HC Deb 24 April 1986 vol 96 cc505-18

20A. Where relevant costs are incurred or to be incurred on the carrying out of works in respect of which a grant has been or is to be paid under Part XV of the Housing Act 1985 (grants for works of improvement, repair or conversion), the amount of the grant shall be deducted from the costs and the amount of the service charge payable shall be reduced accordingly.".

(2) In section 21 of the Landlord and Tenant Act 1985 (request for summary of relevant costs), in subsection (5) (contents of summary) after "shall" insert "state whether any of the costs relate to works in respect of which a grant has been or is to be paid under Part XV of the Housing Act (grants for works of improvement, repair or conversion) and".

(3) In section 47 of the Housing Act 1985 (limitation on service charges payable after disposal of house by pubic sector authority), after subsection (3) add— (4) Where relevant costs are incurred or to be incurred on the carrying out of works in respect of which a grant has been or is to be paid under Part XV (grants for works of improvement, repair or conversion), the amount of the grant shall be deducted from the costs and the amount of the service charge payable shall be reduced accordingly.".

(4) In section 48 of the Housing Act 1985 (request for summary of relevant costs), after subsection (3) (contents of summary) insert— (3A) The summary shall also state whether any of the costs relate to works in respect of which a grant has been or is to be paid under Part XV (grants for works of improvement, repair or conversion".'.

Amendment No. 148, in clause 38, page 75, tine 31, after '3', insert '4A,'.

Amendment No. 150, in line 37, after '4', insert '(Grants for improvement or repair of common parts)'.

Amendment No. 151, in line 37, after '1', insert '(Common parts grants)'.

Amendment No. 152, in line 38 [Clause 38], after '3', insert '4A,'.

Mr. Jones

I do not suppose that I am alone in the House—and I see on the Amendment Paper a new clause from the Opposition on this matter—in receiving complaints from constituents and local authorities about what appears to be a gap in the housing renovation system. The complaints concern the common parts of flats and houses divided into fiats.

At present, the system provides for two requirements. The first is that a proof of ownership must be provided, and the second provides for a certificate that the application for grant should relate to a property which can be occupied or is capable of letting. That is not the case with common parts, except in the rare cases where those parts are owned singly or in conjunction with a neighbouring fiat.

As I have said, there is no real problem in relation to individual flats. Both landlord and tenant can fill the two requirements that I have mentioned. The legal difficulty arises in relation to the common parts which cannot be lived in. That is not a satisfactory state of affairs. I have therefore tabled the new clause and the concomitant amendments. The objective of the new clause is fairly simple, but hon. Members will have noticed that the methodology is more complicated than I would have wished.

I set out to produce a simpler version and to try to amend the present scheme. However, the most obvious way of doing that, after considering the complexity of the legislation, was to create a new type of grant—a common parts grant which would be discretionary for local authorities. As I have said, it may seem over-elaborate, but I think that that is the best way of dealing with it.

There are a number of differences between the proposed new grant and existing grants. Two particular aspects of the grant distinguish it from present grants—the works for which the grant may be made and those eligible to apply. In this context "common parts" includes the structure, exterior, common areas and common facilities in a building divided into flats. Although the main problems arise with blocks of flats, these proposals will also apply to converted houses and flats in other buildings.

The grant will be available to the person who is under an obligation to carry out the works. In most cases that will be the landlord. There may, however, be other cases where no one is under an obligation to carry out essential works of repair, perhaps because leases are defective, as we considered in an earlier amendment. In the case of improvements it is unlikely that anyone would be under an obligation to carry them out. In this situation, any person who has the power to carry out works will be eligible for grant provided that he has an interest in the block or in a flat in the block, whether as a long leaseholder, tenant, landlord, management association, and so on.

It might be helpful to hon. Members if I outline other ways in which the new grant will differ from existing grants. Certificates of future occupation will not be required. Instead, I propose that grant should not be available if more than one quarter of the flats in a building are vacant at the time of application. This is an arbitrary figure but it is designed to provide a safeguard against someone making a profit from the improvement of a substantially vacant block by selling the flats as soon as work has been finished.

