HL Deb 28 February 1984 vol 448 cc1162-72

3.8 p.m.

The Minister of State, Department of the Environment (Lord Bellwin)

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord Bellwin.)

On Question, Motion agreed to.

House in Committee accordingly.

[THE LORD ABERDARE in the Chair.]

Clause 1 [Extension to certain cases where landlord does not own freehold]:

The Earl of Selkirk moved Amendment No. 1: Page 2, line 5, after ("or") insert ("save where the freeholder is a body of persons or Trust established for charitable purposes only").

The noble Earl said: If I may speak to this amendment, we are now entering upon a fairly long Committee stage with some 150 amendments. It is important to remember that we are now amending a Bill which, so far as the first 30 clauses are concerned, consists simply of amendments to another Bill and, speaking for myself, I found it extremely difficult to follow through three documents the effects of what we are discussing. I think—and I ask the Government to remember this—that changing fundamental laws of land tenure every three years or so is not a very good practice. Security depends on knowledge and understanding of what land tenure is and this Bill does not contribute to the clarity or understanding of what that is.

I want to deal with one of the purposes of this Bill: that is, the effect of creating the right to buy on long leases when the leaseholder, or what we now call the landlord, does not own the freehold. The effect of this is that the tenant has the right to buy what we call the landlord's rights. Thereafter, under the leasehold enfranchisement Act 1967 he will have the right to buy the freehold, which means that the freehold of what was a leased property will be broken up.

I want to take the example of a Cambridge college because in some cases this is exactly what has been done. A Cambridge college, is, of course, a charity. I do not need to remind your Lordships that these colleges have been in existence for 500 or 600 years. Naturally enough, they think in terms of centuries and forward lengths of time in the ownership of property. What are they to do with it? They say that one of the most useful things to do is to give a long lease of 100 years to a housing association and that at the end of that time they will wish to consider whether or not to use the property for their own purposes.

It is worth remembering that of all the institutions in our country none stand higher, in the view of people abroad, than our great universities. They have played an immense part in the history of our country and their interests are, I believe, of prime importance. If the clause is agreed to unamended, they will find themselves with land dotted about with freehold property, and their purpose of building a students' hostel or new laboratories, or of developing the college in some way or another will be entirely frustrated.

It is for that reason that I ask the Government to think again. The perfectly legitimate and very valuable social purposes that they want to carry out will not be fulfilled. What is even more serious, in future people will be chary about giving a long lease to a housing association; they will know that the land will never come back to them and that they will be unable to fulfil whatever long-term purposes they may have in mind. This is already happening. Housing associations are finding it more difficult than they did previously to get land. These are unfortunate developments. It will create bad planning and make more difficult the provision of houses where they may be wanted.

The amendment is extremely simple. I venture to suggest to my noble friend that he should put charitable associations that are freeholders under the new clause, which is called 28C, which already contains provisions for charitable housing associations. My noble friend could accept Lord Coleraine's amendment, or he could amend the first line of Section 2 of the 1980 Act.

I ask my noble friend to consider this amendment very carefully. I hope he will not turn it down straight away. If he does, the Committee may have to be asked for its opinion. I should like my noble friend to think very hard about it, because it is of major concern to the great educational institutions of this country. I hope that he will not think that the matter can be brushed aside lightly. I beg to move.

Lord Molson

I should like to support what has been said by my noble friend. This problem can be approached from three different points of view, but they are all so closely connected that it is extremely difficult to know how to deal with them by means of individual amendments. My noble friend referred in particular to the Cambridge colleges. They are a case in point. On the other hand, they are only one particularly important case where large areas may be let, not necessarily by a charitable organisation like a Cambridge college but possibly by another organisation, to a body which is going to develop them on a lease of perhaps 99 years. Ninety-nine years may he a reasonable period for a pension fund which has to look far ahead. If it is possible, under the provisions of the Bill, for the freehold to be acquired, it will be most undesirable for a lease of that kind to be let.

