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Lord Richard: The noble Baroness, Lady Gardner of Parkes, said that this looked like a damp squib. The longer the Committee stage goes on, the damper the squib appears to become; indeed, it is rapidly becoming sodden. I am disappointed by the attitude and approach of the Government in this matter. I am grateful to the noble Lord, Lord Jacobs, for referring to the consultation paper, which is not the kind of thing that a loyal supporter of the Government would wish to do in public. However, since he has done so I am glad of it. With great respect to the Government, we have oversold this to the general public if the concept is as seems to be emerging this afternoon. That concept appears to be based on no compulsion in terms of whether one moves to commonhold; and it must be 100 per cent and no less, on which I have already expressed my views.
We are now told that the amendments tabled by the noble Baroness, Lady Gardner of Parkes, and the noble Lord, Lord Goodhart, are not acceptable to the Government because there is an element of compulsion or quasi direction which the Government do not like. I say with all goodwill to the Minister that if he takes that attitude, he has to do something else. He has to say how commonhold will be encouraged if there is no legal framework within which people are being pushed into commonhold. The Minister indicated that the Government might have in mind other incentives. With great respect, he should spell them out. If he does not spell them out, the general public will be left suspended between a flying freehold and the possibility of a commonhold. What are they to make of it?
We have been selling commonhold. We have all said what a splendid idea it is and people are still saying what a splendid idea it is. But from something which was designed to replace leasehold, it has now become an additional option. The Government will have to face up to that and spell the position out.
Baroness Hanham: I am much indebted to the noble Lord for having mentioned the consultation paper. The Minister was not too clear when responding on the question of the existing premises, which were clearly marked out in the consultation paper. The impression that has been given is that existing leaseholders will not want to or be able to change to commonhold, but that is not what the consultation paper was about, and it is not what everyone thought commonhold was about. There has always been an aspiration that people with leasehold can change to commonhold. I am sure the Minister meant to reply to that point. I am just giving him another opportunity to do so.
Lord Bach: Having been attacked on all sides, I am beginning to think that I may be in just about the correct position now. As far as concerns marketing for commonhold, my department has a budget for raising awareness by training and education and carefully placed advertising among developers, managers and other professionals, and especially among leaseholders, for over the 12 months after Royal Assent. We have already given some thought to that, and we would like to give more thought to it.
Lord Williams of Elvel: I am grateful to the Minister for giving way. He has already said that existing leaseholders would normally not qualify for commonhold-- they would not want to go in for it. What is the point of a marketing programme for existing leaseholders when they have no rights therein whatever?
Lord Bach: If the noble Lord will forgive me, it was he, not I, who said that it had absolutely no relevance to existing leaseholders. In fact, I said the opposite. I said that we hoped that existing leaseholders might, in some cases, take advantage of commonhold. I did not pretend for a moment that it would happen in a large number of cases. I do not think that it will and the Government do not think that it will. But we do hope that it happens in some cases. I mentioned leases where there were just a couple of leaseholders. I am certainly not saying that there will be never be a case where there will be some conversion from existing leasehold to commonhold; I think that there will. That is why we will be trying to persuade leaseholders or talking to leaseholders about changing to commonhold. But we are realistic about it. We know that it cannot be done overnight.
Commonhold has to prove itself. We have enough confidence in commonhold to believe that it will prove itself. That is the best way I can respond to my noble friend Lord Richard. We have not changed our stance in any particular way. We want eventually to see the end of leasehold. We do not believe that the proper way to do it is just to abolish it. That would not have the desired effect. By establishing an alternative leasehold such as commonhold, we believe we will get a much better system of tenure in due course.
Lord Jacobs: The Minister said that the Government had not changed their policy in any way. I did not intend to raise this matter but, having heard that statement, I feel I must. I discussed this paper with the Minister in another place and asked him how he squared the direction that the policy was clearly taking with this ministerial foreword. He thought for some moments and said, "I did not write the foreword". That was the only response he could give.
Baroness Hanham: I wonder whether the Minister will accept from me--I was so impressed by it that I wrote it down--that he did say in his earlier remarks that he did not see commonhold being developed from leasehold.
Baroness Maddock: Perhaps I may press the Minister a little further on the issues of advertising and getting people on board, a point that I raised at Second Reading, particularly with reference to builders and new developers. Given the disquiet in the Committee today, can the Minister enlarge on what discussions have taken place with builders and developers? We have been told by various sources--the Minister will be aware that we are inundated with letters and information from people--that builders and developers are not taking much interest in this. I should be grateful if the Minister could expand a little.
Lord Bach: I am not in a position to give the noble Baroness many details but, from what we have heard--and also from what we have read in the same journals that she has no doubt been able to read--there is considerable interest among developers in commonhold development. That is our understanding. I shall go back to the department, find out what inquiries have been made and write to the noble Baroness.
Baroness Gardner of Parkes: I thank those who have supported me in my unreasonable amendment. When the Minister talks about raising awareness, that is going in quite the wrong direction. The public are already very aware of this issue. The Government promised them that they would be given this solution, which would make life better and fairer for them and give them the right to have their own property. Instead, it is getting nowhere.
The Minister implied the need to raise awareness among developers as well as the public. There is only one way to interest the developers; that is, to follow my noble friend's suggestion of providing incentives for them. The only time I saw anyone perk up with interest at the British Property Federation lunch was when I said that properties attracted much higher prices if they were sold commonhold. Suddenly, someone looked quite alert and said, "Oh really! Is that so?"
You need to take this kind of line when you are talking to developers. You have to prove to them that it will be financially wise to do this. In that way, you might provide incentives for them. Perhaps the Chancellor's forthcoming Budget will contain some incentives.
The noble Lord said: This amendment would require the commonhold community statement to impose a duty to ensure that the unit was regularly upgraded. One of the long-standing problems with leasehold management occurs where leases make no provision for the improvements of buildings. This prevents the cost of improvements being recovered through the service charge. It can lead to services in the building not being modernised because they will count as an improvement rather than a repair or maintenance. The problem has been acknowledged in the Bill. Schedule 9 includes amendments to the existing legislation to add improvements to the standard definition of a service charge.
We believe that similar provisions in commonhold legislation should be inserted to ensure that these problems are prevented from the start. We propose that the statement should require regular upgrading rather than improvement. This is because we recognise that there can be disputes over what constitutes improvement. In any block there will be spenders and savers as well as those who can afford to pay and those who cannot afford to pay. It is important to ensure that the rights of the minority are protected, and that the spenders and better off members of the commonhold community do not railroad the savers and less well off into an obligation to pay for top-of-the-range improvements.
We have therefore used regular upgrading to signify the intention for progressive modernisation of the building over time, although we do recognise that there is as much scope for argument as to what constitutes "regular" and "upgrading" as there might be in "improvement". Amendment No. 39 makes similar provision for the regular upgrading of the common part. I beg to move.
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