Previous Section Back to Table of Contents Lords Hansard Home Page

Baroness Hamwee moved Amendment No. 52:

Page 6, line 24, after ("paragraphs") insert ("3, 3A and").

The noble Baroness said: With Amendment No. 52, I wish to speak to Amendments Nos. 53, 54 and 55 all standing in my name. Amendment No. 52 seeks to refer to two additional paragraphs of Schedule 1 to the Housing Act 1988. Many housing associations are charities and will look to let homes to persons at rents which their prospective tenants can afford. For example, it could be a rent of less than £1,000 a year in Greater London or £250 elsewhere. The housing associations can do that if there is a secure tenancy but they cannot do it without Housing Corporation consent where the tenancy is not a secure tenancy because of the exclusions contained in the paragraphs.

The accommodation may be, for example, not self-contained; housing associations may let a room with the shared use of a kitchen. That will not be a secured tenancy and may not be an assured tenancy. I query the need for Housing Corporation consent. In the amendment, I seek to extend the scope of the work that can be done by a registered social landlord without consent.

Amendment No. 54 also seeks to allow a letting without consent to another registered social landlord. Earlier today we referred to the management of housing association properties by another body. A management agreement may include a letting. A housing association may think it quite right to let a building to another registered social landlord which may specialise in a particular field. One area of work could be hostels for special needs clients. In the amendment I suggest that Housing Corporation consent ought not to be required when both parties are registered social landlords.

On Amendment No. 55, it has been suggested to me that as registered social landlords have a statutory obligation on the face of the Bill under Clause 16 to

6 Jun 1996 : Column 1444

dispose of dwellings to tenants under the right-to-buy, they ought to be able to do so here on the face of the Bill. It is a drafting amendment which has been put to me as being useful, although it is perhaps less of a substantive point than the first three amendments. I beg to move.

9 p.m.

Lord Lucas: Clause 10 specifies certain categories of lettings and other disposals by registered social landlords which do not require the consent of the corporation under Clause 9. These include an assured tenancy or an assured agricultural occupancy, or which would be regarded as such other than they are used for the purposes listed in paragraphs 4 to 8 of Schedule 1 to the Housing Act 1988--that is, including business purposes, licensed premises, agricultural land and holdings, holiday lettings and lettings to students.

Amendment No. 52, tabled by the noble Baroness, Lady Hamwee, would extend the list of disposals not requiring corporation consent to include tenancies under which for the time being no rent, or a defined low rent, is payable. This amendment would, if accepted, enable a registered social landlord to set a rent for a particular tenancy at an artificially low rent or not charge rent at all, for a short undefined period, as a means of avoiding the need for corporation consent and circumventing the sensible safeguards contained in Clause 9 of the Bill.

Amendments Nos. 53 and 54 would extend the categories of letting not requiring corporation consent to include the letting of land, and dwellings on them, by one registered social landlord to another.

This amendment would again reduce the effectiveness of the corporation's regulatory powers as the arrangement proposed would provide an opportunity for a non-charitable registered social landlord to let land to a charitable subsidiary as a means of avoiding creditors if it is in difficulties.

I now turn to Amendment No. 55, which seeks to state that the provision in Clause 10(2) is to be extended to include disposal under Part V of the Housing Act 1985 (the right to buy) and Clause 16 of the Bill (the right to acquire).

These categories of disposal are already exempt from the need to seek corporate consent by way of subsection (3) of Clause 8 of this Bill. The amendment is therefore unnecessary.

I am sorry that I gave the noble Baroness comfort only in relation to what she indicated was the least important of her amendments. I hope, nevertheless, that she will feel able to withdraw them.

Baroness Hamwee: I shall withdraw the amendment and not seek to move the others in this group. However, I am interested in the Minister's reply, which is all to do with anti-avoidance rather than the more positive way in which I put the points. I am surprised if the anti-avoidance provisions are confined to these clauses. I shall take that away and have another look at it. I take the point that the Minister makes about seeking to avoid creditors. My immediate reaction was that it was an interesting but perhaps slightly strained response. For the moment, I beg leave to withdraw the amendment.

6 Jun 1996 : Column 1445

Amendment, by leave, withdrawn.

