§ Mr. Deputy Speaker (Sir Paul Dean)With this, it will be convenient to take the following amendments: No. 124, in page 62, line 48, leave out 'two' and insert 'eight'.
§ No. 125, in clause 92, page 64, line 1, leave out 'two' and insert 'six'.
§
No. 387, in clause 93, page 64, line 19, leave out
'before the end of the period mentioned in section 95 below'
and insert—
'within a period of one month following service of notice by the applicant of his intention to proceed under section 96(1) below'.
§
No. 130, in clause 95, page 65, line 13, at end insert—
'(3) The relevant period referred to in subsection (1) shall be a minimum of—
§ No. 126, in clause 96, page 65, line 35, leave out 'two' and insert 'six'.
§
No. 127, in clause 97, page 66, line 5, at end insert—
'and as soon as is practically possible having regard to the need to draft all legal documents required.'.
§ Mrs. RoeThe amendment seeks to extend from two weeks to four the period within which the applicant must state whether he accepts the landlord's notice under clause 91(1). Having listened to the arguments in Committee, I concede that two weeks may have been a little brisk and that four weeks would strike the happy medium.
§ Mr. BoatengAn element of the Government's approach to this part of the Bill smacks of asset-stripping on the run. At every stage there is an inducement and an encouragement to the would-be applicant, the person who will get his hands on what was public property, to move quickly and to be impeded as little as possible by considerations of the public interest or the rights and concerns of existing tenants.
The Government have made one concession this evening in the form of amendment No. 349 which the Minister has just outlined. But we are bound to say that it does not go far enough. Having conceded the principle that two weeks is too short, she, and the Government, should consider, even at this late stage, the length of time in relation to a number of other matters covered by the group of amendments and should seek to ensure that at every stage there is time for consideration, objection and consultation.
At the moment, we have not a hit-and-run situation, not a smash-and-grab situation, but a stack-and-grab situation. The odds are stacked against anybody who seeks to object to public moneys being dissipated in the transfer of properties, against anyone who seeks to say to the landlord, "Hang on, wait a bit. We want to know more. We want some time to consider the notice that you have served upon us."
A classic example can be found on examination of clause 91, which provides that the landlord should have 12 weeks to get together a notice for service on the applicant, but within two weeks the applicant must respond in writing to any matter stated in the notice that he does not accept. We seek to extend that time. If it is right that the landlord should have 12 weeks, it must be right that the applicant should have sufficient time to consider his or her response to such matters, some of which are very complex. That philosophy runs through our response to what the Minister said about the clause. We invite the Minister to consider whether she is able to justify giving only two weeks to an applicant to scrutinise a notice specifying the price and to object to it.
Let us imagine what such a notice is likely to contain. The determination of a transfer price is a complex undertaking. It would be equally complex to scrutinise it and in many cases it would be necessary for an applicant to seek professional advice. In some cases, it would be necessary for that professional advice to encompass some 100 properties. Is it right that what amounts to a snap decision should be made in two weeks, when one considers the time taken in the conveyancing of one's house? I mean no criticism of the solicitors' profession, of the local authorities concerned or of the estate agents. Heaven forbid that one should criticise those august institutions.
I am glad to see that that brings a smile to the lips of the Minister. He has not been smiling much this afternoon, and one can well understand that, given the circumstances in which he finds himself. Let us hope that the Secretary of State does not wipe the smile from his face, as some Opposition Members predict he will shortly. If it has brought a smile to the Minister's lips I am glad, but will he translate that smile into action? I must say to hon. Members who were not present in Committee that we saw the Minister smile often, but he acted very rarely. In this instance, the Government have acted, but they have acted inadequately. Our modest amendment will enable them to 86 ensure that the public good and the rights of the individual are protected and that the clause does not run contrary to both.
§ Mr. Simon HughesI welcome the Government amendment but I wish that it had gone further. I would have preferred the similar amendment with a longer time period tabled by the Labour party. Four weeks is still an unreasonably short time for the complicated exercise about which we are talking. Amendment No. 130 is also welcome. We should have written into the Bill specific time periods for consultation as required by clause 95.
I want to address my remarks to my amendment No. 387. It is in this group although it relates to clause 93. It seeks to return to the argument for a two-stage voting procedure. It is important, and I support it not just for the sake of it but to try to persuade Ministers of the logic of accepting the amendment, even if they tell me that there may be another way of drafting it.
