HL Deb 28 October 1986 vol 481 cc619-27

3.30 p.m.

Lord Denham

My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that Her Majesty and His Royal Highness, having been informed of the purport of the Housing and Planning Bill, have consented to place their prerogatives and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

Bill read a third time.

Clause 1 [Exception to the right to buy with respect to dwelling-houses for persons of pensionable age]:

[Amendment No. 1 not moved.]

Baroness David moved Amendment No. 2: Before Clause 7, insert the following new clause: (" Public Local Inquiry.

  1. (1) Where a local authority intends to sell, transfer, or devolve management of land held for housing purposes which is subject to an existing tenancy or tenancies, to another person or body, and where objection in writing has been registered by no less than one third of the holders of such tenancies, the Secretary of State shall cause to be held a public local enquiry.
  2. (2) Subsections (2) and (3) of section 250 of the Local Government Act 1972 (giving of evidence at inquiries) shall apply to such a public local inquiry.").

The noble Baroness said: My Lords, we come to an amendment similar to one which we have spoken to on a previous occasion—the tenants' right to a public local inquiry. I am encouraged to bring this amendment forward because of what the Minister said on Report in answer to my noble friend Lord Elystan-Morgan, as reported in Hansard. He said: I am perfectly prepared to look into the whole subject again totally without commitment, because I know it is a subject on which noble Lords opposite have been exercising their minds."—[Official Report, 22/10/86; cols. 320–1.]

We have changed the amendment so that it is now a modest amendment. We ask that an inquiry should Occur, Where a local authority intends to sell, transfer, or devolve management of land held for housing purposes which is subject to an existing tenancy or tenancies, to another person or body, and where and this is where we have changed the amendment— objection in writing has been registered by no less than one third of the holders of such tenancies, the Secretary of State shall cause to be held a public local inquiry.

As I said, this is a modest amendment. We have introduced it because we are not happy about the degree of protection which tenants have in law when such schemes are proposed for their homes.

The first reason for our amendment is that the Government's proposals for a tenants' right of veto are very limited in scope. They do not provide for tenants to have a real say in decisions which are being taken about the future of their homes. As the Minister said in Committee on 9th October (at col. 392 of Hansard), Clauses 6 and 10 merely require that tenants are consulted about one option presented by their local authority land Lord for the handover of their homes to the private sector. Without discussion about alternative options, a majority of tenants may accept this option by default—a decision they may well later regret.

Under the Government's proposals, tenants could easily find themselves conscripted into, not volunteering for, schemes of the kind that the Government wish to encourage under Clauses 6 and 10 of the Bill. Clearly that might not be in the tenants' best interests, or in the interests of the private sector. That is the first reason for our amendment, which would ensure that where a substantial minority of tenants object to such a scheme they would have the right to demand a public inquiry into such proposals.

The second reason for our amendment is that the Government's proposals fail to provide any protection for tenants in most cases where it is proposed to dispose of their homes to the private sector, for redevelopment or refurbishment for sale. These cases will be far more common than those involving the handover of tenants' homes to a private sector manager or landlord, where the right of veto would apply. In such instances, a right of public inquiry may be even more important because tenants may be directly threatened with the loss of their homes as a result of such a scheme.

The Minister suggested on Report that tenants could not be deprived of their homes, but I do not think that is correct. He is reported in Hansard on 22nd October, at the bottom of col. 318, as saying: We are not talking about tenants losing their homes. They will continue to live in the same house, but with a different landlord. We referred on Report to one such scheme where the tenants did lose their homes—the disposal of tenants' homes against their wishes on the Waterlow estate at Bethnal Green for refurbishment and sale by Barratt. The Minister said (at col. 322 of Hansard) that tenants on the Waterlow estate would have had the right of veto on the disposal of their homes if the Bill had been law and the schemes had been approved. That is not the case. The disposal was to a developer to refurbish tenants' homes for sale, as a result of which they have been threatened with eviction. It was not a disposal with sitting tenants to a private landlord.

Our amendment would ensure that tenants threatened with compulsory disposal of the homes in such circumstances would have the right to demand a public local inquiry into their landlord's proposals, just as owner-occupiers would have a similar right where their local authority threatened compulsorily to acquire their homes for a redevelopment scheme.

