikely that many leaseholders who are unable to enfranchise during the original term of the lease will be able to do so later when the cost could be much higher in real terms, apart from increases in house prices. I ask the House to reject that amendment.

5.45 pm

Amendment No. 136 deals with the formula for determining the price payable on enfranchisement for a minor superior interest. The profit rent represents the difference between what the man in the middle receives from the man below him in the chain and what he pays to the man above him. The £5 limit should cover all cases.

The right hon. Member for Rhondda said that he had some evidence relating to Birmingham. We shall consider a higher figure if there is evidence that it is needed. Nobody has sent us evidence since I dealt with the matter in Committee. If the right hon. Gentleman has evidence, I hope that he will send it to us. I advise the House to reject the amendment if it is not withdrawn.

I hope that I have dealt satisfactorily with the extended batch of amendments. The Government have gone as far as their predecessors in establishing leasehold valuation tribunals which, we believe, will assist greatly in resolving disputes about leasehold valuation. We have gone further than the previous

Government in reducing the residential qualification period for enfranchisement from five years to three years. We have also gone further in reducing the period between applications from five years to three years.

I assure my hon. Friends the Members for Cardiff, North and Barry, who have been particularly concerned with the problem, that we have done all that we can to ease the situation. At the same time, we are being just.

Question put, That the amendment be made:—

The House divided: Ayes 236, Noes 283.

