§ '(1) The Housing Act 1988 shall be amended as set out in subsections (2) and (3) below.
(2) In section 94–
- (a) for subsection (1) there shall be substituted—"(1) The right conferred by this Part shall not be exercisable by a public sector landlord, the council of a county or any other body which is not independent of such a landlord or council."
- (b) subsections(3) to (7) shall be omitted.
§ Brought up, and read the First time.
§ Mr. Peter Thurnham (Bolton, North-East)I beg to move, That the clause be read a Second time.
I am delighted to have this opportunity to move the new clause and to explain that it is very simple. Its purpose is to allow the tenant of a council house to choose who his landlord should be, without any restrictions. It is in the nature of a probing amendment and I am grateful for the opportunity that I had a few days ago to discuss the proposal with my hon. Friend the Minister. I congratulate him on this excellent Bill, and on the opportunity that the Bill allows to introduce another proposal to get rid of regulation. I am grateful for the support of many of my hon. Friends, including my hon. Friends the Members for Wyre Forest (Mr. Coombs)—I see that he is in his place —for Chingford (Mr. Duncan Smith), for High Peak (Mr. Hendry) and for Rutland and Melton (Mr. Duncan).
Colleagues may already be aware of arguments that I made in a Conservative Political Centre pamphlet entitled "Choose Your Landlord":
I have always thought it unfair that elderly pensioners and council tenants unable to obtain a mortgage easily should lose out on valuable discounts under the Right-to-Buy,The new clause would, for instance, help the elderly tenant of a council who did not wish to enjoy that right but who wanted, perhaps, his son or another relative or friend to become his landlord. At present such a tenant would have to contrive an arrangement to bring that about, and I have no doubt that that happens. He would have to borrow money from his son, purchase the house under the right to buy and keep it for three years in order not to lose any of his discounts. He would then be free to sell it—if he wished —to his son, who could become his landlord and to whom he could repay the loan. The new clause would help to avoid that rigmarole.255 Under the existing law, the council would not be allowed to sell such a tenanted house directly to the chosen new landlord without first gaining the approval of the Housing Corporation, which would have to be satisfied that the new owner was financially viable and demonstrably committed to long-term rental and repair. In practice, that rules out deals within a family or between friends.
As my right hon. Friend the Minister will know, under the excellent "tenants' choice" arrangements, some 24 local authorities have sold all their housing to housing associations, following a ballot producing a majority decision in favour. Such large-scale voluntary transfers are very welcome, but they do not help the single tenant who wants to have the landlord of his or her choice, especially in areas where local authorities might be entirely opposed to transfers of that kind.
My new clause would allow private individuals to become landlords on council estates. It would give a boost to the right-to-buy scheme, which has already benefited 1.4 million tenants and is now benefiting some 50,000 per annum—not the rate of earlier years, but still significant. Moreover, it would give the sale of council houses in general a big boost.
The proposals should be welcomed. They will further the revival of the private rented sector, which—in the north-west, at any rate—is already making a large contribution to the social rented sector. Some 60 per cent. of the North West Landlords Association's tenants are on benefits, according to a recent survey.
I look forward to my right hon. Friend's presenting a housing Bill, perhaps next year; that would enable these unnecessary restrictions to be removed, if we do not remove them tonight, and make for a free housing market. I wish this excellent Bill well—I congratulate my right hon. Friend on the way in which he has guided it—and welcome the opportunity to flag up the need to deregulate the sale of council houses.
§ Mr. Nigel GriffithsI do not wish to impugn the motives of the hon. Member for Bolton, North-East (Mr. Thurnham) in giving an individual tenant the chance to choose his or her landlord, but I must point out the pitfalls. Those of us whose constituencies contain council houses are probably all aware of the problems that some tenants —especially elderly tenants—have experienced when relatives who are less than scrupulous have bought houses for them and then left them without repairs. If that can happen to a small minority—I do not pretend that it is a majority problem—even when relatives are involved, I am concerned about the plight in which some people would find themselves when opting for another landlord.
