Housing and Urban Development Bill

HC Deb 03 November 1992 vol 213 cc152-250

Order for Second Reading read.

Madam Speaker

I must inform the House that between 6 and 8 o'clock I have no alternative but to limit speeches to 10 minutes as pressure to speak in the debate is considerable.

3.46 pm

The Secretary of State for the Environment (Mr. Michael Howard)

I beg to move, That the Bill be now read a Second time.

The principles underlying the Bill are those of choice, standards and opportunity: the choice and opportunity to own one's home; the right to decent standards for council tenants; and the opportunity to revitalise our cities. Those principles are at the heart of the Government's philosophy for housing and the inner cities.

Part I of the Bill fulfils our manifesto commitment that long leaseholders of flats and high-value houses should have the right to buy the freehold at a fair market price. That is a major step towards the removal of the landlord-tenant relationship, which has made the leasehold system so unpopular for more than a century.

Long leasehold is a form of ownership, comparable in most respects to freehold ownership, but it suffers from two drawbacks compared to freehold. First, a lease is a wasting asset. A new long lease costs virtually the same as the equivalent freehold, but its value declines inexorably as the term expires, which makes a lease increasingly difficult to mortgage and has knock-on effects on the property market and population mobility.

The second problem is that leaseholders are generally considered owner-occupiers, but legally remain tenants. In flats, control remains with the freeholder, but all the upkeep and insurance costs are paid by the leaseholder. The Consumers Association recently found that nearly half of all leaseholders reported serious problems with their freeholders, including difficulties in getting in touch with landlords; failure to carry out repairs; overcharging for services; and the misuse of funds.

Part I of the Bill seeks to deal with those problems. It must be sensible that the people with the greatest financial and personal interest in a property should have the right to control it.

Our proposals mark one more stage in the process of enfranchisement. Leasehold enfranchisement was considered as far back as 1884–85 by the Commission on the Housing of the Working Classes and by a Select Committee in 1886. The first Bill to seek to provide a right of enfranchisement was introduced in 1884.

A Conservative Government instituted the most significant reform of our land tenure system since the reforms of Edward I in 1290—the Law of Property Act 1925. The next step in the process was again taken by a Conservative Government when the Landlord and Tenant Act 1954, gave leaseholders the right to a statutory tenancy once the lease had expired, which helped leaseholders, but did not go far enough in giving them control. The Conservative party then promised enfranchisement in its 1966 election manifesto. Parliament subsequently accepted the principle in the Leasehold Reform Act 1967. That Act gave most long leaseholders of houses the right to enfranchise, but it did not tackle the problem of flats.

In 1974, the Conservative Opposition successfully moved amendments to increase rateable value limits and thus extend the scope of the 1967 Act for houses. We now believe that the time has come to extend the right to enfranchise to flat owners.

Dame Elaine Kellett-Bowman (Lancaster)

Does my right hon. and learned Friend agree that owners of houses and flats who wish to improve their property in ways that are entirely congenial with surrounding property are prevented from doing so by the lease owners, who oblige them to use the lease owners' surveyors and architects at considerable expense, plus VAT? Does he further agree that such alterations could easily be supervised under the existing planning laws?

Mr. Howard

I thank my hon. Friend for making that point, with which I agree, and she underlines the importance of not confining these rights to flat owners. For the reasons that I have given, chapter I of part I of the Bill gives most long leaseholders—I am dealing first with flats and will later come to the point made by my hon. Friend—the right to purchase collectively the freehold of their building.

Mr. Patrick Nicholls (Teignbridge)

I accept the principle and intent of the Bill, but my understanding of clause 5 is that it would give a head lessee on a low rent with a long lease the ability to enfranchise in a block which he owned, and that he could do that even though he was not the tenant of any of the flats in the building. I cannot imagine that it was ever the policy intent that a head lessee should be in that position. Will my right hon. and learned Friend confirm that that is so, and agree to consider the drafting of the provision in Committee?

Mr. Howard

My hon. Friend is broadly speaking right, and I have no doubt that we shall discover in Committee that there are many points where finely balanced arguments exist as to how we prevent anomalies of various kinds arising. My hon. Friend has alluded to one such difficulty. There are others, and they will be discussed extensively in Committee.

Mr. Jerry Wiggin (Weston-super-Mare)

Will my right hon. and learned Friend accept that one of the biggest anomalies is the question of fair compensation—he used that phrase—because it is now widely accepted that: when the deal is done—it is known as a marriage deal—there will be a substantial profit to the leaseholder at the expense of the freeholder? Surely Conservative party policy should not condone robbery. Will my right hon. and learned Friend examine the matter afresh in Committee or rename the measure the Building Societies (Robin Hood) Bill?

Mr. Howard

I am sorry that the first intervention with which I must disagree comes from my hon. Friend. I do not accept that the fair compensation clauses in the Bill do anything other than what they purport to do, which is to provide fair compensation. No doubt that, too, will be discussed exhaustively in Committee. The provisions of the Bill in that respect do not warrant the criticisms that my hon. Friend levelled at them.

Mr. Michael Jopling (Westmorland and Lonsdale)

rose—

Mr. Howard

I will give way to my right hon. Friend, but then I must make progress.

Mr. Jopling

Is the Secretary of State aware that many of his hon. Friends are astonished that the present Government, of all Governments, should be seeking to force people to sell their property and have freely made agreements broken by the will of the House? Is he further aware that many beautiful squares and streets in this capital city may no longer be maintained as they are? Will he bear it in mind that the concept of a fair market price, to which my hon. Friend the Member for Weston-super-Mare (Mr. Wiggin) referred, will be nothing of the sort and gives great offence to many of us?

Mr. Howard

My right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) raised several questions in that intervention. I have already replied to the point that he described as the most important. I do not accept his strictures and I ask the House to reflect on the fact that it is impossible to reform the law of property without affecting existing interests. If one accepts that, from time to time, reforms will be needed, one must also accept that that need will affect existing interests. I accept that it is important that any interests that are so affected should be the subject of proper compensation. I contend that the Bill provides for proper compensation. My right hon. Friend and my hon. Friend the Member for Weston-super-Mare clearly take a different view and the details of that matter will no doubt be canvassed at considerable length in Committee.

As I was saying a considerable time ago, chapter I of part I gives most long leaseholders of flats the right to purchase collectively the freehold of their building. To qualify, flat owners must have a long lease—with an original term of more than 21 years—at a low annual rent in a building in which at least two thirds of the flats are let on long leases. A majority of at least two thirds of those qualifying leaseholders must agree that they wish to enfranchise. Properties in which more than 10 per cent. of the floor area is in commercial use, and conversions of four or fewer flats with a resident landlord, will be excluded.

Chapter II gives long leaseholders of flats in properties that are not eligible for enfranchisement, because, for example, less than two thirds of the flats are on long leases or more than 10 per cent. is in commercial use, an alternative individual right to extend their leases for a 90-year term at a peppercorn rent. That will tackle the problem of diminishing leases.

Chapter III extends the right to acquire the freehold to those living in higher value houses. When those in flats, regardless of value, and those in the vast majority of houses have the right to enfranchise, I do not believe that we can justify the anomaly of excluding high-value houses.

As for compensation, the leaseholders will pay a fair market price for their landlords' interest. That will comprise the investment value of the freeholder's interest in the block plus at least 50 per cent. of the so-called "marriage value"—the extra value that comes about from bringing the freehold and leasehold interests together into one set of hands. Leaseholders will, in addition, pay all reasonable legal costs incurred by the freeholder.

That is a much more equitable basis than that which the Labour Government used in 1967 for houses with low rateable values. I therefore hope that both sides of the House will welcome this extension of freedom and choice to another substantial sector of home owners.

Concern has been expressed—indeed, my right hon. Friend the Member for Westmorland and Lonsdale expressed it a few moments ago—about the proposals' "heritage" implications for some of the fine areas of central London. That is why chapter IV of the Bill provides for landlords to apply to the leasehold valuation tribunal for the approval of an estate management scheme. A scheme will be approved and registered as a local land charge if it is in the general interest that an estate should retain powers of management in an area to maintain the appearance and amenity, and regulate development of that area. I know that many large estates have traditionally managed whole areas in London and elsewhere to high standards. The provision will ensure that they can continue to exert that benign influence.

The public sector housing provisions contained in part II of the Bill—

Mr. Nick Raynsford (Greenwich)

Before the Minister leaves part I, and as he has not mentioned commonhold, will he explain why it is not mentioned in the Bill? Does he recall that, more than a year ago, the Minister for Housing and Planning gave a clear pledge that a Bill to introduce commonhold would be introduced as soon as parliamentary time allowed? Why has that not happened?

Mr. Howard

The position is entirely as explained by my hon. Friend some time ago. A provision will be introduced to establish commonhold as soon as parliamentary time permits.

Mr. George Howarth (Knowsley, North)

Does the right hon. and learned Gentleman consider this Bill an appropriate vehicle in which to bring in commonhold?

Mr. Howard

No. The responsibility for commonhold rests with my right hon. Friend the Chancellor. No doubt in due course such provisions will be introduced, but time does not permit that now.

Part II of the Bill contains the public sector housing provisions and the rent-to-mortgage scheme. The right-to-buy provisions have been one of the major achievements of the Government. The right to buy has enabled nearly 1,500,000 tenants to become owner-occupiers since 1979. It has irreversibly changed the perceptions of tenants about the choices that should be open to them. The opportunity to own a home is one that we now intend to extend to a further group of public sector tenants through the rent-to-mortgage scheme.

Mr. Cynog Dafis (Ceredigion and Pembroke, North)

The Government have presented the right to buy as a matter of high principle, but it is not a principle which is universally applied. Before 1988 the vast majority of people in social housing had the right to buy because they were secure tenants, but since then, with the advent of private finance in the social housing category, a new group of assured tenants has been created, and assured tenants do not have the right to buy. Does that show that the introduction of private finance is a higher principle for the Government than the right to own; or does it show that the main purpose of the right to buy has in practice been to undermine the role of district councils as providers of social housing?

Mr. Howard

No, I do not share the hon. Gentleman's conclusions. We need a balanced approach to the provision of social housing. It is extremely important that we encourage the private sector to make its contribution to that provision. The housing association movement, together with the private sector finance which it has so successfully levered into the provision of social housing, has an important part to play.

Under the rent-to-mortgage scheme, tenants will be able to buy their homes by spending the same amount on a mortgage as they do on rent. The sum that would have been rent will finance a mortgage for an initial payment with which a tenant can buy his home. The balance of the purchase price will be covered by an equity mortgage from the landlord. It will not have to be paid off until the purchaser sells up and moves. The rent-to-mortgage scheme will therefore give tenants the chance to buy their own homes without increasing their outgoings.

Mr. Tony Banks (Newham, North-West)

The Secretary of State will be aware that local authorities own considerable amounts of accumulated capital receipts which the Government prevent them from spending on new build. Given the calls for a boost to the economy, especially to the construction industry, and the problem of homelessness, may we look forward to some good news soon about the use of those capital receipts?

Mr. Howard

I hope that that intervention from my hon. Friend—[HON. MEMBERS: "Hon. Friend?"] I apologise to the hon. Gentleman. I am sure that I am right to beg his pardon in this instance. In any case, I hope that his intervention shows that he accepts the proposition expressed so emphatically by the present leader of his party during the last election campaign: that questions of the release of capital receipts have considerable macro-economic implications. They must always be taken into account when assessing the extent to which receipts can be released, and the matter will continue to be examined in the context of its macro-economic implications.

Mr. Clive Soley (Hammersmith)

Will the Minister give way?

Mr. Howard

I will give way to the hon. Gentleman, who was so conspicuously sat upon during the election campaign by the leader of his party when he ventured to step out of line on the issue of capital receipts.

Mr. Soley

I have been following the Minister's trips around the country when he has mentioned this incident, but he gets it consistently wrong. It did not take place during the election and it was not about capital receipts. It was about whether talks had taken place to bring the public sector borrowing requirement definition in the United Kingdom into line with the European definition. We want to know whether under article 105 of the Maastricht treaty the Government have already brought the PSBR into line with the European definition. If they have, does it mean that they can distinguish much more clearly now between capital and revenue investment?

Mr. Howard

Article 105 is not yet in force. The hon. Gentleman will have to wait a while before we come to deal with that sort of definition in the way in which he has suggested. It is undoubtedly the position—I understand the hon. Gentleman's sensitivity—that the intervention that he made on this matter during the election campaign and the implications for the public sector borrowing requirement of the treatment of capital receipts turn on the point that I made earlier. He had promptly to disown his intervention in the campaign, for which he had to apologise at the insistence of the present Leader of the Opposition. Those are the facts. I think that I must now press on.

Mr. Simon Hughes (Southwark and Bermondsey)

rose—

Mr. Soley

rose—

Mr. Howard

I shall give way to the hon. Member for Southwark and Bermondsey (Mr. Hughes).

Mr. Hughes

The Secretary of State made an important point about the financial consequences for those who avail themselves of the rent-to-mortgages scheme. He said that they would not be worse off in terms of their outgoings. He will be aware that one of the major complaints of those who purchased under the right-to-buy scheme is that they have been saddled with excessive and unexpected capital or service charges. Can he give an undertaking that while the Bill is passing through the House he will deal with the concern of local authorities that do not have money to carry out repairs and the concern of those who bought under the right-to-buy scheme who find that they cannot keep up their payments because of bills that they never expected to have to face?

Mr. Howard

There are safeguards in the provisions, as I think the hon. Gentleman will accept. It will be made clear to anyone who contemplates taking advantage of the provisions that we are discussing that exercising the right to buy involves greater responsibility for the cost of repairs. That is an important matter and something which anyone who is contemplating taking the step will need to take into account.

As I have already said, we remain committed to the extension of home ownership. We fully recognise, however, that individuals who remain tenants in the public sector have the right to expect high-quality service from their landlord. Part II therefore also contains important new measures for them. Public sector tenants have the right to improve their own homes and to invest in them. They have the right also to expect a decent level of service from their landlord.

The citizens charter promised to examine the existing right to repair. We want to simplify and strengthen procedures for the most urgent types of minor repair affecting health, safety or crime prevention. The Bill introduces powers to establish a new right of repair. Tenants will have the right to get urgent minor repairs carried out quickly and with a minimum of bureaucratic complication where their local authority has failed to undertake them properly. I believe that this will make a real difference in meeting the problems that public sector tenants encounter in their daily lives, which most often cause the deepest frustration. I believe that it will be a significant improvement.

Mr. Peter Shore (Bethnal Green and Stepney)

I welcome the Secretary of State's remarks about the rights of public sector tenants. I want to ask him about a group of tenants who appear to have been omitted from the Bill. I refer to tenants who are covered by housing action trust schemes.

As the right hon. and learned Gentleman knows, there has been much unhappiness among potential HAT members about the lack of any guarantees that at the end of the operation of an HAT the tenants will have the right to opt for a return to a local authority landlord. Further, there are worries about whether local authority landlords would have sufficient money available to them to buy back the properties concerned if they wished to do so. As I understand it, strong guarantees are being given by Ministers, particularly by the Minister for Housing and Planning, that as soon as an opportunity arises these matters will be taken on board and made the subject of legislation. Will the right hon. and learned Gentleman promise us that he will at least consider amendments along the lines that I have indicated?

Mr. Howard

The short answer to the right hon. Gentleman's question is yes. When I was Minister for Housing almost three years ago I first gave the undertaking to those who became tenants of housing action trusts that they would have the right to revert to council ownership, should they so desire, at the end of the HAT period. Those undertakings have been repeated by my hon. Friend. It would be appropriate, as I understand it, to amend the Bill to provide statutorily for the right to which the right hon. Gentleman referred.

Very often, tenants of local authorities spend their own money improving their home. In our manifesto, we said that we believe that it was right that they should have some compensation for that expense if or when they eventually moved away. Clause 109, therefore, provides for a scheme to be established to enable secure local authority tenants to claim compensation for home improvements. Tenants will, I am sure, welcome this further encouragement to develop more of a stake in their property.

I come now to our proposals on the delegation of housing management. Our purposes here are twofold. We want to pave the way for the introduction of competitive tendering as a spur to efficiency in housing management, and we want to give tenants real and direct influence over the management of their homes. Local authorities should have nothing to fear from competitive tendering. Where they are best able to provide the services, the competitive framework will enable them to continue to do so, but where those services can be better provided by others it must be in the interests of tenants that they should be. However, as we have always emphasised, compulsory competitive tendering must go hand in hand with an enhanced role for tenants. The present tenants' veto power on management delegation is no longer relevant in a competitive framework.

Mr. Jack Straw (Blackburn)

Why?

Mr. Howard

I shall tell the hon. Gentleman why, if he will contain himself.

In its place, local authorities will have new obligations to consult their tenants fully on the way in which their homes are to be managed. Tenants will also have a new role in monitoring the performance. Some tenants, however, may want to go further. Our Bill therefore provides a new right to manage for tenant organisations. Local authorities will be required to pass over the management of estates to tenant organisations, where tenants are able and willing to take it on. The proposals thus represent the most important extension of the rights of tenants to influence the management of local authority housing ever put before the House.

Mr. Eric Clarke (Midlothian)

As a Member of Parliament who represents a Scottish constituency, may I ask whether this legislation covers Scotland? I thought that the tradition was that changes to the law affecting Scotland were normally the subject of a Scottish Bill. Changes to the law affecting Scotland have been tagged on to the end of this Bill. Is that normal, is it a run-of-the-mill procedure, or is it a change of policy by the Government? Will matters affecting Scotland be tagged on to the end of all Bills, or is it a question of doing away with the Scottish Office altogether?

Mr. Howard

It is none of those things. It is a perfectly normal practice. Scottish provisions are entirely integral to the Bill as a whole and form an important part of it. I shall be saying a word or two about the Scottish provisions in a few moments.

Mr. Raynsford

On the compulsory competitive tendering issue, and tenants rights, it is important that the Secretary of State should be reminded of the answer that he gave to me only last week. He was asked, in anticipation of this issue being raised, how many tenants were consulted by the Government about their proposal to introduce compulsory competitive tendering. The answer was very simple—none. Will the Secretary of State please tell the House why there was no consultation whatsoever with tenants if, as the Government claim, they are supposedly acting in the tenants' interests?

Mr. Howard

The hon. Gentleman overlooks in his question the fact that the proposals as a whole were put out to consultation. It was open to absolutely anyone to reply to that consultation in the course of that exercise, and many organisations did so.

Mr. John Denham (Southampton, Itchen)

Can the Secretary of State tell us during the debate how many of the tenant organisations that responded to the document on compulsory competitive tendering said that they were in favour of its being a compulsory principle that should apply to all local authorities? I am still a member of Southampton city council, an authority whose housing management was judged by the Government last year to be well ahead of the field. Is the Secretary of State aware that preparation for CCT is enormously expensive and that that expense falls, in the largest part, on local authority tenants? How can he be so confident that it is right to place that cost on local authority tenants who, as yet, have shown no interest in their local authority being forced to put its services out to tender?

Mr. Howard

Because local authority tenants will benefit from the savings of compulsory competitive tendering. That is the short answer to the hon. Gentleman.

We are also using this opportunity W ensure that local housing authorities can provide the full range of welfare services to tenants who have special needs and to enable them to account for the cost of those services in their housing revenue accounts if they wish. These powers are being taken urgently following a recent Court of Appeal judgment that called into question the legitimacy of such provision. They are designed to avoid disruption to the delivery of the welfare services on which tenants with special needs depend so heavily. They will be introduced on Royal Assent and will apply retrospectively to protect authorities from further challenge.

Clauses 118 and 119 of the Bill will restore a power to contribute to loan charges arising from expenses incurred by local authorities before 1 April 1989 in assisting owners of defective housing. This power was inadvertently repealed by the Local Government and Housing Act 1989. The intention is that local authorities should be reimbursed the full amounts that would have been due to them if the former power had not been repealed.

In summary, the housing parts of the Bill are designed to give greater control of homes to the people who live in them, by enfranchisement, choice of purchase or a greater say in the management of their property. I know that millions of householders will welcome that extension of their right to choose.

Chapter II of part II contains provisions on housing in Scotland. I am sorry that the hon. Member for Midlothian (Mr. Clarke), who asked a question a moment ago, did not wait for me to deal with Scotland. Most of the chapter's provisions stem from commitments in the tenants charter for Scotland and several of them mirror provisions that I have described for England and Wales. Taken together, they will strengthen and improve quality and choice in housing for public sector tenants in Scotland.

Mr. John Maxton (Glasgow, Cathcart)

It is rather strange that we are debating a major part of a Bill relating to Scotland, yet no Scottish Office Minister is on the Bench. The rent-to-mortgage scheme has been in operation in Scotland for some time. Local authorities have sold houses to Scottish Homes, whose tenants have been able to convert their rents to mortgages. How many tenants in Scotland have taken up the opportunity of this scheme?

Mr. Howard

An encouraging number of tenants in Scotland have taken advantage of the proposals. I am sure that the hon. Gentleman, who is clearly bursting with enthusiasm to serve on the Standing Committee which will consider the Bill, will have an opportunity to explore the matter in great detail with the Scottish Office Minister who will be a member of the Committee.

Mr. Straw

Will the Secretary of State confirm that he has not the first idea how many tenants have taken up the offer in Scotland, and that of the total of 110,000 tenants eligible to apply only 200 have done so?

Mr. Howard

The news from the front is indeed encouraging and should reinforce the House in its determination to treat any quantified estimate of the hon. Member for Blackburn (Mr. Straw) with much caution. To the end of September, the number of tenants in Scotland who have bought under these provisions is not 200, as he suggested, but no fewer than 544—more than 100 per cent. higher than he suggested. I am sure that the House will remember the inaccuracy of the hon. Gentleman's claim when he makes similar claims in future, as he doubtless will.

I turn now to part III of the Bill. There are 150,000 acres of vacant land in the towns and cities of England. Added to that, there is land outside urban areas which has been left derelict by mining or by other industrial uses.

There are many reasons for that desperate waste of a scarce national resource. Industrial and urban change—often desirable in its own right—can leave physical scars. Land is often difficult to assemble in crowded cities. Ownership may be fragmented and uncertain. Infrastructure and access may need to be improved.

Whatever the cause of the problem, we cannot afford the waste it represents. Our cities need land for houses. They need land for shops and places to work. They need open space and a good environment if they are to be pleasant places in which to live. Only then will they attract the life and investment so vital to their regeneration.

The urban regeneration agency to be created by part III will be given the task of bringing that vacant and derelict land back into use. It will focus on the reclamation and regeneration of land, but it will operate very much with its eye on the impact of that land on the wider regeneration of the area.

Mr. Simon Hughes

Does the Secretary of State accept that one of the lessons of urban development corporations is that although development is a good idea, if we do not set out in legislation in whose interests the development should take place, the normal result is that it does not take place in the interests of the local resident population or of the local work force? May we please make the objects of the agency such that in future in areas where there are to be urban redevelopment programmes, local people and employment for local people come first?

Mr. Howard

I do not accept the hon. Gentleman's point. The extent to which the objects of an urban development corporation or of an urban regeneration agency can be achieved in the interests of local people depends significantly on local people themselves and on the part that they are prepared to play. If, for example, a council such as the London borough of Southwark turns down the offer of a place on the urban development corporation operating within its area, the input of the local authority into the workings of the corporation will be far smaller than might otherwise have been the case. That is the way in which these matters can best be dealt with.

Mr. Simon Hughes

rose—

Mr. Howard

I have given way twice to the hon. Gentleman, so I hope that he will forgive me for not giving way to him again.

Mr. Anthony Steen (South Hams)

As my right hon. and learned Friend knows, for 14 years I have pioneered the Conservative campaign to involve the Government in getting rid of some of the public vacant land which exists in many of our towns. I congratulate the Government on responding after 14 years.

May I have two undertakings this afternoon from my right hon. and learned Friend? First, I hope that he will involve the private sector in a big way in providing the additional money because, as I understand it, there is no additional money coming from the Government. Secondly, will he consider issuing a directive that land that is vacant, derelict and dormant in the public sector should be utilised first for housing before using the green-field sites outside the urban areas for housing development? In that way, we would give a priority to filling in the urban areas before we destroyed the green fields outside.

Mr. Howard

I pay tribute to my hon. Friend for his long campaign and for his undoubted work over a substantial period to encourage the Government to take action in those matters. On his two specific points, I certainly confirm that the urban regeneration agency will give great priority to the levering in of private sector finance. The record of UDCs in making use of private sector finance is second to none. The URA will certainly want to continue in that tradition. I am sure that the URA will have an important part to play in achieving the objective of using urban land to make it less necessary to use open land in the countryside for development.

Mr. David Trimble (Upper Bann)

Does the Secretary of State accept that the problem of blighted and underused land is not exclusively confined to England but besets other parts of the kingdom, too? Will the right hon. and learned Gentleman be recommending to his colleagues who have responsibility for other jurisdictions within the kingdom that they adopt similar measures?

Mr. Howard

I am sure that my right hon. and learned Friend the Secretary of State for Northern Ireland shares the objectives that we seek to achieve through the Bill in England, and will consider the most appropriate way of achieving them in Northern Ireland.

Mr. Hartley Booth (Finchley)

I welcome part III of the Bill, which deals with a matter on which I have campaigned for some time. Does my right hon. arid learned Friend recognise that urban regeneration is a long-term process, and will he give the agency freedom from Treasury restrictions so that it can use money as patient money—money invested now at no interest to give returns in the long term?

Mr. Howard

It would be a little rash of me to give my hon. Friend the assurance that he seeks in quite the terms that he asks. I pay tribute to the work that he, too, has done on these matters, particularly before entering the House. I freely acknowledge that, and I have no doubt that we shall want to consider carefully the points that he has raised. I hope that he will forgive me if I do not give him quite the assurance that he seeks.

The agency will take over three separate land-related programmes—English Estates, derelict land grant and city grant. Those initiatives already have many successes to their credit. For example, since 1980, £28 million of derelict land grant has helped to reclaim the 180 hectare site of the former iron and steel making works in Corby. Half a million square metres of floorspace have been constructed and nearly 15,000 new jobs have been created. The £7 million contribution made by English Estates to a joint venture with ICI at the Belasis Hall technology park in Billingham has brought much-needed white collar and service industry employment to Teesside.

Mr. Michael Bates (Langbaurgh)

Will my right hon. and learned Friend give way?

Mr. Howard

In a moment.

A £7 million city grant in support of four projects at the heavily contaminated Round Oaks steelworks site in Dudley attracted nearly £30 million-worth of private sector investment.

I give way to my hon. Friend the Member for Langbaurgh (Mr. Bates), who speaks on these matters for Teesside.

Mr. Bates

Has a decision yet been reached on the location for the headquarters of the new urban regeneration agency? If not, may I wholeheartedly commend to my right hon. and learned Friend the north-east of England—and Teesside, in particular—as a shining example of what can be achieved by Government-sponsored urban regeneration programmes?

Mr. Howard

No decision has yet been made about the headquarters of the agency, but On this, as on all other matters, before taking a decision, we shall listen carefully to my hon. Friend's powerful voice for Teesside. My hon. Friend is absolutely right about the example that Teesside provides.

The urban regeneration agency will build on the successes that I have described. It will be able to support the whole process of reclamation and development of vacant and derelict land. It will be a single point of contact and will have the powers and ability to see the job through from start to finish. It will be a body with the skills to maximise the potential of the schemes that are put to it and to seek out new opportunities of its own. It will be a centre of expertise for all those involved in land reclamation and development.

We consulted on the agency over the summer and received wide support for the principle of our proposals.

Mrs. Helen Jackson (Sheffield, Hillsborough)

Will the Minister give way?

Mr. Howard

No. I must make progress, or I shall be accused of taking far too long.

Of course, the consultation exercise also raised some points of concern. Some in local government feared that they would be marginalised by the URA. Let me assure the House that I intend the agency to work hand in hand with local authorities. We are already receiving requests from local authorities for the agency to work with them. I will want the agency to work with willing partners wherever possible. I hope and believe that that will be the norm.

Many of those who responded to the consultation exercise stressed the importance of existing derelict land grant and English Estates programmes outside urban areas. For instance, much of the present work of derelict land grant falls within coalfields and other former mining areas. The agency will have to establish its priorities in the light of guidance to be issued to it, but the Bill will allow it to operate on vacant, unused, derelict and contaminated land outside urban areas.

The agency will operate at all times within the framework of the planning system and planning policy guidance. The local authority will normally retain full planning powers. However, it is important that an obstructive local authority is not able to prevent the agency from tackling an important area of dereliction. That is why the Bill enables me to designate areas where the agency will possess development control on the UDC model. Designation orders will be subject to parliamentary scrutiny. Within those areas, the URA will still work within the framework of the planning system and will be expected to take account of local authorities' development plans and regional planning guidance unless there are very good reasons for doing otherwise.

The House will already be aware that Lord Walker of Worcester is to be the first chairman of the agency. I can think of no better person to oversee that work. He has long experience of urban renewal and a track record that is second to none. I am confident that under his guidance the agency will get to work quickly with local authorities and the private sector to bring forward imaginative new schemes for regeneration and renewal.

I said at the outset that the Bill was about choice, standards and opportunity. It gives 550,000 owners of leasehold flats and houses the choice to buy their freehold. It gives 1.5 million council tenants a new choice to buy their homes. It also gives them and the remaining 2.5 million tenants the right to decent standards of repairs, management and maintenance. It brings new opportunities to those living in our deprived urban areas. I commend the Bill to the House.

4.31 pm

Mr. Jack Straw (Blackburn)

Britain today faces a worse housing crisis than at any time since the immediate aftermath of the second world war. There is record homelessness, record repossessions, record bankruptcies of building firms, record numbers of building workers on the dole and record numbers of families trapped in homes worth less than they paid for them. There is record and rising demand for affordable homes to rent and a record and dramatically falling number of homes being built for rent. There is also a record slump in public investment in housing which has been slashed from its level 13 years ago by more than 50 per cent. in real terms—by £6,000 million a year—as a deliberate act of Tory policy.

That is the worst housing record of any Government in living memory and it contrasts starkly with the speech of stupefying complacency and supercilious self-congratulation that we have just heard from the Secretary of State.

The Government have neither the ideas nor the will to match the needs of the moment and the Bill shows why. It has 162 clauses, 21 schedules, 234 pages, 130,000 words, but not a single line in the Bill will build a single home. Not a single subsection will house a homeless family. Not a single section will lead to a revival of the housing market or put a single unemployed craftsman back to work.

The Bill speaks volumes for the poverty of imagination of the Secretary of State and his Government. It is therefore first a tragically missed opportunity and that alone would be reason to vote against Second Reading. However, there is worse in the Bill. In the doctrinaire pursuit of the privatisation of council housing management, the Bill takes away a central right of tenants to choose who should manage their estates.

Under the provisions of the Housing Act 1985, which was passed, by the way, by the Government, tenants had the categoric right to veto changes in the management of their homes. Section 27 of that Act states that the Secretary of State shall not give his approval to a change of management if a majority of tenants of the houses to which the agreement relates do not wish the proposal to proceed. That provision has meant that tenants' ballots have had to be held on any changes of management. If the tenants have voted against, their will has prevailed.

Under the Bill, those rights of ballot and of veto are to go—abolished by the Secretary of State. In their place, as we heard from the Secretary of State a few moments ago, comes a piece of condescending gobbledegook by which tenants will be informed of any change of housing management and can then make known to the authority their views on the proposed changes. But there will be no ballot and no veto.

The reasons for the removal of those rights of ballot and of veto are simple if chilling. In housing, as in virtually every other aspect of government, the Conservative party has only one policy—privatisation. It does not matter if the prescription is completely inappropriate if it leads, as with the Secretary of State's former pet scheme, water privatisation, to higher charges and prices. It does not matter if the privatisation leads to the loss of thousands of jobs and the destruction of scores of mining communities, as happened with electricity privatisation. It does not matter if the privatisation will ride roughshod over the wishes of the people in whose name it is supposed to be carried out—the tenants—as it will with the scheme in the Bill.

