Castle Fraser, Grampian

– in the House of Commons at 11:46 pm on 9 March 1993.

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Motion made, and Question proposed, That this House do now adjourn.—[Mr. Arbuthnot.]

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Trade and Industry) 11:47, 9 March 1993

This debate, which I am pleased to have the opportunity to bring to the House, was triggered by the decision of the Castle Fraser estate in my constituency in January to serve eviction notices on 16 tenants to secure vacant possession for the break-up and sale of the estate.

Before the letters went out to the tenants, they were called together and told that they would be receiving this notice because it had proved impossible to sell the estate as a going concern as they had been told should have been possible.

At the time, they were not told of their rights that, for example, a sheriff court order would be required before they were evicted; nor were they given any idea that there could be flexibility in the notice that they had been given. In some cases, all they were told was they had to be out of their homes and would lose their jobs at four weeks' notice.

As can be imagined, that caused a furore in the area. In Gordon district in the past two years, the number of tenants who have gone on to the housing list because tied accommodation was no longer available was 21 and 39 respectively, so 16 coming in one go from one estate was a high proportion of the total that might be expected in any one year.

I contacted the factor of the estate to try to persuade him to be more flexible, and he told me that he recognised that he would have to go through the sheriff court and that he had not instigated that procedure. Nevertheless, he had not told the tenants that, and they thought that the letters were legal notices that they were bound to obey.

It also turned out that the claim that there had been no bids that could have kept the estate together or continued the employment and tenancy of the tenants was not true; there were bids for substantial parts of the estate which would have maintained some of the employment and some of the tenancies. That outcome is still possible.

On the good side, no sheriff court action has been taken. I understand that negotiations are still in hand to complete the sale, and it is possible that some tenants may be retained. Nevertheless, it is unfortunate that was not made apparent at the time notice was given, because a great deal of heartache and anxiety could have been avoided. When I met the tenants a couple of days after they received that notification, they were shaken, shocked and in many ways disillusioned with their treatment.

One sad aspect is that Castle Fraser was in many ways a model, well run estate. The tenants were well treated and the houses well maintained. In that context, the termination of the tenants' employment and the summary notice that they were required to leave was a bigger shock than otherwise might have been the case.

The case highlights a number of important issues. It shows that the present law relating to tied tenancies in Scotland is unsatisfactory. I make it clear that I do not oppose the principle of tied housing, for I recognise its essential role in rural areas. Tied housing could be the subject of a debate, but I do not want to embark upon one at this stage.

People who work on the land need to live close to their jobs, and tied housing is one means of bringing that about. The question is not whether we should get rid of tied housing—I do not think we should, and I do not want to promote or to support legislation to that effect. What matters is managing the transition in a humane and sensible way that gives the tenant fair treatment and does not impose an untoward burden on already hard-pressed local authorities.

The trustees of the Castle Fraser estate took advantage of the law as it stands and the local authority's good will to deposit a problem on the public sector, to maximise the sale value on the break-up of the estate. They should not have been allowed to do that. I am not suggesting that the trustees did anything wrong or illegal, but that we should look to the law as it stands.

I do not believe that the trustees would have taken that action if they had not taken the view that they could dump the problem on the local authority to resolve. Any local authority would find 16 tenants suddenly deposited on its homeless list a problem. My local authority of Gordon has more problems than most in that respect.

There should be a requirement in law for the landowner to observe a court process to recover his property—not just the sheriff court requirement, but a specific claim to demonstrate a good reason for requiring vacant possession. A good reason would be that he needed the house for land management or agricultural purposes; that he needed it for himself or his family, which would be a reasonable entitlement; or that the tenant had caused problems, broken an agreement, or presented a nuisance.

The action should not become effective until the tenant had been adequately rehoused. That would remove the deep anxiety caused to tenants seeing an eviction date looming and not knowing where they were to live. Such changes would not undermine the owner's fundamental right to recover his property, but would prevent an owner from exploiting the situation simply to secure vacant possession to maximise his return or profit from the property's sale. It would remove from tenants the worry of being turfed out into bed-and-breakfast accommodation, and provide them with the knowledge that they would not be moved until they had been adequately rehoused.

