ABOLITION OF LOW RENT TEST FOR HOUSES

HC Deb 09 February 1993 vol 218 cc903-26

`.—(1) In section 1(1)(a) of the Leasehold Reform Act 1967 the words "at a low rent" shall be omitted.

(2) Section 4 of the Leasehold Reform Act 1967 shall cease to have effect.'.—[Mr. Pike.]

Brought up, and read the First time.

Mr. Pike

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

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

I understand that it will be convenient to discuss also the following amendments: No. 22, in clause 5, page 5, line 40, leave out 'at a low rent'.

No. 120, in clause 7, page 8, line 16, leave out from 'exceed' to end of line 29 and insert '£250'.

No. 100, in page 8, line 16, leave out from 'namely—' to end of line 29 and insert—

1. '(a) £250, or
2. (b) one-third of the market rent on the relevant: date.'.

No. 23, in page 8, line 17, leave out 'two thirds of and insert 'one and a half.

No. 24, in page 8, line 26, leave out 'two thirds of' and insert 'one and a half times'.

No. 121, leave out lines 34 to 36.

No. 122, leave out lines 6 to 15.

No. 114, in clause 59, page 63, line 25, leave out from beginning to end of line 47 on page 64.

No. 123, page 63, line 36, leave out from beginning to end of line 37 on page 64.

No. 124, in clause 60, page 63, line 45, leave out from beginning to end of line 37 on page 64 and insert—

'Alternative rent limits for purposes of section 1A(2)

4AS.—(1) For the purposes of section 1A(2) above a tenancy of any property falls within this subsection if at any time during the tenancy either:

1. (a) No rent is payable under it; or
2. (b) The rent so payable does not exceed the maximum limit.

(2) The maximum limit is:

1. (a) Two thirds of the annual letting value of the property (on the same terms) on the date of the commencement of the tenancy; or
2. (b) If greater than (a), two thirds of the fixed amount (if any) of the rental applicable to the property.

(3) The fixed amount applicable to any property is:

1. (a) The rateable value of the property on the relevant day where either—
   1. (i) The tenancy was entered into on or after 1st April 1963 but before 1st April 1990; or
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   2. (ii) The property has a rateable value on 31st March 1990 and the tenancy was entered into on or after 1st April 1990 but in pursuance of a contract made before that date.
2. (b) In any other case £5,000 if the property is in Greater London and £1,000 if elsewhere.

(4) Where the property comprised in the tenancy includes property other than the house and premises:

1. (a) The rent payable under the tenancy shall be deemed to be that part of the rent which is fairly attributable to the house and premises;
2. (b) The rateable value shall be taken to be that part of that value which is fairly attributable to the house and premises; and
3. (c) The letting value of the property at any time shall be taken to be the letting value of the house and premises at that time.

(5) It shall be presumed that the rent payable under a tenancy does not exceed the maximum unless the contrary is proved.".'.

No. 125, in page 64, line 20, leave out from beginning to end of line 22.

Mr. Pike

The new clause and amendments all deal with the low rent test. We hope to get a more positive response from the Government tonight on the matter. Opposition Members are disappointed that the Government have not tabled an amendment to take some action on the problem. We are not alone in that view. Several of the amendments in the group were tabled by Conservative Members. Unless we get a positive response from the Minister and an assurance that the Government will take action, we shall press new clause 18 to a Division. I make that clear in case there are any doubts or misunderstandings, so that people know where they are. I am aware that other amendments in the group may be moved formally at the appropriate stage and pressed to a Division. We intend to test the feeling of the House on the lead new clause 18.

In Committee, the Under-Secretary of State said: but we are perfectly prepared to reconsider where that low rent test should bite."—[Offical Report, Standing Committee B, 17 November 1992; c. 104.] That was on 17 November. We are now three months on. It would be an understatement to say that we were disappointed that the Government had not tabled an amendment to change the position.

It comes down to the type of principle we have been trying to debate. We believe that people should be able to get the enfranchisement provided for in the Bill and that there should not be provisions in the Bill that prevent that. Some hon. Members have tried to take us further back the other way and to preclude more people from being able to exercise enfranchisement. We have seen the Government fighting fairly hard, but being squeezed, to try to hold the position as near as possible and to make the minimum concessions.

If the Government are serious about what they said, that one of the fundamental objectives of the Bill is to ensure that as many people as possible should have the right to enfranchise, they must recognise that this low rent test puts an obstacle in the way of many people who wish to enfranchise. That would be totally wrong and inconsistent with what the Government say that they are trying to do. So we hope that the Government can rethink this and try to respond positively.

In the debate on new clause 15, the Minister repeatedly said that it was not his wish to see people precluded from owning their own properties. He was extolling the virtues of that and of being able to acquire the freehold. Those are very much the views that we are advocating in this debate.

We move the new clause very much in that spirit, because we want to see people able to exercise their right to enfranchise and not be excluded by a test that will exclude more people than it ought to.

This is a matter of great concern, particularly in the London area. It will be of great concern to many people, who will see their opportunity to acquire freehold barred by a Bill which, when it was foreshadowed in the Queen's Speech, made them think that at long last the Government were to take action. They thought they were going to have the right to acquire a freehold, and now they see that the Bill, at its last stage in this House before going to the other place, still has a bar to stop many people exercising a right to acquire freehold. That would be an unfortunate situation.

In the Lord Chancellor's consultative paper on commonhold, published in November 1990, in paragraph 4:11 there is a reference to the low rent test:

It is so unlikely that there is a significant number of cases of residential long leases at a full rent suitable for conversion to commonhold, that the complication of a low rent qualification cannot be justified bearing in mind, especially, that special provision would have to be made to deal with cases where some leases were at a low rent and others were not". Now there seems to have been a shift in the Government view. I do not want to get involved in the commonhold issue, because, Mr. Deputy Speaker, you would immediately rule me out of order. We all wait for the day when the Government can introduce that legislation. Members on both sides of the House have actively campaigned for the commonhold principle to be established. We regret that it is not possible to do it this year and hope that it can be done next year.

8.45 pm

In the first part of this Bill, we have a low rent test, which will remain unless we carry this new clause or one of these amendments and will bar many people from exercising the very principle that the first part of the Bill claims to set out to achieve for occupiers of these properties.

I want to refer to one or two examples of people who know how serious it is. I know that many hon. Members who were on the Committee have had letters on the subject, but it is relevant to refer to some in the context of this debate, because they highlight how crucial is the low rent test and how easy it has often been to ensure that the levels of ground rent have been fixed at a figure that would bar people from being able to exercise their right to acquire freehold.

A Mr. Dyson wrote: This anomaly is the 'low rent' provision which states that to qualify for enfranchisement leaseholders must have rents which are less than⅔rateable value on grant of lease or if lease issued after April 1990, rent must be less than £1,000 in London or £250 elsewhere. This rule currently applies to houses (1967 Leasehold Reform Act)". It then says just how this would bar him in the present situuation from acquiring the property. The ground rent at the start of the lease was £230 per annum and rateable value at the start of the lease was £338. Two thirds of £338 is £226, so for the sake of £4 that individual is barred from exercising his right of enfranchisement. That is the present situation with that house and it will apply if we do not do something to abolish the low rent test or amend it to ensure that such people are not barred. If the ground rent of £230 had been just £4 lower, he would have qualified, and that must be nonsense.

Another letter, from a T. J. 0. Hickey, refers to the two-thirds rule and says that it means that in order to qualify for enfranchisement or extension of a long lease over 21 years there must be a ground rent of less than two thirds of rateable value at the time that lease was granted. He says that the premium charged by the landlord for the lease in 1984 in this case was very close to the market value of the freehold. The rent was fixed at £280 a year in order to be above two thirds of the then rateable value, in this case by £5.

That individual believes that that was clearly done under the legislation of that time to make sure that it was just above the crucial figure. The market rent, the rack rent, would have been much greater, and plainly this tenure was closer to ownership than to renting. I think that the Minister would say that the intention of this sort of legislation is to ensure that such people are not barred. I do not believe that it is the Government's intention to bar that individual from acquiring the freehold and being able to enfranchise. I do not believe that that is what the Government want, but they fail to recognise the genuine difficulty. Even at this late stage, if they recognised that and did something, they could solve this problem.

