PROPOSALS FOR CO-OPERATIVE MANAGEMENT OR OWNERSHIP (Hansard, 24 April 1986)

HC Deb 24 April 1986 vol 96 cc458-64 458

§ '.After section 27 of the Housing Act 1985 insert— "Proposals for co-operative management or ownership

§ 27A. — (1) If a qualifying tenants' association serves written notice on the local housing authority—

(a) proposing that the authority should enter into a management agreement with the association with respect to dwelling-houses and other land specified in the notice, or
(b) offering to buy dwelling-houses and other land specified in the notice at a specified price,

the authority shall take the proposal or offer into consideration.

§ (2) If the authority have not, at the end of the period of six months after service of the notice, entered into such an agreement or, as the case may be, accepted the offer, they shall give the association a written statement of the reasons why they have not done so.

§ (3) A tenants' association is a qualifying association for the purposes of this section if—

(a) it is a housing association of which at least half the members are tenants of dwelling-houses specified in the notice,
(b) it has at least 50 such members or is registered under the Industrial and Provident Societies Act 1965, and
(c) at least half the tenants of the specified dwelling-houses are members of the association.".' —[Mr. John Patten.]

§ Brought up, and read the First time.

5.15 pm

§ The Minister for Housing, Urban Affairs and Construction (Mr. John Patten)
I beg to move, That the clause be read a Second time.

§ Mr. Deputy Speaker (Mr. Ernest Armstrong)
With this it will be convenient to take the following: New clause 5—Financial assistance for tenants' organizations— 'In part IV Housing Act 1985 after section 107 there shall be inserted the following section—

§ "Duty to provide financial assistance for Tenants Organisations.

§ 107A.—(1) A landlord authority shall from its Housing Revenue Account for the purposes of housing management provide financial assistance to tenants' organisations representing secure tenants in its area.

§ (2) The amount of grant payable to each tenants' organisation is an amount to be prescribed in Regulations calculated on a weekly basis by reference to the number of dwellings managed by the landlord authority in the area of that tenants' organisation.

§ (3) The Secretary of State shall by Regulations made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament:—

(a) prescribed the amount per dwelling to be provided in each grant,
(b) determine the criteria by which the landlord authority—

(i) shall distribute the grant loan and
(ii) approve and register tenants' organisations in its area and

(c) specify the approved purposes for which such a grant may be spent.".'.

§ Government amendments Nos. 24 and 149.

§ Mr. Patten
On the 11 March, in our debate in Committee, I promised to bring forward an amendment to give tenants the right to request the setting up of a co-operative, and to place a duty in law on their landlord to consider that request, and give a reasoned response. This new clause fulfils that commitment.
The proposed clause will enable tenants to form themselves into tenant associations to meet the criteria provided for in the clause to put forward proposals either for the delegation of management of their housing association, or alternatively, its sale to the association.
I think I can reasonably claim that a consensus emerged during the Committee discussions.
Regardless of political party, we all wish to see tenants' co-operatives fostered. This is one of the ways in which to give tenants a real say in the management of their estates. By promoting management co-operatives, we provided for restrictions on the right to exchange in and out of such co-operatives.
Following concern expressed by the hon. Member for Woolwich (Mr. Cartwright), I have considered further the terms of clause 6. I have tabled amendment No. 24 to limit the landlord's discretion for withholding consent to those cases where the prospective tenant is not willing to become a member of a co-operative.
The Government strongly favour giving tenants more real opportunities to have an effective say in the running of their estates, and new clause 11 provides the basis and mechanisms for the all important first steps in encouraging the formation of such co-operatives.
Amendment No. 149 provides for the clause to take effect on an appointed day. New clause 11 thus allows tenants to initiate proposals, and, more importantly, gives them the right to a reasoned response.
I have considerable sympathy for what the hon. Gentleman is seeking to achieve in new clause 5 which is to place a duty on local authorities to provide financial assistance for tenants' organisations. We know that for such organisations reasonable funding can make all the difference. I agree that local authorities should promote, encourage and support representative tenants' associations.
Consultation and tenant involvement in management can only be effective when there are active tenants' associations. Whatever good intent is behind the reason for this clause, it raises serious matters of policy and principle which we cannot ignore. The issue both of principle and practice is that which asks the question, "What local organisation could not do without a bit of financial help?" Surely it would be wrong to place a duty on local authorities to pay grants for amounts, and to bodies, not of their choosing.
Local authorities do not have a bottomless purse, whoever may be in control of them or of the central Government. They have to decide their priorities. They already have general powers and discretion to make payments to local groups in order to benefit the area. 460 Under their discretionary powers under sections 111 and 137 of the Local Government Act 1972, they can fix amounts and criteria themselves.
New clause 5 seeks to provide that any grants would be provided from the housing revenue account. That would mean that all tenants would pay for the grants, but only those belonging to the tenants' association would get any benefit. There may be good reasons why some tenants do not wish to belong to an organisation. Under the new clause, they would be paying for something that they would not receive.
We discussed in Committee the fact that tenants' organisations vary greatly and will continue to do so. We welcome the increasing variety of tenants' organisations, because none of us would claim to know the golden mean according to which they should be set up. We are still on a learning curve. In many places, the semi-experimental aeroplane still has to take off. Organisations evolve to suit the needs, conditions and resources of their members. New clause 11 provides for the Secretary of State to specify how tenants' organisations should be constituted and organised if they are to qualify for local authority support. The criteria will have to vary to suit local situations. It is therefore necessary that local authorities should have discretion. In the light of those comments I invite the hon. Gentleman to withdraw new clause 5 and I hope that there will be support for new clause 11 and amendments Nos. 24 and 149.

