Lords amendment: No. 17, before clause 4, insert the following new clause—
. —(1) In Part IV of the Housing Act 1985 (secure tenancies and rights of secure tenants), after section 106 insert—
106A.—(1) The provisions of Schedule 3A have effect with respect to the duties of—
(2) In relation to a disposal to which that Schedule applies, the provisions of that Schedule apply in place of the provisions of section 105 (consultation on matters of housing management).".
(2) After Schedule 3 to the Housing Act 1985 insert as Schedule 3A the Schedule set out in Schedule (Consultation before disposal to private sector landlord) to this Act (consultation before disposal to private sector landlord).
(3) The amendments made by this section apply to disposals after the commencement of this section.
Mr. Deputy Speaker
With this we can take Lords amendments Nos. 26 and 27 and the amendment thereto, No. 169 and the amendment thereto and No. 201A
§ Mr. Patten
It will be useful to have a debate on this important issue. We have here a daunting group of amendments which honour an undertaking that I gave in Committee and which give council tenants a statutory right to be consulted about proposals which would transfer ownership or management of their homes—not their dwelling units—to another body.
I shall concentrate on amendments Nos. 17, 169 and 27 as they contain the main changes on the subject. Amendments Nos. 17 and 169 insert the new section 106A and the new schedule 3A into the Housing Act 1985. Those are important pieces of detail.
728 One of my local newspapers had my handwriting analysed recently by a professional graphologist. It was an independent assessment. The graphologist was not told who or what I was, and said that the writer had no grasp of detail, preferred the broad brush approach and was probably an actor or a Member of Parliament. I now feel that I must read out the detailed matters with some determination so that the excellent Courier newspaper series realises that there was a small mistake in the graphologist's otherwise excellent analysis of my handwriting. It was my best handwriting as well—that is what I found so irritating.
The effect of these amendments is to give council tenants a statutory right to be consulted about proposals to sell their homes to a private landlord. They provide that the Secretary of State shall not give his consent to a disposal if he is satisfied that a majority of the tenants are opposed to it.
Amendment No. 27, which inserts a new section 27A into the 1985 Act, makes similar provision in relation to proposals to delegate the management of tenanted council dwellings to another body. These are lengthy amendments because it is necessary to spell out in some detail—and I was pressed hard in Committee about this — how the consultation arrangements are to work. This is done in new schedule 3A and new section 27A. These provisions place specific duties on the councils to consult their tenants —duties that councils will not be able to evade or skimp as the Secretary of State will be able to ensure that councils comply with them in full.
The amendments will require local authorities to consult tenants fully and to take their views into account before making an application to the Secretary of State. Tenants will have to be told of any significant changes made to the scheme after they have been consulted, including any modifications made to meet their objections.
The tenants will then have a further period of at least 28 days in which to lodge any remaining objections directly with the Secretary of State. If the Secretary of State concludes as a result of this consultation that the majority of tenants are opposed to the proposal, he will not be able to give consent and the scheme will not proceed. Before considering any application for his consent, the Secretary of State will be concerned to see that there were no shortcomings in the way in which the consultation was carried out. If necessary, he will have the power to require the council to carry out further consultations.
As the hon. Member for Southwark and Bermondsey (Mr. Hughes) is seeking to delete paragraph (6) of new schedule 3A and subsection 27A(7) which are contained in this group of amendments, I must stress that the Secretary of State will be an effective long stop in seeing that the consultations are complied with properly.
These provisions provide that a transfer of ownership or management to a private body which takes place with the Secretary of State's prior consent cannot be declared void because of any failure on his part or that of the relevant council to comply with the new consultation provisions. These provisions are essential, as without such a guarantee—and it is well precedented—it is unlikely that any private body would be willing to enter into such a transaction which some time thereafter might be 729 overturnable strictly in law because of some minor technical flaw — for example, in the dissemination of papers.
