Clause 19.—(RETENTION OF MANAGEMENT POWERS FOR GENERAL BENEFIT OF NEIGHBOURHOOD.) (Hansard, 24 October 1967)

§ Mr. Skeffington
I beg to move, That this House doth agree with the Lords in the said Amendment.

§ Mr. Speaker
Unless there is objection, I suggest that we discuss at the same time Lords Amendments Nos. 28 to 36, inclusive.

§ Mr. Skeffington
That is satisfactory, Mr. Speaker.
This series of Amendments will generally commend itself to the House since there was a desire on both sides that the 1610 opportunities provided under Clause 19 for the maintenance of estates in their entirety—where there were advantages for the whole of the community for them to be preserved in that way—should apply not only on the application of the landlord.
This point was put with great force by my hon. and learned Friend the Member for Dulwich (Mr. S. C. Silkin) and the hon. Member for Hendon, South (Sir H. Lucas-Tooth) and subsequently representations were made to the Department. The hon. Member for Hendon, South came with a deputation, particularly in relation to the Hampstead Garden Surburb. To honour an undertaking given by me on the Floor of the House and by my right hon. Friend the then Minister of State in Committee, we saw whether it would be possible to introduce in another place provisions which would meet the desire of my hon. and learned Friend the 1611 Member for Dulwich, the hon. Member for Hendon, South and others.
As we said from the very beginning, intrinsically there was no objection; in fact, there was everything to be said for tenants having this opportunity, although there were greater difficulties in providing satisfactory and suitable arrangements to grant the provisions under Clause 19 to a body of representative tenants, since often they do not have the resources or knowledge of the properties concerned, in addition to there being other difficulties.
Although the provisions which we have made may not be absolutely watertight—because of the practical difficulties which I enumerated on a previous occasion—this series of Amendments was tabled in another place largely to meet the united desire of hon. Members. The most important of these Amendments—the substance of the whole change—is No. 36, which inserts a new subsection. It provides that where the Minister considers that, for any area, a certificate could be given on the application of the landlord—that is, that it is a well maintained estate and meets the characteristics enumerated elsewhere in the Clause—he may grant the certificate to a representative body of people occupying or interested in the property in the area or areas. The word "areas" is used to meet the case of Hampstead Garden Suburb, where the ownership is in two portions, one a trust and the other a company. The provision therefore makes allowance for two ownerships of that kind and it may apply to other parts of the country should an application be made.
9.30 p.m.
The Minister must be satisfied as to the bona fides of the representative body. Obviously, the normal inquiries will be made. I have expressed concern in the past about putting this into legislative form, but inquiries can be made and the Minister will have to use common sense in this matter.
The representative body can make its application alone or jointly with the landlord. It makes it if the landlord apparently does not intend to do so. The very fact that this power is now available to a group of tenants will go a long way to inducing some possible landowners who might not have been so 1612 enthusiastic because undoubtedly, if they apply, they will have very much greater influence on the scheme than if someone else did it. When a certificate is granted the representative body can apply to the High Court for approval to a management scheme and it can do so on its own or with the landlord. It can do this even if one of the other parties may not have made the application.
The court will be ready to give rights and powers to the representative body which normally it would have given to the landlord. The landlord must give his consent in relation to his freehold ownership and the representative body must then compensate the landlord for the loss of his rights if that is appropriate. The court can enable the representative body to participate in any scheme of management by the landlord. Sometimes there will be a kind of partnership between the landlord and the tenants.
It may be difficult for a representative body on an estate to draw up a scheme of management or indeed sometimes to define the boundaries and what property is within them. A group of tenants is not in the same position as the managers of an estate, but the new subsection nevertheless provides that a group of residents occupying as residential lessees shall have an opportunity of putting forward a scheme which often will help them to get a scheme of management of their own. It may be that no one will help them but the fact that they can do it will mean that the landlord will take the initiative or give his sanction.
In many of the better-managed estates, tenants desire to preserve real amenities. There are still practical difficulties in the final way in which this proposition may work out. Nevertheless, we have given it legal statutory opportunity under the Bill and I think this is a very powerful instrument for any such group. The hon. Baronet the Member for Hendon, South is sorry that he cannot be present for this part of the debate. He and Hampstead Garden Suburb feel satisfied with the length to which we have gone to meet them. I put that on record because the hon. Member expressed his regret that he could not be here. I hope that my hon. and learned Friend the Member for 1613 Dulwich will feel that we have gone as far as we can in this matter.