In another place the honourable Gentleman the Parliamentary Secretary referred last year to a number of cases where more or less devasted areas were likely to be redeveloped by a partnership between private enterprise and a local authority. He referred with satisfaction to the way in which private enterprise and a public authority were co-operating and where private and public money were both being used in order to provide immediate development—perhaps housing—during the decades to come, provided there was the certainty that at the end of the lease the freehold would revert to the present freeholder. If under the provisions of the Bill it becomes possible for the freehold to be acquired, there may be pepperpot development all over that area, and in 30, 40, 50 or frequently 99 years' time the freehold will not revert to the present freeholder to enable redevelopment to take place to meet the unforseeable requirements of very nearly 100 years hence.

I revert to the point which my noble friend has made. I do not think we need be ashamed of finding it extraordinarily difficult to deal with amendments to the Bill. I take this opportunity of mentioning to the Government that now that there are five housing Acts which are, to a greater or lesser extent, in operation, I shall take a very early opportunity after the Bill becomes an Act of putting down, I hope in a helpful spirit to everybody concerned and especially to legal practitioners, a Parliamentary Question asking for a list of all the Acts in operation which have to be taken into account in considering any legal point arising out of these affairs and asking also that priority should be given to the consolidation of all the legislation.

At present we are confronted with a Bill whose primary aim is to amend the Act of 1980 but which refers to matters that have been established by other legislation going back, I believe, to 1948. I emphasise that major point which has been raised by my noble friend. I wish to support very strongly the main point he makes—that in considering the enfranchisement provisions of this Bill, it is very important to recognise that there must be safeguards in order to prevent enfranchisement resulting from small freeholdings being established and preventing redevelopment, after a long lease, of large areas of devastated, demolished, and more or less abandoned areas—especially in the inner cities of this country.

The Earl of Caithness

I rise to support this amendment, and I do so from a valuer's point of view. There are many instances I know of where a partnerships agreement has been entered into by a developer—being the freeholder—and a local authority in order to maximise the use of an area of land. That development has taken place in a variety of ways; shops, flats and houses. It is perfectly true to say that shops and flats will not be affected under these provisions. But the houses will be affected because, as has been so eloquently pointed out already, under the Leasehold Enfranchisement Act those houses can be acquired.

This was never the intention of the agreement. The agreement was for a comprehensive development with the local authority looking after a part, and the developer, as freeholder, looking after a part. We now face a situation where the area of houses involved in that development will become enfranchiseable. That will lead to the splitting up of future development sites—future inner city sites in particular, where a comprehensive scheme is always so necessary.

Time and time again I come across situations in which the local authority turns round and says, "If you can persuade such and such to come in on the development, or if you can include shops to make it a comprehensive scheme, then we can go ahead with a sensible development. But as it stands, it is too bitty". This part of the Bill is creating those little bits which will be so hard to develop in the future. I should like to see this provision excluded from the Bill, but I realise that is not practicable to do so. However, I believe that what is practicable and should be adhered to is that charitable institutions such as the colleges of Oxford and Cambridge should at least be excluded from the worst provisions.

The Earl of Radnor

I, too, should like to speak briefly in support of this amendment. It seems to me that universities and suchlike bodies should properly be put aside for special treatment. I do not really see why the matter should not be extended further, but perhaps this is the moment to make the best of a bad job.

The point about which I do feel most strongly—and I believe almost every speaker before has made it—is that concerning the pepper-pot fragmentation of development. It just points up the fact that this clause is a very short-term, shortsighted affair. It is thinking too much of the present and too little of the future. Anyone who is involved with land—and it makes very little difference whether it is country land or urban land—needs to look a little further ahead than just now. It will be the next development when perhaps some of us will not be around to be held indictable, when the real confusion will come.

We already have the bad inner city situation, and that will only be compounded by the time these housing tenants have got through the landlords to the freeholder. I have experience of this myself. It never seems to work very well, and it means that one cannot have comprehensive developments. For those reasons, and at least for the charities, I support this amendment.