I received another letter, after we debated the matter in Committee. It was expressing disappointment that the Committee had not been able to see a positive end to the low rent test and that the Government had not been prepared to accept any of the amendments or options that were debated in the Committee.

The letter stated: As you can imagine, I am deeply concerned that legislation supposedly designed to assist leaseholders might paradoxically destroy the value of their homes, in most cases their principal asset. I am sure that the Minister would not suggest for a moment that the low rent test was intended to prevent enfranchisement, or to devalue properties. If the Bill is not changed, however, such side issues will be bound to arise.

Members of the Standing Committee received many useful briefings from the Leasehold Enfranchisement Association, which deals with many of the people affected by the current problems, and which hopes that most if not all will be able to enfranchise when the Bill is enacted. It hopes for a leasehold extension for those who cannot do so. The association is extremely concerned about the low rent test. In a briefing note sent to us in November, it said: Finally, we would like to draw attention to paragraph 6 of the enclosed note which indicates that the Price Waterhouse/Caws and Morris Report"— a report that we debated, and which was referred to several times in Committee—

demonstrates that in 1989 Central London properties would have frequently failed to clear the proposed low rent' barrier even if their ground rents had been fixed at no more than 5 to 10 per cent. of the potential rack rent of the property concerned. Such ground rents would have had relatively little effect on the premium paid, but would, under the Government's present proposals, nevertheless render the property unenfranchiseable. If the retention of some form of low rent' test is, for whatever reason, deemed necessary, it must, therefore, we suggest, be formulated in a way which leads to the barriers being placed at far higher levels which genuinely approach the attainable rack rent for each property concerned. I know that hon. Members on both sides of the House want to speak in this important debate. Let me make it clear, however, that Opposition Members solidly believe that the low rent test needs to be either changed or abolished. A number of Conservative Members also believe that the Government are wrong in this instance, and I know that they, like me, hope that the Minister will say that the Government are prepared to table an amendment in the other place at an appropriate stage, even if nothing can be done now.

If the Minister cannot give that undertaking, we shall have to try to force a vote with the intention of defeating the Government. If we do that, the Government will have to recognise the overwhelming concern expressed by hon. Members. That concern is not unique to the House of Commons; it is felt by the very people whom, according to the Government, the Bill is designed to help. If the Government want those people to be enfranchised, they must think again, even at this late stage. Unless they change the low rent test, many people will be barred, and the finger of blame will be pointed where it should be pointed—at the Department of the Environment, and at Ministers who must accept responsibility for not being persuaded by an overwhelming case. Our case is that the test is wrong, and that it needs to be changed as quickly as possible.

Sir John Wheeler

I am very pleased to follow the hon. Member for Burnley (Mr. Pike), who spoke in a non-partisan way about an issue that concerns hon. Members on both sides of the House. I agreed strongly with almost everything he said until his closing words.

I know that my right hon. and hon. Friends at the Department of the Environment have received a great deal of correspondence from Conservative Members—including me—over many years. They have treated that correspondence, and the arguments contained in it, with great courtesy, and I am very grateful to them. Whatever the House decides tonight will not reflect in any way on my hon. Friend the Minister, or on his officials, who have had to deal with the matter for so long.

I strongly support reform of the low rent test. I have never been convinced of the need for any such test. It is very telling that, when the matter was examined in detail in Committee—as the hon. Member for Burnley pointed out—a good many Conservative Members were so unimpressed by the justifications advanced for the clause that my hon. Friend the Minister was forced to reconsider. It is disappointing to discover now that my right hon. and hon. Friends have been unable to accept an amendment that reflects the widely held and genuine concerns of my constituents and many others.

I remain unimpressed by any of the arguments—such as they are—that have been used to defend the low rent test. Recently, my right hon. and learned Friend the Secretary of State wrote to me, drawing attention to the importance of the private rented sector. He did not want that sector to be damaged by acceptance of the amendments. I see a great difference between encouraging the private rented sector and what the amendments seek to achieve; I see no conflict.

We are told that a low rent test is needed to verify that a leaseholder has purchased a genuine long lease—that is, one of over 21 years for which a premium has been paid. The purpose of the test is to distinguish such leases from those of over 21 years for which no premium has been paid, and for which a market rent is charged. No one—not even my hon. Friend the Minister—has been able to find an example of the latter category. The low rent test is there to address circumstances that simply do not exist.

Even the Lord Chancellor recognised that in his much-quoted circular on commonhold, which was mentioned earlier. Later in this Parliament, a substantial commonhold Bill will be presented; the issue will return to the House if we do not address it now.

We are told that the low rent test remains because it existed in earlier legislation. But surely, the main function of new legislation is to improve the old statutes. We are not good legislators if we carry forward into the new obvious mistakes from the old.

We are also told that people knew about the low rent test when the agreement was made to purchase a lease. Therein lies the greatest reason for looking again at the low rent test. Many individuals buying long leases had no idea of the wider significance of the ground rent level. That is made clear time and again in the correspondence that most of us have received. People feel cheated.

Consider, for those buying a long lease in my constituency—in, say, St. John's Wood—the difference between a ground rent of £1,000 and £1,010. It may seem only £10, but to the freeholder, with his expensive lawyers well versed in property law, the difference is not just in £10. It is the difference between enfranchisement and disfranchisement. They know that and they use the low rent test to get around the spirit of any leasehold-reforming legislation. Such legislation has been around since 1967, so the inevitable march of reform has been going on a long time.

9 pm

Not only is the individual leaseholder disfranchised, but, by manipulating the low rent test for new leaseholders, freeholders can disfranchise others in the block who meet all the stated criteria. Under the Bill, at least two thirds of a block must be enfranchiseable. So in a block of, say, four or five flats—typical in my constituency; such blocks make up the bulk of leasehold units—a freeholder need only ensure that one flat fails the low rent test effectively to disfranchise all the rest. Do we intend that to be the effect of this legislation? That loophole should be closed once for all; otherwise, it will be a constant cause of discontent and will return to haunt us.

If the Government insist on having a low rent test, it must be realistic and less open to abuse. The current low rent tests relate to a series of values all of which are out of date. How can we justify a test which depends on a comparison with rating valuations from the 1960s and 1970s, especially as we have abandoned the rating system?

Many of the amendments attempt to address that issue. I am not given to voting against the Government, but there comes a time when the duty to one's constituents' on an issue of this kind overrides the commitmente of support to the Government, whom I sincerely and honourably support. If the House divides on the issue tonight, I shall vote for my constituents' interests and in favour of the new clause.

Ms. Glenda Jackson

It is again a pleasure to follow the right hon. Member for Westminster, North (Sir J. Wheeler) and to endorse wholeheartedly everything he said. I particularly support his plea that we view the clause without party political bias.

It is clear from correspondence that hon. Members in all parts of the House have received directly and from the invaluable briefing documents of the Leasehold Reform Co-ordinatinğ Committee and its contingent six organisations that the part of the Bill with which we are dealing strikes at the very basis of the measure and, in a sense, at the authority of the House.

I say that because the legislation is designed to move forward the whole process of leasehold reform, yet, time and again, constituents and groups have written to us saying that they believe—they are correct in their belief —that their freeholder has deliberately set their ground rent at a level which debars them from enfranchisement.

In every case, the leaseholder has spent much money on the fabric of the property, carrying out essential repairs. We are not talking about a new coat of paint. I have received letters from constituents—admittedly, the initial price of the property may have been low—telling how they have replaced a roof, done work on the foundations of the property and replaced windows, long before dealing with paper and paint on the walls. They have believed, and I agree with them, that they owned their property. The low rent provision denies them that right in the eyes of the law. Tonight the House has an opportunity to free them from this injustice.