For the Tory party, privatisation has become a god. Privatisation now comes before all—before common sense, before financial probity, and certainly a long way before tenants' rights.

Nothing is to get in the way of yet another seedy scheme of privatisation from the Secretary of State. As we can see from his speech, the Secretary of State is very sensitive to the charge that he is taking away tenants' rights, but he has had precious little to say in explaining why he has done that. In the press notice which he issued on the Bill he did not say a word about what he was doing to tenants' rights. Instead, he left it to his officials who put out what was rather hopefully described as a factsheet which blithely claimed that the tenants power of veto over the delegation of housing management was "inappropriate". Given that explanation, I pressed the Secretary of State on why it was inappropriate. I wrote to him. When he replied, the Secretary of State explained in some detail how the system of contracting out would work. He went on to say: In the circumstances I am sure that the vast majority of tenants will see the continued existence of an obligation to consult tenants by ballot as no longer relevant. What arrogant, arrant nonsense from the Secretary of State. How can he be certain if he is not going to allow tenants to express their will? As my hon. Friend the Member for Southampton, lichen (Mr. Denham) claimed, is he not aware that overwhelmingly the tenants' associations which commented on the consultative document have opposed the loss of their right of veto? If the Secretary of State is as sure as he claims in that letter, why does he not trust the tenants and ask them by ballot in the only certain way of finding out? Why indeed is the Secretary of State yet again treating council tenants as second-class citizens? Under the Bill, private leaseholders are to be given the right to choose who should manage their blocks of flats at exactly the time that the same right is to be removed from council tenants.

I will tell the House why the Secretary of State is taking away the right of tenants by ballot to choose who should manage their estates. He will not let tenants vote because he knows that his schemes for the privatisation of council house management are so inherently unpopular that they would be rejected across the country in one ballot after another on one estate after another.

I spoke about the record of the Secretary of State. There is another record that the Secretary of State will achieve by the Bill. Along with water privatisation and the poll tax, he will go down as the Conservative Minister who took away tenants' rights, and we shall not let him forget it.

Let me turn to the issue of right to repair. No. 6 of those oxymoron, Department of the Environment "factsheets", attempted to explain away the loss of tenants' rights. Factsheet No. 3 in the same series tries but fails to give details of the new right to repair which, as the Secretary of State said, is another feature of this Bill. Everyone—hon. Members, councillors, and, above all, tenants themselves —has every right to expect a high standard of repair service and speedy remedies if things go wrong. That is not at issue. What is at issue is whether the Government have the remotest notion of how to achieve that shared and laudable end, and whether the right to repair in this Bill will be anything more than yet another ill-thought-through proposal which fills a page in the citizens charter but helps scarcely a single tenant.

The House, after all, has been here before. In 1983—

Mr. Maxton

That is right.

Mr. Straw

My hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) has a long memory and he says that that is right. He will remember this—he spoke in the debate.

In 1983 Ministers introduced a right to repair into the Housing and Building Control Bill, with a fanfare of publicity and many overblown claims. I notice that the Minister for Housing and Planning is looking sheepish about this, and well he might, because when we complained, in the words of my hon. Friend the Member for Islington, South and Finsbury, that the then scheme was "half-baked", the then Under-Secretary responsible for housing—and, my word, how he has risen up the scale in the nine years since—none other than the hon. Member for Ealing, Acton (Sir G. Young), now the Minister for Housing and Planning, sought to rubbish our criticisms of the scheme by doubting the commitment of some Opposition Members to the concept of a right to repair scheme."—[Official Report, Standing Committee B, 10 November 1983; c. 601.] Yet we were right and he was wrong.

Three years after the introduction of this much-vaunted scheme and after £40,000 had been spent on publicity for the scheme—most of it in the run-up to the 1987 general election, by some strange coincidence—just 75 tenants had received £7,300 compensation under the scheme. It was, in other words, a dead duck. The scheme has been such a failure that Ministers have even stopped collecting figures on it.

Mr. Maxton

In Scotland the position is even worse than that because there the Government introduced the legislation with secondary legislation required to bring it into force. So far the statutory instruments required to bring the legislation into force have not been laid.

Mr. Straw

I am grateful to my hon. Friend for pointing out that, as always, the situation in Scotland is worse than that in England, not least because in Scotland there is a form of imposed colonial administration on the good Labour voters there.

Mr. Clive Betts (Sheffield, Attercliffe)

Reference has just been made to the attitude of Opposition Members to the right-to-repair legislation in 1983. Is my hon. Friend aware that at the same time, when consulted, the local authority associations, both Conservative and Labour, both the Association of Metropolitan Authorities and the Association of District Councils, told the Government that they supported the principle of the right to repair but that the scheme would not work? They offered a scheme which was one page in length compared with the Government's 16 pages, and they simply said that the tenants would not understand it. Will my hon. Friend reflect on whether the Government this time round are doing more to consult local authority associations or take any more notice of them than they did on the last occasion?

Mr. Straw

I am sorry to disappoint my hon. Friend, but they are a bit like the Bourbons: they learn nothing and they forget nothing, these Conservatives. There is no evidence whatever that the Minister, for example, has learnt anything from his past mistakes.

As my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) said, my hon. Friends at the time quoted at length what the local authority associations on both sides were saying and gave extensive examples of how the Government's proposals for a right-to-repair scheme would not work. At every stage the Minister for Housing and Planning, then the Under-Secretary, dismissed our complaints and amendments and said that his scheme would work. It worked as an excuse for publicity for the Tory party, paid for by the taxpayer, prior to the general election, but it worked in no other respect and it has flopped.

Mr. Jonathan Evans (Brecon and Radnor)

I wonder whether the hon. Member for Blackburn (Mr. Straw) would at least concede that there would be no need for Parliament to legislate on the right to repair if his friends in local government repaired the housing in the first place?

Mr. Straw

If life were perfect, there would be no need for this place to be here, and no need for the Tories to be here. Of course we need schemes to remedy problems when they arise, and that is not an issue between the sides, but our objection to the scheme that the Under-Secretary brought forward, with the full approval of Government Members, in 1983 was that it would not work; and we are at least as sceptical on this occasion about whether this scheme will work.

Mr. Mike Hall (Warrington, South)

Will my hon. Friend agree with me that one of the reasons why right-to-repair schemes will not work is that they are not backed up by the necessary revenues in the housing investment programmes which the Government have cut year on year, and that is one reason why we have all the problems that are being mentioned today?

Mr. Straw

My hon. Friend is right. In my judgment and experience, it is Labour authorities that deliver a decent repair service, and Conservative authorities and private landlords represented by Tories who deliver a lousy service.

Mr. Charles Hendry (High Peak)

rose—

Mr. Straw

No. I have just taken five interventions on the trot, so the hon. Gentleman must excuse me.

In the factsheets that the Department of the Environment officials dished out when the Bill was published, there is in every other factsheet describing the measures in the Bill a section entitled "How will the scheme work?", but there is no such section on the right to repair, explaining how this scheme will work, so the answer to my hon. Friend the Member for Attercliffe is that I do not know how the new scheme will work and I doubt very much whether Ministers themselves know how it will work. But I warn the Ministers that from what little we have been able to glean it looks as though the scheme could turn into a bodgers' charter, with unending scope for argument between tenant, council and contractor, and plenty of opportunity for the scheme to become a nice little earner for unscrupulous contractors working in concert.

Let me give one example on emergency repairs. Under the scheme each tenant must be sent a work order form along with a list of approved contractors who can be contacted if the job cannot be done in a specified time. But how will this improve the standard of service for emergency repairs where a 24-hour service is required? Who will issue this work order form in the middle of the night when the water is gushing down the stairs? How long must the tenant wait before getting another contractor out of bed —two hours or 24?

The 1983 scheme was abandoned because it was, in the words of the consultative document, excessively bureaucratic and had a low take-up". But how will this scheme be any less bureaucratic than the one it replaces?

Turning to the question of rents to mortgage, there is perhaps no better example of the irrelevant, not to say perverse, priorities of the Government than the proposal for a rents-to-mortgage scheme at this time. With thousands of people facing repossession, why has not the Secretary of State come forward not just with a rents-to-mortgage scheme but with an effective mortgage-to-rents scheme of the kind that we in the Labour party have proposed so that owners about to be thrown out of their homes can convert their tenure to a rental one during the recession?

We have heard many claims about the right to buy. The Secretary of State did not say that the right to buy is virtually non-existent at present; the number of people seeking to buy homes at present has dwindled to 17,000 in the first half of this year.

Mr. George Howarth

They would like the right to sell.

Mr. Straw

As my hon. Friend the Member for Knowsley, North (Mr. Howarth) says, what former tenants would like is the right to sell rather than be trapped in the homes that they once wanted to buy.

Given the collapsed state of the housing market and the large number of low-income purchasers in serious difficulties, we must question whether now is the time to launch the scheme nationwide. Compared with renting, the rents-to-mortgage scheme that the Secretary of State suggests offers a very poor deal for the tenants. Rents-to-mortgage purchasers will not have repairs done by the council, will have to pay for their own buildings insurance, and will be ineligible for housing benefit, but they will face repossession if they do not keep up with their payments. This scheme will only potentially be of interest to those tenants who cannot afford to buy their homes under the right-to-buy scheme. The Secretary of State is attracting people to take on financial responsibility from exactly those groups who ought to be counselled against the idea of purchasing their own home at a time of such financial uncertainty.

As my hon. Friend the Member for Cathcart and I pointed out to the Secretary of State, where the scheme has been piloted it has not been a success. The Secretary of State had better ask his officials for another billet doux. I can tell him, however, that 5,000 sales were predicted under the scheme in Scotland, with 1,000 occurring in the first year; only 200 were achieved. I can also tell him that, according to parliamentary answers, £800,000 has been spent by the Scottish Office—mostly before the election, surprise surprise—on publicising the scheme: £4,000 was spent for each sale. That is a disgraceful example of the Conservative party's use of taxpayers' money to publicise party-political propaganda.

The scheme has not been a success in England, either. In Milton Keynes, just 67 sales have been completed; in Basildon, in my home county of Essex, just 264 of the 6,000 eligible tenants applied to take part in the scheme. Only 39 have completed sales. I should have thought that, given the scheme's palpable failure in England as well as Scotland, the Secretary of State would devote his time and resources to a rather more important way of reviving the housing market.

The proposals for leasehold enfranchisement take up well over half the Bill. The Secretary of State treated us to an interesting historical ramble, from Edward Ito the Law of Property Act 1925, which is burnt on the brain and breast of everyone who has ever had to take law exams. He was, however, his usual disingenuous self when he implied that the Conservatives were in power in 1967. It was the Labour party that steered through the 1967 legislation giving leaseholders of houses the right to buy their freeholds. As we saw from the display on the Conservative Benches, it did so in the face of intense opposition from Conservative Members who represent the landed interest in the House.

I am sorry to sec that the right hon. Member for Westmorland and Lonsdale (Mr. Jopling) and the hon. Member for Weston-super-Mare (Mr. Wiggin), who opposed the Secretary of State, have not had the courage or the courtesy to stay for the rest of the debate. Let me inform them, however—and let me also inform the hon. Member for Teignbridge (Mr. Nicholls)—that, as the Register of Members' Interests has not yet been published, I hope that Conservative Members who are accepting paid consultancies from landed interests such as the Duke of Westminster will declare their interests before speaking in the debate, and that they will tell us how much money they are taking.

Mr. Nicholls

The hon. Gentleman talks of interests that ought to be declared. Perhaps he, like me, has a lease on a flat in a block in London and will be able to enfranchise it as a result of the Bill. I do not expect my landlord to be deprived by my not paying the market rent. Does the hon. Gentleman expect to deprive his landlord?

Mr. Straw

I assure the hon. Gentleman that, if I had a lease that was about to be enfranchised by the Bill, I would have declared my interest. I have no such lease. It is interesting to note, however, that the hon. Gentleman did not tell us whether he had received a paid consultancy. Perhaps he would like to do so now.

Mr. Nicholls

I shall declare my interest at the time that is laid down in the rules of the House.

Even if the hon. Gentleman has no lease to enfranchise, many of his hon. Friends have such leases. The hon. Gentleman is trying to avoid answering my question by casting innuendo. When he forcibly takes property from other people, does he expect to take it for less than it is worth?

Mr. Straw

I did not catch all of that, but I took it to be rather less than a fulsome denial of the charge that I levelled against the hon. Gentleman. Of course, we all understand that there are special demands on his purse: he has to take taxis when the rest of us would walk.

I take it from what the hon. Gentleman said that he is indeed a paid consultant. We look forward to finding out later in the debate who is paying him, how much he is being paid, and why he is acting not as the voice of his constituents in Teignmouth but as the voice of some landlord in London.

Mr. Nicholls

I do not think that the hon. Gentleman wants to open up a debate about hon. Members on both sides of the House who have been in the predicament in which I have found myself. He might find it particularly instructive, bearing in mind some of the people who have sat on the Opposition Front Bench.

Let me ask my question for the last time. If Opposition Members will be entitled to enfranchise their leases under the Bill, does the hon. Gentleman think it right that they should be able to do so at less than the value of the freehold? I have asked that question three times now. I shall declare my interest at the time that is laid down by the rules of the House. Will the hon. Gentleman tell me whether he approves of taking property from people at less than its market value?

Mr. Straw

The hon. Gentleman's question contains a prior assumption that I do not accept. I will answer his question when he tells me how much he is receiving to speak on the Bill, and from whom he is receiving it.

Sir Anthony Durant (Reading, West)

I am a leaseholder with no pecuniary interest, apart from an interest in the flat I occupy. It is in a block, and many of us are worried about what will happen to the Bill. Although—as can be seen in the Register of Members' Interests—I have no pecuniary interest, both leaseholders and freeholders are anxious about how the legislation is progressing. Let me make it absolutely clear that I have no vested interest. Nevertheless, there is no reason why we should not debate the issue.

Mr. Straw

I accept what the hon. Gentleman has said. Opposition Members are also anxious about some aspects of the Bill, and I shall deal with them shortly.

As I said, it was the Labour party that first introduced into legislation the right of leaseholders of houses to enfranchise their leases. It was also the Labour party that, much more recently, first proposed the extension of that right to flat dwellers, in evidence given in 1987 by my hon. Friend the Member for Hammersmith (Mr. Soley) to the Aldridge committee on tenure for flat dwellers. As my hon. Friend said when the Government first announced the acceptance of the committee's recommendations in July 1991, At long last we have a definition of the Prime Minister's philosophy: Majorism equals plagiarism."—[Official Report, 12 July 1991; Vol. 194, c. 1240.] It does not equal much else nowadays. We welcome the proposals in the Bill, as far as they go. As they have so little support among Conservative Members, it may come as a relief to the Secretary of State to learn that we shall be supporting them in Committee. The Bill, however, has three serious defects. First, it excludes many leaseholders for no good reason—for instance, leaseholders in blocks where more than 10 per cent. of the space is non-residential. The Secretary of State and his Minister—and perhaps the Secretary of State for Wales when he winds up the debate—should explain the introduction of that arbitrary 10 per cent. limit.

Secondly, the so-called "additional low rent test" is already providing unscrupulous landlords with a loophole to escape the Bill's provisions. That is a matter of particular concern in inner London, and it has already been raised by my hon. Friends the Members for Islington, South and Finsbury (Mr. Smith) and for Hackney, South and Shoreditch (Mr. Sedgemore). In, for example, the de Beauvoir estate in Hackney, the ground rent was deliberately set at just £100 above the limit so as to fall outwith the Bill. In the Cloudesley estate in Islington, a ground rent has been set at just £4 above the limit of two thirds of the rateable value, again to avoid the low-rent test. I understand that there are many similar examples on the Grosvenor and Cadogan estates. The Secretary of State may wish to bear that in mind when the owners of those estates next try to pretend that, in opposing the Bill, they have only the interests of tenants at heart.

Thirdly, as my hon. Friend the Member for Greenwich (Mr. Raynsford) pointed out in an intervention in the speech of the Secretary of State, the Bill fails to implement the Aldridge committee's proposals for commonhold tenure for flat dwellers. An important survey by the Joseph Rowntree Foundation recently confirmed that landlords in England are engaging in widespread abuse of their legal responsibilities towards not only those who rent flats but the owners of leasehold flats. The system of tenure is inherently unsatisfactory, as I think is widely recognised by hon. Members.

The Law Commission proposals contained in the Aldridge committee report would not have solved all these problems but would have been a major step forward. As my hon. Friend the Member for Greenwich reminded the House, the Minister said in July 1991: Legislation to implement the proposals will be introduced as soon as parliamentary time for it can be found."—[Official Report, 12 July 1991; Vol. 191, c. 1240.] We have to ask again why these proposals are not in this Bill. The legislation is already in draft form; the Bill has been drafted. There is parliamentary time available. Indeed, there has never been a Government with so little in the way of new ideas and so much time on their hands. For the Secretary of State to suggest that this Bill had to be introduced by the Lord Chancellor is poppycock, and he knows it. The Lord Chancellor does not sit in this House and a Minister of the Crown must introduce the Bill in this House whoever has introduced it in the other place.

Is abandoning commonhold the price that Ministers have had to pay to such Conservative grandee landlords as the Duke of Westminster to curtail their opposition to the leasehold enfranchisement parts of this Bill? We suspect that it might be.

In Committee we shall move to include commonhold in the Bill and to amend the long title so that we can. Will Ministers oppose us? If they do, every owner-occupier who is a leaseholder will understand that the Secretary of State's commitment to commonhold in July 1991 was no more than a cynical pre-election sweetener, to be abandoned, like so many other Conservative promises, almost before the ink was dry.

Sir John Wheeler (Westminster, North)

Will the hon. Gentleman accept, since I represent many of those who will gain from this legislation, that what they want is the leasehold reform element of the Bill? They recognise that the commonhold proposition, which is a different form of tenure, will be very complicated and may well involve a Bill of some 130 or more clauses, which can quite properly follow later in this Parliament.

Mr. Straw

Given the length of the Bill already and the fact that there is agreement across the Floor of the House about the importance of commonhold—or at least there was in July 1991—

Mr. Howard

There still is.

Mr. Straw

In that case, why the devil did the right hon. and learned Gentleman not make that clear before this? Why did he not make a statement when he was holding his press conference on the Bill that commonhold remains an important commitment of the Government and there will be a Bill? I have not read of his saying anything of the kind, nor has anybody else.

Mr. Howard

I am very happy to say those words now. It is a measure of the desperation of the hon. Gentleman that he is making an issue of something on which there is no controversy or doubt. We remain committed to commonhold. We will introduce it later in this Parliament in exactly the way suggested by my hon. Friend the Member for Westminster, North (Sir J. Wheeler), to whom, together with my hon. Friend the Member for Kensington (Mr. Fishburn), we owe so much for their campaigning for the measures at present before the House.

Mr. Straw

Yes, we owe a great deal to them, as we do to my hon. Friends the Members for Hammersmith and Greenwich. I think that tenants in London know that they owe a good deal more to my hon. Friends than they do to the right hon. and learned Gentleman's hon. Friends.

I am glad to have that undertaking from the Secretary of State, but I would point out that it was we who had to extract that statement, not he who volunteered it.

I turn, finally, to the urban regeneration agency. When, with regard to Westland, the right hon. Member for Henley (Mr. Heseltine), the former Secretary of State for the Environment, stormed out of the Cabinet in protest at other Ministers making decisions without consulting him —a position of principle which he evidently forgot just a few weeks ago—he spent part of his time writing his manifesto to become leader of the Tory party, entitled "Where there's a will". On page 169, drawing on the success of the Labour creation of the Scottish and Welsh Development Agencies, he recommended an English development agency. He said that we needed an English development agency, a national urban renewal agency to promote, co-ordinate and drive forward the many local development initiatives in which the Department of the Environment is engaged. He went on to say, uncharacteristically, that this was to be an institution which would be localist in character. He said: The EDA must be the start-up motor, taking out of the hands of government the main initiative for bringing local authority, private and voluntary interests into partnership for joint renewal schemes. But the right hon. Gentleman had to convince his colleagues of the merits of an English development agency. In this, as with so much else these days, he did not manage that well.

The urban regeneration agency in this Bill is the result, a rather ineffectual mutation of what the right hon. Gentleman had in mind. Far from being localist in its approach—and I listened carefully to what the Secretary of State said—it shows every sign of being strongly centralist. Reserve powers are to be taken to replace local authorities' own planning and local assembly powers. We will examine this proposal with great care in Committee, but it seems to me that the Government have learned none of the lessons of their perpetual whirligig of one so-called initiative after another in their inner urban policy.

Over half of all the public money expended on the 11 urban development corporations has been spent in London docklands—well over £1,000 million out of a total of £1.9 billion. But the sweeping powers given to the London Docklands development corporation, its failure to involve local authorities, especially in the early days, and, above all, its refusal to take proper account of the impact of its decisions on local communities has meant that it has wasted many millions of pounds of taxpayers' money on inappropriate prestige projects and has created remarkably few jobs for local people.

If the Secretary of State wants the URA to work, he will need—to use his own words—to make sure that it works hand in hand with local authorities. I am glad that he said it and I applaud him for doing so. If that is so, may we ask for assurances that membership of the agency will be broadly based and will include councillors from all parties, and that it will concern itself with creating real jobs, with providing social housing and community facilities, as well as with building empty office blocks?

Then there is the issue of resources raised by the hon. Member for South Hams (Mr. Steen). How much will these be and where will they come from? All we are told in the Bill is that the agency is expected to achieve more regeneration from the resources available to it. So, after all this, will the agency turn out to be another pre-election wheeze that will fail like so many of the schemes that have preceded it?

Aside from some strong criticism of the detail of this Bill, our overriding case against it is that it will do virtually nothing to ease the crisis in housing which is now engulfing this nation and which is a potent symbol of the collapse of this Government's economic and social policy as a whole.

How different it was meant to be. Just eight months ago, the right hon. Member for Henley, then the Environment Secretary, said: Housing sales under the Conservatives are picking up. All this would change if there were a Labour Government. The recovery in the housing market would be devastated just as it gets under way. Eight days later, the Prime Minister asserted: We're going to make life easier for people buying their own homes. Our policies will mean a stronger housing market. Labour's policies would destroy the housing market. But it is the Conservative policies that have destroyed the housing market, that have led to the largest ever fall in house prices and, with them, the assets on which the very survival of so many small businesses is based. It is Conservative policies that have put 450,000 building workers on the dole; and it is Conservative policies that, insanely, have locked up £5 billion of council house sales receipts when homeless families are crying out for new homes, when building workers are desperate for jobs and when the construction and materials industries are desperate for orders.

If the Secretary of State wanted to do something serious and constructive for housing and urban regeneration, he could do so today. He could, and he should, unlock that £5 billion of unused council house sales receipts, allow their phased release, direct them to areas of greatest need, let local authorities start to build new homes and buy empty ones already built, take action which at a stroke would get the housing industry moving, regenerate our urban areas and do something for the hundreds and thousands of people in poor housing or in no housing at all.

If the best that the Secretary of State can do for housing and urban regeneration is this paltry Bill, which will not build a single home, will not save a single family from repossession, and will not put a single extra pound into our inner cities, he will be justly condemned for creating a housing crisis of the most monstrous proportions and for then wilfully refusing to take any effective action to end it.

It is for those reasons that we shall vote against this Bill in the Lobbies tonight.

5.9 pm

Mr. Michael Alison (Selby)

The hon. Member for Blackburn (Mr. Straw) strangely managed to strike a high moral tone. To me and to my right hon. and hon. Friends it came across as a sort of lofty detachment, or superior wisdom and enlightenment. Achieving that impression was worthy of a character from Dickens. Think of the extent of the contortion required for the representative of Labour-controlled local authorities to give that impression —it is nationally understood that their stock in trade in uncollected rents, unrepaired dwellings, and unresponsive stonewalling to requests for the right to buy. He is the spokesman of one of the most unloved and unlovely figures in English social life—the petty and tyrannical municipal landlord. The hon. Member for Blackburn was dressed up as an angel of light, but if he is such an angel, my right hon. and learned Friend's Bill is a universe of suns shining upon the firmament of housing.

The hon. Member for Blackburn urged us to declare our interests. I may be moving from the ridiculous to the sublime, but I declare my interest as the spokesman of the Church Commissioners in my role as the Second Church Estates Commissioner.

In the benign and accommodating presence of my right hon. and learned Friend the Secretary of State, I shall comment on landlord and tenant aspects of the Bill which bear directly on the Church Commissioners. About 8 per cent. of the commissioners' total asset portfolio is in residential property, and 4 per cent. of that is in leasehold property in London, which amounts to about £100 million worth of residential assets.

My right hon. and learned Friend may know that the Church Commissioners' Hyde Park estate—containing about 1,300 units—is a model of its kind, reflecting an harmonious and uniform appearance and well-managed units of residential property, offering high standards and quality of life to leaseholders, with high maintenance and repair standards.

Many other charities—the Smith's Charities is one—deliver high standards of property management to leaseholders, while contributing to their charitable beneficiaries' long-term interests by a parallel long-term retention of the freehold property interest.

Part I of the Bill will effectively drive the Church Commissioners and other similar charities out of their traditional role in residential property investment and management, because they will lose the right to retain a freehold element.

At a time when it is Government policy and the general consensus that the rental housing market should develop rather than be an exclusively freehold market, is it not paradoxical that the Bill should actively and directly deter charitable organisations, such as the Church Commissioners, from building, owning and leasing residential property? Purpose-built blocks of flats will only be built for freehold ownership or short-term tenancies. What other blocks will be built?

I shall keep my speech brief and sum up my arguments. As owners of substantial amounts of residential property in London, the Church Commissioners are opposed to the principle of part I of the Bill, which, together with the proposed commonhold legislation, will prove one further deterrent to landowners to invest funds in residential accommodation. The introduction of such legislation will further diminish landlords' abilities to retain intact their residential estates, with all the associated loss of control over the uniform and harmonious appearance of some areas of London, and over the residents' quality of life. The repair and maintenance of buildings will inevitably become haphazard under the new regime, if it is carried out at all.

If my right hon. and learned Friend cannot be deflected from the principle of part I of the Bill, I hope that he will consider some modifications. First, dwellings that are eligible for enfranchisement should be occupied by tenants who have been owner-occupiers of the units for five years, and are not merely recent arrivals or fly-by-nights, seeking to cash in on the measures being introduced.

Secondly, the enfranchisement provision should not apply to leases held by companies. We are talking about social improvements and social factors, which are irrelevant to the commercial interests of company leaseholders. This might be a draconian change, but I hope that my right hon. and learned Friend will at least contemplate the exclusion of charities from the application of part I of the Bill.

On the qualifying proportion of leaseholders required to trigger the enfranchisement mechanism, I hope that my right hon. and learned Friend will consider an increase. In the experience of the Church Commissioners as leasehold managers, considerable pressure can be brought to bear by a small minority of lessees, intent on exercising a statutory or landlord-granted right of enfranchisement, on lessees who are timid or reluctant to agree to join in, often the more elderly and unsure. The Church Commissioners suggest that, to qualify for enfranchisement, 75 per cent. of the flats in a building should be held on a long lease, rather than two thirds, and 75 per cent. of the leaseholders should signify their desire to enfranchise, rather than two thirds, before the procedure is set in motion. That is all the more relevant because of a disturbing sentence in the briefing note that I received from the Country Landowners Association, which states: under the proposals a minority of leaseholders could displace the landlord (where two thirds of leaseholders elect to enfranchise a block where only two thirds of flats are on long leases). The majority would be ruled by the minority". If there were 100 tenants in a block, only 66 per cent. of whom were on a long lease, two thirds of them—44 out of 100—would trigger the mechanism, and that is unsatisfactory.

I hope that my right hon. and learned Friend will consider the general and specific issues that I have mentioned in a criticism of a Bill which is like a shaft of light on many areas of municipal darkness, which are the heritage of the clumsy, unimaginative and in many ways tyrannical municipal housing of the post-war years—the heritage of the Labour party.

5.20 pm

Mr. George Mudie (Leeds, East)

I hope that hon. Members will forgive me if I move from the housing aspect of the Bill to part III, which deals with the urban regeneration agency. The agency appears to be the Government's major, if not sole, initiative in dealing with the problems of the inner cities. Viewed in that context, and in the present economic climate, with nearly 3 million people unemployed, I find that deeply disappointing, highly irrelevant and a misdirected use of scarce resources.

It is particularly disappointing when we compare the proposal as it appears in the Bill with the way in which it was originally developed. We have here, in effect, a measure to encourage commercial development by the private sector, pump primed by the public sector. It may not be an original concept, and while few may disagree with it, it is nothing like the vigour originally shown by the then Secretary of State for the Environment who has since been astutely moved to the Department of Trade and Industry with a restricted budget and suitable minders.

The President of the Board of Trade, fresh from his wilderness years, saw the value of a large development agency along the lines of the Scottish and Welsh agencies, an agency having within its remit all the urban programme responsibilities, the urban development corporations, certain aspects of the responsibilities of the Department of Trade and Industry and perhaps even parts of the responsibilities of the Department of Employment.

Such an agency would have been a powerful weapon in the fight against urban dereliction, working closely along the lines of the Welsh agency with local authorities and the private sector. It would have created a feeling of urgency and brought hope to the millions of people in the inner cities who face the fierce realities of raising families on unemployment benefit.

A commitment of that type, to an agency working harmoniously with local authorities, might have led to a move towards regional agencies in which local authorities and the Government might have come together to work out sympathetic and sensible policies to deal with the various regional problems that are faced in different parts of the country.

Perhaps the fear of such an evolution in policy forced the Government to retreat, and we are left with a feeble proposal. On the basis of what might have been, rather than what is proposed, I am deeply disappointed, remembering that this is the sole inner city initiative by the Government. It amounts to pump priming derelict land. No wonder the Government have tacked it on at the back of the Bill.

I said that the Bill was irrelevant. We have before us a measure the effect of which is to tempt the private sector on to sites which are at present, because of dereliction, uneconomic. Does any hon. Member know a developer who is willing to invest against the present economic backdrop, even on a prime site? If such a developer can be produced, he will have an immediate invitation from me to come to Leeds. The lack of volunteers tells me that there is knowledge in the House that developers are not queuing up for prime sites. So why the urgency to attract them to derelict sites?

I am not seeking to score debating points [Interruption.]—because this is too serious a matter. I repeat, this is the only inner city initiative by the present Administration, despite the poverty and unemployment there. I am anxious to explain just what life is like in the inner cities.

Mr. Hendry

I am wondering where the hon. Gentleman has been. I urge him to look, in the city that he represents, at the work of the task force and at some of the initiatives, costing £4 billion throughout the country, that the Government are taking in the inner cities. A tremendous amount of work is being done by way of urban regeneration. This measure represents a new initiative on top of that. Does the hon. Gentleman not know that?

Mr. Mudie

I am aware of all that has been happening. For example, I am aware of the urban development corporation that was imposed on Leeds and of the Department of the Environment report that claimed that 5,000 jobs had been created in that city. Is the hon. Member for High Peak (Mr. Hendry) aware that nobody can find those 5,000 jobs? Is he further aware that that UDC operates in secrecy and that some time ago, when the chief executive was asked about those 5,000 jobs, the reply was to the effect that the information was confidential? I am well aware of what is happening in our inner cities.

Mr. Hendry

Will the hon. Gentleman come with me to Clarence dock in Leeds and view the incredible resurgence of that area? Much of the difficulty with urban development corporations has been the refusal of co-operation by Labour local authorities, which are worried because they are faced with a Government who are determined to take action.

