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Mr. John Townend (East Yorkshire): Does the Chancellor accept that he would not have been able to come here today and announce these telephone number increases in expenditure if the Government had kept the pledge that the Prime Minister made before the election--that there would be no overall increase in taxation? The Chancellor is getting £25 billion over a five-year Parliament from pensions, and billions of pounds from petrol and extra tobacco tax. He has attacked married couples with more tax and has also attacked home owners. Does he accept that if, as he proposes, expenditure continues to rise at a faster rate than the growth in the economy, further tax increases are inevitable? Is not this Labour Government reverting to type, as they are taxing, spending and taxing again?

Mr. Brown: Our pledge was to keep the basic rate of tax the same, or to reduce it, which is what we did. We also pledged not to raise the top rate of tax and to cut to 5 per cent. the rate of Conservative-imposed VAT on fuel, which we did. Our pledges on taxation have been kept.

I know that the hon. Gentleman is a permanent tax cutter, and has been saying that in the House for as long as I have known him. He must be very sad that the Conservative party is now dropping its tax guarantee, or is trying to do so. The hon. Gentleman believed in the tax guarantee, but the problem is that the shadow Chancellor did not. The Conservative leader said that there would be a tax guarantee, with no ifs, no buts and no question marks, which the Conservatives would carry out. It was absolutely clear that the tax guarantee would be imposed, which the shadow Chancellor confirmed only a few weeks ago. The Conservatives tried to ditch that seven days ago, which is why nobody believes anything that they say about tax.

Ms Sally Keeble (Northampton, North): I very much welcome the extra spending on child care, schools, higher education and health care. My right hon. Friend also mentioned the child care tax credit and the working families tax credit. Will he give some global figure of how much extra the Government are investing in public services through the tax credits to support hard-working families? As those families rely to a great extent for their security and stability on knowing the long-term plans, does he agree that people will also want to know in the run-up to the election whether the Conservative party is committed to such spending levels?

Mr. Brown: I agree with my hon. Friend. We are spending £7 billion extra a year on families. We are doing that by raising child benefit by 35 per cent., which I presume the Conservative party now wants to cut; by

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introducing the working families tax credit, which is benefiting 1 million families, and which we now know the Conservative party wants to abolish; and by introducing the child care tax credit from next year, which I must presume from the Conservative party's silence it would abolish too. I also presume that the Conservative party will not want the extra investment that we are making in child care under the national child care strategy, which is welcome throughout the country.

We have just today set up a children's fund, in which we have linked charities, community groups, Churches and other organisations throughout the country to tackle and to help to solve the problems of children in need. That will be a £250 million fund which I believe charities will welcome and with which community groups will be happy to work. Again, I must presume that the Conservative party's new policy means that it would oppose even that.

Mr. Michael Fallon (Sevenoaks): Amidst all the hype and spin, will the Chancellor confirm one fact: at the end of his three completed years so far, the tax burden is higher than it was when he started? Secondly, if it is right to give every secondary school £70,000, why not give the schools all the money?

Mr. Brown: The Conservatives' proposals which were issued without great thought--like almost all their policies which have had to be rethought, including the tax guarantee--would fail to promote, for example, special needs. The £1 billion for special needs, and, indeed, school transport, were not even calculated for. After this week's episodes, the Conservative party will have to go back to the drawing board with their proposals in their entirety.

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On the tax burden, I have already given the figures: 37.1 per cent., 37 per cent. and 36.9 per cent. and, by 2003-04, according to the published figures, 36.7 per cent. The shadow Chancellor has got yet another fact wrong today.

Mr. Nigel Beard (Bexleyheath and Crayford): I congratulate my right hon. Friend on his statement, which is indeed a watershed in the history of public services in this country. Given the accumulation of problems over 18 years of neglect of health, education and our transport service, how does he intend to ensure that the money is spent to best effect?