When notice is served, there should also be a requirement to notify the tenant—in writing if possible—of his or her rights. It is astonishing that tenants can be given notice, as they were at Castle Fraser, without any indication that they had the right to await a court order. Tenants should be able to seek advice, perhaps from the local authority officer responsible for the homeless. The local authority and I gave the Castle Fraser tenants the information they required, but two or three days after they were given notice. I regret that the estate's factor gave them no such indication until pressed to do so. I do not believe that any tenant should be faced with that kind of shock, and I do not believe that local authorities should be left to cope with the situation without assistance.

Gordon district is the fastest growing community in Britain—apart from Milton Keynes, which has the benefit of a development corporation to deal with its housing problems. The council has an excellent record of housing management: a very high proportion of houses—approaching 30 per cent., I believe—have been sold. Despite that, or perhaps partly because of it, we have seen increasing homelessness and a lengthening waiting list.

According to the most recent figures, 2,029 people were on the waiting list on 4 March. Between 1 April last year and 28 February this year, 435 homelessness applications were received; by the end of January, 290 had been accepted as priorities. It is estimated that, between the middle of this year and the middle of 1998, 2,433 new houses will be required in Gordon to meet the projected increase in the population.

At present, the council estimates that 1,183 houses are likely to be built, of which precisely three will be local authority houses. Currently, no local authority houses are being built anywhere in Gordon district. I must say that. I find that astonishing. Because of keen demand, the price of houses in Gordon is generally high. The real shortfall in the community is of affordable houses to rent and low-price starts: whenever such houses become available, they are snapped up, leaving a waiting list that is still rising.

Let me say in parenthesis to certain people in Gordon district that tearing up the local plan and allowing people planning permission to build in every field in the area does not meet the need of affordable houses to rent.

The council has shown itself to be flexible. It has taken up every initiative presented by the Government and the Housing Corporation, and has given a lead in exploring every possibility of co-operation, joint ownership and different forms of tenure. There is no ideological conflict between Gordon district and the Government; there is simply a plea for resources.

People become very angry about those who are put into bed-and-breakfast accommodation. They are not concerned only about the hardship; the accommodation is often good, although it does not constitute a satisfactory home from which children can set off to school and to which they can return. Gordon district estimates that it will cost it a quarter of a million pounds in the current financial year, and it has already spent £120,000. That is not a sensible use of public money, but the council has been forced into it.

A strategic agreement has just been signed with Scottish Homes, which I understand is likely to bring in more than £20 million and will provide between 400 and 500 homes over the next three to five years. Of course I welcome that; but that number of houses will not contain, let alone reduce, the waiting list. Welcome though they are, the houses are not in proportion to the problem we face in the north-east of Scotland.

I see that the hon. Member for Aberdeen, South (Mr. Robertson) is in the Chamber. Let me point out that the problem is not confined to Gordon district. I have been in touch with Aberdeen city council, which tells me that the figures peaked in 1987, with 2,000 people on the homeless list; the most recent figure is 1,606. Only 57 council houses are being built throughout the city, against a waiting list of 4,400 and a transfer list of 6,200. The Minister must realise that the problem is very large, and getting larger every year. At present, we are not doing nearly enough to deal with it.

The population expansion in Gordon and in the north-east of Scotland has been consistent for almost 20 years. It is not just a matter of oil and gas people moving into the area. It has changed the profile of the population. It has ensured that we have a younger mix, with a growing number of households in relation to total population. That is increasing the pressure on the housing authorities arid established businesses outside the oil and gas sector.

We are making a great contribution to national resources and national wealth, and I think that we are entitled to be given assistance to deal with our problems. We do not operate on a low-rent basis. Houses are well maintained and well funded, but we cannot provide something with nothing. That is, fundamentally, what I believe the Government have got to take on board.