Mr. Mudie

I will cheerfully accompany the hon. Gentleman to Clarence dock, but first let me acquaint him with a little history. As a former leader of Leeds city council, before the UDC was a twinkle in Nicholas Ridley's eye, I invited the regional director of the Department of the Environment to Clarence dock. He accepted my invitation and I stood on the canal side pointing out to him the opportunities for development throughout the area. I also pointed out what Leeds city council was doing and listed the planning opportunities and permissions. Although we were undertaking all of those operations and had a £45 million partnership with private sector firms, Nicholas Ridley imposed a UDC on us. Bearing all of that in mind, I will cheerfully accompany you to Clarence dock.

Madam Deputy Speaker (Dame Janet Fookes)

Order. I remind the hon. Member that when he uses the word "you" in that fashion he is really referring to me.

Mr. Mudie

Not in my wildest dreams could I hope to walk along Clarence dock with you, Madam Deputy Speaker.

Can the Secretary of State justify the legislative time, ministerial energies and the expenditure of the Department's budget on an issue such as this when, as I have explained, there is no shortage of sites in our cities? Although I concede the scale of dereliction, I urge the right hon. and learned Gentleman to accept that the voices in the inner cities are asking not for the reclamation of derelict land but for employment.

Mr. Steen

While, in the hon. Gentleman's view, the urban regeneration agency may not prove successful, its aim will be to revive and bring back derelict and vacant land. By building factories and houses, employment will be created. I hope that that is the way in which we shall succeed.

Mr. Mudie

I could not have made myself sufficiently clear. Over the years, Leeds city council has cheerfully worked with the Government and the private sector on the concept to which the hon. Gentleman refers. My argument is that at this stage, with the market in its present state, something different is required. If I were in government with scarce resources at my disposal and had to deal with poverty and unemployment in the inner cities, I would not see any urgency, because of the availability of prime development land, in placing the reclamation of derelict land at the top of my list of priorities.

I said that the Bill misdirected scarce resources, and hon. Members will appreciate what I mean. If the President of the Board of Trade had had his way and had been given some ability to be flexible in the expenditure of those scarce resources, the breadth of the initiative would have permitted the movement of funds to whichever parts of the agency were most relevant, in the light of circumstances, in the inner cities. Indeed, funds might even have moved between Departments on a more sensible basis, however scary that may sound to civil servants.

At least £250 million is now committed to an area which the reality of the inner cities suggests is irrelevant. If urban aid programmes have the objective of alleviating poverty in inner cities by enhancing people's job prospects, motivations and skills, scarce money is not being spent in an appropriate matter at the present time.

The Government's unwillingness and the inflexible way in which they feel unable to countenance a move from capital to revenue spending mean that the programmes are set and run even when circumstances change and expenditure is no longer relevant.

Unemployment is growing, and people who have jobs are increasingly worried about the permanence of those jobs. On a longer time scale, there is a serious awareness that if and when we come out of the recession, we must avoid skill shortages choking off growth.

Because of the number of jobless people in the inner city —often three times the number in the outer suburbs—and the need to ensure that we have a sufficiently skilled work force to protect future growth, it would be more sensible to direct the £250 million away from the less urgent land reclamation to a person-oriented programme of employment and training.

I commend to hon. Members an article in The Guardian last Thursday by Edward Pearce— [Interruption.] I hear an hon. Member scoff. I hope that he does not do so before he has read the article. In that extremely sensitive article, Edward Pearce described several cases in the south-east concerning ordinary people who have worked in businesses, raised families and been caught up in unemployment. I do not wish hon. Members to think that I am going over the top. Those good people, who have worked hard and raised their families, have committed suicide because they could not face the stress, pressures and realities of unemployment. That is happening throughout the country.

I appeal to Ministers not to be handcuffed by departmental programmes that are no longer relevant but to change the use of that money and bring hope to the millions of people in the inner city who face a hard future.

5.32 pm

Mr. Roger Gale (Thanet, North)

I mean no discourtesy to the hon. Member for Leeds, East (Mr. Mudie) in not commenting on the urban regeneration part of the Bill. He will understand that, given the fact that there are 162 clauses, there is rather a lot to get one's teeth into in the brief 10 minutes allowed to us. Other hon. Members will no doubt wish to comment on those matters.

I wish to mention three points raised by the hon. Member for Blackburn (Mr. Straw) who, unfortunately, has just left the Chamber. The first relates to commonhold law. Had the hon. Gentleman taken the trouble, as I have, to discuss the matter with my hon. Friend the Member for Solihull (Mr. Taylor), the Parliamentary Secretary, Lord Chancellor's Department, he would know that a complex Bill presently on the stocks is to be introduced. Having discussed the matter with the Lord Chancellor's representative in the House, I feel that it would have been inappropriate to mix it with the Bill. Like my hon. Friend the Member for Westminster, North (Sir J. Wheeler), I am certain that our constituents want leasehold reform first and most.

Secondly, it has escaped neither my notice nor that of my hon. Friends that, when my hon. Friend the Member for Teignbridge (Mr. Nicholls) specifically asked the hon. Member for Blackburn whether the Labour party thought that it was proper to take property from owners without paying the correct market value, he declined to reply. I construe from that that the Labour party pursues the policy, as it has indicated in the past, that it does not believe in paying the market price when appropriating—or misappropriating—property.

Thirdly, Conservative Members will take no lessons from Labour Members about the maintenance of municipal housing when the Labour party has a track record of neglect and decay. Labour-controlled authorities throughout the country still maintain thousands of properties that could be occupied by the homeless.

Mr. Raynsford

Will the hon. Gentleman give way?

Mr. Gale

No, because I have only 10 minutes and I wish to make progress with my speech. I am sure that the hon. Gentleman will make his own speech in due course, as I know that he is an expert on the subject.

I welcome this massive Bill, which my right hon. and learned Friend the Secretary of State has taken such care to introduce. It comprises much-needed reform in housing and urban development. I shall confine my remarks to just one part of the 162 clauses—that which deals with management audit, clauses 67 to 75. Will my hon. Friends on the Front Bench pay particular attention to the provisions for management audit? It is a sad fact, known to every Member of the House, that bad landlords exist in the private as well as the public sector and that, far too often, those landlords seek to evade their obligations to their tenants under existing legislation. I am thinking in particular of their obligations to provide proper accounts of service charges and to allow sight of insurance policies on the properties that they own.

Sadly, the people who suffer from such bad management abuse are those who buy the leasehold property that is most common throughout the country —first-time buyers of small flats and, at the other end of the scale, people buying retirement homes, which may be the last major purchase of their lives.

I wish to refer to three instances of constituents' personal experience. In doing so, I shall be careful not to breach the privilege of the House. I do not wish to name names here that I would not name outside the House and I should therefore make it plain that each of the three companies have, so far as I am aware, operated within the law. That is why a change in the law is so appropriate and vital.

A private retirement block in Birchington, called Bierce Court, was built by Lovells the builders. That company decided to engage under contract, for the management of that property, AMSA Management, a company run by Mr. Anthony Apponyi who likes to be described as Count Anthony Apponyi. That superb development should be the greatest joy and asset to those who bought leases and retired to that private development. It should not be the source of anxiety and distress that it has become for some people. However, in September 1989 the leaseholders of that property discovered that the management company, AMSA, had misappropriated funds and used them for purposes other than the maintenance of the building. Fortunately, they found out in time and, in due course, Mr. Apponyi and his company were required to refund £22,000 of my constituents' money. That is just in one block.

It is not surprising that the leaseholders of that block no longer trust AMSA Management and would like to appoint other managers to their property. But under existing legislation it is extremely difficult, if not impossible, for them to remove the managers appointed by the original builders. In the minutes of their recent annual general meeting, they say: A few weeks ago members of our committee inspected the records of our Bierce Court AMSA bank account. These records could have easily been parcelled up and sent to Bierce Court for inspection, but with their usual sense of confrontation, AMSA insisted that the committee members made the journey to Maidenhead"— from Birchington in Kent— where the cash hook, hank statements and receipts file were kept … A major factor which arises is that in spite of Mr. Apponyi's continual exhortations over the years for residents to pay service charges annually in advance"— so that the management company can acquire higher interest, the "sinking fund"—the residents' fund—has at all times been in a low yielding account. That is the kind of bad management to which residents have been subjected.

The records of the Haven block in Margate in my constituency are held by a company in Weymouth. The management company has said that any tenant is free to go and see those records provided that they are prepared to travel to Weymouth. However, they must then find somebody in when they get there to show them the records.

A group of properties in Margate and Herne Bay in my constituency has caused particular anxiety. I want to quote from a letter which will probably strike a chord with hon. Members because it is the sort that we all receive. My constituent writes: When we purchased the flat, the lease was certainly not explained to us to its full extent by our solicitor, and so at the time we did not realise the problems with regard to the maintenance we would encounter. Our landlord, the lessor of the property refuses to send receipts for maintenance and ground rent payments from us, also we have never had a copy of insurance for the property either and this causes us great concern. We have had very little repair work carried out on the building (consisting of four flats), in fact work has been carried out on only one occasion and the large amounts of money demanded is very high and out of our control. Plus the fact our bedroom wall is still soaking wet with damp and smells disgusting. The maintenance problem has got really out of hand—we have to keep borrowing money to pay it—if not the lessor can repossess our home and we are up to our necks in debt because of it. Last year we paid a total of £1,679.87… and have just had to find another £300 just after Christmas, of course borrowed again—what else can we do'? As a last resort, we may have to stop paying the mortgage, it seems our only choice. But who wants to be evicted and lose all we have worked for. We plead for your help, as we are sure that we are not the only people in the same situation. Unfortunately, we all know only too well that they are not the only ones in that position.

This company, Marlborough Holdings, owned the properties and then sold them to a holding company called Latchguard. Marlborough now manages this company. It will not surprise Members to learn that the directors of Latchguard are P. M. Bazin and G. Bazin, operating from 14 Winterhill way, Burpham, Guildford in Surrey, and that the directors of Marlborough Holdings are P. M. Bazin and G. Bazin, operating from the same place.

I have told the House enough to suggest that bad landlords—they will give the good ones a bad reputation, too—will continue to try to evade whatever legislation the House seeks to impose. I believe that we must ensure that the management audit is within the cost reach and the legal reach of leaseholders. We must provide protection against excessive service charges. And we must give leaseholders the right to change management contracts easily. If we can achieve that, many first-time buyers and many retirement leaseholders will sleep more easily at night.

5.42 pm

Mr. Nigel Jones (Cheltenham)

Perhaps I should declare an interest in that I have a lease on a flat not far from here, but I have no wish to buy it because it is one of the noisiest places in which I have ever tried to sleep. If I have yawned once or twice in this debate, it is not because right hon. and hon. Members have been boring me: it is because last night was especially noisy.

My Liberal Democrat colleagues and I broadly welcome many aspects of this Bill. We also have several worries which we will seek to express by tabling amendments in Committee.

I was grateful to hear the Secretary of State give a commitment to commonhold, for which he says legislation will be presented in this Parliament. We look forward with interest to the arrival of that Bill.

Part I of the Bill, concerning leasehold reform, is to be welcomed, but we are extremely worried that the aim of enfranchisement will be hampered by the number of hurdles put in front of leaseholders seeking to buy the freehold. These hurdles represent obstacles as big as those to be found on Cheltenham racecourse—and believe me, they are big.

The leasehold system is an anachronism. It gives all the benefits to the freeholder and most of the costs to the leaseholder. Reform is long overdue. I am sure that Conservative and Opposition Members will agree that this is one area where we can learn from our European partners, in reforming a system that is unique to England and Wales.

Leaseholders pay virtually the full market value for their property, meet all the repair and maintenance costs, pay for all improvements and yet have only the rights of a tenant, as the Secretary of State said. It is no wonder that up to two thirds of all leaseholders are at any one time in dispute with their freeholders over maintenance issues.

On top of this, leaseholders see the value of their lease decline over time despite a massive personal investment. The system is contrived so that a very small number of freeholders get enormously rich on the back of a large number of leaseholders.

To return to the obstacles: reaching the 67 per cent. enfranchisable qualification will not be easy. The leases must be over 21 years, the ground rent must be low and no more than 10 per cent. of the block must be commercial. We want to know how these criteria were arrived at, why they have been set so high, and why there is a low-rent test when the only difference between a long and short lease is simply the length of the lease.

Perhaps the Secretary of State for Wales could outline the thinking behind these criteria in his reply. These provisions were not mentioned in the Department of the Environment leaflet on enfranchisement in July 1991, and they will have a particularly devastating effect in London where there are many people with long leases granted after 1991, with a ground rent of £1,005 per year—for the sake of £6 they have been disenfranchised.

Any block with four disenfranchised flats disenfranchises the other six. If over 10 per cent. of the floor space is commercial, then the entire block cannot be enfranchised. That means that if just the ground floor of a block is commercial, there have to be at least nine storeys above it for the block to be enfranchisable.

I would like to know what research has been done by the Minister to discover how effective these measures will be. How many blocks of flats will be enfranchisable? Surely not all of them; more like three quarters, a half, or perhaps just one quarter?

The Enfranchisement League estimates that there are 1,500,000 leasehold properties in England and Wales. These proposals will mean that probably only 500,000 of them will be enfranchisable. I would like to see amendments ensuring a much higher proportion. I am also worried about extending enfranchisement to social landlords. I would also like some reassurances that council tenants will have their rights maintained if their block is enfranchised, and that councils will continue to have freedom of nomination into enfranchised blocks.

I and my colleagues from Scotland have had considerable trouble over the part of the Bill concerned with Scotland. It seems discourteous to Scottish Members that this piece of legislation should be included in what is essentially an English and Welsh Act. I should have liked the Scottish part of the Bill to be a separate Act. Had there been two Bills instead of one, the Liberal Democrats would have been minded to vote against the Scottish measure. It is a sign of the Government's weak position north of the border that they are once again relying on English votes to push through legislation that is specific to Scotland.

We welcome the ban on Scottish councillors having housing nomination rights—a corrupt practice that should have been ended years ago. We have the same objections to rents to loans as we have to rents to mortgages— namely, that the scheme is completely inappropriate to the current crisis in the housing market. What the Government should have considered are mortgage rescue schemes to end the tide of repossessions—35,000 in the first six months of this year—rather than pursuing outdated 1980s dogma.

Liberal Democrats oppose compulsory competitive tendering for housing management and will seek to amend the parts that pave the way for this. People's homes are not grass verges or dustbins; they are their security and base. Decisions about CCT should be made by the landlord— the council—in consultation with the tenants, not by the Government.

Liberal Democrats consider it outrageous that people's homes can be transferred to new management without their consent. People must have a say in the management of their homes, yet contract negotiation is by law a secret item for local authorities that is discussed behind closed doors. People must be allowed at the very least to make representations to their local council about the future of their homes. We shall seek to introduce that right by means of amendments in Committee.

The creation of an urban regeneration agency has been welcomed by many bodies, including the Institute of Housing. With the experience of the Urban Development Corporation during the 1980s, however, Liberal Democrats have reservations that stem from the lack of any formal role for local authorities and the powers that the agency will have.

We welcome the simplification of the grant-giving structure, but we are extremely concerned that yet another Government-appointed quango will not take local wishes into account. The agency is vested with draconian powers that will enforce local authorities to make land available. Much of that land, especially in the depths of a recession, could be sold on the cheap. As a result, local authorities would lose valuable assets.

We are concerned about the emphasis that is placed on commercial development. We would not wish to see sites earmarked for housing being taken over by a Government agency and turned into industrial estates. We must ensure that there is balanced development, which means a mix of industry and housing, and that housing developments meet local needs, not Conservative dogma. We shall table amendments in Committee that, if accepted and implemented, will have that effect.

In summary, the Bill has good points, but of more significance are the omissions. The hon. Member for Blackburn (Mr. Straw) said that a housing Bill in 1992 should give priority to providing homes for the homeless. It is estimated that 100,000 new homes are required each year, yet the Bill contains nothing that will help us to reach that target.

We know that about 1 million people face negative equity—in other words, their homes are worth less than the sum which they have on mortgage. The Bill does not address that issue. In fact, it contains provisions to accelerate home ownership. The Government have adopted that approach instead of considering ways of protecting existing home owners through mortgage rescue schemes and shared ownership.

The Bill contains nothing that will deal with the problem of increasing repossessions and, finally, it outlines steps to reduce local authorities' influence on housing by paving the way for compulsory competitive tendering. A Government who were intent on facing the real issues would outline steps to release the billions of pounds which are tied up in housing capital receipts, which would allow local councils to begin house-building programmes. That would enable us to make a start on reaching the target of 100,000 new homes each year. We would be able to house the homeless and confidence would be restored in the housing market, thereby aiding economic recovery.

5.52 pm

Mr. Dudley Fishburn (Kensington)

There are hundreds of thousands of people who have cause to welcome the Bill's Second Reading: almost everyone who lives in a leasehold flat. There are tens of thousands of others who also have cause to welcome this Second Reading: those who live in a leasehold house who hitherto have been unable to enfranchise the lease and buy the property. There are hundreds of thousands outside London—we must not think of London and leaseholders being completely coterminus—such as those who have apartments on the south coast and those who suffer under leasehold law in Wales, who will also benefit from the Bill's provisions.

The Bill will likewise be welcomed by those who provide housing finance. The banks and building societies, for example, have found that lending on leasehold is unsatisfactory. It is a form of lending that ends up so often in argument or uncertainty or in the courts. Thus it is that the banks and building societies have been among some of the most forceful and articulate supporters of the reform.

I feel that we shall see more investment in inner city areas as a result of this reform. There will be more investment in run-down mansion blocks. I disagree with my right hon. Friend the Member for Selby (Mr. Alison) —who made an elegant speech—because mansion blocks in my area have become run down. The freeholder is so often absent. However, once the leaseholder knows that he or she will be in possession in perpetuity, there will be a much greater willingness to invest in what would otherwise be tawdry mansion blocks.

Most of all, the Bill will be welcomed by Back-Bench Members. Indeed, it would have been welcomed by them down the ages. My right hon. and learned Friend the Secretary of State reminded us that the cause of leasehold reform began in the 1890s. During my time in the House I have introduced two ten-minute Bills and one full-day motion on leasehold reform, and I have always been supported by Back-Bench Members on both sides of the Chamber. If, Mr. Deputy Speaker, you see the shadowy figure of Sir Brandon Rhys Williams coming hot foot into the Government Lobby this evening, you will know that he just could not keep away.

The surprise, perhaps, is that it has taken so long to reach this stage. I say to those who have reservations about leasehold reform—especially those who represent the great London estates—that this is hardly a surprising or sudden piece of legislation. It has been a long, long time in coming.

Leasehold is particular to England and Wales. The Scots would not have it. There is no country in Europe that has a system of leasehold apart from a dozen blocks, I understand, somewhere north of Copenhagen. Yet the cities of Paris, Frankfurt and Madrid, for example, can hardly be said not to have sufficient investment in flat-dwellings. In fact, there is investment in those cities that we do not see in the United Kingdom.

There were countries apart from England and Wales that had leasehold law, and they reformed it. America, Australia, New Zealand and Canada all inherited English leasehold law with the colonial law of the 18th century. As things progressed with the passage of time each of those capitalist countries examined leasehold law and said, "No, this is not a satisfactory form of land tenure in the 20th century, and it certainly is not one that will be satisfactory in the 21st century." Each of those countries has done away with leaseholds.

It is worth noting that there is only one advanced urban environment in the world, apart from parts of England and Wales, that has a system of leasehold, and that is Hawaii. That stems from its colonial past. It is worth noting also that Hawaii, even as we speak, is considering legislation to do away with leasehold and to introduce the right to buy.

Those who seek to suggest that the English and the Welsh leasehold system is uniquely qualified to provide a happy form of tenure have perhaps a difficult case to make. Surely it is essential to have an urban environment in which flat dwellers own property. It is only in England and Wales that we find the leasehold system.

As I have said, the reform that is set out in the Bill is to be hugely welcomed. It will be the more welcomed now that we have it on the record that commonhold is to come along to create a new system of land tenure for flat dwellers. The Bill is the teeth of leasehold reform; in effect, it is the first bite. It will be followed by commonhold, which will be set out in a Bill with changes in the law of land tenure. For that reason, as we heard from my right hon. and learned Friend the Secretary of State, it will come from the Lord Chancellor's Department. It is in its first draft. It is immensely complicated. But it is not controversial. It is not yet ready to come before the House. We have heard, however, that it will come before the House. When it does, London's flat dwellers will convert to commonhold, as in other great cities they have converted to condominiums—for example, in New York —and to co-operatives, as in Australia and New Zealand.

The Bill is but the first part of a "double-whammy" that will greatly improve the lot of city dwellers in England and Wales. As such, it is something of a tempting byway to go down to begin to talk about bad landlords versus good landlords. The Bill is not motivated alone by the desire to put bad landlords out of business. It is motivated by the desire to have a form of land tenure that will suit us well into the next century. Therefore, although I have been a resident of the Grosvenor estates for 42 out of my 46 years, I am not in any sense motivated, in pushing for leasehold reform, by any sense of animus or dislike of those impeccable landlords.

I do not have an interest to declare. During that time I have seen no fewer than three leases washed away from my parents and myself. I am now a statutory tenant. When one looks at the great London estates one has surely to admit that they have been good landlords. We do not need to improve our case for leasehold reform by criticising those who do their job well. That is not the basis upon which this necessary and proper reform rests.

When the Bill is considered in Standing Committee we shall wish to consider a number of points. I was pleased to hear that under chapter IV, the first proposition, the Government have done their best to make sure that the great estates in the centre of London will be preserved—that Lady Thatcher, living in a house in Belgravia, will not be able to paint her house blue, should she wish to do so, because the planning laws will not permit it. I think that we can all feel a great sense of relief about that.

However, I want to be doubly reassured. I take seriously those who say that in undertaking this reform we might diminish the conservation areas of central London and that we might make those areas that we know and love look, somehow, tattier, less uniform and less well kept. If an amendment is tabled in Standing Committee that seeks to improve yet further on the assurances that we have been given by the Secretary of State, I and, I am sure, others will want to look seriously at it.

No Conservative Member approves of leasehold reform for the reason that it might give an unfair financial advantage to one person over another. Yet, as the Secretary of State put it very clearly, one cannot change the property laws without that change affecting somebody's interests. England and Wales have been one country—with almost all property belonging to someone —since the arrival of the Normans in 1066. None of us is driven by the desire to see the Bill lead to property confiscation. That is an important point.

I am often most embarrassed by those of my supporters who say, "Yippee, we're going to have leasehold reform, which means that when I sell my flat I'll get an extra £10,000 or £50,000 thrown in for free". That is not the purpose of the Bill, any more than its purpose is to distinguish between good and bad landlords. However, the Second Reading of the Bill puts the Government's stamp on a crusade that has been going on for, as we heard, nearly 100 years, a crusade which is owed to London and to Londoners and which, from this night onwards, will create a better system of tenure for hundreds of thousands of Londoners who live in leasehold flats and houses.

Several hon. Members

rose—

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

Order. I must remind the House that there will be a 10-minute time limit on speeches between 6 and 8 pm.

6.4 pm

Mrs. Bridget Prentice (Lewisham, East)

I am grateful to have this opportunity to speak in the debate on a Bill which will deeply affect so many residents in east Lewisham. I shall concentrate my remarks on two aspects —the introduction of compulsory competitive tendering and the rent-to-mortgage scheme.

It cannot be emphasised too much that the Government are in serious danger of tempting people, through their rent-to-mortgage scheme, into home ownership that they cannot afford. We have already heard from my hon. Friend the Member for Blackburn (Mr. Straw) that the pilot schemes that have been set up are hardly models of outstanding success. We also heard that during the last year there was a miserable take-up, even in Basildon, where there were about 31 sales.

The particular irony of the scheme is that the right to buy will still be a better deal for tenants who can afford it. The people who are therefore likely to be tempted into the rent-to-mortgage scheme will be the most vulnerable and the least able to cope. I refer to people on the lowest incomes. I am surprised that the Government do not realise just how irresponsible the promotion of such action is when one takes into account those who are financially vulnerable at a time of recession and falling house prices.

I hope that the Minister will explain why the Government are introducing a Bill that will cost tenants more than the existing right-to-buy scheme. Can he explain why the right to a rent-to-mortgage scheme is not available to tenants who have a preserved right to buy after the transfer to a new landlord? Can he also explain the resulting inconsistency in the legislation?

We are particularly concerned about the fact that the Government are determined to follow an ideological path to extend home ownership to low-income households while there are record arrears and repossessions this year. We have already said, and we shall say it again and again, that what is needed in Lewisham, throughout London and across the country is more investment in affordable rented accommodation so that young people, those on the homeless register and others can be housed close to their families and communities.

Mr. Jonathan Evans

If we are looking for cash, does the hon. Lady not see that one place to look might be towards uncollected council house rents? I understand that London is at the top of the tree when it comes to uncollected council house rents.

Mrs. Prentice

That is certainly not the case, either in Lewisham or elsewhere. Lewisham council works closely with its tenants and has a very good record, a matter to which I shall turn in a few moments.

It would have been better if the Government had introduced a Bill to release capital receipts from council house sales so that homes for rent could be built, thus enabling us to house the growing number of homeless people in our cities and, I dare say, more and more homeless people in rural areas and get our construction industry back to work.

What is ironic about the Bill is that it is not supported by many Conservatives in local government. The Association of District Councils said that it doubts whether at a time of rising homelessness, increasing numbers of homeless families in temporary accommodation, unprecedented levels of mortgage arrears and repossessions and the continuing need for affordable housing, it is appropriate to introduce a scheme which results in the further erosion in the supply of social dwellings. The ADC goes on to question whether it is sensible to encourage low-income households to take on the responsibilities of home ownership, even at a time of falling prices and low inflation. Therefore, the Government's own side say that the Government have got it wrong.

Another peculiar aspect of the Bill is that the rent-to-mortgage scheme is essentially a deferred-purchase scheme, which, having spent some years in local government, I thought that the Government abhorred. They certainly never supported deferred-purchase schemes for local authorities. Will local authorities be compensated by allowing an interest-free loan to count as a notional capital receipt for the purposes of borrowing consent under housing investment programme allocations? Will local authorities have first refusal on the resale of property?

Compulsory competitive tendering and housing management are further examples of central Government eroding local democracy. The Secretary of State made great play of choice, especially when he mentioned leasehold reforms, yet he is prepared to remove the council tenants' choice. When the Government parade their subsidiarity credentials tomorrow evening, will they blush with embarrassment and hypocrisy at not countenancing the smallest measure of subsidiarity in the United Kingdom?

Tenants have consistently voted to remain with their local authority, so the Government have decided to remove their votes. They are not even to be consulted. Across London, tenants' and residents' associations have consistently opposed the Bill. When the Secretary of State was asked about the response that he had received, he failed to admit that tenants and residents associations in London have opposed part II of the Bill. Why should not tenants have the right to ballot before compulsory competitive tendering is applied to their estate? What price the citizens charter now?

The Bill is ill-conceived, inconsistent and woefully inadequate in addressing the serious housing problems that we face not only in London but across the country. I hope that Conservative Members will put those issues to the fore tonight and join us in voting against the Bill.

6.11 pm

Mr. Charles Hendry (High Peak)

I am grateful for the opportunity to speak in the debate and to welcome the Bill, which I see as an important continuation of the policies that the Government have pursued to provide a diversity of choice in home ownership and to tackle the problems of urban regeneration.

Before welcoming the setting up of the urban regeneration agency, I wish to consider the right to repair —a fundamental right that I am glad to see being enshrined in law. Many councils, such as High Peak borough council and Derbyshire Dales district council, have an excellent record for repairing their housing stock. Sadly, however, that is not true everywhere. We see the most appalling examples of dereliction in some of our great cities, where too often Labour-controlled local authorities have not bothered to put the interests of their tenants first. As my hon. Friend the Member for Brecon and Radnor (Mr. Evans) said, the problem does not stem from a lack of money, because Labour local authorities are owed £430 million in uncollected rent. If that money had been collected, it would have been possible to tackle many of the problems on those council estates.

Mr. Jonathan Evans

Will my hon. Friend give way?

Mr. Hendry

I hope that my hon. Friend will forgive me if I do not give way because of the constraint on time.

Creeping decay is evident on too many council estates, the knock-on effect of which is a vicious spiral of unemployment and of people not wishing to live on them. All too often, when one enters a city with a sign saying "You are entering a nuclear-free zone", one is also entering an enterprise-free zone, a job-free zone and a hope-free zone. Too often that has been the legacy of the Labour party in local government.

I want to consider not so much whether there has been conflict between local and central Government but whether there can be partnership. In that regard, I recognise and welcome the establishment of the urban regeneration agency. It is a frightening statistic that there are 150,000 acres of derelict land in our cities. That problem must be tackled. Many of us in rural constituencies do not want further9over-development of our green-field sites until those inner-city areas have been brought back into use. That is not an example of nimbyism; we take that view because it is in the interests of those great cities that there should not be great tracts of derelict land.

I do not believe that one can distinguish between the interests of urban and rural communities. We depend on one another, and I want to see our great industrial cities recreated as powerhouses of enterprise, industry and growth. I hope that the Bill will help to achieve that.

Local authorities cannot achieve that on their own. They must work in partnership, because they often do not have the resources to tackle the scale of the problem. That is where the urban regeneration agency can play such a productive role. I hope that it will do so in a spirit of partnership, but I recognise the need for the compulsory purchase option, because where it cannot work in partnership the issues are simply so great and important to the people who live in urban communities that they cannot be ignored.

The URA will act as a catalyst. I hope that it will bring together a wide variety of skills and expertise way beyond its resources by working in partnership with local authorities and the voluntary and private sectors. I hope that it will attract plenty of people from the private sector to help in its operation, because they have direct experience of securing such achievements. That spirit of partnership will make a fundamental difference to the way in which our urban regeneration policies work.

I am concerned that perhaps the Bill does not pay enough attention to housing needs, but the hon. Member for Blackburn (Mr. Straw) was quite wrong to say that they had been overlooked. The URA can bring together tracts of land for development. I am sure that developers will take account of the circular from the Department of the Environment, which calls for social and affordable housing for people who live in the communities.

I want us to do more to tackle the imbalance in the market, because in London alone there is 30 million sq ft of empty office space, yet there is a dramatic housing shortage. Developers know that they will not be able to let those buildings as offices for five or 10 years. Let us see whether it is possible, on a short-term basis, to change their use so that they can be used not necessarily to house families but perhaps for student or hostel accommodation. I know that developers would be willing to consider that if planning restrictions allowed them to do so.

The urban regeneration agency is rightly beginning with a restricted ambit. If it can show that it can tackle problems effectively, I hope that it will be allowed to move on and tackle more generally the problems of urban regeneration. One of the present difficulties is that so many initiatives, units and agencies are operating that people are confused about which to go to first. Sometimes one can understand that people who have an idea that they want to develop may give up because they do not know where to get support from. If the urban regeneration agency shows that it can master this skill, let us see it develop into other areas as well.

I believe that that policy lies at the heart of the extension of the policies which have been pursued in recent years. We are now seeing policies of inclusion, which tell people, "It is not because you are rich that you are a part of our society or because you have a business of your own but because you are a person". We must tell people, wherever they live and whatever their aspirations, that our policies will help them. That must be the thrust of our urban regeneration initiative and I welcome the Bill as a step in that direction.

6.18 pm

Mrs. Helen Jackson (Sheffield, Hillsborough)

I will make a few comments on part III and its associated schedules. On Thursday 18 October, the Prime Minister received an open letter from Sheffield chamber of commerce. It said: Your Government gives every appearance of having no policies or strategies which will help this country out of the economic morass into which it is sinking at an increasing rate. Some 250,000 people filled the city of London in the rain on the following Sunday to express their concern.

