Lords amendment No. 47: Insert the following new clause:
.—(1) The Secretary of State may by regulations make provision for the purpose of conferring rights and obligations on any mortgagee of a defective dwelling where—
(2) The rights that may be conferred on a mortgagee by regulations under this section are—
(3) Regulations under this section may provide that, where the conditions in subsection (1)(a) and (b) above are or have been satisfied, this Act, the power of sale in question and any enactment relating to the power of sale shall have effect subject to such modifications as may be specified in the regulations.
(4) Where a defective dwelling is vested in a mortgagee in pursuance of regulations under this section or in pursuance of sections 112 and 113 of the 1980 Act or section 19 of and Schedule 5 to the Housing and Building Control Act 1984 (vesting of mortgaged dwelling-house in local authority etc.), the regulations may provide for the payment in respect of the vesting of an amount calculated on the assumption that none of the defective dwellings to which the designation in question relates are affected by the qualifying defect, and those enactments shall have effect subject to any such provisions.
(5) Regulations under this section—
(6) In this section "mortgagee" and "mortgagor" have the same meaning as in the Law of Proper Act 1925.
(7) This section does not apply to Scotland."—[Mr. David Hunt.]
§ Question proposed, That this House doth agree with the Lords in the said amendment.
§ Mr. Alex Carlile
In relation to amendment No. 47, some serious and substantive points require the consideration of the House. I and my right hon. and hon. Friends, who are here in far greater proportion than any other party in the House—[Interruption.] The official Opposition have been noticeable for the presence of their rebels but not for anything else.
I ask the Minister to explain certain matters which arise from Lords amendments Nos. 47 and 48. Lords amendment No. 47 involves the insertion of a new clause which provides that the Secretary of State may make regulations to conferrights and obligations on any mortgagee of a defective dwelling".It is important to understand what a mortgage is or may be. The mortgagee may be a private individual, or a bank, insurance company or building society. I am sure that the House will agree that the banks, the insurance companies and the building societies do not need a great deal of help from this House to survive the arrival in their hands by foreclosure, or similar procedure, of a defective dwellinghouse.
The first subsection of the new clause provides that the Secretary of State can make regulations conferring on a mortgagee what appear to be the same rights as are conferred upon the private purchaser of a dwellinghouse which is affected by the Bill. That is plain from subsection 1(b), which requires as a qualifying criterion that the mortgagor should be eligiblefor assistance in respect of the defective dwelling.1355 It is important to examine the rights that are conferred by the new clause. The rights which are conferred on the mortgagee, as we can see from subsection 2(a), correspond to the rights which are conferred by the Bill to a person holding a relevant interest in the defective dwelling. It seems that the effect of the new clause will be to give the rights to a building society or insurance company, or any other mortgagee which forecloses, to obtain compensation because the dwelling-house is defective.
A serious issue is raised by that provision. Is it right that mortgagees — financial institutions well able to look after themselves and which are in the business of risk—should be able to take advantage, at the public's expense, of a provision which is designed to protect someone quite different? The Bill, which we commend in almost all respects, is designed to protect the person who is buying in at the cheaper end of the housing market, who is buying an Airey home or other type of building which has proved to be defective, and who finds himself unfairly faced with repairs which he cannot afford to effect. We know that the pressure for the introduction of the Bill has come for just that reason. That pressure arose because many individuals found that their homes were falling down about them and they did not have a hope of financing the repairs out of their own capital or of raising any further capital, beyond the mortgage which they raised on purchase, by going to one of the established financial institutions.
That is one thing: but why should the financial institutions be able to trot along to the Government for support? The compensatory money is not all subsidised. Some of it will have to come from rate-capped authorities, from local authorities which are hard pressed by the Government. We know that our local authorities are sorely pushed. In my constituency, for example no money is being made available for most of the grants which in theory can be taken out. That has happened because the money allocated for the grants has run out. That is a disgrace and the Government have failed to provide an adequate explanation for it. Yet by this new clause the Government propose to line the pockets of the financial institutions, and I wonder why.
Could it be connected with the fact that some of these mortgagees happen to throw the odd few tens of thousands of pounds into the coffers of the Tory party when an election comes along? We should like an answer to that. Who will benefit from this new clause? I look forward to the explanation that I hope that we shall receive from the Minister.
§ Mr. James Wallace (Orkney and Shetland)
I understand that with amendment No 47 we are discussing amendment No 48, which is similar to amendment No 47, but applies to Scotland. I understand that the hon. Member for Edinburgh, South (Mr. Ancram), the Under-Secretary of State for Scotland, has been in the House for part of the evening, but it is regrettable that there is now no Scottish Minister on the Front Bench, when this amendment is being discussed. As my hon. and learned Friend the Member for Montgomery (Mr. Carlile) said, we are wary that this Act should not become a pretext for handing out large sums of public money to such institutions as banks and building societies.
Amendment 48 (4) says:(4) Regulations under this section—1356 The Government must explain what different provision was envisaged when this amendment was drafted, and what different cases they had in mind. Building societies and banks have great expertise at their disposal and will not be buying the properties from the local authorities on simple trust, as many who this Bill is designed to protect will have done. Therefore, they represent a different kind of case from those at which the Bill is directed. These matters are important, and the Government must provide an answer.