Lord Bellwin

May I first say to my noble friend Lord Molson that work is at present taking place on consolidation of the housing Acts and we fully take his point on this? I should be very glad at any time to hear any suggestion which my noble friend may have as far as that work is concerned; I hope he will be pleased to know that it is taking place at the present time.

The amendments tabled by my noble friend Lord Kinnoull and spoken to so well by my noble friend Lord Selkirk are also related to the question of enfranchisement by the right-to-buy lessee. I recognise the hand of the Association of Land-Owning Charities in the amendment to Clause I which my noble friend has proposed, which would, as he said, exclude from the extension of the right to buy under that clause tenants of dwellings where the freehold is held by a body established for charitable purposes. The tenants in that position would be denied the right to own their own home because, quite by chance, the freehold was held by a charitable body. This would have very much the same effect in those cases as excluding freeholds held by such bodies from the enfranchisement provisions of the Leasehold Reform Act 1967. I am told this was an issue that was debated at great length during the passage of that legislation.

Charities are not excluded from the enfranchisement provisions of the 1967 Act and in our view it would be anomalous to create such an exclusion in the context of Clause 1 of this Bill. In moving the amendment, my noble friend spoke of the fear of housing associations that freeholders, and especially charitable bodies, will in future be reluctant to lease land for development if the freehold reversion cannot be guaranteed. Both he and my noble friend Lord Molson quoted the case in Cambridge where the university has broken off negotiations with a housing association for the lease of a site in the city. With great respect, that is not a good example to give. I understand that scheme was to build 60 flats, where rights of enfranchisement do not arise and where the freehold reversion to the university was not in question.

Lord Molson

If my noble friend will allow me to interrupt, in respect of that particular point it happens to be the case that it was flats which were going to be built. But they could perfectly well have been houses. It happens that in that case, fortunately, the scheme was for flats, which do not come within the mischief of this Bill. But had they been houses—and it is natural that, when profitable commercial development is taking place, houses will be developed at the same time—it would have been possible for there to be such enfranchisement as would have meant reversion of the whole of the area to the freeholder impossible.

Lord Beliwin

I hear what my noble friend says, but may I go on to add that I also understand that financial considerations played a part in the university's decision? In any case, I should point out that, so far as universities are concerned. Section 28 of the Leasehold Reform Act 1967 safeguards the position of various bodies, including universities.

I entirely take the point made by my noble friend Lord Selkirk when he spoke about the importance of such bodies. In fact, the Act does safeguard them against a claim for enfranchisement if they can show to the satisfaction of the Secretary of State that the property will be required for relevant development within 10 years. In addition, universities also have powers under Section 29 of the Act to retain the development rights in enfranchised property by requiring covenants to be included in the conveyance.

Clause 1 is fundamental to the objectives of the Bill; that is, to extend home ownership to thousands of secure tenants who missed out on the right to buy provisions of the 1980 Act. We feel that acceptance of this amendment would undermine those objectives. I hope that my noble friend will realise why I am not therefore able to accept it.

The amendments tabled by my noble friend Lord Selkirk in his own name also seek to exclude from the right to buy under Clause 1 those tenancies where the freehold is held by a charity. In its place he seeks to extend to such tenants the scheme of assistance which the Government propose for tenants of charitable housing associations who do not have the right to buy. If my noble friend is agreeable, I suggest that we discuss the merits of that particular scheme when we reach the appropriate new clause after Clause 28: I think that is Amendment No. 69. We can deal with the amendment as such now. I have already said that the Government do not believe it would be right to exclude such charitable freeholders from the provisions of Clause 1 when they are not excluded from the enfranchisement provisions of the Leasehold Reform Act, because we feel that such an exclusion would be anomalous.

I take some of the other points made by my noble friend, particularly the difficulty that housing associations often have in obtaining land for some of the building that they would like to carry out. That is a point on which I am personally very much involved and concerned. But I think it is part of a much wider debate about the availability of land for housing and one upon which, unless pressed, I shall not embark in the context of this amendment.

I am sorry that I start what my noble friend rightly said will be a lengthy Committee stage by not being able to accept, of all things, an amendment from my noble friend, but I think he will understand my dilemma.