During the hubbub of the first somersault by the President of the Board of Trade the following Monday, I heard him refer to part III as part of the solution to what he was doing with the coal industry. He suggested that the urban regeneration agency would make things all right for the miners who, he declared, would lose their jobs.

If it is true that there is an economic crisis, we have a sinking ship. When a ship sinks, it sends out mayday signals to boats in the vicinity. Thank goodness such ships do not send out mayday signals to Ministers in this Government. Rather than use the boats in the vicinity. Ministers would say that they did not like the colour of their crew. They would intend to save the sinking ship by refitting a different boat and appointing their own crew before seeing where the problem might be. That is a recipe for delay and disaster.

It is interesting that a favourite word used by consultants in economic regeneration is "flagship". We know that the flagship of flagships is the London Docklands development corporation which has lapped up more than half of all development corporation moneys over the past few years. Yet the surrounding boroughs in that part of London are still at the bottom of the employment league. That is hardly success in urban regeneration.

I know from my work in Sheffield in 1986–87 that we had a partnership committee—partnership is not new—on which we had representatives from the private sector, from higher education, from the trade unions and from the community. We agreed unanimously—but mistakenly as it turned out—to ask the Government for more resources to—reclaim derelict land in the lower Don valley area of Sheffield, which would be organised and co-ordinated under the direction of our partnership committee. The Government did not like the colour of that and said that they would give us a development corporation.

As a result of that decision, it was not until three years later, in 1990, that any substantial programme of land reclamation was undertaken by the development corporation. The rest of the time the scheme was land and property led. We put sites on the market and waited for developers. We hoped that next week or next month, somebody might come and put some money into the area. We did not carry out the crucial reclamation work which was necessary, nor did we go in for crucial consultation and winning the support of the people in the deprived areas of Sheffield.

The same will happen with the urban regeneration agency. I imagine that matters will proceed as follows. Under schedule 16, it is clear that the Minister will appoint a minimum of six people—probably men—to the agency. They will not have the chance to elect a chair, because the chair, Lord Walker, has already been chosen for them. The six, seven or eight people will then decide to appoint staff, which will take a few months. They will then, as other hon. Members have said, decide where to locate their headquarters, whether Teesside, Leeds, central London or the docklands, and they will buy some premises. A few months later, the staff in post will decide that they need to appoint some consultants to advise them where best to start their work. The consultants will ask existing civil servants, existing local authorities, existing partnership committees and existing officers who try to get urban regeneration off the ground what is the best thing to do first.

The consultants will be well paid.

Sheffield development corporation spent £2 million on consultants in the first two years. It is not surprising that the organisation that has been most fulsome in its support for part III is the Royal Institution of Chartered Surveyors which stands to gain most from the setting up of the new body.

There is nothing in the objectives of the agency that suggests that the ridiculous process, with its deliberations and proceedings, will be open to public scrutiny. The agency will have to give an annual report to the Secretary of State, which will be available to Parliament, but there is nothing in the Bill about the proceedings being open to public scrutiny, as our partnership committees and our local authority committees are.

There is nothing in schedule 16 about how the work of the agency will be linked to the major finance programmes of the European Community. As the Conservative party is making so much fuss about the debate tomorrow, one would think that the Bill would make some reference to the structural funds of the European Community and to the need to link to them. Of course, the Government have abolished the regional bodies in England that could have made sense of the work. Although the process may work in Scotland and in Wales, it will not work in England because the regional bodies have been abolished. No link is suggested in the Bill, which is a point that should be redressed. There is also little in the Bill to link part III with housing, with social programmes, with training, with employment, with trade or with job plans.

I do not know why the Secretary of State does not have faith and confidence in the existing civil servants at regional level or in the existing staff in the local authorities who have been well trained in the work of urban regeneration for many years. They, through hard experience, have learnt to ensure that inner-city finance goes to the people most in need and that is maximised for those in areas of poverty.

My guess is that the Secretary of State does not go to such organisations or such people, because he knows that he will not like what he hears. My hon. Friend the Member for Leeds, East (Mr. Mudie) pointed out that he would hear that land and property-led regeneration in the middle of a recession does nothing for the lives or jobs of the people living in urban areas.

What helps those people are employment initiatives based in the community. What helps them are employment and training initiatives led by the black and ethnic minority communities. What helps them are improvement area initiatives, and upgrading shops and small businesses. What helps them is support for existing businesses, which the agency is not about. What helps them are quality projects which will boost new industries—

Mr. Deputy Speaker

Order.

6.29 pm

Mr. Jonathan Evans (Brecon and Radnor)

Thank you, Mr. Deputy Speaker, for allowing me to speak on the Second Reading of this important Bill.

I begin by declaring an interest as a member of the Law Society, although I derive no pecuniary benefit from my membership—quite the reverse. The Law Society has pressed for the landlord and tenant provisions of the Bill to be separated from its public housing provisions. The society proposes that the landlord and tenant provisions should be dealt with by legislation in its own right. Apparently, the Law Society is confused as to why the two elements should have been combined. Surely we can see the reason for that, however: the Government are determined to defend and extend individual rights effectively in the face of opposition from vested interests, whether in the public or in the private sector, and those vested interests include both the major landlords' interest and the municipal housing authority interest.

The Bill deals with a variety of matters, but I propose to confine my remarks to the rent-to-mortgage scheme and the proposals in relation to compulsory competitive tendering. On rent to mortgage, it is interesting to note that what we have heard from the Opposition merely replicates some of the observations made by the Association of Metropolitan Authorities and others. In essence, they all say that this is not the right time. It is rather like the story of Napoleon and Josephine—it is a good idea but apparently not tonight. In fact, the measure is sorely overdue. Rent to mortgage has been on the political agenda since 1978, when Lord Walker first proposed—

Mr. Raynsford

Will the hon. Gentleman give way?

Mr. Evans

I am sorry. My speech is subject to the time limit, so I am sure that the hon. Member for Greenwich (Mr. Raynsford) will forgive me for not giving way.

Lord Walker introduced the proposals in 1978 and, 10 years later, battled hard against a Government who at that time were not prepared to go beyond the pilot schemes that have been referred to. I am glad that, at long last, the rent-to-mortgage scheme is to be enshrined in legislation.

I was interested to note that we heard nothing from the Opposition Front-Bench spokesman about the situation in Wales. We had figures for Scotland and England, but no figures for Wales. Again, I declare an interest: before I came to the House I had the honour of being the deputy chairman of Housing for Wales, the equivalent of the Housing Corporation and I was closely involved in the establishment of the pilot scheme in Wales. I am pleased to say that, yesterday, representatives of the Development Board for Rural Wales told me that half the organisation's tenants have expressed an interest in the scheme and that a number of the inquiries regarding rent to mortgage eventually proceeded on the basis of the right to buy. Taking those two schemes together, about 10 per cent. of the board's tenants have taken advantage of that Government scheme, which has been very worth while.

The record of the Labour party and its friends in the local authorities on housing management is especially poor. Unfortunately, the hon. Member for Lewisham, East (Mrs. Prentice) seemed unaware of that. As my hon. Friend the Member for High Peak (Mr. Hendry) said, it was declared earlier this year that some £430 million was outstanding in council rents. The hon. Member for Lewisham, East seemed unaware of the fact that 12 of the 20 worst offending councils were in London. Those figures show massive incompetence on the part of many of our local housing authorities. If they do not show incompetence, they show, as one newspaper pointed out, the most unsavoury sort of political collusion between councils and tenants—a sort of political payola. Such councils are unfit to be in charge of managing public housing and, in my view, the Government's proposals are long overdue.

The hon. Member for Greenwich will know that, in 1985, Alice Coleman published a book called "Utopia on Trial"—the result of a five-year study of public housing funded by the Joseph Rowntree Trust. It was claimed when the book was published, and subsequently, by Professor Patrick Nuttgens, that it represented the most sweeping condemnation of local authority housing management ever produced. It was an effective verdict on 40 years of municipal socialism in housing management. All the results suggested that local authorities had failed disastrously in terms of management as well as design.

Those observations were followed up by the Audit Commission in its report the following year. The Audit Commission suggested that local authorities needed to brush up their performance in two respects—better maintenance and better management. According to the commission, it was not—as we so often hear from the Opposition—a matter of money. The commission said that standards of housing management give cause for concern where large sums of money have been spent on growing bureaucracy rather than better services for tenants. That is the crux of Conservative Members' argument.

Mr. Raynsford

Will the hon. Gentleman give way?

Mr. Evans

Perhaps I could further—

Mr. Raynsford

The hon. Gentleman is afraid to give way.

Mr. Evans

If my speech were not subject to the time limit, I should happily give way. The hon. Member for Greenwich will be interested to hear—he may even have read the article—that, in 1987, David Donnison, writing in The Guardian, said: Local government … is very bad at most of the things the housing service has to do. It is good at meeting needs; bad at meeting demands—particularly the demands of people coming from other towns. It is good at giving its staff a hearing; bad at listening to its customers. It is good at keeping rents down—even when centrally funded housing benefits protect the poorest tenants—but bad at repairing and maintaining people's homes efficiently. That is what sustains the gulf between the approach of the Government and that of the Opposition to housing management and illustrates the desperate need for the Bill.

As Alice Coleman said in her book, for 40 years the Labour party had sustained a Utopian view of housing. It is Labour Members who should be experiencing a sense of social failure. The housing schemes of the 1970s and 1980s were ineffectual and a huge waste of public money.

Mr. Raynsford

Come on.

Mr. Evans

Those are not my words; they are Alice Coleman's words, as the hon. Gentleman well knows. The Utopians have had their day—40 long years of it—and it has become increasingly clear that their social engineering has not worked. The answer lies in minimum regulation and maximum consumer choice. The Bill will provide that, and I urge all my hon. Friends to support it.

6.37 pm

Mr. George Howarth (Knowsley, North)

I should like to reduce the temperature of the debate somewhat and return from the realms of fantasy to which the hon. Member for Brecon and Radnor (Mr. Evans) took us and come back to the subject of housing and urban regeneration.

The Bill and ministerial utterances must be judged against the background of a severe housing crisis, and the extent to which what the Government try to do addresses the problems. It is a twofold crisis. First, there is the crisis facing those living in inadequate housing and the homeless. The second crisis has a profound effect on our economy—the debt overhang, the problems of the construction industry and the lack of confidence in the housing market. All those matters need urgently to be addressed not merely because many people are suffering as a result of them but because an economic recovery can take place only once they have been addressed. It is against the background of those important questions that we should judge the Bill.

I will deal with the better part of the Bill first. I welcome —almost without qualification—the long-overdue reform of leasehold. The Minister for Housing and Planning will confirm that my hon. Friend the Member for Hammersmith (Mr. Soley) and I, with some of our colleagues, up to a year before the general election were willing to participate and co-operate in bringing forward legislation in that regard. Although the provision is overdue, it is welcome.

I hope that the Minister can, when he replies to the debate or in Committee, give a convincing reason why the commonhold proposals could not be incorporated in the Bill. We have a partial resolution of the problems facing leaseholders when we could have had a comprehensive bite at the issue and resolved the problems for the next generation and longer. As it stands, we have not completed the process.

Part II of the Bill deals with compulsory competitive tendering, social housing and housing management. The Bill compounds mistakes that the Government have made possibly since 1979–80, but most certainly since the mid-1980s. The Government mistakenly assumed, probably because very few Conservative Members represent urban areas—[HON. MEMBERS: "Not true."] Well, those who do represent such areas clearly walk around with their eyes closed.

The Government mistakenly assume that people who live in urban areas regard Labour-controlled local authorities with deep loathing. Ministers ignore the fact that in areas such as mine, in the London boroughs and elsewhere, the electorates return Labour councils year after year. They do not do that because they think that those councils arc doing a bad job. They are aware of the difficulties facing the councils as a result of central Government funding policy in relation to housing and other policy areas. However, the electors believe that the councils are generally doing quite a good job.

As a consequence of the Government's misunderstanding of what is happening in urban areas, they take a completely false approach to housing in inner city areas and in areas such as my constituency. The Government believe that they can impose an outside agency which bypasses local government and that that will solve the problem. The Government seem desperate to continue that approach although the evidence is that no one wants those agencies and, where they have been offered, people are unenthusiastic about them.

Such an approach gave us housing action trusts and, in the Housing and Planning Act 1986, produced the voluntary transfers. None of those has taken off. There is no huge groundswell of support for them from tenants' organisations and residents. The Bill represents the next step in that it takes away a tenant's right to decide how a landlord is chosen, who it is, in what circumstances and what regime the landlord should apply. Tenants will not be consulted and there will be no ballot.

The Government assume that housing management is an evil force in urban areas and that it must be supplanted by something that they dream up through compulsory competitive tendering. That is far from the truth. In areas such as mine, tenants understand the difficulties facing local authority housing departments. They sometimes become frustrated, but they do not want an external agency to run their housing for them.

We must also consider the process of the urban regeneration agency, which seems to be a modern form of colonialism. As the Government have no electoral foothold in the urban areas, they have decided to send in Lord Walker in the guise of a latter-day Clive of India to set up a form of colonial administration. It is interesting to contrast what is proposed with what has already been carried out.

The ludicrously self-styled President of the Board of Trade set up the Merseyside development corporation and I am glad to see the Secretary of State for Wales, who represents a Merseyside constituency, on the Government Front Bench now. After a few years, that well-known socialist Professor Patrick Minford resigned from the Merseyside development corporation board saying that it had had an overall negative effect on jobs.

It is possible that the Merseyside development corporation could become the agent of the urban regeneration agency under the Bill. The corporation is not interested in industrial development or a working waterfront. Whenever proposals have come forward in that regard—the Secretary of State for Wales will be aware of the saga of Hamilton Oil—the corporation has stood in the way of those proposals. When the chief executive of the corporation was asked recently what achievement he was most proud of, he identified the fairy lights on the parish church at Pier Head. It is clear that the corporation is not working. We want a working port, but instead we get pretty schemes which do not bring employment in their wake.

The Government should take stock of those schemes and what they have achieved so far before repeating the same mistakes. The Government seem to want to shuffle the pack every few years and create new agencies which simply repeat the failures of earlier agencies.

My main concern lies with the major housing crisis in this country and we must consider what will happen if the Bill reaches the statute book in its present form. The Bill will do nothing to help the homeless. It contains no provision to help the homeless. It will do nothing to remove the debt overhang. It will not create a realistic mortgage rescue package, which is desperately needed. The Bill does nothing to reform the inappropriate system of housing finance which has grown up in recent years. Hon. Members are aware that something needs to be done urgently about the housing finance system, but that issue is not addressed in the Bill.

The Bill does nothing to recycle the capital receipts into schemes which would provide for the homeless and provide employment for the unemployed in the construction industry and thus start the process of moving the economy once more. I should like—

Mr. Deputy Speaker

Order. I call Mr. Butterfill.

6.47 pm

Mr. John Butterfill (Bournemouth, West)

May I first apologise to you, Mr. Deputy Speaker, and to the House for having missed the opening part of the debate due to my service upstairs on the Trade and Industry Select Committee. However, I am grateful for the opportunity to participate in this important debate.

I welcome the proposals in the Bill to improve the rights of tenants and to create urban regeneration agencies. Those measures are long overdue and they are well conceived. However, I have some concerns about the proposals for leasehold enfranchisement. Although in general I welcome the proposal that we should reform the leasehold system, there are certain aspects of the proposal that need to be improved and on which I and many other hon. Members have received representations from the Law Society, English Heritage, the Royal Institution of Chartered Surveyors, of which I am a member, the Association of Land-Owning Charities and many others. I hope that my hon. Friend the Minister will consider tabling reasoned amendments in Committee to meet some of the concerns that have been expressed by those bodies.

At the moment, the scope of the Bill in relation to leasehold enfranchisement excludes charitable housing associations, and that is right. However, it does not exclude land-owning charities in general. There is a long and honourable tradition of housing provision by land-owning charities. I hope that my right hon. Friend the Secretary of State for Wales will consider generally excluding land-owning charities because, otherwise, they are convinced that their work will be inhibited. Most hon. Members will have received a communication from the Association of Land-Owning Charities in which it states: The overall effect of the Bill on our members would he to reduce substantially the money which is available for charitable purposes. That is not my right hon. Friend's intention. I am sure that he wishes land-owning charities to be able to continue their good work, and therefore I urge that point on him.

Also, I hope that my right hon. Friend will consider the representations that he has received from English Heritage that such is the importance of certain areas of our national heritage that they too should be excluded from the scope of enfranchisement. In those cases there would have to be an automatic right to a new long lease, but I hope that my right hon. Friend will consider that areas which are of themselves conservation areas with a very high proportion of listed buildings, perhaps as much as 20 per cent., should be excluded from the scope of enfranchisement and dealt with differently.

Many heritage organisations support that view and it seems to have a lot of merit, as otherwise those areas might fall into the disrepair and disharmony that we have seen in certain parts of London. It is not adequate to say that we could arrange for schemes of management. If landlords in those areas lose their financial incentive to maintain their estates, I cannot see what further incentive there would be for them to enter into management agreements. They are very specialised areas and only a small area of exception would be required under the Bill, but I hope that my right hon. Friend will consider it seriously.

The other matter of concern relates to the qualifying provisions. I am rather surprised that the Leasehold Reform Act 1967 and the present proposals differ slightly. In the 1967 Act, enfranchisement was restricted to the principal private residence of the individual concerned and it is not so restricted in the proposed legislation. Unfortunately, there has been quite a lot of evidence that there is already speculative purchase going on by investors in that form of property—people out to make a quick buck. I am sure that it is not my right hon. Friend's intention to enable them to do that. Therefore, those who have second homes and those who are pure investors should be excluded from enfranchisement. It should be restricted to principal private residences. In the case of blocks of flats, that might mean that we have to drop the qualifying majority. I should be quite happy for that to happen, but I do not think that we should be in business to give speculative profits to investors.

I am concerned that the compensation as presently proposed is anomalous. First, the compensation differs between houses and flats. Under this proposal, houses would have the higher level of compensation that was available under the 1967 Act, but they would not enjoy the additional compensation benefits that are proposed under this legislation. Therefore, a landlord who was being acquired by his tenant, if he owned a house, would be disadvantaged compared with the landlord of a flat. I am quite sure that that is not what my right hon. Friend intends.

Secondly, the level of compensation differs according to whether one is being acquired by a tenant or by the state. It is right that the state should have rights of acquiring people's property. We have rightly said that if that happens the owner of the property is compensated by getting 110 per cent. of the value plus the right to any redevelopment value occurring over the next 10 years. That is not provided for in this legislation. They should sit on exactly the same basis from the point of view of compensation.

Similarly, even if we cannot provide for 110 per cent. of value under the proposals, we should compensate the landlord in some way for his loss. In many cases, he will be the reluctant party to the process. Therefore, if there is a marriage value—that is, the difference between the value of the property in one ownership, freehold and leasehold together, and the value of the two parts—the whole of that marriage value should go to the person who is the reluctant party, namely the landlord. It should not be divided between the two because it should not be our business to try to give a profit to the tenant. The tenant should acquire what he needs to acquire, which is the freehold interest, for its fair value. The marriage value should go to the landlord.

There is another point that I am afraid that we cannot provide for, and that is that a landlord such as a pension fund which is compulsorily acquired—they are not all private individuals; many are pension funds, for example —by tenants has to reinvest that money. The costs of reinvestment can include stamp duty, legal costs, agents' fees and so on. They could be 4 per cent. or 5 per cent. That is a loss to the pensioners who are supported by that pension fund. I do not think that we have addressed sufficiently in the compensation aspects of the Bill the costs to those who are genuine investors providing housing which meets a public need.

I hope that some consideration will be given to making this legislation much more comprehensive. At the moment, the 1967 Act is left in place; we do not replace it with this legislation. A consolidating Bill would have been preferable—one that took in all the 1967 Act and put everything on an equal basis. At the moment, we have quite a number of anomalies between the two measures. Also, as Opposition Members have suggested, we could address the commonhold situation. I feel strongly that that part of the Bill has been brought forward fairly hurriedly and it could have been better presented if we had been able to present an overall consolidation measure. I very much hope that further consideration will be given to that point in Committee.

We need to impose a time limit for enfranchisement. The Association of Land-Owning Charities has clearly said that it feels that it is wrong that the right to enfranchisement should go on indefinitely, thus enabling tenants to pick a time when market conditions best suit them and most disadvantage the landlord. Therefore, I hope that my right hon. Friend will consider imposing a time limit after the passing of the Bill for the exercise of enfranchisement rights and also set out clearly—again, the Bill does not do so at the moment—that leases that are granted after the passing of the legislation will not qualify for enfranchisement. It is clear that that replaces the present situation. Anybody who takes out a new lease after the passing of the Bill would know exactly what the situation should be.

Those are a few brief points. In general, I welcome the Bill. I hope that my right hon. Friend will feel able to meet some of my concerns.

6.57 pm

Mr. Nick Raynsford (Greenwich)

The contributions of my hon. Friend the Member for Knowsley, North (Mr. Howarth) and of the hon. Member for Bournemouth, West (Mr. Butterfill) have brought us back to reality after a period in which I feared that the debate was losing touch with reality. Perhaps that is not altogether surprising, given that the debate started in a rather curious way with a Secretary of State who revealed a most astonishing approach to history—an approach which he shares with Joseph Stalin. In other words, his ideological position was such that he found it impossible to accept that the major leasehold reform initiative of 1967 was introduced by a Labour Government.

That sense of fantasy also spilled over to several Conservative Members, whose view of local authority housing is clearly conditioned by the briefs that they receive from Conservative party central office. It must be extremely difficult for them to face reality when Labour councils are returned repeatedly in many areas of the country and will go on being returned. Unfortunately, Conservative Members find it uncomfortable to recognise that reality. We had another touch of unreality—

Mr. Gary Streeter (Plymouth, Sutton)

Will the hon. Gentleman give way?

Mr. Raynsford

Unlike the hon. Gentleman's colleagues, who declined to give way, I shall do so—but briefly.

Mr. Streeter

Does the hon. Gentleman accept that the same principle that he has outlined also applies nationally? The people of this country have continued to return a Conservative Government for the past 13 years and it looks very likely that they will continue to do that.

Mr. Raynsford

As the hon. Member must be aware, the result of the last general election was very far from an endorsement of Conservative policies; their majority was dramatically reduced and, as they all know only too well, if an election were held tomorrow most Conservative Members would lose their seats.

The other touch of reality lacking in the debate is that some Conservative Members, sadly not now in their places, have a quite extravagant view of the possible effects of this piece of legislation. The hon. Member for Kensington (Mr. Fishburn) forecast that hundreds of thousands of leaseholders would benefit, and we read something similar from him in The Sunday Times last Sunday. In reality, as the Government Front Bench will know all too well if they look at the experience of previous legislation—the Landlord and Tenant Act 1987 is very instructive—only a very small number of people can get through the immensely convoluted and complicated processes involved in taking advantage of those procedures. The Government are in for a nasty shock if they are expecting hundreds of thousands of people to avail themselves of the provisions.

The Opposition welcome the principle of leasehold enfranchisement—we should have liked to see it accompanied by the introduction of commonhold, and we regret that it is not—but in reality the scheme being put forward will frustrate the wishes and aspirations of a substantial number of leaseholders, who will simply be unable to get through the process.

Let us consider some of the obstacles. First, there are the eligibility criteria. We have the requirement that no more than 10 per cent. of the floor area of any property can be non-residential. I do not know why the Government have chosen that figure. In the 1987 Bill, they took 50 per cent. as the figure—a far more sensible one which allowed for circumstances where flats are above shops and where a substantial proportion of the floor area of the property will not be residential. Why they propose a 90 per cent. residential requirement I do not understand, but it will restrict leaseholders in properties where there are shops on the ground floor. As has already been pointed out, it would require nine floors of flats above to make the building eligible, and this will not apply in many cases.

Secondly, there is the resident landlord test. Where a landlord resides in the property and it is a converted one, not a purpose-built one, it will not be eligible—obviously in relation to the size of the property, as the Minister pointed out from a sedentary position. As the Consumers Association survey indicated, this could exclude something like 5 per cent. to 6 per cent. of total properties. That is a significant number to be ruled out.

We then have the requirement about low rent. Here again, we have heard evidence of new leases being granted with ground rents just above the £1,000 limit in London, or £250 outside, which will make them ineligible. So already we have a series of eligibility criteria which will provide obstacles.

We then turn to the procedures. Not only must two thirds of the properties in the block be occupied by eligible leaseholders, but two thirds of the eligible leaseholders must trigger the process. Why two thirds? In the Landlord and Tenant Act 1987, a simple majority was the trigger. Why are the Government going for a harder test this time? Why are they creating more obstacles in the way of leaseholders taking advantage? We deserve to have some answers on this.

The Minister for Housing and Planning (Sir George Young)

The hon. Member for Greenwich (Mr. Raynsford) will know that the 1987 Act was triggered in cases of bad management by freeholders. That is a totally different background to the legislation now before the House where, as we have heard from my hon. Friend the Member for Kensington (Mr. Fishburn), there is no presumption that the freeholder is bad.

Mr. Raynsford

The procedure is designed to eradicate a situation which the Government regard as unsatisfactory. The Secretary of State said in his introduction that the leasehold is an anomaly and something that we must change, so why put that obstacle in the way? There was no 66 per cent. requirement in the 1987 Act, which also applied to other circumstances and not just to bad landlords; it was a measure designed to deal with the problems encountered by leaseholders, and there are manifest problems at the moment which need remedies.

Then we have the procedures themselves, the provisions for notices and counter-notices, and for landlords to object on a series of grounds: first, whether the tenants are eligible; secondly, if the landlord claims that he is going to redevelop the property in the next five years, it could be a ground for obstructing and stopping the application; thirdly, if the landlord claims that he cannot manage or maintain certain properties quite separate from the ones subject to the application he can require the applicants to buy those as well, which could put major financial obstacles in their way. We also have the whole valuation process, which will be complex and difficult for many leaseholders to get through. It would therefore be very rash for Conservative Members to assume that there will be a rush of people in large numbers taking advantage.

I look forward to having an answer to a question that I posed recently, but to which I have received no reply, on the number of people who have taken advantage of part II and part III of the 1987 Act. I suspect—here I must sound the same warning as was sounded by the Committee which considered that legislation—that the procedures are too complicated and difficult and that it is unlikely that many will benefit from them.

Turning briefly, because my time is limited, to the second part of the Bill, we are dealing here essentially with a rag-bag of measures which have little or no relevance to the reality of Britain today but are simply Conservative ideology. The rents-to-mortgages scheme has been tested in four areas of the country—Scotland, Wales, Milton Keynes and Basildon—and has been given a decisive thumbs-down in every area. If the hon. Member for Brecon and Radnor (Mr. Evans) believes that the time has come for this, I only hope that if he ever sets up in business he will do his market research more thoroughly, because if the time has come for rents-to-mortgages we are dealing with a bizarre interpretation of reality.

The right-to-repair initiative, as we have already heard, has been a disastrous error, the statistics had to be withdrawn as the figures were so embarrassing—only nine people availing themselves of it in the past year. But here is a serious point. The scheme failed because it was introduced by regulation; it was not subject to scrutiny in the House—[Interruption.] I say "serious" in comparison with the rents-to-mortgages scheme and the right-to-repair scheme which are fantasies of Government ideology. The regulations were not subject to the scrutiny of the House, and they produced a monstrous and ineffective scheme which failed. I warn the Government that they are in danger of repeating that failure by once again going on the same route and not including details of the scheme in the legislation; they are simply trying to legislate to give themselves powers to introduce such a scheme, and they could well be opening the door to a similar disaster in the future.

The whole issue of the delegation of management is fatally flawed by the decision to take from the tenants the right to a say about compulsory competitive tendering. There could be no clearer indication of the Government's hypocrisy with regard to the Bill than the fact that, while talking about helping tenants, they are acting to reduce the tenants' right to have any effective say over the management of their homes.

The Bill will do very little to tackle the real housing problems. It is a smokescreen from a Government who have failed lamentably to meet the country's housing needs. It is a smokescreen designed to give the impression of activity, and it will not provide the answers that are desperately needed by the homeless and by people living in appalling conditions and waiting for better homes.

7.7 pm

Mr. Anthony Steen (South Hams)

I do not intend to follow the hon. Member for Greenwich (Mr. Raynsford). He was very technical and I think that my hon. Friends want to hear something more simple. I am, therefore, going to give a much more simple speech.

Talking about facts and figures, I am sure that the House would like to know that I have just missed a record by seven minutes. I have been here for 18 years and I have never spoken in a Second Reading debate before seven o'clock. I am sorry, Mr. Deputy Speaker, that you were unable to call me eight minutes ago; I would then have beaten that record.

We have been talking about figures. My hon. Friend the Member for Kensington (Mr. Fishburn) mentioned that it was a hundred years before leasehold reform came to the House. I am glad to say that the part of the Bill that I want to talk about—economic and urban regeneration—has taken only 14 years. Successive Governments, Labour as well as Conservative, always talked with great interest about vacant, dormant, derelict and under-utilised land in public ownership, but it was not until today that something has been done about it.

We have seen the results of the lack of interest of successive Governments because green-field sites on the edges of cities have tended to be eaten away and, rather like a doughnut, the inner cities, whether they be Liverpool or Plymouth, have had an emptiness in the centre which years ago had jam in it. They built new towns such as Skelmersdale outside Liverpool, and Ivybridge outside Plymouth in my constituency, instead of filling up the empty hole in the inner city.

It is not surprising, therefore, that in 1981 the Secretary of State for the Environment, then my right hon. Friend the Member for Henley (Mr. Heseltine), pointed out the need to find out where all the vacant land was. He set up a register—which, although we all welcomed it at the time, was really a delaying tactic: a way of not doing anything. He employed a good many civil servants, costing the country a quarter of a million pounds a year, to map out all the derelict vacant land. To their horror, the civil servants found more than 100,000 acres.

Opposition Members do not realise that one of our aims in privatising public vacant land was to take land off the Government register. Every time a public utility was privatised, the vacant land attached to the company concerned came off the register. About 120,000 acres went off the register during the 1980s, not because it was marketed or sold but simply because it was privatised. The Government then decided that it would be too costly to keep the land registers going. They closed them centrally, disposed of the quarter of a million pounds' worth of civil servants and transferred the responsibility to district councils. If questions are asked nowadays about land registers, no one has a clue where the land is.

It is especially welcome that, despite all that, the Government have decided to establish an urban regeneration agency. I pay tribute to two of the co-authors of a book that I wrote three years ago. One is Clive Darlow, who has been involved in strategic land planning and urban renewal for some 25 years; the other is Jonathan Harris, a chartered surveyor and senior partner in a major London practice. We managed to cobble together a unique idea, which we called PLUMS. As a result, the Conservative party included our proposal in its manifesto. It is a pleasure to see the Ministers who are present today, and to know that at last the Government are to tackle a problem that many hon. Members have been highlighting for 14 or 15 years. I know that my right hon. Friend the Secretary of State for Wales will comment on it when he winds up the debate.

Let me deal with some of the problems. The urban regeneration agency is a quango. Many hon. Members on both sides of the House do not like quangos; I was a quango hunter in my younger days, and I was rather sorry to see that another has appeared. The urban regeneration agency is unique, in that it is a peripatetic quango. It will not be based in Teesside or Tyneside, or in London; it will move around. It is rather like a camera with a lens which zooms in on public and private vacant and derelict land. I think that the Secretary of State can say something when the land is private. It identifies the land and says, "We are going to get our teeth into that."

The agency, however, also uses an odd animal called English Industrial Estates, which—surprise, surprise—is another quango. Here we have quango upon quango, operating a zoom lens. The Bill, however, contains a catch: it states that the urban regeneration agency can set up yet another quango—an urban development corporation. A peripatetic quango, working through an existing quango, can set up a third quango. That is an interesting possibility for the Guinness Book of Records.