§ Mr. Jeff Rooker (Birmingham, Perry Barr)
I should like to dispel any doubts that the Minister may have about new clause 11 by giving it a wholehearted welcome. It is a first-class new clause and does not need qualifying in any way. It would be niggardly to say that it does not go as far as we want, because it is in effect designed to meet the attempts of the Opposition in Standing Committee to give tenants the right to trigger off a management co-operative or, in other words, take from their public landlord the control of their own housing.
The Minister said in Committee that we were going much too far too fast, and that the Government would consider an ameliorating measure to give tenants some legal authority to demand the setting up of a tenants' management co-operative and require the local authority to respond to that demand. The new clause is a foundation upon which all of us, including the tenants and the National Federation of Housing Co-operatives, can build. We shall watch closely what happens. My hon. Friends and, no doubt, many Government Members will actively ensure that tenants know about their new legal rights, and will make sure that we understand the reasons that authorities may give for turning down legitimate demands by tenants to get control of the management of all or part of their estates.
We applaud the measure. The Opposition do not carry the vote, so the new clause does not go as far as we would have wished. However, we will give the measure 100 per cent. support and do all that we can to make the clause a reality.
I accept what the Minister says about new clause 5. Unfortunately we were not able to discuss the matter in Committee and therefore we have not had the necessary background debate in respect of financial assistance for tenants' organisations. The Minister is quiet right. If new clause 11 is to mean something and to get off the ground, 461 we need strong, well-motivated and well-resourced tenants' organisations. New clause 5 represents an attempt to raise that issue.
We shall not pursue the matter to a vote. We wanted the issue to be on the agenda so that the Government and their advisers and people outside could see that we consider that it is important. We shall return to the question on future housing legislation. I hope that the Minister will take on board the fact that we are serious about the matter. We were serious about our original proposals in Committee. We understand that our original suggestions about tenants' rights would not really work unless tenants were well resourced and well motivated, and that part of the resources would have to take the form of money.
Unfortunately, because of the financial implications, we had to raise the matter here rather than in the other place. However, we welcome new clause 11 wholeheartedly and we shall ensure that local authorities—whether under Tory, Labour, Liberal or Social Democratic control—are on the receiving end of demands from their tenants to activate their rights under the new clause. If local authorities turn down such demands, we shall want to know why.

§ Mr. Tony Marlow (Northampton, North)
The new clause seems to be worth while and far-reaching. However, as it is an important matter, will my hon. Friend explain precisely what will be involved? As I look at the clause with a non-legal eye, it appears to me that in a group of local authority tenants on a housing estate, if 50 or more such tenants, being at least half of the total, wished to join a qualifying tenants' association, that association could set up its own management, hire and put together its own management organisation and ask the local authority whether it could continue to be managed by the new management rather than the local authority. Alternatively, the tenants could go the whole hog, approach a financial institution, get the cash, ask the institution to back them, and buy, own and manage their own houses and community. Is that what the new clause means?

