HC Deb 26 July 1984 vol 64 cc1320-5

Lords Amendment: No. 3, in page 4, line 42, after "below" insert and section [modification of Act in relation to shared ownership leases](3) of this Act".

Mr. Wyn Roberts

I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Speaker

With this we may discuss Lords amendment No. 46.

9.30 pm
Mr. Roberts

The main provision in this group is the new clause to be inserted after clause 16. It gives the Secretary of State the power to modify the provisions of the Bill to fit the complicated case of a defective dwelling that is held on a shared ownership lease by the owner, or where the freehold of the dwelling has been acquired by means of such a lease.

The typical shared ownership scheme allows the purchase of an initial share followed by the purchase of additional shares at any time in the future if the owner so wishes. Prices for both initial and subsequent shares are usually fixed in relation to the market value of the dwelling at the time of the acquisition of the share.

We do not know whether any precast reinforced concrete dwellings are subject to shared ownership leases. We think that the number of such cases, if any, is very small. But it is possible in such cases either that the owner holds only part of the equity or that, even if he has already acquired the whole of it, the acquisition of shares will straddle the cut-off date—that is the date by which the existence of the defects became generally known. and the value of the dwelling fell considerably. Some shares may have been bought at a defect-free value before the defects became known, while others may have been bought at a defective value after the cut-off date.

It is not difficult to imagine the complications that would arise in administering the scheme if reinstatement grant were to be the appropriate form of assistance. The new clause provides that the regulations may confine the assistance to repurchase, as in the case of a flat.

The Bill's provisions will need to be adapted—for example, for the case where some shares might have been purchased at defective value. Rather than add considerably to the length of the Bill to cater for those few, if any, cases, we propose that the Secretary of State should be given the power, subject to negative resolution, to make the modifications as and when it is clear that they are needed.

The new clause does not apply to Scotland as the concept of shared ownership leases as found in England and Wales has no equivalent in Scottish law. I hope that the House will agree that it is a practical solution to the problem of shared ownership leases.

Mr. Campbell-Savours

Under clause 3, a person seeking help from the local authority for a substandard dwelling—which is defined in the Bill as "defective"—must make written application to the local housing authority. If the applicant is eligible—the Bill also deals with eligibility and the criteria governing it — the housing authority then determines, in accordance with conditions laid down in the clause, whether the applicant is entitled to reinstatement grant or repurchase.

The work required to be done to reinstate a defective dwelling is defined, and the clause makes provision for cases where an eligible person dies or disposes of the property for other than the value of that person's interest in the dwelling.

The Lords amendments would extend the right to assistance to shared ownership leases or freeholds acquired under the terms of a shared ownership lease. Amendment No. 46 sets out the modifications that may be specified in regulations under the Bill.

May we be given examples of such shared ownership leases? The Minister was not specific on that and, when we debated an earlier amendment, he did not identify shared ownership lease schemes. Such schemes exist and the House is entitled to know where they exist, the number of dwellings involved, the cost to the Exchequer of extending the arrangements to those leases and the extent to which the beneficiary may not be the lessee.

The freeholder may have embodied in the lease granted to the lessee a restriction which may turn in the freeholder's favour in the event of further legislation or perhaps as the result of default by the tenant. In other words, the beneficiary in such a case might not be the lessee, although it is intended that the lessee should be the beneficiary under the Bill.

We need to be assured that abuses cannot take place and that freeholders will not be advantaged. I recall cases in Manchester over improvement grants. I appreciate that this provision is not concerned with those grants, but we must draw parallel examples in considering what might happen under the Bill.

A television programme was made about the position in Manchester. The district council allocated improvement grants on the basis of a five-year condition. In the cases I have in mind, landlords who obtained improvement grants and who would have lost them had they sold the property within five years insisted on people who bought their property not receiving the title to that property until the expiry of the five-year period. By that means, landlords did not have to repay to Manchester corporation the improvement grants that they had been given. That is an example of how an agreement can militate against the interests of the person who is intended to be the beneficiary.

I hope that the Government will assure us that there is no possibility of abuse in the extension of the right to shared ownership leases. I hope that no financial benefit will be provided for those for whom the legislation is not intended. If the Government cannot give us an absolute assurance, I shall divide the House on the amendment.

We are always told that it is in our interests to protect the public purse. The Government tell us repeatedly that it is their objective to secure the interests of the taxpayer. They tell us on Finance Bill Committees, "We need the money." All grants cost local authorities or the Government money. I am representing the interests of the taxpayer in seeking an assurance from the Government.

Dr. Marek

There are many good parts of the Bill, but it does not go far enough and there may be some inconsistencies. Amendment No. 2 sought to ensure that benefits that could otherwise accrue to, say, farmers who bought a house for their business would not accrue to them. However, it seems that we are now doing the opposite. Amendment No. 46 says: The Secretary of State may by regulations provide for this Act to have effect, in its application to any case in which a person is eligible for assistance in respect of a defective dwelling and his interest in the dwelling is either—

  1. (a) a shared ownership lease, or
  2. (b) the freehold acquired under the terms of a shared ownership lease"
If there is a shared ownership lease, one person may be an absentee dweller, perhaps living in the south of France. It is possible that both owners will be absentee dwellers, seeking only to make a quick killing. They could use the Bill for their own advantage and subsequently sell the property.

