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House of Commons

Friday 24 May 2002

The House met at half-past Nine o'clock


[Mr. Speaker in the Chair]

Adjournment (Whitsun)

Motion made, and Question proposed, That this House do now adjourn.—[Dan Norris.]

9.34 am

Mr. Iain Coleman (Hammersmith and Fulham): The issue that I wish to raise is one of increasing concern to local authorities across the country, and especially to those in inner London. It relates to abuse of the right-to-buy scheme for local authority tenants, which I realise the Government are investigating.

Like many hon. Members on both sides of the House, I have surgeries that are booked up with constituents who are desperate for decent affordable homes for their families. Of course, the problem is particularly acute in London and the south-east, although I am aware that there is a severe shortage of affordable accommodation in most areas of the country. Whatever view one takes about right-to-buy legislation—I know that hon. Members will have sharp differences of opinion—I am sure that we can agree that the abuse that I want to highlight is one that should be stopped. I am advised by local authority officers working in home ownership units that a number of so-called investment companies that operate in this field are taking advantage of loopholes in current legislation. They acquire properties at reduced prices, rent them out for three years, and in disposing of them make a very significant return on their capital investment.

To achieve that end, such companies encourage existing council tenants to exercise the right to buy and, in return for a one-off cash sum, transfer the property to them on an under-lease. I understand that it is not unusual for these companies to leaflet entire council estates, enticing tenants to contact them by promising a one-off cash sum of as much as £10,000. When a tenant has contacted the company and agreed to the proposal, they vacate the property on the date of completion of purchase from the council.

At the same time as granting an under-lease, the tenant also enters into a contract of sale of the property, to be completed exactly three years and one day after the initial purchase and completion. Repayment of the discount on the property is thus avoided, as the sale is outside the three-year limitation period. The amount of cash paid to the tenant is dependent on the level of discount that the tenant qualifies for, which in turn normally relates to the length of time that they have been local authority tenants.

In my local authority of Hammersmith and Fulham, there have been two recent cases in which, having vacated their properties, tenants have attempted to present themselves as homeless and in need of re-housing. One

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of the tenants has a history of mental illness. Of course, the local authority will not accept such applications because the individuals concerned are in practice intentionally homeless, and therefore not entitled to local authority housing support. I am advised that the Department for Transport, Local Government and the Regions believes that, in such cases, a landlord should be able to recover the discount because a contract of sale exists. The opinions of various counsel were sought on this matter, but regrettably they disagreed with the Department.

It is true that the actions of such companies in this market are not in themselves illegal. Although many hon. Members will agree that their behaviour is deeply disreputable and constitutes theft from the public purse, little, if anything, can apparently be done to stop this activity. Many local authority housing officers, who have to deal daily with the misery and frustration of overcrowded and homeless families, have told me that a single and minor change to current legislation could put an end to this practice. What is required is to make the granting of an under-lease, following a right-to-buy purchase during the first three years of the lease, qualify legally as a disposal of the property. As a result, full repayment of the discount that applied at the time of purchase would be required. Such a move would make the current scam much less attractive to the investment companies operating in this market.

Some people have expressed concern that such a change in the regulations would affect genuine hardship cases, in which tenants who have exercised their right to buy find themselves in financial difficulty through no fault of their own. I recognise the legitimacy of such concerns in cases in which leaseholders—in other words, ex-tenants—have been forced to sub-let their properties to meet mortgage repayments and have had to rely on the kindness of friends and relatives for accommodation. The fear is that the change in the law that I propose would prevent them from sub-letting their property and put them in even greater financial difficulties. However, I do not accept that such a rare occurrence—it does not happen all that often—should prevent us from stopping abuse of the right-to-buy legislation, because landlords already have discretion to waive the requirement to repay all or part of the discount in circumstances in which they believe that such relief is warranted.

I am aware that a combined Association of London Government and London Housing Unit right-to-buy working party is looking at various options that may be available in law to stop the abuse of the legislation. A legal opinion is being sought from a highly reputable local government and housing silk to see what can be done. London boroughs are also working together to identify a suitable case to take to court in a test action to try to recover the discount following the sub-letting of a property. Identifying such an opportunity has inevitably proved to be difficult, because of the covert operations employed by the investment companies, which normally mean that the tenant who has exercised their right to buy has vacated the property and no forwarding contact address is available. In practice, the tenant cannot be contacted.

I hope that the House will agree that action of some kind is required and will welcome the work being carried out by the ALG and LHU working party. I also look forward to the time when the people responsible for such

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conduct get their comeuppance in court and the necessary minor changes are made to the regulations to outlaw this odious abuse of the right-to-buy legislation.

9.42 am

Bob Spink (Castle Point): It is a pleasure to join the usual suspects in this end-of-term report, and I am grateful for the opportunity to participate in the debate. I wish first to raise the issue of street crime in Castle Point—something that I suspect also affects most other constituencies.

Street crime and youth nuisance is becoming an increasing problem for us all. Parents should have primary responsibility for controlling the actions of young people on the streets. Parents should know where their youngsters are, what they are doing and whether they are drinking alcohol. Parents need to take an interest in what their young people are doing and ensure that they are not getting into trouble. However, when young people do get into trouble, the police have a duty to deal with them: it should not be a matter for agencies such as the social services. The police should act to prevent street crime from becoming a nuisance and making our residents' lives a misery, which is what is happening in certain areas in Castle Point, and in many other constituencies.

