AVOIDANCE OF CERTAIN UNAUTHORISED DISPOSALS (Hansard, 6 August 1980)

§ Mr. Stanley
I beg to move, That this House doth agree with the Lords in the said amendment.
During the passage of this Bill Parliament has expressed its clear will that secure tenants of local authorities and certain housing associations should have the right to buy their homes. The Bill sets out a clear procedure for doing that. It is intended that that procedure should be exercised with legal certainty by the tenants concerned.
We have been urged on many occasions—though only by my right hon. and hon. Friends—to ensure that there are no legal devices by which those whom Parliament intends should have the right to buy can be denied that right. We have taken that urging seriously, not least because of certain statements made by the Opposition. We noted the statement by the right hon. Member for Manchester, Ardwick (Mr. Kaufman) on 21 February in Committee. He said that the Conservative Party regarded itself as being bound by the letter of the legislation but not by its spirit.
The basic purpose of this new clause is to ensure that no landlord should—

§ Mr. Straw
Since the Minister is criticising the position taken by the Opposition, can he explain why there was active backing from the Prime Minister and other Ministers to get local authorities such as Berkshire and Oxfordshire to take the previous Labour Government to court to try to find as many loopholes as possible in their comprehensive schools legislation?

§ Mr. Stanley
I shall not criticise the right hon. Member for Ardwick. I hope 653 that, equally, he will not criticise me for bringing forward the new clause.
The basic purpose of the clause is to ensure that no landlord should be able to succeed in frustrating the right to buy by disposing of some or all of his housing to some other body to whom the right to buy does not apply. The Bill, in some cases by amendment of prior legislation, provides for a comprehensive requirement for ministerial consent both to the disposal of part V houses and land and also to the disposal of land and houses by registered housing associations.
This consent requirement is needed in order to simplify the present law. It is also needed to ensure that tenants whom Parliament intends to have the right to buy shall not be deprived of that right as a result of disposals to other bodies to whom the right does not apply.
However, as it stands, section 128 of the local Government Act 1972 has the effect that if a disposal takes place without necessary consent the person to whom it is made still gets valid title. The Bill makes similar provision in respect of housing association disposals in clause 121. We have come to the conclusion, therefore, that as the Bill stands, the rights of tenants are not yet adequately protected.
The new clause deals with the problem by providing that a disposal that takes place without ministerial consent will be void. In other words, it will be as if the disposal had not taken place, thereby ensuring that tenants will still have their right to buy. The important exception is made to deal with the case where an individual makes a single purchase of a house or flat. It is possible that an authority would sell or lease a house or flat and do so without consent, unwittingly, because it had not conformed with the terms of an available consent. Such a disposal would clearly not subvert the right to buy, and it is clearly right to protect the position of the individual purchaser in such cases.
The new clause also deals with a gap in the present requirements for ministerial consent for the disposal of part V council houses, that is, the requirements that apply until the relevant part of the Bill comes into force.
Under the present law, the consent requirements may not cover all possible 654 disposals. We are not prepared to see the right to buy taken away from tenants by any landlord who seeks to make such a disposal in the short time that the Government hope remains before enactment. Therefore, the new clause provides that such a disposal would also be void. We must ensure that individual tenants have the rights that Parliament intends them to have and that those rights are not taken away. These provisions have that purpose. They apply only to transactions after the new clause was tabled in another place.
The Department and the Welsh Office have already written to all local authorities warning them of the new clause. The Housing Corporation has written similarly to housing associations.
The new clause is essential to protect the interests of tenants from any landlord who may attempt to use this legal device to deny tenants the right to buy. I hope that it will be agreed to.