I think that we should hear a little more about the powers of the triple-headed quango. Clearly it will be full of public officials and civil servants; no doubt it will be caught up by the Treasury, and there will be problems and rules and regulations. The good news is that Lord Walker, dressed as St George, will try to slay the quango dragons.

That quango power is based on compulsory purchase orders. I can tell the House in confidence that I talked to the then Chief Secretary to the Treasury before he became Prime Minister, and decided to test the idea on him. He said that he liked the idea of privatising or auctioning off public vacant land, but did not like the idea of compulsory purchase. The idea presented in PLUMS was that public vacant land in regions should be moved into a private company, and that the public authorities should be given the value of the land at the time of the compulsory purchase. The private company in the regions would market the land; as it was sold off, we would give the public authority not only the market value but the increase in the value.

This quango, however, takes the land away—through English Industrial Estates—and does not give the public authority any additional value when it markets and sells the land. Moreover, it is unlikely to market or sell the land, because it is using the public sector. No new money will come to the quango; the existing money is simply put into a bag and handed around. There is very little private sector involvement.

I was pleased when the Secretary of State said, in answer to my intervention, that we would attract private sector involvement. The key to our PLUMS idea was the proposal that we should privatise and market public land and then share the proceeds and profits with the public authorities from which we had taken that land. Under the peculiar arrangement in the Bill, there is quango upon quango—with a third quango possibly involved—with plenty of public officials involved, but no private money. I think that we should be told something about the private money element, and about how the peripatetic quango will operate.

I have given the House a thumbnail sketch of my reasons for welcoming the establishment of the urban regeneration agency. If it is to market and sell land that has been locked up for hundreds of years, however, it will need the commitment and involvement of the private sector. The private sector will be needed to package and organise the pieces of land that are to be marketed and sold. Although, like everyone else, I have the greatest confidence in Lord Walker, I am by no means confident that the establishment of another quango will do the job.

I think that setting up the urban regeneration agency is a first-rate idea. I hope, however, that the Secretary of State for Wales—for whom I have the highest regard—will satisfy the House that that public agency will do the job that we all think it should do.

7.16 pm

Mr. Cynog Dafis (Ceredigion and Pembroke, North)

I wish to speak mainly about housing in Wales, particularly in rural Wales. Although the Bill contains some welcome aspects, including the proposals for leasehold reform, part II will be damaging in some respects, and at best will be irrelevant to the needs of Wales.

Great anxiety is felt about the effects of the proposed compulsory competitive tendering on housing management. It is highly unlikely that any housing association will bid for the work: if the Government doubt that, I suggest that they ask the officers of Tai Cymru how many housing associations they think will be interested. Housing associations have made heroic efforts to cope with their rapidly changing role, and with an increasing burden of work—not least in housing management. I cannot imagine that they would want to add another dimension to that work.

Unless council departments succeed in retaining their function, and unless tenants' organisations take over, it is highly likely that contractors from outside Wales will obtain the work. That has already happened with a school cleaning contract in Dyfed. English companies will come in and take the work. That means, at best, uncertainty of employment for the staff of the existing departments, who may well lose their jobs. It also means inferior working conditions, if the normal pattern of events develops. Even more significant, profits will be siphoned out of the area, resulting in the impoverishment of the local economy. There will be increasing centralisation of economic power and wealth.

No one whom I know—including those in the housing association movement—believes that there is any reason to think that the management of council houses will be any more efficient or sensitive as a result of compulsory competitive tendering. In fact, it is likely to be much less efficient and sensitive.

I have already mentioned, in an intervention, the inconsistency that I find in the emphasis on the right to buy for council tenants, who of course are secure tenants, and the fact that housing association tenants, who are increasingly assured tenants, do not have the right to buy. I should like to hear the Secretary of State's justification for this inconsistency. We may have heard an honest reason for this difference from the hon. Member for Brecon and Radnor (Mr. Evans) in his remarkable attack on local government's record in housing management. He revealed quite clearly that, in his opinion, local government is not fit to he in the business of housing management. I, and other Opposition Members, I am sure, and certainly members of my own party, disagree. We know from experience of the excellent work that councils do in housing management in many parts of Wales.

My main criticism is that this Bill does nothing to provide the integrated housing policy needed in Wales, and, I dare say, elsewhere too. It will do nothing to tackle the problem of homelessness. I must emphasise that homelessness exists in rural areas; it exists in the idyllic-seeming western rural Wales just as it does in urban areas.

In Ceredigion, for example, by the end of this financial year, the district council will have spent a quarter of a million pounds, probably, on bed-and-breakfast accommodation for homeless people—enough to build eight to 10 houses. The statutory homeless will be taking, up something like 30 per cent. of the lettings in this corning year, reducing provision by that much for other applicants, including young families who need houses.

The current strategy has very serious deficiencies. I refer, for example, to the way that renovation grant policy is in something of a shambles. Ceredigion district council estimates that it will need about £3.4 million to meet the demand for renovation grants in 1992–93, and it is highly unlikely, the council fears, that the Welsh Office will allow sufficient funding to meet that need. Preseli district council has had to freeze its renovation grant programme, with very serious effects for small builders and architects who are currently dependent on that work. There has been a serious underestimate of the demand for renovation grants and councils have been left high and dry as a consequence.

The Secretary of State for Wales (Mr. David Hunt)

I have made available this year an additional £18 million for Wales, making £400 million over the three-year period, with £190 million being available this year for home renovation grants.

Mr. Dafis

All I can say is that the district councils in my constituency are now facing real difficulties and will be approaching the right hon. Gentleman on this matter. I am asking him now to take this on board and give it very serious consideration. There are serious deficiencies in this area. Some people might say, too, that these large sums of money might be used in more fruitful ways if there were a proper integrated housing strategy.

Meanwhile, Ceredigion district council is unable to fund the desperately needed renovation of pre-reinforced concrete housing—that is, the PRC housing that remains in the public sector—while, of course, the PRC housing that has been bought under the right to buy has obtained public funding for renovation. That is another inconsistency. Again, I appeal to the Secretary of State for Wales to treat sympathetically applications for special funding for tackling the PRC problem in my constituency and elsewhere.

Councils are unable to intervene—this is a key point —to purchase some of the 2,000-plus holiday homes in Dyfed. In some villages in western and north-west Wales, as much as 40 per cent. of the housing stock are holiday homes. Large numbers of them are currently for sale; they are vacant. These houses are potential homes for local people. Councils do not have the capacity, the funding, the means to purchase, to renovate and let to local people. I believe that in rural Wales intervention in existing housing stock should be at the heart of policy. Inability to act in these key areas exists despite the fact that Ceredigion has £6 million of capital receipts from the sale of council houses, of which it is able to spend in this year only £280,000, I believe.

We desperately need an integrated housing policy for Wales. Renovation grants, of course, can play a useful part in such a strategy, but we also need such things as the designation of land within settlements—this is a planning matter of course, but it is relevant—for exclusively local ownership, and not just the land on the periphery of settlements, which is what the Welsh Office and the Department of the Environment, I believe, have proposed in relation to this function. We need adequate funds for the preservation of existing council-owned housing stock as well as sufficient new building to clear the staggering waiting list in rural Wales and elsewhere.

The Bill does nothing to facilitate the development of such an integrated policy. I doubt very much whether we shall ever have such a strategy in Wales until we have a democratic Parliament to design it and bring it into existence.

7.26 pm

Mr. Matthew Carrington (Fulham)

I greatly welcome this Bill—as, I believe, will all my constituents—particularly those parts of it which deal with leasehold reform. Leasehold tenure is long overdue for reform and I pay a high tribute to my hon. Friend the Member for Kensington (Mr. Fishburn), who has been pressing very hard over the years that he has been in the House to bring this reform forward. He has done so with the support of practically all inner-London Members, because the major abuses in the leasehold system have been in inner London.

We have heard a great deal this evening about the good landlords, and there are undoubtedly some very good landlords who have run their estates over the years very effectively and looked after their leaseholders in an exemplary manner. Unfortunately, there are also a great many bad landlords, and their number is increasing. It is not difficult to see why. The leasehold system started a great many years ago and was designed for people who wanted a form of tenure very different from that required by people buying houses or flats in London today.

What has changed is that during the 1960s, 1970s and 1980s we have seen the conversion into leasehold properties of a great many homes which used to be rented, in particular in my own constituency of large Victorian and Edwardian mansion blocks. These used to be rented and were run on a secure tenancy basis perhaps, but as those tenancies fell in they were converted into leaseholds for the existing tenants, or were sold and converted into leaseholds. There was also the conversion into flats of houses which had previously been in multiple occupation and again this was done on a leasehold basis, for the simple reason that there was no other satisfactory form of tenure available. So developers had to convert and then sell on a leasehold basis.

The developer had no interest, very often, in retaining the freehold, so the freehold was sold separately to the block. Throughout London, and not merely in my constituency, freeholds are being traded as commodities. Some people buy them and run them satisfactorily, but frequently they are bought by people who perceive that ownership of a freehold and the rights that it confers is a way to make money out of the people who are unfortunate enough to find themselves with a leasehold tenure in a property. The way in which people make money out of freeholds is straightforward: by inflating the service charges and the maintenance and repair costs; and by adding on charges for managing the builders' contracts. There are innumerable ways to make money legitimately out of owning the freehold of a leasehold block of flats.

Too often freeholders have tended not to do the work that leaseholders have paid for, although as my old opponent the hon. Member for Greenwich (Mr. Raynsford) said, the Landlord and Tenant Act 1987 introduced some protections, but it did not work satisfactorily and was not easy enough to implement.

I am glad that the Bill goes a long way towards remedying the defects and putting power in leaseholders' hands so that they are able to force the freeholder to justify himself, especially when he provides an unsatisfactory or costly service and are able to buy him out. The best form of tenure is for leaseholders to own the freehold. They will then be able to decide the level of maintenance that they want and the level of service that they are prepared to pay for.

That is by far the best system, but it is not without its problems. We must recognise that it does not always work perfectly when leaseholders own the freehold of a block. I know of several blocks in my constituency where the freehold is owned, and that has led to difficulties among the leaseholders, who disagree about how they should manage the company that owns the freehold. That makes it more important and urgent that we introduce the commonhold Bill, which will reduce some of the present difficulties of freehold companies in leasehold blocks. I urge my hon. and right hon. Friends to table that Bill as soon as possible, as it is the twin of this Bill and is urgently needed.

I am glad that the Crown Estate has said that it will go along with the provisions in the Bill. In my constituency the Crown Estate owns the freehold of several mansion blocks and it would be wrong if the estate did not accept that the tenure of those blocks should be treated like any other landlord's tenure, according to its normal practice. I am grateful that it has shown that intention.

The big problem is the rule on 10 per cent. of the property being commercial. That percentage is unduly restrictive in many London blocks of flats. In my constituency, there are few blocks with shops on the ground floor which have sufficient floors above to satisfy the 10 per cent. rule, and I urge my hon. and right hon. Friends to reconsider. That percentage will exclude many people who should be included, and will give rise to abuses by freeholders. Frequently, Edwardian and Victorian mansion blocks have old coal cellars underneath them. Where shops have been in commercial use on the ground floor, the cellars have not been used. By bringing the coal cellars into commercial use, for storage, the amount of the block in commercial use can be increased to well above 10 per cent. That figure is too low and I urge my hon. Friends to change it to 25 per cent. Ideally, it would be 50 per cent., as that is a more reasonable figure.

Heritage is often mentioned as though London's great conservation areas are all owned under the leasehold system by great estates, but that is far from true. Many historic parts of London have traditionally been owned on a freehold basis and continue to be. The Ladbroke estate, in the constituency of my hon. Friend the Member for Kensington, is one of the great mid-Victorian developments. It has always been owned freehold and has not suffered from any of the problems which have been outlined this evening. I do not believe that a change from leasehold to freehold would cause any great problems. People who own their property look after it better than people who own only the freehold and do not have an immediate residential interest in it. The maintenance of the great estates would improve under the Bill, rather than be threatened.

Another problem concerns the position of council tenants who have exercised their right to buy. Some blocks in my constituency contain a significant proportion of people who have exercised that right and I am sure that that is replicated throughout the country. We must consider the effects on them if they live in a block that will be affected by the Bill, which is in the middle of an estate where the roads and surrounding land are owned by the council. Will my hon. Friends consider that seriously and find out whether they need extra protection?

Apart from those problems, the Bill is greatly welcomed and I look forward to its quickly becoming law.

7.36 pm

Ms. Ann Coffey (Stockport)

First, I must draw the Minister's attention to the housing problems that we face. In my constituency, 7,000 people are on the waiting list. Before some hon. Member jumps up and says that Stockport is a Labour authority, it is not, and it has been commended on its housing management by the Department of the Environment, but it still has 7,000 on its waiting list. Those people are waiting to exercise their right to choose to rent, except that they do not have a choice.

The position in my constituency is similar to that in others and it is a result of the right-to-buy scheme and the fact that local authorities have not been able to replace housing that they lost through tenants exercising that right.

It is interesting that the tenants who exercised their right to buy tended to be in the better-off areas of the town, which has limited the choice of rented property for the remaining tenants. The 7,000 people on the list are part of the hidden homeless. They are camping out with relatives and friends, waiting months and often years for accommodation.

As Opposition Members know, most of our time is taken up trying to resolve housing problems that are insoluble—because there simply is not the accommodation —and listening to heart-rending stories of young families who have to live in intolerable circumstances for a long time. The fact that they are hidden does not make the problem more acceptable; the situation is intolerable.

I sometimes mention the possibility of the private rented sector to young families, but two problems are associated with that. First, the cost of a deposit is high and unaffordable. Secondly, if they live on income support and are entitled to housing benefit, there is sometimes a difference between the rent officer's assessment of what they should pay and the rent charged by the landlord. Because of that difference, the housing benefit does not cover the rent, unless the local council wishes to subsidise it out of the poll tax. As the Minister will appreciate, that is not an option which many local authorities could exercise, or would wish to, given the present financial situation.

Many of my constituents feel that the Government have little commitment to providing a rented sector. Many people want to rent accommodation, both council and other types. Other European countries have a higher proportion of rented accommodation, mainly because of the obsession of the British Government with house ownership, which they regard as a panacea for every problem. I accept that home ownership should be on offer, but many people do not want it. There should be a healthy rented sector, public and private, and on both counts the Conservatives have failed to deliver.

I am at a loss to see how putting housing management out to competitive tendering will help the situation in Stockport. There is nothing wrong with my local housing management, and the Department of the Environment will testify to that. But how can any housing management cope with the problem of 7,000 people wanting to rent property that does not exist? The problem is an inadequate supply of housing, not the way in which housing managers are dealing with the problem.

My hon. Friends and I support tenants' organisations and it is important for such bodies to help solve outstanding problems. But how will tenants' organisations becoming involved with management cope with the overall problem? How will they be any better at managing houses that are not available? They cannot provide vacancies if the accommodation does not exist.

The Bill refers to welfare services being provided from within the housing revenue account. As the Minister knows, the housing revenue account must balance. If welfare services are provided from that account, the result must be increased rents or a slowing down of the process of repair. Either way, some other aspect of the housing revenue account is bound to suffer.

While it is important for welfare services to be part of housing provision—that must be so, with the increasing elderly population who are living longer in the community —including all the support services, I caution against the notion of looking automatically to the housing revenue account to pay for those services. They should properly be provided and paid for by the council and taxpayers as a whole, rather than the burden falling on the rent payers; otherwise they will be paying several times over for those services. They will pay as renters, as poll tax payers and as taxpayers in general. Such a state of affairs would not be fair, and many additional problems would arise, particularly if the Minister insists on the revenue housing account being balanced.

We in the north-west have a crisis in home renovation grants. Resources available for renewal area programmes, strategic and planned, are being dominated by the demand-led mandatory system. A survey of 13 authorities in the north-west, which includes east Lancashire and Greater Manchester, shows that they are all affected by demands beyond the level of resources available. Although authorities in the north-west have submitted genuine bids for finance, last year they received only 30 per cent. of their bids. So despite additional allocations, all authorities have been obliged to take measures to suspend grant approval this year so as to remain within their budgets. That is not a satisfactory state of affairs because we in the north-west have some of the oldest properties and housing that is desperately in need of repair and maintenance. That work must be done if the sector is to be maintained up to standard.

A problem in the north-west is the construction of the capital controls system, which fails to ensure that resources targeted for urban renewal are used for that purpose nationally. The distribution of grant for urban renewal activities should be based on the indicators which underscore the conditions and needs in the north-west. Overall, the capital control system needs better to reflect the purpose for which specified capital grant was introduced, and its distribution should better reflect need, performance, local housing strategies and, in particular, committed renewal area plans. Authorities in the north-west region find funding the 25 per cent. contribution difficult.

When renewal areas were introduced under the Local Government and Housing Act 1989, many authorities, particularly in the north-west, fully supported the proposals concerning the assessment of comprehensive urban renewal strategy and the production of renewal area proposals. In the first year of the new capital controls system, a nationally top-sliced amount was set aside for renewal areas. That top slice was available only in the first year and has not been repeated.

The system of mandatory right to grant to deal with unfit housing conditions is fully supported by the north-west authorities, but to balance the scarce resources in the most effective ways, perhaps authorities should be given more discretion to balance the available resources between demand-led grants and renewal areas.

The capital control system could be revised better to target resources to authorities that tend to use them for urban renewal purposes. The existing arrangements for bringing forward future years' borrowing approvals does not address the increasing difficulties that authorities have funding their contributions. In an overall uncertain resource climate, such a mechanism is not viable long-term —

Mr. Deputy Speaker

Order. I now call Mr. Waterson.

7.46 pm

Mr. Nigel Waterson (Eastbourne)

The introduction of the Bill gives me pleasure and disappointment. It gives me pleasure because it appears to be the answer to the prayers of hundreds of my constituents who suffer under the leasehold system. It gives me disappointment because I see the debate being hijacked by a small number of landlords in London.

The activities of the great estates and their agents to protect their relatively small number of properties is diverting attention from the 2 million or so people who live in leasehold properties in England and Wales. I will leave the debates on the great estates to other hon. Members. I am anxious to tell the House about the effects of the leasehold system on my constituents.

Many south coast towns contain a large proportion of leasehold flats. My constituency and that of my hon. Friend the Member for Hastings and Rye (Mrs. Lait) have some of the largest concentrations. My hon. Friend, who is in the Chamber listening to the debate, has asked me to associate her with many of the points that I shall make, and I am happy to do so.

Anyone in England or Wales who wants to buy a flat has no other choice than to buy leasehold property. My hon. Friends the Members for Kensington (Mr. Fishburn) and for Westminster, North (Sir J. Wheeler), and the former hon. Member for Dulwich, Mr. Bowden, have done much in this sphere and deserve to be congratulated.

Many of my constituents live in leasehold accommodation. When I was first selected as prospective candidate, I was struck by the number of problems that people brought to my attention concerning leasehold blocks of flats in Eastbourne, usually because of a breakdown in the relationship between the freeholder and the leaseholders.

There are the problems of service charges and maintenance. Even though the individuals have paid for the property—a 99-year lease is virtually a full freehold value—they still have no control of their homes. That leads to two main problems, the first being the difficulty of getting anything done. It can be a nightmare, despite the regular charges for service.

An elderly lady came to see me almost in tears because she and other residents in her block had been trying, without success, to persuade the managing agents to do something about the structure and external appearance. When I say that the agents concerned were based in Manchester, hon. Members can easily appreciate some of the problems of communication.

Leaseholders must finance the total cost of any repair or refurbishment work undertaken by the freeholder. It is deplorable that the people who pay the bills should have little or no say in what work is done or how much it costs. A group of tenants contacted me recently to complain about a 30 per cent. increase in management charges in a single year. With inflation at its present low level, that is simply not acceptable for people living on a pension.

Freeholders may say that the best way to counter those management problems is by tightening up existing controls, but many freeholders ignore or subvert the current legal provisions. The only way to stop the frustration and suffering of millions of people is to give them control of their own homes and let them decide how they wish to spend their money. In short, the Bill is another step on the road to a proper, property-owning democracy.

The second of the two main problems faced by leaseholders is that of a decline in his or her asset. Flats are becoming an increasingly important part of the country's housing stock, yet currently, and uniquely to England and Wales, one can buy only a leasehold and not a freehold. Most building societies will not give a mortgage on a lease of less than 25 or 30 years. Thus the largest investment which millions of people ever make in their lives is the only asset whose value is guaranteed to fall over time. A dangerous equity time bomb is ticking away.

The leasehold flat is largely a post-war phenomenon. In the next 10 years or so, the devastating effect of declining assets will start to become all too obvious. In places like Eastbourne, there is a worrying combination of older people, often living on limited incomes, a wasting capital asset, and aging buildings with ever-increasing repair and maintenance bills.

At the end of the lease, the freeholder takes back the full value of the property and all improvements with no compensation to the leaseholder who has financed it all. Effectively, the freeholder is having his cake and eating it.

The leasehold system is viewed with incredulity by every other country in the western world, including Scotland. It has brought huge benefits to a small number of people, literally at the expense of many millions.

Some hon. Members have suggested that the proposals are anti-Conservative and amount to theft of private property. It is worth dwelling on that point. The leasehold system is a unique form of property ownership. With the owner-occupier and private rented sector, the freeholder holds the full value of the property, as is the case with virtually every other form of property ownership. But leasehold is different. It is a mutation of property ownership that cannot be compared with anything else. It is the only system in which the owner sells a large proportion of the property's value at full market value and then has it all revert to him.

The Bill is not about confiscation, which is where something is taken from someone with no recompense. The proposals are clear: the freeholder will receive full market value for the property as well as a share of the marriage value. Tales of confiscation are unfounded scare stories.

The question that is being asked is wrong. It should not be whether we should interfere in this perverse system of property ownership but how we ever allowed it to develop in the first place and why we have done nothing about it before. Like other hon. Members, I regard the Bill as a halfway house. I hope that the Government will find time early next year to introduce legislation on commonhold, which is complementary to the current proposals.

The issue of leasehold reform is not just an interesting philosophical debating point. To people living in leasehold properties, it is their whole lives, their homes and their security. They will thank us for introducing the Bill and others for amending it, where necessary, to ensure that the Government's intentions are met. But they will forgive none of us if we let them down.

7.55 pm

Ms. Glenda Jackson (Hampstead and Highgate)

The Bill is particularly relevant to my constituency. Almost three quarters of my constituents live in social housing or accommodation that is not owner occupied. They know only too well the frustrations of being forced to rely on others for the maintenance of what are homes to those who live in them but what, all too often, are seen as mere investments or statutory obligations to those who manage them.

Like many other hon. Members, I welcome the Government's recognition of the need for reform in a number of areas affecting housing and urban development, but I regret that those measures have taken the Government almost 13 years to introduce and I regret even more the fact that they go only halfway to dealing with the issues that need to be tackled.

For the 30 per cent. of my constituents who currently lease the properties in which they live, the right to buy their freehold or extend the lifetime of their lease will undoubtedly be welcome. The freedom and independence that a freehold provides should undeniably be granted to those who, in many cases, have spent decades investing in their properties. Moreover, at a time of plummeting house values, the financial uncertainty caused by a lease nearing expiry provides an additional and unnecessary cause for concern.

However, that is one part of the Bill in which the Government have introduced half-hearted measures. First, there are too many grounds for exclusion from the right to buy the freehold and, secondly, in common with other hon. Members, I regret that the Government have missed a golden opportunity to include commonhold in the Bill. The distinction between owning one's flat collectively and owning it as an individual may seem trivial to those who drafted the Bill, but it is not a trivial distinction to those who want full ownership of flats that are as important to them as full ownership of a house is to owner-occupiers.

The Government have an obligation to enable as many leaseholders as possible the right to possess and manage their own accommodation, but they also have an obligation to protect those who, through no fault of their own, may find that the desire for self-ownership stretches them beyond their means. That is why I am deeply worried about the concept of rent to mortgage.

In the borough of which my constituency forms a part, almost 2,000 families live in temporary accommodation. The court that deals primarily with home repossessions in my constituency has seen an increase in repossessions of 117 per cent. in the past year. Against that background, it is madness at a time of deepening recession to encourage those on lower incomes to take out mortgages, especially when such mortgages would remove their rights to repairs and housing benefit and their right to move to other rented property. The effect of a rent-to-mortgage tenant defaulting and eventually becoming the victim of repossesion would be to double the homelessness problem. Councils would find themselves with an increase in the number of homeless families directly comparable with a decrease in the amount of accommodation available to house them.

I referred to the Government's obligations. One obligation is to ensure that tenants who live in council property have the right to have that property properly maintained, managed and promptly repaired. A number of clauses deal with those issues, in particular those that deal with the right to repair, the right to improve and the provision of welfare services. Few people would argue that tenants who do not receive prompt repairs should not be compensated or that those who have carried out improvements that increase the value of their property should not enjoy the benefits of that increased value if they move to another property. Surely no one would argue that those who live in sheltered housing should not enjoy the provision of an on-site warden.

However, none of the clauses that deal with those issues are adequate if they do not stand alongside a recognition that the resources provided by the Government to local government are insufficient to provide the standard of repairs, maintenance and management that residents require. Tenants do not want compensation for shoddy workmanship; they want good workmanship the first time round. They do not want apologies, having waited weeks for jobs that should take hours; they want the work done on time. Council tenants have the right to expect that, but they will not have that unless the Government begin to put back some of the billions of pounds that they have systematically removed from councils of all political persuasions in the past 13 years.

We hear much from the Government about rights: rights of individuals, rights to make their own decisions, rights to control their own lives. Indeed, as we have seen, much of this Bill concerns itself with the extension of rights for leaseholders. Therefore, it is inexcusable that this Bill proposes to remove the rights of council tenants to decide who is in control of management of their homes.

The situation is unambiguous. At present, the Secretary of State shall not give his approval if a majority of tenants of the houses to which the agreement relates do not wish the proposal, (i.e. a change in management of their homes), to proceed". In this Bill that right is withdrawn. What possible excuse can there be for a Government who purport to argue for choice and independence removing that independence from council tenants? It is they, not the Secretary of State or the Prime Minister, who live in these homes. It is they, not the Secretary of State or the Prime Minister, who will live daily with the consequences of the scheme for compulsory competitive tendering. And it is they, not the Secretary of State or the Prime Minister, who should have the right to decide whether any change in management should proceed.

There is much in this Bill that is to be welcomed, but there are also many areas where it goes much too far, and many areas where it promises much too little. Most importantly, it does little to reinforce the Prime Minister's stated intention to ensure a classless society. It gives private housing companies excessive rights, leaseholders half rights, and council tenants no rights at all.

If the Government wish this Bill to receive the full support that some of its clauses deserve, they will have to listen much more carefully to the voices of those over whom it will have the greatest influence.

8.1 pm

Mr. Mark Robinson (Somerton and Frome)

I was pleased to hear the hon. Member for Hampstead and Highgate (Ms. Jackson) welcome the Bill, even though she had considerable reservations—rather different, I fear, from the hon. Member for Blackburn (Mr. Straw). I listened carefully to the hon. Gentleman's speech and by the end of it I had begun to wonder whether we were discussing the same Bill. His attack on the Bill was an unguided attack on Government policy, and I was disappointed that his speech bore little relation to the details of this complicated Bill.

I pay tribute to my former Member of Parliament, Sir Brandon Rhys Williams. I echo the words of my hon. Friend the Member for Kensington (Mr. Fishburn), who has done so much to ensure that this legislation came before the House.

Hon. Members on both sides undoubtedly have reservations about parts of the Bill. I was pleased to hear my right hon. and learned Friend the Secretary of State say that he was prepared to consider sensible amendments to loopholes as they emerge in Committee. I endorse the enfranchisement proposals, and I look forward to their being complemented when the legislation that we have been promised as commonhold comes before the House. I understand that that is an extremely detailed and complex piece of legislation, so it is right that it should form a separate Bill—this one is detailed enough.

I should like to concentrate on two areas—first, the welcome proposals for long leaseholders of flats, together with the estate management provisions set out in chapter IV; secondly, the work of the proposed urban regeneration agency in England, as set out in part III.

What attracts me to the proposals in chapter I is the opportunity for long leaseholders of flats to join together to purchase freehold and intervening leasehold interests. That will help many people whose blocks of flats have fallen into disrepair because of bad management. Good landlords will be safeguarded by the two thirds principle, even if that proves difficult to achieve at times. In essence, the Bill provides an incentive to both tenants and landlords to look after their properties.

I have seen many well managed and many badly managed estates. Those who doubt the ability of tenants to look after their properties underestimate the power of ownership. A visit to Hong Kong can be a salutary experience. There tenants manage their own estates, arrange common services, include shopping areas and provide an environment in which people want to live. That is borne out by the queues outside letting offices and the long waiting lists for the best estates. That is in sharp contrast with some estates in England.

What is lacking here? Often the problem is a lack of imaginative design, of pride of ownership, and of community spirit—all ingredients which can be provided even if the original fabric looks unpromising at first. I have seen priority estates projects, especially in the Principality of Wales, which have been transformed in a way that was not thought possible at the outset. This is why I welcome the provisions in chapter IV, which allow landlords to apply to the leasehold valuation tribunal to seek approval of estate management schemes.

I believe that the urban regeneration agency is an important development. Recent years have shown how successful urban regeneration schemes can be. It makes sense, therefore, to pull together the derelict land grant, the city grant and the work of English Estates in assisted areas.

That will provide the necessary cohesion for work that is often already under way. It will also provide some much-needed flexibility in the process of development.

This move will enable land adjoining urban development corporations to be developed under the auspices of the agency. Where work has been completed, UDC powers can be returned to local authorities—that seems eminently sensible. Indeed, it has worked very well in the case of the Cwmbran development corporation—a successful project of the late 1970s and early 1980s. Its usual planning functions have now been handed back to the local authority.

As the urban regeneration agency sets about its work, I hope that my right hon. and learned Friend will allow it to consider market towns such as Frome, which has a population of about 18,000. It has lost much of its traditional employment base in this recession. Long-standing industries have closed, and the town centre is in urgent need of a serious plan for redevelopment. The agricultural market has moved out of town. There are vacant factory sites, following the closure of long-established enterprises. With planning and imagination, Frome can again become a thriving centre.

I hope that my right hon. and learned Friend the Secretary of State will ensure that the agency will look not only to large conurbations but also to smaller towns. I know that my right hon. Friend the Secretary of State for Wales already has considerable experience of this, as does my noble Friend Lord Walker. They have done a great deal of this sort of work among the smaller communities of the south Wales valleys. There is a case for similar work to be done in rural areas which have been hard hit in the current recession.

8.7 pm

Mr. Clive Soley (Hammersmith)

It is one of the remarkable achievements of this Government that after eight senior Ministers, several junior Ministers and eight housing Acts, the Government have left housing in a dramatically worse situation than the one that they inherited in 1979. In this debate, and in all others on housing legislation, that fact should never be forgotten. For the first time in 70 years, homeless teenaged children are begging in our streets. Homelessness is rising faster than at any time that I can remember. Our housing stock is in an advanced state of decay, in both the owner-occupied and the rented sector. That is a damning indictment of any Government and it puts this Bill in perspective.

Throughout the past 13 years the Government have focused on just one issue—owner occupation—in a way which has created a nightmare for many owner-occupiers and done immense damage to the British economic structure. The lack of a healthy rented sector in Britain makes mobility of labour in this country hard to come by.

The Government must not continue to devastate the rented sector. I ask Conservative Members, and especially Ministers, to remember that 2 million homes in the rented sector have been lost in the past 13 years. I take that figure from the Duke of Edinburgh's report, or the Rowntree report. The loss of those homes has had a profound knock-on effect on the economy generally. The Government created an enormous splurge of equity release in the middle to late 1980s, which fed the artificial boom of that period and created the trouble that the Government now face. Money was diverted from industry into home ownership through the use of mortgage income tax relief. In Britain, we invested our savings in our homes in the expectation that their value would increase—an expectation which has now been destroyed—and took investment away from industry. We did immense damage to our industrial base and at the same time we did nothing for housing. The tragedy is that the Government have come forward with a Bill—their ninth housing Bill—that when enacted and implemented will achieve little.