The Waterlow case is important because it shows that tenants' existing rights of consultation are inadequate in relation to such disposals. Tenants were unable to get their land Lord to consult with them until they took court action. They were also unable to persuade the council seriously to consider alternative options that they put forward for the refurbishment of their homes for rent. They were unable to obtain straight answers to questions they asked about the justification for the council's proposals. If they had had a right to demand a public local inquiry—more than a third of the tenants affected did object to the disposal—tenants could have ensured proper discussion about the implications of the disposal.

People are truly worried about what could happen to their homes under this Bill. In this amendment we are asking for a public inquiry only after one-third of the tenants have objected to proposals in writing. Is not that a fair and proper way of dealing with this situation? I beg to move.

The Parliamentary Under-Secretary of State, Department of the Environment (Lord Skelmersdale)

My Lords, when I say that I am going to consider something, I believe it is only right to do just that. I equally believe that it is only right that I should now review the arguments of my consideration in some detail.

Let us take the case where a tenanted council estate is to be sold to a private developer. Let us consider what is going to happen under the provisions in the Bill when such a proposal is at issue. Suppose the local authority identifies an estate as one in which there is potential private sector interest—perhaps an estate which is in need of substantial refurbishment but is not at the top of the authority's own list of priorities. Suppose that the local authority also identifies a developer who is willing to consider purchase and renovation with most or all of the properties subject to sitting tenancies.

At the moment, when the local authority and the developer start discussing the terms of the disposal, what is the single most important fact they must bear in mind? It is surely the fact that the disposal cannot go ahead if a majority of the tenants concerned object to the proposal. It is not a question of the Secretary of State merely being influenced one way or the other by the opinion of the majority. If he is satisfied that a majority of the tenants object to the proposal then the Bill expressly provides that, he shall not give his consent". I am not sure that the noble Baroness has yet taken on board either the novelty or the importance of that provision. It will colour everything else that happens between the local authority, the tenants and the developer. It will affect all subsequent negotiations. Some things of course will not be negotiable—in particular, the tenants' security of tenure, and their right to buy. These must be and are preserved. Any purchaser who cannot accept those conditions is not going to be interested; and therefore such a proposal will not even get to the tenants.

But around those fixed points there are other areas which will be negotiable the price; the nature and phasing of the works to be carried out; and the detailed position of the tenants on matters other than security and the right to buy. The detailed discussion of the scheme will, it is hoped, result in a package being agreed which is acceptable to all three parties. But in the last analysis, if the local authority and the developer cannot carry a majority of the tenants with them, the scheme will not get off the ground.

What does Schedule 1 say about exactly how the consultations are to be carried out? It requires the local authority to give each tenant affected, in writing, details of the proposed disposal, including the identity of the prospective purchaser; details of the likely consequences for the tenant; and details of the preserved right to buy. The local authority must also give the tenant a reasonable time in which to make his views known on the proposal. The schedule also requires that, after initial consultations are over, the local authority must tell tenants of any changes they have made to their proposals in the light of representations before submitting them to the Secretary of State, and the local authority must then tell tenants that they have at least 28 days in which to lodge any remaining objections direct with the Secretary of State.

Furthermore, the schedule provides that the local authority must send the Secretary of State copies of the papers sent to the tenants as the basis for consultation. This will enable the Secretary of State to ensure that tenants have been given adequate information on which to base their reactions to the scheme. If the Secretary of State is not satisfied that sufficient details have been given, or sufficient time allowed, he will have the power to require the local authority to carry out such further consultations as he considers necessary. In those circumstances he will be able to say just how much further consultation should be carried out: for instance, by meetings with the tenants, by circulation of a questionnaire, or by other means, including written representations. I suggest to the House that those are pretty comprehensive requirements. The Secretary of State is going to be in a position to insist that adequate information is given, and adequate time allowed for comments.

I now turn to the specific question raised by this amendment: why not provide for a public inquiry where there is significant opposition to a proposal for privatisation or management delegation? I have considered this question again, but I remain totally unconvinced of the need for a provision in the form of this amendment. This whole subject is about negotiations between the people directly involved: first, the council who must have decided to propose a sale of the property; then the prospective purchasers who must be interested in the scheme; and, finally and most importantly, the tenants themselves. In this situation a public inquiry which by definition gives the opportunity for people not directly involved to have points considered is simply not appropriate.