Common parts grant would not be available if the average rateable value of the dwellings in a building exceeds a specified limit. This is to avoid the Chelsea problem. The limit will be for my right hon. Friend the Secretary of State for the Environment to determine, as is the case with other renovation grants, and I have no doubt that he will adopt the same principle so that the rateable value limits will be aimed at making the new grant available to those people and properties in the greatest need.

It will have been noted by hon. Members that I have also tabled consequential amendments to section 47 of the Housing Act 1985 and to the Landlord and Tenant Act 1985. These are the provisions which were formerly in schedule 19 to the Housing Act 1980. They provide that, folllowing payment of a common parts grant, the amount of service charge payable will be reduced by the amount of the grant. This is to avoid tenants being caned a second time. In addition, similar provision is made for existing house renovation grants.

This is a limited series of measures, which will not apply to a large number of grants, at least to start with, but they will do a great deal to plug a serious gap in the present system which has deterred local authorities which are determined to improve blocks of flats in their areas but have not been able to do so because of the quirks in the present law. Therefore, I commend my new clause to the House.

Mr. John Fraser

May I speak to the associated Opposition amendment? The law on improvement grants for blocks of flats and maisonettes has turned out to be plain daft. There have been a number of cases where substantial grants could be given for alterations, repairs or improvements to individual flats and yet where necessary work on a roof which gave protection to more than one flat requiring a modest amount of money, as a result of rulings by the Department of the Environment and the interpretation of the law could not be undertaken. That has led to the most acute distress. A case is proceeding at the moment between the owners of a block of flats in my constituency and the Department of the Environment. I am not sure whether it has yet been concluded but it has caused the most acute distress and the law needs to be remedied quickly.

The Minister gave us an undertaking in Committee when we raised this issue that the Government would address themselves to it. I do not know whether they have in any way inspired the hon. Member for Hertfordshire, West (Mr. Jones). If they have, we welcome the inspiration and we hope that the Government will be able to accept the amendment, with which we are happy to associate ourselves.

Mr. Simon Hughes

I should like to join that association in views. There is a clear gap in the law. Home improvement grants have failed to help many people who live in accommodation that is effectively shared, or the common parts of which are shared. If the Minister does not respond now by saying that the Government accept the amendments as drafted, I hope that something will be introduced in another place because this is an appropriate Act in which to do something. The new clause put forward by the hon. Member for Hertfordshire, West (Mr. Jones) is more or less appropriate and is certainly sufficiently correct in principle to be adapted by the Department of the Environment within a short time.

Clearly here is an area where property has often been more neglected and so there is more substantial need for moneys for home improvement than in many of the other areas to which money has been directed so far. There is a gap in the law and it appears that there is many-sided agreement on this. I look forward to a positive response.

8.15 pm
Mr. Alfred Dubs (Battersea)

This is another respect in which leaseholders are suffering and there can be no doubt that there is a major defect in the law. Over the past few months I have had a number of bitter and angry letters from people in my constituency who have not been allowed an improvement grant. It is clear that even the Conservative Wandsworth council has blamed the Minister for a decision which has given rise to this difficulty.

I was given this undertaking by the Under-Secretary of State, the hon. Member for Ealing, Acton (Sir G. Young), in April: We are, however, currently considering the possibility of an amendment in the Housing and Planning Bill now before Parliament, to remedy the situation. Therefore, I hope that the new clause tabled by the hon. Member for Hertfordshire, West (Mr. Jones) is Government-inspired and is the way in which the Government, in a slightly roundabout way, are seeking to meet that commitment.

This is an urgent problem. Some of the people who have been held up in their application for an improvement grant are suffering from damp, leaking roofs and so on. There is not a moment to waste in implementing this measure. If the Minister accepts this series of amendments, as I assume he will, will he give an undertaking as to when the provision will come into effect so that those who are waiting will know how much longer they will have to wait?