I shall refer briefly to the public sector borrowing requirement and council receipts. My right hon. and hon. Friends and I are saying—it is almost common ground —that the PSBR is affected by council receipts. We know that, and we know also that that has a macro-economic effect. The issue which divides the Government and the Opposition is that the use of the receipts in a phased way is beneficial to the economy when in a slump. The fundamental reason why Britain is in a deeper slump than that faced by other countries stems partly from that. The French, who do not approach their PSBR in the same way, can have a high-speed rail link because they can borrow on their nationalised railway without affecting the PSBR. They do not have the problems that we face. We are unable to have a high-speed rail link, and at the same time we have greater economic problems. The same comparison applies throughout Europe.

I intervened earlier because the Secretary of State had his facts wrong when dealing with the PSBR argument. The Europeans will insist on our having legislation which fits with the definition being drawn up by ECOFIN. That definition will fit in with European lines and not with ours. There will be advantages in terms of capital receipts, but disadvantages in other areas. I should like the Secretary of State to remain in the Chamber to deal with this matter, but I suspect that he will not. Regardless of whether the Maastricht treaty is ratified—tomorrow's vote will be on confidence in the Prime Minister, not about Maastricht —we want to know whether the Government are moving towards convergence on the PSBR. If so, we must change the definition that we apply. That is what the argument is about. It is complex, but vital.

I am delighted that the Government are moving on the leasehold and commonhold argument. The Minister of State knows that there is an area of agreement in this context. I would wish to be the first to put on record my respect for the late Sir Brandon Rhys Williams, who did so much in advancing the commonhold argument in an area where that could not have won him many friends among rich Tory backers. He did it, however, and his successor, the hon. Member for Kensington (Mr. Fishburn), has done it.

I remind the House that, as long as a year ago, the Opposition were saying that we would co-operate with the Government if they brought forward commonhold legislation. I agree that it will be complex, but both parties have said that they want it. There would have been no serious opposition. We could have produced commonhold legislation before the election, and certainly it could have been presented by now. Such legislation would go a long way to meeting the anxiety of many about the outdated leasehold system.

The right hon. Member for Westmorland and Lonsdale (Mr. Jopling) intervened to say that he was worried about property rights. One of the main differences between the Conservative party and the Labour party is that we in the Labour party put individual rights as high as—and very often higher than—property rights, not least because we remember that slavery, for example, was justified on the basis of property. We say that in many circumstances individual rights are more important than property rights. I thought that the Conservative party had moved some way towards our way of thinking. Having listened to some Conservative Members, that seems to be the position. I think that the Conservative party is right.

There are major failings in the Bill's structure. There are problems with the 10 per cent. rule, but I will not go over ground that has already been covered. There are problems about valuation generally, but setting the right market price is not a great difficulty. The Minister knows that there is a method of adjudication. I should have been much more impressed if the Government had taken on board the much deeper problem which exists when properties are being compulsorily purchased under existing legislation. The same problem would arise with compulsory purchase under the urban regeneration agency. Properties are being repurchased compulsorily at market value when more money is owed on the mortgages than properties are worth. I would be much happier if Conservative Members said that something must be done about that instead of worrying about a system which at least makes available independent valuation. I congratulate the Government on continuing with that even if they do not have all the details right.

I hope that the right to extend a lease will be examined carefully in Committee. It will not be possible for many people to take advantage of a different system such as commonhold or the buying out of a lease. In those circumstances there is a strong case for the right to extend a lease. I recognise that that right is set out in the Bill, but it is important that it should apply widely. If residents in a block of flats choose, for whatever reason, not to buy, many people will be trapped as assured tenants. They will pay uncontrolled rents and many other charges will be imposed on them. That will be the position even if their leases are shortly to expire.

The management of housing represents a disastrous shortcoming in the Government's philosophy. They are still stuck with the idea that in some way council housing is bad. Every measure that they have introduced since 1979, and everything that they have done since then, has been designed to get rid of council housing. Housing action trusts were introduced. Initially, everything was supposed to be privatised. In the end, the Government had to back down and give tenants the right to go back to the council. Under the incredible 1988 legislation, every tenant was supposed to be transferred on the basis of votes in favour, with those who did not vote being presumed to wish to be transferred. If that system had been used for the general election, the Government would have lost hands down. Everybody who did not vote would have been presumed to want to get rid of the Government. It was a ludicrous proposition. It is interesting that only one transfer has reached near-completion under the 1988 legislation and, sadly, Westminster council and the Government have tried to block it: it is, of course, in the control of the tenants.

The Government's failings stem from their belief that councils are always bad and everyone else is good. There is a classic example of missed opportunities in the wrong priorities that are set out in the Bill. On many occasions, I have complained about Mr. Hoogstraten, who is a private landlord. He has been involved in bad landlordism in this country for many years. The Daily Telegraph, to its credit, produced a report on a fire in Hove in which several people died. It was alleged that Mr. Hoogstraten was involved in the management of the property, or in the ownership of it. The person who started the fire later committed suicide.

I wrote to the Lord Chancellor, the Home Secretary, the previous Prime Minister and the Secretary of State for the Environment about that case and about previous cases in which Mr. Hoogstraten had been involved. Despite the existence of the 1988 legislation, I was told that nothing could be done. The Bill refers only to management by councils. What is wrong with recognizing—we in the Opposition changed our position on this issue some years ago, and others outside the House changed their position as well—that ownership in the rented sector is important but is not a critical issue? More important are quality of management, affordable rents and tenantss' rights. If we get those three things right, ownership does not matter too much.

I do not care whether the owner of a house or flat that is rented is a Labour or Tory council, a housing association or a private sector landlord. I say that if there are bad landlords we should be able to put them right and make them good landlords. If that approach fails, tenants want to get out of those landlords' clutches regardless of who they are. If the Conservative party would accept that the management issue involves quality of management generally, it could move mountains.

A Government report—it is sold by HMSO—refers to housing management. I shall quote part of the report for the benefit of Conservative Members, who sometimes make absurd statements about the matter. First of all, it says: The key failing of many councils is that they spend, in comparison to housing associations, too little on management, rather than that they are less 'economic' or 'efficient.' Indeed, all the evidence is that 67 per cent. of council tenants are satisfied with their management, compared with 80 per cent. of housing associations. Conservative Members believe that councils are bad when it comes to rent arrears. However, the report says that the result for rent arears was somewhat different. Measured as a percentage of net debit, councils and associations in the samples were equally effective in collecting rents. Housing associations had a higher proportion of their tenants in serious arrears. If hon. Members were to read that report, they could then speak with some confidence about housing management.

The Secretary of State could have made provision in the Bill for a body such as the Housing Corporation to do something about empty properties. Again, I point out to Conservative Members that it is not empty council properties that are the problem. The key to the problem is empty Government properties. The fact is that 2.5 per cent. of council properties are empty, that 3.1 per cent. of housing association houses are empty, that 5.9 per cent. of private properties are empty and that 16.1 per cent. of Government-owned properties are empty. They include not just defence properties. Those properties are being sold off by the Government on the private market in a way which depresses house prices and damages the economy.

There can be no clearer example of this Government's policy failures than their housing policy failure. Without tediously repeating it, I echo everything that was said by my hon. Friend the Member for Blackburn (Mr. Straw) —that tenants' rights will be tragically and crucially undermined by the attempt to contract out management in a way which prevents tenants from having a say. Tenants should always have a say. That is crucial. For some years Labour party policy has been that tenants' rights should be given much higher priority and that ownership of their properties should not be transferred without their consent.

Conservative Members talk glibly about compulsory competitive tendering. For commercial reasons, that has to be a secret operation. The result is that tenants' rights are swept aside. I do not intend to dwell too long on the rent-to-mortgage scheme. However, that scheme is wrong, even now. It is not just that we need a mortgage rescue scheme. We all remember what the Prime Minister said on "Desert Island Discs"—"We've dealt with the repossessions problem, haven't we?".

On 15 December last year the Chancellor of the Exchequer said that his mortgage rescue scheme, which he cobbled together in response to my party's proposals, would save 40,000 people this year. To the best of my knowledge, about 40 have been saved. It was a disastrous, silly scheme. It has not saved public money. We are still paying out money to put people into bed-and-breakfast accommodation, having taken them out of their homes which then stand empty for months, thus depressing the housing market.

Apart from the problems referred to by my hon. Friends, there is an additional problem if one goes for the rent-to-mortgage scheme. If somebody comes to me and says, "I want to go for the rent-to-mortgage scheme", my first advice—this is why it has had such a low take-up in Scotland, Basildon and Wales—is that that person would be better advised to go for the right-to-buy scheme. He would then avoid the other problems that would be faced if he went for the rent-to-mortgage scheme, including financial problems.

I do not object to the rent-to-mortgage scheme generally, but it ought to be made as easy as possible for people to move from one sector to another, whether it be from renting to owning, or from owning to renting. The problem with the British housing market and the British economy is that it is too difficult to change one's tenure. If we are to make it easier, we should provide a level playing field. The Labour party has cried out for that for years so that people can choose the type of tenancy that they want to meet their life circumstances, which change from time to time.

I do not know how long it will take the Government to learn their lesson regarding the urban regeneration agency. Great quangos form clones with other quangos. The Government have created more quangos than any other Government. They began by knocking them out; then they started to recreate them. If the Government go down that road, they will create unrepresentative organisations which try to do a local authority job. The ideology is wrong.

If one takes the view that local authorities are bad, of course one will create an urban regeneration agency and plonk it on top of local authorities. That happened with docklands. We gave £1 billion of tax advantages in one form or another to one docklands company, Olympia and York, but it still went bust. At the same time, the Government refused to give any money to subsidise the coal industry.

A number of German groups visited docklands. They told me that they were amazed that we should impose such a structure on top of local authorities. They pointed out that the British, who drew up their constitution, would not have allowed that structure to develop in Germany. They were right. We gave them regional government which enabled them to bring about the economic regeneration of the regions. Every European country is doing that, except one. That country is Britain. That is why we are doing so badly.

If we impose a quango which does not work well with local authorities, it will fail. The only thing that will begin to regenerate run-down areas is local authorities working in partnership with the private sector and the Government. That partnership should be flexible enough to focus on the economic needs as well as on the social infrastructure, including housing. The Bill is all right in parts, but it is a terrible, terrible missed opportunity. The Government's housing record is literally appalling.

Several hon. Members

rose—

Mr. Deputy Speaker (Mr. Michael Morris)

Order. I respectfully point out that hon. Members should deal with their mail outside the Chamber.

8.27 pm

Mr. Peter Ainsworth (Surrey, East)

Reference has been made to the complexity of the Bill. I am forced to say that the speech of the hon. Member for Hammersmith (Mr. Soley) has not made it any simpler for me, at least. I am sure that it will be a popular Bill, since its guiding spirit is the desire, long associated with Conservative Members —but, frankly, for less time with Opposition Members— that people should be enabled to exercise more control over important aspects of their lives and, by doing so, to enrich their lives through greater independence and self-determination. That is not, with all due respect to the hon. Member for Cheltenham (Mr. Jones), outdated 'eighties dogma. That is what people want.

The rent-to-mortgage scheme, which builds on the right to buy, is a major step forward in the process of reversing that vortex of dependency which has for so long been the most serious blight affecting many of our inner city areas and for which the Labour party—I see that the hon. Member for Greenwich (Mr. Raynsford) is laughing—has been responsible through its local government policies. That insidious and dispiriting effect on normal human aspirations may in part go some way towards explaining the conundrum faced by the hon. Member for Greenwich regarding the ability of Labour councils to be returned to office with tiresome regularity in some inner city areas hut by no means all.

The rent-to-mortgage scheme incorporated in the Bill represents a simple, cost-effective and relatively low-risk mechanism for council tenants to acquire part or all of their homes. Those who exercise the power to do so will benefit from the relatively painless method of payment and also from the existing right-to-buy legislation. That is very welcome. I hope that it will be widely taken up by people who wish to take greater control over their lives—that is, away from local authorities—and vest it where it belongs: in themselves.

Conservative Members know that there is no reason why the state should be assumed to be a more desirable landlord than anybody else. Indeed, in many cases it is a deeply undesirable landlord, because of inefficiency, delays in repair and a slovenly attitude to serving those who, for too long, have been assumed to have no choice. We are bringing choice to this sector of the housing market, and the Bill includes a number of important further provisions to improve the management of council estates.

The revised and strengthened right to repair is particularly welcome. It did not meet with the approval of the Labour party, but councils that run their affairs efficiently will have nothing to fear from it. It comes as no surprise that Opposition Members find it objectionable or foolish. The advent of compulsory competitive tendering in public sector housing management will, at least, provide opportunities to examine procedures and sharpen service delivery. At best, it could lead to widespread improvement in the management of council-owned estates. It is wholly in keeping with the spirit of the enabling role that local authorities are rightly increasingly coming to play. I welcome the introduction of the statutory framework for involving tenants fully, and for the first time, in the process of deciding who manages their estates, who looks after them and how.

I welcome the proposal to establish the urban regeneration agency, which will streamline the important work that is already under way of bringing back into use derelict, vacant and underused land. To the extent that it proves successful—I have every confidence that it will—it will not only play an important role in regenerating urban areas but, as my right hon. and learned Friend the Secretary of State said, will relieve the pressure for development in neighbouring rural areas, which is of much concern to my constituents in Surrey, East.

The leasehold reform proposals in part I of the Bill will receive a warm welcome from progressive local authorities such as Wandsworth, on which I was privileged to serve for a number of years. I am pleased to see my hon. Friend the Member for Battersea (Mr. Bowis) in his place; no doubt he will agree with me.

I must confess to a number of reservations about the effect of the proposals on the private sector. Let me make it absolutely clear that I have no pecuniary interest in this matter to declare, nor do I have any consultancy. My hon. Friend the Member for Kensington (Mr. Fishburn) would no doubt disagree, but it seems an inescapable fact that one of the key motivations for the reform is a just desire to tackle the problem of bad landlords. My hon. Friends the Members for Thanet, North (Mr. Gale) and for Fulham (Mr. Carrington) spoke eloquently on the subject. No Conservative Member would seek to oppose the aim of dealing with bad landlords. Much of the rest of the Bill aims to deal specifically with the problem, which is as widespread in the public sector as it is in the private sector.

The leasehold enfranchisement proposals offer a radical solution to the problem. They involve Government intervention in freely entered into contracts. Such intervention is not unusual; it applies widely in road building and is used on the grounds of health and safety and concerns about the environment. By popular consent, such intervention is undertaken in the public interest. No doubt Ministers have satisfied themselves that the public interest would be served by the enfranchisement proposals. On that basis, I add my voice to those who suggest that some aspects of part I of the Bill might benefit from constructive examination.

The Government made it clear that it is not an objective of the Bill to enable leaseholders to buy freeholds at a discount, but, as other hon. Members have said, under the proposed marriage-value arrangements the extra value created by merging the freehold and leasehold interests will be shared by the two parties, which automatically creates a discount for the leaseholder. The freehold will immediately be worth more than the price paid for it, and in some cases that could lead to a reasonably substantial capital gain. There would be nothing to prevent the new owner from realising the gain straight away, which leaves the procedure open to potential abuse. If my right hon. and learned Friend the Secretary of State is unwilling to yield on the marriage-value structure, perhaps he will at least think of applying a minimum qualification period such as that adopted for the right-to-buy legislation, which would go a long way towards overcoming the difficulty.

The large commercial estates do not readily lend themselves to public sympathy; they are not exactly the stuff of fashionable legend. Many hon. Members will feel that the largest estates can fend for themselves because they have the resources to do so, but they also have sufficient resources to look after their buildings. Generally, those resources have been put to good use in central London over the years. I hope that my right hon. and learned Friend the Secretary of State will understand that the principal concern is the fate not of the managing estates but of the historic properties under their care, which gives rise to the concern voiced by a number of conservation groups. I hope, therefore, that further consideration will be given to the benefits that might derive from permitting continuity of freehold tenure in areas of heritage value.

I offer those thoughts constructively. I know that, as my hon. Friend the Member for Kensington pointed out, the principal thrust of the reforms will be extremely welcome to the many people who stand to benefit. I am aware, too, that in its approach to the reforms, the Bill questions the continuing viability and validity of the leasehold system, which to many seems unduly complex and perhaps anachronistic.

Finally, I should like to comment on a related matter, because it seems a pity that in a Bill that is so wide ranging there was no room to address one pressing problem with commercial property. Many smaller businesses and shops are locked into upward-only rent reviews. In many cases, that can spell and is spelling disaster. My right hon. and learned Friend has shown his willingness to intervene through the Bill in the private contracts agreed in the housing market, but perhaps he will consider recommending similar intervention in the high street. If it would help to prevent the gradual emptying of high street premises, which is so sadly evident, it would most clearly and unequivocally be in the public interest.

8.39 pm

Mr. Jim Cunningham (Coventry, South-East)

We must say from the outset that the Bill does not really address the housing needs or the employment needs of the country as a whole. We need to go only half a mile from here to be confronted by homeless young people, as my hon. Friends have said. I deduce from that that Ministers must travel through the city with the blinds of their cars drawn. They do not seem to see the tragic consequences of 13 years of disastrous housing policies pursued by the Government. The more I listen to the Government, the more I become convinced that they are continually looking for alibis and that they are not facing reality when it stares them in the face.

I was interested to hear that the hon. Member for Brecon and Radnor (Mr. Evans) seemed to have the solutions to all the problems from his experience in Wales. As I listened to him speak, I wondered why he was not the Minister for Housing and Planning as he seemed to have so many solutions up his sleeve for every housing ailment in the country. The reality is different.

The hon. Member for Brecon and Radnor quoted the Audit Commission. The Audit Commission's first reports were very crude. The commission, as I am sure many of my hon. Friends with local government experience would agree, spent a lot of time going round local authorities and then producing reports that suggested that the quality of service delivery to tenants was far too high. I could quote one or two examples. I am rather suspicious of any reports coming from the Audit Commission because it is a Government organ and says what Government want it to say, especially when there are criticisms of local government.

The other aspect of the Bill that disappointed me stems from the fact that thousands of people were encouraged to buy their homes, yet some of them find that those homes will be mortgage repossessions. There is not one iota of help for those people, despite the fact that before the general election there were hints and nods here, there and everywhere that the Government would do something to address the problem. Those people will feel badly let down when they look at the Bill.

The Conservative party has always claimed to have lauded and championed tenants' rights. In reality, there has been a cosmetic exercise. Tenants will not be able to have a say about who manages their estates. If anyone tries to tell me that the Bill is an extension of tenants' rights, he will not fool me and I am sure that he will not fool the tenants.

The Bill does not address other areas. In Coventry, for example, we have about 16,000 houses in the private and in the public sector which are in bad need of repair. What has happened over the past 13 years? Grants for repairs have been steadily reduced by the Government. That and not the mythology coming from Ministers and from Conservative Members is the reality of the housing position.

Some of the provisions will again involve a cost that the Government will put on local authorities and for which they will blame local authorities. There is, for example, the question of adopting roads. There are thousands if not millions of miles of road in this country. Adopting roads will he a costly exercise for local authorities. Their only options will be to put the cost on the poll tax payers or to try to find the resources from somewhere else, which will imply cuts. Nothing in the Bill addresses that problem. The Government will have a major problem, although I admit that there is a body of opinion that thinks that roads should be adopted. However, the Government should not ask local authorities to do things if they will not give them the resources with which to do them.

There is a question we must ask about the urban development proposals. After they have taken away land paid for by the public and controlled by the local authorities, how will the Government encourage private investment? As my hon. Friends could tell the Government, there are schemes throughout the country in which land has been made available by the local authorities, but in which the private sector will not invest. How will the Government handle that problem?

The Bill is a cosmetic exercise, once again, to cover up 13 years of Tory mismanagement. I give the Government a word or warning. Last year, local authorities in some of the major cities were confronted by social unrest by young people. There is a variety of opinions about what caused that. Such social unrest occurred in Coventry. Young people are left to live on the streets, they are not given adequate benefit and they are not given homes. Young people are not given jobs. Next summer we shall be confronted by a similar problem. What will the Government do about that?

8.45 pm

Mr. Patrick Nicholls (Teignbridge)

I declare my interests as a parliamentary consultant to Port Enterprises Ltd., to the Waterfront Partnership and to Howard de Walden Estates. I also own a lease on a flat in London.

I entirely applaud the sentiments that lie behind the Bill. I was especially pleased to see what it contained about leasehold enfranchisement. The reasons why the Government introduced part I are clear, and they were clear from the Conservative manifesto. The provisions were introduced to encourage home ownership. Part I is all about enabling people to own their homes. That is a thoroughly laudable prospect which has quite rightly been greeted with approval by hon. Members of all parties.

In an ideal world, it would be possible to have principles that did not conflict with other principles, but, as everyone knows, it is not an ideal world. In this case, as I shall explain, there is, it seems to me as a Conservative, a conflict of principles. Matters need not have come about in that way.

If the Government were concerned solely with dealing with cases of bad landlords, they could have used the procedures that already exist in part I of the Landlord and Tenant Act 1987. It would be possible to extend the provisions there, as I used to urge on David Trippier when he was in the Department of the Environment, to deal effectively, decisively and quickly with the question of bad management. The Government decided not to go in that direction and doubtless they made that decision because they had rather more in mind than merely dealing with the question of bad management.

Ministers have already fairly made the point that many of the landlords with whom we are dealing are excellent. It is not just a question of dealing with bad management. Listening to my hon. Friends the Members for Thanet, North (Mr. Gale) and for Eastbourne (Mr. Waterson), I heard of the appalling conditions which some of their constituents are enduring. If we were thinking solely in terms of dealing with bad landlords, we would realise that there are other mechanisms that could be used.

The Government decided to follow the route of the Bill. As a result, there are two principles that conflict. On one hand, there is the desire to extend home ownership. On the other hand, the Government will achieve that by depriving people of their property against their will.

It is all very well for Opposition Members to speak in terms of it being only dukes who will lose. Extraordinarily enough, we heard a trace of that sentiment from my hon. Friend the Member for Eastbourne. He implied that only the great estates were involved and that it did not really matter, because the owners had a bob or two. I believe that it does matter. When one of Her Majesty's subjects has his property taken from him against his will, it is a grave matter which must be considered by Parliament. It is a grave matter whether that deprivation affects the wealthiest duke in the country or the lowliest of Her Majesty's subjects. When the House has to consider taking property away from an owner against his will, it is a matter which is worthy of the most serious deliberation.

I am grateful to my hon. Friend the Minister for Housing and Planning for his consideration and courtesy to me in recent months when he explained to me the reasoning behind the Government's thinking on various points. I feel rather sorry for my hon. Friend, because he must have felt at times that he was being ganged up on from all corners. At times, our debate has seemed to have the battling baronet in one corner and a cohort of dukes in the other. It is a David and Goliath contest with handles. I can understand that at times my hon. Friend must have seen it that way.

. We are dealing with a serious matter because we are taking people's property away against their will. How can we reconcile such action with our Conservative principles? The conflict that I have identified can be dealt with only after two conditions have been satisfied: first, we must be certain that the Bill goes as far as, and no further than, is necessary to meet its objectives; secondly, we must ensure that proper compensation is paid to those who lose their property against their will. As I read the Bill at the moment, the drafting is defective in those two particulars.

Let me deal first with the need to ensure that the Bill does not go further than the policy. The policy is to help people own their homes. The trouble is that the Bill does not specify that the home in question has to be one's main or even subsidiary home. One does not have to live in the place at all. As I told my right hon. and learned Friend the Secretary of State, under clause 5, a head lessee who is a qualifying tenant because he is on a low rent and a long lease can take over a block when he is not, in fact, a tenant or home owner of any of the flats.

Long ago, my hon. Friend the Minister was, like me, a solicitor. As solicitors, we both know where that might lead. A block of flats on regulated tenancies may not, at first sight, be much of an investment prospect precisely because the tenancies are regulated and the rents are quite low. Under clause 5, it would be quite possible for a head lessee to buy his interest, enfranchise and then start winkling out each one of the regulated tenants, sure and safe in the knowledge that when he ultimately gained vacant possession of the whole block he would make a massive capital gain.

I accept, at once and fully, that it cannot possibly have been the Government's intention that that should happen, but any humble country lawyer—I am not talking about parliamentary counsel, who drafted the Bill—looking at clause 5 with a view to what he could make of it would see that that is where it could lead. I do not think for one moment that that was ever the Government's intention. In case my hon. Friend the Minister should be having a cursory look at clause 5 and should notice there the reference to the fact that the right cannot be exercised in respect of a business tenant, I remind him that a business tenant, for the purposes of part II of the Landlord and Tenant Act 1954, does not cover an investment purchaser who becomes a head lessee so that he can get in there and enfranchise. What the Bill does—necessarily, I accept—is to enable home owners to buy their homes from people who do not want to sell; but surely we are not in the business of enabling a type of commercial investor forcibly to acquire property from another type of commercial investor while masquerading as a home owner.

There are apparently two objections to solving that problem. It could be dealt with simply enough by making it a condition of enfranchisement that it should apply to one's main residence. My hon. Friend the Minister explained to me what the objection to that would have been. My answer to his objection is that, although a provision specifying primary occupancy or main residence might cause litigation, all legislation causes litigation; we cannot avoid that. The valuation proceedings under the Bill will cause litigation; we cannot avoid that either. The fact is, however, that "main residence" is a concept well known to the English law and to every hon. Member who has had to apply for MIRAS. Main residence is understood in that context, and it is understood for capital gains tax purposes. Incredibly, bearing in mind the fact that we have heard much from Ministers about the Landlord and Tenant Act 1967, it is in that Act. There is nothing novel, strange or unusual about the concept of main residence. It is there in the 1967 Act and it could be used.

The other, better, objection to my suggestion is that, if such a restriction were imposed, some blocks of flats will not be able to enfranchise because there will be insufficient residents who can enfranchise. I admit that that is a problem, but one cannot throw the baby out with the bathwater just because there is a problem, so allowing the Bill to benefit a class of person whom we never intended it to benefit. An answer to that—although frankly it is not the job of a Back-Bench Member but the Government's job to find a solution to the problem—is this: one could deal with the problem by saying that a block that cannot enfranchise because it has insufficient qualifying members should at least have the automatic right to a new lease. If that were done, most of the objectives of home ownership and its extension would be met without allowing the nightmare scenario whereby those who are, by no stretch of the imagination, home owners winkle their way in. I accept absolutely that that could never have been Ministers' intention.

I now come to the question of compensation. It is easy to deride and say, "They are only dukes. They do not matter. They are lucky to be there." But when one takes people's property away from them they should receive the right amount of compensation. The Government have always admitted that. Replying to last year's debate, the then Under-Secretary made it abundantly clear: We do not intend that through this legislation leaseholders should be able to acquire assets at a discount."—[Official Report, 6 March 1992; Vol. 205, c. 583.] That is a laudable intention, and what I should have expected from my hon. Friend. The fact remains, however, that if one values a property and adds together the value of the landlord's and the tenant's existing interest and works out what the value would have been had the property been in the possession of one person, there will be a difference, and that difference is the marriage value. At the very instant at which the tenant forcibly acquires the property from the landlord, he can go out and sell it for more.

I remind the House of the old phrase, "If it looks like a duck, if it sounds like a duck, if it walks like a duck, it's a duck," and this duck is acquiring property at a discount. There is no other way of expressing it. Lest that seems a little too troublesome a concept to get to grips with, let me suggest a better way of expressing it. A landlord may think to himself on day one, "I can do one of two things with this property. I can sell it today or I can create a leasehold interest." If he lets it on a long lease, he will probably be able to sell it for £80,000. His interest on reversion would be £10,000. The value adds up to £90,000. The landlord may think, however, "I'll flog it outright." If he does that, he may get £100,000. That is on day one. On day two, the tenant can enfranchise and tell the landlord that he wants to split the difference with him. That means that the landlord can be forced against his will to sell tomorrow the very asset that he did not want to sell today. That illustrates the fallacy in the argument advanced by my hon. Friend the Member for Eastbourne in saying that leaseholders are being made to pay twice for something they already have. They are not. What their predecessor in title obtained was the right to build a property on a piece of land. There was never any sale of the land.

My hon. Friend the Minister has told me that he is under pressure from both sides. The leaseholders say that he is being too generous to the nobs. Of course they would say that. There is always a ready market in getting someone else's property at a discount. Every fence I have ever acted for knows that. If we allow the tenant in such a situation to acquire at a price which is less than it would sell for instantly, that is acquiring property at a discount. There is no other way to express it. As a Conservative, I hope that when those leaseholders approach the Minister and say, "Right, come on. We want to acquire for less", they will he told in no uncertain terms that they should pay the correct price and not make a profit.

I have a flat in London and I have a wretched landlord. Mercifully I will be able to get rid of him in due course. I am delighted that I will be able to enfranchise against the landlord. My hon. Friend the Minister for Housing and Planning will bear out the fact that in all the representations that I have made to him and his predecessors over the years about enfranchisement, I have never said that I wanted to acquire leasehold at an unfair price. Our policy is to advance home ownership and for that one pays the price.

The Bill is excellent in so many ways. However, I have never seen a Bill—with the exception of the Bill to abolish the dock labour scheme—which could not be amended, improved and perfected in Committee. I would be immensely sad if I thought that my colleagues believed that there were no issues to consider in the Bill. There are points to be considered and I trust that my right hon. Friend the Secretary of State for Wales will make that point when he replies to the debate.

9.2 pm

Mr. John Denham (Southampton, Itchen)

Many right hon. and hon. Members have served as chair of housing committees in local authorities. As I relinquished my position as chair of the housing committee in Southampton on 16 May, I suspect that I am one of the most recent incumbents of that position and responsibility.

I did not recognise the bizarre description of Labour local housing authorities presented to the House tonight. The idea that Labour local councils are patronising, arrogant and incompetent does not match the facts and that is why my local authority was identified by the Government as being well ahead of the field in housing management last year.

The problem for the Government is not that it is bad political rhetoric; the problem is that if the Government believe it, that leads to had political policy. Like so much other housing legislation, the Bill betrays a Government who have believed their own rhetoric and are acting to defeat an imaginary dragon instead of tackling real problems.

I have believed passionately for many years, and have a great deal of practical involvement, in advancing tenant participation. If we believe in tenant participation, we must listen to what tenants want and say. If we were to ask tenants in almost any council for their priorities, the response would be that those who live in overcrowded conditions or who want to move their families out of tower blocks should have the chance to move into a more suitable home— a house with a garden. However, that point is not dealt with in the Bill. The Bill contains nothing about new resources for new building.

The section about urban regeneration does not refer to the problem that we face in Southampton, which is one not of derelict land but of public land which might be marketed for purposes other than for social housing. If we are to meet the need for social housing in Southampton, the health authority, county council and other public bodies must be co-ordinated in the release of that land for social housing. Sadly, that opportunity has been missed in the Bill.

As far back as 1989, my local authority expressed the desire for estate management boards, tenant management co-operatives and a wide range of other forms of practical tenant control over housing. That was supported with staffing and training. However, the process of developing tenant participation is not, as anyone who has been involved will know, a matter simply of willing it from the top and then it happens. The process is complex. On the local authority side, long-standing practices and obstructive cultures must be changed. The attitudes of local government officers need to he developed positively and they must be supported and trained in their new roles and responsibilities.

