GRANT CONDITIONS: INTRODUCTORY (Hansard, 8 July 1996)

§ Mr. Raynsford
I beg to move amendment No. 107, in page 26, leave out lines 30 to 33.

§ Madam Deputy Speaker
With this, it will be convenient to discuss also the following amendments: No. 108, in clause 45, page 26, leave out lines 40 and 41 and insert— 'within the period of five years beginning on the certified date, he shall pay to the authority on demand the amount of grant reduced by one fifth for each complete year which has elapsed after the certified date and before disposal.'. No. 109, in page 27, leave out lines 5 and 6 and insert— 'within the period of five years beginning on the certified date, he shall pay to the authority on demand the amount of grant reduced by one fifth for each complete year which has elapsed after the certified date and before disposal.'.

§ Mr. Raynsford
The amendment deals with the possibility that local authorities' powers to attach 59 conditions to grant aid might be inhibited. The issue was aired in Committee, and the Minister agreed to consider whether local authorities' powers in this respect might be cut across by the provisions of clause 44. He sent me a helpful letter on 28 June containing his response to most of the issues that we raised in Committee and undertook to reflect on them. He has not as yet let us know whether he thinks that there may be a problem.
The purpose of the amendment is to raise the issue once again and give the Minister an opportunity to advise the House whether there is any risk, without the amendment, that local authorities' powers to attach conditions to grants may be prejudiced.
The subsequent amendments deal with the process of reclaiming grant from people who have received it but have moved within the next five years. It seems perfectly fair that people who have moved on swiftly from a property that has been renovated with the aid of grant, whose value has probably increased as a result, should be liable to repay the grant. There are, however, obvious problems with a five-year cut-off, which could result in cases of hardship. We debated various options in Committee and the Minister agreed to look at the matter. He accepted the need for flexibility to ensure that local authorities can use their discretion to waive the repayment requirements in certain cases. All that is welcome.
However, we still believe that there is merit in an alternative approach similar to that which applies in comparable areas, for example where individuals receive assistance under different headings. If they move within a set period they may be obliged to repay not in one fell swoop but a proportion depending on the time that has passed. For example, under the right-to-buy scheme, individuals who receive discounts on the value of their council property are obliged to repay if they move within three years, but are not obliged to repay the whole amount; they must pay a third for each year that falls short of that three-year period. That is a sensible approach and amendments Nos. 108 and 109 would apply a similar repayment obligation to this provision to ensure that a sliding scale operates over a five-year period rather than an obligation to repay the full amount if an applicant moves within that period.
The amendments are sensible. They are designed to ensure that the system works fairly and without anomalies, and that no unreasonable limitations are placed on local authorities' powers to attach conditions to grants. I hope that the Minister will respond positively.

§ Mr. Clappison
The hon. Member for Greenwich rightly said that I agreed to look again at how clauses 42 and 44 operate together. I first explained how the two clauses operate and, when he pressed me further, I promised to look at the matter again. I did so and came to the same conclusion as I expressed originally in Committee. So I shall explain once again how clauses 42 and 44 operate together, particularly in respect of grant-recoverable conditions.
The section of the Bill that covers grant conditions is clearly titled and includes clauses 44 to 55. Clause 44 must be seen firmly in that context. It covers circumstances where an eligible applicant has undertaken grant-eligible works and received some or all of the grant 60 moneys. It enforces conditions that apply on approval of a valid grant application and require repayment of the grant if one of the conditions is breached. Such circumstances could arise if the house where works are undertaken is sold or not occupied.
By contrast, clause 42 relates to the initial eligibility for grant. In practice, that means that where a local authority finds out after approval of grant that the application covers either applicants or works that were not eligible for grant assistance, they need not pay the grant or can recover any grant paid. The important point is that the clause applies the eligibility rule, not a grant condition. In such cases, the grant is being recovered because it was wrongly paid to an ineligible applicant or for ineligible works. The grant condition applies where a grant is rightly paid but the condition is breached at a later date. So I assure the hon. Gentleman that the two clauses operate properly together and cover different issues.
Amendments Nos. 108 and 109 would delete the current requirement to repay grant in full, where grant is recovered in the case of relevant disposal of the property; before the certified date for completion of works; or on or after the certified date and within the five-year grant condition period. In their place, the amendments would introduce a taper reducing the repayment necessary by one fifth for each year.
In Committee and again today, the honourable Member for Greenwich sought to draw parallels between the recovery provision for the right-to-buy scheme and that for house renovation grants. I do not accept that a direct comparison can be drawn between those two different regimes. Under the right-to-buy scheme, a property is priced at market value and a discount then offered in recognition of a lengthy period of tenure in the property. The repayment provisions are therefore set to recognise that the discount is offered because of those circumstances. A renovation grant, however, is a one-off payment to help a person improve and potentially increase the value of his or her property. It is therefore not unreasonable to expect an applicant to remain in the property for which he or she sought help for an agreed period after receiving the grant. The proposed repayment condition reflects that.
It is perfectly acceptable for applicants to repay grant in full if they dispose of their property within five years, so long as they are made fully aware of that obligation before they accept grant assistance. We should not overlook the fact that a wide range of circumstances where grant may not be recovered is set out in clauses 45(5) and 54. I shall not go into those, but clause 54 sets out a range of exempt disposals where the issue does not arise and clause 45(5) sets out circumstances in which it is not necessary for the local authority to require all or any of the grant to be repaid.
In addition, authorities may apply to the Secretary of State for consent to exempt cases of hardship. The honourable Member for Greenwich raised concerns over the possible number of such applications, particularly where applicants are required to move for employment reasons. I have written to him confirming that we shall introduce a general consent to cover not only cases where an owner must move for employment reasons but where the sale of a property is required by the lender or some such third party. That consent, coupled with the exemptions that I have already mentioned, will give the 61 right flexibility for local authorities without undermining the general principle that grant is given to applicants who intend to remain in their property for at least five years.
Concern was expressed in Committee about whether the proposal had been the subject of consultation. I confirm that it was included in our discussion document, "The Future of Private Housing Renewal Strategies", issued last June, and that there was no widespread disagreement with the proposal to introduce repayment of grant in full for disposals within the five-year period.
I hope that, on the basis that I have outlined, particularly the wide range of exemptions that I described, the hon. Gentleman will feel able to withdraw the amendment.

§ Mr. Raynsford
The Minister does not do justice to his case, although he may do justice to ours. He argues that the analogy with the right-to-buy scheme is not fair because someone who qualifies for the right-to-buy scheme does so as a result of a lengthy period of residence in the accommodation. I remind him that the "lengthy period of residence" is exactly the same as the period of residence required under clause 10 before which people normally become eligible for a renovation grant, so the Minister's argument has reinforced the analogy. We do not accept his view. Mobility is often necessary for all sorts of reasons. I am surprised that he does not accept the fact that people must move for job reasons or changes in domestic circumstances. To block mobility where people have received a renovation grant will disadvantage not only the individuals concerned but the wider economy.
Our alternative proposal would have been a more effective and less bureaucratic way in which to deal with the problem, and consistent with other policy. Incidentally, it would have helped to ease one of today's great housing problems, which the Government have exacerbated: negative equity. People with negative equity, who must also repay renovation grant within five years, will be totally unable to countenance a move. A sliding scale would have reduced the commitment to repay progressively year by year and thus helped to ease that problem.
For all those reasons, it would have been sensible to incorporate the amendment in the Bill. We are surprised at the Government's reluctance to accept it. However, to make progress tonight, I beg to ask leave to withdraw the amendment.