Division No. 325]	AYES	[5.47 pm
Abse, Leo	Douglas-Mann, Bruce	Johnson, James (Hull West)
Adams, Allen	Dubs, Alfred	Johnson, Walter (Derby South)
Allaun, Frank	Duffy, A. E. P.	Jones, Rt Hon Alec (Rhondda)
Alton, David	Dunn, James A. (Liverpool, Kirkdale)	Jones, Barry (East Flint)
Anderson, Donald	Dunnett, Jack	Jones, Dan (Burnley)
Archer, Rt Hon Peter	Dunwoody, Mrs Gwyneth	Kaufman, Rt Hon Gerald
Ashley, Rt Hon Jack	Eastham, Ken	Kilfedder, James A.
Ashton, Joe	Ellis, Raymond (NE Derbyshire)	Kilroy-Silk, Robert
Atkinson, Norman (H'gey, Tott'ham)	English, Michael	Kinnock, Neil
Bagier, Gordon A. T.	Ennals, Rt Hon David	Lamble, David
Barnett, Guy (Greenwich)	Evans, loan (Aberdare)	Lamborn, Harry
Barnett, Rt Hon Joel (Heywood)	Evans, John (Newton)	Lamond, James
Beith A. J.	Ewing, Harry	Leadbitter, Ted
Bennett, Andrew (Stockport N)	Faulds, Andrew	Leighton, Ronald
Bidwell, Sydney	Field, Frank	Lestor, Miss Joan (Eton & Slough)
Booth, Rt Hon Albert	Fitch, Alan	Lewis, Arthur (Newham Norh West)
Bottomley, Rt Hon Arthur (M'brough)	Flannery, Martin	Lewis, Ron (Carlisle)
Bradley, Tom	Fletcher, Ted (Darlington)	Litherland, Robert
Brown. Hugh D. (Provan)	Foot, Rt Hon Michael	Lofthouse, Geoffrey
Brown, Robert C. (Newcastle W)	Ford, Ben	Mabon, Rt Hon Dr J. Dickson
Brown, Ronald W. (Hackney S)	Forrester, John	McCartney, Hugh
Brown, Ron (Edinburgh, Leith)	Foster, Derek	McDonald, Dr Oonagh
Buchan, Norman	Fraser, John (Lambeth, Norwood)	McElhone, Frank
Callaghan, Jim (Middleton & P)	Freeson, Rt Hon Reginald	McGuire, Michael (Ince)
Campbell, Ian	Garrett, John (Norwich S)	McKay, Allen (Penistone)
Campbell-Savours, Dale	Garrett, W. E. (Wallsend)	McKelvey, William
Canavan, Dennis	George, Bruce	MacKenzie, Rt Hon Gregor
Cant, R. B.	Gourlay, Harry	Maclennan, Robert
Carmichael, Neil	Graham, Ted	McNamara, Kevin
Carter-Jones, Lewis	Grant, George (Morpeth)	McWilllam, John
Cartwright, John	Grant, John (Islington C)	Magee, Bryan
Clark, Dr David (South Shields)	Grimond, Rt Hon J.	Marks, Kenneth
Cocks, Rt Hon Michael (Bristol S)	Hamilton, W. W. (Central Fife)	Marshall, David (Gl'sgow, Shettles'n)
Cohen, Stanley	Hardy, Peter	Marshall, Dr Edmund (Goole)
Concannon, Rt Hon J. D.	Harrison, Rt Hon Walter	Marshall, Jim (Leicester South)
Conlan, Bernard	Hart, Rt Hon Dame Judith	Mason, Rt Hon Roy
Cook, Robin F.	Hattersley, Rt Hon Roy	Maxton, John
Cowans, Harry	Haynes, Frank	Maynard, Miss Joan
Craigen, J. M. (Glasgow, Maryhill)	Healey, Rt Hon Denis	Meacher, Michael
Cryer, Bob	Heffer, Eric S.	Mellish, Rt Hon Robert
Cunliffe, Lawrence		Millan, Rt Hon Bruce
Cunningham, George (Islington S)	Hogg, Norman (E Dunbartonshire)	Miller, Dr M. S. (East Kilbride)
	Holland, Stuart (L'beth, Vauxhall)	Mitchell, Austin (Grimsby)
Dalyeil, Tam	Home Robertson, John	Mitchell R. C. (Soton Itchen)
Davidson, Arthur
Davies, Rt Hon Denzil (Lianelli)	Homewood, William	Morris, Rt Hon Alfred (Wythenshawe)
Davies, lfor (Gower)	Hooley, Frank	Morris, Rt Hon Charles (Openshaw)
Davis, Clinton (Hackney Central)	Horam, John	Morris, Rt Hon John (Aberavon)
Davis, Terry (B'rm'ham, Stechford)	Howell, Rt Hon Denis (B'ham, Sm H)	Morton, George
Deakins, Eric	Howells, Geraint	Moyle, Rt Hon Roland
Dean, Joseph (Leeds West)	Huckfield, Les	Newens, Stanley
Dempsey, James	Hughes, Mark (Durham)	Oakes, Rt Hon Gordon
Dewar, Donald	Hughes, Robert (Aberdeen North)	Ogden, Eric
Dixon, Donald	Hughes, Roy (Newport)	O'Halloran, Michael
Dobson, Frank	Janner, Hon Greville	O'Neill, Martin
Dormand, Jack	Jay, Rt Hon Douglas	Orme, Rt Hon Stanley
Douglas, Dick	John, Brynmor	Owen, Rt Hon Dr David
Palmer, Arthur	Short, Mrs Renée	Wainwright, Richard (Colne Valley)
Park, George	Silkin, Rt Hon John (Deptford)	Watkins, David
Parker, John	Silkin, Rt Hon S. C. (Dulwich)	Weetch, Ken
Pendry, Tom	Silverman, Julius	Wellbeloved, James
Penhaligon, David	Skinner, Dennis	Welsh, Michael
Powell, Raymond (Ogmore)	Smith, Rt Hon J. (North Lanarkshire)	White, Frank R. (Bury & Radcliffe)
Prescott, John	Soley, Clive	Whitehead, Phillip
Price, Chrstopher (Lewisham West)	Spearing, Nigel	Whitlock, William
Race, Reg	Spriggs, Leslie	Wigley, Dafydd
Radice, Giles	Stallard, A. W.	Willey, Rt Hon Frederick
Roberts, Albert (Normanton)	Steel, Rt Hon David	Williams, Rt Hon Alan (Swansea W)