We all know that public inquiries have their uses, but I think we would all agree that they are not the most swift, flexible and cheap administrative mechanisms. I think it will be clear from what I have already said that what we are talking about here is a process of consultation between local authority, purchaser and the tenants affected, which must be close and continuous if it is to be successful. I honestly believe that the consultation provisions that we have in the Bill are more likely to be appropriate to that sort of process than are the relatively rigid and formal provisions which govern public inquiries. Consultations are bound to be necessary if a sensible proposal is to be set up in the first place. If they are successful, why impose on that process the additional requirement of a public inquiry? And as this amendment is drafted it would be a requirement if a specified proportion of tenants registered objections to the scheme.

We have heard on several occasions that the interests of people other than the tenants directly affected should be considered, but it must surely be right that those tenants who are actually living in the properties in question, many of which may be in need of substantial repair and improvement, should be the ones to say whether a particular proposal should proceed. In formulating its proposals the council will obviously have regard to such wider interests as the housing needs in its area.

I am saying that I do not think it is sensible to write into this Bill a formal requirement that the Secretary of State shall hold a public inquiry in certain circumstances. That would be inflexible and could damage the prospects of success. The knowledge that they could be faced with delays of months or even longer might well put off potential purchasers.

However, I do not deny that there may be circumstances in which a local inquiry might be the best way of sounding out opinion. The noble Lord, Lord Elystan-Morgan, asked me last week whether there should not be a discretionary power to hold an inquiry where appropriate. Section 616 of the Housing Act 1985 states: for the purposes of the execution of his powers and duties under this Act, the Secretary of State may cause such local inquiries to be held as he may think fit". The consultation provisions in the present Bill are of course to be inserted in' the 1985 Act, so Section 616 will be there if it is appropriate to use it.

I believe that this is as far as we should go. The circumstances in which inquiries will be appropriate are likely to be very rare indeed. The discretionary provision will allow for that. Anything further than that, along the lines of the present amendment, introduces a degree of rigidity which in my view is simply not appropriate to the matter under consideration. In this connection it is, I think, important to remember that the consultation arrangements must cover all schemes involving tenanted council houses, both big and small. It would hardly be appropriate to insist on public inquiries being held, for instance, where only two or three tenanted dwellings would be affected.

I committed myself to look at the whole subject again. This I have done, but I have to say that my conclusions remain the same. The provision we are making in this Bill for consultation with tenants affected by privatisation or management delegation proposals are very substantial indeed. The Secretary of State will have a direct role in ensuring that consultations are adequate, and if, after consultation, a majority remain opposed to a scheme, it will not be open to the Secretary of State to ignore that.

Before a private land Lord can require a tenant to move he must apply to the court for a possession order. That is a quite different matter from the question of whether a council should sell tenanted properties to a private landlord. In such a case the tenants will have security of tenure under the Rent Act. I believe therefore that what we have in the Bill is as far as we can reasonably go. As I have said, the Secretary of State does have a general discretion to hold public inquiries, and that will be available here; but to go beyond that and to write into the Bill, as this amendment would, a requirement for a local inquiry would be inflexible and indeed often superfluous, given the consultations that will have already taken place.

In the light of that, I invite the noble Baroness to withdraw her amendment.

3.45 p.m.

Lord Stallard

My Lords, I have listened very carefully to the detailed reply of the Minister, for which we are very grateful. In particular, I was listening for the point which many of us raised before at Committee stage about cases where the council decides to sell to a developer for refurbishment and further sale; and we have been given some examples of cases by Shelter in recent weeks.

The Bill concentrates on disposal to a private sector landlord. Nowhere does it mention the case of flats that will be turned over to a private developer for refurbishment and future sale. Two examples were given, one being the Skimped Hill estate in Bracknell and the other Portsdown Park estate in Portsmouth, neither of which would be covered by the provisions, as they exist in this Bill, so far as concerns consultation, because the Bill does not deal with that circumstance; it only deals with the case in which a council intends to dispose of dwellings to a private sector landlord. There is a difference which the noble Lord has not cleared up in the way I had hoped he would, and I hope that he will have another look at that specific point.