I have referred to the invaluable briefings that we have received from the Leasehold Reform Co-ordinating Committee. Its view is that

the low rent test is particularly iniquitous … what is clear, however, is that if the low rent test remains at the levels proposed, a number of house and flat-owners who are in every sense the owners of their homes will be unfairly and arbitrarily excluded from the legislation. I have letters from householders who confirm that statement. One asks us to stress the need for the low rent provision to be set at a more realistic figure for London than the current £1,000 a year. The couple in question purchased a 62 year lease on these premises from the Grosvenor estate, in an area where freeholds are rare. We paid a substantial capital premium to the freeholder … as we have responsibility for the repair, maintenance, insurance and all other long-term occupiers' responsibilities: but we are denied the long-term capital growth … The property was neglected by the freeholder, and we have spent £70,000 on capital works". Referring to a new clause that we discussed earlier, the couple say:

Maintaining the fabric of an estate is easy if it is always at someone else's expense. The whole heritage of the part of London and the estate in which the couple lived depended on who lived there —I cannot say the householders, because that is what we are arguing about tonight—being committed to their homes. Indeed, the couple state: The proposed bill is not stealing properties from the great estates. Another letter runs as follows: The low rent clause means we do not currently have the right to enfranchise … the lease was of course structured this way to exclude us from enfranchisement rights. The writer of the letter is amused when I hear the argument that freeholders are the guardians of the heritage". The couple in question received only one cursory visit from their estate representative in eight years.

There are more letters in the same vein. I know that hon. Members on both sides are anxious to speak in this debate, so I will only repeat that we have an opportunity tonight to free the many people who have lavished not only money but love, dedication and time on their homes. We are sometimes in danger of examining the proposals in the Bill solely in terms of bricks and mortar, but it should not be forgotten that what we are discussing are family homes. It should be part of the duty of the House to preserve them.

Mr. Fishburn

The early part of today's debate was very much taken over by a number of my right hon. Friends who are truly the heavyweights of our party—but now they have left, leaving the Floor to the true voice of those who believe in leasehold reform. Gone are the august but distant Members for the shires: left in the House are those of us who live in the heart of London and other areas such as Eastbourne where we know all too well the problems of leasehold law.

I begin by contratulating Ministers on holding the line so well during the first part of this debate. I should not like the absent Secretary of State to think that the relative silence of those of us who have campaigned for so long for leasehold reform meant that we agreed with the august heavyweights. The Minister knows as well as I do that the rules of the House make it difficult for junior Members to speak early in a debate.

Ministers have stuck to their manifesto commitment. they have stuck by the Second Reading vote; most importantly, they have stuck by the Standing Committee that deliberated over the Bill for the past three months. In that Standing Committee the Government first realised that the overwhelming majority of us were in favour of abolishing the low rent test and that is why we tabled the amendment—not least because the Government promised to tell us their view of its abolition at this stage.

Let there be no misunderstanding: a majority of the Standing Committee were in favour of doing away with the test altogether, which is not surprising. Nor is it surprising that the Lord Chancellor—who has much to his credit, not least that he is a Scot and has not been used to the absurdities of leasehold law—echoed that opinion in his paper on commonhold, saying that there is no locus or purpose in a low rent test and that it is inherently bogus.

My right hon. and learned Friend the Secretary of State knows as well as the Lord Chancellor and the Standing Committee that the provisions of the low rent test are bogus. They are a fig leaf to hide the private parts of a few estates and are truly without any tradition in English law. They have been inserted in the Bill artificially, to restrict the number of people who can benefit from leasehold enfranchisement.

The Secretary of State's most legitimate defence is, "We've got to get this Bill through Parliament." I wholly understand that. A political balancing act is taking place. The low rent test has no real significance or legal purpose and it is a case of, "You understand, Dudley, we have to get this through, we must restrict the number of people who can enfranchise so as to buy off those who oppose the Bill." That is politics and it is why the Secretary of State is such an august politician.

The Secretary of State is right that he has to make that balance, but he would be wrong to reject amendments that do away with the low rent test. As my right hon. Friend the Member for Westminster. North (Sir J. Wheeler) said, unless we get this right tonight it will come back to haunt us when commonhold returns to the House and when the next manifestos of the Conservative party and the Opposition are written. I am sure that my hon. Friend the Minister does not wish to find himself going through these arguments again in 1994, 1995 and 1996 and nor do I.

The Secretary of State would also be wrong politically to hold on to the low rent test, because although he would perhaps reduce the criticism from certain quarters, whose absence we have noted, he would disfranchise tens of thousands of people—articulate, middle-class Tories who have paid mightily for long leases, usually in the heart of London and in many towns and cities on the south coast. I see my hon. Friend the Member for Eastbourne (Mr. Waterson) in his place. Those people will feel increased resentment that a Bill has gone out of its way to disfranchise them and that much effort has gone into saying, "You can't enjoy the enfranchisement proposals that we are offering to others."

That is not the Conservative way. Those of us who have been fighting for leasehold reform for a long time—many people have fought for it far longer than I— have been doing so because we believe that leasehold as a form of tenure is wrong.

9.15 pm

We have seen it not as a form of tenancy, but as a form of ownership. People who are disbarred from enfranchising themselves by the low rent test are as fully owners of their long leases as anybody else in the land. We run the risk in classless Britain of listening to the very rich in order to disfranchise those who are middle class.

The low rent test is wrong for another reason. It is a bogus formula based on rateable value. Rateable value when were those words last heard in the House? I can recall the Secretary of State coming to my by-election in 1988 and saying, "We will do away with all these rates; rateable value is a thing of the past; an unsatisfactory way of raising local taxes." And he produced out of the hat the poll tax. Three years later, he produced out of the hat the council tax. That is fine and good, but rateable value, with each and every new local tax, recedes into the dim distance of London's history.

Yet this Bill has written throughout it a number of clauses which refer to rateable values as far back as 30 years ago, and does that specifically to disfranchise a number of people, principally in London, but also throughout the country. It cannot, and does not, make sense.

As if the reference to rateable value were not enough, we are told that certain leases that have ground rents of over £1,000 a year should not be able to qualify for enfranchisement. Yet, for an enormously expensive flat costing, say, £1 million, a ground rent of £1,000 stands in the same proportion as does a ground rent of £100 for a flat worth £100,000. Unless we are careful, under this Government it will be the rule that the more one pays, the fewer rights one has. That is not a good principle on which to go forward.

The low rent test is perhaps most pernicious for the reason that my right hon. Friend the Member for Westminster, North gave—its knock-on effect, or multiplier. Take a block of flats, disfranchise two or three people, and is it really possible to imagine that the rest of the leaseholders in that block will be able to get the two thirds that is necessary to qualify for leasehold enfranchisement? Those who will feel resentment at this exclusion will not just be those who are excluded, but the much wider pool—that is why I number them in tens of thousands who— will not be able to enfranchise themselves because certain flats in their block are disregarded by the law since they fail the low rent test.

In effect, whole swathes of London will be disfranchised and whole armies of Tory voters will feel let down. Worse than that, as the years advance it will open up a two-tier market in London and the towns in the south, which rely so heavily on leasehold reform. Some properties will be enfranchised and will then perhaps convert to common-hold. They can be sold in perpetuity and their owners can raise money on them from building societies and can afford to invest in and improve their premises, to give them that new lick of paint, or put in those new rolled steel joists which are so necessary. Those that are enfranchised will be able to market at a premium; those that are disfranchised by this provision and its knock-on effect will be unable to do so. Their properties, as their leases dwindle in years, will become less saleable. The blight that was so apparent in my constituency 15 to 20 years ago before the Leasehold Reform Act 1967 began to motor will again be apparent in the centre of our capital city. It is that which will come back to haunt us.

The low rent provision is wrong because it is intellectually dishonest. A long lease is a long lease, a rental agreement is a rental agreement, and never the twain shall meet. They do not meet because of some reference to a rateable value or because of an arbitrary figure plucked out of the sky. They are two different animals and there is no cross-over point. That is the joy and clarity of English law. A leasehold of over 21 years has been held under English law to be equal in many aspects to a freehold. It was held in the 1967 Act to be the trigger point at which people could enfranchise. No one—not some people, but no one in the capital city can be found who undertakes a 21–year rental agreement for which he is also prepared to pay a capital sum in advance.

As my right hon. Friend the Member for Westminster, North said, the provision addresses a problem which does not exist, but we know why it is in the Bill. It is there because it addresses a problem that does exist—the need for the Front Bench and the Government to do a balancing act betwen the restrictions demanded by certain interests and the full enfranchisement measure that is demanded by the people of London and those who live under the misery of leasehold law.