§ Mr. John Cartwright (Woolwich)
I welcome new clause 11. To be frank, I would have preferred legislation giving tenants clear rights to trigger the opportunity of establishing a co-operative. However, I understand the arguments deployed by the Minister in Committee and realise that that might be too dramatic a leap at the moment. I echo what was said by the hon. Member for Birmingham, Perry Barr (Mr. Rooker). I suspect that some local authorities of all political persuasions may be reluctant to encourage the development of housing co-operatives. It will then be up to those of us who believe passionately in the principle to bring our political muscle to bear on such authorities and try to make them see the importance of encouraging such development.
I also echo what has been said about the need to provide adequate resources. At lunchtime today, some of us had the opportunity to attend a reception in the other place on behalf of housing co-operatives. I talked to a number of rank and file activists who were involved in the development of housing co-operatives. I was struck by the degree of patience that is needed. One cannot simply declare a co-operative and expect everything to fall into place automatically. Some of the people to whom I spoke 462 had spent two years or more in the formative process of developing a co-operative, understanding what is involved, and considering all the ramifications.
As was said in Committee, not just money but time, effort, and energy will have to be invested in encouraging co-operatives and enabling ordinary tenants to take on such responsibilities. The new clause does not go quite as far as I would have liked, but it is an important step along the road. I welcome it.
I also welcome what the Minister said about amendment No. 24. It involved a comparatively small point, but I am grateful to the Minister for accepting that, as drafted, the Bill appeared to run the risk of being unfair to some tenants. They might have been absorbed into some form of housing association and, as a result, have lost a reasonable right to transfer and exchange. I am grateful to the Minister for picking up that point and for dealing with it so fairly. I certainly support new clause 11 and amendment No. 24.

5.30 pm

§ Mr. John Powley (Norwich, South)
Like other hon. Members, I welcome new clause 11. I was the chairman of the first improvement areas committee way back in the 1970s, when that concept was rightly put forward by the Government of the day. Improvement areas committees were set up within the designated areas. We gave them every encouragement and the exercise proved to be very worth while, as I hope and believe this one will be.
Those within an improvement area were enthusiastic. They elected their own chairman and secretary, and came up with ideas that the local authority thought about. I suspect that something similar will happen with tenants' associations. In the case of improvement areas, there was no financial support, or tag. We rightly depended on local effort and will and on local ideas. I believe that we got a very responsible organisation, just as I believe that this time there will be a responsible attitude from those who put in a lot of their own effort, give up their own time and incur perhaps some modest expenditure to be met out of their own pockets. The lack of a financial tag ensures that people use their own initiative instead of allowing the local authority to force something onto them using some financial inducement.
I hope that a tenants' association will not be used by either side as a political weapon, and that party politics will not come into it. I also hope that people will join an association because they believe in the area, in what needs doing in it and in what the local authority could help them to do. Any political interference would tend to undermine the authority and stature of a tenants' association.
I wonder whether my hon. Friend the Minister has given some thought to what would happen if there were owner-occupiers within the area. I think of the possibility of people who had bought their council houses becoming involved in whatever decisions or environment groups were suggested by the tenants' association. They would probably have more stake than anyone else in what was going on in the area. Both have considerable parts to play, but I believe that some thought should be given to the owner-occupiers.
With those few words, I give the new clause a warm welcome.

