§ Amendments made: No. 286 in page 78, leave out lines 32 to 34.
No. 16, in page 79, line 18, leave out
'assured tenancy is for a term certain'
and insert
'tenancy is a fixed term tenancy for a term'.
No. 17, in page 79, line 26, leave out
'assured tenancy is for a term certain'
and insert
'tenancy is a fixed term tenancy for a term'.—[Mr. Waldegrave.]
§ Mr. WaldegraveI beg to move amendment No. 293, in
page 79, line 43, after 'possession', insert
'or, if that landlord is a registered housing association or charitable housing trust, a superior landlord'.
§ Madam Deputy SpeakerWith this it will be convenient to take the following: Government amendment No. 294. Amendment No. 219, in page 80, line 15, at end insert:
'(e)suitable alternative accommodation is available for the tenant or will be available for him when the order for possession takes effect.'.
§ Amendment No. 220, in page 81, line 33, after 'Ground 1', insert 'and Ground 7'.
Amendment No. 221, in page 81, line 40, after 'Ground 1', insert 'or Ground 7'.
§ Mr. WaldegraveThe amendments deal with the question of suitable alternative accommodation. Opposition Members wanted us to make it a condition of the redevelopment ground for possession that there should be suitable alternative accommodation available for any displaced tenant. We thought that that was too restrictive. We do not want the ground to be so circumscribed that it is useless. Moreover, there is already a ground for possession where suitable alternative accommodation is available. I should emphasise that this ground can be used only in respect of assured tenancies, not for Rent Act tenancies and not if the landlord has bought the property over the head of an existing tenant, and only if the landlord has made every effort to ensure that the work cannot be done without displacing the tenant. It is not a ground that can be used lightly to evict. However, it must not be so hedged with restrictions that it is unusable, as clearly there are large areas in which we want to encourage sensible development.
Amendment No. 293 meets the undertaking that I gave in Committee to examine the amendment suggested by the empty property unit. I am glad to say that we have adopted the suggestion and extended the ground to superior landlords where the immediate landlord is a registered housing association or a charitable housing trust—a matter that the hon. Member for Southwark and Bermondsey (Mr. Hughes) raised in Committee. I hope, as the unit believes, that the amendment will facilitate the use of short-life property, and that must be an objective for us all—in all cities and in London especially.
Amendment No. 294 redrafts the ground in certain ways. It covers joint tenants, so that it cannot be used 1035 where some of the tenants in an agreement antedated the purchase of a property by the landlord even though others came in after he acquired it. That is a useful additional protection for tenants.
The amendment also makes it clear that there may be alternative reasons why it is not possible to carry out the work without displacing the tenant. The original version set out a series of conditions, all of which had to be fulfilled before the ground could apply. This amendment makes the ground more flexible without, I believe, undermining the position of tenants in any way. I hope that the proposals will be welcomed by the hon. Member for Southwark and Bermondsey and perhaps by my hon. Friend the Member for Hornchurch (Mr. Squire).
§ Mr. BattleIt strikes me as ironic that the schedule should be attached to a part of the Bill that refers to security of tenure, given that it deals with grounds for possession. Schedule 2 highlights the great trap for private tenants in the Bill. When the schedule was presented in Committee it showed a marked shift of rights from the private tenant to the landlord. Discretion was taken away from the courts and grounds for possession were made mandatory. I note that the Secretary of State is now present. We have had some welcome concessions on two or three of the earlier grounds. However, I suggest that Government amendment 293 represents a toughening of the original position. As I understand the proposal, a landlord who wants to develop a room in a house in which a tenant rents another room will have the right to claim that the builder has to walk through the tenant's room and that that gives grounds to evict the tenant. In that sense, the amendment extends and toughens ground 7 rather than conceding any of the points that we made about defending tenants' rights.
Ground 7 comes from the Landlord and Tenant Act 1954. Throughout the Committee stage we argued that the schedule took away tenants' rights under the 1977 Act and marked a shift away from tenants' rights. In Committee, the hon. Member for Mid-Staffordshire (Mr. Heddle) harked back to the 1954 Act, but it is worth remembering that that Act referred to commercial tenancies. It is not common for tenants to have an understanding of complex contractual law. They do not go through the fine print of the contract with their landlord—if they get a contract, that is.
