The
Parliamentary Under-Secretary of State for Communities and Local
Government (Barbara Follett): I should like to echo the
words of my hon. Friend the Member for Bolton, South-East and the hon.
Member for Peterborough in saying that it is a pleasure to serve under
your chairmanship today, Dr. McCrea. It is the first time that I have
done so. It is also a pleasure to serve on a Committee that is doing
what I believe Parliament does best—discussing points of
legislation without making party political points that obscure the
intention of the legislation.
I
congratulate my hon. Friend the Member for Bolton, South-East. I do not
know whether I can congratulate someone on their luck in coming first
in the private Member’s Bill ballot—I entered that
faithfully, but never came anywhere higher than about 300th.
[Interruption.] I realise that many other hon.
Members are in the same position.
I also
congratulate my hon. Friend on getting the Bill debated in Committee.
It will be a great legacy for him. Although I was unable to attend the
debate on Second Reading, the Under-Secretary of State for Communities
and Local Government, my hon. Friend the Member for Dewsbury
(Mr. Malik), told me about the unprecedented cross-party
support for the Bill and the remedy that it offers to unauthorised
tenants.
The
Government welcome the Bill unreservedly, and I understand that it is
broadly welcomed by all members of the Committee. That is important
because I am sure that, as the hon. Member for Peterborough mentioned,
the problem of short-notice eviction, particularly in today’s
difficult economic times, exists in most of the constituencies
represented in the room today. I have certainly had to deal with the
problem in my constituency
surgeries. It
is recognised that the problem of short-notice eviction often arises
from a landlord’s failure to gain consent to let from their
lender, whether intentionally or not. The effect on tenants is not
acceptable. The Government’s support for the Bill is based on
the consultation document that we issued over the summer,
entitled “Lender repossession of residential property: Protection
of tenants”, in which we outlined our preferred course of action
in addressing the problem through legislation. The Bill that
we are scrutinising today is that piece of legislation. It fully
supports the Government’s preferred course of action. I realise
that it has come before we have published our response to the
consultation, and I apologise for that. The response will be coming out
shortly, and will take into account the deliberations on the
Bill. The
Government worked with stakeholders last year, and more recently, in
developing the policy response to the problem. I know that my hon.
Friend the Member for Bolton, South-East has continued that engagement
with a range of stakeholders—he mentioned them in his
speech—since he introduced the Bill to the House. I would like
to thank all the stakeholders involved for their work in improving the
position of tenants within the current legislative framework.
I turn to the
points raised by the hon. Member for Peterborough. On the mortgage
conduct business, I was wondering whether the hon. Gentleman had
received the letter from my hon. Friend the Member for Bolton,
South-East following Second Reading.
[Interruption.] Excuse me, I am getting
information as I speak.
Mr.
Jackson:
Inspiration.
Barbara
Follett:
Inspiration—exactly. Peter
Bottomley (Worthing, West) (Con): And
perspiration.
Barbara
Follett: And perspiration. The matter depends on the facts
of the case, but the Financial Services Authority has confirmed that
lenders’ giving reasonable notice to tenants does not conflict
with the MCOB. On the point made by the hon. Member for Peterborough
regarding “a”, not “one”, I suggest that my
hon. Friend the Member for Bolton, South-East should reply to that,
because I know that he has dealt with it on previous
occasions.
Regarding the
Building Societies Association’s concern, judges have discretion
in such cases. They do not have to take only delay into account; they
can also take into account lender and borrower circumstances. The
lender would expect a court hearing to state the lender’s case.
A judge can refuse to grant possession if necessary. I hope that those
rather garbled pieces of inspiration were sufficiently clear for the
hon. Member for Peterborough. If they were not, I will attempt to
address them in more detail in
writing. Meanwhile,
I congratulate my hon. Friend the Member for Bolton, South-East once
more on the calm and competent way in which he has taken through this
important legislation. I commend the Bill to the
Committee.
Peter
Bottomley: Forgive me if I speak briefly, and also for
being here for only a short time; I am supposed to be giving blood at
10 o’clock.
I
congratulate the hon. Member for Bolton, South-East on promoting the
Bill competently in the Second Reading debate and on presenting clause
1 informatively. The
comfort is that the Bill will do good; it will not do harm. It allows a
judge the power to do something, but it does not require them to use
it. The judge can take circumstances into account. For example, if the
person who has granted the mortgage has allowed reasonable notice to a
tenant of whom they become aware, that can be taken into account by the
judge. The Bill does not involve an automatic two-month extension to
the possession
order. The
only question that has been floating around my mind may not
be directly relevant to the Bill, but it is of interest. In
respect of an unauthorised tenancy, what if the person who grants the
mortgage has said to the person who has taken it, “You are not
allowed to let or sub-let without our permission, and we are not going
to give such permission. We require you to regularise the position
without seeking a possession order”? Will the Bill apply in such
circumstances? The issue is not vital to whether the clause is
acceptable; it is just on my
mind.