However, this protection for private bodies where transactions have taken place in good faith with the Secretary of State's prior consent does not mean that councils will be able to ignore the new statutory requirements to consult their tenants, and, as I have stressed, the Secretary of State will himself ensure that this is done properly in every case. Furthermore, it will still be open to tenants who feel aggrieved to take their grievance to the courts for redress.
As for precedents, similar provisions are to be found, for example, in section 17 of the New Towns Act 1981, section 128 of the Local Government Act 1972 and, somewhat surprisingly, in section 23(1) of the infamous Community Land Act 1975. I remember that Act as the cause of my first ever political campaign in my constituency, and we all wore stickers declaring, "Stop the land grab". That was our reaction to the Community Land Act 1975. Given the circumstances of this well-precedented power, I hope that, following my assurances, the hon. Member for Southwark and Bermondsey will not feel it necessary to press his amendments.
The provisions that have come from another place will put on a statutory footing the general principles which it has already been Government policy to apply throughout by administrative means. On no occasion has consent been given in any way other than entirely in conformity with the general principles to which I am referring. We are simply putting into law what we have already been doing because people have been concerned. I wanted to react to that concern, and I did so in Committee.
There has been a lot of debate in the other place about the need for ballots and public inquiries. These are possible means of consultation in particular cases — Thamesmead, for example, in which my hon. Friend the Member for Ealing, Acton (Sir G. Young), then on the Front Bench, played such a formidable part to bring about change.
But not all disposals will be of that kind. They will vary. There could be a ballot or a public inquiry, but these could be quite inappropriate in cases involving one, two, three or four tenanted properties. The tenants must always be given full details in writing, and I pledge that they will get that. They can object to the proposals simply by writing to the Secretary of State. In other instances, the council itself might well wish to hold meetings with the tenants affected to clarify its proposals and, for example, to provide a questionnaire on which tenants could give a number of opinions. In my view, the requirement for a particular form of consultation in all places at all times is a bit inflexible.
We shall be looking very closely at the reaction of councils whose tenants seek opportunities to begin to manage their own affairs. I shall be looking closely at the attitudes of councils towards approaches by prospective co-operatives, management co-operatives and so on, in the ever changing tapestry of new forms of housing tenure, particularly in our cities.
These amendments give us what the House wants and certainly what the Committee wanted — a basic requirement for consultation by the local authority with provision for the Secretary of State to ask for further consultation where he considers it necessary in the form 730 he considers it necessary. The Secretary of State can insist on proper consultation, but he can be flexible about how it is carried out. I think that that is the right approach.
§ Mr. Rooker
I am grateful to the Minister for going out of his way to explain some of the points involved. He referred to groups of tenants going to the local authority. I may have misunderstood, but I believe that that relates to another clause in the Bill — clause 7, which was inserted in Committee. We are now discussing the operation of old clauses 4 and 6 relating to disposal of ownership and sub-contracting of management. I would not want to confuse the two issues. The other is a new right for tenants to demand and seek co-operatives and to get a response from the local authority.
We are grateful for the amendments. That is absolutely clear because they arose from pressure on the Government in Committee. The Minister wrote to me as long ago as 23 April to say that it was not possible to put the amendments in the Bill on Report. There was a good reason for that — the Bill was railroaded and bulldozed through the House. Following consideration in Committee, it came back on Report within a week or a fortnight. Then, for no reason that I have been able to discover, it spent three months in the other place, although nothing happened between April and July.
When the Minister wrote to me on 23 April saying that there would be proposals for consultation for tenants, he listed some of the principles to be used. He went on to say:You will see that this arrangement will give tenants an effective right of veto where the majority are opposed to a disposal of tenanted property or to a management agreement.I put that sentence on the record during the Report stage. It is an important point. Nobody says that the same system has to be used throughout the country; there are many ways in which it can be implemented.