The Government should now accept that the particular circumstances of the Castle Fraser debacle bring home the need for a radical rethink of housing policy in the north-east of Scotland, especially in rural areas. I believe that the Government should give serious consideration to changing the law, to giving more security to tenants in tied accommodation and to providing proper resources to meet the needs, so as to enable the local authorities to deal with real homelessness problems and the hidden homelessness of people on waiting lists who are unable to buy.

The local authorities are perfectly willing to co-operate with the Government on a variety of different terms of tenure and different ways of solving the problems. There are no ideological problems, but to date I have to say that, despite their expressions of good will, the reality is that the Government have not acknowledged the scale of the problem that arises out of our economic success in the north-east of Scotland. As a consequence, we see genuine, individual hardship for people who are unable to get adequate housing.

We also see a constraint upon the economic development that is so beneficial not just to our own community but to the economy of Scotland and the economy of the United Kingdom. I urge the Minister to take on board the fact that the housing problems of the north-east of Scotland need a fundamental reappraisal.

Photo of Lord James Douglas-Hamilton Lord James Douglas-Hamilton , Edinburgh West 12:01, 9 March 1993

I congratulate the hon. Member for Gordon (Mr. Bruce), who has done a service to his constituents by raising this subject.

I have no objection whatever to Gordon district council going to Scottish Homes regarding the allocation of £20 million to further the strategic agreement that it has entered into with the district council, if it feels that an adjustment is urgently needed to deal with these problems. It therefore follows that it may be possible for the district council to follow up with the Scottish Landowners Federation the £3.3 million that has been allocated for bringing empty houses, some of them in Grampian, back into use.

I shall of course take account of what the hon. Gentleman has said about the needs of a growing population, not only in his constituency but in the constituency of my hon. Friend the Member for Aberdeen, South (Mr. Robertson), who is here tonight. These matters will be taken into account before the final allocations are made.

May I express my sympathy for those men and women who face the possibility of losing their homes when they are made redundant? Although the Scottish Office has no powers to intervene, I have asked officials to contact Gordon district council to establish the facts and see how it can assist. Also, with the agreement of Countess Iveagh, my officials have spoken to the Castle Fraser factor and solicitor, who has supplied further information on the current position. It may help the hon. Gentleman if I set out briefly what we understand to be the situation.

The Castle Fraser estate is owned by a trust, which for family reasons decided in 1991 to sell the estate. The argument runs as follows. The late Major Smiley had set standards for the estate which required staffing levels substantially above those required for an estate on commercial lines. It was therefore recognised that any new owner might not keep the present staff complement. This would apply whether or not the estate was sold as a whole, or in a number of lots. In fact, the estate was advertised for sale either as a whole, or in eight lots. As the seller concluded that no satisfactory offer was received for the whole estate, it is now being sold in eight lots. Many of these will be sold to farmers, who will require the tied houses for themselves and their families.

There are 13 families and 16 employees affected by the sale—not 16 families as suggested in press reports. I have been informed by the estate that the Iveagh family has been concerned about the future of these employees and that they are receiving substantial redundancy payments. The redundancy notices have included a formal notice that the tenants' right to occupy these houses ceased with their employment. However, the estate has not taken any action to evict the tenants. It has also negotiated with the new owners to obtain agreement to be flexible about the timing of action to take possession of tied houses, to give the tenants additional time to find alternative accommodation.

I understand that there has been some progress. The estate itself has provided accommodation for two families, and Gordon district has rehoused a single man. I believe that four more families have found alternative accommodation. I hope that more families will be able to find other homes and jobs, in some cases through reemployment by the new owners. Here again, the Scotish Office has no direct powers to intervene, but I hope that both old and new owners will be sensitive to the employment needs of those affected, and I trust that special consideration will be given to the possibility of re-employing those workers. I also understand that the estate has given guarantees of accommodation to six recently retired employees.

As for the current legal position, the hon. Member is aware that tied tenancies are part of contracts of employment. As such, they fall outside the scope of the law of landlord and tenant. All employees will have been made aware of the conditions attached to the tied tenancies when they accepted employment, but I appreciate that the changes of ownership are both sudden and difficult for all concerned.