§ Mr. Graham Page
As the Joint Parliamentary Secretary knows, I have no very great faith in Clause 19. I do not think it sets out a process which is going to be of any use to landlords whose property has been enfranchised or that there will be many cases in which tenants will be prepared to take on the responsibility. However, there is no doubt that the Clause has been improved by the introduction of the subsections dealing with the taking over of these responsibilities by a representative body. My hon. Friend the Member for Hendon, South (Sir H. Lucas-Tooth) also told me that he regrets that he is not able to be present. By his proposal, put forward in this House, he set in motion for an improvement of this Clause.
I think that there will be few occasions on which a body of representatives will be prepared to form themselves into a representative body, to hand their affairs in this connection over to a committee, perhaps consisting of some of themselves and the landlord, and to be liable, personally perhaps, for the actions of this body or this committee. I imagine that they will wish to form themselves into a society or into a company with limited liability.
If I read this correctly, it will be possible for such persons to form themselves into a housing society or a housing association, or into a company limited by liability or by guarantee, or for them in some way to limit their personal liability for actions which may be done in their name by a committee. I assume that a company could be a representative body under Clause 19. I hope so, because this seems to be the practical way of doing it. We all know of many residential estates where there are private roads and common parts to be kept up and where the original estate-owner has disappeared or has not carried on the upkeep of the estate. Usually in such cases the residents form themselves into a limited liability company and make up the roads by subscription to that company, thereby saving themselves from personal liability. I assume that that sort of thing can be done in this case.
1614 I do not think that the fact that an application under Clause 19 can delay any dealings with the properties will cause any difficulty. The Clause originally provided only for an application by the landlord to keep some control of the management and development of the estate. Here the right is being given to a representative body on its own to come in and take over from the landlord. The Joint Parliamentary Secretary said that he hoped that such a body would do it jointly with the landlord. However, there is the power for the representative body to come in and to wrest power from the landlord.
I hope that the Minister, in giving his certificate, will pay regard to the rights of the landlord and to the rights of the tenant and will seek to hold the balance fairly between the two parties. It will be a grave responsibility on the Minister to investigate whether a representative body is capable of running matters or, indeed, for that matter, whether the existing landlord is capable of running them. I hope that this will not mean a great increase in staff at the Ministry.
Finally, although I have no very great faith that the Clause will be used, I think that it has been improved by these Amendments from another place.

§ Mr. Donald Chapman (Birmingham, Northfield)
A large part of the Bourneville Village Trust is in my constituency. The residents on that estate are very interested in Clause 19. There have been public meetings on this issue in my constituency. I am still very concerned about the effects of the Clause and about the Amendment.
My hon. Friend the Joint Parliamentary Secretary spoke of the negotiations he had had with bodies representing what might broadly be called the landlords in cases like this. Did he get assurances from them that they will not try unduly to delay these matters? They have two years in which to get the Minister's certificate and another year for the High Court to get its approval. It can be three years before enfranchisement can begin to take place on any real scale.
I am concerned about the length of time that is involved. Does it mean—this is where I come primarily to these Lords Amendments—that in a case where there is obviously undue delay by 1615 the landlord—I have no reason to think that there will be undue delay in the case of the Bourneville Village Trust, but one never knows—a representative body of tenants of the Trust could begin to get together and use this Amendment to force the hand of the Trust or the landlord? Could they begin to apply to the Minister and say, "There is so much delay on the part of the landlord in using Clause 19. In the meantime he is using the Clause to delay enfranchisement. We now as tenants wish to avail ourselves of Clause 19 in default of speedy action by the landlord and we ask you to recognise us and to set the process in motion"? If this is one result of the Amendments—to hold a pistol at the head of some of the estates to get on with the use of Clause 19 and not delay the process to its full limit—I would be glad to accept these Amendments that their Lordships have suggested.

§ Mr. S. C. Silkin
I congratulate their Lordships on these Amendments which seem to me to set the seal upon a Clause in which I personally have been greatly interested. I have in mind areas such as Bourneville, Hampstead and Dulwich where there are undoubted advantages in the leasehold system, and it is right that what is advantageous in them should be preserved. I am certain that this Clause has that effect.
There seemed to me at an earlier stage of the proceedings on the Bill to be a possible lacuna where one had a landlord who was not prepared to accept the obligations created by Clause 19. I do not overrate that possibility. I am not as pessimistic as the hon. Member for Crosby (Mr. Graham Page) about the operation of Clause 19 because it seems to me that the transitional period before full enfranchisement of any large estate will be so long that no landlord who is interested in preserving the value of his asset is likely to fail to take advantage of this Clause.
To say one word about the point which my hon. Friend has just made, as I see it, the real sanction of the Clause is that unless the landlord makes early application for a certificate he will find that not only have the notices been given by the lessees but that they have actually taken effct. If the landlord delays at all for any substantial period of time he will find 1616 that a great many people have already enfranchised before he is able to apply to the Minister for a certificate at all. It is only after his application has been made that the standstill is created, and even at that stage, as I understand the Clause, the serving of the notice is really as good as having the freehold. I agree with my hon. Friend that the possibility of a body of lessees—whether formed as a society or, as the hon. Member for Crosby suggested, in a company which may very well be appropriate in some cases—to have the power to step in will be a very powerful inducement to many landlords.
I should like shortly to state how I think this could happen in practice. I envisage not so much a body representing all the lessees on a very large estate taking advantage of this provision but rather the lessees on perhaps a small part of an estate which is self-contained, and that the lessees may get together and say, "We can run this small part of the estate on our own and we will proceed to ask for a certificate accordingly." In cases of that kind, it can be extremely valuable, and I am grateful to the Government for having accepted the principle of the Amendment on the matter which I moved in Committee.