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8 Jan 2002 : Column 426

Mr. Wills: I am grateful to the hon. Gentleman for making his point in such a reasonable way. He is right that this is a complex matter and that is why the provisions in the Bill are simple, practical and designed to be flexible. That is why we have also made provision for the use of regulations to deal with what will inevitably be a complex and fast-evolving property market. However, even with the good will of the House and all the time that he wants to scrutinise the Bill in Committee, there is no way that the Committee could possibly iron out all the potential wrinkles in such a complicated subject.

We believe that the Bill will provide quick, practical remedies for long-standing problems and that we have allocated enough time for its consideration. Many of the arguments were extensively rehearsed in another place and I have yet to hear arguments that have not already been extensively considered. I am sure that we shall return to them in Committee and I am confident that, with good will on both sides, we shall have time to give the Bill the proper scrutiny that it deserves.

Mr. William Cash (Stone): Does the Minister recall that the Deregulation and Regulatory Reform Committee considered regulations relating to commonhold? Even though they involved Henry VIII provisions that restrict the opportunity to examine them properly but can allow for the amendment of an Act of Parliament—which would be a major step—there was much discussion and the Government accepted the Committee's recommendations. The Committee declared itself to be satisfied with the Government's response which was that they would introduce draft regulations so that the House would have an opportunity to see exactly what was going on. Unfortunately, my latest information, as of about an hour ago, is that no such draft regulations have been introduced. If I am wrong, I am open to correction but that is the information that I have just received from the Library.

Mr. Wills: I hesitate to say this, but my information is slightly different from the hon. Gentleman's. If he can bear with me, I shall try to resolve the question of whose information is more accurate and provide him with a more definitive answer. At 4.3 pm, I cannot say precisely where we are on that point, but I shall try to find out. I assure him that it is our intention to introduce such regulations. We have always been open and laid the alternatives before the House, and we shall continue to do that. I can reassure him on the general point, but will have to return later to the point of detail.

Mr. Andrew Robathan (Blaby): The Minister has been generous with his time and, in response to my hon. Friend the Member for Daventry (Mr. Boswell), he said that the Bill's whole purpose was to make the issue simple. I am certainly no expert on leasehold and commonhold, which is why I have come to listen to the Minister's speech. The explanatory notes run to 75 pages. I have seen many Bills, but never 75 pages of explanatory notes, so how can he argue that the subject is simple? Surely, we need longer in Committee to discuss the Bill intelligently. A swift timetable motion will mean that it will be driven through with many clauses not being discussed.

Mr. Wills: I think that I have already answered that question. I note the hon. Gentleman's view, but I do not

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think that he has quite understood my point about the need to produce quick, practical solutions to long-standing problems. Even with all the time in the world in the House, we will not be able to iron out all the wrinkles that might occur. I am sure that he has carefully read the 75 pages of explanatory notes and I am deeply flattered that he has taken the trouble to come here to listen to me in the expectation that I can add something to them. I am grateful for his confidence in me on that point at least.

The so-called 100 per cent. rule for commonhold, to which the hon. Member for Eastbourne (Mr. Waterson) referred, has concerned many people. We received a number of representations on it, it was exhaustively debated in another place, and I shall explain the reasons for adopting our approach. For those hon. Members who are not familiar with the rule, the Bill allows for the conversion from leasehold to commonhold to accommodate those leaseholders who want to move beyond enfranchised leasehold to commonhold.

The Bill requires that 100 per cent. of those with a substantial interest in the land that is to be registered as commonhold land are to be required to consent to conversion. That includes the freeholder, whose interests would probably have to be bought out, anyone holding a lease that is granted for 21 years or more, and others such as those holding certain charges over the land. The written consents of persons falling into those categories must be lodged with the Land Registry before land can be registered as commonhold land and the conversion process gets under way. Leaseholders who are not required to consent—that is, those who do not have a substantial interest in the land—will be compensated if they suffer loss as a result of conversion.

We have been criticised for that. We recognise that obtaining the necessary consents is a high hurdle for leaseholders, but we do not believe that it is impossibly high. We acknowledge that take-up for commonhold will probably be greatest in new-build developments and we anticipate that commonhold will become standard for new-build developments that consist of interdependent units and common parts. However, we expect a unit that is owned freehold to become more desirable and trade at a premium compared with equivalent leasehold properties. That should improve the chances of achieving 100 per cent. consent as hesitant leaseholders see the practical benefits of commonhold.

We have never said that it would be impossible to devise a system that requires fewer consents than 100 per cent. However, we believe that the difficulties that would ensue, both during the conversion process and when attempting to manage a hybrid commonhold, would far outweigh the perceived advantages. Inevitably, that will give rise to a set of complex and technical arguments, and I have no doubt that we will consider those in Committee. However, I ask the House to consider what might happen if the 100 per cent. rule were not in place. Without it, there would be two different classes of occupants and two different streams of management under two statutory regimes; two different sets of money to collect and two different sets of accounts to produce; and an infinite variety of different tailor-made schemes to draft and administer.

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In short, anything less than a 100 per cent. rule for commonhold will involve schemes that are more bureaucratic, costly and complex than necessary. In addition, they will ultimately be unnecessary because there is an alternative if fewer than 100 per cent. of leaseholders want to change their method of tenure. Part 2 sets out a new improved scheme for collective enfranchisement. The enfranchisement scheme is tailor-made for that purpose. To push for commonhold with fewer than the necessary consents would be to reinvent collective enfranchisement needlessly.

Mr. Mark Field (Cities of London and Westminster): My hon. Friend the Member for Eastbourne (Mr. Waterson) made a clear point on the 100 per cent. rule. One thing strikes me as odd. What is to stop an unscrupulous freeholder in a large block of flats providing a lease to a relative to ensure that he gets around the provision, and therefore preventing all other dissatisfied leaseholders from taking the commonhold route?

Mr. Wills: I have endeavoured to explain the basis on which we are approaching the problem. Two routes are available to leaseholders who want to change their method of tenure. We expect the commonhold route to be taken primarily in respect of new-build developments, although it is possible that groups of leaseholders and existing leaseholders will also want to do that. Although that option is open to them, there are other routes that give them many advantages. Part 2 covers schemes for collective enfranchisement. They clearly offer huge advantages over the current situation and will deal with many of the problems of leasehold.

Mr. Waterson: I shall try to restrain myself from now on.

I do not necessarily accept what the Minister says about existing blocks, and those are perhaps detailed matters for consideration in Committee, but none of the objections that he listed can possibly apply to brand-new developments, so what is the objection to making commonhold mandatory for new developments if the Government intend that in the medium or long term commonhold should supplant leasehold?

Mr. Wills: I am glad that we have moved from the 100 per cent. rule to another area of concern. I understand the arguments, and obviously we believe that commonhold offers enormous attractions, but it would be wrong of us to prescribe it at this stage. The property market is complex and fluid, and we think that the scheme should have time to bed in. We want to see how the market responds to commonhold, so the answer to the hon. Gentleman's question is, in short, "Let the market decide." We believe that it will make the appropriate decision and recognise the full advantages of commonhold.

Mr. Cash rose

Mr. Wills: Before I give way to the hon. Gentleman, I can tell him that I have in front of me a note saying that he is right about the laying of draft regulations, and I can assure him that they will be laid before a Committee.

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