Subsection (5) of Lords amendment No. 27 says:The Secretary of State shall not give his approval if it appears to him that a majority of the tenants of the houses to which the agreement relates do not wish the proposal to proceed".The Secretary of State must find out about that. It would not be acceptable to have a show of hands at a public meeting. As long as a detailed proposal is put to the tenants and fully explained to them, I cannot see what is wrong with a ballot.
One of the Minister's civil servants, an assistant secretary, Jenny Williams, attended a seminar—
§ Mr. Rooker
I have no doubt that she is talented. That seminar was held at the Housing Centre Trust in April this year and her speech was reported in the July-August edition of Housing Review. However, I read the article only today. Now I know why I am getting so much "stick", because of the way in which my name has been used to excuse certain Government policies. In discussing aspects of the Government's policy, she said:Ministers have promised to consider making statutory provision for tenants to be consulted individually on such proposals".That refers to the proposals to sub-contract management and dispose of sites.
I hope that tenants will be consulted individually by means of a ballot. I do not assume that it will be consultation a la Langbaurgh. A system of individual counselling would be unacceptable as a means of obtaining 731 a decision. After the proposals have been discussed and the details examined, I do not see why a ballot of the tenants cannot take place. In the other place, the Government spokesman repeated again and again that a majority of the tenants would have to be in favour and that it would have to be clearly shown that they were in favour of the proposal. On 7 October, the Minister used the phraseIt really is a veto by tenants."—[Official Report, House of Lords, 7 October 1986; Vol. 144, c. 199.]"Veto" is an extremely powerful word. Everybody understands what it means, One need only look at Northern Ireland, with which the Minister is more familiar than I. The people of Northern Ireland understand what that word means. It means that something can be stopped. Tenants must know that they have a collective right, by majority vote, to challenge anything with which they do not agree.
§ Mr. Cartwright
The hon. Gentleman is aware that an example of a major housing development leaving the public sector in recent years is Thamesmead, most of which is in my constituency. In that case, there was a clear vote by everyone concerned. During the campaign, all points of view were expressed. At the end of it, everybody who was living in the development had an opportunity to vote for the kind of future that they wanted for the area. Is not that the kind of model at which we should be looking?
§ Mr. Rooker
Yes, it is. I understand that the tenants of the former Cantrell Farm at Knowsley voted on that disposal and that a ballot showed that about 1,000 to six were in favour of the change.
Doubts have been raised, though not by me. I understand what is meant by a veto and I am prepared to accept the Minister's letter on that point. I am also prepared to accept the spirit of the amendment. It represents a substantial advance on the Bill's original proposals. It is not for me to defend the Government's Bill, but I flatly refuse to tell lies about it, although other people have told lies. The Minister must make it absolutely clear that it is a veto, as I understand the meaning of that word and as the hon. Member for Woolwich (Mr. Cartwright) and every other reasonable person understands it. On that basis, we welcome the amendments.
The Minister said that the wording of paragraph 7 was taken from a precedent littered throughout our legislation, but I presume that it relates only to procedural mistakes and not if a local authority deliberately misled the Secretary of State, causing him to believe that requirements had been met when that was not the case. This system must not be fudged. Deliberate deception must not be allowed to carry the day. Paragraph 7 is drafted in extremely wide terms. If there is a precedent for it in other legislation, there is obviously a reason for it, but I should like the Minister to confirm that those words have indeed been used in previous legislation.
§ Mr. Peter Bruinvels (Leicester, East)
Many misleading statements have been made about the Housing and Planning Bill. That is the only point that was made by the hon. Member for Birmingham, Perry Barr (Mr. Rooker) with which I agree.
A leaflet issued by the Campaign Against Sales of Estates says: 732If the Housing and Planning Bill becomes law, it will mean no security, no consultation, no right to stay in your home, tenants could be evicted and their estates sold … no right of appeal if tenants don't agree with the plans to sell their estates. … selling estates means fewer homes.I am in favour of all three amendments, so to me that leaflet, entitledGovernment Monopoly: A Game of Chance for Council Tenants",is completely unhelpful. Bearing in mind what my hon. Friend has done to give powers to tenants, it is a disgrace that the leaflet was allowed to be circulated. It was certainly audacious to address the questionnaire to "Mr. John Patten" and to give his address as the House of Commons, despite the fact that the Minister for Housing and Construction is at the Department of the Environment, Marsham street, London SW1.