Moreover, we know that a number of tenants have been induced to buy their houses by concerted advertising campaigns run by people who see a chance of acquiring an asset on behalf of the resident. In return for a long-term lease from a private person, tenants have been induced to buy their council houses; they have then found that they do not actually own them, have run into problems with getting repairs done and have come to grief. I do not wish to overstate the case, but it has happened, and not only on a few occasions.
In the past fortnight or so, there has been a fire in a hostel owned by a private landlord in Scarborough. Two of that landlord's companies have gone bust with debts of 256 £350,000. The council was instructing him to carry out repairs, but he did not feel obliged to do so until he had the funds, and we are all aware of the fatal consequences of that delay. I do not want to prejudge the case, but it is important that there is some mechanism—
It being Ten o'clock, the debate stood adjourned.
Motion made, and Question put forthwith, pursuant to Standing Order No. 14 (Exempted business).
That at this day's sitting, the Deregulation and Contracting Out Bill may be proceeded with, though opposed, until any hour.—[Mr. Andrew Mitchell.]
§ Question agreed to.
§ As amended (in the Standing Committee), again considered.
§ Question again proposed, That the clause be read a Second time.
Mr. GriffithsI conclude my remarks by tying together the three points that I have made.
I have here a copy of a press release issued by the hon. Member for Bolton, North-East (Mr. Thurnham). It states:
Peter Thurnham's New Clause 2 calls for an amendment to the regulations covering sales of council houses to private landlords; councils would not be allowed to reject a bidder on the basis of his quality or previous record".On the face of it, that statement may not seem threatening, provided that the landlord's previous record was good and that he was someone of good standing. However, I ask the hon. Gentleman to consider what would happen if a landlord such as the one in whose property the fire occurred last week were now to offer to buy that property. Again, without wishing to judge the case, I think that it is unlikely that such a person would in the present circumstances be allowed by a responsible council to bid although, if he were to be exonerated after the inquiry, his reputation may be restored. They are my genuine reservations about the new clause.
§ Mr. Neil HamiltonI welcome the opportunity provided by my hon. Friend the Member for Bolton, North-East (Mr. Thurnham) to debate this important topic. I also welcome his comments, especially those that were personally flattering to me. This is an important topic, and the sale of council houses has been one of the Government's most successful policies of the past 15 years. That policy will endure and I share my hon. Friend's aspiration that more council tenants can be provided with the opportunity to own their own homes in the years to come.
The main effect of the new clause would be to delete the current requirement under tenants' choice legislation for potential new landlords to be approved by the Housing Corporation or Housing for Wales. Tenants' choice, which was introduced by part IV of the Housing Act 1988, gives council tenants who want to go on renting their homes but who are dissatisfied with the services that they receive from their present landlord the opportunity to change to another landlord of their choice. Under the scheme, the final outcome is decided by a ballot of all eligible tenants which will take place only after the alternative landlord has set out clearly the terms and conditions on offer. Tenants who vote against transfer stay with the council. Only socially responsible stable bodies committed to the long-term business of rented housing are able to acquire property under tenants' choice and all such landlords must therefore be approved by the Housing Corporation or Housing for Wales.
257 The role of the Housing Corporation in approving landlords is to ensure that potential new landlords will retain housing acquired for letting at rents which those in low-paid employment can afford to demonstrate proper systems of financial control, financial viability and high standards of housing management. The Government are keen to encourage the private rented sector, and the Housing Corporation's requirements are intended to provide reassurance to tenants about their potential future landlord's standards. The requirements are not intended to limit the types of landlord who may come forward with a bid to acquire housing under the tenants' choice legislation. Indeed, the Housing Corporation's own guidance makes it clear that new landlords could include not just housing associations but commercial landlords, individuals such as those my hon. Friend referred to in his speech, and tenant-controlled bodies as well. An individual or organisation which does not have approved status can then apply for it.
The Housing Corporation also has an important: role to play in assessing the financial viability and management of potential landlords. In tenants' choice cases, a sum of money is generally paid by the local authority to the new landlord to meet the cost of priority catch-up repairs to the housing stock. In one case, the sum amounted to £17 million. That level of payment to a new landlord from public funds demands the scrutiny of the suitability of new landlords that the current provisions supply.