When people need a home to rent they do not enter into proper contracts with landlords as a matter of free consent. They enter into contracts in which there is inequality of power between the contracting partners—the landlord and the tenant. The purpose of amendment No. 219 is to press the case that suitable alternative accommodation should be made available to ensure that ground 7 does not become a developers' charter, enabling the landlord to winkle out the tenant and gain possession so that he can redevelop the home only to let it at a higher rent, leaving the original tenant on the street.
We had a long debate in Committee in which the hon. Member for Mid-Staffordshire raised the point that the whole clause hinges on the word "intention". We must ask what is the intention of the landlord. Does he have a real intention to develop or does he simply propose to obtain 1036 planning permission or the suggestion of tenders to provide the necessary evidence to obtain a court order to evict without providing safeguards for tenants?
The Minister will say that ground 7 contains safeguards to prevent a developer from acquiring the freehold over the head of sitting tenants and then using the ground to evict them. The safeguard provides that neither the landlord seeking possession nor any landlord who owned the freehold since the tenancy was granted can have bought the freehold, as opposed to acquiring it by inheritance or gift. However, those safeguards can be bypassed. If the landlord is a company, there is nothing to stop the developer buying a majority shareholding in the landlord and then using ground 7.
In parenthesis, I remind hon. Members that the business expansion scheme proposal lays the clause wide open because the business expansion scheme offers incentives of £500,000. I would add that some of our anger at the way in which the Bill has been brought before us on Report is that it reflects the fact that the Government have made up housing policy piecemeal. The business expansion scheme was presumably being prepared for the Budget in March precisely when we were discussing the clause, yet we could not discuss the impact that it would have. The Bill should have been referred back to the Committee so that we could study the impact of the business expansion scheme on ground 7, because the BES provision buys developers into the Bill at tenants' expense. If the landlord is a company, or becomes a company with a grant under the new business expansion scheme, there is nothing to stop a developer buying a majority shareholding in that company and then using ground 7. There will have been no change in the identity of the landlord—the landlord is still the company—so the safeguard will not apply.
Whether the landlord is an individual or a company, there is nothing to stop a developer entering into an agreement with him under which the developer provides finance for so-called redevelopment. The clause is wide open for exploitation under the business expansion scheme provision. How will the clause close doors to future Rachmans or to the other individuals mentioned in Committee? The answer is that it will not; it will blast them wide open.
Under the clause as drafted, the tenant may be able to avoid possession by giving up that part of the home required by the landlord to carry out the improvement and redevelopment work. But if the landlord wants to arrange for the builder to walk through his room, that does not apply. The only safeguard that can be solidly built into the clause is the provision of suitable alternative accommodation. The scope for abuse by landlords using ground 7 to gain possession to sell rather than to develop and the vulnerability of sitting tenants to developers using ground 7 to sell or redevelop makes a mockery of the White Paper, which claimed that the Bill would give increased protection to tenants. Ground 7 will undermine tenants' protection and make a mockery of that claim.
I detect that a fracture is developing at the heart of the Government's housing policy. That fracture was evident in the Bill. Sometimes we were told to pay attention to the market because the brave winds of the market were being brought in to free the housing market and provide more housing. In Committee the hon. Member for Eastbourne 1037 (Mr. Gow) reminded us often of the works of Milton Friedman who tried to define competitive capitalism. Milton Friedman said that it operates
provided the transaction [within the market place] is bilaterally voluntary and informed exchange can bring about co-ordination without coercion.He put into italics the words:provided the transaction is bilaterally voluntary and informed".—[Official Report, Standing Committee G, 19 January 1988; c. 259.]6.30 pmUnder ground 7 there is no equality. There is no bilateral, voluntary and informed contract between landlord and tenant. The power to evict is given to the landlord.