I end with a warning. There is an indication of which the party should be aware: the Labour party is slowly letting loose its old chains to the established interests that bound it to electoral disaster time after time. The block vote is going; trade union influence is going; clause IV is going. Yet the Government, after a radical decade, risk slipping back through this legislation into the arms of established interests rather than going forward with radical reform. For that reason and for the reasons which I have outlined I shall join my right hon. Friend the Member for Westminster, North in pushing the amendment to a Division.

Mr. John Denham (Southampton, Itchen)

That was an excellent speech by the hon. Member for Kensington (Mr. Fishburn). I doubt whether I can follow its quality. He spoke so persuasively about the impact of the low-rent test on Conservative voters that I am slightly undecided about whether I wish to see success or failure in the Division Lobby. Perhaps it would be better if some of us from the Opposition Benches absented ourselves.

Obviously the House should do what is right and not what is to party advantage. What I heard in the excellent speeches of the three hon. Members who preceded me was hon. Members speaking genuinely in the interests of their constituents whom they have taken the time and trouble to meet and correspond with; they have studied the cases put in front of them and have realised that the low-rent test must go if the interests of their constituents are to be met. The Government should conclude from the comments already made that they can only emerge with credit if they listen to the voice of the House on the issue.

It is agreed across the Chamber, as it was in Committee, that to seek to extend a right such as leasehold enfranchisement is good and proper. We have debated whether the mechanism of commonhold is the better way of doing it, but it was agreed that the right should be extended.

It was also accepted in principle by both sides in Committee that if the right were to be extended, there would be some circumstances in which restrictions would have to be applied. There was no suggestion by either side in Committee that tenants should simply be able to confiscate their landlords' property, although we had debates about the appropriate valuation to be put on enfranchisement.

There was no disagreement about the principle that some limit on qualifying tenancies was necessary, although there was a debate on the number and the types of properties. It was accepted that some restrictions would be necessary to make enfranchisement workable and fair. But if the Government are to impose a restriction, it is essential that it is seen to be just, fair and easily understandable by those to whom it will apply.

We are talking about people's homes, in which they have invested thousands of pounds on their own behalf and been required to invest thousands on their landlord's behalf. They read press reports and the Government's earlier statements and expected and hoped to be able to free themselves from neglectful landlords. A leaseholder whose right to enfranchisement is to be restricted has a right to an assurance that those restrictions are fair, just and understandable.

The problem with the low rent test is that people will not regard it as fair, just or understandable. They will see it as an arbitrary measure which the Government introduced for no intellectually honest or good reason but which has enormous implications for their lives and futures as leaseholders and, as they regard themselves, the real owners of their property. They will find three entirely different bases for calculating low rent in the Bill, which apparently are arbitrarily set according to the date on which they took on their lease. Experts in housing law will be able to identify exactly why there is one test before 1963, another test after 1963 and another more recent test, but to any ordinary person those different tests will seem quite arbitrary. As the right hon. Member for Westminster, North (Sir J. Wheeler) said, the Bill is an opportunity not to reaffirm previous housing legislation but to establish a fairer basis for enfranchisement. That is what we should be doing.

I well remember our debates in Committee and the Lord Chancellor's arguments against a low rent test. I do not recall a convincing case being advanced that the low rent test would operate in the interests of people seeking the right of enfranchisement. I understand the argument hangs on the issue of needing a distinction between renting and genuine leasehold, where people are, to all intents and purposes and in their own minds, purchasing their own property.

Is there really any practical possibility of someone who thought that they were renting a property finding out that they have a right to enfranchisement and then demanding to exercise it? I simply do not believe that. We could search the streets of London and knock on the doors of leasehold properties but fail to find anyone who thought that they were renting property only to find that under this law they had the right to enfranchisement. I do not believe that that problem exists. Even if it did, it could exist only in a tiny number of cases. If there were some unfairness in those people getting a right to enfranchisement, the injustice that might be done would be nothing compared with the injustice that will be done to thousands of people by the low rent test.

I fear that the low rent test is included in the Bill as a result of the concerted lobbying which was widely reported outside the House, although it was not especially evident in Committee. We rarely heard the views of the landlords' lobby in Committee, but I believe that the low rent test is included as a result of lobbying by big interests against the interests of ordinary people who happen to be leaseholders. It is a crucial test of the willingness of the House to stand up to such a lobbying exercise, such backroom or corridor lobbying and influence peddling, and to stand up for the interests of leaseholders who want the right to enfranchisement.

I hope that before too long the House will remove the low rent test from the legislation.

9.30 pm

Mr. Waterson

My starting point is that the Bill is bold and far-sighted. It will benefit thousands of leaseholders not only in my constituency but throughout England and Wales. It is precisely because I take such an enthusiastic view of this aspect of the Government's legislative programme that I want as many people as possible to benefit from it.

I echo the two excellent and memorable speeches made by my right hon. Friend the Member for Westminster, North (Sir J. Wheeler) and my hon. Friend the Member for Kensington (Mr. Fishburn). I mean no disrespect to Opposition Members by paying particular attention to my right hon. and hon. Friends' remarks.

I strongly support the amendments that I and my hon. Friends have tabled. Like many colleagues who were members of the Committee, I was unconvinced by the justification for the low rent test, and I remain unconvinced. We have heard how pressure was put on the Government during the Committee to reconsider the problem, and I share the feeling of disappointment that we are still discussing this version of clause 7. Certainly, nothing has been said today or in Committee to convince me that we need a low rent test. There is no practical reason for it.

As we have heard, the test is not needed to distinguish between long and short leases. The test for that is the number of years of the lease—if it is more than 21 years, it is by definition a long lease, and if it is fewer than 21, it is a short lease. The test is not needed to differentiate between premium long leases, which have a token ground rent, and long leases with a market rent. It is not needed because, simply, there are no properties with long leases and market rents.

I shall not weary the House by being the third or fourth hon. Member to quote the Lord Chancellor's now memorable report of November 1990, save to repeat that it underlines the argument, with which I agree, that the low rent test seems to be aiming at a non-existent problem.

The effect of the low rent test is to give freeholders—present and future—a simple means of circumnavigating the legislation. It is so easy. The proposed low rent threshold is so low, and there are numerous examples of ground rents being set by freeholders at just a few pounds above that level. We have heard some examples of that today.

What are the results? The freeholder wins in two ways. First, the leaseholder, having paid a premium for his lease, discovers that the smart freeholder has set the ground rent that little bit higher and that he is therefore disfranchised. We know that that will happen because history tells us so. We need only consider the leasehold houses in Hackney and Islington where the leaseholders cannot enfranchise under the Leasehold Reform Act 1967 because the freeholder has set the ground rent just a couple of pounds higher than the official low rent level. That has been done deliberately to get around the Act. All that the low rent test will do is to produce anomalous results, especially in London. We have all had letters from leaseholders, especially in central London, who are deeply concerned about the effect of the test.

Even better from the freeholder's point of view is the fact that he can use the loophole to disenfranchise whole blocks at one go. He has only to apply a rent slightly above the low rent level in a small proportion of flats in a block and he has effectively made it impossible for the others to enfranchise. They will simply not be able to meet the two-thirds hurdle which is necessary to be able to enfranchise under the Bill. That is a wonderful loophole for a landlord. Having seen the extent to which landlords have been prepared to go to scupper the Bill in Parliament, who can doubt that they will seize on the low rent test as a simple way in which to get round the legislation?

Ideally, I should like the whole concept of a low rent test to go. It serves no practical purpose except to give landlords a way out. If for some reason it is left and we have to have a low rent test of some sort, we should at least make it a realistic test. For many leasehold properties, the low rent test is a factor of their rateable values. Surely it is wrong to pass new legislation that is based on historic and outdated rating levels when the rates themselves have already been abolished. There is deep concern that the low rent test will lead to the exclusion of genuine leasehold flats which have low rateable values which date back to 1973, but whose ground rents rose dramatically in the late 1980s as a result of the property boom.

The Bill gives us the opportunity to clear up that anachronism if the new clause is accepted. By linking the low rent test to current market levels, we shall have a system that satisfies the Government because it retains a low rent test and satisfies everyone else because it blocks the obvious loopholes. I very much hope that the Government will accept the amendments. I regret to say that if they do not, they are unlikely to enjoy my support in the Lobby this evening.