There have also been headlines in The Leicester Mercury such asGive us a veto over house salesandSales veto claim is misleading.Another heading isTenant has right to be consultedandTenants will not be thrown out of homes".There has been great concern in Leicester. A few days ago, the direct labour organisation put an "info" leaflet through people's doors saying:Councils pressed to sell off housing estates. Leicester on hit list … What's Leicester City Council's policy? Leicester City Council is totally against the Bill.This Bill will do a great deal to help my constituents, in particular Mr. Bill Cooper and the Charnwood Tenants Association, who feel bitterly let down by a council that does not want the estates to be improved.
Amendments Nos. 17 and 169 demonstrate that despite what Leicester city council says the new power will not depend upon the whim of the Secretary of State. The authority will first have to seek his approval and he will have to take certain factors into account before making his decision. In other words, there will be proper consultation before there is any exercise of the right to sell. Account will have to be taken of the effect of the scheme on the extent and character of the housing accommodation in the area and the extent to which the scheme provides for housing to be offered for sale or rent. Most important of all, there will have to be proper consultation with the existing tenants, and people living there will have an absolute say about their future.
The hon. Member for Perry Barr said that there had been lies about the Bill. The council in Leicester had said that there would be no consultation and that the Secretary of State would be able to act without consulting tenants. If approval is given, it will be only after the most careful consideration. There is a power to require further consultation in paragraph 4 of the new schedule, Lords amendment No. 169. My right hon. Friend's consent will be withheld if the majority of tenants are opposed to disposal. No consent will be forthcoming unless it appears to the Secretary of State that the majority of tenants in the dwellings to which the application relates wish the disposal to proceed. That is quite clear. Council tenants will be secure tenants and if the majority do not want their housing estate to be sold, that will be the end of the matter, so my constituents in Leicester, East will be OK.
It will be incumbent on councils to consult, as is only right. Leicester city council is opposed to any privatisation 733 and to any private funds coming into the city. That is a tragedy, because the only way to improve the housing stock is in partnership with the private sector. The Liecester Tenants Federation, which comprises 36 tenants' organisations and is led by Mr. Don Connolly, says clearly that the veto that tenants need must be spelt out clearly. The federation says:We do not know of any tenants who want their homes sold".The federation is not properly representing my constituents in council property because some of those tenants would like their homes to be sold. If the majority agree, we shall have a sale. Otherwise, as my hon. Friend the Minister has made clear, those houses cannot be sold.
It is important to note that each tenant will be individually informed. I wish that Conservative Members would stress that fact and nail the lies that are being put about. It is clear from the Bill that notice in writing will be given. It is also clear that a tenant will have 28 days to send any objection to the Secretary of State. Those are clear reasons for supporting the amendments, which will ensure that tenants who want proper consultation have the final say. The Minister has made it clear in a helpful letter to me that there is no possibility of an immediate handover of a council estate to a private developer. The veto exists and the management and ownership of an estate can be delegated or transferred only with the approval of the Secretary of State.
§ Mr. Rooker
May I query the hon. Gentleman's choice of words? As I understand it—if I am wrong, I have been wrong since day one—nothing in the Bill requires a local authority to dispose of its estates.
§ Mr. Rooker
I am glad that the hon. Gentleman agrees with me because he was giving the impression that local authorities might be forced to dispose of estates. That is not the case.
§ Mr. Bruinvels
I am delighted to confirm that. I know that many of my constituents would like to have their houses sold to private landlords, but that will not be possible unless the majority agree and even then the council's authority will be required. As I said earlier, Leicester city council has already said that it opposes the Bill and I assume that it will not support the measure when it becomes law. All that I seek is the assurance that my hon. Friend the Minister has already given, which is that there will be much more consultation with tenants and that if they choose to have their properties sold their homes will be properly maintained and additional resources will be brought in. If they do not choose, their right to consultation and a veto will be there from day one.