Lord Dean of Beswick

My Lords, I had no intention of speaking to this amendment. However, the Minister's case related solely to the protection given to tenants by the consultation procedure as found in the provisions in Schedule 1. Amendment No. 19, which has been put down in the names of the noble Baroness, Lady David, the noble Countess, Lady Mar, and myself relates to Schedule 1. I shall not speak for very long because I shall make the majority of my remarks on that amendment, but the fact of the matter is that once again the Minister read out the same reasons that he gave in Committee and at Report stage and repeated almost verbatim the protection that the tenant has in the consultation procedure. However the actual kick in Schedule 1 is contained in the last paragraph, which reads: Protection of purchasers The Secretary of State's consent to a disposal is not invalidated by a failure on his part or that of the local authority to comply with the requirements of the Schedule". I do not for one moment suppose that any Secretary of State would do so, but he could really afford to ignore the whole of Schedule 1 on the basis of this escape clause. Bearing in mind that that could happen, does the Minister think that the tenants have the protection that he says they have? We could have a situation in which the local authority could default and it has the protection of the Secretary of State: if, however, the Secretary of State defaults—not through any action of his own but because of a departmental slip—who then protects the tenant? There is the right to protect the purchaser but nowhere does the schedule protect the tenant. Based on the remarks I have made, I do not think that the Minister has made out any case at all for this schedule, which is totally loaded against the existing tenant.

Lord Skelmersdale

My Lords, with the leave of the House, that was not the case we were considering. When we reach the point that the noble Lord, Lord Dean, proposes in Amendment No. 4—unless he wants to deal with the point now, which I am prepared to do—we can consider the workings of Schedule 1. This amendment is directed to those cases where the noble Baroness, Lady David, wishes to insert into the statute a public local inquiry.

Lord Dean of Beswick

My Lords, with the leave of the House, I am most grateful to the noble Lord. The overwhelming part of the Minister's case, when he was trying to convince your Lordships that there was no necessity for a public inquiry, consisted of trying to hide behind or use the provisions of Schedule 1. That is why I intervened.

Lord Skelmersdale

My Lords, I assume that that was an intervention and that I need not ask the leave of the House to speak again. With regard to the point made by the noble Lord, Lord Stallard, the consultation provisions in Clause 6 relate to sales of tenanted properties to any private sector purchaser. In such a case tenants will have the preserved right to buy, security of tenure and such other rights as are protected by agreement with the developer. The question of on-sale by the developer of tenanted properties is irrelevant. Tenants will retain their rights, including security of tenure.

I have reconsidered this matter. I know that noble Lords opposite do not like my conclusions because they are the same as the ones I came to before. That does not mean that I have not given the matter a great deal of thought.

Baroness David

My Lords, I am grateful to the Minister for reconsidering the matter. I think he does me an injustice. I know what is in the schedule. We have been living solidly with this Bill for three weeks now, and I have read the schedule a good many times. I still find myself dissatisfied with it.

If a majority of tenants object, the scheme will not continue. We are thinking of a substantial minority—one third—of the tenants involved who do not like the scheme and who perhaps have not had the chance to make their feelings properly known and to have them taken into account. We are concerned with people's rights, especially rights which have to do with homes. We do not see why private owners should have the right to go to an inquiry if their homes are to be compulsorily purchased and they risk losing them, whereas public sector tenants will not have that right unless we have this public inquiry clause written into the Bill.

I am not satisfied with the answer. I wish to press the amendment.

3.53 p.m.

On Question, Whether the said amendment (No. 2) shall be agreed to?

Their Lordships divided: Contents, 105; Not-Contents, 122.