Mr. Raynsford

This has been a fascinating debate, because there has been unanimity among speakers of all parties so far. That unanimity should give a clear warning to the Government that they would be foolish to proceed on the basis of trying to get the low rent test incorporated in the Bill.

The case is strong, and it has been argued persuasively and forcefully by a number of hon. Members this evening. There is no need for the low rent test and if it is imposed, it will create serious anomalies. Those anomalies will be exploited by people who seek to obstruct leaseholders who would otherwise be entitled to enfranchise and will thus deny the opportunity of enfranchisement to a substantial number of leaseholders. The test would therefore effectively wreck the impact of the Bill.

The hon. Member for Kensington (Mr. Fishburn) put the argument forcefully and effectively when he said that a failure to get it right on this occasion would come back to haunt us. I took part in the discussions on the Landlord and Tenant Act 1987. The Act was an attempt to tackle the problem of freeholders maltreating leaseholders and abusing their position. It was an attempt to rectify some of the problems. The warnings that we voiced then—that, because the legislation was not right, we should have to come back and deal with the matter again—were true. Such a warning is even more true this evening.

My first observation concerns the lack of any need for the low rent test. We have heard frequent references to the Lord Chancellor's Department's view in the consultation paper on commonhold. It would be an absurd anomaly if, were commonhold to come back to the House perhaps in the next Session or perhaps in the subsequent Session, we were to debate the issue simply because the Government had insisted and managed to obtain a majority in favour of the low rent test in this legislation, when, in the commonhold legislation, there was seen to be no need for it. The whole issue would have to be dealt with again, and there would be obvious anomalies.

The Leasehold Enfranchisement Association has provided valuable information through the indefatigable Joan South and others and assisted hon. Members to consider all the issues. The association makes it clear that it is not a problem and that it is a spectre which the Government have conjured up but have not been able to substantiate.

The Consumers Association, in its response, makes exactly the same point. In its survey of leaseholders throughout the country—we are not talking about a purely London problem; we are talking about a problem which affects more than 750,000 leaseholders throughout the country, including many constituencies outside London—it could not find one person in respect of whom the Government suspect that the anomaly might arise, who could be construed as a long leaseholder when in fact he or she was a tenant. It is a non-existent problem, and the Government should recognise that.

The anomalies that will be created have been referred to frequently. I do no more than quote one example involving a leaseholder in Hackney, London, who very persuasively writes: I own a long lease on a house in Hackney which I purchased in 1982 for £47,000. The lease has about 30 years to run. I paid £230 per annum ground rent and the rateable value at the start of my lease was around £340 per annum. It is clear that my lease, like many others, has been deliberately manipulated to make me unenfranchiseable. Obviously, that odious qualification will be exploited by landlords to make flats unenfranchiseable. That could not be put more effectively. Thousands of leaseholders in that position are already debarred.

As sure as can be, if the low rent test remains in the legislation, freeholders seeking to prevent the will of Parliament and to prevent their leaseholders from enfranchising will, in all future lettings, engineer ground rent figures to ensure that they are above the figure of £1,000 in London or £250 elsewhere, and thereby ensure that leaseholders are disfranchised.

The low rent test is a charter for the freeholder who seeks to frustrate the wishes of Parliament. It is a charter for the person who does not want to allow the Bill to proceed. It would be a disastrous mistake if we were to give comfort to the enemies of the Bill—people who have been seeking to frustrate it, people who represent vested interests, and people who represent the old privileges—if they were to achieve a victory by the back door when the argument has gone so forcefully against them.

The Government have failed entirely to produce any evidence to support their case that there is a need for the test. In Committee, on other issues we heard the Minister argue that it was necessary to produce evidence to justify amendments and changes that the Opposition sought. In the absence of convincing, solid evidence of a real problem—the Minister has so far failed to produce it, and I doubt whether he will do so tonight, but I shall listen attentively —it would be very foolish indeed to allow the low rent test to remain in the Bill and thereby create anomalies and the opportunity for people to frustrate the wishes of Parliament.

The case has been made overwhelmingly by many hon. Members. I sincerely hope that, at this late hour, the Minister will heed them and will respond positively and make it unnecessary for a Division to occur. If there is a Division, I sincerely hope that Conservative Members who, for whatever reason, were hesitant to support us in Committee, will not feel inhibited tonight and will vote in favour of getting rid of the low rent test. That would be a vote in favour of leasehold enfranchisement and in favour of people exercising their right.

We know that it is proper for people to have the right to control their own homes and not to depend on the interests of freeholders and landed interests who will seek to exploit their traditional ownership in order to frustrate the opportunities, wishes and aspirations of leaseholders.

Sir George Young

This has been a debate of the highest quality. The quality has been in no way diminished by the fact that all the arguments have been on one side.

I begin by referring to a point made by the hon. Member for Burnley (Mr. Pike) when he urged the Government to adopt the same attitude as they had adopted in earlier debates— to resist the freeholder case. There is a distinction between this debate and earlier ones, in that the new clauses and amendments which were tabled in the earlier ones sought to take rights away from those who will have rights granted to them under the Bill. The Government resisted that.

This debate is slightly different in that it seeks to add to the Bill additional rights for those who do not have them at present. It would be consistent for the Government to resist the arguments in the earlier debates and resist those which have been raised this evening, as I propose to do.

First, I commend the consistency of my hon. Friends. Having made their points, they voted as they propose to vote tomorrow: they will vote for Third Reading. It would be somewhat perverse for Opposition Members to vote today to abolish the low rent test and then vote tomorrow to abolish enfranchisement. That is wholly inconsistent but we have been told that tomorrow evening Labour Members plan to vote against Third Reading.

9.45 pm

Mr. Straw

Labour Members listen to the arguments on the merits. I give the Minister an absolute guarantee that, if he accepts the argument for that amendment—which comes from the Conservative as well as the Labour side —we will support the Bill on Third Reading. What will happen if the Minister does not accept the amendments remains to be seen.

Sir George Young

I am not quite sure if the hon. Gentleman realises what he said. In Standing Committee, Labour Members made it clear that they would support the Bill if it did not contain simply enfranchisement provisions. They voted against the Bill on Second Reading and in Committee—and I am sure that they plan to vote against it tomorrow—because it contains provisions for compulsory competitive tendering and the tenants' veto on housing management.

The hon. Member for Blackburn (Mr. Straw) said that his is prepared to trade the principal objections which his hon. Friends deployed hourly and daily in Committee if the Government concede the amendment. I see a look of gloom on some of his hon. Friends' faces. In Committee, they defended the past daily. As a result of one flippant intervention from the shadow Secretary of State, their principles are simply waived aside.

Mr. Straw

The intervention was far from flippant. I should like the Minister to address the merits of the case which have been powerfully put by my hon. Friend the Member for Burnley and some of my hon. Friends. It is no good the Minister waffling on about what he fantasises are the possible decisions made by the Labour party to which we are party and he is not. He needs to get down to the merits of the case. What possible justification is there for ruling out a large number of tenants on the basis of the so-called low rent test?

Sir George Young

The hon. Gentleman knows perfectly well that I will address the merits of the argument shortly. He said that the Labour party's objection to our proposals on compulsive competitive tendering are negotiable. They are not principles at all; they are negotiable. He said that they will support the Bill on Third Reading if the Government concede the amendment. That is trading the objections of principle which his hon. Friends made in the Standing Committee. Labour Members must get their act together.

My hon. Friends the Members for Kensington (Mr. Fishburn) and for Eastbourne (Mr. Waterson) and my right hon. Friend the Member for Westminster, North (Sir J. Wheeler) made some moving speeches. My hon. Friend the Member for Kensington chided the Government for not being radical enough. If he had listened to the earlier debate, as I did, I am sure that he would agree that many of our right hon. and hon. Friends think that we have embarked on a radical reform. It seems to be something of a paradox that an hour ago we were accused of betraying the freeholder and now we are accused of betraying the leaseholder. I shall address the merits of the case put by my hon. Friends, the hon. Member for Burnley (Mr. Pike) and others.