There is a place for confidence building and training among tenants. The real problems must be tackled particularly if, as is the case in Southampton, some estate and tenant organisations comprise almost entirely young single mothers. We must ensure that they have the time and resources away from their other responsibilities to take part in the management of their estates. There must be a willingness among local authority members to let go of the patronage which has always been part of local authority practice and so allow decisions to be taken by the tenants.

The tragedy is that for the local authorities—at least, for the vast majority of Labour-led local authorities—which have been backing tenant participation positively, the impact of CCT is destroying the progress that has been made towards tenant participation.

The enforced imposition of compulsory competitive tendering cuts across the genuine evolution and development of tenant participation in, and control of, local authority housing and makes matters more difficult. It creates a more complex system that tenants have to operate. It means that they have to go not only to the council as clients but to whichever contractor is providing services. That makes it infinitely more difficult for a tenants' organisation to know with whom it should deal in respect of a problem.

That is not a prediction of what will happen when CCT is introduced in respect of housing management; it is the reality today. In most local authorities, CCT has had the effect of splintering those who are responsible for cleaning the streets, for open-space maintentance and for refuse collection into a myriad contracts with different contractors with whom it is much more difficult for tenants' organisations to work.

I have concluded that the Government's rhetoric on tenant participation has proved to be purely that. The Government's support in speeches and in the small level of funding for tenant participation came about only because it was hoped that tenant participation would lead to tenants turning against Labour council landlords. That has not happened, and that is why in the Bill the fundamental principle of tenant participation, that tenants should have the deciding say over who manages the homes in which they live and for which they pay rent, has been swept aside. Under the legislation tenants will have their management imposed upon them.

Those are not my views alone. When tenants in Southampton met to discuss the CCT proposals and the issues flagged in the Bill—a meeting organised not by the city council but by the priority estates project and funded by the Government, not by the city council—their conclusions were that the proposals brought no power to tenants, that they would be pushed through too quickly and that they were an attack on local democracy. The tenants say, "We are having something that we do not want and we have to pay for it."

Many tenants' associations have responded in a similar vein. A letter from the Thornhill Tower Blocks Residents Association states that it fears that This Government is again rushing through a scheme knowing full well the consequences of such haste, I refer to the poll tax and the hash made of that legislation and the cost. The Kingsland Residents Community Association states: Tenant Participation has been widely encouraged by the Government and Local Authorities, but the proposed legislation makes a mockery of this policy, because there arc no proposals within the legislation for any consultation with Tenant groups. That association's view was that there should be a selection panel for deciding which tender is successful. They suggested that it should be 50 per cent. council tenants and 50 per cent. local authority, with the deciding vote being cast by a council tenant. The Northam Tenants and Residents Association comments: we are concerned that the … Housing Act should not be amended to remove the safeguard that Transfer of houses should not occur unless a majority of tenants agree. In those consultation responses and others that I do not have time to read, three issues are apparent. Encouraging tenant participation is not just a matter of legislation; it is a matter of changing the culture of housing management. That culture and that positive co-operation will be shattered by the legislation.

The Bill knocks out the steady movement towards the estate management boards, tenants' management organisations and co-ops that have been developing in recent years. Even when tenants wish to take on the direct responsibility of management under CCT, in practice very few will be in a position to bid, and they will have to wait at least five years before they can have a say in the management of their estates.

We should remember that neither local authorities nor the Government pay the bills for tenants. Tenants pay the bills. Any Government who refuse to let tenants take the final decisions about their homes are ignoring the wishes of those tenants.

9.9 pm

Mr. Roger Evans (Monmouth)

In welcoming the Bill, I must say that I am extremely disappointed in the approach of part I. The Government might have approached this aspect of the law by a general review of tenures and the incidents of them, or by following the last Conservative manifesto which said that it would tackle this by the introduction of commonhold. The Government might have approached this by tightening the screw in some penal way against bad landlords, which, no doubt, would have attracted universal consent.

The Government might have approached this area of the law by introducing a comprehensive Bill which covered all the relevant material. What they have done is to leave the 1967 Act in place and add something to it, loosely modelled on the 1967 approach. The 1967 Act was a socialist measure, rough in its justice but necessary in south Wales, as my right hon. and learned Friend the Secretary of State for the Environment will no doubt agree. If he looks at the 1967 Act, however, I am sure that he will also agree, as any lawyer would, that it was highly technical, highly obscure and grossly arbitrary in its operation as to who came within its benefits and who did not.

When Ministers contemplate interference in long-established rights of property, entered into under freedom of contract, it is peculiarly incumbent on them, I respectfully suggest, to see that this is done for very careful, well justified public purposes. What is of such concern in part I of the Bill is that it appears, in a fashion which is not related to merit or to reason, to take property assets from one party and to give them to another.

It is quite clear that there is a windfall element of profit in this process of transformation. All that is being offered to the freeholder is 50 per cent. of the marriage value, whereas in reality in the commercial market it would be 80 per cent. There would be a claim for injurious affection for the rest of his estate and there would be consequential losses which the landlord would expect to recover. Therefore, this is a system which in its ordinary commercial operation is expected to fatour the acquiring leaseholder, not the original freeholder.

If, however, we start from that premise, we must go on to examine who is to benefit and who is to lose from these arrangements. I urge upon my right hon. and learned Friend the Secretary of State, first of all that it surely cannot be appropriate for a Conservative Administration to attack the property rights of long-established, ancient charities which have exercised and enjoyed their property rights over centuries. The right hon. Member for Selby (Mr. Alison) spoke on behalf of the Church Commissioners, who have been in existence from about 1710: why should they be singled out and treated as if they were an ordinary commercial landlord unless there is a case against them particularly for what they have done? Why should the dean and chapter of every cathedral close in England who have managed and enjoyed their close as an entirety suddenly discover that leasehold enfranchisement attacks particular parts of that entirety? What public purpose or benefit is to be gained by this kind of arbitrary intervention in property rights?

We could understand it and we would sympathise if this were a measure designed to attack grasping commercial landlords who deserved their just deserts, but the ambit of this is far too wide.

But if it is far too wide for those who lose, the ambit for those who gain is even more extraordinary. The social justice, well apparent in south Wales, in the 1967 Act was that individuals at a certain point in the social scale and of not particularly ample means, whose main residence was at stake and whose family home it was, achieved enfranchisement. Why, however, should, under this new proposal, every commercial company which, as the hon. Member for Teignbridge (Mr. Nicholls) pointed out, may have only temporarily acquired a qualifying leasehold interest benefit without any particular reason whatsoever? And the rules as to who benefits go further than that. The 10 per cent. rule cannot be founded upon anything other than the arbitrary exercise of a discretion, and the low-rent rule qualifying provision is again purely a legislative choice, utterly arbitrary.

What has already begun to happen and will go on happening is that commercial landlords of the least attractive variety will take the short-term course, grant leases for 21 years, which are outside the ambit of this legislation, or make sure that there is more than 10 per cent. which is non-residential in the block or that the ground rents are more than two thirds of the normal commercial rateable value. Such simple, easy steps will be taken in every instance to frustrate the Bill's purpose.

The debate has not dealt with a point that is fundamental to the purpose of the proposed reform. Why has leasehold endured in England—astonishingly—although for many years it has been attacked as an unsatisfactory system of tenure? The explanation is very simple, very ancient and very clear: it is impossible to buy, charge or sell a freehold flat in England without experiencing considerable difficulty because of two well-established principles of English law.

Covenants involving freehold land between freeholders can only be enforced between the original parties; if the original parties are not involved, only covenants that are negative in character and that benefit retained land can be enforced. The courts will not specifically perform such obligations. In a freehold development, there is no proper scheme of obligations to retain the public benefit of maintaining the value of the estate as a whole. The reason goes back to the year 1265, and the statute of Quia Emptores. That misguided 13th-century attempt at consumer protection made it impossible to impose feudal obligations on freeholding tenants. That is still the law in Scotland, where the feudal system has yet to be abolished. Because of that legal anomaly, leasehold remains popular among charities and ordinary commercial landlords and, indeed, among ordinary developers.

The Government ought to ask themselves why the building lease has been the classic means whereby Bath, Eastbourne, Cheltenham and the larger parts of inner London were developed. It was chosen because it enabled legal enforcement obligations to operate in a way that freehold development generally did not. In the Old Kent road, which was developed on a freehold basis, Georgian terraces were ruined at a relatively early date as their front gardens were turned into shops. The system is fundamentally defective, and the legislation should have dealt with the problem.

The social consequences are particularly serious, especially those relating to conservation. The unity of ownership and occupation does not necessarily guarantee a continued high standard of maintenance. Suggesting that local authorities are capable of maintaining high standards by exercising their planning powers is rather like being confident that the fabric of Ancient Rome would be looked after by Attila the Hun. It really will not do.

9.17 pm

Mr. Clive Betts (Sheffield, Attercliffe)

Let me declare a potential interest immediately: I am trying to buy a flat in London. My real interest, however, relates to constituents who are inadequately housed, and whose lives have been blighted by that. From the point of view of my constituents, we are discussing the right subject; it is a pity that the Bill does not allow us to address the real housing problems of many thousands of people.

In the short time available, I shall confine my remarks to the local authority aspects of the Bill. As my hon. Friend the Member for Hammersmith (Mr. Soley) ably demonstrated, the rent-to-mortgage scheme shows the Government's obsession with housing tenure above all else. Instead, we should be discussing the right of everyone in the country to a decent home, and the way in which, collectively, we can improve the quality and quantity of our housing.

Unfortunately, in the Government's terms, the quality of housing seems to he related to persuading people to become owner-occupiers—as though that would somehow magically improve the properties in which they live. Their idea of quantity is related solely to the percentage of the population who become owner-occupiers. The real issues —homelessness, and the time for which people must wait for a home of any kind—are not addressed by the Bill.

On behalf of my constituents, I am upset by the complacency of Conservative Members—Ministers as well as Back Benchers. Surely some of them must have in their surgeries the sort of severe housing problems that Labour Members have every week. And we have to offer people no hope because the resources to deal with them are simply not there.

One can take the homeless crisis in this country on a national scale; the figures are there; or one can take a particular case. In 1976, when I joined the Sheffield city council, we rehoused 100 homeless families a year. This year, 2,000 homeless families will be housed. That is the scale of the problem as it has grown under this Government. One can take the homeless crisis on the particular scale not only of individuals sleeping in cardboard boxes, because the homeless legislation does not touch them in any way, but of families that probably do qualify waiting in every housing department in the country to prove themselves homeless. What greater degradation and humiliation could be inflicted on people than to put them through that sort of process, and not to care about it?

Many older people in Sheffield tell me that when they were younger, just after the war, seeking to get a home of their own for the first time they used to have to live with their in-laws or their parents, often parted from their prospective partners, waiting for a home. When I joined the council, people used to thank goodness that those days were gone and that after two or three years on the waiting list one could get a nice little home in which to start a family. I thought that this Government believed in family values, but the house that they could get in 1976 after three years on the waiting list they now have to wait at least 10 years for.

We could blame the Germans in the 1950s for the housing crisis. I do not think that even this Government can manage to blame the Germans in the 1990s for the housing crisis in all our major cities.

The answer is in the Government's hands. We have a building industry which is largely out of work and many unemployed building workers with the necessary skills. Local authorities have capital receipts and it is time the Government addressed the situation. It is nonsense to have a situation in which by selling an asset and replacing it with another asset the borrowing requirement is increased. Only the British Treasury, with its peculiar detached view of economic reality, could manage to come up with such a solution.

When the right to buy was brought in the Government promised Conservative local authorities that the capital receipts could be spent on building homes. But it is not just a matter of building homes. Conservative Members criticise Labour local authorities for not repairing houses, ignoring the fact that many of those capital receipts were used by Labour local authorities, through a loophole in the legislation in the 1980s, to reroof and rewire homes and generally improve them. The Government closed that loophole in their later legislation and stopped those repair schemes going ahead. It is not Labour local authorities that are to blame.

As my hon. Friend the Member for Hammersmith rightly said, it is not just a matter of capital receipts. We also have to address the borrowing allocations, which are down to one third of what they were in 1980, because some of the receipts are not in the hands of authorities that would naturally spend them on housing needs. Some of the authorities with the worst housing needs do not have the greatest amount of capital receipts.

We need to redefine the public sector borrowing requirement and take local authority borrowing out of the PSBR. We need to sort out the difference between current expenditure for revenue purposes and capital expenditure on long-term investment. We need to have regard to the differences in the PSBR in other European countries. That will certainly have an impact under the Maastricht treaty and we must recognise and take account of it.

I have no time to answer all the attacks that were made on Labour local authorities—some of my colleagues have already done that—but authorities such as Sheffield were introducing right-to-repair schemes and compensation-for-improvement schemes because of their commitment to tenants' rights and their belief in those rights before this Government ever thought of them and brought them into legislation out of political expediency. Their commitment to tenants' rights was shown to be skin deep by the fact that in one piece of legislation they brought in the right for tenants to choose their landlord and in the next piece of legislation they suddenly found that the right of their friends in the private sector to tender for the work was more important than the rights of the tenants. That shows how deep their commitment to tenants' rights is.

If the Government really want tenants to get the benefit of the right to repair and right to improvement compensation, they must talk to the local authority associations and to their own colleagues who run councils and get a scheme that will work and deliver practical benefit, not simply produce a piece of paper that they can wave around as showing that they have fulfilled their manifesto commitment.

Finally, it is a question of assisting economic recovery, rather than merely getting housing circumstances right. Let us put the building industry back to work. Let us assist economic recovery by allowing local authorities to build the homes that people need. I appreciate that that would require the Government to eat a few words, do a few U-turns and even some somersaults, but we all know that these days they are getting good at all those tricks.

9.24 pm

Mr. Piers Merchant (Beckenham)

I am grateful for the opportunity to make a brief last-minute contribution to the debate.

I must first declare an interest as, like many hon. Members, I am the leaseholder of a small flat near this place. I hasten to add that I have no plans to exercise any future possible right to buy into the freehold because I am happy with the existing managing agents and landlord. Unfortunately, that is not the case for many leaseholders, and where the relationship has broken down I have no doubt that many of them will want to exercise the right to buy into the freehold so that they can manage the properties themselves.

My constituency contains an especially large number of leaseholders —approaching 8,000 or 9,000—and in some areas there is nothing but leasehold tenure. In the past six months, I have received a remarkable number of complaints on different issues relating to the way in which properties are maaged or to leaseholders' relationships with freeholders and managing agents. Even if that is not the main reason, it justifies the need to alter existing arrangements and to introduce this reform.

Many leaseholders—perhaps a majority—do not feel entirely secure when they are told that they are home owners; they know that a reversionary right exists and that they cannot control the way in which managing agents operate. The desire to be a full owner and to participate fully, as people in other forms of tenure are able to do, is also powerful.

In May 1991, the Department of 'the Environment produced a report entitled, "The Landlord and Tenant Act 1987: awareness, experience and impact." It gave many examples of where the relationship between freeholder and leaseholder had broken down and it was powerful evidence of the need for reform. I warmly welcome the Bill and the clauses which deal with leasehold enfranchisement, as I am sure will thousands of people throughout the country.

I must briefly quote one example from my constituency—one of —many similar cases that I know of—where there is a clear need for the law to intervene to assuage a difficult situation. One small property—a house which has been divided into leasehold flats—at No. 1 Durham road, is owned by Wellington Property. The managing agent is Appledore Finance, which operates from a post box and hides behind a cloak of anonymity. No one knows who runs it and all the letters sent to leaseholders are simply signed "Appledore". That is a bad start—it hardly encourages confidence or a good relationship. The leaseholders have complained that efficiency is shown only in issuing accounts and bills: the threat to sue and to take legal action is readily used; and there are large, unexplained and regular increases in the service charge, which the leaseholders cannot explain or understand. Recently, a sinking fund was suddenly activated to pay for future work, supposedly on behalf of the leaseholders, who were immediately charged interest if they did not pay a large sum into the fund. Most recently there was an attempt to charge every leaseholder about £10,000 to pay for urgently needed works that the freeholder had suddenly discovered: work that should have been done earlier was not done because the freeholder or his predecessors did not apply the letter of the lease.

Unfortunately, there are all too many examples such as the one I quoted. I could cite many more if I had the time. At the end of the day, they are examples of greedy, oppressive and sometimes exploitative landlords. I appreciate that many examples could be given of landlords who provide an excellent service and have a good relationship with their leaseholders, but where landlords are clearly evading the spirit—and sometimes the letter —of the law, there is powerful reason for the leasehold enfranchisement included in the Bill being introduced. That, together with the need to strengthen proper full home ownership, is a strong argument for speeding this reform into law as quickly as possible.

9.30 pm

Mrs. Ann Clwyd (Cynon Valley)

It was encouraging to see the Secretary of State face a veritable assault from his hon. Friends during his opening speech. I hope that that assault will be repeated tomorrow, possibly with more effect, when those doing the assaulting will accompany us into the Lobby.

Some hon. Members who spoke this afternoon have not stayed the course. Presumably they have gone to celebrate the victory of an American democratic president. We shall be joining them shortly. Some spoke in support of big landlords such as the Duke of Westminster or for tenants such as Lord Tebbit and complained that the legislation was like being mugged by a friend. But some Conservative Members have been as concerned as Opposition Members about various aspects of housing problems.

We in Wales have had some experience of the urban regeneration agency. It appears yet again that the Government have not paid attention to the comments, suggestions and criticisms of their own consultation exercise. Why have the Government not amended their proposals in the light of the criticisms? From where will come the money for the new quango? Will it come from other urban programmes, or will it, as the Bill suggests, be expected to achieve more regeneration from the resources available to it? Is this yet another new quango which will not be backed by new resources?

There has been talk of the agency having a budget of £260 million. What sort of dent will that make on the 160,000 derelict acres in the inner cities? Remember, the Welsh Development Agency has an annual budget of £150 million. This was an opportunity to rationalise the disparate funds for urban development. When will the Government learn? Instead of another fiasco like London docklands, with empty houses and office blocks which in no way meet the needs of the homeless in Tower Hamlets and Newham, the Government should have introduced a regeneration scheme with a fair share of social housing and community facilities, with jobs, training and transport for all the people of London.

My hon. Friend the Member for Leeds, East (Mr. Mudie) rightly said that the authentic voice of the inner cities was calling for jobs. The Government, he said, were misdirecting the use of scarce resources. He should know. The power to vest local authority land and to take planning powers from local authorities in designated areas implies that the urban regeneration agency will be holding a big stick behind its back in its dealings with local government.

Even if the Government claim that they are the powers of last resort, the very existence of the powers will damage the relationship with local government and deprive local authorities of their proper democratic planning role.

Heading the URA will be none other than Lord Walker —[Interruption.]—the former Secretary of State for Wales, the man brought in by the Secretary of State for Trade and Industry to oversee pit closure sweeteners, the man who will mastermind the minimal help that is to be given to mining areas once the pits are gone. The best thing that can be said of Lord Walker is that he knows all about pay-offs and how to get the most out of them. Last April, he got £100,000 after a few months' work when he quit as chairman of Maxwell Communication Corporation. The former Welsh Secretary was allowed to buy—[Interruption.]

Madam Deputy Speaker (Dame Janet Fookes)

Order. I wish to hear the hon. Lady. When there is noise from both sides of the House, that becomes impossible and it is quite unacceptable.

Mrs. Clwyd

Thank you, Madam Deputy Speaker.

The former Welsh Secretary was allowed to buy his £50,000 Mercedes office car for the grand sum of £1. He is on the board of British Gas; his business interests range from Thornton chocolates to Tate and Lyle sugar; until three months ago, he was chairman of Cornhill Insurance; and he is a director of Rothchilds on whose reports the Government base their plans to decimate the coal industry in Britain. What did he do for Wales? Not a lot.

Mr. Mark Robinson

Many of the Labour leaders of local authorities in Wales would disagree with what the hon. Lady is saying and would pay tribute to the work which my right hon. and noble Friend the former Secretary of State did for Wales.

Mrs. Clwyd

The hon. Gentleman would say that, wouldn't he? After all, he was a junior Minister in the Welsh Office, so it is not surprising that he backs his old master.

In a blaze of publicity, Lord Walker set up the valleys initiative to improve significantly the prosperity of the valleys of south Wales. It was meant to be a regeneration programme for mining communities where the pits had already disappeared. Its main economic aim was to reduce unemployment by between 25,000 and 30,000. It failed. Male unemployment in the valleys now is higher than it was in 1988 when the valleys initiative started. In Mid Glamorgan, 24 per cent. of school leavers leave school without any qualifications.

Dame Elaine Kellett-Bowman

Stick to the Bill.

Mrs. Clwyd

I am sticking to the Bill. The hon. Lady clearly has not understood that Lord Walker is to be chairman of the urban regeneration agency. It is interesting to look at his record in Wales. Tory Members may not like it but that is his record in Wales. As for his record on land reclamation, while 1,090 acres were reclaimed in the valleys in 1979–80, by the time Lord Walker was enthroned in the Welsh Office in 1988–89, the figure had fallen by two thirds to 350 acres.

The valleys initiative raised great hopes in the valley communities, but, in reality, it was just another Government public relations exercise, in exactly the same way as the urban regeneration agency will be.

Mr. Mark Robinson

On a point of order, Madam Deputy Speaker. Is it not normal practice in the House to talk about the Bill under discussion and not about extraneous issues?

Madam Deputy Speaker

Before the hon. Lady continues, I would point out that, although it is perfectly permissible to make passing reference to matters that seem to be germane to the Bill, the main thrust of the hon. Lady's argument must relate to Second Reading.

Mrs. Clwyd

May I point out, Madam Deputy Speaker, that when you were not in the Chair the Secretary of State for the Environment talked in some detail about Lord Walker.

Spending on regional policy in Wales, again while Lord Walker was in office, fell by a staggering 58–3 per cent. in 10 years and in Britain by 62.7 per cent. Again, that shows the hollowness of Lord Walker's words to the Tory Reform Group in April 1989. Tory Members do not like such references because they are profoundly embarrassing to those people.

Lord Walker talked about a dynamic regional policy.

Mr. Mark Robinson

On a point of order, Madam Deputy Speaker. I should like to ask what connection the Tory Reform Group has with this Bill.

Madam Deputy Speaker

I heard no reference to that, mainly because of the noise emanating from both sides of the House. That illustrates the point that I made earlier.

Mrs. Clwyd

I can quite understand why Conservative Members want to drown my words.

The fanciful claims made on behalf of the valleys initiative have now been attacked by the Public Accounts Committee in a report published last week. It said: We consider it unsatisfactory that, despite the Welsh Office's undertaking in 1988, to improve the accuracy of the figures provided by the database for regional selective assistance, inaccuracies subsequently remained uncorrected". Now, the man who failed to regenerate the valleys of south Wales is planning to regenerate the inner cities of England, with no new ideas, no new money but plenty of hype. Like the grand old Duke of York, he has 10,000 men: "He'll march them up to the top of the hill and march them down again. And when they are up they are up, and when they are down they are down, and when they are only halfway up they are neither up nor down." That is precisely how the people of Wales view the efforts of the former Secretary of State for Wales.

The United Kingdom faces a huge housing crisis. The Department of the Environment has just released figures showing that more than 100,000 people, including thousands of children, are living in bed-and-breakfast accommodation. In other parts of the country the situation is just as bad. Figures do not tell the whole story. They do not include single people, childless couples or those turned away for other reasons. People are sleeping rough on the streets of London and in many other towns and cities. They are a too familiar sight on the streets of Britain.

London is the worst area in the country for repossessions. The 1992 total will be little changed. Mortgage rescue schemes have flopped while the Government are preoccupied with trying to save their political skin. Thousands of families are trapped because their homes are worth less than their mortgages. More than 24,000 families are on council waiting lists; more than 110,000 tenants want a transfer. Housing conditions, especially in the private sector, are worsening.

I pay tribute to my hon. Friend the Member for Hammersmith (Mr. Soley) for his work on housing over many years and I regret that he has chosen to return to the Back Benches. He pointed out that the Bill fails to deal with all these issues, because the Government do not care about meeting housing needs or ensuring that people live in decent homes. Although the Secretary of State would have us believe otherwise, the Government do not believe in choice, standards or opportunities.

We support the extension of leaseholders' rights and the independent assessment of the value of leases, but we believe that the proposals do not go far enough. Will landlords make windfall gains, or will market valuations deter leaseholders? Will disputes be settled quickly through the leasehold valuation tribunal?

What about the future of private rented flats in the same building? We welcome the Secretary of State's renewed promise to introduce commonhold—that enjoys enthusiastic support on both sides of the House.

My hon. Friend the Member for Greenwich (Mr. Raynsford) asked why it was necessary, to qualify to buy the freehold, that two thirds of properties should be long leaseholds and that two thirds of occupants should have to apply. Perhaps the Secretary of State will tell us. We are not opposed to ideas enabling people to become home owners, but we think it bizarre that the Government should encourage a scheme to promote home ownership for low-income households at a time of record numbers of repossessions and when 300,000 families are having problems paying their mortgages.

My hon. Friend the Member for Lewisham, East (Mrs. Prentice) described the serious danger of tempting people into rent-to-mortgage arrangements. They are likely to be the most vulnerable people on the lowest incomes. What is needed is more investment in affordable, rentable accommodation. We all know that pilot rent-to-mortgage projects have all but failed, and I am sure that the Secretary of State for Wales can confirm that under the scheme run by the Development Board of Rural Wales only 52 sales had been achieved by 3 February this year.

Given the state of the housing market, why are the Government pressing ahead with further measures to tempt tenants into home ownership? Given the evidence that the cost of administration will be disproportionately high in relation to the numbers of successful applicants, why are the Government hell-bent on the scheme? Why do they not listen to my hon. Friends the Members for Blackburn (Mr. Straw) and for Stockport (Ms. Coffey), for example, and introduce instead an effective mortgage-to-rent scheme? It would be much more appropriate.

The decision to amend tenants' rights to consultation in the context of compulsory tendering has proved highly unpopular with housing organisations and tenants' bodies. Why do the Government not recognise that they have no mandate for CCT from those who are living in the homes that will be affected by their proposals?

On right to repair—[HON. MEMBERS: "Sit down."] Conservative Members must take full responsibility for interrupting my speech and causing me to be longer than I intended. We support efforts to improve local authorities' repair services. The Association of District Councils and others are doubtful, however, whether the new right-to-repair scheme will produce an improvement. The idea that a modified right to repair could be introduced by local authorities at no extra cost is not realistic. Does the Secretary of State agree that there is a series of cost implications for local authorities and that some of the extra costs will fall upon tenants through higher rents?

Nowhere is the housing crisis greater than in Wales. Shelter estimates that as many as 60,000 people are homeless in Wales alone. Government policies have led to the sale of 60,000 homes. In 1975, 8,000 council houses were built. Only 900 were built in 1987. In 1990, not one house was started by local authorities in the valleys area. Yet in the decade to 1991 the valleys councils received £384 million in capital receipts from the sale of council houses. Why are they still not allowed to build? Why will the Secretary of State not pledge to release capital receipts so that councils can build houses to rent?

Yet again the Government have invested much political capital in Housing for Wales. It is another quango that does not have one local authority representative on its board. That shows yet again the contempt in which the Government hold local authorities. They devalue and denigrate the important role that the authorities have played and could play in housing policy. The Bill is marginal and not relevant to Britain's housing problems. It is yet another tragically missed opportunity.

9.47 pm

The Secretary of State for Wales (Mr. David Hunt)

We have listened to 30 speeches during the debate, which has been comprehensive and wide ranging. Many issues have been covered. I hope that hon. Members on both sides of the House will excuse me if I am not able in the time allotted to me to deal with all the points that have been raised. I shall ensure, however, that everyone who has raised a matter that requires an answer will receive one from either my right hon. and learned Friend the Secretary of State for the Environment or myself.

There is another name on the Bill, as it were, and it has been mentioned by my hon. Friend the Member for Kensington (Mr. Fishburn). I was so pleased when the name was also mentioned by the hon. Member for Hammersmith (Mr. Soley). I refer, of course, to the late Sir Brandon Rhys Williams, and not because of the leasehold enfranchisement proposals alone. As those of us in Wales know, Brandon Park is the site of the new Bosch factory, and it was very much the dream of Sir Brandon. He set such a good example on both leasehold franchisement and urban regeneration.

The housing provisions in the Bill are all about new rights for existing leaseholders and existing tenants, but the House has been right to see the Bill in the context of the Government's housing policies as a whole. I criticise no hon. Member for the points that have been raised in the debate. Our housing policies as a whole are designed to ensure that decent housing is within the reach of all families. As my hon. Friend the Member for Eastbourne (Mr. Waterson) pointed out, the Bill is an important further step towards a property-owning democracy.

Several hon. Members referred to homelessness. I would point out to the hon. Member for Hammersmith that the Government have adopted important measures to help homeless families. I shall give two examples. The first is the output of social housing through housing associations, financed by the Housing Corporation and Housing for Wales. In addition, we are making increasing use of private finance. That has doubled over the past four years. Secondly, I would point out to the hon. Member for Stockport (Ms. Coffey) that the deregulation of the private rented sector for 1989, which the Opposition opposed all the way along, is gradually bringing about the renaissance of the private rented sector.

The hon. Member for Cheltenham (Mr. Jones) and other hon. Members raised the question of mortgage arrears. For people in difficulty with their mortgages, the single most important measure that the Government have taken is to bring down interest rates from 15 to 8 per cent. That helps individual borrowers and the housing market. Rescue schemes announced by the mortgage lenders last December will save about 55,000 repossessions this year. The Lord Chancellor's latest figures for repossession orders confirm an encouraging fall.

Leasehold reform is an important reform. I congratulate my hon. Friend the Member for Kensington on a remarkably good speech. He spoke without any notes. My parliamentary private secretary, my hon. Friend the Member for Battersea (Mr. Bowis), passed a letter to me during the debate from one of his constituents—[Interruption.]—who said that the Bill is fair and popular legislation—[Interruption.]—that must go through. I say also to the—[Interruption.]

Madam Deputy Speaker

Order. I think that some of the remarks made by the hon. Member for Knowsley, North (Mr. Howarth) would have been better left unsaid. I note that earlier on he had 10 minutes of the time of the House.

Mr. Hunt

As for what was said by my hon. Friend the Member for Fulham (Mr. Carrington), my right hon. and hon. Friends have fought hard for these reforms. Several hon. Members, including my hon. Friends the Members for Eastbourne and for Beckenham (Mr. Merchant), highlighted a number of other concerns. The hon. Member for Cynon Valley (Mrs. Clywd) was right when she said —as was also pointed out by my hon. Friend the Member for Monmouth (Mr. Evans)—that the bringing forward of commonhold proposals is needed. My hon. Friend the Member for Thanet, North (Mr. Gale) said that they will come forward. Of course that will happen. I recognise that my hon. Friends the Members for Eastbourne and Fulham and the hon. Member for Cheltenham are impatient, as are the hon. Members for Blackburn (Mr. Straw) and for Hampstead and Highgate (Ms. Jackson), but reform will come. However, it would have been inappropriate to include it in the Bill.

Mr. Paul Murphy (Torfaen)

Why?

Mr. Hunt

Because it is long and complicated and requires a Bill of its own.

My hon. Friend the Member for Monmouth, my right hon. Friend the Member for Selby (Mr. Alison) and my hon. Friend the Member for Bournemouth, West (M r. Butterfill) raised important points of detail. They argued for more restrictive rules, whereas my hon. Friend the Member for Fulham and the hon. Member for Greenwich (Mr. Raynsford) said that the rules were already too restrictive, which leads me to believe that my right hon. and hon. Friends have probably got it about right. However, all these matters will be considered in Committee. I can give my hon. Friend the Member for Teignbridge (Mr. Nicholls) the assurance that he sought.

As for the other housing provisions, the rent-to-mortgage scheme offers an important route into home ownership for no greater outlay than the rent that is already being paid. Tenants who pay full rent henceforth can invest that money in their own homes. It will give people a much wider range of choice.