These are good amendments. Ministers should be congratulated on taking up some of the amendments that were suggested in Committee. I look forward to seeing the Bill become law, because it will ensure that all tenants in Leicester, East and elsewhere, are given proper rights, can live in decent, properly managed property and are given free consultation, with tenants' and residents' associations being in the forefront in helping to maintain a decent quality of life on each estate.
§ Mr. Simon Hughes
I also welcome the Government amendents, which have been produced as a result of the pressure exerted by Opposition Members in Committee. 734 My hon. Friend the Member for Woolwich (Mr. Cartwright) and Labour Members argued from the start that is was necessary to have proper consultation.
The Government amendments were published on 26 September and I should say to the hon. Member for Leicester, East (Mr. Bruinvels) that, although I have never seen or heard of the document that he quoted, if it was published before 26 September it is fair to note that at that time there was no statutory provision for consultation. Up to that time, worries that there would be no adequate consultation were sufficiently well founded for people to campaign for such consultation.
The reason for my two probing amendments was to examine subsection (7) of new section 27A and paragraph 6 of the proposed new schedule. The Minister said that those provisions were precedented and a letter from his Department to Lady David set out the precedents.
However, are not the proposed provisions unnecessarily cautious? If there were legal arguments, it might be suggested that if there had been defects in any of the procedures, including the consultation, there would be no going back on the decision. I understand that unscrambling legal eggs, transferring management of estates and so on, is extremely complex, but I have a number of questions for the Minister and we must have answers if the proper anxieties about whether the reference to "veto" means that there really will be a veto are to be allayed. These are not unfounded anxieties. Shelter has taken counsel's advice, which is that the Government's proposals would allow the veto to be watered down.
Is it correct that consent could be given if a local authority had wittingly or unwittingly misled the Secretary of State about the reasons for the failure to comply or if there had been some neglect—not necessarily culpable—within the Department, either by Ministers or officials? It is suggested that any tenant's challenge to the Secretary of State's decision to give consent would not make any disposal void by invalidating the consent, whatever the basis of the challenge and however serious the substance of the argument.
Is it correct that there will be no other remedy open to a tenant if something has gone wrong? He will not be able to get damages for a wrong, negligent or technically deficient decision and would have suffered the loss of a secure tenancy or a change of management against his wish. That might be important if there had been a close vote, perhaps 51 to 49.
Have the Minister and his officials examined alternative wording to make it expressly clear that the Secretary of State will be concerned only about technical rather than substantial deficiencies in the procedure? The legal advice to Shelter suggested that wording such asa failure ‖ to comply with such requirements as were unnecessary in all the circumstances to be complied with",followed by a specific list of technical deficiencies, would be clearer.
Perhaps the Minister's officials will be able to advise him whether there are differences with the precedents. I accept that the formula has been used before because I have come across it before during my three and a half years as a Member, which seems all too short a period. Section 17 of the New Towns Act 1982 has more limited scope because it does not affect people specifically. As it is 735 related to the disposal of land, it affects them only indirectly. The Minister will remember that the Community Land Act 1975 is also about disposals of land. However, it includes an alternative remedy, that of prosecution and fine, in the event of a technical breach. Under the Local Government Act 1972, no secure tenants were affected.
My last question is whether the Minister accepts that all of the precedents for the formula were introduced in different circumstances and do not affect directly the rights of secure tenants to make it better or appropriate now to accept the amendments that I have brought before the House, or at least to think again about the drafting of the measure.
I am prepared to take the Minister's word on these matters. I was not a member of the Committee which considered the Bill, but I am aware of the debates in Committee and the pressure which was put on the Minister. I have read also the reports of the debates in another place. If the Government accept the consultation process, and accept also, to use the words of the hon. Members for Birmingham, Perry Barr (Mr. Rooker) and for Leicester, East, that veto means veto, we cannot have a clause that suggests that veto does not mean veto.
