Commonhold and Leasehold Reform Bill [Lords]

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Mr. Taylor: I dispute the Minister's historic stereotype. It is like something out of a pantomime—Labour were for tenants, and the Tories were for landlords. What nonsense! Even if it was once true, that time is past. Who enabled council house tenants to own their own homes? I suggest that we call it quits, and put the matter behind us. However, if she wants to use the old idiom—that I am the one who wants the price mechanism, and that the Tories are normally for free markets—

Ms Keeble: May I correct the hon. Gentleman? I did not say that. I was not talking about people's attitudes. I said that most of the Opposition amendments have been protective of freeholders' rights. That was a specific point.

Mr. Taylor: The point that I want to make clear—does the Minister want it in the old idiom?—is that if I, as a Tory, am prepared to be interventionist about a price mechanism, even if it is arbitrary and even if it sometimes produces a slightly capricious result, why is not the Minister? Labour's deep loyalty is usually to those who are least able to deal with markets, who get buffeted and pushed around by them and find them difficult to control. It should be a good Labour instinct to protect people in difficult markets when the person on the other side is in a stronger position—and especially when there is no other shop to go to.

I appeal to the hon. Member for Cleethorpes. If the Bill has no price mechanism, there will not be many new freeholders in Cleethorpes; but there will be some very rich lawyers in Solihull.

Mr. Cash: No one can say we have not had an interesting and stimulating exchange of views. A number of matters have been raised. We have already touched on marriage value, and I said that we shall return to that matter on Report. We have heard about the substantial problems faced by the hon. Member for Cleethorpes, and the strongly worded and deeply felt arguments put by my hon. Friend the Member for Solihull. Abolishing leasehold altogether may be a consequence of the move towards commonhold, but I am not entirely sure that a Bill that abolished leasehold would go down well on either side of the political divide, nor that it would be in the national interest. It is one thing to say that one does not like the way something works, but another to say that the remedy is execution.

Shona McIsaac: I would not say execute. It is more like humanely put down.

Mr. Cash: The Cash bolt was invented by one of my forebears, so I hope that the hon. Lady understands that we have made our contribution to humane disposal in the past.

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We have to keep a sense of perspective. The subject of forfeiture was raised and I have a letter about it. No doubt we shall come back to it in due course. It is extremely wise of us to bear in mind the famous expression that appears, I think, in Maine's ''Ancient Law'' stating that justice is to be found in the interstices of procedure. That is a rather pompous way of putting it, but if we want a proper mechanism or formula, to lay down the criteria is a different matter from applying them in the procedures available in the appropriate tribunal, whether that is a court or the LVT. We shall come to some amendments that I have tabled on the mechanics of the LVT and the procedures that apply to it.

Issues were raised on Second Reading about the clear misuse of provisions contained in leases for the purposes of exploiting people. Such misuse must be wrong. It deserves careful consideration. That is not to say that it follows that a system of forfeiture can ultimately lead to a person losing their premises when it would be clear, by any standards, that he could not expect to remain there and continue to break every covenant in the place. There are thresholds and senses of perspective that we must bring into our proceedings.

I have been impressed by the quality of the arguments that I have heard today from both sides of the Committee, but we must weigh up each matter to reflect the proper balance of interests of the freeholder and leaseholder. I repudiate what the Minister said about our simply making arguments that favour the freeholder. That is not the case, and I seem to remember that the Government were reluctant to make any significant move on the question of unanimity. That remains an outstanding issue to which we will return on Report, and I think that we will return to matters under the clause as well.

Mr. Taylor: Even as my hon. Friend anticipates our return to certain matters, will he remember the old adage that it is not so important that the law be fair but that it be certain?

Mr. Cash: Indeed, and I am sure that my hon. Friend is right, although the more certain that the law is in the minds of those who make propositions, the more possible it is that the judge will take a contrary view, so that the law becomes certain only when the judgment is given. Therefore it is essential for us to get the balance right, and not to throw the baby out with the bath water. We must arrive at some sensible balance that will enable the tribunal or court to come to the right decision, with the appropriate procedures.