Mr. John Patten

I am well aware of the consequences, particularly in London, of the home improvement grant legislation. There is a gap in the law which has been recognised by my hon. Friend the Member for Hertfordshire, West (Mr. Jones), the hon. Member for Southwark and Bermondsey (Mr. Hughes) and the Labour Front Bench spokesmen. Indeed, in Committee, the hon. Member for Norwood (Mr. Fraser) raised this important point. That is why I am grateful to my hon. Friend for tabling new clause 12 and the consequential amendments which will remove the anomaly in the Housing Act 1985 by enabling grants to be given for works to the common parts of buildings including flats.

The hon. Member for Battersea (Mr. Dubs) mentioned Wandsworth. Indeed, one of the people who has pressed powerfully on the Government the case for this change in the law has been that excellent Conservative leader in Wandsworth, Councillor Paul Beresford. I am sure that he will welcome this news this evening. I also welcome the proposed consequential amendment on service charges. It is important to ensure—

Mr. Rooker

Come on.

Mr. Patten

Everyone is allowed a couple of minutes during a bipartisan evening.

It is important to ensure that leaseholders who pay variable service charges will be able to benefit from this new grant. Here again, it is a duty on me to say that I applaud the excellent decision reached by the excellent chairman of the housing committee of Westminster city council, Councillor Patricia Kirwan, to enter into a voluntary agreement with private landlords on a new code to regulate private lettings in the city of Westminster. We are fortunate to have people such as Councillors Beresford and Kirwan in local government.

Mr. Rooker

What about Dick Knowles?

Mr. Patten

I would certainly associate Councillor Dick Knowles with my remarks about the need to have good leaders in local government in all political parties. He is always wonderfully rude to me in the friendliest sort of way whenever I meet him.

I have little to add to what my hon. Friend has said about his new clause and the consequential amendments. He put the case for this urgently needed change clearly and I am extremely happy to accept, lock stock and barrel, his new clause and the amendments. In saying that, it means that new clause 16 cannot be accepted because it is not drafted in a way that makes it acceptable to the Government. Of course, it has an identical intention, and I recognise the issue raised by the hon. Member for Norwood in Committee. I am extremely grateful to my hon. Friend the Member for Hertfordhsire, West.

Mr. Dubs

When will it come into effect?

Mr. Patten

I forgot to deal with that point. It will come into effect when the Bill becomes law.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New schedule agreed to.

[Mr. Robert Jones.]

Mr. John Patten

I beg to move Government amendment No. 4, in page 2, line 6, leave out from 'flat,' to end of line 15 and insert '44 per cent. plus two per cent. for each complete year by which the qualifying period exceeds two years, up to a maximum of 70 per cent. '.

Mr. Deputy Speaker

With this it will be convenient to discuss amendment No. 5, in page 3, line 7, at end insert '(5)(a) In the case of a flat to which subsection (2)(b) applies the District Valuer shall on the application of a person exercising the right to buy to determine the value of the flat in whose block there has been no transfer for value of fewer than three flats in that block (other than a transfer for value on the exercise of the right to buy) give formal notice to the landlord requesting the landlord to offer for sale, with vacant possession a similar flat in the same block

  1. (b) on receipt of such formal notice the landlord shall do his utmost to comply with the notice and shall notify the Secretary of State in writing of the steps which he proposes to take to comply with the notice within three weeks of the receipt thereof.
  2. (c) The landlord shall notify the District Valuer of a sale and the price at which the sale was made within seven days of the exchange of contracts for that sale.
  3. (d) in determining the value of the flat the District Valuer shall take full account of any price notified to him under subsection (c).'

Mr. Pattie

Clause 1 of the Bill, as amended in Committee, provides for a three-tier system of discount on houses and flats sold under the right to buy. The effect of clause 1 as it stands is that for houses the scale would start at 32 per cent. for tenants with the minimum two years, and rise to a maximum of 60 per cent. by steps of l per cent. for each of the tenant's qualifying years in excess of two. For flats, in general, the scale would run, as the Bill sets out in its original form, from 42 per cent. by l per cent. steps to 70 per cent. This was the proposal in the Bill as introduced.

