Lords amendment: No. 64, in page 24, line 29, at beginning insert
In Part I of Schedule 4 to the 1980 Act (grounds on which court may order possession) after ground 5 there shall be inserted the following grounds—
§ Ground 5A
The tenancy was assigned to the tenant, or to a predecessor in title of his who is a member of his family and is residing in the dwelling-house, by an assignment made by virtue of section
37A of this act and a premium was paid either in connection with that assignment or the assignment which the tenant or predecessor himself made by virtue of that section.
In this paragraph "premium" means any fine or other like sum and any other pecuniary consideration in addition to rent.
§ Ground 5B
The dwelling-house forms part of, or is within the curtilage of, a building to which sub-paragraph (2) of paragraph 1 of part I of Schedule 1 to this Act applies and—
Mr. Deputy Speaker
With this it will be convenient to take Lords amendments Nos. 64, 74 to 78, 186 and Government amendments, 189, 195, 196, 202 and 203.
§ Sir George Young
Last November, the Government announced their intention to give secure tenants a statutory right to exchange their homes. The Department of the Environment issued a consultation letter setting out its proposals. The Government's intention was declared in the light of the rather patchy way in which landlords now allow their tenants to move home. Some landlords are generous in their consideration of applications and embrace the wider national argument for mobility by rehousing people from outside their areas, despite a natural first duty towards their own ratepayers. These landlords recognise, too, the need to mitigate personal hardships and suffering caused by restricting tenants' mobility. Other landlords are, to put it frankly, rather unhelpful, sometimes to the point of obstructiveness. Some landlords are parochially resistant to the idea of people moving to their areas from elsewhere.
All hon. Members agree that housing mobility for tenants who want to move is to be encouraged. We have taken steps in recent years to promote mobility by encouraging tenants to believe that it is possible to move, and to provide the means whereby such moves may be accomplished.
The national mobility scheme is a voluntary arrangement that began three years ago between public sector landlords throughout the United Kingdom and it has shown what can be done. The ten-thousandth move at national level, that is, across county boundaries, was celebrated in January this year. I was delighted to hand over the keys to the tenant concerned, who lives in Oxford.
The tenants exchange scheme was launched two years ago to provide a co-ordinated national information service for tenants wanting to find someone with whom to exchange in any part of England and Wales. But little purpose is achieved if, having found a possible exchange partner, tenants find themselves frustrated by their landlords' unreasonable refusal of consent to the exchange.
The proposed right to exchange is intended, therefore, to help tenants by limiting the scope for landlords to withhold consent. I am glad to say that there was 613 widespread support in varying degrees for the Government's proposals, especially from groups representing tenants' interests, such as the National Consumer Council. The provisions were drawn up to meet the concern of landlords that they should have adequate protection against unacceptable exchanges, but to remove any opportunity for capricious or frivolous decisions.
I shall briefly describe the main principles of the right to exchange. Amendment No. 76 is the principal provision. Every secure tenant would have a right, subject to his landlord's consent, which could not be withheld except on certain prescribed grounds, to assign his tenancy to another secure tenant whether or not of the same landlord on condition that the other secure tenant was given consent by his landlord for a parallel assignment. The provisions do not restrict exchanges to straight swaps, but would allow three-way, or more, arrangements.
As hon. Members are aware, the 1980 Act provides that assigned tenancies are non-secure unless they are assigned under certain prescribed circumstances. Clause 24 modifies that provision so that tenancies cannot be assigned unless those prescribed circumstances apply, in which case the tenancies remain secure. Assignment of tenancies to effect exchanges will also be secure.
Amendment No. 201 to schedule 10, which was taken earlier, will ensure that, where a successor exchanges he retains his status as a successor. Our original proposals that were introduced last November suggested that landlords would be required to respond to tenants' applications within 28 days. In the light of comments received we have extended the response period to six weeks. Landlords can attach conditions to consents only where tenants have outstanding obligations to their landlords, in particular the paying of rent arrears. It will not be possible, for example, for landlords to impose a condition requiring a fee for consenting to tenants' applications to exchange. Failure to respond to a tenant's application within the six-week period will imply consent. Where a landlord intends to withhold consent he must do so in writing indicating the grounds for refusal, which the tenant could challenge in the county court if he wished.
Hon. Members may find it helpful if I run through the main grounds for refusal as set out in amendment No. 186, which new schedule 4A would prescribe where they differ from the equivalent grounds for seeking possession, as set out in schedule 4 to the 1980 Act. The landlord would be able to refuse consent where the tenant applying to exchange with the proposed incoming tenant had an outstanding court order against him giving possession to the landlord. That means that tenants to be evicted on the grounds of tenant misdemeanour could lose their right to exchange.
Landlords would also be able to refuse consent where the tenant making the application to exchange, or the proposed incoming tenant, had been served with a notice seeking possession that was still in force, on any of grounds 1 to 5 of schedule 4 to the 1980 Act relating to some unsatisfactory way in which they had conducted themselves as tenants. The House will know that we are proposing a new ground 5A to the schedule of grounds for possession, so that tenants who trade their tenancies by receiving or paying inducements for their tenancies can be evicted.