We in politics also have a duty to ensure that we provide suitable facilities to give youngsters something to do other than gather on the street. In Castle Point, I am sad to say that we have fallen short on that duty. I am working with several groups to provide improved facilities on Canvey Island and in Benfleet, Hadleigh and Thundersley to give youngsters an alternative to getting into trouble on the streets. When they gather in groups, they sometimes do not even do anything wrong, but their mere presence—making some noise and being a little rowdy, as youngsters can be—is intimidating for elderly people. I welcome the initiatives by various groups in Castle Point to provide skateboard parks, BMX tracks and new scout huts. I am involved in those efforts and I congratulate the people behind them. The youngsters deserve our support.

I also congratulate all those people who are involved in youth organisations, such as the scouts, the brownies, the sea scouts and the venture scouts. All those organisations do a tremendous job and help to give young people exciting alternative activities and to guide them through their important, and sometimes difficult, developmental years.

I have already mentioned Canvey Island once and I could not make this speech without mentioning its third road. Canvey must have a third road for congestion, economic and, not least, safety reasons. Some areas of Canvey Island are 8 ft below sea level. Sea levels are rising because of climate changes, so we must be vigilant and ensure that the sea walls around the island are sufficient to protect it. Hon. Members may recall that in 1953, Canvey Island suffered a terrible flood, in which 53 people lost their lives. At the time, my predecessor, Sir Bernard Braine, was the Member of Parliament. I am sorry, I mean my last but one predecessor—I forget that I was careless enough to lose the election in 1997. Sir Bernard, who became Lord Braine, was much loved in the House.

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Many people on Canvey Island still recall the flood so they are emotionally attached to the need for a third road. I hope to have a dedicated debate on the issue soon, so that I can invite the hon. Members for Basildon (Angela Smith) and for Thurrock (Andrew Mackinlay) to explain to my constituents why the Labour-controlled councils in their constituencies are so intent on blocking Canvey's third road. Those councils do not want the road to go through their districts, although I cannot see any reason why the road would cause any harm to them. The only viable way that the road could go is through those districts, but the Under-Secretary of State for Transport, Local Government and the Regions, the hon. Member for Plymouth, Devonport (Mr. Jamieson), has told me that unless Thurrock council withdraws its objection to the third road, the Government will not support or seek to finance it. We need all the neighbouring local councils to agree to the plan. The roadblock on Canvey's third road lies with Labour-controlled Thurrock council, so I want the hon. Member for Thurrock, who is an excellent chap, to explain the council's reasons.

Canvey people want to march on No. 10 Downing street, because they blame the Government, or on county hall, because they blame the county councillors. I am sympathetic to their cause and I will walk on those marches with them, but that will do no good unless Thurrock council will remove its roadblock. We cannot hide behind blaming the Prime Minister on this issue, unfortunately.

We have excellent local hospitals. The two that serve my constituency, Southend and Basildon hospitals, were both listed in the top 40 hospitals in a recent survey. I congratulate the management and the medical, support and administrative staff of those hospitals on that fine achievement. We want to build on that achievement and improve provision in various ways.

We must remain vigilant and ensure that there are no cuts to the excellent cancer services provided by Southend hospital, which are much respected by the people of south-east Essex. We should improve and support them in every possible way. I pay tribute to my hon. Friends the Members for Rochford and Southend, East (Sir Teddy Taylor), for Southend, West (Mr. Amess) and for Rayleigh (Mr. Francois) for their excellent work in supporting those cancer services.

In improving health care locally, we need to move some services such as simple tests, treatments, procedures and medicine applications away from the main hospitals into the local communities. That is more convenient, especially for vulnerable people such as the elderly, young people with babies in prams and those who do not have access to cars. It is difficult to get to the two hospitals from places in my constituency such as Canvey Island. I welcome the fact that we now have a Canvey out-patients clinic, something for which Sir Bernard Braine, many local politicians of all parties and I fought for many years.

I am delighted that on the mainland we also have the Tyrells out-patient centre which opened very recently. I am sure that it will develop and provide excellent treatment for local people. We must take every opportunity to look at further ways to extend and improve primary care provision in the local community, thus reducing pressure on our central hospitals.

I could not make this end-of-term report without mentioning c2c, our famous Fenchurch street rail line. This time, I have good news—the services have actually

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improved. I have not had a single letter of complaint in the past month, which is a first in my 10 or 12 years at Castle Point as Member of Parliament and ex-Member of Parliament. The strategic rail plan gave a target of increasing passenger numbers by 50 per cent. over the next few years. However, by the time the train arrives at Benfleet station, which is the busiest on the Fenchurch street line, it is often full. My constituents often cannot even stand on the train they want; they have to wait for the next one or endure a very uncomfortable 35 or 40 minutes travelling to London. How we can increase passenger numbers without increasing capacity, I do not know.

In looking at ways to increase capacity, it occurred to me that 500 or 600 people a day get on at the terminal at Shoeburyness at the end of the Fenchurch street line and more than 3,000 people get on the train from Canvey Island every day, yet there is no terminal on Canvey Island. As part of the Thames gateway and the Shellhaven port development, there is a proposal to double up on the rail line that goes along the south of the Fenchurch street line. That line could then easily be extended for the extra mile on to Canvey Island where there is a massive brownfield site that would make a superb location for a new rail terminus.

I have raised the matter with the Strategic Rail Authority and c2c. It has had a mixed reception, although we are having meetings to discuss it. Providing a new terminus station on Canvey Island would increase capacity on the Fenchurch street line as a whole, take pressure off the main Fenchurch street line so that other people will want to use it, and achieve the excellent target of the Strategic Rail Authority and the Government of a 50 per cent. increase in passengers.

On a lighter note, in a week's time we will be watching the first game in the World cup. I am delighted to be able to mention the World cup before the hon. Member for West Ham (Mr. Banks) beats me to it. I wish the England team all the very best. We are all keeping our fingers crossed, and I am sure that England will do extremely well. Indeed, I am prepared to take bets that we will get into the quarter or semi-finals at least.

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