The amendment tabled in Committee by my hon. Friends the Members for Northampton, North (Mr. Marlow) and Aldridge-Brownhills (Mr. Shepherd) made special provision for flats in deck access blocks and tower blocks with 10 or more floors. Under their amendment the scale for such flats would start at 50 per cent. and rise by 1 per cent. steps to a maximum of 80 per cent.

When we debated that amendment in Committee I suggested that a special discount scale for certain categories of flats could have unfortunate effects. I do not wish to repeat that in detail and I am sure that hon. Members are well aware of my views. However, I recognise my hon. Friends' strength of feeling in Committee that we ought to go beyond the simple 10 per cent. increase in discount on flats for which the Bill, as introduced, provided.

The amendment does that, but it avoids the complication of three different discount scales by providing for better discounts on flats of any kind sold under the right to buy. This is the Government's response to the painful defeat I experienced in Standing Committee by an all-party group on an amendment put down by my hon. Friend the Member for Northampton, North.

It is a dreadful experience to be defeated in Committee. One gets into terrible trouble with the Whips and derision is poured onto one's head by colleagues. I realised I had to claw back as best I could. What I have done in this amendment is to provide for a flat tenant's discount to rise by 2 per cent. steps. Therefore, a tenant with a minimum of two years' standing—necessary to exercise the right to buy—would be entitled to a discount of 44 per cent. and a maximum of 70 per cent. would be reached after only 15 years.

I will give a moment of detail on this as it is important. I am advised that this provision would give much the same average discount as tenants of flats in deck access and tower blocks would have received if my hon. Friend's amendment were enacted in its present form—about 65 per cent. Under my proposal, however, all the tenants of flats, not just tenants of flats in the categories annunciated by my hon. Friend's amendment in Committee, would benefit. Under my hon. Friend's proposal, less than about half of flat tenants would have been eligible for the higher discount. I hope that this change, together with other provisions in the Bill, will encourage tenants to think seriously about buying.

Mr. Hughes

The other statistic which would be helpful to know would be the difference that this would make to the revenue of local authorities as against the present position and as against the position as it would be on the basis of the original drafted clause. On the present rate of sales it would be helpful to know what the difference will be. One of the key factors is not the effect on people's right to buy but the effect on the revenue accounts of the local authorities who have one property less.

Mr. Patten

That is a perfectly proper question, but unfortunately I cannot answer it properly or even give an improper answer drafted by my civil servants. The civil servants are very good at drafting improper answers when asked.

We cannot predict what the effect of this legislation will be on flat sales—so far, the number of flat sales have been extremely small. Only 2 or 3 per cent. of all sales through the right to buy have been flat sales. Sales have been extremely restricted. Thus, we cannot predict the impact of an increase of 10 per cent. discount or the effect of shortening from 30 years to 15 years the period during which the maximum can accrue will have on people's behaviour.

I hope it will encourage people to think seriously about buying their flats. However, we do not know if it will. I cannot say, therefore, without going into the funniest arithmetic of all, what the effects will be on local government finance. The fact that only 3 per cent. of right to buy purchasers have been for flats means that, at the present, the effect on revenue has been minimal. I cannot give a straight answer. I have not satisfied the hon. Gentleman, but I have owned up to the fact that I cannot give a straight answer.

Mr. Hughes

I am grateful for the Minister's answer. Although there may be statistics, I understand his problem. Is his Department proposing to compensate local authorities for any increased sales which they suffer as a result of this legislation becoming law?

Mr. Patten

I do not like the use of "suffer" in this context. The position will remain exactly as it is with the right to buy.

I now turn to amendment No. 5 tabled by my hon. Friend the Member for Eastbourne (Mr. Gow) whom I disappointed so much in the last debate but one. We debated this issue in Committee on 8 April and I had the feeling that I was indirectly addressing my hon. Friend even though he was not a Committee member. I had an uneasy prickle that somewhere behind me was the figure of my hon. Friend and that his hand might descend on my collar at any time.

In Committee, my hon. Friend the Member for Northampton, North tabled a new clause to give effect to the proposal of my hon. Friend the Member for Eastbourne. We had a good debate in Committee and I think my hon. Friend the Member for Eastbourne had a chance to study that particular debate. I have not got much to add to what I said in that debate. There are some practical difficulties.