Dr.
Iddon: I shall try to respond to those points as well as I
can. The word “a” and the use and meaning of it in the
Bill was raised on Second Reading. We took the criticisms seriously and
I consulted the legal people in the Department for Communities and
Local Government. They are aware of the criticisms and I am assured
that in a court of law the judge will interpret the word
“a” as meaning “only one”. We do not think
there is any doubt about that. We appreciate the concerns of the
lenders, as represented by the Council for Mortgage Lenders, for
example. I have met a representative of that organisation and people
from the Department have met the organisation’s representatives
several times and tried to reassure them on that
point. The
Bill is the scaffold, and the regulations and guidance notes will fill
in the rest of the building. The judge will have all the information in
front of him, and anyone else who wants to consult the Bill will also
have that information. The Department for Communities and Local
Government assures me that it will ensure that, in the guidance notes
and regulations that will have to go before a delegated legislation
Committee, the word “a” will mean only once—the
tenant will have only one shot at delaying the procedure, whether at
the possession stage or application for warrant stage. I do not think
that any judge in any court of law in Britain would allow tenants to
abuse the law as people have suggested they might if the word
“a” were not understood. I am confident that we are sound
on that
point. The
Minister has already referred to the MCOB, which requires the person
selling the property to acquire the best possible price. The rules are
from the Financial Services Authority and consultations have taken
place. As the Minister has said, we do not believe that MCOB rules are
infringed in any way by the Bill.
As for who
delivers the envelopes, under the current rules either the lender or
the Courts Service can do that. However, I and others believe that it
is best if the lender delivers the envelopes. Envelopes from courts are
likely to be branded, and we must consider the fact that the tenant
might not want people who live in the same property or in the vicinity
to know of their difficulty. Moreover, a branded envelope from a court
might just raise curiosity, as a result of which someone else might
open it. We consider that envelopes that are not branded in such a way
are preferable, which is why it is best if the lenders send them
out.
9.45
am
Mr.
Jackson: For the avoidance of doubt, I should say that I
support that view. The indicated cost to the public purse of sending
such correspondence via the Courts Service is prohibitive, and the
existing system, which works, is not a substantial impediment to the
information getting to the
person. While
we are on the subject of guidelines, I wish to make a plea about the
generic issue of data protection, which was mentioned on Second
Reading. Would it be possible for the guidance given by the Information
Commissioner on the sharing of information in respect of repossessions
to be included in the regulations? If not, can the letter from the
Information Commissioner be placed in the House of Commons
Library?
Dr.
Iddon: We shall certainly bear in mind the second issue
raised by the hon. Gentleman; I think that it can be accommodated. I
thank him for his support in respect of his first
point. I
want to respond to the hon. Member for Worthing, West on whether there
is another way of maintaining the tenant in the same property, by
regulating the situation legally. Curiously, just yesterday I received
a letter about a person who became an unauthorised tenant, without
knowing so until the procedure had started. The situation was worked
around in such a way that the landlord became an accepted buy-to-let
landlord.
In such
cases, higher interest is payable on commercial buy-to-let mortgages;
indeed, there will probably be a higher arrangement fee. That happened
to the person who wrote to me. The two people in the property became
authorised tenants instead of unauthorised tenants, so there are ways
to unravel the situation. That is obviously the best outcome for the
lender, who does not have to sell the property, and for the tenant, who
does not have to leave the
property. I
say to the hon. Member for Peterborough that I have been told that the
letter from the Information Commissioner is already in the Library. The
data protection issue raised on Second Reading will be dealt with under
guidance to the Bill, but not under
regulation. Question
put and agreed
to. Clause
1 accordingly ordered to stand part of the
Bill.
Clause
2Notice
of execution of possession
order Question
proposed, That the clause stand part of the
Bill.
Dr.
Iddon: Clause 2 will apply to lenders once they have
obtained a possession order and applied for a warrant of possession. It
will introduce a new light-touch process for lenders that will oblige
them to give notice of the execution of the possession order to the
occupier of the property. That will give the tenant or tenants a second
opportunity in the process to request a delay in possession if they
have failed to act at the first
opportunity. Question
put and agreed
to. Clause
2 accordingly ordered to stand part of the
Bill.
Clause
3Interpretation Question
proposed, That the clause stand part of the
Bill.
Dr.
Iddon: Clause 3 deals with the interpretation and
commencement of the
Bill.
Peter
Bottomley: I think the hon. Gentleman has misspoken.
Clause 3 relates only to interpretation.
Dr.
Iddon: The hon. Gentleman is right; I
apologise. Question
put and agreed
to. Clause
3 accordingly ordered to stand part of the
Bill. Clause
4 ordered to stand part of the
Bill. Bill
to be reported, without
amendment. 9.51
am Committee
rose.
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