There would be some certainty when a decision was made, but my hon. Friend will also remember that degrees of certainty can be shifted by superior courts. What is certain on day one when the court of first instance makes its decision suddenly becomes uncertain when it reaches the Court of Appeal. Thereafter, it might be subject to the House of Lords if necessary and, these days, to courts in foreign lands. That is the nearest that I will go to adjudicating on such matters in my present capacity.

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12.15 pm

Important provisions on human rights have come to our attention in our proceedings. The concept is extremely elastic, with much good in it and a great deal of uncertainty. However, I am beginning to stray into subjects dangerous for you, Mr. Illsley, and for me. We will consider the matters carefully. I propose that we do so on Report in the hope that the Minister will bear in mind that it was for the interests of the House, given the debate on Second Reading, that we have considered them in Committee, but that they should go back to the Floor of the House if necessary so that they can be discussed by the House as a whole.

Ms Keeble: May I formally move that the clause stand part of the Bill? It is fairly technical.

The Chairman: The Chairman moves that clauses stand part of the Bill, but he is pleased to get the Committee to do it.

Question put and agreed to.

Clause 134 ordered to stand part of the Bill.

Clause 135

Abolition of residence test

Ms Keeble: I beg to move amendment No. 102, in page 65, line 20, at end insert—

    '(1ZB) Where a flat forming part of a house is let to a person who is a qualifying tenant of the flat for the purposes of Chapter 1 or 2 of Part 1 of the Leasehold Reform, Housing and Urban Development Act 1993 (c.28), a tenant of the house does not have any right under this Part of this Act unless, at the relevant time, he has been occupying the house, or any part of it, as his only or main residence (whether or not he has been using it for other purposes)—

    (a) for the last two years; or

    (b) for periods amounting to two years in the last ten years.''.'.

The Chairman: With this it will be convenient to take Government amendments Nos. 103 to 106.

Ms Keeble: The amendment is intended to address concerns raised in another place about the enfranchisement of head leases. For a head lease of a building that can be regarded as a house and parts of which have been sublet on long leases, changes to the Bill would enable a non-resident head lessee, with possibly only a nominal interest in the building, to enfranchise the whole building under the Leasehold Reform Act 1967. Such a head lessee would stand to make a windfall profit at the expense of the landlord if under-lessees subsequently collectively enfranchised or acquired new leases under the Leasehold Reform, Housing and Urban Development Act 1993. It was agreed in another place that we would table an appropriate amendment in this House.

The amendment closes a loophole that made it possible for people to realise windfall profits. It provides that, where part of a house is sublet to a person who is a qualifying tenant for the purposes of the 1993 Act, the house cannot be enfranchised under the 1967 Act unless the head lessee has occupied the house, or any part of it, for the previous two years or periods totalling two years in the past 10. That will

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prevent any opportunity for non-resident head lessees to enfranchise and make windfall gains from subsequent enfranchisement or lease renewal under the 1993 Act. It will retain the existing right for head lessees to enfranchise in such circumstances.

Amendments Nos. 103 to 106 make consequential changes. I ask the Committee to endorse them.

Mr. Cash: I heard what the Minister said. At this juncture, I am not disposed to dispute the argument. We will consider the matter, but so far as I am concerned we will allow the amendments to pass for the time being.

Amendment agreed to.

Question proposed, That the clause, as amended, stand part of the Bill.

Shona McIsaac: I welcome the abolition of the residence test in clause 135. As I said in an earlier discussion, I have had not necessarily evidence of abuse, but instances of my constituents being disadvantaged. One of the most severe cases was that of an 84-year-old resident. Her health was failing and she was keen to enfranchise, because she knew that she might shortly die and she understood that it was important to secure the freehold for her family. However, after that elderly lady had had a number of strokes and had gone into long-term care, her family were told by the freeholder that she no longer met the residence test and could not enfranchise. Sadly, the lady died before enfranchisement could occur, so as the rules stand her family had no right to continue with the purchase of the freehold. Will the Minister confirm that the abolition of the residence test will prevent such abuse?

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Prepared 22 January 2002