§ Mr. GummerI beg to move amendment No. 60B, in page 61, leave out lines 21 to 23. 991 The amendment would delete clause 94. That clause was successfully moved by the Opposition; it would raise the limit for possible enfranchisement of blocks of flats from 10 per cent. commercial use to 25 per cent. I know that there are significant anxieties about that. I think we have mitigated them considerably by the changes that we have already made, in the form of the management improvements that the House has been pleased to support.
There should be a balance between the rights and the opportunities of the leaseholders and the question of commercial premises. Commercial premises—which are, in a mansion block, the bottom of the block—often provide great difficulty. If they are very successful, the price of the leasehold enfranchisement is so great that it is especially difficult for people to enfranchise. Most of them are not like that. They are often the sort of shops in which it is quite difficult to create a really decent retail environment. I am very keen on encouraging people to do more for these shops and improve them. I am therefore especially concerned about this matter.
I shall give two possible examples of what would happen if the 10 per cent. limit were raised. In the first example, the shops are very prosperous and expanding their trade. The residential leaseholders would have to pay a very high price to buy the freehold interest; in most cases, they would be unable to afford it, so raising the limit would have no effect. In the second example, the retail businesses are not doing so well and are struggling to keep afloat. The price would be more reasonable for the residential leaseholders, but enfranchisement might affect the viability of the marginal businesses and, on some occasions, drive it over the edge.
I am trying very hard to reinvigorate our city centres and groups of shops. I believe that it would be a mistake to increase the limit, and that it would strike against the idea of reinvigoration. I hope that the House will agree that we got it right in 1993 in setting the proportion at 10 per cent. and that we should not be contemplating raising it now. I believe that the damage that would be done to shops that were not very profitable would not be outweighed by those who would enfranchise successfully. When the shops were profitable, people would find it difficult to pay the leasehold price and they would be left in the position that they are in now. I hope that the House will agree that it is not a sensible way forward.
§ Mr. RaynsfordWe have heard from the Secretary of State the same catalogue that he gave earlier this evening denying leaseholders the opportunity to enfranchise by simply proposing to reverse the gains that were made in Committee earlier this month.
I remind the Secretary of State that the Landlord and Tenant Act 1987 puts the threshold for non-residential accommodation at 50 per cent. In 1992–93, the hon. Member for Kensington (Mr. Fishburn) forecast incorrectly that it would be accepted at 20 per cent. He was conned by Ministers who persuaded him, after he had given a forceful speech in favour of increasing the percentage, that they would look sympathetically at his proposals. They conned the hon. Gentleman then in the same way as the Government have conned leaseholders today.
We deplore the way in which the Government are once again betraying leaseholders' interests through the amendment and trying to destroy the good work that was 992 done in Committee. Ministers might like to reflect on comments of the Minister for Local Government, Housing and Urban Regeneration at the end of the Committee, when he described it as a very constructive Committee which reflected well on the British parliamentary system. It can hardly reflect well on the British parliamentary system if the Government seek to reverse on the Floor of the House amendment after amendment that was passed in Committee.
This is a discreditable move by the Government for which they will pay. Many leaseholders who live in blocks of flats that contain a small element of non-residential accommodation will be denied the opportunity to buy their freeholds. They will know that the Government have taken that right from them, and they will blame the Government at the next general election for that denial of their rights.
Amendment agreed to.