Mr. Brown: I am grateful to my hon. Friend. He rightly says that the matter is not just one of increasing the amount of money. It must be increased, contrary to what the shadow Chancellor says, because there has been long-term underinvestment, which was a feature of 18 years of Conservative government. We must ensure that the money goes to front-line services. That is why, when the health and transport plans and what are called our public service agreements are published, there will be strict output targets, a new regime of penalties and incentives, greater inspection in many areas and a flow of information to the public, which is itself a discipline.

Therefore, we are taking steps to try to improve value for money and quality of service, which particularly people from the poorest areas have been denied for too long as a result of cuts in investment. We are determined to ensure such action. I welcome what my hon. Friend says. This is sustained investment in our country's future and it means that we can look forward, under a Labour Government, to improvement in the social and economic fabric.

Mr. Deputy Speaker: Order. We must move on; there will be further opportunities to return to these matters.

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Point of Order

5.4 pm

Mr. Bob Russell (Colchester): On a point of order, Mr. Deputy Speaker. On 6 July, along with other right hon. and hon. Members, I tabled an oral question to the Chancellor of the Exchequer. I had the good fortune to be drawn at No. 1. Last night, 11 days later, I was advised that the question had been vetoed by the Chancellor. I have made inquiries today and his office has confirmed that. The question was identical to one that I tabled two years ago, which was answered on the Floor of the House by the Paymaster General. May I please have some guidance on the Chancellor's right personally to veto an oral question 11 days after it was tabled?

Mr. Deputy Speaker (Sir Alan Haselhurst): I am grateful to the hon. Gentleman for giving notice of his point of order. As "Erskine May" makes clear, it is a long-established principle that decisions on the transfer of questions rest with Ministers, not the Chair. However, the Speaker does expect Departments to act promptly in transferring questions. Successive Speakers have said that it is a discourtesy if transfers are not notified within two sitting days of the first appearance of the notice. In this case, the practice has been breached by a very wide margin. Decisions on which Minister should answer a particular question should be taken consistently, so that Members can have a reasonable expectation of what questions will be answered by which Department when they table oral questions.

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Leasehold Reform

5.5 pm

Shona McIsaac (Cleethorpes): I beg to move,


To put my case simply, I want to bring in a Bill to stop greedy landowners insisting that home owners--usually pensioners in my part of the country--pay them tens of thousands of pounds simply so that they can stay in their own homes. I wish to thank the chairman of the all-party group on leasehold reform, my hon. Friend the Member for Brent, North (Mr. Gardiner), the Campaign for the Abolition of Residential Leasehold and LEASE--the Leasehold Advisory Service--for their support on this issue.

Two million people live in leasehold properties; there are thousands in my constituency. That is a time bomb waiting to go off. Unless the Government wake up and do something urgently, thousands of pensioners could find themselves on the streets through no fault of their own. Councils will have to pick up the tab, while landowners and landlords will be laughing all the way to the bank.

Many homes built in the Victorian building boom in the 19th century were sold on 99-year leases. Those leases are now up for renewal, and people who have worked hard all their working lives to pay off their mortgages are being asked to fork out vast sums to buy the freehold of homes that they thought they already owned. Residents are being asked to pay up to £30,000 to purchase the freehold of those houses. In Grimsby and Cleethorpes, that is more than the value of the property.

Of course people who cannot afford to buy the freehold can extend their lease by 50 years, but, in doing so, they lose all their rights to buy the freehold and, in effect, become tenants. That is a scam by the landlords and landowners. It is a scandal that those who have contributed nothing for almost 100 years can waltz in and demand from home owners outrageous sums so that they can stay in their own homes. Those landlords and landowners never laid a brick or paid to build the houses. They never paid a penny towards their upkeep and improvement over the years. They never paid a household bill, insurance, the rates or the council tax. Yet they want tens of thousands of pounds from mainly elderly people--often widows--who simply cannot lay their hands on such sums. The law must be changed to stop leaseholders being fleeced by unscrupulous landowners.