My hon. Friend's scheme is certainly ingenious, but I fear that practical difficulties remain to be resolved. I am not suggesting that the practical problems are insoluble. However, before adding such novel, complex and costly procedures to the statute book we have to be sure that the scale of the problem justifies a move of this kind. There is no clear evidence to suggest that it does. I am in a position to pay tribute to my hon. Friend the Member for Eastbourne for the role he played when he was Minister for Housing, Urban Affairs and Construction. He set up, with the co-operation of the London boroughs of Ealing and Wandsworth—I am afraid I must mention Wandsworth again as that was the other co-operative body—a study to consider the effects of the sort of situation which my hon. Friend imagined.

The results offered no support for the view that the valuation set on flats by borough valuers or district valuers are excessive. I set out the exact facts and figures in my answer in Committee to the new clause put down by my hon. Friend the Member for Northampton, North. We are continuing to monitor the sale and resale of flats in these areas under the scheme set up by my hon. Friend the Member for Eastbourne. So far we have not received a shred of evidence about over-valuation. I agree that this sample is not very large. There was no evidence to show that a scheme of the kind proposed by my hon. Friend was necessary.

I hope that my hon. Friend will consider withdrawing his amendment.

Mr. Gow

I welcome the provision of extra discount for those who buy flats, and I congratulate my successor on that part of the Bill that is before us. What is now section 128 of the Housing Act 1985 provides that any question … as to the value of a dwelling-house … shall be determined by the district valuer". The purpose of my amendment is to give further protection to the purchaser of a flat. I wish to move from the particular to the general.

8.30 pm

On 5 April there came to the office in Eastbourne a constituent who is considering exercising the right to buy. The house that he is minded to buy is one to which the Housing Defects Act 1984 applies. It is a prefabricated, reinforced concrete house. Quite understandably, my constituent was dissatisfied with the value placed upon that house by the Eastbourne borough council. He had previously been to see his Member of Parliament, who agreed with him that the valuation placed on the house by the borough council was too high. My constituent therefore applied, as he is entitled to do under the Housing Act 1980, to the district valuer for a determination of the value.

On 28 February 1986 the district valuer wrote to my constituent in the following terms: Reference is made to the Notice served on the Eastbourne Borough Council requiring my determination of the value of the above property in accordance with the provisions of Section 11 of the Housing Act 1980. The property was inspected on 16 January 1986. I note in passing that the inspection was carried out on 16 January 1986 but that the letter was not written until 28 February 1986. The district valuer then said: Representations, either verbal and/or written, from the landlord and the tenant have been considered together with all relevant valuations and available market evidence. Those are the words that I want to underline to the House and in particular to my hon. Friend the Minister for Housing. The district valuer said that representations, together with all relevant valuations and available market evidence, had been considered. You may find it immensely surprising, Mr. Deputy Speaker—as I do—since this is a prefabricated, reinforced concrete house, that the district valuer then said: No structural survey has been made. Following my constituent's visit on 5 April, I wrote to the district valuer on 8 April and said: In the sixth paragraph of your Determination you say that you have considered 'all relevant valuations and available market evidence.' So that I may advise my Constituent, could you please make available to me those 'relevant valuations and available market evidence' which you considered? Why did you make no structural survey of this property? It was not the district valuer who replied to my letter of 8 April. On the contrary, the reply came from the assistant chief valuer, land services and taxation division of the Inland Revenue— a valuer, no doubt, of great distinction. He said: In view of my earlier correspondence with you, the District Valuer at Eastbourne has forwarded me a copy of your letter to him dated 8 April. It would not be appropriate for him"— that is, the district valuer— to give the information which you now request. The DV has made his statutory determination using his professional knowledge and taking into account all relevant matters of which he was aware … I regret that I consider further discussion of any individual cases subsequent to a determination would serve no useful purpose. But what was it for which I asked? I asked for the evidence upon which he had based his judgment and for all relevant valuations and available market evidence. I also asked him why there had been no structural survey of the property.