Baroness Nicol

I am sorry the Minister feels that he cannot meet this point. We support this series of amendments, and I should like to answer some of the points made by the Minister. The discussion on universities seems to be playing a leading part. In terms of university development 10 years is a fairly useless time, and being able to safeguard a holding for that length of time is not a great deal of use. As far as enfranchisement under the 1967 Act is concerned, I think we are talking about a very different kind of development nowadays. That Act came in (as I am sure the Minister will remember) to deal with miners' cottages, where ex-miners or their widows were being turned out. There were other things of that kind where the housing developments were fairly straightforward and clear to see.

The developments we are now talking about are not only not completely flats but are a much more complicated structure altogether, in that they have many shared facilities, including the grounds and car parking. The argument about flats and being protected from enfranchisement does not really work. If there is a development of houses and flats together and the owners of the houses can buy their freeholds and the owners of the flats cannot, it will not be very long before one Government or another decides that there is an injustice and, inevitably, the enfranchisement of the flats will follow.

We decided last year in a very well argued case on all sides of the House that charities needed to be protected for very good reasons. They are the one method we have of ensuring a long-term supply of rented housing. However much we may increase the number of people in this country who have their own houses, there will always be a section of the population which cannot, for some reason or another, buy their houses. The powers of the local authority are being gradually eroded in this way by Bill after Bill. Very soon we shall reach a stage where local authority housing will be almost negligible. In that case we shall rely even more on the charities to provide this sort of accommodation.

None of the defences put up by the Minister really holds water when examined. I do not wish to detain the Committee at this stage because I know that we have what is perhaps much more important business to discuss, but I am very disappointed that the Minister has not at least promised to look at this amendment and come back with more hope for the people who have moved it. It is not for me to say whether the Committee should divide, and I leave that to the movers of the amendment.

Lord Evans of Claughton

May I briefly say that we on these Benches associate ourselves with the views expressed. Admittedly the problem is one of limited extent in university towns generally, and is in small pockets. Although it applies to a very small number of pieces of land, there is an important principle involved because charities are there to assist and to help the less well-off. They assist the very people who cannot afford to buy their own accommodation. I should have thought that charities such as the universities and the other charities we have heard about will feel their whole charitable purpose is being eroded if the amendment, or something like it, is not made to the Bill. The whole basis of the concept of the charitable use of land will be eroded.

It is a different position from that of local authorities. Charities perform, by definition, charitable purposes. The local authorities are there to provide housing. If one permits the lessee of charitable freehold land the right to buy, then one is in fact going against the very purpose for which the charities may have been set up—to help the less well off and those in need. Therefore, I hope the Minister will reconsider the rather hostile position he has taken to what I believe are very well-intentioned amendments.

Lord Bellwin

I hope I am not taking hostile positions in this early stage of our proceedings. May I say how pleased I am to see the noble Lord, Lord Evans of Claughton, in his place. May I remind the noble Baroness, Lady Nicol—she who waxes so indignant about the 1967 Act and its contents—that it was a Lahour Government which brought in that legislation. Indeed, I would go further and remind her that the very attempt that was made by the Conservative Opposition at that time to bring in exactly the kind of clause now proposed was passed in your Lordships' House and reversed by her Government in another place, where it was taken out again. So I think we should make it quite clear as to who is supporting whom, and when.

Baroness Nicol

The Minister now has a very good opportunity to undo what he feels was so wrongly done by the Labour Government.

Lord Bellwin

I was well aware when I made the comment I did that that might be a riposte, but the fact is that just as the then Labour Government felt it was wrong at that time so the present Government feel it is wrong now. Having said that, I want also to say that I am not without sympathy for the points made, and that as in so many matters of this kind it is not always a question of right and wrong or black and white. There are situations which I acknowledge are a cause of concern to my noble friends, in particular, and I do not seek to deny that. My noble friend Lord Molson said that the Cambridge situation quoted was concerned with flats but that it might just as well have been houses, and in that case what would the position have been. I accept that as a very fair point. I hope that he and the Committee will in turn accept that the great majority of these developments do concern flats rather than houses.