Roberts, Allan (Bootle)	Stoddard, David	Williams, Sir Thomas (Warrington)
Roberts, Ernest (Hackney North)	Strang, Gavin	Wilson, Rt Hon Sir Harold (Huyton)
Roberts, Gwilym (Cannock)	Straw, Jack	Wilson, William (Coventry E)
Robertson, George	Summerskill, Hon Dr Shirley	Winnick, David
Rodgers, Rt Hon William	Taylor, Mrs Ann (Bolton West)	Woodall, Alec
Rooker, J. W.	Thomas, Dafydd (Merioneth)	Woolmer, Kenneth
Ross, Ernest (Dundee West)	Thomas, Jeffrey (Abertillery)	Wrigglesworth, lan
Ross, Stephen (Isle of Wight)	Thomas, Dr Roger (Carmarthen)	Wright, Sheila
Rowlands, Ted	Tilley, John	Young, David (Bolton East)
Sandelson, Neville	Tinn, James
Sever, John	Torney, Tom	TELLERS FOR THE AYES:
Sheerman, Barry	Urwin, Rt Hon Tom	Mr. James Hamilton and
Sheldon, Rt Hon Robert (A'ton-u-L)	Varley, Rt Hon Eric G.	Mr. Donald Coleman.
Shore, Rt Hon Peter (Step and Pop)	Wainwright, Edwin (Dearne Valley)
NOES
Aitken, Jonathan	Cope, John	Heddle, John
Alexander, Richard	Cormack, Patrick	Henderson, Barry
Alison, Michael	Corrie, John	Heseltine, Rt Hon Michael
Amery, Rt Hon Julian	Costain, A. P.	Hicks, Robert
Ancram, Michael	Critchley, Julian	Hogg, Hon Douglas (Grantham)
Arnold, Tom	Crouch, David	Holland, Philip (Carlton)
Aspinwall, Jack	Dickens, Geoffrey	Hooson, Tom
Atkins, Rt Hon H. (Spelthorne)	Dorrell, Stephen	Hordern, Peter
Atkins, Robert (Preston North)	Douglas-Hamilton, Lord James	Howe, Rt Hon Sir Geoffrey
Atkinson, David (B'mouth, East)	Dover, Denshore	Howell, Ralph (North Norfolk)
Baker, Nicholas (North Dorset)	du Cann, Rt Hon Edward	Hunt, David (Wirral)
Banks, Robert	Dunn, Robert (Dartford)	Irving, Charles (Cheltenham)
Bell, Sir Ronald	Durant, Tony	Jenkln, Rt Hon Patrick
Bendall, Vivian	Dykes, Hugh	Johnson Smith, Geoffrey
Benyon, Thomas (Abingdon)	Eden, Rt Hon Sir John	Jopling, Rt Hon Michael
Benyon, W. (Buckingham)	Edwards, Rt Hon N. (Pembroke)	Joseph, Rt Hon Sir Keith
Best, Keith	Eggar, Timothy	Kitson, Sir Timothy
Bevan, David Gilroy	Fairgrieve, Russell	Knox, David
Biffen, Rt Hon John	Faith, Mrs Sheila	Lamont, Norman
Biggs-Davison, John	Farr, John	Lang, Ian
Blackburn, John	Fell, Anthony	Langford-Holt, Sir John
Blaker, Peter	Fenner, Mrs Peggy	Latham, Michael
Body, Richard	Finsberg, Geoffrey	Lawrence, Ivan
Bonsor, Sir Nicholas	Fisher, Sir Nigel	Lawson, Nigel
Boscawen, Hon Robert	Fletcher, Alexander (Edinburgh N)	Lee, John
Bottomley, Peter (Woolwich West)	Fletcher-Cooke, Charles	Lennox-Boyd, Hon Mark
Bowden, Andrew	Forman, Nigel	Lester, Jim (Beeston)
Boyson, Dr Rhodes	Fowler, Rt Hon Norman	Lewis, Kenneth (Rutland)
Braine, Sir Bernard	Fox, Marcus	Lloyd, Ian (Havant & Waterloo)
Bright, Graham	Fraser, Rt Hon H. (Stafford & St)	Lloyd, Peter (Fareham)
Brinton, Tim	Fraser, Peter (South Angus)	Loverldge, John
Brittan, Leon	Fry, Peter	Luce, Richard
Brocklebank-Fowler, Christopher	Gardner, Edward (South Fylde)	Lyell, Nicholas
Brooke, Hon Peter	Garel-Jones, Tristan	McCrindle, Robert
Brotherton, Michael
Brown, Michael (Brigg & Sc'thorpe)	Gilmour, Rt Hon Sir Ian	Macfarlane, Neil
Bruce-Gardyne, John	Glyn, Dr Alan	MacGregor, John
	Goodhew, Victor	MacKay, John (Argyll)
Bryan, Sir Paul	Goodlad, Alastair	Macmillan, Rt Hon M. (Farnham)
Buchanan-Smith, Hon Alick	Gorst, John	McNair-Wilson, Michael (Newbury)
Buck, Antony	Gower, Sir Raymond	McNair-Wilson, Patrick (New Forest)
Budgen, Nick	Grant, Anthony (Harrow C)	McQuarrie, Albert
Bulmer, Esmond	Greenway, Harry	Madel, David
Burden, F. A.	Grieve, Percy	Major, John
Butcher, John	Griffiths, Peter (Portsmouth N)	Marlow, Tony
Butler, Hon Adam	Grist, Ian	Marshall, Michael (Arundel)
Cadbury, Jocelyn		Marten, Neil (Banbury)
Carlisle, John (Luton West)	Grylls, Michael	Mates, Michael
Carlisle, Rt Hon Mark (Runcorn)	Gummer, John Selwyn	Mather, Carol
Chalker, Mrs. Lynda	Hamilton, Hon Archie (Eps'm&Ew'll)	Maude, Rt Hon Angus
Channon, Paul	Hamilton, Michael (Salisbury)	Mawby, Ray
Chapman, Sydney	Hampson, Dr Keith	Mawhinney, Dr Brian
Churchill, W. S.	Hannam, John	Mayhew, Patrick
Clark, Hon Alan (Plymouth, Sutton)	Haselhurst, Alan	Mellor, David
Clark, Sir William (Croydon South)	Hastings, Stephen	Meyer, Sir Anthony
Clarke, Kenneth (Rushcliffe)	Havers, Rt Hon Sir Michael	Miller, Hal (Bromsgrove & Redditch)
Clegg, Sir Walter	Hawkins, Paul	Mills, lain (Meriden)
Colvin, Michael	Hawksley, Warren	Miscampbell, Norman