§ Mr. Kaufman
I am grateful to the Minister for quoting my words in Committee because it gives me the opportunity to reiterate them now. The Opposition have made it clear that they will repeal the compulsory sale of council houses on their return to office. However, while the law is in force, we shall accept it. We shall oppose this provision within the law. We shall not in any way seek to have the law broken. I made that clear on many occasions in Committee, and I am glad to take this opportunity to repeat it, because it is important to emphasise that all parties in the House should accept the law as it is made by Parliament. If Ministers have some intention, it is not the duty of the citizen to obey that intention; it is the duty of the citizen to accept the law. That is what I made clear, and I am grateful to the Minister for having said that. Any local authority that can find ways of not carrying out this law, while not breaking it, will certainly have the compliments of the Opposition.
I should like to make two points on the new clause. First, it shows that the Government have some kind of obsessessive mistrust of local authorities. In Committee we were assured that Ministers were confident that the reserve powers in clause 22 would not have to be used, but they are now sticking their fingers into what they think are holes in the dyke.
655 The Minister, with his zealous, clever, dutiful and agreeable officials, has been putting bits of sticking plaster all over the Bill since January. More than 500 bits of sticking plaster are stuck all over the Bill. The Minister may find that those bits of sticking plaster do not fill all the gaps in the Bill. It may be that he would have liked another stage—perhaps a third House of Parliament—to put through a further 200 or 300 amendments to improve the situation still further. We do not like the new clause for that reason. But for a Department that has to deal with local authorities, it seems obnoxious that the motivating thought should be that local authorities are not to be trusted.
The reason why I particularly do not like this provision is that it is retrospective. It will go back a number of weeks and cover events that will have taken place before Royal Assent. The Minister, when referring to remarks made by my hon. Friend the Member for Salford, East (Mr. Allaun) about the £100 option, for example, accused him of wishing to legislate retrospectively on that matter. Yet the Government are legislating retrospectively in order to require local authorities to be relieved of public possessions.
I should also like some information from the Minister, because it is not clear to me what disposals are covered. I pluck an example at random from my constituency, of the Birch housing co-operative, which is anxious for Manchester City Council to sell it a small number of houses for its co-operative, which it can then modernise and turn into habitable dwellings. Under the Bill that is possible for an individual, and a sale to an individual is not prohibited by this new clause. I shall be interested to know the position of a sale to a housing co-operative.
I have written to the chairman of the Housing Corporation—which I am pleased will remain in existence long enough for him to be able to reply to me officially—about this co-operative. I should also be interested to know what will happen when a local authority sells to a housing association in order that the housing association can sell on to a housing co-operative, the housing corporation having carried out the modernisation 656 work. I take a moment to pay tribute to the Minister for his knowledge of the Bill. I wish that it were matched by flexibility in policy, but we cannot always hope for that.
It would be helpful if we could be assured that worthy, small co-operatives in inner city areas were not prohibited from their activities, even in the short period that remains before the Bill is enacted, or, indeed, afterwards, The Minister knows that many inner city areas have problems such as those of Manchester. I do not apologise to the House for using an example in my constituency in order to draw attention to a general point. It will be helpful if the Minister will provide an answer to that question in his reply. I should add, almost in passing, that we shall of course vote against the amendment.

§ Mr. Stanley
The right hon. Member for Manchester, Ardwick (Mr. Kaufman) criticised this amendment as being retrospective. Although I do not often pray in aid nationalisation legislation, if he looks at the Labour Government's Aircraft and Shipbuilding Industries Act, with which he was so intimately associated, he will note that it included a provision that rendered null and void anything that took place in the companies concerned after the date of publication of the legislation. That thought struck us when we considered how to deal with the problem.
On the specific point of disposals, the effect of the amendment is not to prohibit disposals but to ensure that where the consent of the Secretary of State is required for a disposal, that consent is obtained. If it is not obtained the purchaser will not obtain valid title. There would be nothing to stop a disposal by a local authority to a housing association, which could then be the subject of further disposal, but disposal by a local authority needs the consent of the Secretary of State.

§ Mr. Straw
As I understand from what the Minister said earlier, section 128 of the Local Government Act 1972 was so worded that where a mistake was made and a local authority had failed to gain consent, it did not affect a bona fide purchaser. Will the Minister explain the position of a bona fide purchaser who purchases more than two dwellings from 657 a local authority which has failed to gain consent as a result of a mistake? Will that innocent purchaser fail to gain title as a result of this amendment?

§ Mr. Stanley
Some important points of law are involved, and if my reply is not in any way correct I shall writer further to the hon. Gentleman. All local authorities were alerted to the new requirements in the legislation from the date on which it was tabled in another place. It has been made clear that consent is required. I hope that all local authority housing associations are clearly aware of that. If consent is not obtained and the disposal is not to an individual, the purchaser would not get valid title.

§ Mr. Kaufman
Before the Minister sits down, perhaps he will deal with the question of—

§ Mr. Speaker
I now have to put the Question on the motion to agree with the Lords in all the remaining Lords amendments up to and including No. 145.