The Government's policy has been based on the philosophy of the social market. There is a fracture in the Government's policy in that the Minister has been underlining the word "social" in the phrase "social market economy". Although we have not yet seen it, he has offered us the social landlord and the social charter. I suspect that the Secretary of State has been underlining the word "market". Therefore, the Minister for Housing and Planning has been stressing the word "social" and the Secretary of State has been stressing the word "market" at the expense of the word "social". Those two things are totally incompatible and the Housing Bill is now emerging as a real hotch-potch.
If the Bill is designed to transform the private rented market, there is a responsibility to ensure that those who have to live in that transformed private rented market do not feel that they are among the most insecure in our society, barring the homeless who do not even merit a mention in the Bill. The Bill is a missed opportunity.
§ Mr. John Heddle (Mid-Staffordshire)I will not attempt to answer some of the points made by the hon. Member for Leeds, West (Mr. Battle) except to say that earlier today he and I took part in a television programme on Channel 4 on this very subject. As always happens—I am sure, Mr. Deputy Speaker, that in your long and distinguished career you will have done the same—as soon as one steps out from the television studio, one kicks oneself for not having thought of the simple answer to what had appeared to be a tricky question when sitting before the camera. The hon. Member for Leeds, West said then that there was no mention of homelessness in the Bill. The House will recall that in the Employment Act 1988 there is no mention of unemployment. The purpose of employment Acts is to increase employment and the purpose of the Housing Bill is to increase the availability of housing. I am sure that when it receives Royal Assent it will do that.
I welcome my hon. Friend the Minister's fine tuning of the definition of "suitable alternative accommodation". I am sure that that is right because I believe that it will facilitate a better and more productive use of our existing housing stock. However, in the event of a disagreement or dispute between the landlord and the tenant as to the suitability of the alternative accommodation provided by the landlord, who acts as the final arbiter? I wonder whether my hon. Friend the Minister will consider that point during this Report stage.
§ Mr. Simon HughesAmendment No. 293 is welcome. The provisions of that amendment were tabled on an all-party basis in Committee by the hon. Members for 1038 Hornchurch (Mr. Squire), for Bootle (Mr. Roberts) and myself. We are members of the management committee of the empty property unit.
§ Mr. McCartneyNamedropper.
§ Mr. HughesNo doubt if the hon. Member for Makerfield (Mr. McCartney) was a London Member he would be desperate to obtain a place on that management committee—[Interruption.]—and desperate to obtain accommodation.
I should like to pick up the points made by the hon. Member for Leeds, West (Mr. Battle). Ground 7 is a ground for possession if there is to be a development of the building. I accept that it is limited because it does not apply to buildings acquired financially. It applies to buildings that are inherited or otherwise held. Nevertheless, it is a common occurrence that the landlord of privately owned property may wish to develop the property, demolish it, reconstruct it wholly or in part, or "carry out substantial works." The landlord may start to do that and leave the tenant with nowhere to go and no other offer of property from that landlord.
I accept that the Minister and the Secretary of State will say, quite reasonably, that the landlord may not own another property. That may be true. However, if that tenant could not have his or her interest sustained while the property was being redeveloped, probably for continued letting, would it not be right that that tenant should have access to a type of mobility exchange scheme that would require the landlord to provide suitable alternative accommodation? It may be accommodation obtained through another route and not property belonging to the landlord or property over which he has control.
There is another necessary qualification—that is, if the building was about to fall down or have a notice served on it by the local council. Clearly, one could not expect a tenant to remain in a property that was about to disappear. However, as the hon. Member for Leeds, West argued, it is unacceptable that at the whim of a landlord a tenant can be made homeless. The landlord may simply want to develop a building so as to provide more properties and generate more income and it is wrong that a tenant has no answer from the landlord or the court because the ground for possession is mandatory. The landlord can simply say, "I am sorry, but you will have to leave. We have no way of telling you where you should go and it is no longer possible for this to be your home."
It is often the case—not always—that the mandatory ground for possession of private property affects the old and the single. It is often the case that it is single pensioners or pensioner couples who, having lived for many years in a property, find themselves in such a position. Local authorities do not respond quickly and housing associations do not have anything available quickly. They are not willing to move until the person is actually homeless or very nearly homeless. It is an inhumane ground for possession if we do not try to do something to provide alternative accommodation for the tenant, and the landlord should be involved in that.
