FURTHER PERIODS TO COUNT FOR QUALIFICATION AND DISCOUNT (Hansard, 12 April 1984)

§ The Parliamentary Under-Secretary of State for Wales (Mr. Wyn Roberts)
I beg to move, That this House doth agree with the Lords in the said amendment.

§ Mr. Deputy Speaker (Mr. Ernest Armstrong)
With this it will be convenient to take Lords amendments Nos. 18, 19, 111 to 114, 122 to 124, 126 to 129, 206, 208 and 210.

§ Mr. Roberts
My noble Friend Lord Bellwin moved this amendment so felicitously in the other place that the noble Baroness Birk said that had it been set to music by Andrew Lloyd Webber my noble Friend would have had a hit on his hands. I hope that I can emulate my noble Friend.
The key amendment in this group is No. 122. It proposes a change in the rules governing a tenant's discount entitlement in those relatively rare cases where the tenant in question has already once purchased his home from a public sector body with the benefit of a discount. The other amendments in the group are all consequential to that change, or drafting amendments.
The present "previous purchaser" rule provides that, where an individual has once exercised his right to buy, he may only count periods subsequent to that purchase for qualification and discount purchases if at a later stage he again becomes a tenant and again wishes to buy. I cannot say that this rule has so far given rise to a great number of problems; there are not many tenants who since 1980 have managed to buy, sell, become tenants again and buy again. But individual authorities have brought certain problems to our attention, and we have spotted various potential anomalies in looking at the provisions more carefully.
In those circumstances, it seemed worth trying to get the rules right, even though it meant introducing new amendments at a relatively late stage of the Bill's progress. The "previous purchaser" rules will, in the nature of things, become more relevant with the passage of time. But we were also particularly concerned to get the rules right in the context of the proposed defective dwelling legislation. The Bill recently introduced will provide in certain circumstances for councils to repurchase defective dwellings and to give their occupants secure tenancies. In those cases tenants will often wish to buy again.
One loophole in the present position is that it bites only when the previous purchase has been made under the right-to-buy legislation. That is clearly anomalous. The 604 discounts made available by other public sector bodies under voluntary sales schemes may be as generous as those under the right to buy. The sales scheme operated by the United Kingdom Atomic Energy Authority is a case in point. Equally, voluntary sales by district councils may be on terms which are even more generous than those available under the current legislation. Since July last year, councils have had consent to sell on a discretionary basis at discounts of up to 60 per cent. in anticipation of the provisions in this Bill. So it is obviously sensible that, if we are to have a previous purchaser rule at all, it should take account of both the statutory and voluntary sales schemes.
Other anomalies follow from the fact that the present rule has no regard to the actual discount a tenant may have received on a previous purchase. This means, for example, that a second purchaser will be entitled to exactly the same discount regardless of whether he in practice received the maximum £25,000 first time round or, conversely, he received no discount because of the "cost floor" rule.
The new rule proposed in amendment No. 122 will in some circumstances be more favourable to the previous purchaser, and in some circumstances less so. I believe that it is, at any rate, fairer. It provides that, first, a tenant's discount entitlement should be calculated by reference to all the periods he has spent as a secure tenant, regardless of whether or not he has purchased before; but that, secondly, the discount entitlement so calculated should be abated by the cash value of any discount from which he may have benefited on a previous purchase; and that, third, in calculating this abatement, any purchase from a public sector body at a discount should be taken into account, regardless of whether or not the purchase was under the right to buy scheme. The final element of these proposals is that they provide that, where the benefit of discount on any previous purchase has been split between more than one person—for example, where a husband and wife have bought jointly but subsequently separated—the abatement of discount entitlement on any second purchase shall be proportionate to the benfit of any discount previously received. While I accept that the proposed new rules are not easy to grasp at a superficial reading, I have no doubt that they are more equitable and will be welcomed by local authorities of all persuasions.

§ Mr. John Fraser
What is to be the sanction against non-disclosure of a previous purchase? I understand that under the rules it is possible for one to have purchased a house from a housing association that is not a charity—or, after these proceedings, to have purchased a house if one was a tenant of a charity—and, at a later stage of one's life, to have become a tenant of a local authority, and perhaps in one's old age to have purchased an elderly person's bungalow. What are the effective sanctions against non-disclosure, which must be tempting to a tenant if there is a substantial discount to be obtained as a result of non-disclosure?
Will the Minister explain the philosophy behind this proposal? Is it that the discount is a loss to the community, a loss not to be repeated more than once? I should have thought that the idea behind this Government scheme, with which I do not entirely agree, was that it was of advantage to the community and society generally as well as to the individual tenant to exercise the right to buy and receive a discount. These provisions seem to admit, however, that 605 there is some loss to the public purse as the result of the exercise of a discount and that that loss should be limited. Does the Minister take that view, too?

§ Mr. Wyn Roberts
I should have thought that anyone not disclosing a first purchase would stand to lose in the sense that, if he was involved in a second purchase, he would—the authority selling to him would want to know his previous history—wish his period as a tenant to be taken into account. I do not see any benefit arising to the second purchaser in the event of non-disclosure.
Obviously. too, when he exercises his right to buy, the authority with which he is dealing trusts that he is acting in good faith. I am sure that in making his application he would, at some stage before completion, show the bona fide nature of his application.
In my opening remarks I explained the thinking behind our acceptance of the amendment. What we are basically trying to do is bring the right to buy on to the same basis as voluntary sales schemes. We are inspired in this case by the desire to ensure fairness as between one kind of purchaser and another.