I was not sure at the end of his speech whether the hon. Member for Blackburn was in favour of the scheme, but we shall no doubt find out in Committee. I remember that he was against the right-to-buy scheme. The hon. Gentleman said that in the first six months there had been only 17,000 sales. In the first quarter there were 20,000 sales. Completed sales are moving at the rate of about 50,000 a year. The hon. Member for Lewisham, East (Mrs. Prentice) spoke out strongly against the scheme, as did other Opposition Members, but I believe that the scheme ought to be supported in all parts of the House.

The hon. Member for Hampstead and Highgate said there are no rights in the Bill for council tenants. I wave at her this book, "A Charter for Council House Tenants". Our charter in Wales has been sent to all tenants to help them obtain the standards of service that they are entitled to expect. The charter committed the Government not only to the rent-to-mortgage scheme but to the right to manage, which is being given to council tenants for the first time.

Mr. John Battle (Leeds, West)

Where does the charter make it clear that tenants' rights will be removed by the Bill? Is not that true of the proposals for compulsory competitive tendering?

Mr. Hunt

No, it is not in there because it is untrue. [HON. MEMBERS: "Have you read it?] Yes, I have.

The charter commits the Government to the right of tenants to have urgent repairs done quickly and to receive compensation for home improvements.

Mr. Straw

Will the Secretary of State give way?

Mr. Hunt

I am still answering questions on this point. I hope that the hon. Member for Southampton, Itchen (Mr. Denham) will welcome the Bill's provisions that give council tenants more rights. As my hon. Friend the Member for Somerton and Frome (Mr. Robinson) said, rights can transform the untransformable, and have done so in Wales.

Mr. Straw

What exactly was the Secretary of State saying is untrue? Is not it a matter of fact and record that, by deleting section 27A of the Housing Act 1985, the Bill will remove tenants' clear right to veto by ballot changes in housing management? The Bill removes tenants' right to choose who should manage their estates.

Mr. Hunt

I refer the hon. Gentleman to clause 115, under which, for the first time, local authority tenants get the right collectively to manage their dwellings. I ask hon. Members to look at that.

The disgraceful attack that the hon. Member for Cynon Valley made on Peter Walker will not go unanswered. I remind the Labour party that it was the only political party to get money from Maxwell. How dare it attack my noble Friend. The hon. Lady should get her facts right. She got it wrong again: she said that the Welsh Development Agency has a budget of £150 million. I have news for her: this year, its budget has increased to its highest level in cash and real terms to £167 million.

I say to my hon. Friend the Member for South Hams (Mr. Steen), who knows more about urban regeneration than all the Labour Members put together, that the Bill will give a new, exciting opportunity. I say to the hon. Member for Cynon Valley—

Dr. Kim Howells (Pontypridd)

rose—

Mr. Hunt

I am still answering the points made by the hon Lady. In the valleys, we have seen a remarkable transformation, and that has had much to do with the positive contribution of my noble Friend Lord Walker, and we should remember that.

The Labour party has shown how much it hates home ownership. It may try to pretend that it is in favour of extending home ownership, but self-interest teaches it to be wary of the independence and pride that come with a property-owning democracy. It opposes enfranchisement and ownership; the Conservative party openly embraces those concepts. Ownership is at the heart of the Government's housing ideal because it leads to independence and active citizenship. Labour still wants people to be the vassals of some municipal socialist hierarchy. It wants people to be owned lock, stock and homestead by the Labour party. Conservatives believe that local councils should be the servants of the people; Labour sees them as landlords, political masters and latter-day feudal barons.

Labour Members have spoken a lot of rubbish in the debate. I am delighted that in urban regeneration and in rent to mortgage, Wales has again led the way. Many Opposition Members have witnessed at first hand in Wales the enormous benefits of measures such as those in the Bill. The Opposition must be the most negative in the history of this place. We are bringing power closer to the people. I commend the Bill to the House.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 327, Noes 259.

Division No. 80]	[10.00 pm
AYES
Adley, Robert	Conway, Derek
Ainsworth, Peter (East Surrey)	Coombs, Anthony (Wyre For'st)
Aitken, Jonathan	Coombs, Simon (Swindon)
Alexander, Richard	Cope, Rt Hon Sir John
Alison, Rt Hon Michael (Selby)	Cormack, Patrick
Allason, Rupert (Torbay)	Couchman, James
Amess, David	Cran, James
Ancram, Michael	Currie, Mrs Edwina (S D'by'ire)
Arbuthnot, James	Curry, David (Skipton & Ripon)
Arnold, Jacques (Gravesham)	Davies, Quentin (Stamford)
Arnold, Sir Thomas (Hazel Grv)	Davis, David (Boothferry)
Ashby, David	Day, Stephen
Aspinwall, Jack	Deva, Nirj Joseph
Atkins, Robert	Devlin, Tim
Atkinson, David (Bour'mouth E)	Dickens, Geoffrey
Atkinson, Peter (Hexham)	Dicks, Terry
Baker, Rt Hon K. (Mole Valley)	Dorrell, Stephen
Baker, Nicholas (Dorset North)	Douglas-Hamilton, Lord James
Baldry, Tony	Dover, Den
Banks, Matthew (Southport)	Duncan, Alan
Banks, Robert (Harrogate)	Duncan-Smith, Iain
Bates, Michael	Dunn, Bob
Batiste, Spencer	Durant, Sir Anthony
Beggs, Roy	Dykes, Hugh
Beith, Rt Hon A. J.	Eggar, Tim
Bellingham, Henry	Elletson, Harold
Bendall, Vivian	Emery, Sir Peter
Beresford, Sir Paul	Evans, David (Welwyn Hatfield)
Biffen, Rt Hon John	Evans, Jonathan (Brecon)
Blackburn, Dr John G.	Evans, Nigel (Ribble Valley)
Body, Sir Richard	Evans, Roger (Monmouth)
Bonsor, Sir Nicholas	Evennett, David
Booth, Hartley	Faber, David
Boswell, Tim	Fabricant, Michael
Bottomley, Peter (Eltham)	Fairbairn, Sir Nicholas
Bottomley, Rt Hon Virginia	Fenner, Dame Peggy
Bowden, Andrew	Field, Barry (Isle of Wight)
Bowis, John	Fishburn, Dudley
Boyson, Rt Hon Sir Rhodes	Forman, Nigel
Brandreth, Gyles	Forsyth, Michael (Stirling)
Brazier, Julian	Forsythe, Clifford (Antrim S)
Bright, Graham	Forth, Eric
Brooke, Rt Hon Peter	Fowler, Rt Hon Sir Norman
Brown, M. (Brigg & Cl'thorpes)	Fox, Dr Liam (Woodspring)
Browning, Mrs. Angela	Fox, Sir Marcus (Shipley)
Bruce, Ian (S Dorset)	Freeman, Roger
Burns, Simon	French, Douglas
Burt, Alistair	Fry, Peter
Butcher, John	Gale, Roger
Butler, Peter	Gallie, Phil
Butterfill, John	Gardiner, Sir George
Campbell, Menzies (Fife NE)	Garel-Jones, Rt Hon Tristan
Carlile, Alexander (Montgomry)	Garnier, Edward
Carlisle, John (Luton North)	Gill, Christopher
Carlisle, Kenneth (Lincoln)	Gillan, Cheryl
Carrington, Matthew	Good lad, Rt Hon Alastair
Carttiss, Michael	Goodson-Wickes, Dr Charles
Cash, William	Gorman, Mrs Teresa
Channon, Rt Hon Paul	Gorst, John
Chaplin, Mrs Judith	Grant, Sir Anthony (Cambs SW)
Churchill, Mr	Greenway, Harry (Ealing N)
Clappison, James	Greenway, John (Ryedale)
Clark, Dr Michael (Rochford)	Griffiths, Peter (Portsmouth, N)
Clarke, Rt Hon Kenneth (Ruclif)	Hague, William
Clifton-Brown, Geoffrey	Hamilton, Rt Hon Archie
Coe, Sebastian	(Epsom-Ewell)
Colvin, Michael	Hamilton, Neil (Tatton)
Congdon, David	Hampson, Dr Keith

Hannam, Sir John	Needham, Richard
Hargreaves, Andrew	Neubert, Sir Michael
Harris, David	Newton, Rt Hon Tony
Haselhurst, Alan	Nicholls, Patrick
Hawkins, Nick	Nicholson, David (Taunton)
Hawksley, Warren	Nicholson, Emma (Devon West)
Hayes, Jerry	Norris, Steve
Heald, Oliver	Onslow, Rt Hon Cranley
Heathcoat-Amory, David	Oppenheim, Phillip
Hendry, Charles	Ottaway, Richard
Heseltine, Rt Hon Michael	Page, Richard
Hicks, Robert	Paice, James
Higgins, Rt Hon Terence L.	Patnick, Irvine
Hill, James (Southampton Test)	Patten, Rt Hon John
Hogg, Rt Hon Douglas (G'tham)	Pattie, Rt Hon Sir Geoffrey
Horam, John	Pawsey, James
Hordern, Sir Peter	Peacock, Mrs Elizabeth
Howard, Rt Hon Michael	Pickles, Eric
Howarth, Alan (Strat'rd-on-A)	Porter, Barry (Wirral S)
Howell, Rt Hon David (G'dford)	Porter, David (Waveney)
Howell, Ralph (North Norfolk)	Portillo, Rt Hon Michael
Hughes Robert G. (Harrow W)	Powell, William (Corby)
Hughes, Simon (Southwark)	Rathbone, Tim
Hunt, Rt Hon David (Wirral W)	Redwood, John
Hunt, Sir John (Ravensbourne)	Renton, Rt Hon Tim
Hunter, Andrew	Richards, Rod
Jack, Michael	Riddick, Graham
Jackson, Robert (Wantage)	Robathan, Andrew
Jenkin, Bernard	Roberts, Rt Hon Sir Wyn
Jessel, Toby	Robertson, Raymond (Ab'd'n S)
Johnson Smith, Sir Geoffrey	Robinson, Mark (Somerton)
Jones, Gwilym (Cardiff N)	Roe, Mrs Marion (Broxbourne)
Jones, Nigel (Cheltenham)	Ross, William (E Londonderry)
Jones, Robert B. (W Hertfdshr)	Rowe, Andrew (Mid Kent)
Kellett-Bowman, Dame Elaine	Rumbold, Rt Hon Dame Angela
Key, Robert	Ryder, Rt Hon Richard
Kilfedder, Sir James	Sackville, Tom
King, Rt Hon Tom	Sainsbury, Rt Hon Tim
Kirkhope, Timothy	Scott, Rt Hon Nicholas
Kirkwood, Archy	Shaw, David (Dover)
Knapman, Roger	Shaw, Sir Giles (Pudsey)
Knight, Mrs Angela (Erewash)	Shephard, Rt Hon Gillian
Knight, Greg (Derby N)	Shepherd, Colin (Hereford)
Knox, David	Shepherd, Richard (Aldridge)
Kynoch, George (Kincardine)	Shersby, Michael
Lait, Mrs Jacqui	Sims, Roger
Lamont, Rt Hon Norman	Skeet, Sir Trevor
Lawrence, Sir Ivan	Smith, Sir Dudley (Warwick)
Legg, Barry	Smith, Tim (Beaconsfield)
Leigh, Edward	Soames, Nicholas
Lennox-Boyd, Mark	Speed, Sir Keith
Lester, Jim (Broxtowe)	Spencer, Sir Derek
Lidington, David	Spicer, Sir James (W Dorset)
Lloyd, Peter (Fareham)	Spicer, Michael (S Worcs)
Lord, Michael	Spink, Dr Robert
Luff, Peter	Spring, Richard
Lynne, Ms Liz	Sproat, Iain
MacGregor, Rt Hon John	Squire, Rachel (Dunfermline W)
MacKay, Andrew	Stanley, Rt Hon Sir John
McLoughlin, Patrick	Steen, Anthony
McNair-Wilson, Sir Patrick	Stephen, Michael
Madel, David	Stern, Michael
Maitland, Lady Olga	Stewart, Allan
Malone, Gerald	Streeter, Gary
Mans, Keith	Sumberg, David
Marland, Paul	Sweeney, Walter
Marlow, Tony	Sykes, John
Marshall, John (Hendon S)	Tapsell, Sir Peter
Marshall, Sir Michael (Arundel)	Taylor, Ian (Esher)
Martin, David (Portsmouth S)	Taylor, John M. (Solihull)
Mawhinney, Dr Brian	Taylor, Sir Teddy (Southend, E)
Merchant, Piers	Temple-Morris, Peter
Milligan, Stephen	Thomason, Roy
Mills, Iain	Thompson, Patrick (Norwich N)
Mitchell, Andrew (Gedling)	Thornton, Sir Malcolm
Mitchell, Sir David (Hants NW)	Thurnham, Peter
Moate, Roger	Townend, John (Bridlington)
Monro, Sir Hector	Townsend, Cyril D. (Bexl'yh'th)
Montgomery, Sir Fergus	Tracey, Richard
Moss, Malcolm	Trend, Michael

Trotter, Neville	Whitney, Ray
Twinn, Dr Ian	Whittingdale, John
Tyler, Paul	Widdecombe, Ann
Vaughan, Sir Gerard	Wilkinson, John
Viggers, Peter	Willetts, David
Waldegrave, Rt Hon William	Wilshire, David
Walden, George	Winterton, Mrs Ann (Congleton)
Walker, Bill (N Tayside)	Winterton, Nicholas (Macc'f'ld)
Wallace, James	Wolfson, Mark
Waller, Gary	Wood, Timothy
Ward, John	Yeo, Tim
Wardle, Charles (Bexhill)	Young, Sir George (Acton)
Waterson, Nigel
Watts, John	Tellers for the Ayes:
Wells, Bowen	Mr. David Lightbown and Mr. Sydney Chapman.
Wheeler, Sir John

NOES
Abbott, Ms Diane	Davidson, Ian
Adams, Mrs Irene	Davies, Bryan (Oldham C'tral)
Ainger, Nick	Davies, Rt Hon Denzil (Llanelli)
Ainsworth, Robert (Cov'try NE)	Davies, Ron (Caerphilly)
Allen, Graham	Davis, Terry (B'ham, H'dge H'l)
Anderson, Ms Janet (Ros'dale)	Denham, John
Armstrong, Hilary	Dewar, Donald
Ashton, Joe	Dixon, Don
Austin-Walker, John	Dobson, Frank
Banks, Tony (Newham NW)	Donohoe, Brian H.
Barnes, Harry	Dowd, Jim
Barron, Kevin	Dunnachie, Jimmy
Battle, John	Dunwoody, Mrs Gwyneth
Bayley, Hugh	Eagle, Ms Angela
Beckett, Margaret	Eastham, Ken
Bell, Stuart	Enright, Derek
Benn, Rt Hon Tony	Etherington, Bill
Bennett, Andrew F.	Evans, John (St Helens N)
Benton, Joe	Ewing, Mrs Margaret
Bermingham, Gerald	Faulds, Andrew
Berry, Dr. Roger	Field, Frank (Birkenhead)
Betts, Clive	Flynn, Paul
Blair, Tony	Foster, Derek (B'p Auckland)
Blunkett, David	Foulkes, George
Boateng, Paul	Fraser, John
Boyce, Jimmy	Fyfe, Maria
Boyes, Roland	Galbraith, Sam
Bradley, Keith	Galloway, George
Bray, Dr Jeremy	Gapes, Mike
Brown, Gordon (Dunfermline E)	Garrett, John
Brown, N. (N'c'tle upon Tyne E)	George, Bruce
Burden, Richard	Gerrard, Neil
Byers, Stephen	Godsiff, Roger
Caborn, Richard	Golding, Mrs Llin
Callaghan, Jim	Gordon, Mildred
Campbell, Ronnie (Blyth V)	Gould, Bryan
Campbell-Savours, D. N.	Graham, Thomas
Canavan, Dennis	Grant, Bernie (Tottenham)
Cann, Jamie	Griffiths, Nigel (Edinburgh S)
Chisholm, Malcolm	Griffiths, Win (Bridgend)
Clapham, Michael	Grocott, Bruce
Clark, Dr David (South Shields)	Gunnell, John
Clarke, Eric (Midlothian)	Hain, Peter
Clarke, Tom (Monklands W)	Hall, Mike
Clelland, David	Hanson, David
Clwyd, Mrs Ann	Hardy, Peter
Coffey, Ann	Harman, Ms Harriet
Cohen, Harry	Hattersley, Rt Hon Roy
Connarty, Michael	Henderson, Doug
Cook, Frank (Stockton N)	Heppell, John
Cook, Robin (Livingston)	Hill, Keith (Streatham)
Corbett, Robin	Hinchliffe, David
Corbyn, Jeremy	Hoey, Kate
Cousins, Jim	Hogg, Norman (Cumbernauld)
Cox, Tom	Home Robertson, John
Cryer, Bob	Hood, Jimmy
Cummings, John	Hoon, Geoffrey
Cunliffe, Lawrence	Howarth, George (Knowsley N)
Cunningham, Jim (Covy SE)	Howells, Dr. Kim (Pontypridd)
Dafis, Cynog	Hoyle, Doug
Dalyell, Tam	Hughes, Kevin (Doncaster N)
Darling, Alistair	Hughes, Robert (Aberdeen N)

Hughes, Roy (Newport E)	Pendry, Tom
Hume, John	Pickthall, Colin
Illsley, Eric	Pike, Peter L.
Ingram, Adam	Pope, Greg
Jackson, Glenda (H'stead)	Powell, Ray (Ogmore)
Jackson, Helen (Shef'ld, H)	Prentice, Ms Bridget (Lew'm E)
Jamieson, David	Prentice, Gordon (Pendle)
Janner, Greville	Prescott, John
Jones, Barry (Alyn and D'side)	Primarolo, Dawn
Jones, Ieuan Wyn (Ynys Môn)	Purchase, Ken
Jones, Jon Owen (Cardiff C)	Quin, Ms Joyce
Jones, Lynne (B'ham S O)	Radice, Giles
Jones, Martyn (Clwyd, SW)	Randall, Stuart
Jowell, Tessa	Raynsford, Nick
Kaufman, Rt Hon Gerald	Reid, Dr John
Keen, Alan	Robertson, George (Hamilton)
Kennedy, Jane (Lpool Brdgn)	Robinson, Geoffrey (Co'try NW)
Khabra, Piara S.	Roche, Mrs. Barbara
Kilfoyle, Peter	Rogers, Allan
Kinnock, Rt Hon Neil (Islwyn)	Rooker, Jeff
Leighton, Ron	Rooney, Terry
Lestor, Joan (Eccles)	Ross, Ernie (Dundee W)
Lewis, Terry	Rowlands, Ted
Litherland, Robert	Ruddock, Joan
Livingstone, Ken	Salmond, Alex
Lloyd, Tony (Stretford)	Sedgemore, Brian
Llwyd, Elfyn	Sheerman, Barry
Loyden, Eddie	Sheldon, Rt Hon Robert
McAllion, John	Shore, Rt Hon Peter
McCartney, Ian	Short, Clare
Macdonald, Calum	Simpson, Alan
McFall, John	Skinner, Dennis
McKelvey, William	Smith, Andrew (Oxford E)
Mackinlay, Andrew	Smith, C. (Isl'ton S & F'sbury)
McLeish, Henry	Smith, Llew (Blaenau Gwent)
McNamara, Kevin	Soley, Clive
Madden, Max	Spearing, Nigel
Mahon, Alice	Spellar, John
Mandelson, Peter	Squire, Rachel (Dunfermline W)
Marek, Dr John	Steinberg, Gerry
Marshall, David (Shettleston)	Stevenson, George
Marshall, Jim (Leicester, S)	Stott, Roger
Martin, Michael J. (Springburn)	Strang, Dr. Gavin
Martlew, Eric	Straw, Jack
Maxton, John	Taylor, Mrs Ann (Dewsbury)
Meacher, Michael	Thompson, Jack (Wansbeck)
Meale, Alan	Tipping, Paddy
Michael, Alun	Turner, Dennis
Michie, Bill (Sheffield Heeley)	Vaz, Keith
Milburn, Alan	Walker, Rt Hon Sir Harold
Miller, Andrew	Walley, Joan
Mitchell, Austin (Gt Grimsby)	Wardell, Gareth (Gower)
Moonie, Dr Lewis	Wareing, Robert N
Morgan, Rhodri	Watson, Mike
Morley, Elliot	Wicks, Malcolm
Morris, Rt Hon A. (Wy'nshawe)	Wiggin, Jerry
Morris, Estelle (B'ham Yardley)	Williams, Rt Hon Alan (Sw'n W)
Morris, Rt Hon J. (Aberavon)	Williams, Alan W (Carmarthen)
Mowlam, Marjorie	Wilson, Brian
Mudie, George	Winnick, David
Mullin, Chris	Wise, Audrey
Murphy, Paul	Worthington, Tony
Oakes, Rt Hon Gordon	Wray, Jimmy
O'Brien, Michael (N W'kshire)	Wright, Dr Tony
O'Brien, William (Normanton)	Young, David (Bolton SE)
O'Hara, Edward
Olner, William	Tellers for the Noes:
O'Neill, Martin	Mr. Gordon McMaster and Mr. Thomas McAvoy.
Orme, Rt Hon Stanley
Parry, Robert

Question accordingly agreed to.

Bill read a Second time.

10.15 pm

Mr. James Wallace (Orkney and Shetland)

On a point of order, Madam Deputy Speaker. It will not have escaped your notice that the Housing and Urban Development Bill has a number of clauses relating to Scotland. So that Scots Members may have a proper opportunity to debate those clauses, would it be in order for me to seek to refer the Bill to a Committee of the whole House? If so, I beg to move, That the Bill he committed to a Committee of the whole House.

Question put, That the Bill be committed to a Committee of the whole House:—

The House divided: Ayes 15, Noes 303.

Division No. 81]	[10.15
AYES
Beith, Rt Hon A. J.	Lynne, Ms Liz
Campbell, Menzies (Fife NE)	Salmond, Alex
Carlile, Alexander (Montgomry)	Skinner, Dennis
Cryer, Bob	Tyler, Paul
Ewing, Mrs Margaret	Wallace, James
Johnston, Sir Russell
Jones, Ieuan Wyn (Ynys Môn)	Tellers for the Ayes:
Jones, Nigel (Cheltenham)	Mr. Archy Kirkwood and Mr. Simon Hughes.
Kennedy, Charles (Ross, C&S)
Llwyd, Elfyn

NOES
Adley, Robert	Clappison, James
Ainsworth, Peter (East Surrey)	Clark, Dr Michael (Rochford)
Aitken, Jonathan	Clarke, Rt Hon Kenneth (Ruclif)
Alexander, Richard	Clifton-Brown, Geoffrey
Alison, Rt Hon Michael (Selby)	Coe, Sebastian
Allason, Rupert (Torbay)	Colvin, Michael
Amess, David	Congdon, David
Ancram, Michael	Coombs, Anthony (Wyre For'st)
Arbuthnot, James	Coombs, Simon (Swindon)
Arnold, Jacques (Gravesham)	Cope, Rt Hon Sir John
Arnold, Sir Thomas (Hazel Grv)	Couchman, James
Ashby, David	Cran, James
Aspinwall, Jack	Currie, Mrs Edwina (S D'by'ire)
Atkins, Robert	Curry, David (Skipton & Ripon)
Atkinson, David (Bour'mouth E)	Davies, Quentin (Stamford)
Atkinson, Peter (Hexham)	Davis, David (Boothferry)
Baker, Rt Hon K. (Mole Valley)	Day, Stephen
Baker, Nicholas (Dorset North)	Deva, Nirj Joseph
Baldry, Tony	Devlin, Tim
Banks, Matthew (Southport)	Dicks, Terry
Banks, Robert (Harrogate)	Douglas-Hamilton, Lord James
Bates, Michael	Dover, Den
Batiste, Spencer	Duncan, Alan
Beggs, Roy	Duncan-Smith, Iain
Bellingham, Henry	Dunn, Bob
Bendall, Vivian	Durant, Sir Anthony
Beresford, Sir Paul	Dykes, Hugh
Biffen, Rt Hon John	Eggar, Tim
Blackburn, Dr John G.	Elletson, Harold
Body, Sir Richard	Emery, Sir Peter
Booth, Hartley	Evans, David (Welwyn Hatfield)
Bottomley, Peter (Eltham)	Evans, Jonathan (Brecon)
Bottomley, Rt Hon Virginia	Evans, Nigel (Ribble Valley)
Bowden, Andrew	Evans, Roger (Monmouth)
Bowis, John	Evennett, David
Boyson, Rt Hon Sir Rhodes	Faber, David
Brandreth, Gyles	Fabricant, Michael
Brazier, Julian	Fairbairn, Sir Nicholas
Bright, Graham	Fenner, Dame Peggy
Brooke, Rt Hon Peter	Field, Barry (Isle of Wight)
Brown, M. (Brigg & Cl'thorpes)	Fishburn, Dudley
Browning, Mrs. Angela	Forman, Nigel
Bruce, Ian (S Dorset)	Forsyth, Michael (Stirling)
Burns, Simon	Forsythe, Clifford (Antrim S)
Burt, Alistair	Forth, Eric
Butcher, John	Fowler, Rt Hon Sir Norman
Butler, Peter	Fox, Dr Liam (Woodspring)
Butterfill, John	Fox, Sir Marcus (Shipley)
Carlisle, John (Luton North)	Freeman, Roger
Carlisle, Kenneth (Lincoln)	French, Douglas
Carrington, Matthew	Fry, Peter
Carttiss, Michael	Gale, Roger
Cash, William	Gallie, Phil
Channon, Rt Hon Paul	Gardiner, Sir George
Chaplin, Mrs Judith	Garel-Jones, Rt Hon Tristan
Churchill, Mr	Garnier, Edward

Gill, Christopher	Knox, David
Gillan, Cheryl	Kynoch, George (Kincardine)
Goodlad, Rt Hon Alastair	Lait, Mrs Jacqui
Goodson-Wickes, Dr Charles	Lamont, Rt Hon Norman
Gorman, Mrs Teresa	Lawrence, Sir Ivan
Gorst, John	Legg, Barry
Grant, Sir Anthony (Cambs SW)	Leigh, Edward
Greenway, Harry (Ealing N)	Lennox-Boyd, Mark
Greenway, John (Ryedale)	Lester, Jim (Broxtowe)
Griffiths, Peter (Portsmouth, N)	Lidington, David
Hague, William	Lightbown, David
Hamilton, Rt Hon Archie	Lloyd, Peter (Fareham)
(Epsom-Ewell)	Lord, Michael
Hamilton, Neil (Tatton)	Luff, Peter
Hampson, Dr Keith	MacGregor, Rt Hon John
Hannam, Sir John	MacKay, Andrew
Hargreaves, Andrew	McLoughlin, Patrick
Harris, David	McNair-Wilson, Sir Patrick
Haselhurst, Alan	Madel, David
Hawkins, Nick	Maitland, Lady Olga
Hawksley, Warren	Malone, Gerald
Hayes, Jerry	Mans, Keith
Heald, Oliver	Marland, Paul
Heathcoat-Amory, David	Marlow, Tony
Hendry, Charles	Marshall, John (Hendon S)
Heseltine, Rt Hon Michael	Marshall, Sir Michael (Arundel)
Hicks, Robert	Martin, David (Portsmouth S)
Higgins, Rt Hon Terence L.	Mawhinney, Dr Brian
Hill, James (Southampton Test)	Merchant, Piers
Hogg, Rt Hon Douglas (G'tham)	Milligan, Stephen
Horam, John	Mills, Iain
Hordern, Sir Peter	Mitchell, Andrew (Gedling)
Howard, Rt Hon Michael	Mitchell, Sir David (Hants NW)
Howarth, Alan (Strat'rd-on-A)	Moate, Roger
Howell, Ralph (North Norfolk)	Monro, Sir Hector
Hughes Robert G. (Harrow W)	Montgomery, Sir Fergus
Hunt, Rt Hon David (Wirral W)	Moss, Malcolm
Hunt, Sir John (Ravensbourne)	Neubert, Sir Michael
Hunter, Andrew	Newton, Rt Hon Tony
Jack, Michael	Nicholls, Patrick
Jackson, Robert (Wantage)	Nicholson, David (Taunton)
Jenkin, Bernard	Nicholson, Emma (Devon West)
Jessel, Toby	Norris, Steve
Johnson Smith, Sir Geoffrey	Onslow, Rt Hon Cranley
Jones, Gwilym (Cardiff N)	Oppenheim, Phillip
Jones, Robert B. (W Hertfdshr)	Ottaway, Richard
Kellett-Bowman, Dame Elaine	Page, Richard
Key, Robert	Paice, James
Kilfedder, Sir James	Patnick, Irvine
King, Rt Hon Tom	Patten, Rt Hon John
Kirkhope, Timothy	Pattie, Rt Hon Sir Geoffrey
Knapman, Roger	Pawsey, James
Knight, Mrs Angela (Erewash)	Peacock, Mrs Elizabeth
Knight, Greg (Derby N)	Pickles, Eric

Porter, David (Waveney)	Sweeney, Walter
Portillo, Rt Hon Michael	Sykes, John
Rathbone, Tim	Tapsell, Sir Peter
Redwood, John	Taylor, Ian (Esher)
Renton, Rt Hon Tim	Taylor, John M. (Solihull)
Richards, Rod	Taylor, Sir Teddy (Southend, E)
Riddick, Graham	Temple-Morris, Peter
Robathan, Andrew	Thomason, Roy
Roberts, Rt Hon Sir Wyn	Thompson, Patrick (Norwich N)
Robertson, Raymond (Ab'd'n S)	Thornton, Sir Malcolm
Robinson, Mark (Somerton)	Thurnham, Peter
Roe, Mrs Marion (Broxbourne)	Townend, John (Bridlington)
Ross, William (E Londonderry)	Townsend, Cyril D. (Bexl'yh'th)
Rowe, Andrew (Mid Kent)	Tracey, Richard
Rumbold, Rt Hon Dame Angela	Trend, Michael
Ryder, Rt Hon Richard	Trotter, Neville
Sackville, Tom	Twinn, Dr Ian
Sainsbury, Rt Hon Tim	Vaughan, Sir Gerard
Scott, Rt Hon Nicholas	Viggers, Peter
Shaw, David (Dover)	Waldegrave, Rt Hon William
Shaw, Sir Giles (Pudsey)	Walker, Bill (N Tayside)
Shephard, Rt Hon Gillian	Waller, Gary
Shepherd, Colin (Hereford)	Ward, John
Shepherd, Richard (Aldridge)	Wardle, Charles (Bexhill)
Shersby, Michael	Waterson, Nigel
Sims, Roger	Watts, John
Skeet, Sir Trevor	Wells, Bowen
Smith, Sir Dudley (Warwick)	Wheeler, Sir John
Smith, Tim (Beaconsfield)	Whitney, Ray
Soames, Nicholas	Whittingdale, John
Speed, Sir Keith	Widdecombe, Ann
Spencer, Sir Derek	Wilkinson, John
Spicer, Sir James (W Dorset)	Willetts, David
Spicer, Michael (S Worcs)	Wilshire, David
Spink, Dr Robert	Winterton, Mrs Ann (Congleton)
Spring, Richard	Winterton, Nicholas (Macc'f'ld)
Sproat, Iain	Wolfson, Mark
Squire, Robin (Hornchurch)	Wood, Timothy
Stanley, Rt Hon Sir John	Yeo, Tim
Steen, Anthony	Young, Sir George (Acton)
Stephen, Michael
Stern, Michael	Tellers for the Noes:
Stewart, Allan	Mr. Sydney Chapman and Mr. Tim Boswell.
Streeter, Gary

Question accordingly negatived.

Bill committed to a Standing Committee, pursuant to Standing Order No. 61 (Committal of Bills).