Of course, as always we will look at what has been said, but it would be wrong for me to give an impression that we intend to come back at a later stage with something on this. That is not my remit, and although I have respect for the points made I am bound to say that I am not convinced.

Lord Monson

May I say that I strongly support this amendment and will certainly support it in the Division Lobby. I challenge the Minister in his assertion that charitable freeholders are already protected when redevelopment is to take place within 10 years. That may well be so, but on the whole we are not talking about redevelopment taking place in 10 years, but about a much longer timescale.

Lord Coleraine

My noble friend was very quick to chide the noble Baroness, Lady Nicol, for apparently changing sides since her party introduced the Leasehold Reform Act 1967, but my noble friend will not have forgotten the hostility with which his party greeted the Leasehold Reform Act then, first on the ground of the confiscatory nature of the compensation which was to be paid by an enfranchising tenant and, secondly, if I remember correctly, where it affected such bodies as charities. At a later stage I shall be speaking to my Amendment No. 28, in which I seek to exclude the effect of the Leasehold Reform Act altogether from this Bill. But I should like to say that I shall not find it possible to vote against this amendment if it goes to a Division.

The Earl of Selkirk

I must say that I am disappointed at much of what my noble friend has said. He has simply given a flat refusal to consider the position of charities. He is putting charities in a disadvantageous position. For instance, in future housing associations will not be able to buy land for development in the way that private institutions can. A private developer will easily be able to develop land and will be in no danger. Therefore, the owners of the land will let to private associations and not to housing associations. That is clearly and definitely a disadvantage. I take up another point that my noble friend makes. The associations must apparently let as flats, and not as houses. Without any doubt at all, most people prefer houses to flats. It is imposing a definite disadvantage, which I think is wrong.

My noble friend asks me to wait for Amendment No. 69. Is that to evade the issue, or will he give me something on Amendment No. 69? If he says that he will give me something on that, I shall consider it; otherwise, I think that we must divide on this as it is such an important matter. It is very close to the welfare of certain big charitable associations in this country, which deserve our fullest consideration.

3.42 p.m.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 157; Not-Contents, 77.