I must emphasise that tied tenants cannot be evicted without a court order. For Castle Fraser tied tenants who are agricultural workers, under section 24 of the Rent (Scotland) Act 1984, the sheriff can suspend a court order for possession in certain circumstances—for example, in response to representations if the actions of the owner are considered to be unreasonable or would cause hardship to the individuals concerned. I consider that there is a strong moral obligation, which should be accepted by the estate owners in such cases, to allow a satisfactory time for the estate employees to relocate themselves and their families. It is a sign of responsible land ownership that, when such sales take place, there is a sensible period of transition to enable the former estate employees and their families to adjust to the new conditions.

The hon. Member will be aware that English legislation is not identical to that in Scotland. He has referred in the past to the legislation in England on security of tenure in so far as it affects tied tenants who are agricultural workers. Unfortunately, such legislation would not help estate employees, who do not qualify as agricultural workers. Introducing such legislation in Scotland would be complex, and could have implications for other aspects of Scots law, including agricultural law. However, I have decided to ask the Scottish Law Commission to examine the question of tied tenancies and to give me its views in due course. I trust that that will reassure the hon. Member that I am treating his remarks with great concern.

I have seen a copy of the letter to the hon. Member from the Scottish Landowners Federation. I note that discussions involving the Rural Forum and others are under way about the problems caused by tied tenancies. I understand that those are continuing, and it would be premature for me to comment on the proposals at this stage. I would naturally support any action which, while recognising the benefits of tied tenancies, gave proper emphasis to the interests of tenants. But I would make two points.

First, although the SLF claims that the real problem is a lack of alternative housing, as I have already said, we are taking vigorous action to improve the supply of rural housing. Secondly, I note the SLF's concern about the ineffective working of the English Agricultural Dwelling House Advisory Committee, which decides whether repossession of a tied house is justified on grounds of agricultural necessity. That justifies my caution about the introduction of such an approach in Scotland.

Photo of Lord James Douglas-Hamilton Lord James Douglas-Hamilton , Edinburgh West

Briefly, as I have a lot of ground to cover.

Photo of Malcolm Bruce Malcolm Bruce Shadow Spokesperson (Trade and Industry)

May I explain that the Scottish Landowners Federation says that the reason why the advisory committee is not working is the shortage of suitable accommodation in the relevant areas—so the two aspects are linked.

Photo of Lord James Douglas-Hamilton Lord James Douglas-Hamilton , Edinburgh West

We are working hard to ensure that there is more accommodation, and Scottish Homes' rural housing strategy is geared to achieving that end, by housing associations providing affordable homes for rent, and grants for rent and ownership—GRO— funding, to provide low-cost home ownership or housing for rent.

Rural home ownership grants are also available to individuals in remote areas to enable them to build their own homes. The target for 1992–93 is to provide 1,000 new or improved units in rural areas. More than 80 per cent. of that target has already been achieved, and 100 per cent. is forecast by 31 March. That will be a remarkable achievement. But even more importantly, Scottish Homes plans to provide 1,600 homes for rent or sale in rural areas in 1993–94, an increase of 60 per cent. over this year's target. That includes 100 grants for local people to build their own homes.

Considerable resources are of course needed to support such ambitious plans. We have increased Scottish Homes' overall programme to £327 million for 1993–94, an increase of 9 per cent. on the original plans for this year. Rural areas are set to benefit to an even greater extent from the additional resources. The programme for 1992–93 includes around £47 million for expenditure in rural areas. The programme for 1993–94 will include more than £55 million for expenditure in rural areas—an increase of almost 22 per cent., which is a substantial step forward.

As well as providing large numbers of affordable homes, Scottish Homes is also promoting innovative responses to the special needs of rural areas. The 10 rural demonstration areas, set up as part of its rural housing strategy, cover a wide range of areas and initiatives.

