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Viscount Caldecote: My Lords, in view of the wide support on all sides of the House, I am extremely disappointed that my noble friend on the Front Bench was not able to be more sympathetic to the amendment. He said that the Government have gone a long way to meet some of the points made in Committee. I submit that the Government have gone a short way and that we have not gone nearly far enough along the road that many of us would like. That is clear from the view that has been expressed today.

I did not think that my noble friend's arguments about the dangers and difficulties of abolishing the low rent test were at all convincing. He argued on the basis of maintaining the flexibility in the market. Is he really saying that there are going to be many long leases, however defined, let at rack rents? I do not think that that is true. As I have said, I am extremely disappointed by the Government's response. Although I do not want to press the amendment at this stage, I reserve the right to think about it again and, having read the reply in Hansard, to return with it at Third Reading. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 9 [Low rent test: extension of rights]:

Lord Lucas moved Amendment No. 152:

Page 160, line 43, after ("purposes") insert ("and has been owned together with such land since the coming into force of section 104 of the Housing Act 1996").

The noble Lord said: My Lords, in moving Amendment No. 152, I should also like to speak to Amendment No. 154. Amendment No. 152 is an anti-avoidance measure for the rural exemption to the low rent test. In Committee, my noble friend Lord Coleraine pointed out that there was nothing to prevent the freeholder of a house in a rural area that would have been enfranchisable from buying an adjoining plot of non-residential land, thus taking advantage of the rural exemption.

The Government reflected on my noble friend's observation and concluded that adjoining land qualifying the house for the rural exemption must have been held together with the house continuously since the coming into force of the Bill. My amendment is to that effect. It ties in with the provision in new section 1AA(3)(c) of the Leasehold Reform Act 1967, which requires that the tenancy itself must have been granted on or before commencement. I believe that this is a useful anti-avoidance measure. I beg to move.

On Question, amendment agreed to.

[Amendment No. 153 had been withdrawn from the Marshalled List.]

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8.45 p.m.

Lord Lucas moved Amendment No. 154:

Page 160, leave out line 45 and insert ("that section came into force").

On Question, amendment agreed to.

The Deputy Speaker (Lord Burnham): My Lords, we now come to Amendment No. 155 and I must advise the House that if this amendment is agreed to, I cannot call Amendment No. 155A.

Viscount Caldecote moved Amendment No. 155:

Page 160, line 45, at end insert ("and
(d) the freeholder satisfies the Leasehold Valuation Tribunal that the house--
(i) is leased at an annual rent less than one-half of the current annual letting value of comparable properties in the designated rural area concerned,
(ii) is occupied by a member of the family of the freeholder or former freeholder of the estate within which it is situated or has been leased on terms related to such future occupancy, or
(iii) is occupied by an employee or former employee of that freeholder.
An application to the Leasehold Valuation Tribunal in accordance with paragraph (d) above shall be made by the freeholder within two months of his receipt of the relevant notice of the leaseholder's claim to enfranchise under the terms of this Act.").

The noble Viscount said: My Lords, I have already spoken to this amendment. As drafted, it relates to Amendment No. 151, although it is much more restrictive and deals solely with rural restrictions.

My noble friend referred to the importance of not breaking up rural estates. This amendment would precisely prevent that by ensuring that all properties required in connection with the estate, and for the proper management and stewardship of the estate, are excluded from the enfranchisement provisions. I cannot see how my noble friend can say that that contributes to the break-up of estates. It simply enables properties to be enfranchised which now have nothing to do with the estate but which might well have had something to do with it 50 or 100 years ago when hundreds of people worked on the farms instead of two or three. Can my noble friend comment on that point? I beg to move.

Lord Hamilton of Dalzell: My Lords, my noble friend on the Front Bench says that he is friendless in this debate. I assure him that he is not. As there seems to be a sort of batting order about the number of noble Lords who speak, I think that perhaps I should voice my opinion on this, although I did so in Committee and I have not changed my opinion since then. The trouble with my noble friend Lord Caldecote is that he will not be satisfied until every single house in the country which was previously leasehold is taken over by the leaseholders. When I listen to these debates--

Viscount Caldecote: My Lords, that is quite unfair. I made a particular distinction in the amendment between those houses that are required for the operation of the estate--it is absolutely right that they should not be

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enfranchisable--and those that are not. I have no wish at all to make all houses enfranchisable, as my noble friend says, now or at any time in the future.

Lord Hamilton of Dalzell: My Lords, I hear what my noble friend says, but how is he to judge what is part of an estate and what is not? Personally, I have spent a vast sum of money on making sure that houses on my estate are free to be let to people on my estate because I do not depend on the fact that agriculture will always remain a profitable occupation. I have put myself in such a position that there are no longer any leaseholders at all on my estate.

During this debate and debates on other aspects of this Bill, I hear noble Lords from the other side of the House complaining that there is no security of tenure. Of course there is no security of tenure. Security of tenure has been destroyed. My noble friend Lord Caldecote would want to make a proper job of it and destroy it altogether.

Perhaps I may cite a particular instance. I had a chap on a 12-year lease who had done various improvements to his house to suit his own convenience. He asked me for another 12-year lease. I was just on the point of granting it to him so that he could do further things to amuse himself and make himself more comfortable when leasehold enfranchisement loomed on the horizon. He has now become a statutory rent holder on a rack rent and can do nothing in his house. That is much to his inconvenience. It is beyond belief that people like my noble friend should insist endlessly on forcing through this issue when clearly the intelligent course is to leave it as it is.

Lord Lucas: My Lords, I appear to be striking a reasonable balance between my noble friends on this matter. I understand what has been said by my noble friend Lord Hamilton of Dalzell, which illustrates some of the problems to which this amendment gives rise. I believe that we should be looking at the relationship between the house and the estate of which it is part, not the relationship between the leaseholder and freeholder. The principle should be based not on who occupies the house but on whether it has been let on a long lease at a rent which exceeds the threshold for the low rent test. We believe that that is the right way to treat it, rather than looking at family or employment relationships which do not describe the relationship between the two bits of property. The basis of my opposition to the amendment of my noble friend is practicality and trying to ensure that things work in the right way, rather than a matter of settled principle. The matter has been given considerable consideration since Committee stage, and we believe that we are striking the right balance.

Viscount Caldecote: My Lords, I do not wish to make life difficult for my noble friend, but I find his logic extremely difficult to follow. However, on the basis of what I said earlier, I beg leave to withdraw the amendment.

Amendment, by leave withdrawn.

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Viscount Caldecote moved Amendment No. 155A:

Page 160, line 45, at end insert ("and
( ) the tenancy was granted for a term of years certain not exceeding seventy-five years.").

The noble Viscount said: My Lords, Amendment No. 155A is a fallback if the House does not accept either of the other amendments in my name. It would remove some glaring anomalies in certain villages, of which I gave one example. I do not want to use that particular village as an argument in itself; it is merely an example. I believe that a period of 75 years provides a very much better balance than that which exists now in settling these difficult matters. I beg to move.

Lord Lucas: My Lords, this is not a matter that we can accept. Although I understand the argument that is advanced by my noble friend, the Government prefer to stick to the basic principle of trying to preserve the arrangements which have been made in the countryside in the past for the purposes of keeping together an estate. We should not try to alter the law of the land to rescue a few villagers in one village who find themselves unable to benefit from the Bill as it currently stands. We do not disadvantage anyone in this Bill, but that a few people may not benefit as a result should not weigh with us too heavily in making sure that we have the principle right. I believe that that is what we have done.

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