DIVISION NO. 1
CONTENTS
Abinger, L. Blanch, L.
Airedale, L. Blyton, L.
Allerton, L. Bottomley, L,
Amherst, E. Boyd-Carpenter, L.
Ardwick, L. Brockway, L.
Attlee, E. Broxbourne, L.
Auckland, L. Bruce of Donington, L.
Avebury, L. Burton of Coventry, B.
Aylestone, L. Caithness, E.
Banks, L. Caradon, L.
Bessborough, E. Carmichael of Kelvingrove, L.
Beswick, L, Chelwood, L.
Birk, B. Chichester, Bp.
Bishopston, L. Chitnis, L.
Cledwyn of Penrhos, L. McCarthy, L.
Coleraine, L. Mackie of Benshie, L.
Collison, L. Masham of Ilton, B.
Cooper of Stockton Heath, L. Merrivale, L.
Cornwallis, L. Mishcon, L.
Craigavon, V. Molson, L.
Croft, L. Monk Bretton, L.
Cullen of Ashbourne, L. Monson, L.
David, B, Morris, L.
Davies of Penrhys, L. Mulley, L.
Dean of Beswick, L. Nicol, B.
Delacourt Smith of Alteryn, B. Northchurch, B.
Denington, B. Oram, L.
Diamond, L. Perth, E.
Donaldson of Kingsbridge, L. Peyton of Yeovil, L.
Donnet of Balgay, L. Phillips, B.
Elliot of Harwood, B. Plant, L.
Elwyn-Jones, L. Ponsonby of Shulbrede, L.
Elystan-Morgan, L. Prys-Davies, L.
Ennals, L. Radnor, E.
Enniskillen, E. Raglan, L.
Evans of Claughton, L. Rankeillour, L.
Ewart-Biggs, B. Reilly, L.
Ezra, L. Richardson, L.
Falkender, B. Rochester, L.
Fisher of Rednal, B. St. Davids, V.
Fitt, L. Saint Oswald, L.
Fortescue, E. Saltoun, Ly.
Fraser of Kilmorack, L. Seear, B.
Freyberg, L. Seebohm, L.
Gainford, L. Selkirk, E. [Teller.]
Gaitskell, B. Sempill, Ly.
Gallacher, L. Serota, B.
Gladwyn, L. Shaughnessy, L.
Glenamara, L. Shinwell, L.
Glenkinglas, L. Sidmouth, V.
Graham of Edmonton, L. [Teller.] Simon of Glaisdale, L.
Somers, L.
Greenway, L, Soper, L.
Hale, L. Spens, L.
Halsbury, E. Stallard, L.
Hampton, L. Stamp, L.
Hanworth, V. Stedman, B.
Harris of Greenwich, L. Stewart of Alvechurch, B.
Hatch of Lusby, L. Stewart of Fulham, L.
Hayter, L. Stoddart of Swindon, L.
Henniker, L. Stone, L.
Houghton of Sowerby, L. Strabolgi, L.
Hylton, L. Strathspey, L.
Hylton-Foster, B. Swinfen, L.
Ingleby, V. Taylor of Blackburn, L.
Jeger, B. Taylor of Gryfe, L.
John-Mackie, L. Taylor of Mansfield, L.
Kaldor, L. Tenby, V.
Kilmany, L. Thorneycroft, L.
Kilmarnock, L. Tordoff, L.
Kinloss, Ly. Underhill, L.
Kinnaird, L. Wallace of Coslany, L.
Kinnoull, E. Wells-Pestell, L.
Kirkhill, L. Whaddon, L.
Lawrence, L. White, B.
Listowel, E. Wigoder, L.
Llewelyn-Davies of Hastoe, B. Wilberforce, L.
Lloyd of Hampstead, L. Winstanley, L.
Loudoun, C. Wise, L.
NOT-CONTENTS
Alexander of Tunis, E. Daventry, V.
Avon, E. Denham, L. [Teller.]
Bellwin, L. Dilhorne, V.
Beloff, L. Drumalbyn, L.
Belstead, L. Duncan-Sandys, L.
Blake, L. Effingham, E.
Bruce-Gardyne, L. Elgin and Kincardine, E.
Cairns, E. Ellenborough, L.
Campbell of Alloway, L. Elton, L.
Campbell of Croy, L. Faithfull, B.
Carnegy of Lour, B. Geoffrey-Lloyd, L.
Cathcart, E. Glanusk, L.
Cockfield, L. Gormanston, V.
Cottesloe, L. Gray of Contin, L.
Cox, B. Gridley, L.
Hailsham of Saint Marylebone, L. Mowbray and Stourton, L
Murton of Lindisfarne, L.
Henderson of Brompton, L. Nugent of Guildford, L.
Home of the Hirsel, L. Orkney, E.
Ilchester, E. Pender, L.
Inglewood, L. Portland, D.
Ingrow, L. Renton, L.
Kaberry of Adel, L. Rochdale, V.
Kemsley, V. St. Aldwyn, E.
Killearn, L. Sandys, L.
Kimberley, E. Sharples, B.
Lane-Fox, B. Skelmersdale, L.
Lauderdale, E. Soames, L.
Long, V. Stodart of Leaston, L.
Lucas of Chilworth, L. Strathclyde, L.
Lyell, L. Sudeley, L.
McAlpine of Moffat, L. Swansea, L.
Mackay of Clashfern, L. Swinton, E. [Teller.]
Mancroft, L. Tranmire, L.
Margadale, L. Trumpington, B.
Marley, L. Vaux of Harrowden, L.
Massereene and Ferrard, V. Vivian, L.
Mersey, V. Westbury, L.
Mottistone, L. Young, B.

Resolved in the affirmative, and amendment agreed to accordingly.

Lord Skelmersdale

I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.