Airedale, L. Listowel, E.
Amherst, E. Llewelyn-Davies of Hastoe, B.
Ardwick, L. Lloyd of Kilgerran, L.
Avebury, L. Lockwood, B.
Aylestone, L. Lovell-Davis, L.
Banks, L. Mackie of Benshie, L.
Bernstein, L. McNair, L.
Beswick, L. Mais, L.
Birk, B. Mar, C.
Blyton, L. Milford, L.
Bonham-Carter, L. Mishcon, L.
Boston of Faversham, L. Molloy, L.
Bottomley, L. Morton of Shuna, L.
Brockway, L. Murray of Epping Forest, L.
Bruce of Donington, L. Northfield, L.
Burton of Coventry, B. Oram, L.
Campbell of Eskan, L. Paget of Northampton, L.
Carmichael of Kelvingrove, L. Pitt of Hampstead, L.
Chitnis, L. Ponsonby of Shulbrede, L. [Teller.]
Cledwyn of Penrhos, L.
Collison, L. Prys-Davies, L.
David, B. Rathcreedan, L.
Davies, L. Reilly, L.
Davies of Penrhys, L. Rochester, L.
Dean of Beswick, L. Rugby, L.
Denington, B. Sainsbury, L.
Devonshire, D. Seear, B.
Diamond, L. Sefton of Garston, L.
Donaldson of Kingsbridge, L. Serota, B.
Elwyn-Jones, L. Shackleton, L.
Ennals, L. Shepherd, L.
Ewart-Biggs, B. Silkin of Dulwich, L.
Ezra, L. Simon, V.
Falkender, B. Stallard, L.
Fisher of Rednal, B. Stedman, B.
Fitt. L. Stewart of Fulham, L.
Foot, L. Stoddart of Swindon, L. [Teller.]
Gallacher, L.
Galpern, L. Strabolgi, L.
Glenamara, L. Strauss, L.
Graham of Edmonton, L. Taylor of Blackburn, L.
Gregson, L. Taylor of Mansfield, L.
Grimond, L. Tordoff, L.
Harris of Greenwich, L. Turner of Camden, B.
Houghton of Sowerby, L. Underhill, L.
Hughes, L. Vernon, L.
Hutchinson of Lullington, L. Wallace of Coslany, L.
Irving of Dartford, L. Wells-Pestell, L.
Jacques, L. Whaddon, L.
Jeger, B. White, B.
Jenkins of Putney, L. Williams of Elvel, L.
Kilbracken, L. Wilson of Rievaulx, L.
Kilmarnock, L. Winstanley, L.
Leatherland, L.

Resolved in the negative, and amendment disagreed to accordingly.

Alexander of Tunis, E. Campbell of Croy, L.
Allerton, L. Carnegy of Lour, B.
Alport, L. Carnock, L.
Ampthill, L. Cayzer, L.
Auckland, L. Chelmer, L.
Bancroft, L. Coleraine, L.
Bauer, L. Constantine of Stanmore, L.
Beaverbrook, L. Cottesloe, L.
Beloff, L. Croft, L.
Belstead, L. Cullen of Ashbourne, L.
Bessborough, E. Dacre of Glanton, L.
Blake, L. Davidson, V. [Teller.]
Blanch, L. Denham, L. [Teller.]
Blyth, L. Denning, L.
Boyd-Carpenter, L. Duncan-Sandys, L.
Broxbourne, L. Effingham, E.
Bruce-Gardyne, L. Ellenborough, L.
Butterworth, L. Elliot of Harwood, B.
Byron, L. Elton, L.
Caithness, E. Faithfull, B.
Campbell of Alloway, L. Fanshawe of Richmond, L.
Fortescue, E. Merrivale, L.
Fraser of Kilmorack, L. Mersey, V.
Gainford, L. Milverton, L.
Gibson-Watt, L. Molson, L.
Glanusk, L. Monk Bretton, L.
Gorell, L. Monson, L.
Gray, L. Morris, L.
Gray of Contin, L. Mowbray and Stourton, L.
Gridley, L. Munster, E.
Hailsham of Saint Marylebone, L. O'Brien of Lothbury, L.
Orr-Ewing, L.
Halsbury, E. Pender, L.
Hayter, L. Peyton of Yeovil, L.
Henderson of Brompton, L. Porritt, L.
Hesketh, L. Portland, D.
Hives, L. Quinton, L.
Home of the Hirsel, L. Rankeillour, L.
Hooper, B. Reay, L.
Hunter of Newington, L. Renton, L.
Hylton-Foster, B. Rodney, L.
Ilchester, E. St. Davids, V.
Inglewood, L. Sandford, L.
Ironside, L. Sandys, L.
Kaberry of Adel, L. Seebohm, L.
Kinloss, Ly. Sharples, B.
Kinnaird, L. Skelmersdale, L.
Knollys, V. Strathcona and Mount Royal, L.
Lane-Fox, B.
Lauderdale, E. Strathspey, L.
Layton, L. Sudeley, L.
Lloyd-George of Dwyfor, E. Terrington, L.
Long, V. Teviot, L.
Lonsdale, E. Trefgarne, L.
Lucas of Chilworth, L. Trumpington, B.
Lyell, L. Vaux of Harrowden, L.
McAlpine of West Green, L. Vickers, B.
McFadzean, L. Vivian, L.
Macleod of Borve, B. Whitelaw, V.
Malmesbury, E. Wise, L.
Mancroft, L. Wynford, L.
Margadale, L. Young, B.