Some properties would be difficult to sell, but some may be in the middle of Wales or the Lake District. In those areas, it is essential that owners live in their houses and contribute to the well-being of the community. The house may be in a time-sharing scheme. There are such schemes in Scotland and I should like the Minister to tell us what is the difference between shared ownership and time-sharing. The thrust of these amendments seems to be in be opposite direction from that of amendment No. 2 and the associated amendments.

There is another reason why I am unhappy about the amendments. Amendment No. 46 states that: the Secretary of State may by regulations provide for this Act to have effect. He may, or he may not. As a matter of principle, I do not like legislation of that type. I would far rather—

9.45 pm
Mr. Campbell-Savours

On a point of order, Mr. Speaker. I am having trouble in hearing my hon. Friend because of the noise from the Government Benches. If hon. Gentlemen wish to discuss matters during the debate, should they not leave the Chamber so that we can discuss the Bill quietly?

Mr. Speaker

I am having no difficulty in hearing what the hon. Member for Wrexham (Dr. Marek) is saying, and the hon. Member for Workington (Mr. Campbell-Savours) is much closer to him than I am.

Dr. Marek

Thank you, Mr. Speaker.

The new clause is permissive. It states that the Secretary of State may make regulations. It would be far better that regulations or orders should be made by the House, so that we would know what they provided and what their effects would be. We do not even know what would be done by means of the regulations. I would not be inclined to support an amendment such as amendment No. 46 unless there were strong arguments in its favour. In this case there are not, and I shall support my hon. Friend the Member for Workington (Mr. Campbell-Savours).

Mr. Don Dixon (Jarrow)

If the shared ownership is shared with the local authority, does my hon. Friend know whether the local authority will receive any assistance in connection with its share in the defective dwelling?

Dr. Marek

That is an important point. The local authorities could be placed in an invidious position.

It is not good enough for us to be told that regulations may be made. I hope that the Minister will withdraw the clause—or perhaps the whole Bill—for reconsideration. Parts of the Bill are valuable, but a Bill should be exactly right before it becomes law, and we should ensure that every dot and comma is in the right place.

Amendment No. 46 leaves a very wide field open to ministerial diktat. During my first year in the House, I have been struck by the fact that in more and more legislation matters are left for the Minister to decide. That is fundamentally wrong. The House should keep control over legislation, and we are not doing so in this case.

My third point is about shared ownership and the problems that could be involved in certain areas. I do not envisage that there would be any great problems in the centre of Birmingham, Sheffield or Rotherham, but there could be problems in the Lake District, or north or central Wales.

Mr. Tom Pendry (Stalybridge and Hyde)

Or Stalybridge.

Dr. Marek

Stalybridge would certainly come into the category. There would be a danger that houses might become owned on a time-share basis, or that people would be able to take advantage of the legislation by having houses done up and then letting them. That would be against the spirit of the Bill. The Bill is not designed to enable people to carry on a business, or to set up in business. It is important that, in rural areas, every house should be occupied all the year round and as the only residence of a family. I am not convinced that the Bill will ensure that. Far too many houses in desirable areas have fallen victim to becoming holiday homes. Lords amendment No. 46—by the suggested subsection (5)—provides: Regulations under this section may make different provision for England and Wales and for different descriptions of shared ownership lease. I hope that it stops the activity that I have described but I do not believe that it will. Moreover, I fail to see why provision for England and Wales should be different from that in Scotland. The basic problem of home ownership is the same in England, Wales and Scotland. Lords amendment No. 46—by the suggested subsection (6)—provides: This section does not apply to Scotland. The Minister said that the reason for that is that shared ownership is not known in Scotland—but it might be in future, in spite of the fact that the legal niceties of tied ownership are different from shared ownership. The Act would have to be revised to take account of such a change but I do not envisage a Government in, say, 1992 presenting a one-clause Bill to amend the Act because of a mistake in 1984 and because Scotland must now be included because things have changed. The mark of a good legislator must be anticipation of what is likely to happen and providing for it.

I hope that the Government will think again. Perhaps the Government will think again. Perhaps the Minister will be able to assure me that there will be no increase in the number of holiday homes in desirable rural areas. What regulations does he have it in mind to make? Presumably the Government are not merely providing that they can make regulations without having thought the matter through. They must have an eye to what the regulations will be. That being so, who will the regulations include? It must be right for the House to know that, even if we cannot see the Government's intentions in print. If I do not receive assurances, it will be my duty to vote against Lords amendment No. 3. However, I am anxious to discover whether the Minister can give those assurances.