§ Mr. Simon Hughes (Southwark and Bermondsey)
I have two brief comments to add to those of my hon Friend 463 the Member for Woolwich (Mr. Cartwright). Hon. Members may remember that my hon. Friend the Member for Liverpool, Mossley Hill (Mr. Alton) introduced the Right to Co-operate Bill under the ten minutes rule. Although the new clause is welcome it goes only half way down that road.
I echo the remarks of those hon. Members who have said that we shall need a right to co-operate. The view is still prevalent that co-operatives are not the best form of management. Recently, I had a long local involvement with a block of properties in my constituency. The block is over the bridge, in Cooper close, just off the Waterloo road. It was under GLC ownership, but ownership recently passed to Southwark council. Despite the goodwill and massive effort of the occupants, some resistance has so far thwarted the attempts of all the block's occupiers to become a co-operative. That has happened despite the fact that the block is ideally suited to such an arrangement. Until we have the right, local authorities will be able to say no, and to reserve the matter entirely to local authority management.
The new clause puts the pressure on, but falls short of achieving the aims of many people. The problem can be solved only by going down the rest of the road quickly.
New clause 5 concerns financial assistance for tenants' organisations. My one caveat about it is that there is a danger in suggesting that there should be a national standard for the amount of money to be provided. That matter should be determined locally. All hon. Members will agree that as non-political, representative bodies, tenants' associations should be able to flourish and prosper. They should be well run and should serve the community well, while at the same time counteracting the power of the landlord. Indeed, that is very necessary, as the landlord normally has all the cards and all the knowledge.
If central Government prescribe the proper amount, a danger arises. Local authority funds for housing should admit of an allocation for tenants' organisations and associations. I hope that we do not allow central Government to decide what should be permitted locally. That is my concern. I fear that the Labour party has a tendency to centralise everything. That tendency is still manifest, and I hope that it will be resisted.

§ Mr. Chris Smith (Islington, South and Finsbury)
As someone who worked for a considerable number of years in the housing co-operative movement before being elected to the House, I warmly welcome new clause 11. It represents a major step in the right direction.
However, I take issue with the hon. Member for Southwark and Bermondsey (Mr. Hughes) over his remarks about the Labour party. My local authority of Islington has many management and ownership co-operatives. They are sponsored by the local authority, frequently in the face of carping criticism from local Social Democrats.
I hope and trust that the Government, and those local authorities that seize the opportunity afforded by new clause 11, will not see it as a cost-cutting or saving exercise. Unless sufficient resources are made available to housing co-operatives to allow them to manage and maintain their properties properly, and unless resources are sufficient to enable them to run as co-operatives— 464 which is certainly no easy task for lay people—co-operatives may not achieve their potential. Consequently, I hope that the Government will not see the provision as a means of cutting expenditure but, rather, as a means of emancipating tenants and giving people the chance to exercise more control over their environment and their housing.

§ Mr. John Patten
Emancipating tenants and putting people first is exactly what the new clause is all about in this new world of subfusc politics, in which we are all involved.
The debates in Committee on tenants' co-operatives and the short debate today have shown Parliament at its best. Both sides of the House wish to improve the lot of one section of society. The Government have been prepared to go further than they had previously envisaged, but the Opposition have also recognised that although they would like to go further, there may be some sense in not going quite so far this time.
Opposition Members have given due notice that they may wish to go a lot further at a later stage. Indeed, the Government and I also wish to go further. However, we live in a difficult and evolutionary world. Hon. Members on both sides of the House have spoken about the problems of setting up management co-operatives, about the practical difficulties and about the considerable personal commitment that is needed by those involved. We do not know where that evolutionary process will end. It could even end in the sort of thing that my hon. Friend the Member for Northampton, North (Mr. Marlow) mentioned in his brief speech.
I think that new clause 11 and the associated amendments are a step on the way, and I commend them to the House.

§ Mr. Marlow
If somebody wants to set up an organisation for co-operative management or ownership, and the local authority says that it does not want them to do so, even though it is manifestly the case that the majority of people who live in the community want it to go ahead, is there anything that they will be able to do under this arrangement? If not, is my hon. Friend considering bringing forward further amendments in the other place?

§ Mr. Patten
I recall that we had quite lengthy debates on that in Committee. I commend what I said during those debates. It will not be possible under this legislation to force a recalcitrant local authority to say yes. However, I am convinced that once the issue is on the political agenda it will be exceptionally difficult for a local authority to say no under any circumstances. I think that we have the balance right and I think that both sides of the House recognise that we have it right for 1986. That is not to say that in 1989, 1992 or whenever, some future Government might not think that we have to go much further in many directions, all of which have been referred to during this useful short debate. With those words, I commend the new clause and the associated amendments to the House.

§ Question put and agreed to.

§ Clause read a Second time, and added to the Bill.