DEFINITION OF BANKRUPT'S ESTATE (Hansard, 18 July 1985)

§ Mr. Gould
I beg to move amendment No. 283, in page 100, line 3, at end insert— `(c) The bankrupt's only or main residence which is:
(i) a protected tenancy or restricted contract as defined in the Rent Act 1977;

(ii) a protected occupancy as defined in the Rent (Agriculture) Act 1976; or

(iii) a secure tenancy as defined in the Housing Act 1980 unless it is a tenancy to which Part II of the Landlord and Tenant Act 1954 applies."

Mr. Deputy Speaker
With this it will be convenient to discuss Government amendments Nos. 140 to 147.

§ Mr. Gould
In Committee I mentioned the problem of the family home when the bankrupt—to take the most obvious example—was a council tenant. Under the existing law, the tenancy would vest in the trustee, but for no purpose. The only consequence of that would be that in many cases the bankrupt's family would lose its family home without a corresponding gain to the creditors.
The Minister kindly said that he understood my anxiety and undertook to try to do something about it, and he has tabled amendments Nos. 140 to 147, which are welcome so far as they go. I believe that the Minister has fulfilled his undertaking to try to find a solution to the problem. However, I wonder whether he could be prevailed upon to go a little further. The problem is that in each case the tenancies will still vest in the trustee, although in most cases the tenancy will be of no value.
The trustee or the official receiver may then disclaim the tenancy under clause 154. That will improve the tenant's position, but many tenants will not understand what is going on unless they receive clear notice of the disclaimer. In many cases they will not have proper advice. They may not be able or ready to act within the 14 days that they are given. There is a grave danger that, merely because many of the people about whom we are worried will not have access to proper advice and will be completely confused by being caught up in the proceedings, they will lose their homes for no good reason.
I ask the Minister whether he considered, and, if so, what was the outcome of his consideration, if it were possible to prevent the vesting of the tenancy in some defined circumstances. That would be a neater and more foolproof solution to the problem. That is what amendment No. 283 is designed to achieve.
I am advised that there may be a serious technical problem with the amendment, but if the Minister does not take that seriously I wonder whether he would accept in principle that it may be a better approach and may meet the point that we both want to achieve.

§ Mr. Fletcher
The difficulty is that if a blanket exemption were provided for all tenancies there would have to be a reserve power to enable trustees to claim tenancies which were of value to the estate.
As a third party—the landlord—would be involved, the claiming would have to be done through the court. That 603 could involve considerable trouble for the trustee and expense to the estate. We do not have evidence that a substantial number of people suffer hardship under the present system sufficient to justify a radical change such as the hon. Member for Dagenham (Mr. Gould) suggests. We must also remember that he said that people involved in this matter may not always have the benefit of proper advice. Bearing that in mind, we cannot avoid the fact that the tenancy may be of value to the estate and that there is a third party involved.

§ Mr. Gould
I am a little worried about the Minister's point that not many people are involved. We do not know how many people may be involved, but if a technically satisfactory solution could be arrived at, surely it would be worth helping a handful of people. I am not convinced that the numbers are material. The Minister should consider whether it is possible to find a satisfactory solution which would avoid hardship for the families of some bankrupts.

§ Mr. Fletcher
I agree that there may be some hardship, but there is no evidence available and I do not believe that the fact that there were many such cases was brought out elsewhere. I do not think that there is sufficient evidence to justify the blanket exemption that the hon. Member suggests.

§ Mr. Gould
The Housing Aid Trust which has advised me on this matter believes that it is serious. I imagine that it would be happy to provide the Minister with the evidence. I wonder whether the Minister would reconsider the matter in the light of any evidence that that organisation provided. On that understanding, I beg to ask leave to withdraw the amendment.