Leasehold is a fundamentally flawed system of home ownership. It is a throwback to feudal times. Someone who wrote to me recently called his landlord a modern-day robber baron. The leasehold system enables the landowners to benefit from a rise in property values at no cost to themselves.

My right hon. Friend the Minister for Local Government and the Regions said:


I shall tell the House about some of the misery that I have come across in my constituency. One woman was quoted £20,000 to buy the freehold when there was still 30 years on the lease. Another pensioner is frantically trying to

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raise money from relatives to meet a demand of £10,000 to buy her freehold, which is due to expire soon. She cannot get a bank loan for that sum because she is aged over 80.

Another frail widow wanted to sell her house so that she could go into residential care. Her lease is due to expire, and she too has been quoted £10,000 to buy the freehold. She had hoped for comfort and care in her remaining years, but is now fraught with worry about raising money that she simply does not have. Another family who could not get hold of the necessary money have resigned themselves to extending the lease for 50 years. Those people have become tenants, losing the right to buy their freehold. They no longer own their own home. In all the cases that I have given, the mortgages had been paid off. People thought that they owned their own homes.

We must reform the completely unrealistic conditions that apply when families inherit leasehold houses. To buy freehold, family members must have been resident in the house at the time when the deceased passed away, and they must have been resident for three of the past 10 years. Everything is stacked in favour of the landlords: few families can meet those conditions.

The Under-Secretary of State for the Environment, Transport and the Regions, my hon. Friend the Member for Sunderland, South (Mr. Mullin), wrote to me saying that people who inherit a lease will often be unable to qualify to buy freehold and might have to pay large sums for it. I can offer the example of a constituent who passed away in January, leaving his house, with the mortgage paid, to his family. The family discovered that the lease ran out at the beginning of April. The freeholder, a Mr. J. C. Mountain, refused at first to sell the freehold. When I put pressure on him, he agreed to do so, and wrote to me on 13 March--days before the lease expired--quoting a price of £35,000 if my constituents were to inherit their parents' home. They could not raise the money and have lost their parents' home. The freeholder is laughing all the way to the bank.

Owners of freeholds, such as Mr. Mountain and the estate of the Earl of Yarborough, must be delighted that the Government have been slow to introduce measures to stamp out their nice little earners. Landowners also fail to tell people about their rights--leasehold valuation tribunals, for example. Bully-boy tactics are being used to scare pensioners into coughing up the dosh.

Ultimately, the Government must keep their manifesto promise to abolish leasehold as a form of housing tenure. Today, however, I seek to protect the rights of homeowners through the abolition of marriage value as part of the calculation in determining the price of a freehold. We must get rid of the special valuation basis for calculating the price of a freehold, which, because of high prices, freeholders in Grimsby and Cleethorpes are using wrongly to determine prices. The special valuation basis, under which the landowner must receive 50 per cent. of the marriage value and compensation for any severance and losses while the leaseholder must meet his or her own costs and those of the landowner--is wrong.

My hon. Friend the Member for Great Grimsby (Mr. Mitchell)--who is not present--has told me that Grimsby grannies, many of whom are widows of trawlermen for whom he has fought for many years, are losing their homes while the Government dither.

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I therefore introduce this Bill to enhance the rights of owners of leasehold houses by abolishing marriage value when considering the purchase price of the freehold, by extending the rights of family members to purchase the freehold of a house on inheriting it and by extending the right of homeowners to purchase a freehold if, at the end of a 99-year lease, they extend it.

Question put and agreed to.

Bill ordered to be brought in by Shona McIsaac, Mr. David Borrow, Mrs. Christine Butler, Mr. Ian Cawsey, Valerie Davey, Mr. Paul Flynn, Mr. Barry Gardiner, Mrs. Joan Humble, Mr. Jon Owen Jones, Mr. Austin Mitchell, Mr. Ian Stewart and Mrs. Betty Williams.


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