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7.30 pm
I do not know for sure, because I have not heard, whether the Liberal Democrats will pursue new clause 4, but, if they do not, it will not be because of any explanation from the Minister as to the manner in which the proposals in new clause 12, which is extremely extensive, have been understood by the House. No one could possibly have understood from what the Minister has said exactly what is at stake and how the proposals would operate. I am sorry to have to say this, but the Minister's explanation was rather truncated, to say the least, and the House deserves better than that.
The Liberal Democrats also tabled amendment No. 25 to clause 72 on the qualifying rules in relation to the right to manage. Under their amendment, they propose to insert
a new provision at the end of line 20 on page 34, which relates to the premises to which chapter 1 applies. The Bill states that chapter 1
- "applies to premises if—
(a) they consist of a self-contained building or part of a building, with or without appurtenant property,
(b) they contain two or more flats held by qualifying tenants, and
(c) the total number of flats held by such tenants is not less than two-thirds of the total number of flats contained in the premises."
- "or—
(d) they consist of individual houses and blocks of flats comprised in an estate management scheme."
We then come to Government amendment No. 35, which, by any reasonable standards, is pretty convoluted, but for the benefit of the House, I should say that it would amend clause 116, which refers to qualifying leases. Clause 116 refers to the 1993 Act to which we have already referred and states:
- "In section 5(1) of the 1993 Act (which provides that a qualifying tenant is a tenant under a long lease which is at a low rent or for a particularly long term), omit 'which is at a low rent or for a particularly long term'".
- "In section 69(1)(b) of the 1993 Act (estate management schemes), for the words 'by virtue of the amendments of that Chapter made by paragraph 3 of Schedule 9 to the Housing Act 1996 (c.52)' substitute 'in circumstances in which, but for section 116(1) of the Commonhold and Leasehold Reform Act 2002 and the repeal by that Act of paragraph 3 of Schedule 9 to the Housing Act 1996 (c.52), they would have been entitled to acquire it by virtue of the amendments of that Chapter made by that paragraph'."
For the reasons that I have already given, it is by no means satisfactory that the Government have simply introduced those proposals without adequate explanation and at this late stage. After all, let us face it, the Bill started out many months, if not years, ago. It has been through about five stages in the other place and it has been debated on Second Reading and in Committee in this House, and we are now on Report. We are all in favour of improving the Bill. I have repeatedly said that we want it to be improved and, furthermore, that we want to be sure that it makes improved and enhanced provision for the benefit not only of commonhold but of leasehold arrangements. However, it certainly does not improve the quality of debate in the House if, in fact, no explanation or description of the proposals is given.
I do not want to make any invidious comparisons, but certainly with regard to the issues that we discussed earlier, we heard an extensive description of the Government's arguments. Sometimes their proposals were not adequate and we had to vote against them, but that
does not alter the fact that, in matters of such importance affecting so many people, we must have a proper explanation. The best thing that the Minister could do—if she would be good enough—is to do as I have asked and, even if we have to sit here for a little time, provide a proper explanation of what these provisions involve. I have no doubt that we would then all be the wiser and the explanation would be on the record.We need to make another point in this context: under the current rules of statutory interpretation, which have changed considerably over the many years during which I have been involved in this sort of business, it is now far more likely that the courts will consider what the Minister has said and the nature of the debate in Parliament, and as we move further down the route of other jurisdictions which seem to impinge on our legislation, that rule will become even more readily applicable. Therefore, it is absolutely incumbent on Ministers to explain fully what they are up to.
The reason why we are legislating is to ensure that the people of this country have the opportunity to hear a full explanation. Not everyone would expect to be able to understand every word of the Bill's drafting. It is complicated; we all know that. However, it is important that these matters be fully and adequately explained to the House and put on the record. Hansard comes out every day; some of it is extremely tedious to read, but for those who are affected by these important provisions, a proper and full explanation is required.
I invite the Minister, if not to go back to square one, to give us a proper and full explanation of these provisions, because her introduction of new clause 12 left us not much the wiser.
Mr. Mark Field: The Minister will be relieved to know that I will not speak at length, in view of the comprehensive comments of my hon. Friend the Member for Stone (Mr. Cash).
I understand that there are about 3.8 million leaseholders in this country. At times, when the Bill has been making its slow and steady way towards the statute book, I have wondered whether all of them live in my constituency—I think that a fair number of them do.
Mr. Sanders: The amendments cover people who are not leaseholders but have enfranchised. I am on the same side as the hon. Gentleman on this issue, but I emphasise that these amendments are very important and cover far more people than leaseholders alone.
Mr. Field: I thank the hon. Gentleman for his intervention.