What will be the position of those who are considering purchasing a flat? That was a house. There are not many examples of prefabricated, reinforced concrete houses changing hands between one purchaser and another, both of whom are in the private sector, because it is virtually impossible, as the Opposition know, to get a mortgage. As the hon. Members for Birmingham, Perry Barr (Mr. Rooker) and for Norwood (Mr. Fraser) know, the number of approved methods of repair is not very great. If that was the reply that was given in respect of a prefabricated, reinforced concrete house by the district valuer, where there was little evidence of the open market value, how much more difficult would it be to establish the value of a flat in a block of flats where no other sales had taken place?

I am second to none in my admiration for the professional skill and expertise of district valuers, but we are asking them under the 1980 Act, reproduced in the 1985 Act, particularly in the case of flats—however estimable, highly qualified and devoted they may be—to do something which even the wisest man cannot do. Even the hon. Members for Perry Barr and for Norwood, and even the hon. Member for Bootle (Mr. Roberts), were he here, could not say, however wise they may be, what would be the market value of the first flat on the 15th floor that was about to be sold.

The only way to give real assistance to the district valuer in his task is to try to sell one of those flats on the open market. If one asked the finest estate agents—there may be a number of estate agents on the Opposition Benches to whom we could give this task—to try to find a purchaser, then we should know the open market value of that flat.

The purpose of the amendment is to provide protection for those who wish to purchase a flat. The value that is frequently placed upon a flat—here I respectfully disagree with my hon. Friend the Minister for Housing—means that prospective tenants do not buy. Of course my hon. Friend is right to say that there is no evidence. The reason for the lack of evidence is that few deck access flats have been sold. One cannot say that the valuations of deck access flats are proper valuations, because when a prospective purchaser is told what the open market value is he says, "I'm not going to go ahead at that value." That is why there is no evidence.

Before he had heard my modest contribution to this debate, my hon. Friend said that he was unable to accept the amendment. Having heard what I have said, I hope that he may be able to accept it, or that, if he is unable to accept it this evening his noble Friend, who is to pilot the Bill through another place, will look again at this matter. It is not good enough to say that there is no evidence. The evidence is there in this dramatic way. Part of the reason for my hon. Friend's introduction of extra discounts for flats was that such a tiny number of flats had been sold. Why had such a tiny number of flats been sold? It was because either the district council, or the borough council, or the district valuer, had placed a value upon the flat that the tenant knew was nowhere near the price that he would be able to obtain on a resale.

Mr. Simon Hughes

Will the hon. Gentleman give way?

Mr. Gow

No. I think that I detect the mood of the House. It is anxious to make progress. I have said enough to explain my case.

Mr. Cartwright

The formulation in the Government amendment leaves the Bill in a tidier state than it had reached in Committee. It is a great deal better to have only two ranges of discount instead of three. The argument for having a greater discount for the purchase of flats and maisonettes is that they are less attractive propositions and there are far more associated problems. I am glad that the Minister was a little cautious in the way in which he presented his amendment. He clearly did not necessarily suggest that these discounts would result in a great flow of purchases.

Like many of us he understands that many other problems are involved. Practical difficulties are associated with buying a flat or maisonette, and there are problems of service and maintenance charges. To be fair, the Government have tried to deal with those matters in other clauses. Problems are associated with the general environment of the block and the unattractiveness of some council flats and maisonettes. A problem follows from the resale of housing of the general quality of which we are talking. All these matters will have a much bigger impact than discount on whether more flats and maisonettes are sold.

I underline what the hon. Member for Eastbourne (Mr. Gow) has said. In constituencies such as mine and that of my hon. Friend the Member for Southwark and Bermondsey (Mr. Hughes), there is no evidence at all of the sale of flats of any sort, public or private. If we consider a flat in a singularly rundown council estate, whether it is in a tower block on a deck access block or is a maisonette in a high-density development, there is no evidence at all to enable us to decide what is a reasonable market value for that property, given not just the square footage or facilities it contains but the general area in which it is situated, its surrounding environment, and all the features that go to make up the package that someone will buy.