I am sure that I carry my hon. Friend the Member for Bolton, North-East with me when I say that it will be desirable to retain that feature of the legislation. I have had the opportunity to discuss at length outside the House many of the ideas that my hon. Friend has put forward not only in his speech this evening, but also in the many publications in his name.
He has made a very important contribution to the continuing debate upon the democratisation of housing and the spread of home ownership. I believe that the independence which comes from owning one's house has been a significant factor in the other important changes which have taken place in society in this country in the last 15 or 20 years.
I welcome my hon. Friend's contribution to the debate. I hope that he will agree that the proposals that he has put forward this evening in his new clause are only part of a wider agenda for housing. It would not be sensible to just pick and choose odd pieces from the jigsaw. While I believe that his ideas merit further serious consideration, I do not think that the deregulation Bill is the appropriate vehicle to achieve the objectives that he has in view. He should not use the Bill simply to include one important ingredient of his general proposals.
I suggest that my hon. Friend—I hope that he will be agreeable to this course of action—withdraws his new clause this evening and that we pursue his ideas outside the House. He can then work them into a more wide-ranging and properly constructed set of proposals which might be more appropriate to include in a Bill directed specifically at housing, rather than a general Bill about deregulation within which many of the essential features of the liberalisations that he wishes to bring about could not figure because they would be beyond the scope of the Bill.
I thank my hon. Friend for his contribution to the debate. I hope that we may be able to continue the debate 258 later when he may be successful in putting together some workable proposals which will achieve the laudable objectives that he has set out.
§ Mr. ThurnhamI am grateful to my hon. Friend the Minister for his comments. I shall be happy to withdraw the new clause on the basis of what has been said, but first I will comment briefly on the points raised during the debate.
I was interested to hear the speech of the hon. Member for Edinburgh, South (Mr. Griffiths). I think that he would agree that the multiple occupation case in Scarborough is very different from what is being discussed in the new clause, which relates specifically to council tenants choosing a new landlord. The Labour party said in one of its recent policy documents that the private rented sector badly needs a boost. But I think that the hon. Gentleman would accept that in the private rented sector there is no restriction whatever on one landlord passing a property to another landlord. It may occur on the death of a previous landlord, for example.
The new landlord does not have to be approved by the Housing Corporation. No checks have to be made on his financial viability, reputation or anything else. The security for the tenant lies in the tenancy agreement itself, not in anything relating to the individual who may or may not be the landlord at a particular moment in time. The hon. Gentleman should trust the judgment of the tenant who wants to choose a new landlord and look for security in the tenancy agreement itself.
§ Mr. Nigel GriffithsI would consider that the hon. Gentleman's argument had a little more conviction if, when housing association or Housing Corporation tenants in Scotland and elsewhere wanted to choose their landlord, they were not deliberately barred from opting for a district council. The Government do not want to extend that choice to tenants. It is a bit much for the hon. Gentleman to pretend that the Conservatives support tenants' choice. We support tenants' right to choose their landlord, and we believe that if they want to choose the district council they should be allowed to do so.
§ Mr. ThurnhamThe hon. Gentleman must be aware of the weight of evidence showing, I believe, that local authorities are among the worst landlords that exist. The Council of Mortgage Lenders has sent me information from a survey entitled, "Housing in Britain", which shows that between 1986 and 1993 the proportion of tenants dissatisfied with council renting rose from 11 per cent. to 13 per cent. whereas with private renting the proportion fell to 10 per cent. It is clear where the dissatisfaction lies.
The hon. Gentleman has only to read the most recent report of the local government ombudsman to discover that housing was the single biggest cause of complaints to local authorities. There were more than 5,000 complaints relating to council house management, repairs, mortgages, housing benefit, housing grants, and so on, and there are many references to failure to comply with legal requirements, failure to investigate issues properly, failure to take appropriate action, failure to provide adequate information, and so on. The direction in which people are heading is clear.
I took considerable heart from what the Minister said, and on the basis that we can look forward to a comprehensive housing Bill in the next Session of Parliament—I hope that what I have said both in the new 259 clause and elsewhere, such as in my pamphlet, may be included in such a Bill-I beg to ask leave to withdraw the motion.
§ Motion and clause, by leave, withdrawn.