We debated the matter at some length in Committee and undertook to look again at the issues surrounding the test and to return to it on Report. Let me make it clear that it has been one of the most difficult decisions that we have had to take. We have consulted, discussed and debated the matter. We have seen hon. Members and representatives of leaseholders. We understand just how complex it is and that there are extremely strong arguments for retaining the test as well as for abolishing it. That said, I have to tell the House that the Government have decided that the low rent test should be retained in its current form. Let me explain to the House why we have reached that conclusion.

The comparison of the annual ground rent to the rateable value or, in the case of pre-1963 leases, the letting value—is a simple test used to distinguish what are, in theory, renting tenancies from "ownership" tenancies. It appears in roughly the same form in several pieces of important landlord and tenant legislation—including the Landlord and Tenant Act 1954, the Leasehold Reform Act 1967, the precedent for the Bill, and the Rent Act 1977. It has had quite an impact on the residential property market over several decades and we should not therefore relinquish or alter it lightly.

We have already provided that the test for flats be applied to the ground rent and rateable or letting value during the first year of the lease, rather than the date of the claim, as a concession to bringing within the scope of the Bill leases with rent reveiw clauses. Many leases are subject to such clauses which have effect periodically, typically every five, 10 or 20 years. The reviews are often linked to an inflation index or similar provisions in an Act arid are included to maintain the level of ground rent payments by periodic adjustment. However, rent review clauses vary in many ways and can produce vastly different results.

When the leases are first granted, the ground rent is low —less than two-thirds of the rateable or letting value. But a review will often push the ground rent up beyond the low rent threshold—something which most leaseholders cannot be expected to predict. With the old-style test which took account of the rent and rateable value on either a fixed date—March 1965 in the 1967 Act—or the first day of the term, some leaseholders would have found themselves unable to satisfy the low rent test—and unable to enfranchise. The new-style test is designed to help them.

We propose also to amend the Leasehold Reform Act to give leaseholders in houses the choice between the original low rent test and this new one for flats. For leases granted since 1 April 1990 when rental equivalent values were first employed, a different test applies.

The argument has been put several times that the requirement that a qualifying tenant be a long leaseholder is a sufficient test of ownership. That is not the case. Leases which are not at a low rent would fall within the rent and housing Acts unless the property has a rateable value in excess of the prescribed limits. These are by definition renting tenancies.

The Government believe that the low rent test provides an important distinction between the rental and the long lease market and marks the extent of the transfer of equity between landlord and tenant. It is important to enfranchise only those interests where the freeholder has given up all but a residual interest in the property. We do not wish to extend enfranchisement or the right to buy to the private rented sector and the low rent test is a means of achieving this. We know that there are long leases with rents of £5,000 or £10,000 a year, so we cannot rely on the long lease test alone.

The hon. Member for Greenwich (Mr. Raynsford) challenged me to see whether we had any evidence that there were such leases and I have in front of me a letter from one of the major estates in London, which says: We have well over 50 properties defined in statute as long' but where the rent is in excess of £5,000 pa and many of these are over £10,000 pa. So there is a need for a distinction between leases and rented property.

Sir John Wheeler

As a baronet, my hon. Friend is generous to give way, but he is skating on thin ice. Not one Member on either side of the Chamber has spoken in support of the Government in this debate. Will he allow that when the debate goes to their Lordships' House, their Lordships may take the voice of this House as the authentic voice on the issue?

Sir George Young

It is not for me, albeit as a baronet, to guess what will happen at the other end of the Palace. In the preceding debate, there was unanimity on this side of the House on requiring leaseholders to pay far more than my right hon. Friend would like. Not one Conservative Member made the case that I am sure that my right hon. Friend would have wished. None the less, the Government resisted those arguments, and we had to endure some criticism for doing so. So my right hon. Friend cannot rely too much on the weight of opinion among Conservative Members. He may find that the argument works to his disadvantage in later debates.

Sir Jerry Wiggin

Will my hon. Friend allow me to place it on record that the fact that a contrary voice was not heard was due to the certain knowledge that he would be robust on the subject?

Sir George Young

I am grateful to my hon. Friend, albeit at this late stage in the debate, for a voice in support of the case which the Government are deploying.

The low rent test ensures that long leases granted at a high rent, perhaps—in the case of houses—at a premium which reflected the non-enfranchiseable nature of the lease, or where the landlord continues to have a high financial interest in the block, cannot be enfranchised. There is evidence—I have deployed it—that there is some blurring of these lines which makes a division important, particularly in London where there is some overlap of ground rents of long leases and market rents.

Amendment No. 124 refers to "annual letting values". While I acknowledge their inclusion for pre-1963 leases in the Leasehold Reform Act 1967 and the Bill under discussion today, I dispute that they are the appropriate means to determine whether a lease is at a low rent or not.

The reason for their inclusion in 1967 was to take account of the delay in a rating revaluation after the second world war. This meant that after the war the incompatibility between genuine ground rents and any test based on pre-war rateable values was sufficient to justify the use of letting or rental values instead. As all residential rents were statutorily controlled at that time, there was a single market in rents which made the test effective and easy to apply.

That approach simply would not work today, with leases granted since the introduction of enfranchisement for houses and since the deregulation of rents in the letting market because of the wide gulf that exists between regulated rents and market rents. I acknowledge that in a few cases some landlords have been granting new leases on houses at high rents to avoid enfranchisement. But in those cases the price of the house and that paid for the lease should have reflected the status of the lease and the fact that it was not enfranchiseable.

The precedent for this Bill, the Leasehold Reform Act 1967, has been on the statute book for 25 years and leaseholders should have known when purchasing their leases that they would not be able to enfranchise. I know that some may not have been aware of this, but we cannot legislate for that reason alone. Nor should we forget that these tenants are already outside the scope of the Leasehold Reform Act. This evening we are not taking away any rights that people already have.

Leases have been created and arrangements have been built around the existing framework. Different legislative regimes apply to high and low ground rents, although in different contexts to enfranchisement, and leases have been drafted in full knowledge of this. It would be wrong to move the goal posts now.

In the case of flats, it is far less likely that ground rents have been manipulated in any way. Enfranchisement for flats is a recent development—first announced to the House in July 1991. As I said earlier, different statutory limits apply for leases granted since April 1990, these being £1,000 in Greater London and £250 elsewhere.

I realise that the announcement that the Government have made will cause disappointment to many interests in the House. Nonetheless, we decided that there are valid arguments for retaining the low rent test in its present form and I invite the House to resist the new clause.

Mr. Pike

The Minister claimed to know how Labour Members would vote tomorrow. He was mistaken, because, even if he had been a fly on the wall at our meeting earlier, he would have found that we made no decision on our vote on Third Reading tomorrow—

It being Ten o'clock, further consideration of the Bill stood adjourned.

Motion made, and Question put forthwith, pursuant to Standing Order No. 14 ( Exempted business), That, at this day's sitting, the Housing and Urban Development Bill may be proceeded with, though opposed, until any hour.—[Mr. Arbuthnot.]

Question agreed to.

Question again proposed, That the clause be read a Second time.

Mr. Pike

It was our intention to see how we progressed today and during the debate on important parts of the Bill that we shall discuss before Third Reading tomorrow. I was disappointed at the Minister's response. Perhaps the reason why his voice is affected is that he has no confidence in the points that he is having to make. I do not believe that he believes the things he was telling us; he has been leaned on—whether by the Secretary of State or someone else, I do not know. I do not believe that he was convinced by the argument and the case that he made. I am convinced that he believes that what we have been arguing for is the right course and that what he has been saying weakens the objectives that the Government have been stating for the Bill.

In response to the intervention by the right hon. Member for Westminster, North (Sir J. Wheeler), the Minister made the valid point that every contribution from both sides was solid in the view that this low rent test was wrong and should be either changed or abolished. The comparison that the Minister chose was false, and a red herring, because he referred to unanimity on the Conservative side on the previous clause. In this debate the unanimity has been across the floor of the House.

The arguments have been well made, but it is right to refer to the speech of the hon. Member for Kensington (Mr. Fishburn). He made two important points, which I believe Conservative Members need to take into account when they decide which way to vote in a couple of minutes.