I ask for the Minister's considered response to my argument. There is legal opinion and professional opinion that at present the veto is not secure. The Minister must be clear on this issue because many people outside this place are worried about the security of the Government's policy on a matter of great importance to many who are presently council tenants. I refer to the future disposal of management of their estates.
§ Mr. John Patten
I must respond to the issues raised by the hon. Member for Birmingham, Perry Barr (Mr. Rooker), by my hon. Friend the Member for Leicester, East (Mr. Bruinvels), who made a telling contribution, and by the hon. Member for Southwark and Bermondsey (Mr. Hughes). To take up the argument advanced by the hon. Member for Perry Barr, I have read twice what I regard as the key phrase in my speech which is: "If the Secretary of State concludes as a result of this consultation that the majority of tenants are opposed to the proposal, he will not be able to give consent, and the scheme will not proceed." I do not want to get into Gertrude Steinish stuff about a veto is a veto is a veto, but I cannot be any clearer in spelling out that which is contained in that part of my speech.
I have been reminded by a note which has been placed in front of me—which after due graphological analysis I divine to have been written by the same Mrs. Williams to whom the hon. Member for Perry Barr referred—that tenants will be consulted individually in writing. I hope that that writing will be slightly clearer than Mrs. Williams's. The note continues:See 27(1)(a) etc. as predicted at the seminar.That means that the Secretary of State will have all the information that she or he needs to determine whether the majority of tenants are opposed to the scheme. If the majority object, the scheme cannot go ahead. I do not think that I can be any clearer than that. I am putting the matter in different ways so that there is a choice of words which can be plucked from my speeches and used, I hope, in the publicity material delivered by the direct labour 736 organisation, at huge expense to ratepayers in Leicester, including the constituents of my hon. Friend the Member for Leicester, East. I want to see one of the little red leaflets go through every door. I trust that they will state, first, what I have said this afternoon, followed by an apology for unnecessarily frightening or scaring tenants about their prospects in my hon. Friend's constituency and, secondly, draw to the attention of tenants the fact that in another part of the Bill tenants in Leicester, East, as I know my hon. Friend wants, will have a full opportunity to form up to Leicester city council, that amazingly interesting body, and tell it that they wish to have the opportunity to manage their own affairs.
That is what the Bill does; that is the opportunity that the Bill provides for tenants; and I note that thus far Leicester city council has suppressed at every turn that information. If the council wants to give me the space in its little pamphlet, I shall happily write free of charge within a very short time an explanatory article on the new rights that tenants will have as well as the protection which the hon. Member for Perry Barr and my hon. Friend the Member for Leicester, East want tenants to have in future. Incidentally, I have a lot of money on my hon. Friend retaining his seat at the next general election, including a number of side bets.
I have tried to explain that the provisions that the hon. Member for Southwark and Bermondsey seeks to amend provide that the transfer of ownership or management to a private body that takes place with the Secretary of State's prior consent cannot be declared void because of any failure on his part. In reaching that decision, we took into account many of the points to which the hon. Gentleman has referred. In this Bill we must seek to be free and fair in our attitude to all parties, and we must make sure that all the parties understand their obligations. I refer to the council, the tenants and any third party that is involved. We have picked the words as drafted extremely carefully and, following the care with which the provisions are drafted, I cannot imagine any tenant finding herself or himself in the position to which the hon. Gentleman has referred. Secondly, we have considered the wording extremely carefully and we believe that it is clear. It is aimed only at technical difficulties of the sort that I mentioned in my introductory remarks.
I have given every undertaking that I possibly can both in Committee and on the Floor of the House this evening. I hope that the Bill will proceed unamended.
§ Question put and agreed to.
§ Lords amemdments Nos. 18 to 23 agreed to.