[Amendments Nos. 53 to 55 not moved.]

Clause 10 agreed to.

On Question, Whether Clause 11 shall stand part of the Bill?

Lord Monkswell: First, I apologise to the usual channels for not being available this morning when the Marshalled List was determined and therefore being unable to have an input where my name appeared on the list of amendments. At this stage, I shall speak only to the Question whether Clause 11 stand part, and then speak separately to the Question whether Clause 12 stand part. I had intended to speak to Amendment No. 70 as part of the "global debate" on this subject; but it would probably be best for the Committee if that amendment is taken separately at its rightful place on the Marshalled List next week, and similarly with the Question whether Clause 20 stand part, which might have been included in a much larger debate than we need to have in relation to Clause 11.

While speaking about the arrangement of the groupings, it may be useful if I advise the Committee that my Amendments Nos. 59 and 81 can be debated separately rather than being grouped together.

In relation to Clause 11 stand part, I seek some government explanation as to why the normal procedures of the market place and our property-owning democracy should be departed from in this particular case. I refer to the inclusion within the clause of what is effectively a covenant requirement that if a house is disposed of within three years, any discount given to the purchaser should be repaid, albeit in declining amounts depending on the time.

Normally when one buys something in this country, one buys it outright. One then has the right to do what one will with it. That is the free expression of the market. The Government have made great play of that aspect. It is curious that when we talk in relation to this clause about the purchase of a home for people to live in, for three years they should not have the unfettered right to dispose of it without penalty.

Let us think of various different situations that might pertain. It may be that those living in the house find alternative employment some way away as a result of which they need to move house. It may happen that, by conscious decision and acts on their part, they have improved the house and thereby increased the value of their property and seek to dispose of it in order to realise the extra value to enable them to move on in the market. Why should there be this restriction on the new owners of the house to dispose of it as they see fit in an unfettered way without penalty? I suspect that I may have some inkling of what the Minister may say, but it would be interesting to hear the Government's response to the questions I have raised on this subject.

Baroness Gardner of Parkes: Having listened to the noble Lord, I feel that he shows no understanding at all of the fact that people are being given a large discount. There is no question of people not being free to sell at

6 Jun 1996 : Column 1446

full price if they repay that discount. The whole argument that he put forward is completely fallacious. I cannot agree with it.

Lord Monkswell: Perhaps I may respond to those remarks. If the discount is so significant, why is it expunged after three years? Why should it not last for 10 or 20 years? Why should it last for only one year? The Government need to answer why there should be that penalty and why that particular timespan is enshrined in the Bill.

Baroness Gardner of Parkes: That is not the point that the noble Lord raised in his speech on this matter. He has now introduced an entirely different point. Arbitrary dates are chosen for many things: for inheritance tax and lifetime gifts, for example. In this country there are many occasions on which we are used to a specific time over which things are phased out. It is not at all an unusual practice.

Baroness Hamwee: I have no sympathy with the first remarks of the noble Lord, Lord Monkswell, but he has raised a point on which it is worth spending a moment or two; namely, the period of time within which--I shall not call it a penalty; it is not a penalty but simply repayment of a discount--that repayment is to have effect. Clearly, there has to be a balance in these matters. However, the repayment is not payment of a penalty; it is repaying a benefit. That is the whole thrust of this legislation. But I too would be interested to know the Government's thoughts on the choice of the three-year period.

Lord Lucas: There are two points to make. One is obvious; namely, that this is a provision which has been in force since 1985. It has been running for some time. Secondly, I do not know the Government's original reason for proposing the three-year period, but I can suggest a very good reason for a period to be retained.

If there were a short period, or none at all, there would be a great trade in these goods. There would be middlemen coming along who would say, "Buy your house. I'll buy it off you two weeks later and we'll split the profit." The length of time needed to avoid that is the length of time over which the interest on the amount that the tenant has to pay would extinguish the discount that he was getting. In my rough calculation that would be about three years. I should view it as an anti-avoidance provision, so that the people who can take advantage are the real tenants and not people motivated by middlemen looking to share a quick profit.

Next Section Back to Table of Contents Lords Hansard Home Page