I would be grateful to hear the Minister's initial response to that. I wonder whether something could be done to protect tenants who find themselves in what would otherwise be a hopeless position.
§ Mr. WaldegraveWe had a prolonged debate on this matter in Committee and some of the same arguments have been produced today. There is a division across the Floor of the House. One of the reasons why so little property is brought into the rented sector and why so much property that could be rented is left empty is that landlords fear that it will be virtually impossible for them to gain reuse of the property if major development proposals come up.
We are trying to strike a balance throughout the Bill. The Opposition are arguing that tremendous obligations should be put on landlords to take responsibility for the housing of their tenants even if they are leaving the landlord business and perhaps taking part in an inner city development, which would be welcome. That would prevent landlords from letting and, if they do obtain possession of a property, it would encourage them to leave it empty rather than run the risk of any further developments being blocked. That is where we must try to achieve a balance in the Bill. We believe that ground 7 is right.
The hon. Member for Leeds, West (Mr. Battle) asked how serious the intention to redevelop had to be. I hoped that I had shown in Committee that the courts carefully consider the seriousness of intention. I quoted a number of cases from the workings of commercial law, on which our proposal is based, to show that if a landlord wishes to terminate a business lease for redevelopment he must show the necessary intention not only by saying that he chooses to redevelop but by having planning permission and contracts let, assuming that he is charging market rents. If he is making further lettings, he is already charging market rents and does not experience the same pressure to get people out as landlords with Rent Act tenancies.
§ Mr. Battlerose——
§ Mr. WaldegraveI fear that I will not convince Opposition Members about this matter. We believe that if we change the balance a little, properties will become available.
§ Mr. BattleThe clause is based on the Landlord and Tenant Act 1954. Under that Act, compensation is paid to business tenants who are being moved out, so why is there no compensation in the Bill for those who lost their homes?
§ Mr. WaldegraveIf I remember rightly, relocation costs can be paid——
§ Mr. BattleRemoval costs.
§ Mr. Waldegraverose——
§ Mr. HeddleDoes my hon. Friend agree that under the Landlord and Tenant Act 1954 compensation is paid in place of providing suitable accommodation? It enables the displaced tenant to provide his own suitable accommodation.
§ Mr. WaldegraveMy hon. Friend is more learned about that matter than I am.
§ Mr. Simon HughesWill the Minister say whether in all cases such development would meet the objectives on which he and his colleagues are so keen—the reletting of property for residential use? I see that an answer is coming from behind the Minister. Is it not right that development for commerical purposes may not necessarily produce 1040 further accommodation for letting? If so, it is not easily defended on the ground that it will produce more private sector rented property.
§ Mr. WaldegraveIf land is being used not for the provision of homes but for another necessary inner city development, it is more unfair that the responsibility for accommodating tenants should lie in every case with the landlord. My hon. Friend the Member for Nottingham, East (Mr. Knowles) passed me a useful reminder that the existing assured tenancy scheme includes a redevelopment ground.
§ Mr. Boatengrose——
§ Mr. WaldegraveWe have spent many hours debating this matter, but there is a clear difference of philosophy. We believe that the burdens on landlords have contributed to the decline of the rented sector. Much of the empty property in inner cities is kept empty against the fear of redevelopment. We hope that we have dealt with that problem in the short term.
If we go back down this route, we shall be contributing to the continuance of empty property, and I would not want to urge the House to do that.
§ Mr. BoatengI invite the Minister to give the first of what I suspect will be many honourable mentions in dispatches to his parliamentary private secretary.
§ Mr. McCartneyHod-carrier.
§ Mr. BoatengHod-carrier is too crude and coarse an expression to describe the Minister's PPS. He performs a useful function, though it is not as constructive as that of a hod-carrier.
Once again, the Minister has been writhing and wriggling. We saw the hand motions, the tugging of the ear and the engaging smile that we all came to know so well in Committee. He will have to do much better. If he does not, he will be here for many hours.