On the basis of that kind of experience, some of my constituents who have been brave enough—some would say foolhardy enough—to buy flats in such an area may have paid more than it was reasonable to expect them to pay. Thus the case made out by the hon. Member for Eastbourne is very good. I hope that the Minister will consider the possibility suggested, because it is important that we try to discover what is a reasonable price in an open market for some of the properties we expect tenants to buy.

Mr. Marlow

I thank the Minister for the gracious, graceful and highly intelligent way in which he has introduced his amendment. I also find very persuasive the amendment introduced by the Member for Eastbourne (Mr. Gower). He will not be surprised by my saying that, because I put forward a similar amendment in Committee, inspired by my hon. Friend the Member for Eastbourne.

There is a great justification for having a higher discount on flats than applies to houses. First, as has been said by at least two hon. Members, we have not sold many flats. Secondly, not many flats have been sold because when a house is purchased there is an unavoidable annual commitment to pay the mortgage. However, when a flat is purchased there is the unavoidable annual commitment of paying the mortgage, the insurance, the cost of keeping a roof on the block of flats, and the service charges, so if there is a higher percentage discount on the sale of a flat. The actual percentage that has to be paid as unavoidable annual commitment is probably much the same for a flat as it would be for a house. That is why the amendment is justified.

Discussions have taken place since the first amendment was passed by the Committee. There were difficulties about how much money would be involved, but we are delighted that the Treasury has come up trumps. The amendment now extends the legislation a much greater range of flats; it was restricted before. It also provides that while a person who has been in residence in a flat for between two and eight years does not receive quite as big a discount as under the previous provision. A person who has been in residence for between eight and 15 years actually gets a bigger discount. It is quite often a person in that category who is better able to buy the property. Thus the probability is that, under this amendment, more people in the deck access and tower block type of flats will buy their flats. In addition, a whole other raft of tenants will be encouraged to buy flats at a higher rate of discount. The whole proposal is very exciting. It provides a wonderful opportunity for many people to purchase the homes in which they have been living, and it can have a great effect on improving the environment in which so many of our citizens now live.

8.45 pm
Mr. Simon Hughes

I want to raise two points, the first relating to the change in discount rules and the other relating to the amendment of the hon. Member for Eastbourne (Mr. Gow). In an intervention this afternoon, I asked the Minister a question because of the concern which I have and which Liberal and alliance-run councils and many other councils have—that, with every change in the rules adding to discounts, whether for houses or flats, there is no compensation back to the local authorities for what in effect they lose in terms of housing stock.

What is involved may indeed be the least desirable accommodation. If we accept the entitlement of people to claim the right to buy and if there is difficulty, as the Government have found, in encouraging people to buy flats in tower blocks, then the Government pretend their policy is more effective by giving greater and greater incentives. If the increase as a result of this policy is not much beyond 4 per cent., the Government will probably give away flats in tower blocks in order to show what a successful policy they have. That is certainly where this policy leads; I have no doubt that such a measure will be introduced if the percentage increase remains low. The problem for the local authorities remains the same. Those with the largest number of flats in constituencies and boroughs such as Southwark and the largest number of flats that are difficult to rent have the greatest problem in accommodating people in decent housing.

Since I first came into the House and subsequently, I have expressed my concern and scepticism about the present legislation. With each change the Government have made to the law, I believe they have added to the discounts without adding at all to the compensation for local authorities. My colleagues and I certainly will not be happy until the Government compensate by adding the money into the housing revenues of local authorities that they have been taking away in larger and larger proportions. I shall be interested to see what the figures produce. I urge the Minister to do something much more substantial for the housing needs of those who are not housed at all or who do not have decent accommodation rather than increasing to privatise blocks or parts of blocks of flats.