There are circumstances in which tenants who have voted yes or who have not voted at all may want to be able to decide whether to stay with their local authority after they know definitely whether a transfer is to take place. A similar decision in opposite circumstances is already possible. If an individual tenant votes no, the autumn consultation paper on tenants' choice made it clear that such a tenant would have an option to
withdraw their objection in writing.If a tenant who votes yes decides to stay with the council, the consequence of the phrase "tenants' choice" must be that they should be able to have the landlord that they prefer. The logic of that is that there are two stages. First, there is the decision as to whether the block or estate transfers. Secondly, if it does, tenants have to decide whether they want to go with the transfer. I will suggest two different circumstances in which people could reasonably want to have, and should be given, the chance to decide to stay with the council after they know that the freehold of their estate or block is to be transferred.First, a tenant may find out late in the procedure circumstances and facts that influence the decision whether he or she wishes to transfer. It is easy to think of examples of that. For example, someone may vote for a transfer and then find out that everybody else on his or her floor or in his or her row will be staying with the council. They may regret their decision to vote for a new landlord because they would stick out like a sore thumb. They might decide that it would be better if their floor or row remained with the old landlord. The circumstances after the vote would determine their preference.
I would be interested to know from the Minister why they should not be able to exercise their preference. Under present arrangements, tenants in such circumstances cannot choose to stay with the council that reflects the Government's aim of de-municipalisation. It is a way of achieving the maximum transfer out of the council housing sector. Tenants in similar but opposite circumstances in which a few tenants find that they are the only people on a block or on an estate to vote against a transfer and decide that they want to join their neighbours in transferring will be able to do so.
The second circumstance is one in which the two-stage voting procedure, which our amendment proposes, is not only desirable in the interests of maximum tenants' choice but is necessary. It is where there is to be a secret ballot. It is an important point, and I should be fascinated to hear 87 the Minister's response. Does the Minister accept—this is a crucial question—that the system as proposed does not allow a secret ballot in any circumstances? If there is a secret ballot, people vote anonymously and nobody knows who casts which vote for which result. Under the Bill, the votes cannot be secret because individual decisions are made as to who transfers and who does not, as well as a collective decision about the future of the block. There cannot be a secret ballot because the result of those voting yes is then notified to everybody on the estate or block in question.
7.45 pm
If a secret ballot were to take place under what is called tenants' choice, it would inevitably have to be followed by a separate procedure under which tenants would make known their effective decision about the transfer or stay with the council landlord. When a decision about the transfer of an estate or block is made, there should always be a secret ballot. That is important so that adverse or pecuniary pressure is not applied. The necessary consequence of a secret ballot is a two-stage voting procedure. I hope that the Minister will confirm that there is a fundamental defect on the procedure because tenants cannot vote on a proposed landlord in secret. We must have an amendment to allow secret ballots to take place.
Another interesting implication of the present arrangement whereby tenants can make a second stage decision to transfer but not to stay with the council must be pointed out. The rent terms offered by the council may be different depending on whether the council continues to own the block or, following a transfer to a non-council landlord, rents it from that new landlord and sub-lets to the tenants. A council may charge a rent of £20 a week to its tenants and an applicant may offer tenants a rent of £30 a week plus substantial improvements to the estate. We can imagine for simplicity that tenants have a straightforward choice between higher rents and improvements with the new landlords or lower rents and no improvements with the council landlord.
If a transfer took place, the council would, for those flats where tenants wish to remain with the council, have to pay the new landlord the higher rents. In paragraph 36, the document on tenants' choice makes it clear that
In general terms, it is proposed that the rent and service charge payable by a landlord under a leaseback arrangement should be neither more or less than the rent and service charge payable by a tenant of a similar property who has chosen to transfer to the applicant.For that reason the council may make its policy for future rents dependent on its costs. If transfer takes place, council rents may, indeed probably will, be higher than if the transfer does not take place. That will happen because the council will be charged more and, as the Minister said, the only option is for the council to subsidise the difference. Councils will not have the money to do that, and rents will go up. That is a fact of municipal life. The council will not be able to finance an ongoing deficit to keep its rents down when it is being charged more.For that reason, tenants who vote to stay with the council may decide to transfer, which they will be able to do. The rent differential will no longer pertain because the council will have to charge higher rents as well. Therefore, tenants may want to make a second choice. The essential point about amendment No. 387 is that somebody's vote 88 for what should happen to a block or estate might be different from what that person would prefer for himself or herself. Each tenant must make two separate decisions. I hope that the Minister will accept that this issue needs to be reconsidered. At present, the Bill does not permit the two decisions to be taken separately. Clause 93(2) identifies the vote as one and the same thing—the public decision about whether to transfer.
Confusion clearly exists in Government. The Secretary of State nearly slipped up in an interview with Municipal Journal on 10 June 1988. The interview says:
The Environment Secretary says: 'There are two separate questions. First is who shall be the block landlord and it is to that which the voting system applies … The second point is that the legislation says each individual tenant has the right to decide who is his own landlord. The second stage is that such a tenant can say I will stay with the local authority in which case he takes a local authority tenancy and the local authority takes the tenancy of the landlord. Or he can say I'm quite happy to go with the new landlord and he gets a direct tenancy with the new landlord.' Mr. Ridley denies that is a new fallback stage.Officials had to come to the Secretary of State's rescue. The interview continues:Department of the Environment officials later clarified this point. There is one vote, they said, with two implications. The sum total is where the block goes, individual decisions are where the tenancies go. As for whether there will be a demand for new landlords Mr. Ridley exclaims 'What harm is there in giving them a choice.'It is not only a one-way choice but a false choice made without knowledge of the facts. Further, it will not be a secret choice. The ballot concerns not only the rigged vote, to which we shall turn in a moment—
§ Mr. BoatengThe sooner the better.