A further ground for refusal is where substantial under-occupation of the dwelling would result if the tenancy were to be assigned to the proposed incoming tenant. We 614 received a number of representations asking how "substantial under-occupation" might be defined. I understand the desire to be explicit. However, the House will recognise the difficulties in attempting an unambiguous definition. A parallel is demonstrated by the extensive and complicated definition of overcrowding set out in section 77 and schedule 6 to the Housing Act 1957.
Similarly, under-occupation depends on the circumstances, and what is meant by bedrooms, or bed spaces, or indeed "spare". It will ultimately be for the courts to decide what constitutes substantial under-occupation on the facts of any individual case.
For myself, I would normally regard it as unreasonable to object to an exchange simply on the ground that the tenant would have the enjoyment of a spare bedroom. Some people may take the view that having a spare room to put up visiting friends or relations for the night is under-occupation, but I do not. That is why we have tried to give latitude in favour of tenants by the use of the words "substantial under-occupation".
The other grounds for refusal are self-evident and precedented, either already in schedule 4 to the 1980 Act or, as was mentioned earlier, in the proposed new ground 5B relating to dwellings within the curtilage of operational buildings and within cemeteries. The two starred Government amendments to amendment No. 186 simply carry through to new schedule 4A the intention that dwellings within cemeteries be treated in the same way as dwellings within operational buildings. Amendment No. 203 to schedule 10 amending section 86 of the 1980 Act provides that county courts may consider whether a landlord's refusal to consent to an exchange was outside the prescribed grounds.
New ground 5A is also intended to ensure that a tenant should not be able to relieve himself of the threw of eviction by immediately assigning the property again—as he can under section 37 of the 1980 Act -- to a member of his family.
Amendments Nos. 195 and 196 are consequential to the introduction of the right to exchange and amend section 13 of the 1980 Act. This provides that where, after a secure tenant has applied for the right to buy, another person succeeds to that tenancy, then the new tenant shall be in the same position as if he had applied. One effect would be that the price for the dwelling house would be based on the value of the house as at the date of the former tenant's application. A tenant would normally succeed to a secure tenancy on the death of the former tenant. It could happen also if the tenancy was assigned to the new tenant, for instance on the dissolution of a marriage by order under section 24 of the Matrimonial Causes Act 1973.
But the right-to-exchange provisions have the effect that tenants taking over existing tenancies on assignment fall within the ambit of section 13. They would therefore have the benefit of the fixed valuation. We do not think that this is right, and these two amendments are intended to exclude from the scope of section 13 tenants taking over existing tenancies—and, therefore, possibly existing rights to buy applications—under the right to exchange.
There is one further technical consequential amendment, No. 189, to schedule 10 to the Bill. The amendment to the Leasehold Reform Act 1967 arises because life tenancies granted by local authorities are secure tenancies under the 1980 Act. The right to such tenancies could give 615 these tenants additional and unintended rights to enfranchise under the 1967 Act. The amendment excludes the possibility.
Amendments Nos. 75, 77 and 78 to clause 24 are minor and consequential, as is amendment No. 202 to schedule 10.
The minor amendment, No. 74 to clause 24, is consequential and paves the way for amendment No. 79 which follows this tranche of amendments.
§ Mr. Chris Smith
I speak for two reasons. First, I congratulate the Minister on a masterly summary of an extremely complicated series of amendments and clauses. Doubtless his civil servants should also be congratulated. Secondly, the Opposition warmly welcome the principle of a right to exchange. This is a valuable addition to the rights available to secure tenants.
However, a slight worry is that the scheme brought forward by the Government will in practice not provide the sort of right to exchange expected by tenants who feel that automatically it will make it easier to exchange than at present. In practice I doubt whether, when the amendment has been passed, there will be many benefits on the ground.
First, if we are to achieve in practice what the Government are seeking in principle to achieve through these amendments, there will have to be some mechanism to help tenants identify people who might wish to exchange with them. At the moment, the only practicable mechanism is by word of mouth or newspaper advertisements. Both those avenues are used to a considerable extent. Do the Government envisage that that situation will remain unchanged after the legislation has been amended in this way, or do they perhaps intend that there should be some provision, perhaps alongside the national mobility scheme, for putting tenants in touch with each other? Unless the Government's aim has some practical manifestation, existing tenants will not benefit much from the amendments.
Secondly, I am concerned about the form in which the grounds for refusal by the local authority appear in amendment No. 186. I draw the attention of the House to the wording of grounds 3 and 4. The Under-Secretary identified a problem. He said that a certain amount of ambiguity is necessary beause it is almost impossible to define under-occupation, over-occupation or lack of suitability in precise language. I accept that point, but I do not think that it was necessary to leave the wording so wonderfully ambiguous. Under ground 3, the local authority can refuse consent because the accommodation offered "is substantially more extensive". Not only is there considerable room for argumert about what "extensive" means in any instance, but the word "substantial" is a minefield for interpretation.