§ Mr. WaldegraveI think that I hold the record as a Minister—certainly during this century—for a continuous sitting of the House. I am happy to continue indefinitely. I wish that the hon. Gentleman would unfold his arms, because he is wearing a most remarkable tie. With his arms folded, we are not getting the full benefit of it.
§ Mr. Allan RobertsWe are not happy with what the Minister has been saying about empty property. Local authorities are the Government's whipping boys. The Government always try to blame the housing shortage and the number of people in bed-and-breakfast accommodation on the fact that waiting lists are growing and on the fact that local authorities have properties standing empty. They always ignore the private sector and especially the houses standing empty that are under Government ownership.
Over the past 10 years I have campaigned to get empty properties into use. I have been known to propose legislation that criticised local authorities that unnecessarily kept properties empty. I, unlike the Government, have always tried to strike a balance.
In 1986 there were 111,600 houses in local authority ownership standing empty, but there were 493,200 houses empty in the private sector. By 1987, the number of houses in local authority ownership empty had reduced to 1041 108,600, but there had been an increase in the private sector figure to 511,200. During that period, the Government's Housing Act 1980 provisions and the shorthold-tenancy provisions were in operation. The Government said that they would solve the problem and that all houses that landlords kept empty because they could not obtain vacant possession would come flooding back on to the market. The Minister is advancing the same fallacious arguments in these proposals.
§ Mr. Robin Squire (Hornchurch)As the hon.Gentleman has spoken in public in favour of greater use of empty property under different tenures and ownership, will he concede that if the Bill is passed without further comment about empty private property it is, none the less, perfectly valid to consider proposals for greater use of local authority property?
§ Mr. RobertsAs long as local authorities are not being unduly penalised or criticised unreasonably for not letting empty properties that could not be let because they did not have finance following the cuts in housing investment programmes to make empty properties available with the speed that they would like. I agree that we should be critical of local authorities that have properties standing empty unnecessarily. Simply to quote figures of properties in local authority ownership that are standing empty does not give the true picture. The Government quoted massive figures of properties standing empty in Liverpool. They were tenement blocks standing empty prior to demolition. Those figures were unfair and it was not right to pillory local authorities and make them the scapegoat for the Government's failure to allow sufficient houses to be built for people on waiting lists.
I shall give some figures from Sefton metropolitan district council. It is an important local authority and the constituency of Bootle falls within its boundaries. In Sefton 335 local authority houses and 113 houses owned by housing associations are standing empty. There are 6,333 standing empty in the private rented sector. That is a scandal in view of a waiting list of over 4,000. The local authority is doing an excellent job, even though since 1979 it has had a 78.3 per cent. cut in its housing investment programme allocations.
§ Amendment agreed to.
§
Amendments made: No. 294, in page 80 leave out lines 1 to 15 and insert—
For the purpose of this ground, if, immediately before the grant of the tenancy, the tenant to whom it was granted or, if it was granted to joint tenants, any of them was the tenant or one of the joint tenants under an earlier assured tenancy of the dwelling-house concerned, any reference in paragraph (b) above to the grant of the tenancy is a reference to the grant of that earlier assured tenancy.
For the purposes of this ground "registered housing association" has the same meaning as in the Housing Associations Act 1985 and "charitable housing trust" means a housing trust, within the meaning of that Act, which is a charity, within the meaning of the Charities Act 1960.',
§
No. 19, in page 80, line 21, after 'landlord', insert—
'or, in the case of joint landlords, any one of them.'
No. 287, in page 80 line 30, leave out from `hearing' to end of line 35 and insert—
and for the purpose of this ground "rent" means rent lawfully due from the tenant'.
§ No. 288, in page 80, line 37, at end insert—
§ Ground 10A
§
Suitable alternative accommodation is available for the tenant or will be available for him when the order for possession takes effect.'
§ No. 289, in page 80, line 44, at end insert—
§ 'Ground 11A
§
Whether or not any rent is in arrears on the date on which proceedings for possession are begun, the tenant has persistently delayed paying rent which has become lawfully due.'.
§ No. 290, in page 81, line 33, leave out '1' and insert '10A'.
§ No. 291, in page 81, line 40, leave out 'I' and insert `10A'.—[Mr. Waldegrave.]