I support amendment No. 5 in principle. I appreciate the ridiculous conclusion the hon. Member for Eastbourne arrived at in his proper inquiries which clearly led him to the alley from which he is seeking to escape in his amendment. However, a matter of some technicality is involved in the question of the first occupant to exercise the right to buy in the block when there is no other empty property at all, but where it is still possible, given the wording of the amendment, for a valuation to be carried out properly. I appreciate that one can value as though a flat were vacant even when it is occupied, but I fear that there may still be a technical difficulty with the amendment. If that difficulty can be resolved and there are ways of getting a proper valuation, not only should that happen but the valuations should be in the public domain. I hope that the Revenue and the other people involved will respond to the concern expressed in this debate, giving proper information when Members of the House or other people seek it and not hiding behind matters of technicality and obscurity.

Mr. Rooker

The rubbish spoken by people outside after the Committee completed considering clause 1 only showed their ignorance in not even bothering to read the details of our proceedings. We had extensive debates on the difficulty of living in flats, whether deck access or tower block, not all of which are hard to let. There was a substantial difficulty with an imprecise Opposition amendment dealt with at the first sitting of the Committee, but I made it absolutely clear that the Opposition would not act in that way, with a simple alteration of the discount. We still believe that people will not buy what they cannot sell. That is the real issue, although, as my hon. Friend the Member for Norwood (Mr. Fraser) said, there are council blocks of flats on the Edgware road which have been sold piecemeal. with two-bedroom flats on the 16th floor selling at more than £50,000. Of course, London is always different from the rest of the country.

As I said on Second Reading, the Government could make the discount 90 per cent., and there would still be a problem. People would not be able to do what they wanted. The issue can be tackled in other ways, not just by piecemeal selling. However, we concur with the Government's approach to clause 1 because, technically, the clause is now meaningless in terms of its operation.

The hon. Member for Eastbourne (Mr. Gow) identified the difficulty of valuing a property on the open market. I appreciate the fact that district valuers face difficulties, in carrying out structural surveys of homes which are probably designated under the Housing Defects Act 1984. The problem affects many tens, if not hundreds, of thousands of our fellow citizens.

We do not want to hinder progress on this part of the Bill or, indeed, progress on the Bill as a whole, until we become party political shortly. The Government have tried to solve this problem of their defeat on clause 1. They were defeated because hon. Members on both sides of the House searched, blindly, for another way. They did not want simply to jack up discounts piecemeal. They wanted to improve housing for people living in flats, whether they rented or wanted to exercise the right to buy.

Mr. John Patten

I welcome the comments of the hon. Member for Birmingham, Perry Barr (Mr. Rooker). Some people did not understand the nature of the debate on clause 1. Anyone interested in it should read the debate in Standing Committee.

I am pleased that Government amendment No. 4 has been welcomed. I am particlarly pleased at the welcome given to it by my hon. Friend the Member for Northampton, North (Mr Marlow). To use his immortal words. "The Treasury has come up trumps." I shall pass on his comments to my right hon. Friend the Chief Secretary to the Treasury who sits with his little calculator in the Treasury looking for opportunities to add things up and, from time to time, to come up trumps. On this occasion, my right hon. Friend has certainly come up trumps, and we are grateful to him.

I made much in Standing Committee of the fact that we do not have any evidence. Lo and behold, from behind me came evidence that I did not have before of a particular problem. I was disturbed by what my hon. Friend the Member for Eastbourne (Mr. Gow) said. I was disturbed at the disgraceful delays in answering correspondence by the Liberal-controlled Eastbourne council on behalf of his constituents. Councils—whether Conservative, Labour or, as in this case, Liberal—should get on with the job of answering letters and looking after the people who live in their areas.

Mr. Simon Hughes

Not the council. It was the district valuer who delayed.

Mr. Patten

The hon. Gentleman should have listened more carefully to the comments of my hon. Friend the Member for Eastbourne. There were delays in answering letters from the council before the district valuer became involved.

Mr. Simon Hughes


Mr. Patten

The hon. Gentleman can read the account in Hansard.

I make no promises to my hon. Friend the Member for Eastbourne, but he has given me pause for thought. If he can spare the time to send me the evidence to which he referred, I shall consider further with my noble Friend the Minister of State whether we should make changes in the other place. That is not a pledge to do something in the other place. It is a pledge to look seriously at the evidence of my hon. Friend the Member for Eastbourne.

Amendment agreed to.

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