- (a) may make different provision for different cases, and
- (b) may make incidental and consequential provision.
§ Mr. Gow
I hope that I shall be able to answer the points raised by the hon. Member for Orkney and Shetland (Mr. Wallace) and the hon. and learned Member for Montgomery (Mr. Carlile), one of whom comes from Scotland and the other of whom comes from Wales.
The purpose of the amendment is to enable my right hon. Friend to make suitable provision to enable all mortgagees entitled to exercise the right of sale to apply for assistance in place of the owner or to step into the shoes of the owner who has made an application but does not press it to a conclusion. Neither the hon. Member for Orkney and Shetland nor the hon. and learned Member for Montgomery was a member of the Committee—I do not make a complaint about that but merely comment on it — and therefore neither of them was present for our debates on this subject. The hon. Member for Glasgow, Maryhill (Mr. Craigen) was a member of the Committee and he took a particular interest in the subject, and will be able to testify to our long debates on it.
The purpose of the amendment is to put into the same position as private mortgages those who are also building societies. I commend it to the House as a fair measure.
§ Question put, That this House doth agree with the Lords in the said amendment:—
§ The House divided: Ayes 111, Noes 16.1357
|Division No. 444]||[12.53 am|
|Alexander, Richard||Dorrell, Stephen|
|Amess, David||Douglas-Hamilton, Lord J.|
|Ancram, Michael||Durant, Tony|
|Amold, Tom||Evennett, David|
|Ashby, David||Fallon, Michael|
|Aspinwall, Jack||Fox, Marcus|
|Atkins, Rt Hon Sir H.||Gale, Roger|
|Atkinson, David (B'm'th E)||Goodlad, Alastair|
|Baker, Nicholas (N Dorset)||Gorst, John|
|Baldry, Tony||Gow, Ian|
|Berry, Sir Anthony||Hamilton, Hon A. (Epsom)|
|Biffen, Rt Hon John||Harvey, Robert|
|Boscawen, Hon Robert||Hayes, J.|
|Bottomley, Peter||Heddle, John|
|Bowden, Gerald (Dulwich)||Henderson, Barry|
|Braine, Sir Bernard||Howard, Michael|
|Bright, Graham||Hunt, David (Wirral)|
|Brinton, Tim||Hurd, Rt Hon Douglas|
|Brown, M. (Brigg & Cl'thpes)||Lilley, Peter|
|Browne, John||Lloyd, Peter, (Fareham)|
|Bruinvels, Peter||Lord, Michael|
|Burt, Alistair||Lyell, Nicholas|
|Butterfill, John||McCurley, Mrs Anna|
|Campbell-Savours, Dale||Maclean, David John|
|Carlisle, John (N Luton)||Major, John|
|Cash, William||Maples, John|
|Chope, Christopher||Marland, Paul|
|Clark, Hon A. (Plym'th S'n)||Mather, Carol|
|Cocks, Rt Hon M. (Bristol S.)||Maude, Hon Francis|
|Conway, Derek||Merchant, Piers|
|Coombs, Simon||Meyer, Sir Anthony|
|Cope, John||Miller, Hal (B'grove)|
|Currie, Mrs Edwina||Montgomery, Fergus|
|Morris, M. (N'hampton, S)||Stevens, Lewis (Nuneaton)|
|Morrison, Hon C. (Devizes)||Stevens, Martin (Fulham)|
|Morrison, Hon P. (Chester)||Stewart, Allan (Eastwood)|
|Neubert, Michael||Temple-Morris, Peter|
|Nicholls, Patrick||Thompson, Donald (Calder V)|
|Norris, Steven||Thorne, Neil (IIford S)|
|Osborn, Sir John||Thurnham, Peter|
|Page, Sir John (Harrow W)||Tracey, Richard|
|Page, Richard (Herts SW)||Twinn, Dr Ian|
|Percival, Rt Hon Sir Ian||Waddington, David|
|Powley, John||Wakeham, Rt Hon John|
|Raffan, Keith||Walden, George|
|Rhodes James, Robert||Waller, Gary|
|Rhys Williams, Sir Brandon||Wardle,-C. (Bexhill)|
|Roberts, Wyn (Conwy)||Watts, John|
|Robinson, Mark (N'port W)||Wells, Bowen (Hertford)|
|Roe, Mrs Marion||Whitfield, John|
|Rowe, Andrew||Wolfson, Mark|
|Sainsbury, Hon Timothy||Wood, Timothy|
|Shaw, Sir Michael (Scarb')||Yeo, Tim|
|Smith, Tim (Beaconsfield)|
|Soames, Hon Nicholas||Tellers for the Ayes:|
|Spencer, Derek||Mr. Ian Lang and Mr. Douglas Hogg.|
|Alton, David||Hancock, Mr. Michael|
|Ashdown, Paddy||Howells, Geraint|
|Beith, A. J.||Hughes, Simon (Southwark)|
|Bruce, Malcolm||Johnston, Russell|
|Marek, Dr John||Steel, Rt Hon David|
|Owen, Rt Hon Dr David||Wallace, James|
|Penhaligon, David||Tellers for the Noes:|
|Skinner, Dennis||Mr. Archy Kirkwood and Mr. Alex Carlile.|
|Smith, Cyril (Rochdale)|
§ Question accordingly agreed to.—[Special Entry.]