HL Deb 07 August 1980 vol 412 cc1610-3

3 Clause 15, page 13, line 39, after ("price") insert ("that price to be determined by adding half the difference between the value of the dwelling-house at the time of completion of the transaction and the value at the time the notice exercising the right to buy was served.")

The Commons disagreed to the above amendment for the following reason:

4 Because it would provide for an increase in the purchase price and thereby destroy the purpose of the clause.

4.11 p.m.


My Lords, I beg to move that this House doth not insist on their Amendment No. 3, to which the Commons have disagreed for the reason numbered 4.

Amendment No. 23, as Amendment No. 3 was numbered in another context, would increase the price which a tenant, whose circumstances entitled him under Clause 15 to delay completion, would have to pay. On top of the price based on the value of his home when his notice claiming the right to buy was served, he would have to pay half of the difference between its value then, and its value on the date when the transaction was completed.

The provisions included in the Bill for deferred completion were intended to give extra help to tenants who wanted to move from renting to home-ownership, but whose finances at the time when they served their notices did not give them the right to a mortgage that would cover the purchase price. We felt strongly that people in this position should be shown a little extra consideration, if that would help them to get a foot onto the first rung of the home-ownership ladder. It was a tightly-drawn provision, available —and I must stress that—only where the circumstances of the tenant demonstrated that there was a case for it. No tenant whose income entitled him to a mortgage which covered the purchase price could simply choose to delay his purchase, with the benefit of a frozen price.

For these tenants, who, by definition, in view of their financial circumstances, are on the very edge of being able to buy, delayed completion must provide two things, if it is to be of any value. First, it must provide a definite price, on the basis of which the tenant can lay his plans and make his calculations. The finances of those who qualified would require them to plan ahead very carefully, and it would be impossible for them to plan with certainty, if they did not have a definite target at which to aim. The revaluation and adjustment of the purchase price, called for by Amendment No. 23, would take place only at the end of the process. In the meantime, the tenant would not know what the final price would be, and whether he would be able to afford it. That could mean up to two years of anxiety and uncertainty for the tenant.

Secondly, at the end of the period of delayed completion, and after the revaluation which would be required by Amendment No. 23, the tenant may find that, after all his careful planning, the price has once again been pushed beyond his reach. Taken all in all, a provision of that kind could hardly be regarded as being in the tenant's interests. If the principle of delayed completion is to be of any value, the Bill must provide for a fixed price. Anything else would nullify any benefit that the tenant might otherwise have received from such a provision.

Even before the Bill was drafted, the Government's position on this matter was absolutely clear. The principle of delayed completion at a fixed price appeared in the manifesto on the basis of which we came to power. The Bill contained a provision putting our commitment into practice, when it was given a Second Reading both in another place and in your Lordships' House. I do not underrate the strength of feeling of those noble Lords who voted for these amendments on Report, nor the pride that this House rightly takes in its efforts to make improvements, as it sees them, in legislation which comes before us. On very many other matters we have just been discussing your Lordships' view has been accepted. But on this particular issue I must ask the House to accept that Amendment No. 23 would much devalue a provision for which the Government have the clearest possible mandate. I urge your Lordships not to insist on this amendment. I entirely understand the points made on this amendment, but it was narrowly decided in a certain way. In the context of all that is going on, your Lordships may feel able not to insist on your amendment. My Lords, I beg to move.

Moved, That the House doth not insist on their Amendment No. 3, to which the Commons have disagreed for the reason numbered 4.—(Lord Bellwin.)

Baroness BIRK

My Lords, I shall not insist on the amendment, and I put the Minister's mind at rest about that. But I must just comment on this amendment. Again, I shall not rehearse all the arguments that we have gone through, but the amendment which was introduced into this House on Report was quite different from any of the other amendments that were moved in regard to the option. The Minister was quite right when he said that there has been strong feeling about this matter, and not only on this side of the House. We feel that, in addition to the discount, the option will give a financial advantage which is quite unwarranted, and will put the purchaser of a council house very far ahead in financial terms of the purchaser of any private property.

What this amendment does is to say that the profit should be split between the purchaser and the local authority, the landlord, which seems to me very moderate. It is really a halfway house. I can only express sorrow that the Government did not see fit to accept our amendment. But I do not think they will go back on their manifesto promise about the option, which would have made the whole matter very much fairer.

On Question, Motion agreed to.