LEASEHOLD FLATS (Hansard, 24 April 1986)

§ Mr. John Fraser (Norwood)
I beg to move, That the clause be read a Second time.
On Second Reading, the Opposition said that we would give every possible assistance to the Government in order to put into legislative form the recommendations of the Nugee committee on the management of leasehold flats. That remains our view. This clause is the last opportunity for the Government to accept our offer, although it would mean legislating by statutory instrument.
I realise that, since the new clause was originally conceived and put down for consideration in Committee, the Government have said that they will implement Nugee in primary legislation next Session. We welcome that statement and the fact that the Government say that they will go further than Nugee and enable leaseholders collectively to acquire the freehold of a block of flats, if the landlord neglects his responsibilities. So far, so good: there is no great disagreement.
However, the Opposition want even more than Nugee. It is important that leaseholders of flats should have the right to extend their leases in the same way as that right was given to leaseholders of houses under the Housing Subsidies Act 1967. Leaseholders of flats whose leases have 50 years or less to run find that they have a diminishing asset. It is difficult to obtain mortgages on such flats. That is not good either for individuals or for the state of the housing stock.
Secondly, we do not believe that the right collectively to acquire the freehold should depend upon neglect by the landlord. The 1967 Act did not say that a precondition of enfranchisement should be the behaviour of the landlord. Many good freeholders manage leasehold estates. Dulwich college in my constituency is one example. That has never been an argument against the right of enfranchisement. The enfranchisement principle ought to proceed rapidly into law for both flats and houses. We shall expedite the passage of the Bill in the next Session of Parliament, but we shall want it to go further than even Nugee or the Government's response.

§ Mr. Alfred Dubs (Battersea)
I appreciate that the Minister will say that he does not like such major matters to be the subject of delegated legislation, and I sympathise with his view. However, he will appreciate that there is widespread concern about the matter. Since I introduced my Ten-minute Bill on this subject, I have received many letters from all over the country. People are absolutely desperate that the difficulties in which they find themselves should be quickly remedied by legislation.
I wish that the Government had taken note of the widespread feeling in the country. The Government support the Nugee report, but I hope that we can press them to go considerably further. Many leaseholders feel that the conditions are absolutely intolerable. The Government ought to have delayed this Bill a little longer in order to introduce the necessary measures to give effect to Nugee now, instead of making people wait for another year or more. Even at this late stage, I hope that the Government will say that they will consider what they can do and that, if necessary, they will introduce an amendment in another place. The Opposition would support such a move. As the will is there, why cannot the Government do it, even at this late hour?

§ Mr. Simon Hughes
I support the new clause. The Nugee committee did a good job. It made a comprehensive list of recommendations. This sector has been considerably neglected. People have great difficulty in gaining control over either their long-term or their short-term destiny.
The Secretary of State's written answer to the hon. Member for Westminster, North (Mr. Wheeler) provides a general outline of the Government's commitment to the recommendations of the Nugee report. Between now and the beginning of the next Session, I ask the Minister to examine whether some of the other recommendations can be included and whether the suggestions that this new clause contains can be taken on board. If it would be helpful, all parties could contribute to the discussion in the light of the recommendations and the Government's initial response. I am sure that the Minister wishes to maximise the impact of the legislation next year for the good of those in the private sector who will benefit enormously if Nugee, or even Nugee-plus, is implemented within a year from now.

§ Mr. John Patten
I am in some difficulty over this new clause. I applaud its general drift and recognise that it reflects an all-party feeling that something must be done as quickly as possible for those in private leasehold blocks of flats.
However, I believe it is right that the hon. Gentleman the Member for Norwood (Mr. John Fraser) should remind us that there are good landlords and managing agents who do a good job. I apologise to the hon. Gentleman. When he made his generous offer on behalf of the Labour Party, yesterday during Question Time, to assist with the passage of the Nugee recommendations through legislation, I thanked him for his offer of collaboration. I hope that was an uncharacteristic slip of the tongue; I meant to thank him for his co-operation. I do not suspect the hon. Gentleman ever of wishing to collaborate with the Conservative party.
6.30 pm
I was in the House to hear the speech that the hon. Gentleman the Member for Battersea (Mr. Dubbs) made on his ten-minute Bill. It is clear that members of the alliance and the Labour party and on this side of the House want to do something, but unfortunately a lot of detailed work must be done. I am not being bureaucratic or ministerial about this; I simply do not believe that putting Nugee-plus into effect in the way suggested will produce anything like good law; it will produce hopeless and muddled law. We must discuss the detail of some of these proposals much more with the interested parties. For example, the proposal to appoint a receiver and manager for the operation of the right of first refusal and the variation of defective leases raise intricate issues indeed that require careful drafting.
Other points raised by the Nugee committee's report touch on matters outside the direct sphere of housing and my responsibilities. For example, the setting up of trust funds and sinking funds to deal with service charges raises complicated and difficult issues, as does the issue of insurance for these large blocks of flats. Many of the issues have implications for the rights and duties of landlord and tenant respectively, and they actually involve major changes to the landlord and tenant law. On some of the items listed as matters to be included in the regulations in the new clause—for example, the treatment of blocks of flats at the end of their economic life—the Nugee 480 committee made no specific recommendations, except to tell the Government to do something, but not how to do it. Until further work has been done, it is not possible to determine how far it will be practicable or desirable to implement the proposals by means of secondary legislation, which I do not believe would do the job well. Indeed, there is a risk that the enabling power would turn out to be inadequate to achieve what is needed.
Recognising as I do the urgency of the situation, and the all-party will in the House to do something as quickly as possible, I think that this is the right way to do it. I wish that we could introduce legislation this Session but, without anticipating the Queen's Speech, I fear that we will not be able to do so. I hope that we can do something as soon as possible.