The high and somewhat uncertain cost of enfranchisement, which has been discussed, is very much a live issue, particularly in central London. The comments of my hon. Friend the Member for Stone reflected the concern about the enormous associated bureaucracy. If the Government are unable to tell us at this juncture how they envisage the estate management schemes working, lawyers will have a field day. I should perhaps say that I am a former member of that profession. We will see an expensive and protracted exercise in bluff and counter-bluff, based on little decisive evidence.
I hope that the Minister will go into some detail to explain how she envisages new clause 12 and Government amendment No. 35 working. The terms of
the new clause are very extensive; the worry is that it will do little good for the many former leaseholders and those who are enfranchising and want to see the benefit of the legislation. If, as has so often been the case, it has not been thought through properly and is too complicated, this worthwhile effort to introduce another piece of legislation—we have had a number of Acts going back to the Leasehold Reform Act 1967, which was the trailblazer in this area—will simply create problems. Without sufficient improvement and clarification, the Bill will cause great problems. I hope that the Minister will be able to elucidate these matters.Simply putting into place a new layer of complicated legislation will not achieve the trailblazing goals of six or seven years ago that the Labour party made great play of, particularly before the 1997 election. The worst thing is that many millions of leaseholders will find themselves still in a problematic situation with a lot of new legislation on the statute book that achieves very little. I hope that, given the comments of the hon. Member for Guildford (Sue Doughty) and my hon. Friend the Member for Stone, we will have more explanation from the Minister about how the new clause will work.
7.45 pm
Ms Keeble: I shall start by commenting on the points raised by the hon. Member for Guildford (Sue Doughty); I will then deal with those of the hon. Member for Stone (Mr. Cash). There are also some general points to consider as well as specific ones.
The hon. Member for Guildford spoke about the right to manage—the right to manage is for blocks of flats, but we are dealing with whole estates. She also referred to the reasonableness of the costs of estate management schemes. We brought forward new clause 12 to deal with that issue. It will provide that the charges under estate management schemes will be payable only to the extent that they are reasonable. The leasehold valuation tribunals will have the power to determine the extent to which such charges are reasonable. I will give an explanation of the definition of "reasonableness" that I hope will keep the hon. Member for Stone happy. It is precisely to deal with some of the issues referred to by the hon. Lady that we introduced the new clause.
The thrust of the hon. Gentleman's argument was that the new clause is very long and has been introduced at a late stage of the Bill's proceedings. Nobody could gainsay that. However, we have constantly brought forward amendments to refine the Bill. It has been a long process; before the Bill even reached this House, it was introduced twice in the other place, so there has been constant refinement. We have accepted throughout the process that it is still possible to make amendments. The hon. Gentleman has paid tribute to the fact that the Government have brought forward many amendments, even at this stage, to deal with concerns that were raised in Committee by hon. Members on both sides of the House.
As I will probably say ad nauseam, tonight and on Wednesday, many of the issues in the Bill are extremely complex. Many provisions are interrelated and have knock-on effects on various pieces of legislation. We are dealing with people's homes and must ensure that provisions are watertight; people get very sensitive if
changes are made to legislation that affects their home and there are unintended consequences. Therefore, the changes tend to be complex. We run into problems if a simple amendment has unforeseen consequences or has not been thought through properly.The hon. Gentleman said that new clause 12 is not clear, but I think that it is startling clear. It sets out the arrangements for ensuring that people know their rights and are able to exercise them. I understand that guidance will not be forthcoming because all the steps in the process are clearly set out in new clause 12. It refers to two Acts because two Acts have been involved in enfranchisement. That point has been raised repeatedly on both sides of the House—perhaps more often from my hon. Friends, whose constituents have enfranchised under various pieces of legislation. I argue that these arrangements—unusually, perhaps, for a complex piece of legislation—are set out as a clear process.
The hon. Gentleman asked about the use of "reasonable". I understand that that was first applied to variable charges under the Landlord and Tenant Act 1985. Applying it to charges made under the estate management schemes merely follows the long-established precedent for service charges. The LVT will consider all circumstances in reaching a view on reasonableness, just as it does now.
If arbitration takes place on estate management schemes, it is up to the parties to agree an arbitrator. The purpose of the new clause is to prevent binding arbitration clauses in schemes that would deny access to the LVT. The drafting follows the general approach taken in the Bill towards service and administration charges, and the hon. Gentleman will understand that we need such regimes to be as close to one another as possible.
The hon. Member for Stone asked for information on the point contained in amendment No. 35. As I have said previously, the Bill includes several points at which an amendment in one place would have an unintended consequence elsewhere. Several later amendments would also do just that. In this case, once clause 116 came into force, we should be removing an existing right to make an application for an estate management scheme under section 69 of the Leasehold Reform, Housing and Urban Development Act 1993. That was not our intention.
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