Mitchell, David (Basingstoke)	Rees-Davies, W. R.	Stradling Thomas, J.
Moate, Roger	Renton, Tim	Tapsell, Peter
Monro, Hector	Rhodes James, Robert	Taylor, Robert (Croydon NW)
Montgomery, Fergus	Rhys Williams, Sir Brandon	Taylor, Teddy (Southend East)
Moore, John	Ridley, Hon Nicholas	Tebbit, Norman
Morris, Michael (Northampton, Sth)	Ridsdale, Julian	Temple-Morris, Peter
Morrison, Hon Charles (Devizes)	Rifkind, Malcolm	Thomas, Rt Hon Peter (Hendon S)
Morrison, Hon Peter (City of Chester)	Rippon, Rt Hon Geoffrey	Thornton, Malcolm
Mudd, David	Roberts, Michael (Cardiff NW)	Townend, John (Bridlington)
Murphy, Christopher	Roberts, Wyn (Conway)	Townsend, Cyril D. (Bexleyheath)
Myles, David	Rossi, Hugh	Trippier, David
Needham, Richard	Rost, Peter	Trotter, Neville
Nelson, Anthony	Royle, Sir Anthony	van Straubenzee, W. R.
Neubert, Michael	Salsebury, Hon Timothy	Vaughan, Dr Gerard
Newton, Tony	St. John-Stevas, Rt Hon Norman	Viggers, Peter
Nott, Rt Hon John	Scott, Nicholas	Waddington, David
Onslow, Cranley	Shaw, Michael (Scarborough)	Wakeham, John
Oppenheim, Rt Hon Mrs Sally	Shelton, William (Streatham)	Waldegrave, Hon William
Osborn, John	Shepherd, Colin (Hereford)	Walker, Bill (Perth & E Perthshire)
Page, John (Harrow, West)	Shepherd, Richard (Aldridge-Br'hills)	Walker-Smith, Rt Hon Sir Derek
Page, Rt Hon Sir R. Graham	Shersby, Michael	Waller, Gary
Page, Richard (SW Hertfordshire)	Silvester, Fred	Walters, Dennis
Parris, Matthew	Sims, Roger	Ward, John
Patten, Christopher (Bath)	Skeet, T. H. H.	Warren, Kenneth
Patton, John (Oxford)	Speed, Keith	Watson, John
Pattie, Geoffrey	Speller, Tony	Wells, Bowen (Hert rd & Stev'nage)
Pawsey, James	Spence, John	Whitelaw, Rt Hon William
Percival, Sir Ian	Spicer, Jim (West Dorset)	Whitney, Raymond
Pink, R. Bonner	Spicer, Michael (S Worcestershire)	Wickenden, Keith
Pollock, Alexander	Sproat, lain	Wiggin, Jerry
Porter, George	Squire, Robin	Wilkinson, John
Prentice, Rt Hon Reg	Stainton, Keith	Williams, Delwyn (Montgomery)
Price, David (Eastleigh)	Stanbrook, Ivor	Winterton, Nicholas
Prior, Rt Hon James	Stanley, John	Wolfson, Mark
Proctor, K. Harvey	Steen, Anthony	Young, Sir George (Acton)
Pym, Rt Hon Francis	Stevens, Martin
Raison, Timothy	Stewart, Ian (Hitchin)	TELLERS FOR THE NOES:
Rathbone, Tim	Stewart, John (East Renfrewshire)	Mr. Spencer Le Marchant and
Rees, Peter (Dover and Deal)	Stokes, John	Mr. Anthony Berry.

Question accordingly negatived.

6 pm

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

I am now required, under the terms of the resolution to which the House agreed on Monday last, to put the Question on the remaining Government amendments.

Amendment made: No. 85, in page 85, line 1, leave out ' 16 ' and insert ' 9, 16, 23'.—[Mr. Stanley.]