The hon. Gentleman's first point was that if a Division had been pressed on this in Committee there would have been a majority opposed to the Government's view. Government Members chose not to press the Government on that occasion because of assurances that they would look again at the issue and come back, probably with a new proposal, at Report stage. Those hon. Members must be disappointed that the Government have failed them tonight and failed the people who have leasehold properties. Secondly, it is not just the individual who is affected by the low rent test; it can have an effect on the whole of a property because of the voting numbers necessary. The effect can therefore be extended to people who are not themselves directly disqualified by the test.

The Government have got it wrong and I hope that Conservative Members will vote with us on new clause 18 and stand by the people who want to enfranchise and get the opportunity that the Government claim to offer them —from which they will be barred unless we win new clause 18.

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

The House divided: Ayes 252, Noes 294.

Division No. 146]	[10.04 pm
AYES
Abbott, Ms Diane	Boyes, Roland
Adams, Mrs Irene	Bradley, Keith
Ainger, Nick	Bray, Dr Jeremy
Ainsworth, Robert (Cov'try NE)	Brown, Gordon (Dunfermline E)
Allen, Graham	Brown, N. (N'c'tle upon Tyne E)
Alton, David	Bruce, Malcolm (Gordon)
Anderson, Ms Janet (Ros'dale)	Burden, Richard
Armstrong, Hilary	Byers, Stephen
Ashby, David	Caborn, Richard
Austin-Walker, John	Campbell, Mrs Anne (C'bridge)
Banks, Tony (Newham NW)	Campbell, Menzies (Fife NE)
Barnes, Harry	Campbell, Ronnie (Blyth V)
Barron, Kevin	Campbell-Savours, D. N.
Battle, John	Cann, Jamie
Bayley, Hugh	Carlile, Alexander (Montgomry)
Beckett, Margaret	Chisholm, Malcolm
Beith, Rt Hon A. J.	Clapham, Michael
Bell, Stuart	Clark, Dr David (South Shields)
Benn, Rt Hon Tony	Clarke, Tom (Monklands W)
Bennett, Andrew F.	Clelland, David
Benton, Joe	Clwyd, Mrs Ann
Bermingham, Gerald	Coffey, Ann
Berry, Dr. Roger	Cohen, Harry
Betts, Clive	Connarty, Michael
Blunkett, David	Cook, Robin (Livingston)
Boateng, Paul	Corbett, Robin
Boyce, Jimmy	Corbyn, Jeremy

Corston, Ms Jean	Jones, Ieuan Wyn (Ynys Môn)
Cousins, Jim	Jones, Jon Owen (Cardiff C)
Cox, Tom	Jones, Lynne (B'ham S O)
Cryer, Bob	Jones, Martyn (Clwyd, SW)
Cummings, John	Jones, Nigel (Cheltenham)
Cunliffe, Lawrence	Jowell, Tessa
Cunningham, Jim (Covy SE)	Keen, Alan
Cunningham, Dr John (C'p'l'nd)	Khabra, Piara S.
Dafis, Cynog	Kilfoyle, Peter
Dalyell, Tam	Kirkwood, Archy
Darling, Alistair	Leighton, Ron
Davidson, Ian	Lestor, Joan (Eccles)
Davies, Rt Hon Denzil (Llanelli)	Lewis, Terry
Davies, Ron (Caerphilly)	Litherland, Robert
Davis, Terry (B'ham, H'dge H'l)	Lloyd, Tony (Stretford)
Denham, John	Llwyd, Elfyn
Dewar, Donald	Loyden, Eddie
Dixon, Don	Lynne, Ms Liz
Dobson, Frank	McAllion, John
Donohoe, Brian H.	McAvoy, Thomas
Dowd, Jim	McCartney, Ian
Dunnachie, Jimmy	Macdonald, Calum
Dunwoody, Mrs Gwyneth	McFall, John
Eastham, Ken	McLeish, Henry
Enright, Derek	McMaster, Gordon
Etherington, Bill	McNamara, Kevin
Evans, John (St Helens N)	Madden, Max
Fatchett, Derek	Mahon, Alice
Faulds, Andrew	Marek, Dr John
Field, Frank (Birkenhead)	Marshall, David (Shettleston)
Fishburn, Dudley	Marshall, Jim (Leicester, S)
Fisher, Mark	Martin, Michael J. (Springburn)
Flynn, Paul	Martlew, Eric
Foster, Derek (B'p Auckland)	Meale, Alan
Foster, Don (Bath)	Michael, Alun
Foulkes, George	Michie, Bill (Sheffield Heeley)
Fraser, John	Michie, Mrs Ray (Argyll Bute)
Galloway, George	Milburn, Alan
Gapes, Mike	Miller, Andrew
Garrett, John	Mitchell, Austin (Gt Grimsby)
George, Bruce	Moonie, Dr Lewis
Gerrard, Neil	Morgan, Rhodri
Gilbert, Rt Hon Dr John	Morley, Elliot
Godman, Dr Norman A.	Morris, Rt Hon A. (Wy'nshawe)
Godsiff, Roger	Morris, Estelle (B'ham Yardley)
Golding, Mrs Llin	Morris, Rt Hon J. (Aberavon)
Gordon, Mildred	Mowlam, Marjorie
Gould, Bryan	Mudie, George
Griffiths, Nigel (Edinburgh S)	Mullin, Chris
Griffiths, Win (Bridgend)	Murphy, Paul
Grocott, Bruce	Oakes, Rt Hon Gordon
Gunnell, John	O'Brien, Michael (N W'kshire)
Hain, Peter	O'Brien, William (Normanton)
Hall, Mike	Olner, William
Hanson, David	O'Neill, Martin
Hardy, Peter	Orme, Rt Hon Stanley
Harman, Ms Harriet	Parry, Robert
Harvey, Nick	Pickthall, Colin
Henderson, Doug	Pike, Peter L.
Heppell, John	Pope, Greg
Hill, Keith (Streatham)	Powell, Ray (Ogmore)
Hinchliffe, David	Prentice, Ms Bridget (Lew'm E)
Hoey, Kate	Prentice, Gordon (Pendle)
Home Robertson, John	Prescott, John
Hood, Jimmy	Primarolo, Dawn
Hoon, Geoffrey	Purchase, Ken
Howarth, George (Knowsley N)	Radice, Giles
Howells, Dr. Kim (Pontypridd)	Raynsford, Nick
Hoyle, Doug	Redmond, Martin
Hughes, Kevin (Doncaster N)	Reid, Dr John
Hughes, Roy (Newport E)	Robertson, George (Hamilton)
Hughes, Simon (Southwark)	Robinson, Geoffrey (Co'try NW)
Hutton, John	Roche, Mrs. Barbara
Illsley, Eric	Rogers, Allan
Ingram, Adam	Rooney, Terry
Jackson, Glenda (H'stead)	Ross, Ernie (Dundee W)
Jackson, Helen (Shef'ld, H)	Ruddock, Joan
Jamieson, David	Salmond, Alex
Janner, Greville	Sedgemore, Brian
Jones, Barry (Alyn and D'side)	Sheerman, Barry

Sheldon, Rt Hon Robert	Vaz, Keith
Shore, Rt Hon Peter	Walker, Rt Hon Sir Harold
Simpson, Alan	Walley, Joan
Skinner, Dennis	Wardell, Gareth (Gower)
Smith, Andrew (Oxford E)	Watson, Mike
Smith, C. (Isl'ton S & F'sbury)	Welsh, Andrew
Smith, Llew (Blaenau Gwent)	Wheeler, Rt Hon Sir John
Snape, Peter	Wicks, Malcolm
Soley, Clive	Williams, Rt Hon Alan (Sw'n W)
Spearing, Nigel	Williams, Alan W (Carmarthen)
Spellar, John	Wilson, Brian
Squire, Rachel (Dunfermline W)	Winnick, David
Steinberg, Gerry	Wise, Audrey
Stevenson, George	Worthington, Tony
Stott, Roger	Wray, Jimmy
Strang, Dr. Gavin	Wright, Dr Tony
Straw, Jack	Young, David (Bolton SE)
Taylor, Mrs Ann (Dewsbury)
Taylor, Matthew (Truro)	Tellers for the Ayes:
Tipping, Paddy	Mr. Jack Thompson and
Turner, Dennis	Mr. Andrew Mackinlay.