Mr. Wyn Roberts

As I said in moving the amendment, we do not know whether any PRC dwellings are subject to shared ownership leases, so I cannot give the details of location requested by the Opposition, but we have covered the eventuality. The hon. Member for Wrexham (Dr. Marek) confessed that he did not like the regulations. As I have said, the aim is simply to cover a most unlikely eventuality. Moreover, the regulations can be prayed against in either House.

Question put, That this House doth agree with the Lords in the said amendment:—

The House divided: Ayes 146, Noes 8.

Division No. 439] [9.55 pm
Alexander, Richard Hunt, David (Wirral)
Amess, David Hunter, Andrew
Ancram, Michael Hurd, Rt Hon Douglas
Ashby, David Jessel, Toby
Aspinwall, Jack Jones, Gwilym (Cardiff N)
Atkins, Rt Hon Sir H. Kilfedder, James A.
Atkinson, David (B'm'th E) King, Rt Hon Tom
Baker, Nicholas (N Dorset) Lawrence, Ivan
Baldry, Tony Lester, Jim
Batiste, Spencer Lilley, Peter
Berry, Sir Anthony Lloyd, Peter, (Fareham)
Bevan, David Gilroy Lord, Michael
Biffen, Rt Hon John Luce, Richard
Biggs-Davison, Sir John Lyell, Nicholas
Boscawen, Hon Robert McCurley, Mrs Anna
Bottomley, Peter MacKay, Andrew (Berkshire)
Bowden, Gerald (Dulwich) Maclean, David John
Braine, Sir Bernard Major, John
Bright, Graham Maples, John
Brinton, Tim Marland, Paul
Brown, M. (Brigg & Cl'thpes) Mather, Carol
Browne, John Maude, Hon Francis
Bruinvels, Peter Merchant, Piers
Burt, Alistair Meyer, Sir Anthony
Butterfill, John Miller, Hal (B'grove)
Carlile, Alexander (Montg'y) Montgomery, Fergus
Carlisle, John (N Luton) Morris, M. (N'hampton, S)
Cash, William Morrison, Hon C. (Devizes)
Chapman, Sydney Morrison, Hon P. (Chester)
Chope, Christopher Murphy, Christopher
Clark, Hon A. (Plym'th S'n) Neubert, Michael
Clark, Dr Michael (Rochford) Nicholls, Patrick
Colvin, Michael Norris, Steven
Conway, Derek Oppenheim, Phillip
Coombs, Simon Osborn, Sir John
Cope, John Owen, Rt Hon Dr David
Crouch, David Page, Richard (Herts SW)
Currie, Mrs Edwina Peacock, Mrs Elizabeth
Dorrell, Stephen Percival, Rt Hon Sir Ian
Douglas-Hamilton, Lord J. Powley, John
Dover, Den Proctor, K. Harvey
Durant, Tony Raffan, Keith
Edwards, Rt Hon N. (P'broke) Rhys Williams, Sir Brandon
Evennett, David Rifkind, Malcolm
Eyre, Sir Reginald Roberts, Wyn (Conwy)
Fallon, Michael Robinson, Mark (N'port W)
Fookes, Miss Janet Roe, Mrs Marion
Fox, Marcus Rossi, Sir Hugh
Gale, Roger Rowe, Andrew
Goodlad, Alastair Sainsbury, Hon Timothy
Gorst, John Sayeed, Jonathan
Gow, Ian Shaw, Giles (Pudsey)
Greenway, Harry Shaw, Sir Michael (Scarb')
Hamilton, Hon A. (Epsom) Shelton, William (Streatham)
Hancock, Mr. Michael Smith, Tim (Beaconsfield)
Hargreaves, Kenneth Soames, Hon Nicholas
Harvey, Robert Spencer, Derek
Hayes, J. Spicer, Michael (S Worcs)
Heddle, John Stanbrook, Ivor
Henderson, Barry Stern, Michael
Howard, Michael Stevens, Lewis (Nuneaton)
Howarth, Gerald (Cannock) Stevens, Martin (Fulham)
Stewart, Allan (Eastwood) Waller, Gary
Stradling Thomas, J. Wardle, C. (Bexhill)
Temple-Morris, Peter Watson, John
Thompson, Donald (Calder V) Watts, John
Thompson, Patrick (N'ich N) Wells, Bowen (Hertford)
Thorne, Neil (IIford S) Whitfield, John
Thurnham, Peter Wolfson, Mark
Tracey, Richard Wood, Timothy
Twinn, Dr Ian Yeo, Tim
van Straubenzee, Sir W.
Waddington, David Tellers for the Ayes:
Wakeham, Rt Hon John Mr. Douglas Hogg and Mr. Ian Lang.
Walden, George
Campbell-Savours, Dale Skinner, Dennis
Clark, Dr David (S Shields) Wareing, Robert
Cohen, Harry
Corbyn, Jeremy Tellers for the Noes:
Dixon, Donald Dr. John Marek and Mr. Dave Nellist.
Powell, Raymond (Ogmore)

Question accordingly agreed to.

It being after Ten o'clock, further consideration of the Lords amendments stood adjourned.

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