Ground 4 is even worse. Under ground 4, the local authority can refuse consent becauseThe extent of the accommodation afforded by the dwelling-house is not reasonably suitable to the needs of the proposed assignee and his family.If a tenant is brave enough to challenge a local authority's decision in the courts, the courts will have grave difficulty in establishing what we meant by "reasonably" and "suitable". There is no attempt in the ground to define the meaning of "reasonably suitable".
616 Unless there is much greater clarity about the possible grounds for refusal tenents will not know where they stand, and one of the advantages of a right to exchange is that tenants should know where they stand.
I am therefore reluctant to give a 100 per cent. welcome to the Government's decision, because there is no practical mechanism to give effect to the right in practice and because——
§ Sir George Young
The hon. Gentleman is usually enormously well informed, but he has not mentioned the existence of the tenants exchange scheme which provides exactly the object which he seeks. It puts tenants who wish to move to another part of the country in touch with tenants in that part of the country who are interested in moving to their area. We have done that. It is a computerised system that was set up by my Department two years ago. We need the right to exchange because there is no advantage in tenants contacting each other and agreeing to exchange if local authorities then stand in the way. The right to exchange is therefore an integral part of our strategy for mobility, of which the tenants exchange scheme, about which I am not sure whether the hon. Gentleman knows, is an important component.
§ Mr. Smith
I am indeed aware of the tenants exchange scheme. I am also well aware of the fact that it is not working terribly well and not just because of the point that the Minister has made. Some local authorities are unfortunately refusing to afford tenants the ability to assign tenancies to others by an exchange. It is also not working because of the publicity that it has been given and because the way in which it operates and the facility made available to tenants throughout the country to participate in it are not yet fully fledged. I hope that the Government will give some attention to the possibility of enshrining that right in legislation and beefing up the tenants exchange scheme, perhaps by putting more resources into it, giving it more publicity and making tenants more aware of their rights.
I hope that the Government will come forward with a commitment to do that as, without such a commitment to make a practice of the preaching, the legislation will not achieve much. I wish that the Government had been slightly more clear and precise in their language in framing possible grounds for refusal. For the two reasons that I have given, my welcome is muted but I still believe that the Government are absolutely right to ensure that there is a need to give tenants the right to exchange. I welcome their conversion to that principle.
§ Mr. Simon Hughes
I recollect that when the Minister made this announcement in Committee it was received with various degrees of enthusiasm. My recollection is that the Government were highly enthusiastic, that I was almost entirely enthusiastic and that the Labour party was less enthusiastic. Things appear to have moved considerably. I welcome that, because the right of tenants to exchange is something that many of them have wanted for a long time.
I wish only to urge the Department to move a little down the road that has been suggested by the hon. Member 617 for Islington, South and Finsbury (Mr. Smith). To ensure that the right to exchange is meaningful to the many tenants who want to get in touch and exchange with other tenants, it would be helpful if the Department considered some form of guideline or administrative direction that prevents people having to go to court to fight battles about whether they can transfer. As a result of fighting battles on behalf of tenants and others in the county courts and arguing on the interpretation of Housing Acts, I believe that grounds 3 and 4 will give rise to enormous scope. I think that the Minister accepts that they are open to many interpretations and it will probably be a long time before the law settles down and is clear.
We are normally involved with how many rooms a family needs. I have no doubt that it is acceptable in this context to allow for provision for a spare room for visitors. I am told that that is the policy in my borough and many others, although it seldom happens. I also have no doubt that it is no good making the definition that of statutory overcrowding as set out in the Housing Act 1957, which counts people sleeping in the living room and other utterly unsuitable means of assessing need. I hope that the Department will be able to supplement those provisions with some form of direction—such as it issues on many matters—to local authorities, after consultation with them, to lay down room numbers and bedroom numbers as a back-up to interpreting grounds 3 and 4. Ground 3 would be much clearer if people had such information.
Ground 4 also needs some directions. "Reasonably suitable" can mean all sorts of things in the eyes of the authority. I do not know whether it means that an authority would not consider approving an assignment of a family with young children to go to a tower block. If it does, it may mean above the sixth floor or the twelfth floor. It could mean all sorts of things. To leave it as a piece of legislation that could relate to the position of the block or the property, its relationship to neighbouring properties and its proximity to main road, is totally unsatisfactory.
I hope that we can ensure that the scheme will work without people having to have recourse to the courts, which is expensive, time-consuming and results in inconsistency throughout the country. Some cases are referred to the Court of Appeal and others to the House of Lords, and would be better resolved at an early stage. I welcome the right to exchange, and hope that the resources which would allow the tenants exchange scheme to become a reality, will be made more effective. Tenants in Southwark and I often have great difficulty finding out which authority governs the area to which they wish to move. I hope that this is a start and that the Government take it further.
§ Question put and agreed to.
§ Lords amendments Nos. 65 to 75 agreed to.