NOES
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)	Couchman, James
Allason, Rupert (Torbay)	Cran, James
Amess, David	Currie, Mrs Edwina (S D'by'ire)
Ancram, Michael	Davies, Quentin (Stamford)
Arbuthnot, James	Davis, David (Boothferry)
Arnold, Jacques (Gravesham)	Day, Stephen
Arnold, Sir Thomas (Hazel Grv)	Deva, Nirj Joseph
Atkinson, David (Bour'mouth E)	Devlin, Tim
Baker, Rt Hon K. (Mole Valley)	Dickens, Geoffrey
Baker, Nicholas (Dorset North)	Dicks, Terry
Baldry, Tony	Dorrell, Stephen
Banks, Matthew (Southport)	Douglas-Hamilton, Lord James
Banks, Robert (Harrogate)	Dover, Den
Bates, Michael	Duncan, Alan
Batiste, Spencer	Duncan-Smith, Iain
Bellingham, Henry	Dunn, Bob
Bendall, Vivian	Durant, Sir Anthony
Beresford, Sir Paul	Dykes, Hugh
Biffen, Rt Hon John	Eggar, Tim
Body, Sir Richard	Elletson, Harold
Bonsor, Sir Nicholas	Emery, Rt Hon Sir Peter
Booth, Hartley	Evans, David (Welwyn Hatfield)
Boswell, Tim	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)	Forman, Nigel
Browning, Mrs. Angela	Forsyth, Michael (Stirling)
Bruce, Ian (S Dorset)	Forth, Eric
Burns, Simon	Fowler, Rt Hon Sir Norman
Burt, Alistair	Fox, Dr Liam (Woodspring)
Butcher, John	Fox, Sir Marcus (Shipley)
Butler, Peter	Freeman, Roger
Butterfill, John	French, Douglas
Carlisle, John (Luton North)	Fry, Peter
Carlisle, Kenneth (Lincoln)	Gale, Roger
Carrington, Matthew	Gardiner, Sir George
Carttiss, Michael	Garel-Jones, Rt Hon Tristan
Channon, Rt Hon Paul	Garnier, Edward
Chaplin, Mrs Judith	Gill, Christopher
Churchill, Mr	Gillan, Cheryl
Clappison, James	Goodson-Wickes, Dr Charles
Clark, Dr Michael (Rochford)	Gorman, Mrs Teresa
Clarke, Rt Hon Kenneth (Ruclif)	Grant, Sir Anthony (Cambs SW)
Clifton-Brown, Geoffrey	Greenway, Harry (Ealing N)
Coe, Sebastian	Greenway, John (Ryedale)
Colvin, Michael	Griffiths, Peter (Portsmouth, N)
Congdon, David	Grylls, Sir Michael

Hague, William	Nelson, Anthony
Hamilton, Rt Hon Archie (Epsom)	Neubert, Sir Michael
Hamilton, Neil (Tatton)	Newton, Rt Hon Tony
Hampson, Dr Keith	Nicholls, Patrick
Hanley, Jeremy	Nicholson, David (Taunton)
Hannam, Sir John	Nicholson, Emma (Devon West)
Hargreaves, Andrew	Norris, Steve
Hawkins, Nick	Onslow, Rt Hon Sir Cranley
Hawksley, Warren	Oppenheim, Phillip
Hayes, Jerry	Ottaway, Richard
Heald, Oliver	Page, Richard
Heathcoat-Amory, David	Paice, James
Hendry, Charles	Patnick, Irvine
Heseltine, Rt Hon Michael	Patten, Rt Hon John
Higgins, Rt Hon Sir Terence L.	Pattie, Rt Hon Sir Geoffrey
Hill, James (Southampton Test)	Pawsey, James
Hogg, Rt Hon Douglas (G'tham)	Peacock, Mrs Elizabeth
Horam, John	Pickles, Eric
Hordern, Rt Hon Sir Peter	Porter, Barry (Wirral S)
Howard, Rt Hon Michael	Porter, David (Waveney)
Hughes Robert G. (Harrow W)	Portillo, Rt Hon Michael
Hunt, Rt Hon David (Wirral W)	Powell, William (Corby)
Hunt, Sir John (Ravensbourne)	Rathbone, Tim
Hunter, Andrew	Redwood, John
Hurd, Rt Hon Douglas	Richards, Rod
Jack, Michael	Riddick, Graham
Jackson, Robert (Wantage)	Robathan, Andrew
Jenkin, Bernard	Roberts, Rt Hon Sir Wyn
Johnson Smith, Sir Geoffrey	Robertson, Raymond (Ab'd'n S)
Jones, Gwilym (Cardiff N)	Robinson, Mark (Somerton)
Jones, Robert B. (W Hertfdshr)	Roe, Mrs Marion (Broxbourne)
Jopling, Rt Hon Michael	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
Knapman, Roger	Scott, Rt Hon Nicholas
Knight, Mrs Angela (Erewash)	Shaw, David (Dover)
Knight, Greg (Derby N)	Shaw, Sir Giles (Pudsey)
Knox, David	Shephard, Rt Hon Gillian
Lait, Mrs Jacqui	Shepherd, Colin (Hereford)
Lamont, Rt Hon Norman	Shersby, Michael
Lang, Rt Hon Ian	Sims, Roger
Lawrence, Sir Ivan	Skeet, Sir Trevor
Legg, Barry	Smith, Sir Dudley (Warwick)
Leigh, Edward	Smith, Tim (Beaconsfield)
Lennox-Boyd, Mark	Soames, Nicholas
Lester, Jim (Broxtowe)	Speed, Sir Keith
Lidington, David	Spencer, Sir Derek
Lightbown, David	Spicer, Sir James (W Dorset)
Lilley, Rt Hon Peter	Spicer, Michael (S Worcs)
Lloyd, Peter (Fareham)	Spink, Dr Robert
Lord, Michael	Spring, Richard
Luff, Peter	Sproat, Iain
Lyell, Rt Hon Sir Nicholas	Squire, Robin (Hornchurch)
MacGregor, Rt Hon John	Steen, Anthony
MacKay, Andrew	Stephen, Michael
Maclean, David	Stern, Michael
McLoughlin, Patrick	Stewart, Allan
McNair-Wilson, Sir Patrick	Streeter, Gary
Madel, David	Sumberg, David
Maitland, Lady Olga	Sweeney, Walter
Major, Rt Hon John	Sykes, John
Malone, Gerald	Tapsell, Sir Peter
Mans, Keith	Taylor, Ian (Esher)
Marland, Paul	Taylor, John M. (Solihull)
Marlow, Tony	Taylor, Sir Teddy (Southend, E)
Marshall, John (Hendon S)	Temple-Morris, Peter
Martin, David (Portsmouth S)	Thompson, Sir Donald (C'er V)
Mawhinney, Dr Brian	Thompson, Patrick (Norwich N)
Merchant, Piers	Thornton, Sir Malcolm
Milligan, Stephen	Thurnham, Peter
Mills, Iain	Townend, John (Bridlington)
Mitchell, Andrew (Gedling)	Townsend, Cyril D. (Bexl'yh'th)
Moate, Sir Roger	Tracey, Richard
Molyneaux, Rt Hon James	Tredinnick, David
Monro, Sir Hector	Trend, Michael
Montgomery, Sir Fergus	Trotter, Neville
Moss, Malcolm	Twinn, Dr Ian
Needham, Richard	Vaughan, Sir Gerard

Viggers, Peter	Wiggin, Sir Jerry
Waldegrave, Rt Hon William	Willetts, David
Walden, George	Wilshire, David
Walker, Bill (N Tayside)	Winterton, Mrs Ann (Congleton)
Waller, Gary	Wolfson, Mark
Ward, John	Wood, Timothy
Wardle, Charles (Bexhill)	Yeo, Tim
Watts, John	Young, Sir George (Acton)
Wells, Bowen
Whitney, Ray	Tellers for the Noes:
Whittingdale, John	Mr. Sydney Chapman and
Widdecombe, Ann	Mr. Timothy Kirkbope.

Question accordingly negatived.