Scottish Homes is also working with other key agencies in rural areas, in particular with local authorities. Scottish Homes has now signed strategic investment agreements with more than 30 local authorities, many of which cover rural areas. I was very pleased to hear that Scottish Homes and Gordon district council recently signed the agreement which allows for a five-year investment of around £20 million. This will provide around 450 new or improved units of mixed house type, as the hon. Member mentioned.

One project of note which may assist in that connection is the £1.7 million housing development for first-time buyers at Pitmedden, through a partnership between Scottish Homes, Stewart Milne Construction and Gordon district council. The 42 homes will primarily be targeted at Gordon district council's tenants and people on the council's waiting list, with particular attention to those on low incomes. The first houses are scheduled for completion this summer, which might be a relevant timetable in the context of this debate. Such schemes have a double benefit; they provide not only homes for those on low incomes, which is important for the economic prosperity of the area, but also free district council accommodation, which in turn helps it to tackle homelessness.

While on the subject of local authorities, 1 should also note that rural authorities receive a greater share of the housing revenue account resources available, compared with the scale of their housing stock. In 1993–94, rural authorities with just over 23 per cent. of the council housing stock will receive 25.2 per cent.—more than £97 million out of the provisional HRA allocations. Rural authorities with just 29 per cent. of the Scottish population will receive 34.4 per cent., nearly £37 million of the national non-HRA allocations available for assistance to the private housing sector for 1993–94. Rural local authorities also have a relative advantage in the distribution of housing support grant.

I might add that, through Scottish Homes, we have worked for example with the Scottish Landowners Federation in Grampian, Tayside and Fife to help bring empty properties in rural areas back into use. Scottish Homes is also working with the Forestry Commission and the Ministry of Defence on similar initiatives.

Those initiatives are some of the many carried out using an additional allocation of £3.3 million, which I earmarked specifically just before the election, in this financial year, to bring empty properties back into use. They also include projects to bring empty upper-floor town centre property back into use. In total, those projects will bring into, or retain for, use almost 200 properties. That is a matter that the district council might like to follow up with the Scottish Landowners Federation, in case there might be relevant possibilities in that area.

On the question of homelessness, tied tenants have exactly the same rights to local authority help under the homelessness legislation as anyone else. The kind of help that housing authority had a duty to provide would depend on individual circumstances, but, at a minimum, would include advice and assistance in finding alternative accommodation. This need not be in a council house. For example, an authority may have nomination rights to housing association tenancies. Indeed, there are a number in Lang Stane, and Castlehill. I do not know whether there are any vacant houses, but nomination rights do exist. As I have said, the district council is free to discuss these matters in depth with Scottish Homes.

Alternatively, the accommodation could be permanent, although, if this is not immediately available, the authority should ensure that temporary accommodation is available over the interim period. I understand that the local housing authority—Gordon district council—is keeping itself informed of developments on the Castle Fraser estate. It is to be commended for doing so.

I announced recently that Gordon district would receive an extra allocation of £240,000 in 1992–93 for tackling homelessness. This will enable the authority to reduce the use of bed-and-breakfast accommodation. Gordon district has also been given a substantial provisional allocation of more than £7.025 million for 1993–94, which can be used to aid the homeless if this is a local priority. It is possible that some of those affected by the changes will benefit from this increasing scale of investment in rural areas by Scottish Homes.

If the shortfall in supply can be overcome, the necessity for employees to accept tied housing at the start of an employment contract can be reduced over time. There may, however, continue to be a supply problem in some remote areas, where estate management requires the worker or workers to be close at hand. In those special cases, where there has been a satisfactory working relationship over many years, it is extremely important that the good will of estate workers and their families be actively conserved by the owners of the estates themselves. That is very much in their own interests if the viability of these estates is to be maintained in practice.

Again I thank the hon. Member for Gordon for rendering a service to his constituents. I hope that I have been able to indicate some of the possible ways forward. If the problem is not solved, the hon. Gentleman may come and have a discussion with me, and we shall see what can be done at that stage. In any case, I hope that these matters will be resolved before long.

Question put and agreed to.

Adjourned accordingly at seventeen minutes past Twelve o'clock.