§ Mr. HughesIt is important to show the inadequacies of the voting system.
§ Mr. SpearingLetters system.
§ Mr. HughesThat is true. To call it a voting system is cloaking it with an authenticity that it clearly will not have.
The application procedure as a whole will take six months or more. The proposal in the amendment would add, at most, an extra four weeks. Tenants certainly would not object to it, because it would cater for their interests and maximise their choice. I hope that the Government will think again about this additional iniquity in a ridiculous voting system.
§ Mrs. RoeTenants' choice procedures are potentially time-consuming, and we do not want to extend them further unless absolutely necessary.
The hon. Member for Brent, South (Mr. Boateng) mentioned asset-stripping. I remind him of the stringent approval criteria under the Housing Corporation amendments that we discussed earlier, and of the Secretary of State's power to control, by his consent under clause 98, any disposals of property transferred under this part of the Bill.
§ Mr. BoatengWill the Minister give way?
§ Mrs. RoeI shall not give way, because we have much to do.
As to amendment No. 125, once the scope of the application is agreed, the landlord sets his proposed price. I do not understand why an applicant would need more 89 than two weeks to dispute that price. He will have had time to make an assessment of the price, so he should be able to react more quickly.
Amendment No. 126 would allow the landlord six weeks to dispute a final notice of intention to proceed. I cannot see the need for this amendment. What will the landlord be disputing? As we are all agreed on the need for an independent teller, such as the electoral reform society, the conduct of the ballot should be beyond question.
As to the principle of amendment No. 130, I assure hon. Members that we have no intention of prescribing unrealistically short periods for consultation. I do not think that a period for consultation and a ballot should be less than 28 days. We have agreed to consult expert and interested bodies such as the Electoral Reform Society about this matter, which will help us to arrive at a sensible and fair time limit.
As to amendment No. 127, I am advised that there is no need to say that the completion of the transaction can be accomplished only subject to the necessary legal requirements being met, including the drafting of relevant papers. Time limits should not be set to accommodate the slowest performer. On the contrary, we wish to encourage the swift and businesslike conclusion of each application. I remind hon. Members that, under clause 101, it is open to the parties to extend the time limit by agreement. I ask hon. Members not to press the rest of the amendments.
Amendment No. 387 addresses the separate issue of how many times tenants should decide the future of their tenancies. If the overall ballot is such that the applicant decides to proceed and issues notice to that effect, amendment No. 387 would allow the tenant a further month to change his vote. Those who had voted yes could change their minds, thus throwing the applicant's calculations into a meaningless muddle. The applicant must be in a position, before he decides whether to proceed, to know which tenants intend to remain with the council. We therefore cannot agree to prolong and disrupt the consultation process in that way.
The hon. Member for Southwark and Bermondsey (Mr. Hughes) said that the tenant should not have to decide whether to go or stay until his neighbours had decided. In theory, that process could go on for ever. There comes a time when tenants must choose, not on the basis of what their neighbours are doing but on what the applicant offers on consultation.
The hon. Member for Southwark and Bermondsey mentioned the issue of the secret ballot. It is a feature of the consultation procedure that each tenant can decide the future of his or her tenancy. As the hon. Gentleman said, there cannot be an anonymous ballot.
§ Mr. McCartneyWill the Minister give way?
§ Mrs. RoeI will give way to the hon. Gentleman if he will be patient and allow me to finish the points that I am making.
Any anonymous ballot is not the same as a secret ballot. The independent teller will collect the votes and will pass on to the applicant only the information that he needs to pursue his application. That gives the appropriate protection of the tenant's private interests.
Tenants who decide to stay will not pay private sector rents; the existing landlord pays what the transferring tenants have freely agreed to pay. The rent to be paid for 90 existing tenancies is a matter for the tenant and the landlord to agree, and full-cost recovery is not a usual feature of individual council rents.
§ Mr. McCartneyThis is a historic moment; it has taken four months for the Minister to give way to me.
In Committee, I asked about the voting procedure and individual tenants. Was the hon. Lady sneaking out a concession when she mentioned each tenant? In Committee, when we asked what would happen if each tenant had the right to vote, the Minister was unclear. Is the Minister clarifying the position and saying that in joint tenancies each tenant will have the right to vote or will tenants be nominated? If so, which tenant will have the vote?
§ Mrs. RoeThis matter has been covered in debate. It has been made clear that it is one vote per household.
§ Amendment agreed to.